-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QmY1AGe75RbezpDyvlPBash7oXhmXRHryl/KwK1g56BtwsuOLKXwvYESxvWZn/IA d2UnxlXUUfgEbSu379ReKQ== 0000893220-97-000780.txt : 19970417 0000893220-97-000780.hdr.sgml : 19970417 ACCESSION NUMBER: 0000893220-97-000780 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970415 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970415 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HERCULES INC CENTRAL INDEX KEY: 0000046989 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS CHEMICAL PRODUCTS [2890] IRS NUMBER: 510023450 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00496 FILM NUMBER: 97581599 BUSINESS ADDRESS: STREET 1: 1313 N MARKET ST STREET 2: HERCULES PLZ CITY: WILMINGTON STATE: DE ZIP: 19894 BUSINESS PHONE: 3025945000 MAIL ADDRESS: STREET 1: HERCULES PLAZA STREET 2: RM 8151 NW CITY: WILMINGTON STATE: DE ZIP: 19894-0001 FORMER COMPANY: FORMER CONFORMED NAME: HERCULES POWDER CO DATE OF NAME CHANGE: 19680321 8-K 1 FORM 8-K HERCULES INCORPORATED 1 SECURITIES AND EXCHANGE COMMISSION ---------------------- WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 APRIL 15, 1997 COMMISSION FILE NUMBER 1-496 ---------------------- HERCULES INCORPORATED A DELAWARE CORPORATION I.R.S. EMPLOYER IDENTIFICATION NO.51-0023450 HERCULES PLAZA 1313 NORTH MARKET STREET WILMINGTON, DELAWARE 19894-0001 (302) 594-5000 2 INFORMATION TO BE INCLUED IN THE REPORT ITEMS 1, 3, 4, 5, 6, 7(a), 8 and 9 are not applicable and are omitted from this report. ITEM 2. ACQUISITION/DISPOSITION OF ASSETS Prior to March 31, 1997, Tastemaker U.S. and Tastemaker B.V. were globally engaged, both directly and indirectly through their respective subsidiaries, in the development, manufacture and sale of ingredients and compounds used primarily to provide flavor or taste in food and beverage products (the "Flavor Business"). Tastemaker U.S., a Delaware general partnership, was owned 50% by Fries & Fries Inc., a wholly-owned Delaware subsidiary of Mallinckrodt, Inc. ("F&F"), 40% by Hercules Flavor, Inc. and 10% by Hercules Credit, Inc. (both wholly-owned domestic subsidiaries of Hercules Incorporated). Tastemaker B.V. was owned 49.5% by F&F, 49.5% by Hercules Nederland B.V., a wholly-owned Dutch subsidiary of Hercules Incorporated ("HNBV"), and 1% by Tastemaker U.S. On March 31, 1997 HNBV transferred its 49.5% interest in Tastemaker B.V. to Givaudan-Roure (International) SA, a Swiss corporation ("GRI") in exchange for $76,560,104. Also on March 31, 1997, Mallinckrodt Inc. contributed all of the capital stock of F&F to Givaudan-Roure (United States), Inc., a Delaware corporation ("GRUSI"), in exchange for 88,941.349 shares of non-voting 5.5% Redeemable Preferred Stock of GRUSI. GRUSI is directly or indirectly wholly-owned by Roche Holdings, Inc., a Delaware corporation ("Roche"). Immdediately thereafter, F&F withdrew as a partner in Tastemaker U.S., leaving Hercules Flavor, Inc., and Hercules Credit, Inc., as the remaining partners. Pursuant to the F&F withdrawal, (i) Tastemaker U.S. transferred all of the then operating assets of Tastemaker U.S. (other than certain financial assets which remain with Tastemaker U.S.) to F&F in redemption of F&F's partnership interest and (ii) F&F assumed all of the liabilities of Tastemaker U.S., including then existing debt of approximately $500,000,000. After the F&F withdrawal, Tastemaker U.S. retained financial assets of $526,529,790 (i.e. cash of $26,529,790 and a $500,000,000 New Flana LLC Fixed Rate Note). The Note is payable to Tastemaker U.S. and accrues interest at a fixed annual rate of 6.217 percent payable semiannually. Principal on the Note is due August 16, 2002. After the F&f withdrawal, Tastemaker U.S. remains a Delaware partnership, the interests in which are entirely owned by Hercules Flavor and Hercules Credit. It is expected that the name of Tastemaker U.S. will be changed and its business activities will include financial services, and not the Flavor Business. The value or benefits derived by HNBV is connection with the transfer of its interest in Tastemaker B.V. was determined through arms-length negotiation based upon the value of Tastemaker B.V. on the date of such closing. The - 2 - 3 value or benefits derived by Hercules Flavor, Hercules Credit and Hercules Incorporated in connection with the above mentioned transactions was determined through arms-length negotiation based upon the value of Tastemaker U.S. on the date of closing. Except as described in this report, there does not exist any material relationship between Roche, GRI and/or GRUSI, on the one hand, and Hercules Incorporated or any of its affiliates, any director or officer of Hercules Incorporated, or any associate of any such director or officer, on the other hand. - 3 - 4 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (b) PRO FORMA FINANCIAL INFORMATION Hercules Incorporated has not yet fully determined the financial consequences of the transactions described under Item 2; however, it believes that there will be a gain reported (net of associated costs and expenses) as a result of such transactions. After such determination, the gain will be reported promptly in a filing made under applicable rules and regulations of the Securities Exchange Act of 1934. (c) EXHIBITS:
Number Description 2.1 Agreement dated February 4, 1997 among Mallinckrodt Inc., Hercules Incorporated, Roche Holdings, Inc., and Givaudan-Roure (International) SA 2.2 First Amendment to Agreement dated March 28, 1997 among Mallinckrodt Inc., Hercules Incorporated, Roche Holdings, Inc., and Givaudan-Roure (International) SA 2.3 Purchase and Sale Agreement dated February 4, 1997 among Hercules Incorporated, Hercules Nederland B.V, and Givaudan-Roure (International) SA 2.4 Amended and Restated U.S. Partnership Agreement dated February 4, 1997 among Hercules Credit, Inc., Hercules Flavor, Inc., and Fries & Fries, Inc.
- 4 - 5 Signatures Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereto fully authorized. Hercules Incorporated By /s/ Israel J. Floyd ------------------------------------- Israel J. Floyd, Corporate Secretary and Assistant General Counsel - 5 - EX-2.1 2 AGREEMENT DATED FEBRUARY 4, 1997 1 EXHIBIT 2.1 AGREEMENT AMONG HERCULES INCORPORATED, MALLINCKRODT INC., ROCHE HOLDINGS, INC. AND GIVAUDAN-ROURE (INTERNATIONAL) SA DATED AS OF FEBRUARY 4, 1997 2 TABLE OF CONTENTS Page RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1. DEFINITIONS AND INTERPRETATION. . . . . . . . . . . . . . 4 1.1 Capitalized Terms. . . . . . . . . . . . . . . . . 4 1.1.1 1934 Act . . . . . . . . . . . . . . . . . 5 1.1.2 1995 Financial Statements. . . . . . . . . 5 1.1.3 Accountants. . . . . . . . . . . . . . . . 5 1.1.4 Accountants' Net Determination . . . . . . 5 1.1.5 Accountants' Report. . . . . . . . . . . . 5 1.1.6 Adjusted Aggregate Value . . . . . . . . . 5 1.1.7 Adjustment Time. . . . . . . . . . . . . . 6 1.1.8 Affiliate. . . . . . . . . . . . . . . . . 6 1.1.9 Agreement. . . . . . . . . . . . . . . . . 6 1.1.10 Adjustment Arbitrator. . . . . . . . . . . 6 1.1.11 Benefit Arrangement. . . . . . . . . . . . 6 1.1.12 Business . . . . . . . . . . . . . . . . . 6 1.1.13 Business Personnel . . . . . . . . . . . . 6 1.1.14 Closing. . . . . . . . . . . . . . . . . . 6 1.1.15 Closing Date . . . . . . . . . . . . . . . 6 1.1.16 Closing Deadline . . . . . . . . . . . . . 6 1.1.17 Code . . . . . . . . . . . . . . . . . . . 7 1.1.18 Companies. . . . . . . . . . . . . . . . . 7 1.1.19 Company Tax Return . . . . . . . . . . . . 7 1.1.20 Contribution Agreement . . . . . . . . . . 7 1.1.21 Cost of Arbitration. . . . . . . . . . . . 7 1.1.22 Current Assets . . . . . . . . . . . . . . 7 1.1.23 Current Liabilities. . . . . . . . . . . . 7 1.1.24 D&F Transaction Agreements . . . . . . . . 8 1.1.25 Damages. . . . . . . . . . . . . . . . . . 8 1.1.26 Designated Buyers. . . . . . . . . . . . . 8 1.1.27 Designated Transaction Agreements. . . . . 9 1.1.28 Disclosure Schedule. . . . . . . . . . . . 9 1.1.29 Disputing Party. . . . . . . . . . . . . . 9 1.1.30 Disputing Party's Proposal . . . . . . . . 9 1.1.31 Environment. . . . . . . . . . . . . . . . 9 1.1.32 Environmental Breach . . . . . . . . . . . 9 1.1.33 Environmental Indemnification Threshold. . 9 1.1.34 Environmental Requirements . . . . . . . . 9 1.1.35 ERISA Affiliate. . . . . . . . . . . . . . 10 1.1.36 Estimated Adjusted Aggregate Value . . . . 10 1.1.37 Estimated Long-Term Liabilities Adjustment . . . . . . . . . . . . . . . . 11 1.1.38 Estimated Tastemaker B.V. Value. . . . . . 11 1.1.39 Estimated Working Capital Adjustment . . . 11 1.1.40 F&F. . . . . . . . . . . . . . . . . . . . 11 1.1.41 F&F Transaction Agreement. . . . . . . . . 11 1.1.42 FCPA . . . . . . . . . . . . . . . . . . . 11 1.1.43 Final Net Determination. . . . . . . . . . 12 1.1.44 Financial Statements . . . . . . . . . . . 12 3 1.1.45 Fries Withdrawal . . . . . . . . . . . . . 12 1.1.46 Fries Withdrawal Closing . . . . . . . . . 12 1.1.47 Fries Withdrawal Documents . . . . . . . . 12 1.1.48 GAAP . . . . . . . . . . . . . . . . . . . 12 1.1.49 Governmental Authority . . . . . . . . . . 12 1.1.50 HCI. . . . . . . . . . . . . . . . . . . . 12 1.1.51 HFI. . . . . . . . . . . . . . . . . . . . 12 1.1.52 HNBV . . . . . . . . . . . . . . . . . . . 12 1.1.53 Hazardous Substances . . . . . . . . . . . 13 1.1.54 Hercules Transaction Agreement . . . . . . 14 1.1.55 Indemnification Threshold. . . . . . . . . 14 1.1.56 Indemnified Party. . . . . . . . . . . . . 14 1.1.57 Indemnifying Party . . . . . . . . . . . . 14 1.1.58 Intellectual Property. . . . . . . . . . . 14 1.1.59 Interim Financial Statements . . . . . . . 14 1.1.60 International Plan . . . . . . . . . . . . 14 1.1.61 Licenses . . . . . . . . . . . . . . . . . 14 1.1.62 Long-Term Liabilities. . . . . . . . . . . 14 1.1.63 Long-Term Liabilities Adjustment . . . . . 15 1.1.64 Long-Term Liabilities Baseline . . . . . . 15 1.1.65 Multiemployer Plan . . . . . . . . . . . . 16 1.1.66 Net Working Capital. . . . . . . . . . . . 16 1.1.67 Newco. . . . . . . . . . . . . . . . . . . 16 1.1.68 Newco Preferred Stock. . . . . . . . . . . 16 1.1.69 Owners . . . . . . . . . . . . . . . . . . 16 1.1.70 Owners' Knowledge. . . . . . . . . . . . . 16 1.1.71 Owners' Maximum Liability. . . . . . . . . 16 1.1.72 Partners' Representatives. . . . . . . . . 17 1.1.73 Partnership Agreement. . . . . . . . . . . 17 1.1.74 PBGC . . . . . . . . . . . . . . . . . . . 17 . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.1.75 PBO. . . . . . . . . . . . . . . . . . . . 17 1.1.76 PBO. . . . . . . . . . . . . . . . . . . . 17 1.1.77 Pinnacle . . . . . . . . . . . . . . . . . 17 1.1.78 Plan . . . . . . . . . . . . . . . . . . . 17 1.1.79 Pre-Closing Tax Period . . . . . . . . . . 17 1.1.80 Short Period . . . . . . . . . . . . . . . 17 1.1.81 Specified Officers . . . . . . . . . . . . 17 1.1.82 SPHN . . . . . . . . . . . . . . . . . . . 18 1.1.83 Tastemaker B.V. Current Assets . . . . . . 18 1.1.84 Tastemaker B.V. Current Liabilities. . . . 19 1.1.85 Tastemaker B.V. Long-Term Liabilities. . . 19 1.1.86 Tastemaker B.V. Long-Term Liabilities Adjustment . . . . . . . . . . . . . . . . 19 1.1.87 Tastemaker B.V. Long-Term Liabilities Baseline . . . . . . . . . . . . . . . . . 20 1.1.88 Tastemaker B.V. Subsidiary . . . . . . . . 20 1.1.89 Tastemaker B.V. Working Capital. . . . . . 20 1.1.90 Tastemaker B.V. Working Capital Adjustment . . . . . . . . . . . . . . . . 21 1.1.91 Tastemaker B.V. Working Capital Baseline . . . . . . . . . . . . . . . . . 21 1.1.92 Tastemaker B.V. Value. . . . . . . . . . . 21 1.1.93 Tastemaker Combined and Consolidated Value. . . . . . . . . . . . . . . . . . . 22 4 1.1.94 Tastemaker Debt. . . . . . . . . . . . . . 22 1.1.95 Tastemaker Subsidiaries. . . . . . . . . . 22 1.1.96 Tax. . . . . . . . . . . . . . . . . . . . 22 1.1.97 Tax Annex. . . . . . . . . . . . . . . . . 23 1.1.98 Tax Loss . . . . . . . . . . . . . . . . . 23 1.1.99 TFI. . . . . . . . . . . . . . . . . . . . 23 1.1.100 Transaction Documents. . . . . . . . . . . 23 1.1.101 Transition Team Protocol . . . . . . . . . 23 1.1.102 VUT. . . . . . . . . . . . . . . . . . . . 23 1.1.103 Working Capital Adjustment . . . . . . . . 23 1.1.104 Working Capital Baseline . . . . . . . . . 24 1.2 Accounting Terms . . . . . . . . . . . . . . . . . 24 1.3 Construction . . . . . . . . . . . . . . . . . . . 24 1.4 Captions and Headings. . . . . . . . . . . . . . . 24 1.5 No Party Deemed Drafter. . . . . . . . . . . . . . 24 1.6 Reformation. . . . . . . . . . . . . . . . . . . . 25 1.7 Currency . . . . . . . . . . . . . . . . . . . . . 25 1.8 Materiality. . . . . . . . . . . . . . . . . . . . 25 2. THE DESIGNATED TRANSACTIONS, F&F TRANSACTION, HERCULES TRANSACTION AND MALLINCKRODT TRANSACTION. . . . . . . . . 26 2.1 Designated Transactions. . . . . . . . . . . . . . 26 2.2 F&F Transaction. . . . . . . . . . . . . . . . . . 27 2.3 Hercules Transaction . . . . . . . . . . . . . . . 28 2.4 Mallinckrodt Transaction . . . . . . . . . . . . . 28 2.5 Consideration. . . . . . . . . . . . . . . . . . . 29 2.6 Determination of Adjusted Aggregate Value and Tastemaker B.V. Value. . . . . . . . . . . . . . . 29 2.6.1 Adjusted Aggregate Value . . . . . . . . . 29 2.6.2 Tastemaker B.V. Value. . . . . . . . . . . 34 2.7 Closing Aggregate Value Adjustment . . . . . . . . 36 2.8 Closing. . . . . . . . . . . . . . . . . . . . . . 38 3. REPRESENTATIONS AND WARRANTIES OF THE OWNERS. . . . . . . 39 3.1 Organization, Standing and Power; Authority of Tastemaker for the Designated Transaction Agreements . . . . . . . . . . . . . . . . . . . . 39 3.2 Ownership of Tastemaker B.V., Tastemaker Subsidiaries and Tastemaker B.V. Subsidiary and Pinnacle . . . . . . . . . . . . . . . . . . . . . 40 3.3 Consents and Approvals; No Violation . . . . . . . 43 3.4 Financial Statements . . . . . . . . . . . . . . . 46 3.5 Liabilities. . . . . . . . . . . . . . . . . . . . 46 3.6 Books and Records. . . . . . . . . . . . . . . . . 47 3.7 Accounts Receivable. . . . . . . . . . . . . . . . 47 3.8 Inventory. . . . . . . . . . . . . . . . . . . . . 47 3.9 Absence of Certain Changes or Events . . . . . . . 48 3.10 No Existing Violation, Default, Etc. . . . . . . . 51 3.11 Licenses and Permits . . . . . . . . . . . . . . . 53 3.12 Environmental Matters. . . . . . . . . . . . . . . 53 3.13 Tax Matters. . . . . . . . . . . . . . . . . . . . 57 3.14 Orders, Litigation, Etc. . . . . . . . . . . . . . 58 3.15 Labor Matters. . . . . . . . . . . . . . . . . . . 59 3.16 Contracts. . . . . . . . . . . . . . . . . . . . . 60 3.17 Employee Benefits. . . . . . . . . . . . . . . . . 62 5 3.18 Intellectual Property. . . . . . . . . . . . . . . 69 3.19 Properties . . . . . . . . . . . . . . . . . . . . 72 3.20 Insurance Coverage . . . . . . . . . . . . . . . . 74 3.21 Company Brokers. . . . . . . . . . . . . . . . . . 75 3.22 Withdrawal Consents and Approvals; No Violation. . 75 4. REPRESENTATIONS AND WARRANTIES OF THE INTERESTED PERSONS . . . . . . . . . . . . . . . . . . . . . . . . . 79 4.1 Organization, Standing and Power . . . . . . . . . 79 4.2 Authority. . . . . . . . . . . . . . . . . . . . . 79 4.3 Consents and Approvals; No Violation . . . . . . . 80 4.4 Brokers. . . . . . . . . . . . . . . . . . . . . . 82 4.5 Withdrawal Consents and Approvals; No Violation. . 82 5. COVENANTS OF THE OWNERS . . . . . . . . . . . . . . . . . 85 5.1 Access to Properties and Records . . . . . . . . . 85 5.2 Operations . . . . . . . . . . . . . . . . . . . . 85 5.3 Financial Statements . . . . . . . . . . . . . . . 86 5.4 Fees . . . . . . . . . . . . . . . . . . . . . . . 87 5.5 Non-Solicitation of Employees. . . . . . . . . . . 87 5.6 Confidentiality. . . . . . . . . . . . . . . . . . 88 5.7 Accounts; Safe Deposit Boxes; Powers of Attorney; Officers and Directors . . . . . . . . . 88 5.8 Access . . . . . . . . . . . . . . . . . . . . . . 89 5.9 Resignations . . . . . . . . . . . . . . . . . . . 89 5.10 Tastemaker B.V. Partnership Election . . . . . . . 89 5.11 Third Party Infringement . . . . . . . . . . . . . 90 5.12 Third Party Defaults . . . . . . . . . . . . . . . 90 5.13 Resignations . . . . . . . . . . . . . . . . . . . 90 5.14 Severance and Stay Incentives. . . . . . . . . . . 90 5.15 Tax Waiver Notification. . . . . . . . . . . . . . 91 6. COVENANTS OF THE INTERESTED PERSONS . . . . . . . . . . . 91 6.1 Compliance with Transition Team Protocol . . . . . 91 6.2 Fees . . . . . . . . . . . . . . . . . . . . . . . 91 6.3 Record Retention and Access. . . . . . . . . . . . 92 6.4 Confidentiality. . . . . . . . . . . . . . . . . . 92 6.5 Responsibility for D&F Transaction Agreements. . . 93 6.6 Laidlaw Landfill Site. . . . . . . . . . . . . . . 94 6.7 Designated Transaction Approvals . . . . . . . . . 94 7.1 Satisfaction of Conditions . . . . . . . . . . . . 94 7.2 Governmental Consents. . . . . . . . . . . . . . . 95 7.3 Public Announcements . . . . . . . . . . . . . . . 96 7.4 Further Assurances . . . . . . . . . . . . . . . . 97 7.5 Tax Annex. . . . . . . . . . . . . . . . . . . . . 97 7.6 Tastemaker B.V. Pension. . . . . . . . . . . . . . 97 7.7 Tastemaker Debt. . . . . . . . . . . . . . . . . . 97 8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS: INDEMNITY FOR DAMAGES . . . . . . . . . . . . . . . . . . 99 8.1 Survival . . . . . . . . . . . . . . . . . . . . . 99 8.2 Indemnity by the Interested Persons. . . . . . . . 100 8.3 Indemnity by the Owners. . . . . . . . . . . . . . 101 8.4 Indemnity by Hercules. . . . . . . . . . . . . . . 103 8.5 Indemnity by Mallinckrodt. . . . . . . . . . . . . 103 6 8.6 Limitations on the Owners' Indemnification Obligations. . . . . . . . . . . . . . . . . . . . 104 8.7 Limitations of Remedies. . . . . . . . . . . . . . 108 8.8 Indemnification Procedures . . . . . . . . . . . . 109 8.8.1 Notice of Claims . . . . . . . . . . . . . 109 8.8.2 Failure to Respond to Notice . . . . . . . 110 8.8.3 Notice of Dispute. . . . . . . . . . . . . 111 8.8.4 Third Party Claims . . . . . . . . . . . . 112 8.8.4.1 Participation by Indemnified Party . . . . . . . . . . . . . . . . 113 8.8.4.2 Full Release . . . . . . . . . . 113 8.8.4.3 Refusal to Settle. . . . . . . . 114 8.8.5 Claims Made in Written Notice. . . . . . . 115 8.8.6 Control in Cases of Environmental Breach . . . . . . . . . . . . . . . . . . 115 8.9 Tax Annex is Controlling . . . . . . . . . . . . . 116 8.10 Registration Indemnity . . . . . . . . . . . . . . 117 8.11 Mitigation of Damages. . . . . . . . . . . . . . . 118 8.12 Reliance Upon Agreement. . . . . . . . . . . . . . 118 9. RESOLUTION OF DISPUTES. . . . . . . . . . . . . . . . . . 119 9.1 Conclusive and Exclusive . . . . . . . . . . . . . 119 9.2 Resolution Panel . . . . . . . . . . . . . . . . . 121 9.3 Position Statements. . . . . . . . . . . . . . . . 122 9.4 Negotiations . . . . . . . . . . . . . . . . . . . 123 9.5 Resolution Panel Decision. . . . . . . . . . . . . 123 9.6 Forum and Waivers. . . . . . . . . . . . . . . . . 123 10. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . 124 10.1 Conditions to Obligations of the Interested Persons. . . . . . . . . . . . . . . . . . . . . . 124 10.1.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . 124 10.1.2 Performance of Agreements. . . . . . . . . 125 10.1.3 Officers' Certificate. . . . . . . . . . . 125 10.1.4 Applicable Law; Governmental Approvals; Filings. . . . . . . . . . . . . . . . . . 125 10.1.5 Litigation; Governmental Action. . . . . . 126 10.1.6 Material Change. . . . . . . . . . . . . . 126 10.1.7 Transaction Agreement Conditions . . . . . 126 10.1.8 Works Council Act. . . . . . . . . . . . . 127 10.1.9 Designated Transactions Closing. . . . . . 127 10.1.10 Specified Third Party Consents . . . . . . 127 10.1.11 Withdrawal Approvals; Litigation . . . . . 127 10.2 Conditions to Obligations of the Owners. . . . . . 128 10.2.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . . . . 128 10.2.2 Performance of Agreements. . . . . . . . . 129 10.2.3 Officer's Certificate. . . . . . . . . . . 129 10.2.4 Applicable Law; Governmental Approvals; Filings. . . . . . . . . . . . . . . . . . 129 10.2.5 Litigation; Governmental Action. . . . . . 130 10.2.6 Transaction Agreement Conditions . . . . . 130 10.2.7 Designated Transaction Closing . . . . . . 131 10.2.8 Withdrawal Approval; Litigation. . . . . . 131 7 10.3 Extension of the Closing Date. . . . . . . . . . . 132 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 133 11.1 Termination and Cancellation . . . . . . . . . . . 133 11.2 Effect of Termination. . . . . . . . . . . . . . . 135 11.3 Notices. . . . . . . . . . . . . . . . . . . . . . 135 11.3.1 Hercules Notice Address. . . . . . . . . . 136 11.3.2 Mallinckrodt Notice Address. . . . . . . . 136 11.3.3 Roche Notice Address . . . . . . . . . . . 137 11.3.4 GRI Notice Address . . . . . . . . . . . . 137 11.4 Assignment . . . . . . . . . . . . . . . . . . . . 138 11.5 Waiver . . . . . . . . . . . . . . . . . . . . . . 138 11.6 Amendments . . . . . . . . . . . . . . . . . . . . 139 11.7 Limitations on Rights of Third Parties . . . . . . 139 11.8 Counterparts . . . . . . . . . . . . . . . . . . . 139 11.9 Governing Law. . . . . . . . . . . . . . . . . . . 139 11.10 Entire Agreement . . . . . . . . . . . . . . . . . 139 8 Table of Appendices APPENDIX A - Tastemaker Subsidiaries and Tastemaker B.V. Subsidiary APPENDIX B - Form of Designated Transaction Agreements APPENDIX C - Disclosure Schedule APPENDIX D - Tax Annex APPENDIX E - Transition Team Protocol APPENDIX F - Foreign Approvals APPENDIX G - Withdrawal Approvals APPENDIX H - Confidentiality Letter APPENDIX I - Purchase Price for Assets under Designated Transaction Agreements APPENDIX J - Required Consents APPENDIX K - Governmental Approvals APPENDIX L - Plans and Plan Assets THE TABLE OF APPENDICES SET FORTH ABOVE BRIEFLY IDENTIFIES THE CONTENTS OF ALL APPENDICES TO THE AGREEMENT DATED AS OF FEBRUARY 4, 1997 AMONG MALLINCKRODT INC., HERCULES INCORPORATED, ROCHE HOLDINGS, INC. AND GIVAUDAN-ROURE (INTERNATIONAL) SA (THE "AGREEMENT"). WITH THE EXCEPTION OF APPENDIX D WHICH IS INCLUDED WITH THIS FILING, ALL OF THE APPENDICES LISTED IN THE TABLE OF APPENDICES ARE OMITTED, AND HERCULES INCORPORATED AGREES TO FURNISH SUPPLEMENTALLY A COPY OF ANY OMITTED APPENDIX TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST. 9 AGREEMENT This Agreement (the "AGREEMENT"), dated as of February 4, 1997, is made and entered into by and among HERCULES INCORPORATED, a Delaware corporation ("HERCULES"), MALLINCKRODT INC., a New York corporation ("MALLINCKRODT"), GIVAUDAN-ROURE (INTERNATIONAL) SA, a Swiss corporation ("GRI"), and ROCHE HOLDINGS, INC., a Delaware corporation ("ROCHE" and, together with GRI, the "INTERESTED PERSONS" and each individually an "INTERESTED PERSON"). RECITALS A. Tastemaker, a general partnership organized and existing under the laws of the State of Delaware ("TASTEMAKER"), and Tastemaker B.V., a limited liability entity organized and existing under the laws of The Netherlands ("TASTEMAKER B.V."), together are engaged globally, both directly and indirectly through their respective subsidiaries, in the development, manufacture and sale of ingredients and compounds used primarily to provide flavor or taste in food and beverage products (the "BUSINESS"). B. Tastemaker is owned forty percent (40%) by Hercules Flavor, Inc., a Delaware corporation and wholly owned subsidiary of Hercules ("HFI"), ten percent (10%) by Hercules Credit, Inc., a Delaware corporation and wholly owned subsidiary of Hercules ("HCI"), and fifty percent (50%) by Fries & Fries, Inc., a Delaware corporation and wholly owned subsidiary of Mallinckrodt ("F&F"). C. Tastemaker B.V. is owned one percent (1%) by Tastemaker, forty-nine and one-half percent (49.5%) by F&F and forty-nine and one-half percent (49.5%) by Hercules Nederland B.V., a limited liability entity organized and existing under the laws of The Netherlands and wholly owned subsidiary of Hercules ("HNBV"). D. Tastemaker Finance, Inc. ("TFI"), a Delaware corporation, and each other Tastemaker Subsidiary listed on APPENDIX A are, except as otherwise set forth in such Appendix, wholly owned, directly or indirectly, by Tastemaker. Each Tastemaker B.V. Subsidiary listed on APPENDIX A is, except as otherwise set forth in such Appendix, wholly owned by Tastemaker B.V. E. Roche or one of its subsidiaries intends to organize Givaudan-Roure (United States) Inc., a Delaware wholly owned subsidiary ("NEWCO"), which will be, prior to the consummation of the transactions contemplated by the Contribution Agreement (as hereinafter defined), capitalized with 100% of the issued and outstanding common stock of Givaudan-Roure Corporation, Inc., a New Jersey corporation and a wholly owned subsidiary of Roche. F. GRI or certain Affiliates of Roche and GRI, as the case may be, (GRI, together with such Affiliates, the "DESIGNATED BUYERS") and Tastemaker intend to enter into a series of Purchase and Sale Agreements in substantially the form of APPENDIX B attached hereto (the "DESIGNATED TRANSACTION AGREEMENTS"), 10 subject and pursuant to which and prior to the consummation of the transactions contemplated by the F&F Transaction Agreement (as hereinafter defined), the Hercules Transaction Agreement (as hereinafter defined) and the Contribution Agreement (as hereinafter defined), Tastemaker shall transfer to the Designated Buyers, and the Designated Buyers shall acquire (i) certain of Tastemaker's foreign subsidiaries (specified in APPENDIX I attached hereto), in exchange for the aggregate payment by the Designated Buyers of cash in the amount specified, along with the method to be used to calculate the individual payments making up such aggregate payment, and (ii) TFI and Tastemaker's one percent (1%) interest in Tastemaker B.V. for the amounts specified next to their respective names, all as set forth in APPENDIX I attached hereto. G. Concurrently with the execution of this Agreement and the Hercules Transaction Agreement (as hereinafter defined), F&F and GRI have entered into a Purchase and Sale Agreement dated as of the date hereof (the "F&F TRANSACTION AGREEMENT"), subject and pursuant to which and subsequent to the consummation of the transactions contemplated by the Designated Transaction Agreements, F&F has agreed to transfer to GRI, and GRI has agreed to acquire, F&F's forty-nine and one-half percent (49.5%) interest in Tastemaker B.V. in exchange for the payment by GRI to F&F of cash in the amount specified in the F&F Transaction Agreement. H. Concurrently with the execution of this Agreement and the F&F Transaction Agreement, the Interested Persons, Hercules and HNBV have entered into a PURCHASE AND SALE AGREEMENT dated as of the date hereof (the "HERCULES TRANSACTION AGREEMENT"), subject and pursuant to which and subject and pursuant to the terms and conditions of this Agreement, subsequent to the consummation of the transactions contemplated by the Designated Transaction Agreements, Hercules and HNBV have agreed that HNBV shall transfer to GRI, and Roche and GRI have agreed that GRI shall acquire, HNBV's interest in Tastemaker B.V. through the acquisition by GRI of HNBV's forty-nine and one-half percent (49.5%) interest in Tastemaker B.V. for cash in the amount specified in the Hercules Transaction Agreement. I. Subsequent to the consummation of the transactions contemplated by the Designated Transaction Agreements, the F&F Transaction Agreement and the Hercules Transaction Agreement, Mallinckrodt desires to contribute to Newco Mallinckrodt's interest in F&F in a share contribution which Mallinckrodt and Roche intend will qualify as a tax-free contribution under Section 351 of the Code (as hereinafter defined), subject and pursuant to the terms and conditions of this Agreement and the Contribution Agreement dated as of the date hereof among Mallinckrodt, Newco and the Interested Persons (the "CONTRIBUTION AGREEMENT") which shall be entered into concurrently herewith. NOW, THEREFORE, in consideration of the premises and of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows: 1. DEFINITIONS AND INTERPRETATION 1.1 Capitalized Terms. The following capitalized terms, 11 when used in this Agreement and not otherwise defined, shall have the following indicated meanings: 1.1.1 1934 Act shall mean the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 1.1.2 1995 Financial Statements shall mean the December 31, 1995 audited combined consolidated financial statements of Tastemaker and Tastemaker B.V. 1.1.3 Accountants shall have the meaning ascribed to such term in Section 2.6.1 of this Agreement. 1.1.4 Accountants' Net Determination shall have the meaning ascribed to such term in Section 2.6.1 hereof. 1.1.5 Accountants' Report shall have the meaning ascribed to such term in Section 2.6.1 of this Agreement. 1.1.6 Adjusted Aggregate Value shall mean an amount equal to the Tastemaker Combined and Consolidated Value, less the PBO Adjustment, and (A) either (i) increased by the Working Capital Adjustment, if the Net Working Capital as of the Adjustment Time exceeds the Working Capital Baseline or (ii) decreased by the Working Capital Adjustment, if the Working Capital Baseline exceeds the Net Working Capital as of the Adjustment Time, and (B) either (i) decreased by the Long-Term Liabilities Adjustment if the Long-Term Liabilities as of the Adjustment Time exceed the Long-Term Liabilities Baseline, or (ii) increased by the Long-Term Liabilities Adjustment if the Long-Term Liabilities Baseline exceeds the Long-Term Liabilities as of the Adjustment Time. 1.1.7 Adjustment Time shall mean the close of business on the business day immediately preceding the Closing Date. 1.1.8 Affiliate shall mean, with respect to any entity, an entity controlling, controlled by or under common control with such entity, with control being defined as the power to direct the management of an entity through direct or indirect ownership. 1.1.9 Agreement shall mean this Agreement, the Disclosure Schedule and all schedules, annexes, exhibits and appendices hereto. 1.1.10 Adjustment Arbitrator shall have the meaning ascribed to such term in Section 2.6.1 of this Agreement. 1.1.11 Benefit Arrangement shall have the meaning ascribed to such term in Section 3.17 of this Agreement. 1.1.12 Business shall have the meaning ascribed to 12 such term in Recital A above. 1.1.13 Business Personnel shall have the meaning ascribed to such term in Section 3.15 of this Agreement. 1.1.14 Closing shall have the meaning ascribed to such term in Section 2.8 hereof. 1.1.15 Closing Date shall mean the date upon which the transactions contemplated by the Transaction Documents and the D&F Transaction Agreements are consummated. 1.1.16 Closing Deadline shall mean July 31, 1997; PROVIDED, HOWEVER that if the condition set forth in Section 10.1.4 or Section 10.2.4 is not satisfied or, to the extent permitted by law, waived in writing on or before July 31, 1997, the Closing Deadline shall be August 31, 1997. 1.1.17 Code shall mean the Internal Revenue Code of 1986, as amended. 1.1.18 Companies shall mean the collective reference to Tastemaker, Tastemaker B.V., the Tastemaker Subsidiaries and the Tastemaker B.V. Subsidiary, and "COMPANY" shall mean any one of the Companies. 1.1.19 Company Tax Return shall have the meaning ascribed to such term in the Tax Annex. 1.1.20 Contribution Agreement shall have the meaning ascribed to such term in Recital I above. 1.1.21 Cost of Arbitration shall have the meaning ascribed to such term in Section 2.6.1 hereof. 1.1.22 Current Assets shall mean, as of any time, all items, excluding deferred taxes and the current portion, if any, of the Investment Assets (as defined in the Partnership Agreement), which would be classified as a current asset under the heading "CURRENT ASSETS" on a combined consolidated balance sheet of Tastemaker and Tastemaker B.V. determined and prepared in accordance with GAAP applied on a basis consistent with the practices and methodologies used in preparing the December 31, 1995 audited combined consolidated balance sheet of Tastemaker and Tastemaker B.V. 1.1.23 Current Liabilities shall mean, as of any time, all items, excluding deferred taxes, the Tastemaker Debt and any Tax that is the liability or obligation of Tastemaker, which would be classified as a current liability under the heading "CURRENT LIABILITIES" on a combined consolidated balance sheet of Tastemaker and Tastemaker B.V. determined and prepared in accordance with GAAP applied on a 13 basis consistent with the practices and methodologies used in preparing the December 31, 1995 audited combined consolidated balance sheet of Tastemaker and Tastemaker B.V.; provided, that when determining whether any Tax is included as a Current Liability for purposes of calculating the Adjusted Aggregate Value, the principles of Treasury Regulations Section 1.1502-76(b), applied in the manner set forth in the Tax Annex, shall govern. 1.1.24 D&F Transaction Agreements shall mean the collective reference to the F&F Transaction Agreement and the Designated Transaction Agreements. 1.1.25 Damages shall mean any claim, cost, loss, liability, fine, penalty, interest, payment, expense and/or damage (including reasonable attorneys' and accountants' fees and expenses) resulting from or arising out of any fact, event or circumstance with respect to which a party to this Agreement is obligated to provide indemnification pursuant to Article 8 hereof. 1.1.26 Designated Buyers shall have the meaning ascribed to such term in Recital F of this Agreement. 1.1.27 Designated Transaction Agreements shall have the meaning ascribed to such term in Recital F of this Agreement. 1.1.28 Disclosure Schedule shall mean the Disclosure Schedule dated as of the date hereof, a copy of which Disclosure Schedule is attached hereto as APPENDIX C. 1.1.29 Disputing Party shall have the meaning ascribed to each term in Section 2.6 of this Agreement. 1.1.30 Disputing Party's Proposal shall have the meaning ascribed to such term in Section 2.6 of this Agreement. 1.1.31 Environment shall mean the ocean, natural resources (including flora and fauna), soil, surface water, ground water, any present or potential drinking water supply, land surface, subsurface strata or the ambient air. 1.1.32 Environmental Breach shall have the meaning ascribed to such term in Section 8.6(b) of this Agreement. 1.1.33 Environmental Indemnification Threshold shall have the meaning ascribed to such term in Section 8.6(b) of this Agreement. 1.1.34 Environmental Requirements shall mean all federal, state, local and foreign laws, rules, regulations, orders, decrees, judgments, permits and licenses in effect on the Closing Date, relating primarily to health, safety or 14 the Environment or the generation, handling, disposal, transportation, release or threatened release of Hazardous Substances, including those set forth in or promulgated pursuant to the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., as amended ("FWPCA"), the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., as amended ("SDWA"), the Clean Air Act, 42 U.S.C. Section 7401 et seq., as amended ("CAA"), the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., as amended ("RCRA"), the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., as amended ("TSCA"), the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., as amended ("OSHA"), the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, as amended ("CERCLA"), the Emergency Planning and Community Right-To-Know Act, 42 U.S.C. Section 11001 ("EPCRA"), and the substantive equivalent of the foregoing in any state, local or foreign jurisdiction. 1.1.35 ERISA Affiliate shall have the meaning ascribed to such term in Section 3.17 of this Agreement. 1.1.36 Estimated Adjusted Aggregate Value shall mean an amount equal to the Tastemaker Combined and Consolidated Value, less the PBO Adjustment, and (A) either (i) increased by the Estimated Working Capital Adjustment, if the Net Working Capital as of the Adjustment Time as estimated by the Owners exceeds the Working Capital Baseline, or (ii) decreased by the Estimated Working Capital Adjustment, if the Working Capital Baseline exceeds the Net Working Capital as of the Adjustment Time as estimated by the Owners, and (B) either (i) decreased by the Estimated Long-Term Liabilities Adjustment if the Long-Term Liabilities as of the Adjustment Time as estimated by the Owners exceed the Long-Term Liabilities Baseline, or (ii) increased by the Estimated Long-Term Liabilities Adjustment if the Long-Term Liabilities Baseline exceeds the Long-Term Liabilities as of the Adjustment Time as estimated by the Owners. 1.1.37 Estimated Long-Term Liabilities Adjustment shall mean the Long-Term Liabilities Adjustment determined based upon the Owners' estimate of the balance of Long-Term Liabilities as of the Adjustment Time and delivered to each of the Interested Persons by the Owners pursuant to Section 2.6 below. 1.1.38 Estimated Tastemaker B.V. Value shall mean the Owners' estimate of the Tastemaker B.V. Value delivered to the Interested Persons pursuant to Section 2.6.2 hereof. 1.1.39 Estimated Working Capital Adjustment shall mean the Working Capital Adjustment determined based upon the Owners' estimate of the balances of Current Assets and Current Liabilities as of the Adjustment Time and delivered to each of the Interested Persons by the Owners pursuant to 15 Section 2.6 below. 1.1.40 F&F shall have the meaning ascribed to such term in Recital B above. 1.1.41 F&F Transaction Agreement shall have the meaning ascribed to such term in Recital G above. 1.1.42 FCPA shall have the meaning ascribed to such term in Section 3.10 of this Agreement. 1.1.43 Final Net Determination shall have the meaning ascribed to such term in Section 2.6.1 hereof. 1.1.44 Financial Statements shall have the meaning ascribed to such term in Section 3.5 of this Agreement. 1.1.45 Fries Withdrawal shall have the meaning ascribed to the term "FRIES WITHDRAWAL" in the Partnership Agreement. 1.1.46 Fries Withdrawal Closing shall have the meaning ascribed to the term "WITHDRAWAL CLOSING" in the Partnership Agreement. 1.1.47 Fries Withdrawal Documents shall have the meaning ascribed to the term "FRIES WITHDRAWAL DOCUMENTS" in the Partnership Agreement. 1.1.48 GAAP shall mean generally accepted accounting principles as in effect in the United States of America at the time of the preparation of the financial statements with respect to which such term is used. 1.1.49 Governmental Authority shall mean any domestic (federal, state or local) or foreign government or governmental agency, department, commission, authority, court, tribunal or adjudicative body. 1.1.50 HCI shall have the meaning ascribed to such term in Recital B above. 1.1.51 HFI shall have the meaning ascribed to such term in Recital B above. 1.1.52 HNBV shall have the meaning ascribed to such term in Recital C above. 1.1.53 Hazardous Substances shall mean any materials defined as pollutants, contaminants, or hazardous or toxic materials, substances or waste in any way by, and only to the extent regulated by, any Environmental Requirements as of the Closing Date, including without limitation: (i) any "HAZARDOUS SUBSTANCE" or "POLLUTANT OR CONTAMINANT," as defined in Sections 101(14), (33) of CERCLA or the 16 regulations designated pursuant to Section 102 of CERCLA, 42 U.S.C. Section 9602 and found at 40 C.F.R. Part 302, and as regulated by CERCLA, and any element, compound, mixture, solution, or substance designated pursuant to Section 102 of CERCLA and as regulated by CERCLA, (ii) any substance designated pursuant to Section 311(b)(2)(A) of FWPCA and as regulated by FWPCA, (iii) any hazardous waste having the characteristics identified under or listed pursuant to Section 3001 of RCRA, 42 U.S.C. Sections 6901, 6921, (iv) any substance containing petroleum, as defined in Section 9001(8) of RCRA, 42 U.S.C. Section 6991(8) or 40 C.F.R. Part 280, its derivatives, byproducts and hydrocarbons and as regulated by RCRA, (v) any toxic pollutant listed under Section 307(a) of the FWPCA, 33 U.S.C. Section 1317(a) and as regulated by FWPCA, (vi) any hazardous air pollutant listed under Section 112 of the Clean Air Act, 42 U.S.C. Sections 7401, 7412, as amended and as regulated by the Clean Air Act, (vii) any imminently hazardous chemical substance or mixture with respect to which action has been taken pursuant to Section 7 of TCSA, 15 U.S.C. Sections 2601, 2606, as amended and as regulated by TSCA, or (viii) any other hazardous or toxic materials, contaminants, substances or wastes regulated by applicable Environmental Requirements. 1.1.54 Hercules Transaction Agreement shall have the meaning ascribed to such term in Recital H above. 1.1.55 Indemnification Threshold shall mean an amount equal to one percent (1%) of the Tastemaker Combined and Consolidated Value. 1.1.56 Indemnified Party shall have the meaning ascribed to such term in Section 8.8 of this Agreement. 1.1.57 Indemnifying Party shall have the meaning ascribed to such term in Section 8.8 of this Agreement. 1.1.58 Intellectual Property shall have the meaning ascribed to such term in Section 3.18 of this Agreement. 1.1.59 Interim Financial Statements shall have the meaning ascribed to such term in Section 3.4 of this Agreement. 1.1.60 International Plan shall have the meaning ascribed to such term in Section 3.17 of this Agreement. 1.1.61 Licenses shall have the meaning ascribed to such term in Section 3.11 of this Agreement. 1.1.62 Long-Term Liabilities shall mean, at any time, the liabilities of the Companies (other than Current Liabilities, the long-term component of pension liabilities, deferred taxes, the Tastemaker Debt and any Tax that is a 17 liability or obligation of Tastemaker) which would be classified as a liability under the heading "TOTAL LIABILITIES" on a combined consolidated balance sheet of Tastemaker and Tastemaker B.V. determined and prepared in accordance with GAAP applied on a basis consistent with the practices and methodologies used in preparing the December 31, 1995 audited combined consolidated balance sheet of Tastemaker and Tastemaker B.V. 1.1.63 Long-Term Liabilities Adjustment shall mean, at any time, an amount equal to either (i) if the Long-Term Liabilities at such time exceed the Long-Term Liabilities Baseline, the amount by which the Long-Term Liabilities at such time exceed the Long-Term Liabilities Baseline or (ii) if the Long-Term Liabilities Baseline exceeds the Long-Term Liabilities at such time, the amount by which the Long-Term Liabilities Baseline exceeds the Long-Term Liabilities at such time; provided, however, that if the Long-Term Liabilities at such time equal the Long-Term Liabilities Baseline, the Long-Term Liabilities Adjustment shall be zero. 1.1.64 Long-Term Liabilities Baseline shall mean the total liabilities of the Companies (other than Current Liabilities, the long-term component of pension liabilities, deferred taxes, the Tastemaker Debt and any Tax that is the liability or obligation of Tastemaker) which were classified as a liability under the heading "TOTAL LIABILITIES" on the June 28, 1996 unaudited combined consolidated balance sheet of Tastemaker and Tastemaker B.V. and their respective subsidiaries, which was an amount equal to Thirty Eight Million Four Hundred Fifty Thousand Twenty-Four Dollars ($38,450,024.00) less any Tax on such balance sheet that is the liability or obligation of Tastemaker. 1.1.65 Multiemployer Plan shall have the meaning ascribed to such term in Section 3.17 of this Agreement. 1.1.66 Net Working Capital shall mean, at any time, an amount equal to the difference between (i) the amount of Current Assets at such time, and (ii) the amount of Current Liabilities at such time. 1.1.67 Newco shall have the meaning ascribed to such term in Recital E above. 1.1.68 Newco Preferred Stock shall mean the preferred shares, $1,000 stated value per share, of Newco with the rights, powers, preferences and other terms as set forth in APPENDIX A of the Contribution Agreement. 1.1.69 Owners shall mean the collective reference to Hercules and Mallinckrodt, and "OWNER" shall mean either of Hercules or Mallinckrodt, as the context requires. 1.1.70 Owners' Knowledge shall mean the actual 18 knowledge of the Specified Officers, and all facts which a particular Specified Officer reasonably should have known in light of such Specified Officer's actual responsibilities and duties at the Companies. 1.1.71 Owners' Maximum Liability shall mean an amount equal to twenty percent (20%) of the Tastemaker Combined and Consolidated Value. 1.1.72 Partners' Representatives shall mean R.K. Elliot, R.J.A. Fraser, M.G. Nichols and T.D. Meier. 1.1.73 Partnership Agreement shall mean the Amended and Restated U.S. Partnership Agreement dated February 4, 1997 among F&F, HFI and HCI and relating to Tastemaker. 1.1.74 PBGC shall have the meaning ascribed to such term in Section 3.17 of this Agreement. 1.1.75 PBO Adjustment shall have the meaning ascribed to such term in Section 2.7 of this Agreement. 1.1.76 PBO Plan shall have the meaning ascribed to such term in Section 2.7 of this Agreement. 1.1.77 Pinnacle shall have the meaning ascribed to such term in Section 3.1 of this Agreement. 1.1.78 Plan shall have the meaning ascribed to such term in Section 3.17 of this Agreement. 1.1.79 Pre-Closing Tax Period shall have the meaning ascribed to such term in the Tax Annex. 1.1.80 Short Period shall have the meaning ascribed to such term in the Tax Annex. 1.1.81 Specified Officers shall mean Michael E. Davis (President and Chief Executive Officer), Leslie L. Blau (Vice President and General Manager, Asia Pacific), Anthony J. Dennis, Ph.D. (Vice President, Research and Development), Karen W. Duros (Vice President, General Counsel and Secretary), John P. Murta (Vice President and Chief Financial Officer), Tadanao Naganuma (General Manager, Japan), Robert C. Pellegrino (Vice President and General Manager, Americas), Edward A. Steiger (Vice President, Human Resources), R. Stephen Sumption (Vice President and General Manager, Consolidated Flavor Systems), Michael A. Taylor (Vice President and General Manager, Citrus Specialties), Pieter van de Watering (Vice President and General Manager, Europe), R.K. Elliot (Tastemaker Partners' Representative), R.J.A. Fraser (Tastemaker Partners' Representative), M.G. Nichols (Tastemaker Partners' Representative), T.D. Meier (Tastemaker Partners' Representative), Angel Heras Elvira 19 (Managing Director, Tastemaker S.A.), Steven G. Haussler (Treasurer, Tastemaker Canada, Inc., Tastemaker, Inc. and Cocoa Trading and Transport Company, and Assistant Treasurer, Tastemaker Trading Sales Corporation), Mauricio Graber (General Manager, Tastemaker S.A. de C.V.), John R. Sheahan (Director, Tastemaker Holdings Limited and Tastemaker Limited (U.K.)), Phillip F. Dressel (President and Chairman of the Board, Tastemaker, Inc. and Cocoa Trading and Transport Company), Jeffrey M. Kemp (Assistant Treasurer, Tastemaker Trading Sales Corporation), Daniel R. Larsen (Assistant Treasurer, Tastemaker Trading Sales Corporation), and Lewis L. Croft (Director, Tastemaker Pty. Ltd. and Tastemaker Limited (New Zealand)). 1.1.82 SPHN shall have the meaning ascribed to such term in Section 7.6 hereof. 1.1.83 Tastemaker B.V. Current Assets shall mean, as of any time, all items, excluding deferred taxes, which would be classified as a current asset under the heading "CURRENT ASSETS" on a consolidated balance sheet of Tastemaker B.V. determined and prepared in accordance with the customary accounting practices, procedures and policies of Tastemaker B.V. used in connection with its regularly prepared internal financial statements. 1.1.84 Tastemaker B.V. Current Liabilities shall mean, as of any time, all items, excluding deferred taxes, which would be classified as a current liability under the heading "CURRENT LIABILITIES" on a consolidated balance sheet of Tastemaker B.V. determined and prepared in accordance with the customary accounting practices, procedures and policies of Tastemaker B.V. used in connection with its regularly prepared internal financial statements. 1.1.85 Tastemaker B.V. Long-Term Liabilities shall mean, at any time, the liabilities of Tastemaker B.V. (other than the Tastemaker B.V. Current Liabilities, the long-term component of pension liabilities and deferred taxes) which would be classified as a liability under the heading "TOTAL LIABILITIES" on a consolidated balance sheet of Tastemaker B.V. determined and prepared in accordance with the customary accounting practices, procedures and policies of Tastemaker B.V. used in connection with its regularly prepared internal financial statements. 1.1.86 Tastemaker B.V. Long-Term Liabilities Adjustment shall mean, at any time, an amount equal to either (i) if the Tastemaker B.V. Long-Term Liabilities at such time exceed the Tastemaker B.V. Long-Term Liabilities Baseline, the amount by which the Tastemaker B.V. Long-Term Liabilities at such time exceeds the Tastemaker B.V. Long-Term Liabilities Baseline or (ii) if the Tastemaker B.V. Long-Term Liabilities Baseline exceeds the Tastemaker B.V. Long-Term Liabilities at such time, the amount by which the Tastemaker B.V. Long-Term Liabilities Baseline exceeds the Tastemaker B.V. 20 Long-Term Liabilities at such time; provided, however, that if the Tastemaker B.V. Long-Term Liabilities at such time equal the Tastemaker B.V. Long-Term Liabilities Baseline, the Tastemaker B.V. Long-Term Liabilities Adjustment shall be zero. 1.1.87 Tastemaker B.V. Long-Term Liabilities Baseline shall mean the total liabilities of Tastemaker B.V. (other than the Tastemaker B.V. Current Liabilities, the long term component of pension liabilities and deferred taxes) which were be classified as a liability under the heading "TOTAL LIABILITIES" on the June 28, 1996 unaudited consolidated balance sheet of Tastemaker B.V., which was an amount equal to Five Million Eight Hundred Sixty Thousand Dollars ($5,860,000.00). 1.1.88 Tastemaker B.V. Subsidiary shall mean Tastemaker S.A., a limited liability company organized and existing under the laws of Spain. 1.1.89 Tastemaker B.V. Working Capital shall mean, at any time, an amount equal to the difference between (i) the amount of Tastemaker B.V. Current Assets at such time, and (ii) the amount of Tastemaker B.V. Current Liabilities at such time. 1.1.90 Tastemaker B.V. Working Capital Adjustment shall mean, at any time, an amount equal to either (i) if the Tastemaker B.V. Working Capital at such time exceeds the Tastemaker B.V. Working Capital Baseline, the amount by which the Tastemaker B.V. Working Capital at such time exceeds the Tastemaker B.V. Working Capital Baseline, or (ii) if the Tastemaker B.V. Working Capital Baseline exceeds the Tastemaker B.V. Working Capital at such time, the amount by which the Tastemaker B.V. Working Capital Baseline exceeds the Tastemaker B.V. Working Capital at such time; provided, however, that if the Tastemaker B.V. Working Capital at such time equals the Tastemaker B.V. Working Capital Baseline the Tastemaker B.V. Working Capital Adjustment shall be zero. 1.1.91 Tastemaker B.V. Working Capital Baseline shall mean the Tastemaker B.V. Working Capital on the June 28, 1996 unaudited consolidated balance sheet of Tastemaker B.V., which was an amount equal to Nine Million Two Hundred Twenty-One Thousand One Hundred Ninety-Two Dollars ($9,221,192.00). 1.1.92 Tastemaker B.V. Value shall mean an amount equal to $150,000,000 and (A) either (i) increased by the Tastemaker B.V. Working Capital Adjustment, if the Tastemaker B.V. Working Capital as of the Adjustment Time 21 exceeds the Tastemaker B.V. Working Capital Baseline or (ii) decreased by the Tastemaker B.V. Working Capital Adjustment, if the Tastemaker B.V. Working Capital Baseline exceeds the Tastemaker B.V. Working Capital as of the Adjustment Time, and (B) either (i) decreased by the Tastemaker B.V. Long- Term Liabilities Adjustment if the Tastemaker B.V. Long-Term Liabilities as of the Adjustment Time exceed the Tastemaker B.V. Long-Term Liabilities Baseline, or (ii) increased by the Tastemaker B.V. Long-Term Liabilities Adjustment if the Tastemaker B.V. Long-Term Liabilities Baseline exceeds the Tastemaker B.V. Long-Term Liabilities as of the Adjustment Time. 1.1.93 Tastemaker Combined and Consolidated Value shall mean an amount equal to One Billion One Hundred Ninety Million Dollars ($1,190,000,000.00). 1.1.94 Tastemaker Debt shall mean the amount of principal and accrued but unpaid interest, fees and other costs outstanding under the $600,000,000 Credit Agreement dated January 24, 1997. 1.1.95 Tastemaker Subsidiaries shall mean the collective reference to those entities set forth on APPENDIX A hereto, other than Tastemaker B.V. and the Tastemaker B.V. Subsidiary, and "TASTEMAKER SUBSIDIARY" shall mean any one of the Tastemaker Subsidiaries. 1.1.96 Tax shall have the meaning ascribed to such term in the Tax Annex. 1.1.97 Tax Annex shall mean and refer to those covenants, procedures, controls and other provisions set forth on APPENDIX D attached hereto. 1.1.98 Tax Loss shall have the meaning ascribed to such term in the Tax Annex. 1.1.99 TFI shall have the meaning ascribed to such term in Recital D of this Agreement. 1.1.100 Transaction Documents shall mean the collective reference to this Agreement, the Hercules Transaction Agreement and the Contribution Agreement. 1.1.101 Transition Team Protocol shall mean and refer to those provisions set forth in APPENDIX E attached hereto, as referred to in Sections 5.1, 5.3, 5.8 and 6.1 below. 1.1.102 VUT shall have the meaning ascribed to such term in Section 2.7 of this Agreement. 1.1.103 Working Capital Adjustment shall mean, at any time, an amount equal to either (i) if the Net Working Capital at such time exceeds the Working Capital Baseline, 22 the amount by which the Net Working Capital at such time exceeds the Working Capital Baseline, or (ii) if the Working Capital Baseline exceeds the Net Working Capital at such time, the amount by which the Working Capital Baseline exceeds the Net Working Capital at such time; provided, however, that if the Net Working Capital at such time equals the Working Capital Baseline the Working Capital Adjustment shall be zero. 1.1.104 Working Capital Baseline shall mean the Net Working Capital of the Companies on the June 28, 1996 unaudited combined consolidated balance sheet of Tastemaker and Tastemaker B.V., which was an amount equal to Seventy-Seven Million Seven Hundred Six Thousand Nine Hundred Thirteen Dollars ($77,706,913.00) less any Tax on such balance sheet that is a liability or obligation of Tastemaker. 1.2 Accounting Terms. Accounting terms used in this Agreement and not otherwise defined shall have the meanings ascribed thereto under GAAP. 1.3 Construction. Unless the context clearly indicates to the contrary, words singular or plural in number shall be deemed to include the other and pronouns having a neuter, masculine or feminine gender shall be deemed to include and refer to any and all genders. Whenever the terms "herein," "hereunder," or words of like import are used in this Agreement, the intended reference is to the entire Agreement and not to the clause, sentence, section or subsection in which such word appears. 1.4 Captions and Headings. The captions and headings in this Agreement are inserted for convenience of reference only and shall not be considered a part of, or affect the construction or interpretation of, any provision of this Agreement. 1.5 No Party Deemed Drafter. This Agreement represents the culmination of extensive and arms length negotiations among the parties. No party shall be deemed the drafter of this Agreement, and this Agreement shall not be construed for or against any party by reason of a particular party being deemed the drafter. 1.6 Reformation. Should any term or condition of this Agreement be determined by a court of competent jurisdiction to be unenforceable for any reason, including, without limitation, violation of statute or public policy, such provision shall, if possible, be reformed by the parties hereto or, if the parties cannot agree, by the appropriate court of competent jurisdiction to comply with applicable legal requirements in a manner that is as close in its intent and effect to the original provision as possible or, if such reformation cannot be accomplished, shall be stricken without affecting the validity of any other term or condition of this Agreement. 1.7 Currency. All references in this Agreement to "DOLLARS" 23 or "$" shall be deemed to mean and refer to United States dollars. 1.8 Materiality. Whenever the terms "material" or "material adverse effect" are used in Articles 3 and 5 and Section 10.1 of this Agreement, such terms shall be interpreted and construed as meaning "material" to the business, assets, condition (financial or otherwise) or results of operations of the Companies, taken as a whole, or referencing a "material adverse effect" on the business, assets, condition (financial or otherwise) or results of operations of the Companies, taken as a whole; provided, however, that any such effect caused by or resulting from (i) any change in generally accepted accounting principles, (ii) the announcement or pendency of the transactions contemplated by the Transaction Documents or the D&F Transaction Agreements, (iii) fluctuations in the relative values of domestic and/or foreign currencies, or (iv) any change in economic conditions generally shall not be considered when determining whether a material adverse effect has occurred. Whenever the terms "material" or "material adverse effect" are used in Articles 4 and 6 and Section 10.2 of this Agreement, such terms shall be interpreted and construed as meaning "material" to the business, assets, condition (financial or otherwise) or as a result of operations of the Interested Persons and their consolidated subsidiaries, taken as a whole, or referencing a "material adverse effect" on the business, assets, condition (financial or otherwise) or as a result of operations of the Interested Persons and their consolidated subsidiaries, taken as a whole; provided, however, that any such effect caused by or resulting from (i) any change in generally accepted accounting principles, (ii) the announcement or pendency of the transactions contemplated by the Transaction Documents or the D&F Transaction Agreements, (iii) fluctuations in the relative values of domestic and/or foreign currencies, or (iv) any change in economic conditions generally shall not be considered when determining whether a material adverse effect has occurred. 2. THE DESIGNATED TRANSACTIONS, F&F TRANSACTION, HERCULES TRANSACTION AND MALLINCKRODT TRANSACTION 2.1 Designated Transactions. Subject and pursuant to the terms and conditions of the Designated Transaction Agreements, Tastemaker shall transfer to the Designated Buyers the assets specified in the Designated Transaction Agreements in exchange for the consideration payable to Tastemaker, as provided in APPENDIX I hereto. Tastemaker shall be solely responsible for all covenants, representations, warranties, liabilities and obligations of Tastemaker under the Designated Transaction Agreements, and neither Mallinckrodt nor Hercules shall have any responsibilities, liabilities or obligations under the Designated Transaction Agreements. Each of Roche, GRI, Hercules and Mallinckrodt acknowledges and agrees that in entering into, and consummating the transactions contemplated by, and after the consummation of the transactions contemplated by, the Designated 24 Transaction Agreements, the Interested Persons, on behalf of themselves and the Designated Buyers, and the Owners, on behalf of themselves and F&F and Tastemaker, are relying upon, and are entitled to rely upon, the representations, warranties and covenants of Roche, GRI, Hercules and Mallinckrodt set forth in this Agreement. 2.2 F&F Transaction. Subject and pursuant to the terms and conditions of the F&F Transaction Agreement, F&F shall transfer to GRI, and GRI shall acquire, F&F's forty-nine and one-half percent (49.5%) interest in Tastemaker B.V. in exchange for the consideration payable to F&F by GRI as provided in the F&F Transaction Agreement. Except as expressly provided in Section 5.5 of the Contribution Agreement, F&F shall be solely responsible for all covenants, representations, warranties, liabilities and obligations of F&F under the F&F Transaction Agreement, and neither Mallinckrodt nor Hercules shall have any responsibilities, liabilities or obligations under the F&F Transaction Agreement. Each of Roche, GRI, Hercules and Mallinckrodt acknowledges and agrees that in entering into, and consummating the transactions contemplated by, and after the consummation of the transactions contemplated by, the F&F Transaction Agreement, GRI and Mallinckrodt, on behalf of itself and F&F, are relying upon, and are entitled to rely upon, the representations, warranties and covenants of Roche, GRI, Hercules and Mallinckrodt set forth in this Agreement. 2.3 Hercules Transaction. Subject and pursuant to the terms and conditions of this Agreement and the Hercules Transaction Agreement, Hercules shall cause HNBV to transfer to GRI, and GRI shall acquire, HNBV's forty-nine and one-half percent (49.5%) interest in Tastemaker B.V. in exchange for the consideration payable to HNBV by GRI as provided in the Hercules Transaction Agreement. Concurrently with the execution of this Agreement, Hercules, GRI and Roche shall execute and deliver, and Hercules shall cause HNBV to execute and deliver, the Hercules Transaction Agreement. Hercules and HNBV shall be solely responsible for all covenants, representations, warranties, liabilities and obligations of Hercules and HNBV under the Hercules Transaction Agreement, and Mallinckrodt shall have no responsibilities, liabilities or obligations under the Hercules Transaction Agreement. 2.4 Mallinckrodt Transaction. Subject and pursuant to the terms and conditions of this Agreement and the Contribution Agreement, Mallinckrodt shall contribute to Newco one hundred percent (100%) of the issued and outstanding capital stock of F&F and shall receive Newco Preferred Stock and (if applicable) cash as provided in the Contribution Agreement. Concurrently with the execution of this Agreement, Mallinckrodt and the Interested Persons shall execute and deliver, and the Interested Persons shall cause Newco to execute and deliver, the Contribution Agreement. Mallinckrodt shall be solely responsible for all covenants, representations, warranties, liabilities and obligations of Mallinckrodt under the Contribution Agreement, and 25 Hercules shall have no responsibilities, liabilities or obligations under the Contribution Agreement. 2.5 Consideration. On the Closing Date, the Interested Persons shall make, and shall cause the Designated Buyers and Newco to make, payments and deliveries to Tastemaker, Tastemaker B.V., F&F, HNBV and Mallinckrodt, in accordance with the Designated Transaction Agreements, the F&F Transaction Agreement, the Hercules Transaction Agreement and the Contribution Agreement. 2.6 Determination of Adjusted Aggregate Value and Tastemaker B.V. Value. The Adjusted Aggregate Value and the Tastemaker B.V. Value shall be determined in accordance with Sections 2.6.1 and 2.6.2 below. 2.6.1 Adjusted Aggregate Value. Five (5) business days prior to the Closing Date, the Owners shall cause to be prepared and delivered to each of the Interested Persons the Owners' good-faith estimate of the amounts of Current Assets, Current Liabilities and Long-Term Liabilities as of the Adjustment Time, together with the Owners' calculation of the Estimated Working Capital Adjustment and the Estimated Long-Term Liabilities Adjustment as of the Adjustment Time based upon such estimates, which shall be used for purposes of determining the Estimated Adjusted Aggregate Value as of the Adjustment Time. Promptly after the Closing Date, the Interested Persons shall engage Coopers & Lybrand L.L.P. (the "ACCOUNTANTS") to conduct an audit of the Current Assets, the Current Liabilities and the Long-Term Liabilities as of the Adjustment Time, and the Interested Persons shall use their best efforts to cause the Accountants to complete such audit and deliver to each of the Interested Persons and the Owners within sixty (60) days after the Closing Date the Accountants' determination of Current Assets, Current Liabilities and Long-Term Liabilities as of the Adjustment Time, and the Working Capital Adjustment and Long-Term Liabilities Adjustment as of the Adjustment Time collectively (the "ACCOUNTANTS' NET DETERMINATION"), together with the certification of the Accountants that the balances of Current Assets, Current Liabilities and Long-Term Liabilities were determined in accordance with the terms of this Agreement (the "ACCOUNTANTS' REPORT"). The fees and expenses of the Accountants in preparing the Accountants' Report shall be paid one-half by the Owners and one-half by the Interested Persons. The Interested Persons and the Owners shall have a period of sixty (60) days following receipt of the Accountants' Report to review the books and records of the Companies for purposes of determining whether they agree with the Accountants' Report and the determination of the Working Capital Adjustment, the Long- Term Liabilities Adjustment, Current Assets, Current Liabilities and Long-Term Liabilities set forth therein, and the Interested Persons shall give the Owners and their respective representatives access to the books and records of the Companies for such purpose. If any party disagrees with either the Working 26 Capital Adjustment or the Long-Term Liabilities Adjustment determined based upon the Accountants' Report, such party (whether one or more than one, each a "DISPUTING PARTY") shall, at or before the end of such sixty (60) day period, give to all other parties a written notice which shall set forth a detailed explanation of such Disputing Party's disagreement with the determination of the Working Capital Adjustment or the Long-Term Liabilities Adjustment set forth in the Accountants' Reports (or the amounts of Current Assets, Current Liabilities or Long-Term Liabilities used in the determination thereof), as well as an amount for each disputed item and a proposal based on such amounts for an amount that the Disputing Party believes to be more accurate than the Accountants' Net Determination (a "DISPUTING PARTY'S PROPOSAL"). If both of the Owners or both of the Interested Persons dispute the Accountants' Report, the Owners or the Interested Persons, as the case may be, may (but shall not be obligated to) submit a joint notice of dispute. If no party gives such notice within said sixty (60) day period, the Working Capital Adjustment and the Long-Term Liabilities Adjustment determined by the Accountants and set forth in the Accountants' Report shall be deemed correct and conclusive for purposes of determining the Adjusted Aggregate Value. If any party timely disputes the Accountants' determination of either the Working Capital Adjustment or the Long-Term Liabilities Adjustment (or the amounts of Current Assets, Current Liabilities or Long-Term Liabilities used in the determination thereof), the parties shall negotiate in good faith in an attempt to agree upon a resolution of such dispute for a period of thirty (30) days from the end of such sixty (60) day review period. If, notwithstanding the good faith efforts of the parties, the parties are unable to reach agreement upon the Working Capital Adjustment and the Long-Term Liabilities Adjustment, the items in the Accountants' Report that are in dispute (and only the disputed items) will be referred for final binding resolution to the United States national office of KPMG Peat Marwick LLP or, if KPMG Peat Markwick LLP is unwilling or unable, due to conflicts, to serve in such capacity, one of the six (6) largest United States certified public accounting firms which shall be mutually agreed upon by the parties hereto (or such other internationally recognized accounting firm as is agreed upon by the parties) and which shall exclude those firms that provide or have provided accounting services to any of the parties (the "ADJUSTMENT ARBITRATOR"). The items in dispute shall be determined by the Adjustment Arbitrator in accordance with the terms and provisions of this Agreement, and the parties agree to use their best efforts to cause the Adjustment Arbitrator to render its decision within sixty (60) days after the dispute has been referred to the Adjustment Arbitrator for resolution. The determination of the Adjustment Arbitrator shall be final and binding for purposes of determining the amount of Current Assets, Current Liabilities and Long-Term Liabilities as of the Adjustment Time, and the resulting Working Capital Adjustment and Long-Term Liabilities Adjustment as of the Closing Date (collectively, the "FINAL NET DETERMINATION"), and all parties shall be bound thereby and judgment upon such resolution may be entered in any court having 27 requisite jurisdiction. The responsibility to pay the total fees and expenses of the Adjustment Arbitrator for the entire arbitration process described above as computed after the completion or termination of the arbitration (the "COST OF ARBITRATION") shall be allocated as follows: (i) To compute each party's allocation of the Cost of Arbitration, each party's variance from the Final Net Determination (each a "DETERMINATION VARIANCE") shall be equal to the Final Net Determination minus (x) for each Disputing Party, the Accountants' Net Determination, adjusted by the net sum of the adjustments set forth in such Disputing Party's Proposal, and (y) for each party that is not a Disputing Party, the Accountants' Net Determination. (ii) Each party shall be allocated responsibility to pay the part of the Cost of Arbitration equal to the Cost of Arbitration multiplied by the absolute value of such party's Determination Variance divided by the sum of the absolute values of the Determination Variances of all parties. (iii) With respect to any fees and expenses of the Adjustment Arbitrator required to be paid prior to the determination of the Final Net Determination, the Owners and the Interested Persons shall bear the payments of such fees and expenses equally; provided that after the Cost of Arbitration has been finally determined, the parties hereto shall make such payments to each other as may be necessary to give effect to the allocation of the Cost of Arbitration determined as set forth in clause (ii). The parties intend and agree that the procedures set forth in this Section 2.6.1 shall be the sole and exclusive procedures for resolving all disputes concerning the Working Capital Adjustment and the Long-Term Liabilities Adjustment as of the Closing Date. Within ten (10) days after the date upon which the Working Capital Adjustment and the Long-Term Liabilities Adjustment are finally determined (whether by agreement of the parties, dispute resolution or as a result of the failure to timely provide a notice required by this Section), the consideration paid or delivered pursuant to the Contribution Agreement on the Closing Date shall be adjusted as provided in the Contribution Agreement. 2.6.2 Tastemaker B.V. Value. Five (5) business days prior to the Closing Date, the Owners shall cause to be prepared and delivered to each of the Interested Persons the Owners' good faith estimate of the Tastemaker B.V. Current Assets, Tastemaker B.V. Current Liabilities and Tastemaker B.V. Long-Term Liabilities as of the Adjustment Time, together with the Owners' calculation of the Estimated Tastemaker B.V. Value based upon such estimates, which shall be used for purposes of determining the Estimated Tastemaker B.V. Value on the Closing Date. Within thirty (30) days after the Closing Date, the Interested Persons shall prepare and deliver to the Owners the balance sheet of Tastemaker B.V. as of the Adjustment Time, together with the Interested Persons' calculation of the Tastemaker B.V. Working Capital Adjustment and the Tastemaker B.V. Long-Term Liabilities Adjustment, and the resulting 28 Tastemaker B.V. Value. The Owners shall have a period of thirty (30) days following receipt of such information to review the books and records of Tastemaker B.V. for purposes of determining whether they agree with the Interested Persons determination of the Tastemaker B.V. Working Capital Adjustment and the Tastemaker B.V. Long-Term Liabilities Adjustment, and the Tastemaker B.V. Value calculated based thereon. If either of the Owners disagrees with the Tastemaker B.V. Working Capital Adjustment or the Tastemaker B.V. Long-Term Liabilities Adjustment as determined by the Interested Persons, such Owner shall, at or before the end of such thirty (30) day review period, give to the Interested Persons written notice which shall set forth a detailed explanation of such Owner's disagreement with the Interested Persons determination of the Tastemaker B.V. Working Capital Adjustment or the Tastemaker B.V. Long-Term Liabilities Adjustment. If either of the Owners timely disputes the Interested Persons determination of either the Tastemaker B.V. Working Capital Adjustment or the Tastemaker B.V. Long-Term Liabilities Adjustment, the parties shall negotiate in good faith in an attempt to agree upon a resolution of such dispute for a period of thirty (30) days from the end of such thirty (30) day review period. If notwithstanding the good faith efforts of the parties, the parties are unable to reach agreement upon the Tastemaker B.V. Working Capital Adjustment and the Tastemaker B.V. Long-Term Liabilities Adjustment, such dispute shall be resolved in accordance with Article 9 of this Agreement. 2.7 Closing Aggregate Value Adjustment. (a) The Estimated Adjusted Aggregate Value and the Adjusted Aggregate Value have been reduced by $10,425,000 (the "PBO ADJUSTMENT"). (b) If the Fries Withdrawal Closing occurs within two days after the Closing Date, on the date of the Fries Withdrawal Closing, Owners shall cause the Companies to transfer (whether by operation of law or otherwise), to the Interested Persons or an Affiliate of the Interested Persons, and at such time the Interested Persons or an Affiliate of the Interested Persons shall accept (whether by operation of law or otherwise), sponsorship of each plan, contract, agreement or statutory program providing for the payment of benefits, within the meaning of Statement No. 87 of the Financial Accounting Standards Board (each a "PBO PLAN" and collectively the "PBO PLANS") and shall assume all obligations of the Companies to provide benefits under such PBO Plans. In consideration of, and at the same time as such transfer and assumption, Owners shall cause the Companies to transfer (whether by operation of law or otherwise), to the Interested Persons or an Affiliate of the Interested Persons any and all assets (including without limitation all right, title and interest in any trust agreement, insurance contract or other instrument) held in connection with, set aside for or specifically dedicated to each PBO Plan ("PLAN ASSETS") (i) the value of which as of December 31, 1996 in the case of each such PBO Plan listed on APPENDIX L (other than the plan covered by or under the heading "Holland (including VUT)" listed on APPENDIX L (the "DUTCH PLAN")) was at least equal to the value of the assets listed in respect of each such PBO Plan on APPENDIX L (other than 29 the Dutch Plan) and (ii) with respect to the Dutch Plan, (A) the value of which shall be, as of the date of transfer to a successor plan established by Tastemaker B.V., at least equal to 23 million Dutch Guilders, (B) increased by the earnings attributable to the investment of such assets and by any contributions by Tastemaker B.V. and its employees to the Dutch Plan in either case during the period from December 31, 1996 to the date of transfer and (C) reduced by the losses attributable to the investment of such assets and by any benefit payments made to or in respect of any employee of any of the Companies covered by the Dutch Plan as of December 31, 1996 who retired or otherwise terminated service after December 31, 1996 and prior to the date of transfer. Interested Persons accept the reduction in the Estimated Adjusted Aggregate Value and the Adjusted Aggregate Value above and the transfer of the Plan Assets to the Interested Persons or an Affiliate of the Interested Persons as provided in this subsection (b), in full settlement of all claims the Interested Persons or their Affiliates may have against the Owners in respect of funding and asset values of any of the PBO Plans, and the Interested Persons shall indemnify and hold harmless the Owners and their respective officers, employees, agents, directors, subsidiaries, affiliates and representatives from and against any and all claims relating to the funding status of, or payment obligations under, each PBO Plan; provided such reductions and such transfer shall in no way release the Owners from their obligations under Section 3.17; and provided further, that the Interested Persons expressly do not assume any liability or obligation of the Owners under or in connection with any PBO Plan other than the obligations of a PBO Plan sponsor. 2.8 Closing. Subject to the terms and conditions of the D&F Transaction Agreements and the Transaction Documents, the closing of the transactions contemplated by the D&F Transaction Agreements and the Transaction Documents (the "CLOSING") shall occur on March 31, 1997. The Closing shall be held at the offices of Taft, Stettinius & Hollister, 425 Walnut Street, Cincinnati, Ohio. The closing of the transactions contemplated by the Designated Transaction Agreements shall commence at 10:00 a.m. Eastern Standard Time on the Closing Date. The closing of the transactions contemplated by the F&F Transaction Agreement and the Hercules Transaction Agreement shall commence immediately following the completion of the closing of the transactions contemplated by the Designated Transaction Agreements. The closing of the transactions contemplated by the Contribution Agreement shall commence immediately following the completion of the closing of the transactions contemplated by the Designated Transaction Agreements, the F&F Transaction Agreement and the Hercules Transaction Agreement. 3. REPRESENTATIONS AND WARRANTIES OF THE OWNERS The Owners represent and warrant to the Interested Persons as of the date hereof and, except with respect to any representations and warranties which expressly provide that they are given as of a particular date, as of the Closing Date, as follows: 30 3.1 Organization, Standing and Power; Authority of Tastemaker for the Designated Transaction Agreements. Tastemaker is a general partnership duly formed and validly existing under the laws of the State of Delaware and has the requisite power and authority to carry on its business as conducted on the date hereof. Tastemaker B.V. is a limited liability entity duly organized and validly existing under the laws of The Netherlands and has the requisite power and authority to carry on its business as conducted on the date hereof. Except as set forth in SCHEDULE 3.1 of the Disclosure Schedule, each of the Tastemaker Subsidiaries is duly organized and validly existing under the laws of the jurisdiction in which it is organized as set forth on APPENDIX A hereto and has the requisite power and authority to carry on its business as conducted on the date hereof. The Tastemaker B.V. Subsidiary is duly organized and validly existing under the laws of Spain and has the requisite power and authority to carry on its business as conducted on the date hereof. Pinnacle Flavours & Chemicals Private Limited is a private company limited by shares, duly organized and validly existing under the laws of India ("PINNACLE"). Except as set forth in SCHEDULE 3.1 of the Disclosure Schedule, each of the Companies is duly qualified to transact business, and is in good standing, in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified would not reasonably be expected to have a material adverse effect on the Companies. Tastemaker has all requisite power and authority to enter into each of the Designated Transaction Agreements and to consummate the transactions contemplated thereby. The execution and delivery of each of the Designated Transaction Agreements prior to the Closing Date by Tastemaker and the consummation by Tastemaker on the Closing Date of the transactions contemplated thereby will have been duly authorized by all necessary action on the part of Tastemaker. The Designated Transaction Agreements will have been duly executed and delivered by Tastemaker prior to the Closing Date and (assuming the due authorization, execution and delivery thereof by the other parties thereto) will then constitute the valid and binding obligations of Tastemaker, enforceable against Tastemaker in accordance with their respective terms. 3.2 Ownership of Tastemaker B.V., Tastemaker Subsidiaries and Tastemaker B.V. Subsidiary and Pinnacle. Tastemaker B.V. is owned one percent (1%) by Tastemaker. Tastemaker B.V. is the sole owner of the Tastemaker B.V. Subsidiary and holds a twenty-four percent (24%) minority shareholding in Pinnacle. Pinnacle is an investment accounted for under the equity method on the combined consolidated financial statements of Tastemaker and Tastemaker B.V., and Tastemaker B.V. does not control or direct the day-to-day operations of Pinnacle. A true and complete list of all subsidiaries of any of the Companies, including the ownership of each of the Tastemaker Subsidiaries and the 31 Tastemaker B.V. Subsidiary, accurately described, is on APPENDIX A hereto. There are no options, warrants, calls, rights or agreements (other than the Designated Transaction Agreements and the Partnership Agreement): (i) to which Tastemaker is a party obligating Tastemaker to issue, deliver, sell, repurchase, redeem or otherwise acquire, cause to be issued, delivered, sold, repurchased, redeemed, or otherwise acquired, any partnership interests in Tastemaker or obligating Tastemaker to grant, extend or enter into any such option, warrant, call, right or agreement; (ii) except as set forth in SCHEDULE 3.2 of the Disclosure Schedule, to which Tastemaker or any of the Tastemaker Subsidiaries is a party obligating Tastemaker or any of the Tastemaker Subsidiaries to issue, deliver, sell, repurchase, redeem or otherwise acquire or cause to be issued, delivered, sold, repurchased, redeemed, or otherwise acquired, additional shares of capital stock of or ownership interests in any of the Tastemaker Subsidiaries or obligating Tastemaker or any of the Tastemaker Subsidiaries to grant, extend or enter into any such option, warrant, call, right or agreement; (iii) to which Tastemaker or Tastemaker B.V. is a party obligating Tastemaker or Tastemaker B.V. to issue, deliver, sell, repurchase, redeem or otherwise acquire or cause to be issued, delivered, sold, repurchased, redeemed, or otherwise acquired any additional ownership interest in Tastemaker B.V. or obligating Tastemaker or Tastemaker B.V. to enter into any such option, warrant, call, right or agreement; or (iv) to which Tastemaker B.V. or the Tastemaker B.V. Subsidiary is a party obligating Tastemaker B.V. or the Tastemaker B.V. Subsidiary or Pinnacle to issue, deliver, sell, repurchase, redeem or otherwise acquire or cause to be issued, delivered, sold, repurchased, redeemed, or otherwise acquired additional ownership interests in the Tastemaker B.V. Subsidiary or Pinnacle, or obligating Tastemaker B.V. or the Tastemaker B.V. Subsidiary or Pinnacle to grant, extend or enter into any such option, warrant, call, right or agreement. Except as set forth in SCHEDULE 3.2 of the Disclosure Schedule, and except pursuant to the transactions contemplated by the Designated Transaction Agreements and the Partnership Agreement, the interest of Tastemaker in each Tastemaker Subsidiary as set forth in APPENDIX A hereto is owned by Tastemaker free and clear of all security interests, liens, claims, pledges, voting rights, charges and encumbrances of any nature whatsoever. Except as set forth in SCHEDULE 3.2 of the Disclosure Schedule, and except pursuant to the transactions contemplated by the Designated Transaction Agreements, the interest of Tastemaker in Tastemaker B.V. as set forth in APPENDIX A hereto is owned by Tastemaker free and clear of all security interests, liens, claims, pledges, voting rights, charges and other encumbrances of any nature whatsoever. Except pursuant to the transactions contemplated by 32 the Designated Transaction Agreements and except as set forth in SCHEDULE 3.2 of the Disclosure Schedule, the interest of each Tastemaker Subsidiary in each other Tastemaker Subsidiary as set forth in APPENDIX A hereto is owned by such Tastemaker Subsidiary free and clear of all security interests, liens, claims, pledges, voting rights, charges and other encumbrances of any nature whatsoever. Except pursuant to the transactions contemplated by the Designated Transaction Agreements and except as set forth in SCHEDULE 3.2 of the Disclosure Schedule, the interest of Tastemaker B.V. in the Tastemaker B.V. Subsidiary as set forth in APPENDIX A hereto and the twenty-four percent (24%) interest of Tastemaker B.V. in Pinnacle is owned by Tastemaker B.V. free and clear of all security interests, liens, claims, pledges, voting rights, charges and other encumbrances of any nature whatsoever. 3.3 Consents and Approvals; No Violation. Except as set forth in SCHEDULE 3.3 of the Disclosure Schedule, the execution and delivery of the Transaction Documents and the D&F Transaction Agreements do not, and the consummation of the transactions contemplated thereby and compliance with the provisions thereof will not, result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material right or benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of any of the Companies under: (i) any provision of the charter or organizational documents of any of the Companies, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, agreement, instrument, permit, concession, franchise or license by which any of the Companies is bound or any License or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation by which any of the Companies is bound or to which any of their respective properties or assets is subject, other than, in the case of clauses (ii) and (iii), any such violations, defaults, rights, liens, security interests, charges or encumbrances that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Companies, and would not impair the ability of the Owners or any of their respective Affiliates to perform their obligations under any of the Transaction Documents or the D&F Transaction Agreements, prevent the consummation by the Owners or any of their respective subsidiaries of any of the transactions contemplated by any of the Transaction Documents or the D&F Transaction Agreements or, other than by reason of any act or omission of the Interested Persons or their respective subsidiaries, materially and adversely affect the rights and benefits of the Interested Persons or any of their respective Affiliates under the Transaction Documents and the D&F Transaction Agreements. No filing, declaration or registration with, or consent, approval, order or authorization of, any Governmental Authority is required by, or with respect to, any of the Companies in connection with the execution and delivery by the Owners, or any of their respective subsidiaries, as the case may be, of the Transaction Documents and the D&F Transaction Agreements or the consummation by the Owners, or any of their respective subsidiaries, as the case may be, of the transactions contemplated by the Transaction Documents and the D&F Transaction Agreements, except: (a) in connection, or in compliance, with the provisions of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, (b) for such filings, declarations, registrations, consents, approvals, orders and authorizations as 33 are required from Governmental Authorities in the countries disclosed in APPENDIX F hereto, and such other filings, declarations, registrations, consents, approval, orders and authorizations as may be required under the laws of any other foreign country in which any of the Companies is organized, conducts any business or owns any property or assets, and (c) for such other filings, declarations, registrations, consents, approvals, orders and authorizations, the failure of which to obtain or make would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Companies and would not impair the ability of the Owners or any of their respective Affiliates to perform their obligations under any of the Transaction Documents and the D&F Transaction Agreements, prevent the consummation by the Owners or any of their respective subsidiaries of any of the transactions contemplated by any of the Transaction Documents and the D&F Transaction Agreements or, other than by reason of any act or omission of the Interested Persons or their respective subsidiaries, materially and adversely affect the rights and benefits of the Interested Persons under the Transaction Documents and the D&F Transaction Agreements. 3.4 Financial Statements. The December 31, 1995 audited combined consolidated financial statements of Tastemaker and Tastemaker B.V. (the "1995 FINANCIAL STATEMENTS") have been prepared in accordance with GAAP and fairly present the combined consolidated financial position of Tastemaker and Tastemaker B.V. as at December 31, 1995 and the combined consolidated results of their operations and their combined consolidated cash flows for the year ended December 31, 1995. The June 28, 1996 unaudited combined consolidated balance sheet, income statement and cash flow statement of the Companies previously delivered to each of the Interested Persons (the "INTERIM FINANCIAL STATEMENTS") fairly present the combined consolidated financial position of Tastemaker and Tastemaker B.V. as of June 28, 1996 (subject to reasonable year-end adjustments, adjustments to conform to GAAP and the absence of footnotes) and have been prepared in accordance with the customary accounting practices, procedures and policies of the Companies used in connection with regularly prepared internal financial statements, which practices, procedures and policies are not necessarily consistent in all respects with GAAP or the practices, procedures and policies used in preparing the 1995 Financial Statements. Except as set forth in SCHEDULE 3.4 of the Disclosure Schedule, since the date of the Interim Financial Statements, there has been no material adverse change in the financial condition or operations of the Companies, taken as a whole. 3.5 Liabilities. Except as reflected or reserved against in the 1995 Financial Statements or the Interim Financial Statements (collectively, the "FINANCIAL STATEMENTS"), or disclosed in the footnotes thereto, or disclosed in SCHEDULE 3.5 of the Disclosure Schedule, none of the Companies had any liabilities at the respective dates of such Financial Statements, absolute, determined, determinable, contingent or otherwise, that 34 would reasonably be expected to have a material adverse effect on the Companies. 3.6 Books and Records. The books and records of the Companies are complete and accurate in all material respects in accordance with applicable policies of the Companies. 3.7 Accounts Receivable. All accounts receivable of the Companies reflected on the agings of accounts receivable included in SCHEDULE 3.7 of the Disclosure Schedule and all accounts receivable of the Companies recorded on the books of the Companies since the date of such agings arose out of bonafide transactions in the ordinary course of business of the Companies. All accounts receivable of the Companies included in Current Assets as of the Adjustment Time will have arisen out of bonafide transactions in the ordinary course of business of the Companies and will then be free and clear of all liens securing indebtedness of any person or entity other than the Companies. 3.8 Inventory. The inventory of the Companies as reflected in the Interim Financial Statements was stated therein at the lower of average cost or market, in the aggregate, and consisted of items substantially all of which are, except as provided in any inventory reserve, of a quality and quantity useable and saleable in the ordinary course of business of the Companies. Except pursuant to the transactions contemplated by the Partnership Agreement and the Designated Transaction Agreements, all inventory of the Companies is owned free and clear of all liens securing indebtedness of any person or entity other than the Companies. Since the date of the Interim Financial Statements, the Companies have maintained their inventories in the ordinary course of business. 3.9 Absence of Certain Changes or Events. Since December 31, 1995, except as reflected in the Interim Financial Statements or disclosed in SCHEDULE 3.9 of the Disclosure Schedule: (i) except for any liabilities incurred in the ordinary course of business that would be reflected on a balance sheet of the Companies prepared in accordance with GAAP, consistently applied, none of the Companies has incurred any liability or obligation (indirect, direct, absolute, determined, determinable, contingent or otherwise), that has had or would reasonably be expected to result in a material adverse effect on the Companies; (ii) none of the Companies has entered into any material oral or written agreement or other transaction, that is not in the ordinary course of business and that has had or would reasonably be expected to result in a material adverse effect on the Companies; (iii) none of the Companies has sustained any damage, destruction or other loss or interference with its business, assets or properties from fire, flood, windstorm, accident or other calamity (whether or not covered by insurance) that has had or that would reasonably be expected to have a material adverse effect on the Companies; and (iv) none of the Companies has had an event, occurrence, development or state of 35 circumstances or facts (including, without limitation, the sale of PFW Aroma Chemicals, previously a subsidiary of Hercules, to Yule Catto & Co. plc) which has had or would reasonably be expected to have a material adverse effect on the Companies. As of the date hereof, none of the Specified Officers has notified any of the Partners' Representatives that he or she intends to resign within one (1) year after the Closing of the transactions contemplated by the Transaction Documents. Since December 31, 1995, except as reflected in the Interim Financial Statements or disclosed in SCHEDULE 3.9 of the Disclosure Schedule, there has, with respect to the Companies, been no: (i) incurrence, assumption or guarantee by the Companies of any material indebtedness for borrowed money other than in the ordinary course of business and in amounts and on terms consistent with past practices; (ii) creation or other incurrence of any lien on any material asset of any of the Companies other than in the ordinary course of business consistent with past practices; (iii) transaction or commitment made, or any contract or agreement entered into, whether oral or written, by the Companies relating to their assets or business (including the acquisition or disposition of any assets) or any relinquishment by the Companies of any contract or other right, in either case, in excess of $100,000, other than transactions and commitments for the purchase and sale of inventory, transactions and commitments in the ordinary course of business and transactions and commitments pursuant to the Transaction Documents and the D&F Transaction Agreements; (iv) change in any method of accounting or accounting practice by the Companies; (v) (A)(I) collective bargaining agreement entered into with any representative of employees or (II) expiration of any collective bargaining agreement without its renewal and/or a new collective bargaining agreement having been entered into and executed with a representative of employees, or (B) as of the date hereof, (I) written employment agreement providing for annual salary in excess of $100,000 (or a material amendment of any existing such agreement), (II) severance or change in control agreement providing compensation or benefits in excess of $100,000 (or material amendment of any such existing agreement), or (III) enhanced retirement or deferred compensation arrangement entered into, in the case of subclauses (I), (II), and (III) to this clause (B), with any officer or employee or independent contractor of any of the Companies whose annual salary exceeds $100,000; (vi) (A) grant of any stay bonus to any employee of any Company which bonus individually exceeds $50,000 (or amendment of any existing such bonus), (B) implementation of any severance plan, program or policy under which, if any employee covered by such plan, program or policy were terminated, such employee would be entitled in the aggregate to more than $100,000 of benefits; or (C) as of the date hereof, adoption of or change to any stay incentive or severance program covering a group of not less than twelve (12) employees of the Companies; (vii) material change in compensation payable to any employee of any of the Companies whose annual salary is in excess of $100,000 pursuant to any retirement plan, program or policy, other than in the ordinary course of business consistent with past practice; (viii) as of 36 the date hereof, labor dispute, other than routine individual grievances, or any activity or proceeding by a labor union or representative thereof to organize any employees of the Companies, which employees were not subject to a collective bargaining agreement on December 31, 1995, or any lockouts, strikes, slowdowns, work stoppages or, as of the date hereof, to the Owners' Knowledge, threats thereof by or with respect to such employees; (ix) repurchase, redemption or other acquisition by any of the Companies of any outstanding shares of capital stock or other securities of, or other ownership interests in, the Companies; or (x) amendment of any material term of any outstanding security of any Company. 3.10 No Existing Violation, Default, Etc. Except as set forth in SCHEDULE 3.10 of the Disclosure Schedule, none of the Companies is in violation of: (i) its charter or other organizational documents, (ii) any applicable law, ordinance or administrative or governmental rule or regulation (including any such law, ordinance or administrative or governmental rule or regulation applicable to the production processes or sale by the Companies of their respective products) or (iii) any order, decree or judgment of any Governmental Authority having jurisdiction over any of the Companies, except for any violations that would not reasonably be expected to have or to cause a material adverse effect on the Companies. SCHEDULE 3.10 of the Disclosure Schedule includes the policies of the Companies regarding the Foreign Corrupt Practices Act of 1988, as amended (the "FCPA"), including a description of the means by which information regarding such policies is disseminated to employees of the Companies. To the Owners' Knowledge, none of the Companies nor any officer, director, employee or agent of any of the Companies acting on behalf of the Companies has made, directly or indirectly, any payment or promise to pay, or gift or promise to give, or authorized such a promise or gift, of any money or anything of value, directly or indirectly, to (i) any foreign official (as such term is defined in the FCPA) for the purpose of influencing any official act or decision of such official or inducing him to use his influence to affect any act or decision of a Governmental Authority or (ii) any foreign political party or official thereof or candidate for foreign political office for the purpose of influencing any official act or decision of such party, official or candidate or inducing such party, official or candidate to use its influence to affect any act or decision of a foreign government or agency or subdivision thereof, in the case of both (i) and (ii) in order to assist any of the Companies to obtain or retain business or direct business to any of the Companies, under circumstances which would subject any of the Companies or their respective Affiliates, officers or directors to liability under the FCPA. Except as set forth in SCHEDULE 3.10 of the Disclosure Schedule, no event of default or event that, but for the giving of notice or lapse of time, or both, would constitute an event of default exists or, upon the consummation of the transactions contemplated by the Transaction Documents and the D&F Transaction Agreements, will exist on the part of any of the Companies under any loan or credit agreement, 37 note, bond, mortgage, indenture or guarantee of indebtedness for borrowed money or any other material lease, agreement or instrument to which any of the Companies is a party or by which any of the Companies or any of their respective properties, assets or business is bound, except for any such default or event of default which would not reasonably be expected to have a material adverse effect on the Companies. 3.11 Licenses and Permits. Except as disclosed in SCHEDULE 3.11 of the Disclosure Schedule, none of the Companies is in violation of or default under any permit, license, franchise or authorization from any Governmental Authority which is necessary in connection with the ownership, lease or operation of its properties or the conduct of its business as owned or leased and conducted on the date hereof (collectively, the "LICENSES"), except to the extent that such violation or default has not had and would not reasonably be expected to have a material adverse effect on the Companies. SCHEDULE 3.11 of the Disclosure Schedule contains a true and complete list of all material Licenses as of the date hereof, together with the name of the Governmental Authority issuing each such License; all such material Licenses are valid and in full force and effect; and to the Owners' Knowledge, no such material License will be revoked, terminated prior to its normal expiration date or not renewed. 3.12 Environmental Matters. (a) Except as set forth in SCHEDULE 3.12 of the Disclosure Schedule, (i) there is no liability of any of the Companies under any Environmental Requirement in existence on the Closing Date, whether absolute, determined, determinable, contingent or otherwise, and (ii) the properties, assets and operations of the Companies are in compliance with all applicable Environmental Requirements, except, in either case, for any such liability or non-compliance that would not reasonably be expected to have a material adverse effect on the Companies. Since February 1, 1992, no spill, release, threatened release or discharge of Hazardous Substances into the Environment which is required by applicable Environmental Requirements to be reported has occurred at any of the Companies' facilities or, to the Owners' Knowledge, on any real property adjacent thereto, and since February 1, 1992, there has been no corrective action, remediation or clean up required of the Companies by applicable Environmental Requirements as a consequence of any such spill, release, threatened release or discharge. All corrective action, remediation or other clean up activities undertaken by the Companies have been performed, or are being performed, in accordance in all material respects with all applicable Environmental Requirements. Each of the Companies has discharged in all material respects any and all record keeping and reporting requirements applicable to it pursuant to all applicable Environmental Requirements and all such reports and records are complete and correct in all material respects and have been retained by the Companies for the length of time required by any applicable Environmental Requirements setting forth document retention requirements. Except as set forth in SCHEDULE 3.12 of the Disclosure Schedule, none of the operating 38 sites of the Companies or, to the Owners' Knowledge, any property adjacent thereto, or, to the Owners' Knowledge, any sites used for the disposal of wastes generated by the Companies have been designated as a "SUPERFUND SITE" or are otherwise the subject of an order of removal or remedial action for which the Companies have liability pursuant to the provisions of applicable Environmental Requirements and there are no conditions or circumstances affecting the operating sites for the Companies or any property adjacent thereto which, to the Owners' Knowledge, might reasonably cause them to be designated as a "SUPERFUND SITE" or render them subject to any such order of removal or remedial action for which the Companies will have liability pursuant to the provisions of applicable Environmental Requirements. Except as set forth in SCHEDULE 3.12 of the Disclosure Schedule, no unresolved notice, notification, demand, request for information, citation, summons or order has been issued, no pending complaint has been filed, no unpaid penalty has been assessed and no investigation, action, claim, suit, proceeding or review is pending, or to the Owners' Knowledge, threatened by any Governmental Authority with respect to the Companies and relating to or arising out of any Environmental Requirements that would reasonably be expected to have a material adverse effect on the Companies, and to the Owners' Knowledge there is no basis for sending any such notice or asserting any such claim. Except as set forth in SCHEDULE 3.12 of the Disclosure Schedule, no polychlorinated biphenyls, radioactive material, lead, lead paint, asbestos-containing material, incinerator, sump, surface impoundment, lagoon, landfill, septic, wastewater treatment or other disposal system or underground storage tank (active or inactive) is present at any property owned, leased or operated by the Companies in violation of applicable Environmental Requirements, which violation, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Companies. All permits required by applicable Environmental Requirements and necessary for the operation of the Companies' businesses or the use of the Companies' assets have been obtained or have been applied for within the period of time permitted by law, and in either case are identified in SCHEDULE 3.12 of the Disclosure Schedule, and if already obtained are in effect on the date hereof in accordance with their terms except for those which, if not obtained or not in effect, would not have a material adverse effect on the Companies. Except as set forth in SCHEDULE 3.12 of the Disclosure Schedule, the Companies are in material compliance with the terms of such permits, no action or investigation has been taken, commenced or, to the Owners' Knowledge, threatened by any Governmental Authority or any other persons to revoke or modify such permits or applications or to enforce the terms of or take action for violation of such permits, and, to the Owners' Knowledge, there is no reasonable basis for any such action or investigation. No Specified Officer possesses any evidence which would lead a reasonable person to believe that any permits applied for will not be granted or that permits or permit renewals which have been applied for but have not yet been granted or renewed will, when issued or as a condition of 39 issuance, require material capital expenditures or materially interrupt the operations of the Companies in order to bring any subject facility or apparatus into material compliance with applicable Environmental Requirements. None of the Companies use the portion of the Laidlaw Landfill site in St. Louis, Missouri which is believed to be included on the National Priorities List for the treatment, storage or disposal of any waste or material. (b) The Companies do not own, lease or operate and have not within the past four (4) years owned, leased or operated any real property in New Jersey or Connecticut. 3.13 Tax Matters. Except as set forth in SCHEDULE 3.13 of the Disclosure Schedule, with respect to Taxes and Company Tax Returns: (i) all Company Tax Returns required to be filed on or prior to the date hereof have been filed when due in accordance with all applicable laws; (ii) as of the time of filing, or, if subsequently amended as of the date of such amendment, and to the Owners' Knowledge, such Company Tax Returns correctly reflected in all material respects the facts regarding the income, business, assets, operations, activities and status of the Companies and any other information required to be shown therein; (iii) all Taxes shown to be due on such Company Tax Returns have been timely paid, withheld or remitted to the appropriate Governmental Authority or extensions for payment have been duly obtained; (iv) as of the date hereof, none of the Companies (and no member of any affiliated, consolidated, combined or unitary group of which a Company is or has been a member) has waived or granted any extension of any statute of limitations in respect of any Company Tax Returns or Taxes; (v) as of the date hereof, there is no audit, dispute, claim, action, proceeding or investigation pending or, to the Owners' Knowledge, threatened against or with respect to any Company with respect to any Tax, which audit, dispute, claim, action, proceeding or investigation, if determined adversely, would reasonably be expected, in combination with any such audits, disputes, claims, actions, proceedings or investigations, to have a material adverse effect on the Companies; (vi) as of the date hereof, none of the Companies is delinquent in the payment of any Tax, requested any extension of time within which to file any Company Tax Return and has not yet filed such Return, and all deficiencies asserted or assessments made as a result of any audit by a Governmental Authority of a Company Tax Return have been paid in full; and (vii) there are no requests for rulings or determinations in respect of any Tax pending between any Governmental Authority and any Company. 3.14 Orders, Litigation, Etc. Except as listed on SCHEDULE 3.14 of the Disclosure Schedule, there are no outstanding orders, judgments, injunctions, awards or decrees of any Governmental Authority against any of the Companies or any of their properties, assets or businesses that would reasonably be expected to have a material adverse effect on the Companies. Except as listed on SCHEDULE 3.14 of the Disclosure Schedule, there are no private or governmental actions, suits or claims or legal, administrative or arbitration proceedings or 40 investigations pending against or, to the Owners' Knowledge, threatened against or affecting, any of the Companies or any of their properties, assets or businesses that would reasonably be expected to have a material adverse effect on the Companies. There are no actions, suits or claims or legal, administrative or arbitration proceedings or investigations pending against or, to the Owners' Knowledge, threatened against or affecting, any of the Companies or any of their properties, assets or businesses relating to the transactions contemplated by the Transaction Documents, the D&F Transaction Agreements or the Fries Withdrawal Documents. 3.15 Labor Matters. Except as set forth in SCHEDULE 3.15 of the Disclosure Schedule, none of the Companies has any labor contracts, collective bargaining agreements or material consulting agreements with any persons employed by or otherwise performing services primarily for any of the Companies (collectively, the "BUSINESS PERSONNEL") or any representative of any Business Personnel. Except as listed on SCHEDULE 3.15 of the Disclosure Schedule, since February 1, 1992, none of the Companies has engaged in any unfair labor practice with respect to Business Personnel that is material to the Companies, and there is no unfair labor practice complaint pending against any of the Companies with respect to Business Personnel that is material to the Companies. There is no labor strike, dispute, slowdown or stoppage pending against or, to the Owners' Knowledge, threatened against or affecting, any of the Companies that would reasonably be expected to have a material adverse effect on the Companies, and none of the Companies has experienced any work stoppage or other material labor difficulty involving its employees during the last four (4) years that has had or would reasonably be expected to have a material adverse effect on the Companies. Except as listed on SCHEDULE 3.15 of the Disclosure Schedule, the Companies have been since February 1, 1992, and currently are in material compliance with the requirements of all applicable labor and employment laws, rules and regulations. Except as disclosed on SCHEDULE 3.15 of the Disclosure Schedule, none of the Companies is engaged in negotiations or discussions with any labor or trade union or works council regarding amendment of any collective bargaining agreement or changes to any retirement, welfare or severance plan. 3.16 Contracts. SCHEDULE 3.16 of the Disclosure Schedule contains a list as of the date hereof of all contracts (other than purchase orders and sales orders with customers and suppliers of the Companies) to which any of the Companies is a party or by which any of the Companies or its respective properties is bound which (i) provides for the payment or receipt by the Companies of $100,000 or more in any given 12-month period, (ii) prohibits the Companies from engaging in their respective normal businesses in any geographic location or (iii) prohibits the Companies from competing with any person or entity. The contracts listed on SCHEDULE 3.16 of the Disclosure Schedule 41 also include: (i) as of the date hereof, any lease (whether of real or personal property) providing for payment or receipt by any of the Companies of $100,000 or more in any given 12-month period; (ii) as of the date hereof, any agreement for the purchase of equipment or other capital assets that provides for payments by any of the Companies of $100,000 or more in any given 12-month period; (iii) as of the date hereof, any agreement providing for the sale by any of the Companies of equipment or other capital assets that provides for annual payments to any of the Companies of $100,000 or more in any given 12-month period; (iv) any partnership, joint venture or other similar agreement or arrangement to which any of the Companies is a party, other than joint product development arrangements with customers; (v) as of the date hereof, any agreement other than the Transaction Documents and the D&F Transaction Agreements relating to the acquisition or disposition of any business by any of the Companies (whether by merger, sale of stock, sale of assets or otherwise); (vi) as of the date hereof, any agreement relating to indebtedness for borrowed money or the deferred purchase price of property to which any of the Companies is a party (in either case, whether incurred, assumed, guaranteed or secured by any asset), except any such agreement with an aggregate outstanding principal amount not exceeding $100,000; and (vii) any agreement or transaction between any of the Companies and any of the Owners, F&F, HNBV, HFI, HCI or any of their respective Affiliates (other than the other Companies) involving a matter in excess of $100,000 or which cannot be terminated by the Interested Persons as of or after the Closing with thirty (30) days or less prior notice without termination payment or penalty. To the Owners' Knowledge, except as otherwise provided in SCHEDULE 3.16 of the Disclosure Schedule and subject to normal expiration or termination as provided in such contracts, each contract disclosed in SCHEDULE 3.16 of the Disclosure Schedule is a valid and binding agreement of the respective Company, and is in full force and effect, except as any of the foregoing may be limited by the bankruptcy or insolvency of any other party thereto or the application by a court of appropriate jurisdiction of any equitable principles. Except as provided in SCHEDULE 3.16 of the Disclosure Schedule, none of the Companies is in default or breach in any material respect under the terms of any contract described on such SCHEDULE 3.16. True and complete copies of all contracts listed on SCHEDULE 3.16 of the Disclosure Schedule have been made available to each of the Interested Persons, except as set forth in SCHEDULE 3.16 of the Disclosure Schedule. 3.17 Employee Benefits. SCHEDULE 3.17 of the Disclosure Schedule contains listings of each Plan (as hereinafter defined). True and complete copies of all of such Plans (and if applicable related trust agreements) together with the most recent annual reports (Form 5500 including, if applicable, Schedule B thereto) and the most recent actuarial valuation report prepared in connection with any Plan, have been made available to the Interested Persons. No Plan is maintained in connection with any trust described in Section 501(c)(9) of the Code. Each Plan 42 complies in all material respects with the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Code and all other applicable laws and administrative or governmental rules and regulations. No "REPORTABLE EVENT" (within the meaning of Section 4043 of ERISA) has occurred with respect to any Plan (other than with respect to the transactions contemplated by the Transaction Documents, the D&F Transaction Agreements, the Fries Withdrawal and the Fries Withdrawal Documents). As of the date of this Agreement, no Company is a contributing sponsor described in 4043(b)(1) of ERISA. No condition exists which would subject any of the Companies or any of their ERISA Affiliates (as hereinafter defined) to any fine under Section 4071 of ERISA; none of the Companies, nor any of their ERISA Affiliates, has withdrawn from any Plan or Multiemployer Plan (as hereinafter defined) or has taken, or is currently considering taking, any action to do so; and no action has been taken, or is currently being considered, by any of the Companies or any of their ERISA Affiliates to terminate any Plan subject to Title IV of ERISA. None of the Companies nor any ERISA Affiliate of any of them has engaged in, or is a successor or parent corporation to an entity that has engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA. No condition exists that (i) could constitute grounds for termination by the PBGC of any employee benefit plan that is subject to Title IV of ERISA that is established, maintained or contributed to by any of the Companies or any of their ERISA Affiliates or (ii) presents a material risk of complete or partial withdrawal from any Multiemployer Plan (as hereinafter defined), which could result in any of the Companies or any of the Interested Persons or any ERISA Affiliate of any of them incurring a withdrawal liability within the meaning of Section 4201 of ERISA. The assets of the Companies are not now, nor will they solely because of the mere passage of time be, subject to any lien imposed under Code Section 412(n) by reason of a failure of any of the Owners or the Companies or any ERISA Affiliate of any of them to make timely installments or other payments required under Code Section 412. No Plan, nor any trust created thereunder, has incurred any "ACCUMULATED FUNDING DEFICIENCY" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived. There are no actions, suits or claims pending or, to the Owners' Knowledge, threatened (other than routine claims for benefits) with respect to any Plan which would reasonably be expected to have a material adverse effect on the Companies. None of the Companies nor any of their ERISA Affiliates has incurred or, to the Owners' Knowledge, would reasonably be expected to incur any liability material to the Companies under or pursuant to Title IV of ERISA or Section 4971 of the Code. No prohibited transactions described in Section 406 of ERISA or Section 4975 of the Code have occurred which would reasonably be expected to result in liability material to the Companies. All Plans that are intended to be qualified under Section 401(a) of the Code have received a favorable determination letter as to such qualification from the Internal Revenue Service, and to the Owners' Knowledge, no event has occurred, either by reason of any action or failure to act, which would cause the loss of any such qualification. To the Owners' 43 Knowledge, there is no reason why any Plan is not so qualified in operation. None of the Companies is a party, contributes or within the past six years has contributed, to a multiemployer plan, as defined in Sections 3(37) and 4001(a)(2) of ERISA. None of the Companies contributes to, or has within the past six years contributed to a single-employer plan within the meaning of Section 4001(a)(15) which has two or more contributing sponsors, as defined in Section 4001(a)(13), at least two of whom are not under common control, within the meaning of ERISA. The Companies have complied in all material respects with the health care continuation requirements of Part 6 of Title I of ERISA to the extent applicable. Except as disclosed on SCHEDULE 3.17 of the Disclosure Schedule, the execution and delivery of the Transaction Documents and the D&F Transaction Agreements do not, and the consummation of the transactions contemplated thereby and compliance with the provisions thereof will not, result in an increase in the amount of compensation or benefits or accelerate the vesting or timing of payment of any compensation or benefits payable by any of the Companies to any Plan, Benefit Arrangement (as defined below), International Plan (as defined below) or to any employee of any of the Companies. SCHEDULE 3.17 of the Disclosure Schedule contains listings of each Benefit Arrangement (as hereinafter defined) existing as of the date hereof. True and complete copies or descriptions of each Benefit Arrangement (and, if applicable, related trust agreements) and all amendments thereto have been made available to the Interested Persons. Each Benefit Arrangement has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all applicable statutes, orders, rules and regulations and has been maintained in good standing with applicable regulatory authorities. All contributions and payments accrued under each Plan and Benefit Arrangement, determined in accordance with prior funding and accrual practices, as adjusted to include proportional accruals for the period ending on the Closing Date, will be discharged and paid on or prior to the Closing Date to the extent then due or, to the extent required by GAAP, reflected as a Current Liability as determined in the calculations related to the Adjusted Aggregate Value. As used in this Agreement: (i) "PLAN" means an "EMPLOYEE BENEFIT PLAN," as defined in Section 3(3) of ERISA, (other than a Multiemployer Plan) which (i) is subject to any provision of ERISA, (ii) is established, administered, maintained or contributed to by any of the Companies or any of their Affiliates and (iii) covers any employee or former employee of any Company in respect of service with any Companies or to which any of the Companies or any of their ERISA Affiliates otherwise may have any liability; (ii) "MULTIEMPLOYER PLAN" means a "MULTIEMPLOYER PLAN" (as defined in Section 4001(a)(3) of ERISA) to which any of the Companies or any of their ERISA Affiliates is or has been obligated to contribute or otherwise may have any liability; and (iii) with respect to any person, "ERISA AFFILIATE" means any trade or business (whether or not incorporated) which is under common control or would be considered a single employer with such person pursuant to Section 414(b), (c), (m) or (o) of the Code and the regulations promulgated thereunder or pursuant to Section 4001(b) 44 of ERISA and the regulations promulgated thereunder. "BENEFIT ARRANGEMENT" means any employment, severance, change in control or similar contract or arrangement or any plan, policy, fund, program or contract or arrangement providing for bonus, profit-sharing, stock option, or other stock related rights or other forms of incentive or deferred compensation, vacation benefits, workers' compensation or severance benefits that (A) is not a Plan, (B) is entered into, maintained, administered or contributed to, as the case may be, by any of the Owners, the Companies or the Affiliates of any of them and (C) covers in respect of service with any Company any current or former U.S. employee or U.S. independent contractor of any of the Companies who is or was employed in the United States. "INTERNATIONAL PLAN" means (I) any written employment agreement providing for annual salary in excess of $100,000 or any severance or similar contract or arrangement providing for compensation (including retirement benefits) in excess of $100,000 that (A) is not a Plan or a Benefit Arrangement and (B) is entered into between any of the Companies and any current or former employee, agent or independent contractor of any of the Companies who is employed by any of the Companies in the Netherlands, the United Kingdom, Mexico, Japan, Australia, Canada, or Singapore or who while employed by any of the Companies was employed in the Netherlands, the United Kingdom, Mexico, Japan, Australia, Canada, or Singapore or (II) any written plan, policy, fund, program, arrangement, or contract of or with any of the Companies or any of their Affiliates in respect of service with any of the Companies covering a group of employees (at least 12 in number) who are employed by any of the Companies in the Netherlands, the United Kingdom, Mexico, Japan, Australia, Canada, or Singapore or who while employed by any of the Companies were employed in the Netherlands, the United Kingdom, Mexico, Japan, Australia, Canada or Singapore; providing for (A) retirement benefits (including pension, health, medical or life insurance), but excluding any retirement scheme fund, plan or program (x) sponsored by any government or (y) providing benefits statutorily mandated under the laws of the applicable jurisdiction either at the minimum level statutorily mandated or pursuant to a statute which does not specify a minimum benefit, or (B) bonus (including post employment bonus), profit sharing, stock option, or other stock related rights or other forms of incentive or deferred compensation, vacation benefits, life insurance (including any self insured arrangements), health or medical benefits, disability benefits, supplemental unemployment benefits or severance benefits (cumulatively "BENEFITS"), other than any plan, policy, fund, program, arrangement or contract providing for BENEFITS statutorily mandated by the laws of the applicable jurisdiction either at the minimum level statutorily mandated or pursuant to a statute which does not specify a minimum benefit that (A) is not a Plan or a Benefit Arrangement and (B) is entered into, maintained, administered, or contributed to by any of the Sellers, the Companies or the Affiliates of any of them. "PBGC" means the Pension Benefit Guaranty Corporation. SCHEDULE 3.17 of the Disclosure Schedule lists each International Plan. True and complete copies of each International Plan and all 45 amendments thereto have been made available to the Interested Persons. Each International Plan has been maintained and operated in substantial compliance with its terms and with the requirements prescribed by any and all applicable statutes, orders, rules and regulations and has been maintained in good standing with all applicable regulatory authorities. With respect to each International Plan all necessary or appropriate approvals, qualifications or certifications have been obtained and no event has occurred or condition exists which would cause the loss of such approval, qualification or certifications. All contributions and payments accrued under each International Plan, determined in accordance with prior funding and accrual practices, as adjusted to include proportional accruals for the period ending on or prior to the Closing Date will be discharged and paid on or prior to the Closing Date to the extent then due or, to the extent required by GAAP, reflected as a Current Liability as determined in the calculation related to the Adjusted Aggregate Value. 3.18 Intellectual Property. (a) The filed patents, the patent and trademark applications, and the registered trademarks, servicemarks and copyrights of each of the Companies as of the date hereof (the "REGISTERED ITEMS") are listed in SCHEDULE 3.18 of the Disclosure Schedule with an indication as to each, as applicable, of: (i) the type of such right (i.e., patent, trademark, etc.); (ii) the owner of such right; and (iii) the jurisdictions by or in which such right has been issued or registered or in which an application for such issuance or registration has been filed, including the respective registration or application numbers. (b) For purposes of this Section 3.18, the proprietary intellectual property of each of the Companies (other than the Registered Items) necessary for the conduct of their respective businesses as conducted on the date hereof shall be referred to as the "ANCILLARY ITEMS." The Registered Items and the Ancillary Items are collectively referred to as the "INTELLECTUAL PROPERTY." (c) Except as set forth in SCHEDULE 3.18 of the Disclosure Schedule, the Companies own or have the right to use all Registered Items, and to the Owners' Knowledge, the Companies own or have a right to use the Ancillary Items. (d) Except as set forth in SCHEDULE 3.18 of the Disclosure Schedule, each Registered Item owned by the Companies is free and clear of all security interests, liens, claims, pledges, charges or encumbrances of any nature whatsoever, except for any such security interests, liens, claims, pledges, charges or encumbrances which would not reasonably be expected to have a material adverse effect on the Companies. (e) SCHEDULE 3.18 of the Disclosure Schedule contains a list as of the date hereof of each license and sub-license agreement (with any of the Companies as licensor or licensee) covering any Intellectual Property which involves the payment or receipt by the Companies of in excess of $100,000 of license fees or royalties per year. Such list specifies the identity of all parties to the listed license and sublicense agreements and a 46 general description of the subject matter thereof. All of such license agreements are in full force and effect, and there exists no material default by any of the Companies under such license agreements. (f) Except as set forth in SCHEDULE 3.18 of the Disclosure Schedule, no use by any of the Companies of any of the Registered Items in connection with the Business as conducted on the date hereof infringes upon, or otherwise violates, the rights of any person (other than the Interested Persons or their Affiliates) with respect thereto where such infringement or violation could reasonably be expected to result in a restriction upon or a termination of the Companies' right to use such Registered Item. Except as set forth in SCHEDULE 3.18 of the Disclosure Schedule, as of the date hereof, to the Owners' Knowledge the Companies have not received notice that use by any of the Companies of any of the Ancillary Items in connection with the Business as conducted on the date hereof infringes upon, or otherwise violates, the rights of any person (other than the Interested Persons or their Affiliates) with respect thereto where such infringement or violation could reasonably be expected to result in a restriction upon or a termination of the Companies' rights to use such Ancillary Items. (g) Except as set forth in SCHEDULE 3.18 of the Disclosure Schedule and except as may be provided in any license agreement listed on SCHEDULE 3.18, none of the Intellectual Property that is owned by any of the Companies is subject to any outstanding judgment, injunction, order, decree or agreement restricting the use thereof by any of the Companies or restricting the licensing thereof by the Companies to any person. (h) Except as set forth in SCHEDULE 3.18 of the Disclosure Schedule, (i) the Companies have, to the Owners' Knowledge, the exclusive right to use the Tastemaker name in connection with the Business in any jurisdiction in which the Companies do business on the date hereof, and (ii) as of the date hereof, the Companies have not, to the Owners' Knowledge, received any notice of conflict with respect to the rights of others regarding the use of the name Tastemaker in connection with the Business. (i) Except as set forth in SCHEDULE 3.18 of the Disclosure Schedule, no person, firm or corporation or other business association is, to the Owners' Knowledge, presently authorized by the Owners or the Companies to use the Tastemaker name. The Owners have heretofore made available to each of the Interested Persons copies of any documents listed in SCHEDULE 3.18 of the Disclosure Schedule. 3.19 Properties. (a) The Companies own or have the right to use all real and tangible personal property necessary for the conduct of their businesses. Such property, excluding assets not used in the operations of the Companies, is in good operating condition and repair, subject to ordinary wear and tear, and there exist no material restrictions on the right or ability of the Companies to use such property in the conduct of their respective businesses as conducted on the date hereof. Except as set forth on SCHEDULE 3.19 to the Disclosure Schedule, all such 47 property as is owned by the Companies is free and clear of all security interests, liens, claims, pledges, charges and other encumbrances of any nature whatsoever, securing indebtedness of any person or entity other than the Companies, except for any such security interests, liens, claims, pledges, charges or encumbrances which would not reasonably be expected to have a material adverse effect on the Companies. (b) SCHEDULE 3.19 of the Disclosure Schedule contains a true and complete list of each lease of personal property to which any of the Companies is a party as of the date hereof, which provides for the payment or receipt by the Company of any amount in excess of $100,000 per year. All such personal property leases are in full force and effect, and there exists no material default by any of the Companies under any such personal property leases. True and complete copies of all such personal property leases have been made available to each of the Interested Persons. (c) All real property owned by any of the Companies as of the date hereof is described in SCHEDULE 3.19 of the Disclosure Schedule, and none of such real property is subject to any mortgage which secures debt of any person or entity other than the Companies. A true and complete list of all leases of real property by any of the Companies upon which offices staffed with personnel of the Companies are located or manufacturing operations of the Companies are conducted as of the date hereof is contained in SCHEDULE 3.19 of the Disclosure Schedule, all such real property leases are in full force and effect, and there exists no material default by any of the Companies under any such real property leases. True and complete copies of all such real property leases have been made available to each of the Interested Persons. All such real property is suitable in all material respects for the conduct of the businesses of the Companies as conducted on the date hereof. To the Owners' Knowledge, none of the structures on any such owned real property substantially encroaches upon real property of another person, and no structure of any other person substantially encroaches upon any of such owned real property. 3.20 Insurance Coverage. SCHEDULE 3.20 of the Disclosure Schedule contains a true and complete description as of the date hereof of the Companies' insurance programs covering the assets, properties, operations and activities of the Companies. Except as disclosed on SCHEDULE 3.20 to the Disclosure Schedule, there is no material claim by the Companies pending under any policies of insurance as to which coverage has been questioned, denied or disputed by the underwriters of such policies or in respect of which such underwriters have reserved their rights. All premiums payable under all policies of insurance maintained by the Companies have been paid timely and the Companies have otherwise complied in all material respects with the terms and conditions of all such policies. To the Owners' Knowledge, there is no threatened termination of, or material alteration of coverage under, any policies of insurance maintained by the Companies. 3.21 Company Brokers. None of the Companies is a party to 48 any agreement providing for the payment of any broker's, finder's or other similar fee or commission in connection with the execution and delivery of, or the consummation of the transactions contemplated by, any of the Transaction Documents or the D&F Transaction Agreements, the Fries Withdrawal or the Fries Withdrawal Documents. 3.22 Withdrawal Consents and Approvals; No Violation. Assuming the completion of the closing of the transactions contemplated by the D&F Transaction Agreements and the Transaction Documents and other than by reason of any acts or omissions by the Interested Persons and their respective Affiliates (including, after the Closing, without limitation, F&F) and any events or occurrences after the Closing not related to any acts or omissions by the Owners and their respective Affiliates (including, prior to the Closing, without limitation, F&F), except as set forth in SCHEDULE 3.22 of the Disclosure Schedule, the exercise on the Closing Date by F&F of the Fries Withdrawal immediately after completion of the Closing will not, and the consummation of the Fries Withdrawal Closing immediately after completion of the Closing and compliance with the provisions of the Partnership Agreement and the Fries Withdrawal Documents in connection therewith will not, result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material right or benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of Tastemaker under: (i) the Partnership Agreement, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, agreement, instrument, permit, concession, franchise or license by which Tastemaker is bound or License or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation by which Tastemaker is bound or to which any of its properties or assets is subject, other than, in the case of clauses (ii) and (iii), any such violations, defaults, rights, liens, security interests, charges or encumbrances (A) that are attributable to the Interested Persons or their Affiliates, or (B) that would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on Tastemaker, and would not impair the ability of Tastemaker to perform its obligations under the Partnership Agreement or the Fries Withdrawal Documents, prevent the consummation by Tastemaker of the Fries Withdrawal Closing or, other than by reason of any act or omission of the Interested Persons or F&F or their respective subsidiaries, materially and adversely affect the rights and benefits of F&F under the Partnership Agreement or the Fries Withdrawal Documents. Assuming the completion of the closing of the transactions contemplated by the D&F Transaction Agreements and the Transaction Documents and other than by reason of any acts or omissions by the Interested Persons and their respective Affiliates (including, after the Closing, without limitation, F&F) and any events or occurrences after the Closing not related to any acts or omissions by the Owners and their respective 49 Affiliates (including, prior to the Closing, without limitation, F&F), no filing, declaration or registration with, or consent, approval, order or authorization of, any Governmental Authority is required by, or with respect to, Tastemaker in connection with the exercise on the Closing Date by F&F of the Fries Withdrawal immediately after the completion of the Closing or the consummation of the Fries Withdrawal Closing immediately after the Closing, except: (a) in connection, or in compliance, with the provisions of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, (b) for such filings, declarations, registrations, consents, approvals, orders and authorizations in the Countries disclosed in APPENDIX G hereto, and such filings, declarations, registrations, covenants, approvals, orders and authorizations that may be required under the laws of any other foreign country in which Tastemaker or any then existing subsidiary of Tastemaker is organized, conducts any business or owns any property or assets, and (c) for such other filings, declarations, registrations, consents, approvals, orders and authorizations (1) that are attributable to the Interested Persons or their Affiliates, or the ownership of F&F by the Interested Persons or their Affiliates, or (2) the failure of which to obtain or make would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Tastemaker and would not impair the ability of Tastemaker to perform its obligations under the Partnership Agreement or the Fries Withdrawal Documents, prevent the consummation by Tastemaker of the Fries Withdrawal Closing or, other than by reason of any act or omission of the Interested Persons or F&F or their respective subsidiaries, materially and adversely affect the rights and benefits of F&F under the Partnership Agreement or the Fries Withdrawal Documents. Assuming the completion of the closing of the transactions contemplated by the D&F Transaction Agreements and the Transaction Documents and other than by reason of any acts or omissions by the Owners and their respective Affiliates, including, prior to the Closing, without limitation, F&F, and any event or occurrence prior to the Closing not related to any acts or omissions by the Interested Persons and their respective Affiliates, except as disclosed on SCHEDULE 3.17 of the Disclosure Schedule, the exercise on the Closing Date of the Fries Withdrawal immediately following the completion of the Closing will not, and the consummation of the Fries Withdrawal and the transactions contemplated by the Fries Withdrawal Documents on the Closing Date immediately following the Closing will not, result in an increase in the amount of compensation or benefits or accelerate the vesting or timing of payment of any compensation or benefits payable by any of the Companies to any Plan, Benefit Arrangement (as defined below), International Plan (as defined below) or to any employee of any of the Companies, other than any such increase, acceleration, vesting or changes in timing as are attributable to the Interested Persons or their Affiliates. 4. REPRESENTATIONS AND WARRANTIES OF THE INTERESTED PERSONS. The Interested Persons represent and warrant to each of the 50 Owners as of the date hereof and as of the Closing Date as follows: 4.1 Organization, Standing and Power. GRI is a corporation duly organized and validly existing and in good standing under the laws of Switzerland and has the requisite power and authority to carry on its businesses as conducted on the date hereof. Roche is a corporation duly organized and validly existing and in good standing under the laws of Delaware and has the requisite power and authority to carry on its businesses as conducted on the date hereof. 4.2 Authority. The Interested Persons have all requisite power and authority to enter into each of the Transaction Documents and the D&F Transaction Agreements and to consummate the transactions contemplated thereby. The execution and delivery of each of the Transaction Documents and the D&F Transaction Agreements by Roche and/or GRI, as the case may be, and the consummation by the Interested Persons of the transactions contemplated thereby have been duly authorized by all necessary action on the part of Roche and/or GRI, as the case may be. Each of the Transaction Documents and the D&F Transaction Agreements has been duly executed and delivered by Roche and/or GRI, as the case may be, and (assuming the due authorization, execution and delivery thereof by each other party thereto other than the Designated Buyers) constitutes the valid and binding obligation of Roche and/or GRI, as the case may be, enforceable against Roche and/or GRI, as the case may be in accordance with its respective terms. Each of the Designated Buyers has all requisite power and authority to enter into each of the Designated Transaction Agreements and to consummate the transactions contemplated thereby. The execution and delivery of each of the Designated Transaction Agreements prior to the Closing Date by each of the Designated Buyers that is a party thereto and the consummation by each of the Designated Buyers on the Closing Date of the transactions contemplated thereby will have been duly authorized by all necessary action on the part of each of the Designated Buyers. The Designated Transaction Agreements will have been duly executed and delivered by each of the Designated Buyers that is a party thereto prior to the Closing Date and (assuming the due authorization, execution and delivery thereof by Tastemaker) will then constitute the valid and binding obligations of each of the Designated Buyers that is a party thereto, enforceable against each of the Designated Buyers in accordance with their respective terms. 4.3 Consents and Approvals; No Violation. The execution and delivery of the Transaction Documents and the D&F Transaction Agreements do not, and the consummation of the transactions contemplated thereby and compliance with the provisions thereof will not, result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material right or benefit under: (i) any provision of the charter or organizational documents of either of 51 the Interested Persons; (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, agreement, instrument, permit, concession, franchise or license by which either of the Interested Persons is bound; or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation by which either of the Interested Persons is bound or to which any of its properties or assets is subject, other than, in the case of clauses (ii) and (iii), any such violations, defaults or rights that, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Interested Persons, and would not impair the ability of either of the Interested Persons to perform its obligations under any of the Transaction Documents or the D&F Transaction Agreements, prevent the consummation by either of the Interested Persons of any of the transactions contemplated by any of the Transaction Documents or the D&F Transaction Agreements or, other than by reason of any act or omission of the Owners or their respective Affiliates, materially and adversely affect the rights and benefits of the Owners under the Transaction Documents and the D&F Transaction Agreements. No filing, declaration or registration with, or consent, approval, order or authorization of, any Governmental Authority is required by, or with respect to, either of the Interested Persons in connection with the execution and delivery by either of the Interested Persons of the Transaction Documents or the consummation by either of the Interested Persons of the transactions contemplated by the Transaction Documents, except: (a) in connection, or in compliance, with the provisions of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended; (b) the filing of the certificate of designation of Newco Preferred Stock with the Secretary of State of the State of Delaware; and (c) for such filings, declarations, registrations, consents, approvals, orders and authorizations as are disclosed on APPENDIX F to this Agreement that may be required under the laws of any foreign country in which any of the Companies is organized, conducts any business or owns any property or assets. 4.4 Brokers. No broker, investment banker or other person other than J.P. Morgan & Co., Incorporated, the fees and expenses of which will be paid by the Interested Persons, is entitled to any broker's, finder's or other similar fee or commission in connection with the execution and delivery of, or the consummation of the transactions contemplated by, any of the Transaction Documents and the D&F Transaction Agreements based on agreements or arrangements made by the Interested Persons or the Designated Buyers. 4.5 Withdrawal Consents and Approvals; No Violation. Assuming the completion of the closing of the transactions contemplated by the D&F Transaction Agreements and the Transaction Documents and other than by reason of any acts or omissions by the Owners and their respective Affiliates (including prior to the Closing, without limitation, F&F), and any events or occurrences prior to the Closing not related to any acts or omissions by the Interested Persons and their respective Affiliates, the exercise by F&F on the Closing Date of the Fries 52 Withdrawal immediately after completion of the Closing will not, and the consummation of the Fries Withdrawal Closing immediately after the Closing and compliance with the provisions of the Partnership Agreement and the Fries Withdrawal Documents in connection therewith will not, result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material right or benefit under: (i) any provision of the charter or organizational documents of either of the Interested Persons or F&F; (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, agreement, instrument, permit, concession, franchise or license by which either of the Interested Persons or F&F is bound; or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation by which either of the Interested Persons or F&F is bound or to which any of their respective properties or assets is subject, other than, in the case of clauses (ii) and (iii), any such violations, defaults or rights that, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the Interested Persons or F&F, and would not impair the ability of F&F to perform its obligations under the Partnership Agreement or the Fries Withdrawal Documents, prevent the consummation by F&F of the Fries Withdrawal Closing or, other than by reason of any act or omission of the Owners or Tastemaker, materially and adversely affect the rights and benefits of Tastemaker under the Partnership Agreement and the Fries Withdrawal Documents. Assuming the completion of the closing of the transactions contemplated by the D&F Transaction Agreements and the Transaction Documents and other than by reason of any acts or omissions by the Owners and their respective Affiliates, (including, prior to the Closing, without limitation, F&F) and any events or occurrences prior to the Closing not related to any acts or omissions by the Interested Persons and their respective Affiliates, no filing, declaration or registration with, or consent, approval, order or authorization of, any Governmental Authority is required by, or with respect to, either of the Interested Persons or F&F in connection with the exercise on the Closing Date by F&F of the Fries Withdrawal immediately after the completion of the Closing or the consummation by F&F of the Fries Withdrawal Closing immediately after the completion of the Closing, except: (a) in connection, or in compliance, with the provisions of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended; and (b) for such filings, declarations, registrations, consents, approvals, orders and authorizations as are disclosed on APPENDIX G to this Agreement that may be required under the laws of any foreign country in which Tastemaker or any of its Subsidiaries is organized, conducts any business or owns any property or assets, and (c) for such other filings, declarations, registrations, covenants, approvals, orders and authorizations the failure of which to obtain or make would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on F&F and would not impair the ability of F&F to perform its obligations under the Partnership Agreement or the Fries Withdrawal Documents, prevent 53 the consummation by F&F of the Fries Withdrawal Closing or, other than by reason of any act or omission of Tastemaker, materially or adversely affect the rights and benefits of Tastemaker under the Partnership Agreement or the Fries Withdrawal Documents. 5. COVENANTS OF THE OWNERS. 5.1 Access to Properties and Records. After the full execution and delivery hereof until the Closing Date, the Owners shall cause the Companies to give the officers, employees, attorneys, accountants, contractors and other agents and representatives of the Interested Persons reasonable access to the Companies' offices, properties and records in accordance with the Transition Team Protocol. 5.2 Operations. Except as may otherwise be contemplated by the Transaction Documents and the D&F Transaction Agreements, from the date hereof to the Closing, the Owners shall cause the Companies to: (i) conduct their respective operations in compliance with applicable laws and only in the ordinary course, provided, that the Owners shall be permitted to cause the Companies to declare and pay dividends and make other distributions from the date hereof until (but in no event after) the Adjustment Time; (ii) use reasonable best efforts to maintain their respective properties and facilities in their present condition, reasonable use and ordinary wear and tear excepted; (iii) use reasonable best efforts to maintain their respective relationships with customers, suppliers and key employees; (iv) use reasonable best efforts to obtain any material consents of non-governmental third parties required in connection with the consummation of the transactions contemplated by the Transaction Documents, the D&F Transaction Agreements and, if requested by the Interested Persons, the Fries Withdrawal Documents; and (v) continue to maintain insurance with coverages, deductibles and limits which are the same in all respects material to the Companies as exist on the date hereof. Without limiting the generality of the foregoing, from the date hereof until the Closing Date, the Owners will not permit the adoption of any change to the Partnership Agreement and will not permit any of the Companies to: (a) adopt or propose any change in its certificate of incorporation or bylaws or other similar constituent documents; (b) merge or consolidate with any other person; or (c) acquire a business of any other person; (d) sell, lease, license or otherwise dispose of any material assets or property; or (e) agree or commit to do any of the foregoing; except in the case of (d) and (e), (A) pursuant to existing contracts or commitments, and (B) in the ordinary course of business. 5.3 Financial Statements. On or before the Closing Date, the Owners shall deliver or cause to be delivered to each of the Interested Persons an unaudited combined consolidated balance sheet, income statement and cash flow statement of the Companies as at, and for the interim period ending on, the last day of the most recent accounting month of the Companies prior to the 54 Closing Date for which such statements are available. The statements to be delivered pursuant to this Section shall be prepared in accordance with the customary accounting practices, procedures and policies of the Companies used in connection with regularly prepared internal financial statements, which practices, procedures and policies will not necessarily be consistent in all respects with GAAP or the practices, procedures and policies used in preparing the 1995 Financial Statements. The Interested Persons shall have access to certain other information customarily prepared by the Companies concerning the financial condition and results of operations of the Companies in accordance with the Transition Team Protocol. 5.4 Fees. Except as otherwise agreed by the parties in writing, each of Hercules and Mallinckrodt shall pay all legal, accounting, financial advisory, brokerage and finder fees and commissions, filing fees and other similar fees and expenses incurred by or imposed upon it in connection with the negotiation and preparation of the Transaction Documents, the D&F Transaction Agreements and the Fries Withdrawal Documents and the consummation of the transactions contemplated by the Transaction Documents, the D&F Transaction Agreements, the Fries Withdrawal and the Fries Withdrawal Documents, and the Interested Persons shall have no liability of any kind therefor. 5.5 Non-Solicitation of Employees. Each of the Owners agrees that for a period of three full years from the Closing Date, neither it nor any of its Affiliates shall solicit the employment of, or the performance of services by, any current employee of any of the Companies whose employment is not terminated by the Interested Persons or their respective Affiliates subsequent to the Closing Date; provided, however, that general solicitations not targeted to employees of the Companies on the Closing Date shall not be deemed to violate this Section 5.5. 5.6 Confidentiality. After Closing, the Owners and their Affiliates will hold, and will use reasonable efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of law, all confidential documents and information concerning the Companies and the Business, except to the extent that such information was: (a) previously known on a nonconfidential basis by the Owners; (b) in the public domain through no fault of the Owners; (c) later lawfully acquired by the Owners from any source other than one related to the Owners' prior ownership of the Companies, which source was not bound by any confidentiality obligation; or (d) disclosed for purposes of litigation prosecution or defense, Tax return preparation or payment, reporting historical financial results and other proper business purposes. Notwithstanding anything in this Section 5.6 to the contrary, the obligation of the Owners and their Affiliates to hold any such information in confidence shall be satisfied if they exercise the same care with 55 respect to such information as they would take to preserve the confidentiality of their own similar information. 5.7 Accounts; Safe Deposit Boxes; Powers of Attorney; Officers and Directors. The Owners shall provide prior to Closing; (i) a true and correct list of all bank and savings accounts and safe deposit boxes of the Companies and those persons authorized to sign thereon; (ii) a true and correct list of all powers of attorney granted by the Companies for purposes of authorizing persons not employees of the Companies to withdraw money from bank accounts of the Companies or to pledge the credit of the Companies; and (iii) a true and correct list of all officers and directors of each of the Companies. 5.8 Access. Owners agree to make available to, and to cause the Companies to make available to, the Interested Persons during the period beginning on the date hereof, and ending on the Closing Date, certain Business Personnel identified by Interested Person for purposes of discussing with them their role in the future success of, and the terms of their future employment with, the combined organization of the Interested Persons, in accordance with the Transition Team Protocol. 5.9 Resignations. The Owners will deliver to each of the Interested Persons the resignations of all officers and directors of the Companies who will be officers, directors or employees of either of the Owners or any of their respective Affiliates after the Closing Date from their positions with the Companies on or prior to the Closing Date. The Owners will indemnify the Interested Persons for any severance or other employee benefit payments triggered by such resignations. 5.10 Tastemaker B.V. Partnership Election. Prior to the Closing Date, Hercules and Mallinckrodt shall cause Tastemaker B.V. to make an election complying with the requirements of Treasury Regulations Section 301.7701-3(c) to be classified, effective as of a date prior to the Closing Date, as a partnership for United States federal income Tax purposes. 5.11 Third Party Infringement. Between the date hereof and the Closing Date, the Owners will promptly notify the Interested Persons of (i) any infringement by any third party upon the rights of the Companies in or to Intellectual Property of which the Specified Officers become aware and (ii) any notice the Specified Officers receive from any third party that the Companies are or may be infringing upon the intellectual property rights of any third party. 5.12 Third Party Defaults. Between the date hereof and the Closing Date, the Owners will promptly notify the Interested Persons of any material default by any other person or entity, under any agreements of the Companies which are required by this Agreement to be listed on the Disclosure Schedule. 5.13 Resignations. Between the date hereof and the Closing 56 Date, the Owners shall notify the Interested Persons in the event any of the Specified Officers notifies any of the Partners' Representatives that he or she intends to resign within one (1) year after the Closing of the transactions contemplated by the Transaction Documents. 5.14 Severance and Stay Incentives. From the date hereof until the Closing Date, the Owners shall give the Interested Persons written notice of (i) the execution by the Companies of any employment agreement with any single employee providing for an annual salary of $100,000 or more or providing for any severance pay or stay incentive of $50,000 or more for any one employee, or (ii) the adoption of any stay incentive or severance program covering a group of not less than twelve (12) employees of the Companies. 5.15 Tax Waiver Notification. Between the date hereof and the Closing Date, the Owners shall notify the Interested Persons in the event (i) the Companies (or any member of any affiliated, consolidated, combined or unitary group of which a Company is a member) waives or grants any extension of any statute of limitations in respect of any Company Tax Returns or Taxes or (ii) any Company requests any extension of time in which to file any Company Tax Return. 6. COVENANTS OF THE INTERESTED PERSONS. 6.1 Compliance with Transition Team Protocol. From the date hereof until the Closing, the Interested Persons shall, and shall cause their officers, employees, attorneys, accountants, contractors and other agents and representatives to, comply with the Transition Team Protocol. 6.2 Fees. Except as otherwise agreed by the parties in writing, the Interested Persons shall pay all legal, accounting, financial advisory, brokerage and finder's fees and commissions, filing fees and other similar fees and expenses incurred by or imposed upon the Interested Persons in connection with the negotiation and preparation of the Transaction Documents, the D&F Transaction Agreements and the Fries Withdrawal Documents and the consummation of the transactions contemplated by the Transaction Documents, the D&F Transaction Agreements, the Fries Withdrawal and the Fries Withdrawal Documents, and the Owners shall have no liability of any kind therefor. 6.3 Record Retention and Access. For a period of ten (10) years following the Closing Date, the Interested Persons shall grant each of the Owners and their respective representatives, upon receipt of reasonable prior notice from the Owners, access to, and shall make available to each of the Owners and their respective representatives, all properties, facilities, documents and correspondence of the Companies existing on the Closing Date, during regular business hours and upon reasonable prior notice, for purposes of preparing tax returns and securities filings, 57 prosecution and defense of litigation and all other proper business purposes; provided that, in connection with such access the Owners will at all times comply with the Interested Persons' normal visitor safety and security procedures and requirements. If within such ten (10) year period destruction of any records, files, documents or correspondence of the Companies is desired (other than records, files, documents or correspondence which would not normally be retained in the records of the Companies' record retention policies existing on the date hereof), the Interested Persons shall not destroy or permit the destruction of such items without giving thirty (30) days prior written notice to the Owners, upon which notice the Owners shall have the right to take possession of such records, files, documents and correspondence. 6.4 Confidentiality. Until such time (if any) as the transactions contemplated by the Transaction Documents have been consummated, the Interested Persons shall continue to comply with, and shall be bound by the terms and conditions of, that certain confidentiality letter dated September 26, 1996, executed and delivered by Roche, which confidentiality letter is attached hereto as APPENDIX H and shall be for the benefit of, and enforceable by, without limitation, each of the Owners. 6.5 Responsibility for D&F Transaction Agreements. The Interested Persons shall cause their respective subsidiaries and Affiliates to fully and timely fulfill and perform, and the Interested Persons hereby unconditionally guarantees the full and timely performance and fulfillment by their subsidiaries and Affiliates of, all of their respective obligations under the D&F Transaction Agreements required to be performed or fulfilled by GRI prior to the completion of the closing of the transactions contemplated by the D&F Transaction Agreements; provided, however, that upon completion of the closing of the transactions contemplated by the prior Transaction Agreements (i) the Interested Persons shall be fully and finally released of all liabilities, responsibilities and obligations with respect to all representations, warranties, covenants, agreements and other obligations of their subsidiaries and Affiliates under the D&F Transaction Agreements, and (ii) no claim may be asserted or maintained against the Interested Persons with respect to any representation, warranty, covenant, agreement or other obligation under the D&F Transaction Agreements and all such claims shall be, and hereby are, forever released, waived and barred. 6.6 Laidlaw Landfill Site. The Interested Persons agree that none of the Companies will use the portion of the Laidlaw Landfill site in St. Louis, Missouri which is believed to be included on the National Priorities List on or after the Closing Date for the storage, treatment or disposal of any waste or material. 6.7 Designated Transaction Approvals. To the extent the identity of a Designated Buyer or information regarding a Designated Buyer is required for taking, preparing, making and/or 58 filing, or causing to be taken, prepared, made and/or filed, with each appropriate Governmental Authority, any actions, filings and requests for approvals, consents, permits, authorizations or waivers that are required from such Governmental Authority for the consummation of the transactions contemplated by such Designated Transaction Agreement, GRI shall be responsible for the same. 7. MUTUAL COVENANTS OF THE OWNERS AND THE INTERESTED PERSONS 7.1 Satisfaction of Conditions. From and after the date hereof, each of Hercules, Mallinckrodt, Roche and GRI shall use their best efforts (individually or jointly, as the case may be) to cause all conditions precedent set forth in Sections 10.1 and 10.2 of this Agreement (as appropriate to each of them) to be satisfied and fulfilled at the earliest practicable date, to the extent the satisfaction or fulfillment thereof is its responsibility hereunder or within its reasonable control. If any event should occur, either within or without the control of any party hereto, which would prevent fulfillment of the conditions precedent to the obligations of any party to consummate the transactions contemplated by any of the Transaction Documents, all parties shall use their respective best efforts to cure or remove the effect of the event as expeditiously as possible; provided, however, that (without limitation) nothing set forth in this Section 7.1 shall be construed as requiring any party to institute litigation or expend any sums in the defense or settlement of litigation in order to cure or remove the effect of any such event. 7.2 Governmental Consents. Promptly following the full execution of this Agreement, each of Hercules, Mallinckrodt, Roche and GRI shall take, prepare, make and/or file, or cause to be taken, prepared, made and/or filed, with each appropriate Governmental Authority, all actions, filings and requests for approvals, consents, permits, authorizations or waivers that are required from such Governmental Authority for the consummation of the transactions contemplated by each of the Transaction Documents, the D&F Transaction Agreements and, if requested by the Interested Persons, the Fries Withdrawal and the Fries Withdrawal Documents and shall diligently and expeditiously prosecute, and shall cooperate fully with each other in the prosecution of, such actions, filings and requests and all proceedings necessary to secure such approvals, consents, permits, authorizations and waivers. The parties acknowledge and agree that the actions, filings and requests required to be made pursuant to this Section include, without limitation, compliance with the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and those set forth on APPENDIX F and, if requested by the Interested Persons, those set forth on APPENDIX G. Notwithstanding anything in this Section 7.2 to the contrary, none of Mallinckrodt, Hercules, Roche or GRI, nor any of their respective Affiliates, shall be required to agree to any consent decree, order or settlement in connection with an investigation by, filing with or approval, consent permit, authorization or 59 waiver of any Governmental Authority. 7.3 Public Announcements. None of Hercules, Mallinckrodt, Roche or GRI shall make any public announcement at any time concerning the Transaction Documents, the D&F Transaction Agreements or the Fries Withdrawal Documents, or the transactions contemplated by the Transaction Documents, the D&F Transaction Agreements, or the Fries Withdrawal Documents, without the prior approval of all parties to this Agreement. In the event any party to this Agreement determines, after seeking and obtaining the advice of competent counsel, that a public announcement concerning the Transaction Documents, the D&F Transaction Agreements or the Fries Withdrawal Documents, or the transactions contemplated by the Transaction Documents, the D&F Transaction Agreements or the Fries Withdrawal Documents, is required by law, the party required to make such announcement shall give all other parties hereto such notice of, and opportunity to review, the proposed form and substance of the required announcement as is practicable under the circumstances, but such review shall in no event prevent the party required to make such announcement from making an announcement in such form and substance as it shall reasonably determine is required. 7.4 Further Assurances. After the Closing Date, each of Hercules, Mallinckrodt, Roche and GRI shall, from time to time upon any other party's request, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, all such further assignments, documents, data, employment records, instruments, transfers, conveyances, discharges, releases, assurances and consents, and shall take or cause to be taken such further actions, as such other party may reasonably request to further evidence or carry out the transactions contemplated by, and the purposes of, the Transaction Documents, the Fries Withdrawal and the Fries Withdrawal Documents. 7.5 Tax Annex. After the Closing Date, each of Hercules, Mallinckrodt, Roche and GRI shall comply with the terms and conditions of the Tax Annex. 7.6 Tastemaker B.V. Pension. The parties agree to cooperate with each other in connection with the segregation and transfer of assets allocable to employees of Tastemaker B.V. from Stichting Pensioenfonds Hercules Nederland ("SPHN") to a successor plan established by Tastemaker B.V. 7.7 Tastemaker Debt. In the event that the Interested Persons give written notice to the Owners on or before February 7, 1997 of their intent to cause F&F to exercise of the Fries Withdrawal, from the date of such notice until March 1, 1997, each of Hercules, Mallinckrodt, Roche and GRI shall use their reasonable best efforts to enable the benefits and obligations of Tastemaker, as borrower, under the Tastemaker Debt to be assigned to and assumed by, or otherwise transferred to F&F upon such terms and conditions as are satisfactory to all parties hereto and consistent with the requirements of the Contribution 60 Agreement and the Partnership Agreement with respect thereto. To such end and to the extent required, Roche shall unconditionally guaranty the obligations of F&F with respect to the Tastemaker Debt upon its transfer to F&F and, if required by the lender of the Tastemaker Debt, Roche shall procure an unconditional guaranty of such obligations from its ultimate parent, Roche Holdings Ltd. If, notwithstanding the reasonable best efforts of the parties, the proposed terms for the assignment, assumption, and transfer of the Tastemaker Debt to F&F are not agreed with the lenders of the Tastemaker Debt or are not reasonably satisfactory to the parties hereto by March 1, 1997, each of Hercules, Mallinckrodt, Roche and GRI shall use their reasonable best efforts to obtain replacement financing of the Tastemaker Debt upon terms mutually satisfactory to the parties, which shall permit the assignment, assumption and transfer thereof to F&F and which will satisfy the terms and conditions set forth in Section 10.2.6 of the Contribution Agreement and Section 8.7.C of the Partnership Agreement, and the Closing Date shall be changed to a date not later than the Closing Deadline and mutually agreeable to the parties, which date shall allow a reasonable time (assuming full cooperation by all parties) to obtain said replacement financing. The Owners shall pay all costs and fees under the lenders of the Tastemaker Debt (or any replacement thereof) associated with the transfer of such obligations to F&F and, if an unconditional guaranty of Roche Holdings Ltd. is required by the lenders of the Tastemaker Debt and provided by Roche Holding Ltd., the Owners shall reimburse Roche Holding Ltd. for up to $750,000 of any stamp taxes imposed by a Governmental Authority with respect to such unconditional guaranty of Roche Holdings Ltd., if and to the extent such stamp tax is required to be paid by Roche Holdings Ltd. The parties agree that they will not unreasonably withhold any consent or agreement required of the parties in this Section 7.7. 8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS: INDEMNITY FOR DAMAGES 8.1 Survival. All representations and warranties of the parties made in this Agreement, and all covenants and agreements of the parties made in this Agreement and required to be performed on or before the Closing Date, shall survive until 5:00 p.m. Eastern Standard Time on the second annual anniversary of the Closing Date, notwithstanding any investigation heretofore made or omitted by the parties, and shall expire and be of no further force and effect after such time; provided that (i) the representations and warranties contained in Sections 3.1, 3.2, 4.1 and 4.2 shall survive indefinitely, (ii) the representations and warranties in Section 3.12 shall survive until the fifth anniversary of the Closing Date, (iii) the covenants, agreements, representations and warranties in the Tax Annex and Sections 3.13 and 3.17 shall survive until expiration of the statute of limitations applicable to the matters covered thereby, if any (giving effect to any waiver, mitigation or extension thereof) or, if none is applicable, the second annual anniversary of the 61 Closing Date, and (iv) the representations and warranties in Sections 3.22 and 4.5 shall survive for two days after the Closing Date unless the Fries Withdrawal Closing occurs within two days after the Closing Date in which case such representations and warranties shall survive until the second annual anniversary of the Closing Date. No party will have any liability to any other party arising out of a breach of any representation or warranty contained in this Agreement or of any covenant or agreement made in this Agreement and required to be performed on or before the Closing Date, unless the party claiming that such breach occurred gives to all other parties hereto written notice and a detailed explanation of the alleged breach on or before 5:00 p.m. Eastern Standard Time on the last day of the applicable survival period; provided, however, that if notice of a claim is timely given, the claim specified in such notice, and the specific representation, warranty, covenant or agreement upon which any such claim is based, shall survive until such claim has been finally resolved and provided further that for the purpose of this Section, notice of a claim shall be deemed given by the Interested Persons on the Closing Date with respect to those items disclosed under the heading "SPECIFIED ENVIRONMENTAL MATTERS" on SCHEDULE 3.12 of the Disclosure Schedule. 8.2 Indemnity by the Interested Persons. Subject to the provisions of Section 8.1 above, and further subject to any rights of set off of Roche and GRI or any Affiliate of Roche and GRI against either of the Owners or their respective Affiliates, each of Roche and GRI shall indemnify and hold harmless each of Hercules and Mallinckrodt, and each of their respective officers, directors, agents, employees, subsidiaries, affiliates and representatives in respect of any Damages suffered or incurred as a result of or arising out of the breach by Roche, GRI or Newco of any representation, warranty, covenant or agreement set forth in any of the Transaction Documents. From and after the Fries Withdrawal Closing (if it occurs), each of Roche and GRI shall indemnify and hold harmless each of Hercules and Mallinckrodt, and each of their respective officers, directors, agents, employees, subsidiaries, affiliates and representatives, in respect of any Damages suffered or incurred as a result of or arising out of the breach by F&F after the Closing of any representation, warranty, covenant or agreement set forth in the Partnership Agreement or any of the Fries Withdrawal Documents. 8.3 Indemnity by the Owners. Subject to the provisions of Section 8.1 above, and further subject to any rights of set off of Hercules or Mallinckrodt or any Affiliate of Hercules or Mallinckrodt against either of the Interested Persons or their respective Affiliates, each of the Owners shall indemnify and hold harmless the Interested Persons, their officers, directors, agents, employees, subsidiaries, affiliates and representatives in respect of any Damages suffered or incurred as a result of or arising out of the breach by the Owners of any representation, warranty, covenant or agreement set forth in this Agreement; provided, however, that for purposes of determining whether a 62 breach by the Owners of a representation set forth in Article 3 (other than the representation and warranty in the first clause (iv) of Section 3.9, as to which this proviso shall not be applicable) is indemnifiable pursuant to this Section 8.3, the accuracy of such representations shall be determined without giving effect to the qualifications to such representations concerning "material" (including as such term qualifies specific items or effects) and "OWNERS' KNOWLEDGE," and, with respect to Section 3.12 only, without giving effect to the disclosures set forth under the heading "SPECIFIED ENVIRONMENTAL MATTERS" in SCHEDULE 3.12 of the Disclosure Schedule and without giving effect to the disclosures set forth in item three under the heading "OTHER CLAIMS" on SCHEDULE 3.14, provided further, any claim for indemnification for breach of a representation and warranty contained in Section 3.1 through 3.11 and 3.14 through 3.22 shall not be indemnifiable, pursuant to Section 8.3, or counted toward the Indemnification Threshold, unless the actual and determined Damages suffered or incurred as a result of or arising out of such breach exceed $500,000, and any claim for indemnification for a breach of the representation and warranty contained in Section 3.12 shall not be indemnifiable, pursuant to Section 8.3, or counted toward the Environmental Indemnification Threshold, unless the actual and determined Damages suffered or incurred as a result of or arising out of such breach exceed $100,000, it being agreed in both cases that (i) all claims arising out of a set of operative facts or arising out of or in connection with an event or series of events joined by a common nexus of operative facts may be aggregated for such purposes, and (ii) the Owners shall have no liability to the Interested Persons, their officers, directors, agents, employees, subsidiaries, affiliates and representatives for any claim for breach of a representation and warranty arising out of a set of operative facts or arising out of or in connection with an event or series of events joined by a common nexus of operative facts if the actual and determined Damages suffered or incurred as a result of or arising out of such breach are less than or equal to $500,000 for an Article 3 (other than Sections 3.12 and 3.13) breach and $100,000 for a Section 3.12 breach. 8.4 Indemnity by Hercules. Subject to the provisions of Section 8.1 above, and further subject to any rights of set off of Hercules or any Affiliate of Hercules against either of the Interested Persons or their respective Affiliates, Hercules shall indemnify and hold harmless Roche and/or GRI, as applicable, their officers, directors, agents, employees, subsidiaries, affiliates and representatives in respect of any Damages suffered or incurred as a result of or arising out of the breach by Hercules or HNBV of any representation, warranty, covenant or agreement set forth in the Hercules Transaction Agreement. 8.5 Indemnity by Mallinckrodt. Subject to the provisions of Section 8.1, and further subject to any rights of set off of Mallinckrodt or any Affiliate of Mallinckrodt against either of the Interested Persons or any of their respective Affiliates, Mallinckrodt shall indemnify and hold harmless Roche and/or GRI, 63 as applicable, their officers, directors, agents, employees, subsidiaries, affiliates and representatives in respect of any Damages suffered or incurred as a result of or arising out of the breach by Mallinckrodt of any representation, warranty, covenant or agreement set forth in the Contribution Agreement. 8.6 Limitations on the Owners' Indemnification Obligations. (a) Notwithstanding anything in this Article 8 to the contrary, neither Hercules nor Mallinckrodt shall have any liability or obligation to indemnify the Interested Persons pursuant to Section 8.3 hereof (except as otherwise provided in Sections 8.6(b) and 8.10 and in the Tax Annex) with respect to a breach of a representation or warranty, unless and until the aggregate liability of the Owners for all indemnifiable Damages of the Interested Persons, their officers, directors, agents, employees, subsidiaries, affiliates and representatives, other than those indemnifiable Damages pursuant to Sections 8.6(b) and 8.10 hereof and the Tax Annex hereto, exceeds the Indemnification Threshold, and then the Owners shall only be liable for indemnifiable Damages of the Interested Persons (other than those indemnifiable Damages pursuant to Sections 8.6(b) and 8.10 hereof and the Tax Annex hereto, which shall be paid as provided therein), their officers, directors, agents, employees, subsidiaries, affiliates and representatives in excess of the Indemnification Threshold. (b) Notwithstanding anything in this Article 8 to the contrary, neither Hercules nor Mallinckrodt shall have any liability or obligation to indemnify the Interested Persons pursuant to Section 8.3 hereof with respect to a breach by the Owners of any representation or warranty set forth in Section 3.12 (an "ENVIRONMENTAL BREACH") unless and until the aggregate liability of the Owners for all indemnifiable Damages of the Interested Persons, their officers, directors, agents, employees, subsidiaries, affiliates and representatives arising as a result of or out of such Environmental Breaches exceeds five million dollars ($5,000,000) (the "ENVIRONMENTAL INDEMNIFICATION THRESHOLD"), and then the Owners shall be liable for indemnifiable Damages (without regard to the Indemnification Threshold provision of Section 8.6(a) hereof) of the Interested Persons, their officers, directors, agents, employees, subsidiaries, affiliates and representatives arising as a result of or out of any Environmental Breach to the extent in excess of the Environmental Indemnification Threshold; provided, however, that indemnifiable Damages arising as a result of or out of any Environmental Breach, to the extent they are for investigatory, clean up or remedial activities, shall be limited, except as set forth below, to those costs and expenses that are required by a Governmental Authority possessing jurisdiction over the matter, based upon the most cost-effective alternative allowable by such Governmental Authority and utilizing the most cost-effective technology available,e and provided, further, if the Interested Persons undertake any investigatory, clean up, remedial or excavation activities at the facility other than as required (i) under the Participation Agreement with BSB Gelderland dated February 10, 1994 or (ii) by a Governmental Authority possessing jurisdiction over the matter and based upon the most cost- 64 effective alternative allowable by such Governmental Authority and utilizing the effective technology available, with respect to the soil and ground water contamination at Barneveld, The Netherlands, which is disclosed under the heading "SPECIFIED ENVIRONMENTAL MATTERS" on SCHEDULE 3.12 of the Disclosure Schedule, all Damages with respect to such soil and ground water contamination shall be limited to an aggregate amount of two million five hundred thousand dollars ($2,500,000); and provided further, that for purposes of determining whether an Environmental Breach has occurred, the accuracy of the representations set forth in Section 3.12 shall be determined without giving effect to the disclosures set forth under the heading "SPECIFIED ENVIRONMENTAL MATTERS" in SCHEDULE 3.12 of the Disclosure Schedule. (c) Further, and notwithstanding anything in this Article 8 to the contrary, the aggregate liability of the Owners to the Interested Persons under Section 8.3 with respect to a breach of a representation or warranty shall in no event exceed the Owners' Maximum Liability; provided that (i) the liability of the Owners under the Tax Annex hereto shall not be subject to Owners' Maximum Liability, but shall in no event exceed the limitations set forth in the Tax Annex; and (ii) the liability of the Owners under the Tax Annex hereto shall not count towards the determination of whether the Owners' liability pursuant to Section 8.3 has exceeded the Owners' Maximum Liability. In addition to the limitations on the liability of the Owners set forth in this Article 8, each of Hercules, Mallinckrodt, Roche and GRI agrees that (x) the liability of Hercules and Mallinckrodt under Section 8.3 of this Agreement and the Tax Annex hereto shall not be affected by whether the applicable breach is caused by or attributable to one or the other (or neither) of them, and (y) the Interested Persons and their respective officers, directors, agents, employees, subsidiaries, affiliates and representatives shall not seek to recover from either of Hercules or Mallinckrodt, and neither Hercules nor Mallinckrodt shall in any event be liable for, more than fifty percent (50%) of the Damages recoverable by the Interested Persons and their officers, directors, agents, employees, subsidiaries, affiliates and representatives from the Owners pursuant to Section 8.3 above; it being the intention of the parties that Hercules and Mallinckrodt equally bear the burden of the indemnification obligations set forth in Section 8.3 and that neither Owner shall be liable or responsible for any failure, inability or unavailability of the other Owner with respect to the obligations of the Owners in Section 8.3 above. Notwithstanding anything herein to the contrary (i) Hercules shall in no event have any liability or responsibility for any representation, warranty, covenant or agreement set forth in either of the Contribution Agreement or the F&F Transaction Agreement; (ii) Mallinckrodt shall in no event have any liability or responsibility for any representation, warranty, covenant or agreement set forth in either of the Hercules Transaction Agreement or, except as expressly provided in Section 5.5 of the Contribution Agreement, the F&F Transaction Agreement; (iii) none of the Indemnification Threshold, the Owners' Maximum Liability 65 or the $500,000 and $100,000 limitations set forth in Section 8.3 shall be applicable to limit the liability of Hercules or Mallinckrodt to any of the Interested Persons under Sections 8.4 and 8.5, respectively, above; and (iv) in no event shall Damages recoverable pursuant to this Article 8 or pursuant to the Tax Annex be duplicative. (d) Notwithstanding anything contained herein to the contrary, the parties hereto intend and agree that the limitations on Damages recoverable from the Owners set forth in this Section 8.6 or Section 8.3 above shall not be applicable to the breach of a covenant or agreement (as opposed to a representation or warranty) by the Owners; provided, however, that for purposes of such limitations on Damages, any covenant or agreement relating to the truth or veracity of the representations and warranties of the Owners shall be treated in the same manner as a representation or warranty and the breach of any such covenant or agreement shall be subject to the limitations set forth in this Section 8.6 and in the last proviso of Section 8.3 above. 8.7 Limitations of Remedies. The indemnification remedy set forth in this Section 8 and the Tax Annex and any injunctive or other equitable relief to which any party may be entitled from a court of appropriate jurisdiction shall be the sole remedies to which any party hereto is entitled for any breach or non-compliance with the provisions of the Transaction Documents, or any agreement, instrument or document delivered in connection therewith. Any recovery of Damages pursuant to the indemnification remedy set forth in this Section 8 (other than with respect to an Environmental Breach pursuant to Section 8.10 hereof or the Tax Annex), shall be limited to a recovery of compensatory damages and shall not include any punitive or consequential damages or other non-compensatory damages; provided that any such punitive or consequential damages or other non-compensatory damages shall be recoverable if such damages are suffered or incurred as a result of or arising out of an Environmental Breach or to the extent awarded by a court or other adjudicative body of appropriate jurisdiction and authority at an outcome of any third party claim for which indemnification is otherwise available hereunder. 8.8 Indemnification Procedures. The parties agree that the procedures for asserting claims for indemnification and recovery of Damages pursuant to this Section 8 shall be as follows: 8.8.1 Notice of Claims. In the event that a party (the "INDEMNIFIED PARTY") shall reasonably believe that it has a claim for Damages (whether or not arising out of a third party claim) against any other party or parties hereto pursuant to this Section 8 ("INDEMNIFICATION CLAIM"), it shall give prompt notice in accordance herewith to the responsible party or parties (the "INDEMNIFYING PARTY") of the nature and extent of such Indemnification Claim and the Damages incurred by it; provided that any failure to give such notice shall not affect the Indemnified Party's right to indemnification hereunder except to the extent the Indemnifying Party is prejudiced thereby. If the 66 Damages are liquidated in amount, the notice shall so state, and such amount shall be deemed the amount of such Indemnification Claim of the Indemnified Party against the Indemnifying Party (subject to the right of the Indemnified Party to submit claims for additional indemnifiable Damages incurred after the date of any such notice). If the amount is not liquidated, the notice shall so state and, in such event, such Indemnification Claim shall be deemed asserted against the Indemnifying Party, but no payment or satisfaction shall be made on account thereof until the amount of such Indemnification Claim is liquidated. Such notice shall also describe the consequences of a failure to respond to such notice within the time periods set forth in, and pursuant to, Section 8.8.2 below. 8.8.2 Failure to Respond to Notice. If the Indemnifying Party shall not, within twenty (20) days after the giving of such notice by the Indemnified Party, notify the Indemnified Party in accordance herewith that the Indemnifying Party disputes the right of the Indemnified Party to indemnity in respect of such Indemnification Claim, then such Indemnification Claim shall be paid or satisfied as follows: (i) if said Indemnification Claim is liquidated then, subject to the limitations set forth in Sections 8.3 and 8.6 above, the full amount of Damages associated with such Indemnification Claim shall be paid to the Indemnified Party by the Indemnifying Party at the end of such twenty (20) day period, or (ii) if the amount of such Indemnification Claim is unliquidated at the time notice is originally given to the Indemnifying Party, the Indemnified Party shall give a second notice to the Indemnifying Party when the liquidated amount of such Indemnification Claim is known and, unless the Indemnifying Party shall object in writing to such amount (as opposed to the Indemnification Claim itself, as to which the right to dispute has expired) within twenty (20) days after the giving of said second notice, then, subject to the limitations set forth in Sections 8.3 and 8.6, the payment of such Indemnification Claim shall be made by the Indemnifying Party to the Indemnified Party at the end of such twenty (20) day period. Any portion of the amount of Damages asserted by an Indemnified Party in connection with an Indemnification Claim shall, if not objected to by the Indemnifying Party in accordance with the procedures established herein, be considered to be subject to satisfaction by payment without further objection. If, on its own initiative and in accordance with the provisions of this Section and any other provisions herein as applicable, the Indemnifying Party shall not have made payments to the Indemnified Party of any Indemnification Claim when said payment is due, the Indemnified Party shall have the right to enforce in any court of appropriate jurisdiction its right, subject to Section 9.6 hereof, to collect from the Indemnifying Party the amount of such Indemnification Claim. 8.8.3 Notice of Dispute. If an Indemnifying Party shall notify the Indemnified Party that it disputes any Indemnification Claim or the amount of Damages in respect thereof (which notice shall only be given if the Indemnifying Party has a good faith belief that the Indemnified Party is not entitled to indemnity or the full amount of indemnity as claimed) then the 67 parties hereto shall endeavor to settle and compromise such Indemnification Claim, and if unable to agree on any settlement or compromise, such Indemnification Claim shall be settled in accordance with the dispute resolution provisions of Section 9, and any liability and the amount of the Damages established pursuant to Section 9 shall be promptly paid and satisfied. 8.8.4 Third Party Claims. An Indemnified Party will promptly give notice to the Indemnifying Party of any claim of a third party which may reasonably be expected to result in an Indemnification Claim by the Indemnified Party. Subject to Section 8.8.6, an Indemnifying Party shall have the right to direct the defense, compromise or settlement of such third party claim with counsel selected by it, provided the Indemnifying Party gives written notice to the Indemnified Party of its election to do so within twenty (20) days after receipt of notice in accordance with the preceding sentence, subject to the right of the Indemnifying Party to tender the defense, compromise or settlement of any such claim back to the Indemnified Party if, on the basis of subsequently discovered information it becomes clear that such claim is not subject to indemnification hereunder. If the Indemnifying Party fails to so notify the Indemnified Party of its election to defend any such third party claim, the Indemnified Party will (upon further notice to the Indemnifying Party) have the right to undertake the defense, compromise or settlement of such third party claim, subject to the right of the Indemnifying Party to assume the defense of any such claim at any time prior to settlement, compromise or final determination thereof, if and only if such assumption would not materially prejudice the defense of such third party claim or the rights of the Indemnified Party. It is understood that any party undertaking the defense, compromise, or settlement of an indemnifiable claim hereunder shall pursue diligently such claim in good faith with a view toward achieving the most favorable possible resolution of such claim. 8.8.4.1 Participation by Indemnified Party. In the event an Indemnifying Party has assumed the defense of any such third party claim, the Indemnified Party shall nonetheless have the right to select its own counsel and participate in the defense of such third party claim at and for its own expense and account. Counsel for the Indemnified Party in such circumstances shall consult and cooperate at all times with counsel for the Indemnifying Party in defending against any such third party claim. 8.8.4.2 Full Release. An Indemnifying Party shall not under any circumstances, without the prior written consent of the Indemnified Party, settle or compromise any third party claim or consent to the entry of any judgment which (i) provides for any form of relief against the Indemnified Party other than monetary relief that will be paid in full by the Indemnifying Party, or (ii) does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party a release from all liability in respect of such third party claim, in form and substance reasonably satisfactory to the Indemnified Party. 8.8.4.3 Refusal to Settle. Notwithstanding 68 anything to the contrary contained herein, if a third party claim is made which the third party has unequivocally offered in writing to settle on a basis that satisfies the requirements of Section 8.8.4.2 above (an "UNEQUIVOCAL OFFER") but an Indemnified Party elects not to settle on the basis of such Unequivocal Offer, then either (a) if the defense, compromise or settlement of such claim has been previously assumed by the Indemnifying Party, at the option of the Indemnifying Party the Indemnifying Party may pay to the Indemnified Party an amount equal to the amount required to be paid in such Unequivocal Offer (plus any related reasonable costs and expenses theretofore incurred by the Indemnified Party with respect to such claim) and, upon such payment, the Indemnifying Party shall be released from and held harmless by the Indemnified Party with respect to all Damages suffered or incurred as a result of arising out of said third party claim and the Indemnified Party shall assume the defense, compromise or settlement of such claim, or (b) if the defense, compromise or settlement of such claim has not been assumed by the Indemnifying Party, the Indemnifying Party shall not be liable hereunder, with respect to any Indemnification Claim arising from such third party claim, for more than the amount set forth in any such Unequivocal Offer (or, if more than one Unequivocal Offer has been made with respect to such third-party claim, the Unequivocal Offer that required the lowest payment) plus any related reasonable costs and expenses incurred by the Indemnified Party as of the date of such Unequivocal Offer unless either (i) the Unequivocal Offer was delivered to and rejected by the Indemnifying Party, or (ii) the Unequivocal Offer was delivered to the Indemnifying Party and the Indemnifying Party did not, within ten (10) days after receipt of such Unequivocal Offer, notify the Indemnified Party in writing that such Indemnifying Party would pay the amount requested in the Unequivocal Offer. 8.8.5 Claims Made in Written Notice. All claims for indemnification hereunder shall be made in a written notice setting forth, with particularity, the nature of the claim for which indemnification is sought. All parties agree that no claim for indemnification shall be made hereunder unless the party requesting indemnification shall have a good faith belief that it is entitled to indemnification hereunder. 8.8.6 Control in Cases of Environmental Breach. With respect to any claim for indemnification made pursuant to Section 8.3 as a result of a breach of Section 3.12 which does or would reasonably be expected to involve any investigative, clean up or other remedial activities on property then owned or leased by the Interested Persons or their Affiliates ("REMEDIAL WORK"), the Indemnified Party shall have the option to direct the defense, compromise or settlement of such claim until the Environmental Indemnification Threshold has been met, and thereafter the Indemnifying Party shall have the option to direct the defense, compromise or settlement of any such claim (such party, as applicable, shall be the "CONTROLLING PARTY"). Both parties agree to cooperate in good faith in resolving any such claim. In addition, the Controlling Party agrees to (a) use consultants and contractors which are reasonably satisfactory to 69 the other party, (b) ensure that any Remedial Work is conducted in a safe, lawful and workmanlike manner in compliance with all Environmental Requirements, (c) provide the other party with reasonable advance notice of and an opportunity to comment upon any filings to be made with any Governmental Authority or other third parties and (d) provide the other party with reasonable advance notice of and an opportunity to review and comment upon plans for and written reports of, and to observe any, Remedial Work. To the extent the Indemnifying Party is the Controlling Party, the Controlling Party agrees that it will use reasonable efforts to avoid interference with the normal business operations of the Companies and the Interested Persons agree to provide necessary access during normal business hours to the property of the Companies. Where the Indemnifying Party is the Controlling Party and has received a bid for necessary Remedial Work from a qualified consultant or contractor, the Interested Persons shall have the option to direct or undertake the Remedial Work themselves in which case the indemnifiable Damages shall be limited to the amount of the bid, notwithstanding anything in Sections 8.3 and 8.6 to the contrary. 8.9 Tax Annex is Controlling. Notwithstanding any provision in this Agreement to the contrary, to the extent that any provision in this Article 8 is inconsistent with the Tax Annex, the Tax Annex shall be controlling. 8.10 Registration Indemnity. Each of the Owners shall indemnify and hold harmless the Interested Persons in connection with all costs and expenses, including, without limitation, application, registration and filing fees, in excess of $3,000,000 incurred by the Interested Persons in connection with the registration with or GRAS ("GENERALLY RECOGNIZED AS SAFE") clearance or approval by the United States Food and Drug Administration (FDA), the Flavor Expert Panel (FEXPAN) or any other similar non-governmental authority or Governmental Authority of any chemical substance, component or ingredient ("SUBSTANCE") used as of the date hereof, or as of the Closing Date in the manufacturing or production of products by any of the Companies to the extent not registered with or GRAS-cleared by any such non-governmental authority or Governmental Authority as of the date hereof, or as of the Closing Date; provided that the indemnity provided in this Section 8.10 shall only apply to one registration, clearance or approval per Substance (in each case as specified by the Owners) and shall expire on the sixth annual anniversary of the Closing Date, after which date Owners shall have no further liability or obligations under this Section 8.10, and provided, further, that after the Closing the Interested Persons use their best efforts to achieve all such registrations in a cost-effective manner and at the earliest practical date, and provided further that the Owners shall in no event be liable for the costs of registering the substances, components or ingredients described on SCHEDULE 8.10 of the Disclosure Schedule, nor shall such costs be considered in determining whether the $3,000,000 referenced above has been exceeded. Notwithstanding any other provision hereof, it is understood by 70 the parties that no threshold, deductible or limitation on indemnification hereunder (including, without limitation, the Owners' Maximum Liability limitation or the $500,000 and $100,000 limitations on the size of indemnifiable claims set forth in Section 8.3 above) shall relate to the provisions of this Section 8.10, and indemnification under this Section 8.10 shall not be counted toward the Indemnification Threshold or the Environmental Indemnification Threshold. 8.11 Mitigation of Damages. Notwithstanding anything to the contrary contained herein, the Indemnified Party shall be obliged to mitigate the amount of Damages otherwise recoverable hereunder, except that such duty of mitigation shall not apply with respect to any Damages recoverable as a consequence of any breach of Section 3.12 hereof. 8.12 Reliance Upon Agreement. In the event the Fries Withdrawal is exercised and the Fries Withdrawal Closing occurs within two days after the Closing Date (i) each of Roche, GRI, Hercules and Mallinckrodt acknowledges and agrees that in exercising the Fries Withdrawal and consummating the Fries Withdrawal Closing, and after the consummation of the Fries Withdrawal Documents, each of Roche, GRI, Hercules and Mallinckrodt, on behalf of themselves and their respective Affiliates, is relying upon, and is entitled to rely upon, the representations, warranties and covenants of Roche, GRI, Hercules and Mallinckrodt set forth in this Agreement, and (ii) each of Hercules and Roche agrees, on behalf of themselves and their respective Affiliates that are partners of Tastemaker, that the "ESTIMATED ADJUSTED AGGREGATE VALUE," the "ADJUSTED AGGREGATE VALUE," the "ESTIMATED TASTEMAKER B.V. VALUE," and the "TASTEMAKER B.V. VALUE" (as such quoted terms are used and defined in the Partnership Agreement) shall equal, and shall be determined in the same manner as, the Estimated Adjusted Aggregate Value, the Adjusted Aggregate Value, the Estimated Tastemaker B.V. Value and the Tastemaker B.V. Value, respectively, determined in accordance with Section 2.6 of this Agreement. 9. RESOLUTION OF DISPUTES 9.1 Conclusive and Exclusive. Except as expressly provided (i) in the Tax Annex and (ii) in Section 2.6.1 with respect to the procedures for resolving disputes regarding the Working Capital Adjustment and the Long-Term Liabilities Adjustment, each and all disputes under the Transaction Documents shall be conclusively and exclusively resolved in accordance with the terms and conditions set forth in this Section 9. Notwithstanding the foregoing, the parties recognize and acknowledge that (i) in the event that all conditions precedent to the transactions contemplated by the Transaction Documents, the D&F Transaction Agreements and, if applicable, the Fries Withdrawal Documents have been satisfied or waived and the consummation of any of the transactions contemplated by such agreements and documents (other than the initial transactions 71 contemplated by the Designated Transaction Agreements) does not follow as soon as practicable after such initial transaction, then specific performance of any such transactions shall be a remedy that the Interested Persons may seek and the parties agree that the Interested Persons shall be entitled to such remedy; and (ii) in the event of a potential, anticipatory or actual breach of certain provisions of the Transaction Documents and the D&F Transaction Agreements (dealing with confidentiality, public announcements, non-competition and the like) it may be necessary or appropriate for a non-breaching party to seek injunctive relief, if and to the extent legally available, in order to avoid harm or further harm to such non-breaching party, and the parties hereby agree that any such non-breaching party shall be entitled to seek and obtain injunctive relief (but only injunctive relief) in any court of competent jurisdiction (subject to Section 9.6 below) without first complying with this Article 9; provided, however, that (i) if granted, such injunctive relief shall apply only to prevent a breach or further breach of the specific Sections of the Transaction Documents and the D&F Transaction Agreements for which such relief is appropriate and shall remain in effect only so long as the court deems necessary or appropriate to permit resolution of the underlying disputes in accordance with this Article 9, and (ii) no other relief or claim may be obtained or sought from the court granting any such injunctive relief unless and until the parties have fully complied with the dispute resolution provisions of Sections 9.2 through 9.5 of this Article 9. Neither the seeking of injunctive relief nor the granting thereof is intended to, or shall, result in the application of a substantive or procedural law other than the applicable governing law pursuant to Section 11.9 hereof. 9.2 Resolution Panel. Subject to Section 9.1, any dispute under the Transaction Documents shall first be submitted to a panel made up of officers from the parties to the dispute (the "RESOLUTION PANEL"). If the dispute involves both of the Interested Persons and both of the Owners, the Resolution Panel shall consist of four members, of which two members shall be the Chief Executive Officers, or other duly authorized executive managers not theretofore involved in the dispute, of Roche and GRI or their Affiliates, and the other two members shall be the Chief Executive Officers or Chief Operating Officers, or another duly authorized executive manager not theretofore involved in the dispute, of Hercules and Mallinckrodt and their Affiliates. If the dispute involves only one of the Interested Persons and/or only one of the Owners, the Resolution Panel shall consist of four members, which shall include the Chief Executive Officers or Chief Operating Officers or other duly authorized executive managers not theretofore involved in the dispute of all parties to the dispute and (i) if only one Interested Person is involved in the dispute, another authorized executive manager of such Interested Person, and (ii) if only one Owner is involved in the dispute, another authorized executive manager of such Owner; provided, however, that the parties not involved in the dispute shall be given notice of, and access to information relevant to, the dispute. 72 9.3 Position Statements. Subject to Section 9.1 in the event of a dispute under the Transaction Documents (except as otherwise provided in any Transaction Document), any party may give a notice to the other parties (including any party not involved in the dispute) requesting that the Resolution Panel try in good faith to negotiate a resolution of (but without any obligation to resolve) such dispute. Not later than fifteen (15) days after said notice, each party involved in the dispute shall submit to all other parties (including any party not involved in the dispute) a written statement (provided that if both of the Owners are involved in such dispute, the Owners shall be entitled, but not obligated, to submit a joint written statement, and if both of the Interested Persons are involved in such dispute, the Interested Persons shall be entitled, but not obligated, to submit a joint written statement) setting forth such party's description of the dispute and of the respective positions of the parties on such dispute, and such party's recommended resolution and the reasons why such party feels its recommended resolution is fair and equitable in light of the terms and spirit of the Transaction Documents. The submission and exchange of such written statements of the parties shall be simultaneous. Such statements represent part of a good-faith effort to resolve a dispute and as such, no statement may be introduced as evidence or used as an admission against interest in any judicial resolution of such dispute. 9.4 Negotiations. If the dispute continues unresolved for a period of fifteen (15) days (or such longer period as the Resolution Panel may otherwise agree upon) after the simultaneous exchange of such written statements, then the Resolution Panel shall promptly commence and thereafter pursue for a period of not less than thirty (30) days good-faith negotiations to resolve such dispute (the "RESOLUTION NEGOTIATIONS") but without any obligation to resolve it. A party not involved in the dispute shall be entitled to observe, but not participate in, the Resolution Negotiations. 9.5 Resolution Panel Decision. If, within thirty (30) days (or such longer period as the Resolution Panel may unanimously agree) after the commencement of Resolution Negotiations, (i) the Resolution Panel renders an agreed resolution on the matter in dispute, then all parties shall be bound thereby and judgment upon such resolution may be entered in any court having requisite jurisdiction; or (ii) the Resolution Panel does not render an agreed resolution, then the parties involved in such dispute shall be free to pursue their legal rights and remedies in such manner as they may determine, subject, however, to the provisions of Section 9.6 below. 9.6 Forum and Waivers. EACH OF ROCHE, GRI, MALLINCKRODT AND HERCULES AGREES THAT, EXCEPT TO THE EXTENT OTHERWISE PROVIDED IN THE TAX ANNEX, ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF ANY ONE OR MORE OF THE TRANSACTION DOCUMENTS, OR THE VALIDITY OR PERFORMANCE OF ANY OF THE TRANSACTION DOCUMENTS, 73 SHALL BE INITIATED AND PROSECUTED AS TO ALL PARTIES TO THE DISPUTE AND THEIR SUCCESSORS AND ASSIGNS AT NEW YORK, NEW YORK, WHICH SHALL BE THE EXCLUSIVE FORUM FOR ALL SUCH ACTIONS, SUITS OR PROCEEDINGS. EACH OF ROCHE, GRI, MALLINCKRODT AND HERCULES CONSENTS TO AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER ITS PERSON BY ANY STATE OR FEDERAL COURT SITUATED AT NEW YORK, NEW YORK HAVING JURISDICTION OVER THE SUBJECT MATTER, WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL DIRECTED TO THE PARTIES AT THEIR RESPECTIVE ADDRESSES SET FORTH IN SECTION 11.3 OR AS OTHERWISE PROVIDED UNDER THE LAWS OF THE STATE OF NEW YORK. EACH OF ROCHE, GRI, MALLINCKRODT AND HERCULES WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. EACH OF ROCHE, GRI, MALLINCKRODT AND HERCULES HEREBY RECIPROCALLY AND IRREVOCABLY WAIVES TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE RELATING TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION DOCUMENTS. 10. CONDITIONS PRECEDENT 10.1 Conditions to Obligations of the Interested Persons. The obligations of the Interested Persons to consummate the transactions contemplated by the Transaction Documents are subject to the satisfaction or waiver by the Interested Persons in writing of each of the following conditions precedent: 10.1.1 Accuracy of Representations and Warranties. The representations and warranties of the Owners made in this Agreement shall be true and correct in all material respects on the Closing Date. 10.1.2 Performance of Agreements. Each of the Owners shall have performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Agreement to be performed and complied with by it on or prior to the Closing Date. 10.1.3 Officers' Certificate. Each of the Interested Persons shall have received from each Owner a certificate dated the Closing Date signed by a duly authorized officer of each of the Owners delivering such certificate and certifying to each of the Interested Persons that the representations and warranties of the Owners made herein are true and correct in all material respects on the Closing Date as if made at and as of such date and that the Owner rendering such certificate has performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Agreement to be performed and complied with by it at or prior to the Closing Date. 74 10.1.4 Applicable Law; Governmental Approvals; Filings. No provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of the Closing. The licenses, permits, consents and approvals of Governmental Authorities required by law and listed in APPENDIX K hereto shall have been obtained in form and substance reasonably satisfactory to each of the Interested Persons and shall not have been revoked, and any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, relating to the transactions contemplated hereby shall have expired or been terminated. 10.1.5 Litigation; Governmental Action. There shall not be pending or in force on the Closing Date any injunction, order or decree, or any complaint of any Governmental Authority praying for an order or decree, restraining or enjoining the consummation of the transactions contemplated by any one or more of the Transaction Documents, and no Governmental Authority shall have instituted, or notified the Interested Persons of its intention to institute, any suit, investigation or proceeding seeking to nullify, render ineffective or attack on any substantive grounds the legality of any one or more of the Transaction Documents. 10.1.6 Material Change. Between the date hereof and the Closing Date, there shall not have occurred any event which individually or in aggregate has had or would reasonably be expected to have a material adverse effect on the Companies. 10.1.7 Transaction Agreement Conditions. Each of the Transaction Documents and the F&F Transaction Agreement shall have been executed by each party thereto, and all of the conditions precedent to the obligations of the Interested Persons set forth in the Transaction Documents and the F&F Transaction Agreement shall have been satisfied or waived by the Interested Persons in writing. 10.1.8 Works Council Act. The requirements for compliance under the Dutch Code of Conduct for Mergers and the Dutch Works Council Act shall have been satisfied and no appeal to the Enterprise Division of the Amsterdam Court of Appeal shall have been made by the Works Council; provided that all information provided to the Owners by the Interested Persons in connection with such requirements was to the knowledge of such Interested Persons' true at the time made; and provided further that the Interested Persons contacts with the Works Council in connection with such requirements have been forthright and in good faith. 10.1.9 Designated Transactions Closing. The closing of the transactions contemplated by each of the Designated Transaction Agreements shall have occurred and been completed. 10.1.10 Specified Third Party Consents. The consents 75 described, and under the items listed, on APPENDIX J shall have been obtained. 10.1.11 Withdrawal Approvals; Litigation. No provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of the Fries Withdrawal Closing. The licenses, permits, consents and approvals of Governmental Authorities required by law for the consummation of the Fries Withdrawal Closing and listed in APPENDIX K hereto shall have been obtained in form and substance reasonably satisfactory to each of the Interested Persons and shall not have been revoked, and any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, relating to the Fries Withdrawal shall have expired or been terminated. There shall not be pending or in force on the Fries Withdrawal Closing any injunction, order or decree, or any complaint of any Governmental Authority praying for an order or decree, restraining or enjoining the consummation of the transactions contemplated by any or more of the Fries Withdrawal or the Fries Withdrawal Documents, and no Governmental Authority shall have instituted, or notified the Interested Persons of its intention to institute, any suit, investigation or proceeding seeking to nullify, render ineffective or attack on any substantive grounds the legality of any one or more of the Partnership Agreement or the Fries Withdrawal Documents. All acts, consents, documents and other matters, other than the giving of notice of exercise of the Fries Withdrawal and the execution and delivery of the Fries Withdrawal Documents, required by the Partnership Agreement to be taken or obtained in connection with the Fries Withdrawal and the Fries Withdrawal Closing shall have been taken or obtained. 10.2 Conditions to Obligations of the Owners. The obligations of each of Hercules and Mallinckrodt to consummate the transactions contemplated by the Transaction Documents are subject to the satisfaction or waiver by each Hercules and Mallinckrodt in writing of each of the following conditions precedent: 10.2.1 Accuracy of Representations and Warranties. The representations and warranties of the Interested Persons made in this Agreement shall be true and correct in all material respects on the Closing Date. 10.2.2 Performance of Agreements. The Interested Persons shall have performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Agreement to be performed and complied with by it on or prior to the Closing Date. 10.2.3. Officer's Certificate. Each of the Owners shall have received from each Interested Person a certificate dated the Closing Date signed by a duly authorized officer of 76 each of the Interested Persons delivering such certification and certifying that the representations and warranties of the Interested Persons made herein are true and correct in all material respects on the Closing Date as if made at and as of such date and that the Interested Person sending such certificate has performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Agreement to be performed or complied with by it at or prior to the Closing Date. 10.2.4 Applicable Law; Governmental Approvals; Filings. No provision of any applicable law or regulation and no judgment, injunction, order or decree shall prohibit the consummation of the Closing. The licenses, permits, consents and approvals of Governmental Authorities required by law for the consummation of the transactions contemplated by each of the Transaction Documents and listed in APPENDIX K hereto shall have been obtained in form and substance reasonably satisfactory to the Owners and shall not have been revoked, and any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, relating to the transactions contemplated hereby shall have expired or been terminated. 10.2.5 Litigation; Governmental Action. There shall not be pending or in force on the Closing Date any injunction, order or decree, or any complaint of any Governmental Authority praying for an order or decree, restraining or enjoining the consummation of the transactions contemplated by any one or more of the Transaction Documents, and no Governmental Authority shall have instituted, or notified either of Hercules or Mallinckrodt of its intention to institute, any suit, investigation or proceeding seeking to nullify, render ineffective or attack on any substantive grounds the legality of any one or more of the Transaction Documents and all of the conditions precedent to the obligations of F&F set forth in the F&F Transaction Agreement shall have been satisfied or waived in writing by F&F. 10.2.6 Transaction Agreement Conditions. Each of the Transaction Documents and the F&F Transaction Agreement shall have been executed by each party thereto, and all of the conditions precedent to the obligations of Hercules and HNBV set forth in the Hercules Transaction Agreement shall have been satisfied or waived in writing by Hercules and HNBV and all of the conditions precedent to the obligations of Mallinckrodt set forth in the Contribution Agreement and the F&F Transaction Agreement shall have been satisfied or waived in writing by Mallinckrodt. 10.2.7 Designated Transaction Closing. The closing of the transactions contemplated by each of the Designated Transaction Agreements shall have occurred and been completed. 10.2.8 Withdrawal Approval; Litigation. No provision of any applicable law or regulation and no judgment, 77 injunction, order or decree shall prohibit the consummation of the Fries Withdrawal Closing. The licenses, permits, consents and approvals of Governmental Authorities required by law for the consummation of the Fries Withdrawal Closing and listed in APPENDIX K hereto shall have been obtained in form and substance reasonably satisfactory to the Owners and shall not have been revoked, and any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, relating to the Fries Withdrawal shall have expired or been terminated. There shall not be pending or in force on the Fries Withdrawal Closing any injunction, order or decree, or any complaint of any Governmental Authority praying for an order or decree, restraining or enjoining the consummation of the transactions contemplated by any one or more of the Fries Withdrawal or the Fries Withdrawal Documents, and no Governmental Authority shall have instituted, or notified either of Hercules or Mallinckrodt of its intention to institute, any suit, investigation or proceeding seeking to nullify, render ineffective or attack on any substantive grounds the legality of any one or more of the Partnership Agreement or the Fries Withdrawal Documents. All acts, consents, documents and other matters, other than the giving of notice of exercise of the Fries Withdrawal and the execution and delivery of the Fries Withdrawal Documents, required by the Partnership Agreement to be taken or obtained in connection with the Fries Withdrawal and the Fries Withdrawal Closing shall have been taken or obtained. 10.3 Extension of the Closing Date. In the event a condition precedent set forth in Section 10.1 or 10.2 of this Agreement is not satisfied or waived in writing by the beneficiary thereof on or before the date established by the parties as the Closing Date for reasons beyond the reasonable control of the party responsible for satisfying such condition, and such condition, in the reasonable opinion of the party who is responsible for satisfying such condition, is capable of being satisfied prior to the Closing Deadline, the Closing Date shall be extended, but not beyond the Closing Deadline, to a date determined in good faith by the party or parties responsible for satisfying such condition. The party responsible for satisfying such condition shall use its reasonable best efforts in such case to cause such condition precedent to be satisfied, and all parties shall use their respective reasonable best efforts to obtain an extension of time from any Governmental Authority whose approval or consent to the consummation of the transactions contemplated by any of the Transaction Documents is required and will expire prior to the extended Closing Date. 11. MISCELLANEOUS 11.1 Termination and Cancellation. This Agreement may be terminated and the transactions contemplated herein may be abandoned at any time prior to Closing: 11.1.1 By the mutual written consent of the parties hereto; 11.1.2 By any party hereto if neither the 78 terminating party nor an Affiliate of the terminating party is then in material breach of its obligations under any of the Transaction Documents or the D&F Transaction Agreements and if the Closing Date has not occurred on before the Closing Deadline; 11.1.3 By any of Hercules, Mallinckrodt, Roche or GRI if any of the D&F Transaction Agreements, the Hercules Transaction Agreement or the Contribution Agreement is terminated in accordance with the terms thereof prior to consummation of the transactions contemplated thereby; 11.1.4 By the Interested Persons if any of the conditions precedent set forth in Section 10.1 have not been satisfied on or before the date established by the parties as the Closing Date (as the same may be extended pursuant to Section 10.3); 11.1.5 By either of Hercules or Mallinckrodt if any of the conditions precedent set forth in Section 10.2 have not been satisfied on or before the date established by the parties as the Closing Date (as the same may be extended pursuant to Section 10.3); 11.1.6 By any party hereto not then in material breach of its obligations hereunder if another party hereto (other than an Affiliate of the terminating party) has materially breached any covenant herein, such breach is within the reasonable control of the breaching party and either (i) such breach is not capable of being cured or corrected, or (ii) the breaching party has not cured or corrected such breach within ten (10) days after receipt of notice of such breach; 11.1.7 By any party hereto if there shall be any law or regulation adopted subsequent to the date hereof that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent jurisdiction; or 11.1.8 By any of the Owners or the Interested Persons, if following substantial compliance with any request for additional information or documentary material pursuant to Section 7A(e)(2) of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, any such party or its affiliates shall have received any communication from the Department of Justice or Federal Trade Commission (each an "HSR AUTHORITY") (which communication shall be confirmed to the other parties by the HSR Authority) that causes such party to reasonably believe that any HSR Authority has authorized the institution of litigation challenging the transactions contemplated by any of the Transaction Documents, the D&F Transaction Agreements and the Partnership Agreement under the U.S. antitrust laws, which litigation will include a motion seeking an order or injunction prohibiting the consummation of any of the transactions contemplated by the Transaction Documents, the D&F Transaction Agreements and the Partnership Agreement. 11.2 Effect of Termination. Upon any termination of this Agreement, each party hereto shall bear all expenses incurred by it in connection with the negotiation, preparation, execution and performance of this Agreement. No such termination shall relieve any party hereto of any liability for a breach of or default under this Agreement, which liability, including all expenses of each party hereto incurred in connection with the negotiation, preparation, execution and 79 performance of this Agreement. No such termination shall relieve any party hereto of any liability for a breach of or default under this Agreement, which liability, including all expenses of each party hereto incurred in connection with the negotiation, preparation, execution and performance of this Agreement, shall continue notwithstanding such termination. The provisions of Section 6.4 hereof shall survive any termination of this Agreement. 11.3 Notices. All notices, requests, consents, approvals, waivers and other communications hereunder shall be in writing and shall be deemed given or delivered on the earlier of: (i) the date actually received if properly addressed and delivered to the addresses for notices specified herein, regardless of how sent; or (ii) five (5) business days after being mailed by United States certified or registered mail, return receipt requested, with postage prepaid, in each case addressed in accordance with the following: 11.3.1 Hercules Notice Address: Notices and other communications to Hercules shall be sent to the following addresses: Hercules Incorporated Hercules Plaza 1313 North Market Street Wilmington, Delaware 19894-0001 Attention: George MacKenzie, Senior Vice President and CEO Telephone No.: 302-594-5175 Facsimile No.: 302-594-7032 with a required copy to: Hercules Incorporated Hercules Plaza 1313 North Market Street Wilmington, Delaware 19894-0001 Attention: Israel J. Floyd Assistant General Counsel and Corporate Secretary Telephone No.: 302-594-5128 Facsimile No.: 302-594-7252 or to such other addresses as Hercules may from time to time designate in a notice pursuant to this Section 11.3. 11.3.2 Mallinckrodt Notice Address. Notices and other communications to Mallinckrodt shall be sent to the following addresses: Mallinckrodt Inc. 675 McDonnell Boulevard St. Louis, Missouri 63134 Attention: Mack G. Nichols President and Chief Operating Officer Telephone No.: 314-854-5320 80 Facsimile No.: 314-854-5323 with a required copy to: Mallinckrodt Inc. 675 McDonnell Boulevard St. Louis, Missouri 63134 Attention: Roger A. Keller Vice President and General Counsel Telephone No.: 314-854-5240 Facsimile No.: 314-854-5366 or to such other addresses as Mallinckrodt may from time to time designate in a notice pursuant to this Section 11.3. 11.3.3 Roche Notice Address. Notices and other communications to Roche shall be sent to the following addresses: Roche Holdings, Inc. 15 East North Street Dover, Delaware 19901 Attention: Treasurer Telephone No.: 302-425-4701 Facsimile No.: 302-425-4713 with a required copy to: Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Attention: Phillip R. Mills Telephone No.: 212-450-4618 Facsimile No.: 212-450-5500 or to such other addresses as Roche may from time to time designate in a notice pursuant to this Section 11.3. 11.3.4 GRI Notice Address. Notices or other communications to GRI shall be sent to the following addresses: Givaudan-Roure (International) SA 5, Chemin de la Parfumerie CH-1214 Vernier, Geneva Attention: Othmar Vock Telephone No.: 011-41-22-780-9440 Facsimile No.: 011-41-22-780-9152 with a required copy to: Davis, Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Attention: Phillip R. Mills Telephone No.: 212-450-4618 Facsimile No.: 212-450-5500 or to such other addresses as GRI may from time to time designate 81 in a notice pursuant to this Section 11.3. 11.4 Assignment. None of Hercules, Mallinckrodt, Roche or GRI shall assign this Agreement, or any rights hereunder, by operation of law or otherwise, without the prior written consent of all other parties hereto; provided that, without the prior written consent of Mallinckrodt and Hercules, either Roche or GRI may assign its respective rights under this Agreement, in whole or from time to time in part, to one or more of its Affiliates, however, no such assignment shall relieve Roche or GRI from responsibility or liability hereunder. 11.5 Waiver. No waiver of any provision hereof shall be effective unless such waiver is set forth in a writing signed by the party to be charged thereby and all other parties are provided notice thereof, and then such written waiver shall be effective only in the instance and for the purpose specified therein. No failure or delay on the part of any party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 11.6 Amendments. This Agreement may be amended or modified in whole or in part only by a duly authorized written agreement that refers to this Agreement and is signed by all of the parties hereto. 11.7 Limitations on Rights of Third Parties. Nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give any person or entity other than Hercules, Mallinckrodt and the Interested Persons any rights under this Agreement. 11.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 11.9 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York of the United States of America, without giving effect to its conflict of law principles. 11.10 Entire Agreement. The Transaction Documents constitute and contain the entire agreements among Hercules, Mallinckrodt and the Interested Persons and their respective subsidiaries with respect to the subject matter hereof and thereof and supersede all other agreements, written or oral, made prior to the date hereof, or contemporaneously herewith and relating to the transactions contemplated by such Transaction Documents. No representation, warranty, covenant or agreement relating to the transactions contemplated by the Transaction Documents shall be binding upon any party hereto unless expressly 82 set forth in such Transaction Documents, and then only to the extent so provided in such agreements. 83 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. HERCULES INCORPORATED By_________________________________ Name_______________________________ Title______________________________ MALLINCKRODT INC. By_________________________________ Name_______________________________ Title______________________________ GIVAUDAN-ROURE (INTERNATIONAL) SA By_________________________________ Name_______________________________ Title______________________________ ROCHE HOLDINGS, INC. By_________________________________ Name_______________________________ Title______________________________ 84 APPENDIX D - TAX ANNEX TAXES 1. TAX DEFINITIONS 1.1. Capitalized Terms. The following capitalized terms used in this Appendix D and in the Partnership Agreement, any Transaction Document or any D&F Transaction Agreement, unless otherwise defined, shall have the following meanings: 1.1.1. "ACCOUNTING REFEREE" shall have the meaning ascribed to such term in Section 2.2 of this Appendix D. 1.1.2. "ADJUSTED BASELINE" shall mean the present value, as of the Fries Withdrawal Date, of the net Tax benefit or detriment to the Interested Persons and their Affiliates which is attributable to the difference between (i) the basis of F&F or any F&F Affiliate, as determined for United States federal income Tax purposes, in the Inventory and the Wasting Assets acquired as part of a Fries Withdrawal immediately following such Withdrawal, assuming the Fries Withdrawal is treated as the liquidation of a partner's interest in a partnership under sections 731, 732, and 751 of the Code, computed pursuant to Section 2.2 of this Appendix D and in accordance with the assumptions set forth in Section 2.1 of this Appendix D, and (ii) Tastemaker's basis in the Inventory and Wasting Assets immediately prior to such Fries Withdrawal. 1.1.3. "ADJUSTMENT FRACTION" shall have the meaning ascribed to such term in Section 5.2(a) of this Appendix D. 1.1.4. "AMORTIZABLE INTANGIBLE" shall have the meaning ascribed to such term in Section 2.1(vi) of this Appendix D. 1.1.5. "AUDITED PARTY" shall have the meaning ascribed to such term in Section 4.8(c) of this Appendix D. 1.1.6. "BUILDING" shall mean any "nonresidential real property" (as such term is defined in Section 168(e)(2)(B) of the Code). 1.1.7. "COMPANY TAX RETURN" shall mean any Tax Return required to be filed (i) by or on behalf of a Company and (ii) with respect to a Pre-Closing Tax Period or Short Period. 1.1.8. "CONTESTANT" has the meaning set forth in Section 4.8(a) of this Appendix D. 1.1.9. "ELECTION DEADLINE" has the meaning set forth in Section 4.8(b)(1) of this Appendix D. 1.1.10 "EQUIPMENT" shall mean any "3-year property," "5-year property," "7-year property," "10-year property," 85 "15-year property," or "20-year property" (as such terms are defined in Section 168(e) of the Code). 1.1.11. "F&F AFFILIATE" shall mean any Affiliate of F&F to whom F&F transfers a portion of its partnership interest in Tastemaker and to whom real estate assets are transferred as part of a Fries Withdrawal. 1.1.12. "F&F GROUP" shall have the meaning ascribed to such term in Section 4.1(a) of this Appendix D. 1.1.13. "F&F INTANGIBLES" shall mean, collectively, each Intangible (other than "Previously Amortizable F&F Intangibles") contributed by F&F to the capital of Tastemaker. 1.1.14. "F&F TAX RETURN" shall mean any Tax Return required to be filed (i) by or on behalf of F&F and (ii) with respect to a Pre-Closing Tax Period or Short Period. 1.1.15. "FINAL DETERMINATION" shall mean (i) any final determination of liability in respect of a Tax (or any final determination in respect of a decrease in or adjustment to any loss, deduction, credit or other Tax asset) that, under applicable law, is not subject to further appeal, review or modification through proceedings or otherwise (including the expiration of a statute of limitations or a period for the filing of claims for refunds, amended returns or appeals from adverse determinations), (ii) the payment of Tax by an Interested Person, an Owner or any Affiliate of an Interested Person or Owner, whichever is responsible for payment of such Tax under applicable law, with respect to any item disallowed or adjusted by a Governmental Authority, or the entry into a legally binding settlement or compromise agreement in respect of a decrease in or adjustment to any loss, deduction, credit or other Tax asset, provided that such responsible party determines in good faith that no action should be taken to recoup such payment of Tax or to further contest such decrease in or adjustment to a Tax asset, and (iii) the final determination made by the Private Mediator pursuant to such Section 4.8(b) of this Appendix D with respect to a Tax Claim; provided, in the case of any final determination described in clause (i) or any payment of Tax described in clause (ii), that if any Owner makes a timely Private Contest Election pursuant to Section 4.8(b) of this Appendix D, such determination or payment shall not be a Final Determination. 1.1.16. "FRIES WITHDRAWAL" shall have the meaning ascribed to such term in Section 8.3 of the Partnership Agreement. 1.1.17. "FRIES WITHDRAWAL DATE" shall have the meaning ascribed to such term in Section 8.5 of the Partnership Agreement. 1.1.18. "HERCULES INTANGIBLES" shall mean, collectively, each Intangible contributed by Hercules to the 86 capital of Tastemaker. 1.1.19. "HERCULES TAX" shall mean any Restructuring Tax resulting from the transactions undertaken pursuant to the Hercules Transaction Agreement. 1.1.20. "INITIAL BASELINE" shall mean $95,000,000. 1.1.21. "INTANGIBLE" shall mean any "Section 197 intangible" (as such term is defined in Sections 197(d) and (e) of the Code), and any other intangible asset which is subject to amortization for United States federal income tax purposes pursuant to a provision of the Code other than Section 197. 1.1.22. "INVENTORY" shall mean any item which is properly includible in inventory pursuant to Section 471 of the Code and applicable Treasury Regulations. 1.1.23. "KEEPWELL AGREEMENT" shall have the meaning ascribed to such term in Section 6.3 of the Contribution Agreement. 1.1.24. "LETTER OF CREDIT" shall have the meaning ascribed to such term in Section 10.2.7 of the Contribution Agreement. 1.1.25. "MALLINCKRODT TAX" shall mean any Taxes of F&F and any Restructuring Tax resulting from the transactions undertaken pursuant to the F&F Transaction Agreement or the Contribution Agreement. 1.1.26. "OTHER OPEN YEARS" shall have the meaning ascribed to such term in Section 5.2(c) of this Appendix D. 1.1.27. "OWNERS' BASELINE CALCULATIONS" shall have the meaning ascribed to such term in Section 2.2 of this Appendix D. 1.1.28. "PARTNERSHIP INTANGIBLES" shall mean, collectively, the F&F Intangibles, the Hercules Intangibles, the Previously Amortizable F&F Intangibles, and the Tastemaker Intangibles. 1.1.29. "PARTNERSHIP RETURN" shall have the meaning ascribed to such term in Section 4.1(c) of this Appendix D. 1.1.30. "POST-CLOSING TAX PERIOD" shall have the meaning ascribed to such term in Section 4.3 of this Appendix D. 1.1.31. "POST-DETERMINATION RECOMPUTED BASELINE" shall mean, with respect a Redetermination Event as a result of which the Owners or Interested Persons are obligated to make a payment pursuant to Section 5.2 of this Appendix D, the Recomputed Baseline as computed immediately following such Redetermination Event. 87 1.1.32. "PRE-CLOSING TAX PERIOD" shall have the meaning ascribed to such term in Section 4.1(a) of this Appendix D. 1.1.33. "PRE-DETERMINATION RECOMPUTED BASELINE" shall mean, with respect a Redetermination Event as a result of which the Owners or Interested Persons are obligated to make a payment pursuant to Section 5.2 of this Appendix D, the Recomputed Baseline as computed immediately prior to such Redetermination Event, not taking into account all payments which (A) are treated for Tax purposes as adjustments to the consideration paid or delivered pursuant to the D&F Transaction Agreements or Transaction Documents or to assets received by F&F or any F&F Affiliate or contributed to Tastemaker in connection with a Fries Withdrawal pursuant to Section 7 of this Appendix D, (B) do not constitute Redetermination Events and (C) have not previously been taken into account in determining any Post-Determination Recomputed Baseline for purposes of Section 5.2(a) of this Appendix D upon the occurrence of any Redetermination Event. 1.1.34. "PREVIOUSLY AMORTIZABLE F&F INTANGIBLES" shall mean, collectively, each Intangible contributed by F&F to the capital of Tastemaker which, immediately prior to such contribution, was subject to amortization for United States federal income tax purposes. 1.1.35. "PRIVATE APPEAL" shall have the meaning ascribed to such term in Section 4.8(b)(2) of this Appendix D. 1.1.36. "PRIVATE CONTEST ELECTION" shall have the meaning ascribed to such term in Section 4.8(b)(1) of this Appendix D. 1.1.37. "PRIVATE MEDIATOR" shall mean the individual appointed pursuant to Section 4.8(b)(2) of this Appendix D, which individual is an attorney and is either (i) a former United States Tax Court judge or (ii) in private practice and a nationally recognized expert in the field of United States federal income taxation. 1.1.38. "PRIVATE TRIAL" shall have the meaning ascribed to such term in Section 4.8(b)(2) of this Appendix D. 1.1.39. "RECOMPUTED BASELINE" shall mean, at any time, the Adjusted Baseline, recomputed by making such modifications to the assumptions, methodology and information to which Section 2.1 of this Appendix D refers (other than the items specified in clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), clause (C) of (xvii), (xviii), (xix), (xx), and (xxi) of such Section 2.1) as are necessary in order fully to take into account all events occurring prior to such time; provided, that in making such recomputation, no modifications shall be made with respect to the assumptions, methodology and information to which such Section 2.1 refers when computing the net tax benefit or detriment to the Interested Persons and their Affiliates that is 88 attributable to taxable periods of F&F, Roche or any Roche Affiliate (other than taxable periods which are the subject of the Tax Claim, if any, resulting in the Redetermination Event) for which, as of such time, the statute of limitations (giving effect to any waiver, mitigation or extension thereof) has expired; and provided further, that no change in law which occurs between the times of determination of the Adjusted Baseline and the Recomputed Baseline shall be taken into account. 1.1.40. "REDETERMINATION EVENT" shall mean (i) any Final Determination or (ii) any payment of any amount (other than the payment of an amount pursuant to Section 5.2 of this Appendix D) by the Owners or the Interested Persons which is treated by the parties for Tax purposes as an adjustment to aggregate consideration paid or delivered pursuant to the D&F Transaction Agreements and the Transaction Documents or the total value of the assets received by F&F or any F&F Affiliate or contributed to Tastemaker in connection with a Fries Withdrawal pursuant to Section 7 of this Appendix D and which exceeds $1 million, in each case so long as the Final Determination described in clause (i) or the payment described in clause (ii) results in a Post-Determination Recomputed Baseline which differs from the corresponding Pre-Determination Recomputed Baseline. 1.1.41. "RESTRUCTURING TAX" shall mean any Tax resulting from the transactions undertaken pursuant to the Transaction Documents, the D&F Transaction Agreements or the Partnership Agreement (including, without limitation, a Fries Withdrawal). 1.1.42. "ROCHE AFFILIATE" shall mean any Affiliate of Roche. 1.1.43. "SECTION 351 LOSS" shall have the meaning ascribed to such term in Section 5.3 of this Appendix D. 1.1.44. "SHORT PERIOD" shall mean the portion of any Straddle Period ending at the end of the Closing Date. 1.1.45. "STEP-UP ADJUSTMENT" shall mean the amount, if any, by which the Initial Baseline exceeds the Adjusted Baseline. 1.1.46. "STEP-UP GAIN" shall have the meaning ascribed to such term in Section 5.2(b) of this Appendix D. 1.1.47. "STEP-UP LOSS" shall have the meaning ascribed to such term in Section 5.2(a) of this Appendix D. 1.1.48. "STEP-UP TAX" shall mean any liability for Tax (or any refund claim), a Final Determination in respect of which will result in the Owners or Interested Persons being required to indemnify the Interested Persons, the Owners or the Interested Persons' and Owners' respective Affiliates, as the case may be, pursuant to Section 5.2 of this Appendix D. 89 1.1.49. "STRADDLE PERIOD" shall have the meaning ascribed to such term in Section 4.1(a) of this Appendix D. 1.1.50. "SUBSEQUENT LOSS" shall have the meaning ascribed to such term in Section 4.2(d) of this Appendix D. 1.1.51. "TASTEMAKER INTANGIBLES" shall mean, collectively, each Intangible of Tastemaker other than the F&F Intangibles, the Hercules Intangibles, and the Previously Amortizable F&F Intangibles. 1.1.52. "TASTEMAKER REFINANCED DEBT" shall have the meaning ascribed to such term in Section 4.9(a) of this Appendix D. 1.1.53. "TAX" means (i) any federal, state, local or foreign income, profits, gross receipts, property, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add-on minimum, ad valorem, transfer, stamp, capital stock or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalty or addition to tax imposed by any Governmental Authority, (ii) liability of F&F or a Company for the payment of any amounts of the type described in Clause (i) above as a result of being a member of an affiliated, consolidated, combined or unitary group, or being a party to any agreement or arrangement whereby liability of F&F or such Company, as the case may be, for payments of such amounts was determined or taken into account with reference to the liability of any other person for any Pre-Closing Tax Period or Straddle Period, and (iii) liability of F&F or a Company for the payment of any amounts as a result of being party to any Tax sharing, allocation, compensation or like agreement or arrangement binding, as the case may be, F&F or such Company or with respect to the payment of any amounts of the type described in Clauses (i) or (ii) above as a result of any express or implied obligation to indemnify any other entity or individual. 1.1.54. "TAX CLAIM" has the meaning set forth in Section 4.8(a) of this Appendix D. 1.1.55. "TAX INDEMNIFICATION PERIOD" means (i) with respect to any Tax described in Clause (i) of the definition of "Tax," any Pre-Closing Tax Period or Short Period of F&F or a Company, (ii) with respect to any Tax described in Clause (ii) of the definition of "Tax," any Pre-Closing Tax Period or Short Period of F&F or a Company and the taxable period of any member of a group described in such Clause (ii) which includes (but does not end on) the Closing Date, (iii) with respect to any Tax described in Clause (iii) of the definition of "Tax", the survival period of the obligation under the applicable contract or arrangement. 1.1.56. "TAX LOSS" shall have the meaning ascribed to such term in Section 5.1(a) of this Appendix D. 90 1.1.57. "TAX RETURN" shall mean any return, report or similar statement (including any attached schedules) required to be filed with any Governmental Authority and relating to Taxes, including, without limitation, any information return, claim for refund, amended return or declaration of estimated Taxes. 1.1.58. "TRANSFER TAX" shall have the meaning ascribed to such term in Section 4.7 of this Appendix D. 1.1.59. "WASTING ASSET" shall mean any Equipment, Partnership Intangible or Building. 1.2. Capitalized Terms Not Defined in Appendix D. Capitalized terms used in this Appendix D and not otherwise defined in this Appendix D shall have the meanings ascribed to such terms in this Agreement. 2. ADJUSTED BASELINE Section 2.1. Assumptions Used in Determination of Adjusted Baseline. The Adjusted Baseline shall be determined in accordance with the following assumptions, methodology and information: (i) A discount rate of 6 percent, compounded quarterly, shall be used; (ii) The effective tax rate for the Interested Persons shall be 38 percent; (iii) In respect of Inventory of Tastemaker transferred to F&F or an Affiliate of F&F upon a Fries Withdrawal, such Inventory shall be taken into account to reduce gross income during the taxable period in which such Fries Withdrawal occurs; (iv) The "applicable recovery period" (as such term is used in Section 168 of the Code) for any Buildings transferred to F&F or any F&F Affiliate as part of a Fries Withdrawal shall be 39 years; (v) The "applicable recovery period" (as such term is used in Section 168 of the Code) for any Equipment transferred to F&F as part of a Fries Withdrawal shall be (u) with respect to such Equipment as is "3-year property" (as such term is used in Section 168 of the Code), 3 years; (v) with respect to such Equipment as is "5-year property" (as such term is used in Section 168 of the Code), 5 years; (w) with respect to such Equipment as is "7-year property" (as such term is used in Section 168 of the Code), 7 years; (x) with respect to such 91 Equipment as is "10-year property" (as such term is used in Section 168 of the Code), 10 years; (y) with respect to such Equipment as is "15-year property" (as such term is used in Section 168 of the Code), 15 years; and (z) with respect to such Equipment as is "20-year property" (as such term is used in Section 168 of the Code), 20 years; (vi) The amortization period for any Partnership Intangibles which are (A) transferred to F&F as part of a Fries Withdrawal and (B) amortizable by F&F pursuant to Section 197(a) of the Code (such Intangibles, "Amortizable Intangibles"), shall be 15 years; (vii) Each Wasting Asset transferred to F&F or any F&F Affiliate as part of a Fries Withdrawal shall be treated as being held by F&F or such F&F Affiliate, as the case may be, for the entire amortization period or applicable recovery period, if any, for such Wasting Asset; (viii) Amortization deductions attributable to any Amortizable Intangible shall be determined by using the straight line method; (ix) Depreciation deductions for any Equipment or Building shall be determined by using the "applicable depreciation method" for such property specified in Section 168 of the Code and by assuming that (x) no election is made under Section 168(b)(5) of the Code and (y) F&F or any F&F Affiliate, as the case may be, is a calendar year taxpayer with no assets other than those acquired as part of the Fries Withdrawal; (x) The amount claimed as a depreciation or amortization deduction in any taxable period with respect to a Wasting Asset transferred to F&F or any F&F Affiliate as part of a Fries Withdrawal shall be determined: (A) in the case of Buildings or Equipment, by applying the "applicable convention" (as such term is used in Section 168(d) of the Code and construed by the Internal Revenue Service in currently applicable administrative guidance, including Revenue Procedure 89-15) for such property; (B) in the case of any Amortizable Intangibles, beginning with the month in which such Fries Withdrawal occurs; and (C) in the case of other Partnership Intangibles amortizable under Sections of the Code other than Section 197(a), as appropriate under applicable law; 92 (xi) For United States federal income Tax purposes, none of the difference between (A) the aggregate basis to F&F, determined immediately after a Fries Withdrawal, of the F&F Intangibles transferred to F&F as part of such Withdrawal, and (B) the aggregate basis to Tastemaker, determined immediately prior to a Fries Withdrawal, of such Intangibles, shall be attributable to Amortizable Intangibles; (xii) For United States federal income Tax purposes, 50 percent (50%) of the difference between (A) the aggregate basis to F&F, determined immediately after a Fries Withdrawal, of the Hercules Intangibles transferred to F&F as part of such Withdrawal, and (B) the aggregate basis to Tastemaker, determined immediately prior to a Fries Withdrawal, of such Intangibles, shall be attributable to Amortizable Intangibles; (xiii) For United States federal income Tax purposes, 50 percent (50%) of the difference between (A) the aggregate basis to F&F, determined immediately after a Fries Withdrawal, of the Tastemaker Intangibles transferred to F&F as part of such Withdrawal, and (B) the aggregate basis to Tastemaker, determined immediately prior to a Fries Withdrawal, of such Intangibles, shall be attributable to Amortizable Intangibles; (xiv) For United States federal income Tax purposes, 100 percent (100%) of the difference between (A) the aggregate basis to F&F, determined immediately after a Fries Withdrawal, of the Previously Amortizable F&F Intangibles transferred to F&F as part of such Withdrawal, and (B) the aggregate basis to Tastemaker, determined immediately prior to a Fries Withdrawal, of such Intangibles, shall be attributable to Amortizable Intangibles; (xv) For United States federal income Tax purposes, the basis to F&F or any F&F Affiliate (as the case may be) of its interest in Tastemaker, and the bases to Tastemaker of any Wasting Assets or other property transferred by Tastemaker to F&F or such F&F Affiliate as part of a Fries Withdrawal, determined as of the time immediately prior to such Fries Withdrawal, shall be computed (A) using all such Tax Returns, work papers, business records and other materials as are possessed by or, in the exercise of due diligence, can be 93 obtained by the parties and (B) in accordance with all applicable provisions of the Code and Treasury Regulations implementing such provisions; (xvi) For United States federal income Tax purposes, the basis to F&F or any F&F Affiliate, as the case may be, determined as of the time immediately after a Fries Withdrawal, of any property transferred to F&F or such F&F Affiliate as part of such Withdrawal shall be (A) computed, in the case of Inventory, in accordance with Section 732(c)(1) of the Code and the Treasury Regulations implementing such provision, (B) computed, in the case of any other property, in accordance with Sections 751, 732(b) and 732(c)(2) of the Code and the Treasury Regulations implementing such provisions, provided, however, that full effect shall be given to any agreement reached by the Interested Persons and Owners as to the value of any partnership unrealized receivables, as set forth in Treasury Regulation Section 1.751-1(c)(3), and that any property of Tastemaker described in Section 1231 of the Code shall be treated as excluded in its entirety from the definition of inventory pursuant to Section 751(d)(2)(B) of the Code, and (C) depreciated or amortized as rapidly as possible, in accordance with applicable law, to the extent such recovery period and method is not otherwise provided for in this Section 2.1; (xvii) Each of the transactions contemplated by the Designated Transaction Agreements shall be deemed to have occurred without regard to whether such transaction actually occurs, unless the failure of such transaction to occur was attributable to a failure of an Owner or a Company to perform its obligations under the relevant Agreement; (xviii) The Adjusted Baseline shall be computed in a manner which takes into account the payment required by Section 2.3 of this Appendix D; (xix) The Adjusted Baseline shall be determined without regard to any change in law between the date hereof and the date on which the Adjusted Baseline is determined; (xx) Tax benefits and burdens are realized by the Interested Persons and their Affiliates on a quarterly basis; and 94 (xxi) The Interested Persons shall be deemed to have complied with the covenants set forth in Section 4.9, regardless of whether the Interested Persons in fact comply with such covenants. Section 2.2. Procedure for Determination of Adjusted Baseline. Within 15 days following the date on which the Adjusted Aggregate Value is finally determined pursuant to Section 2.6 of the Agreement, the Owners shall cause to be prepared and delivered to the Interested Persons a good faith calculation of the Adjusted Baseline and the Step-Up Adjustment (the "Owners' Baseline Calculations"). The Owners' Baseline Calculations shall be based only on such assumptions of fact or law as to which there is a reasonable basis. The Owners shall promptly provide to the Interested Persons all relevant portions of all Tax returns, work papers, procedures, and other materials relevant to the Owners' Baseline Calculations as the Interested Persons may reasonably request. Unless the Interested Persons timely object as specified in this Section 2.2, the Owners' Baseline Calculations shall be binding on the parties for purposes of Sections 2.3 and 2.4 of this Appendix D. The Interested Persons may object to the Owners' Baseline Calculations only upon making a good-faith determination that such Calculations are based on one or more (i) computational errors, (ii) materially inaccurate factual assumptions, or (iii) legal conclusions that do not provide a reasonable basis for the tax treatment of any item included in such Calculations, provided, however, that the Interested Persons may, notwithstanding the existence of such reasonable basis, disclose the treatment of such item on any Tax Return if the Interested Persons provide Owners with notice of the intent to make such disclosure at least thirty days prior to the filing of such Tax Return and consult with Owners and/or Owners' counsel in good faith regarding the necessity for such disclosure, and provided further, however, that no such disclosure will be made if the Interested Persons have received an opinion of nationally recognized tax counsel that it is more likely than not that the treatment of such item will be respected for federal income tax purposes. If the Interested Persons object to all or any part of the Owners' Baseline Calculations, they shall within thirty days after receiving such Calculations notify the Owners in writing that they so object. If a notice of objection is duly delivered, the Interested Persons and the Owners shall negotiate in good faith and use their best efforts to reach agreement as to the computational, legal or factual question forming the basis for the Interested Persons' objection. If the Interested Persons and the Owners are unable to reach such agreement within twenty days after due delivery of such notice, the parties' dispute shall be referred for resolution to the same Adjustment Arbitrator as is selected by the parties pursuant to Section 2.6.1 of the Agreement or, if no Adjustment Arbitrator is selected by the parties pursuant to such Section 2.6.1, to a certified public 95 accounting firm selected by the parties by applying the principles of such provision (the "Accounting Referee"). The Accounting Referee shall determine any item which is disputed by the parties (and only such items) in a manner consistent with the terms of Section 2.1 of this Appendix D and shall apply such procedures as such Accounting Referee may require in resolving the parties' dispute. The parties agree to use their best efforts to cause the Accounting Referee to resolve their dispute within 60 days after referral of the dispute to such Accounting Referee. The costs, fees and expenses of the Accounting Referee, to the extent incurred with respect to the parties' dispute over the calculation of the Adjusted Baseline and the Step-Up Adjustment, shall be borne by the Interested Persons, if such Referee resolves the parties' dispute in favor of the Owners, and by the Owners, if such Referee resolves the parties' dispute in favor of the Interested Persons. Upon the resolution pursuant to the procedures set forth in this Section 2.2 of all disputed items relating to the calculation of the Adjusted Baseline and the Step-Up Adjustment, the calculation of the Adjusted Baseline and the Step-Up Adjustment pursuant to such resolution shall be binding on the Interested Persons and the Owners for purposes of Sections 2.3 and 2.4 of this Appendix D. Section 2.3. Payment of Step-Up Adjustment. Within 10 days after the calculation of the Adjusted Baseline and the Step-Up Adjustment becomes binding on the parties pursuant to Section 2.2 of this Appendix D, the Owners shall pay to the Interested Persons, by wire transfer of immediately available funds, an amount equal to the sum of (i) the Step-Up Adjustment and (ii) interest on the Step-Up Adjustment from and including the Closing Date to but excluding the date of payment at a rate per annum equal to the rate of interest announced by Morgan Guaranty Trust Company of New York from time to time as its Base Rate in New York City in effect from time to time during the period from the Fries Withdrawal Date to the date of payment. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the total number of days elapsed. Section 2.4. Adjusted Baseline Reflected on Tax Returns. All Tax Returns filed by or on behalf of the Owners, the Interested Persons or any of the Owners' or Interested Persons' Affiliates (including Tastemaker) shall be consistent with the calculation of the Adjusted Baseline (including all assumptions, methodology and information on which such Adjusted Baseline is based, other than the items specified in clauses (ii), (iii), (vii), clauses (x) and (y) of (ix), (xvii), and (xxi) of Section 2.1 of this Appendix D) which becomes binding pursuant to Section 2.2 of this Appendix D; provided, that the Owners, the Interested Persons and the Owners' and Interested Persons' Affiliates each shall file or cause to be filed on its behalf Tax Returns which take into account any changes in law, any event described in clauses (i) and (ii) of the definition of "Final Determination" 96 binding on the party filing such Returns, any payment by the Interested Persons or Owners treated for Tax purposes as an adjustment to the consideration paid or delivered pursuant to the D&F Transaction Agreements or the Transaction Documents or assets received by F&F or any F&F Affiliate or contributed to Tastemaker in connection with a Fries Withdrawal. If any Tax Return filed by a party prior to the time at which the calculation of the Adjusted Baseline becomes binding is inconsistent with such calculation of the Adjusted Baseline, then such party shall, to the extent permissible or required under applicable law, file an amended Tax Return which is consistent with such calculation of the Adjusted Baseline. 3. REPRESENTATIONS Hercules and Mallinckrodt, jointly and severally, represent and warrant to the Interested Persons as of the date hereof and as of the Closing Date: 3.1. Valid Section 338 Elections. The acquisition by Tastemaker Finance Inc. of the stock of each of Tastemaker Inc. (formerly called Consolidated Flavor Corporation) and Cocoa Trading and Transport Company constituted, in the case of each entity the stock of which was acquired, a "qualified stock purchase" within the meaning of Section 338(d)(3) of the Code. In the case of each acquisition described in the preceding sentence, a valid election was made under Section 338(h)(10) of the Code. 4. COVENANTS 4.1. Responsibility for Periods Beginning Before Closing Date. (a) With respect to jurisdictions in which F&F (i) is required to file a consolidated, combined or unitary Tax Return with Mallinckrodt or any consolidated, combined or unitary group of which F&F is a member ("F&F Group") or (ii) is eligible to file a Tax Return with Mallinckrodt or any member of the F&F Group and has filed such a Return in the most recent taxable period for which a Return was due, Mallinckrodt shall include, or cause to be included, F&F in such Tax Returns for all taxable periods ending at or before the end of the Closing Date ("Pre-Closing Tax Periods") and all taxable periods beginning prior to and ending after the Closing Date ("Straddle Periods"). Items of income of F&F included in such Returns shall be determined in accordance with principles of Treasury Regulation Section 1.1502-76(b) applied to the portion of such period ending at the end of the Closing Date and the portion of such period beginning on the day following the Closing Date, including the application of Treasury Regulation Section 1.1502-76(b)(1)(ii)(B) to treat transactions occurring after the consummation of the transactions contemplated by the Contribution Agreement, including the transfer of any interest in Tastemaker by F&F to any F&F 97 Affiliate and a Fries Withdrawal pursuant to or in respect of the Partnership Agreement, as occurring on the day following the Closing Date. F&F's share of Tastemaker income for Straddle Periods shall each be allocated to the periods before and after the consummation of the transactions contemplated by the Contribution Agreement, as required by Treasury Regulation Section 1.1502-76(b)(2)(v), by applying the interim closing of the books method and the principles of Treasury Regulation Section 1.1502-76(b), including the application of Treasury Regulation Section 1.1502-76(b)(1)(ii)(B) to treat transactions occurring after the consummation of the transactions contemplated by the Contribution Agreement, including the transfer of any interest in Tastemaker by F&F to any F&F Affiliate and a Fries Withdrawal pursuant to or in respect of the Partnership Agreement, as occurring on the day following the Closing Date. Mallinckrodt shall timely prepare and file, or cause to be timely prepared and filed, all such Tax Returns described in the first sentence of this paragraph 4.1(a) with respect to Pre-Closing Tax Periods and Straddle Periods referred to in this Section 4.1(a), subject to Roche's review and approval (which approval shall not be unreasonably withheld) of the portions of such Returns which relate to F&F. All Tax Returns prepared pursuant to this Section 4.1(a) shall be prepared or completed in a manner consistent with prior practice of Mallinckrodt or F&F, as applicable, concerning the income, properties or operations of F&F (including elections and accounting methods and conventions), except as otherwise required by law. Mallinckrodt shall timely pay, or cause to be timely paid, when due all Taxes relating to the Returns that it is required to prepare and file pursuant to this Section 4.1(a). (b) With respect to jurisdictions (i) in which F&F is required to file a Tax Return and (ii) with respect to which Section 4.1(a) does not apply, Mallinckrodt shall timely prepare and file, or cause to be timely prepared and filed all such Tax Returns of F&F for all Pre-Closing Tax Periods and Roche shall timely prepare and file or cause to be timely prepared and filed all such Tax Returns for all Straddle Periods, subject to Mallinckrodt's review and approval (which approval shall not be unreasonably withheld). Items of income of F&F included in such Tax Returns shall be determined in accordance with principles of Treasury Regulation Section 1.1502-76(b) applied to treat transactions occurring after the consummation of the transactions contemplated by the Contribution Agreement, including the transfer of any interest in Tastemaker by F&F to any F&F Affiliate and a Fries Withdrawal pursuant to or in respect of the Partnership Agreement, as occurring on the day following the Closing Date. F&F shall timely pay, when due, all Taxes relating to the Tax Returns prepared and filed pursuant to this Section 4.1(b). Mallinckrodt shall reimburse F&F for any Taxes payable pursuant to this Section 4.1(b) for any Pre-Closing Tax Period or any Straddle Period to the extent applicable to the period ending at the end of the Closing Date determined under principles of Treasury Regulation Section 1.1502-76(b) on or before the later of (i) with respect to Taxes due under any Tax Returns prepared by Roche, fifteen days after such Tax Returns have been sent to 98 Mallinckrodt for approval, or (ii) within fifteen days prior to the date on which the related tax liability is due. All Tax Returns prepared pursuant to this Section 4.1(b) shall be prepared or completed in a manner consistent with prior practice of F&F concerning the income, properties or operations of F&F (including elections, accounting methods and conventions), except as otherwise required by law. (c) With respect to jurisdictions in which Tastemaker (i) is required to file a partnership information Tax Return ("Partnership Return") or (ii) is eligible to file a Partnership Return and has filed such a Return in the most recent taxable period for which a Partnership Return was due, Hercules shall timely prepare and file, or cause to be timely prepared and filed all such Partnership Returns for all Pre-Closing Tax Periods and Straddle Periods, subject to the Roche's review and approval (which approval shall not be unreasonably withheld) of all Partnership Returns for Straddle Periods. Partners' distributive shares of Tastemaker items of income, gain, loss, deduction or credit shall be determined in accordance with Treasury Regulation Section 1.706-1(c)(2)(ii) by applying the interim closing of the books method. All Partnership Returns prepared pursuant to this Section 4.1(c) shall be prepared or completed in a manner consistent with prior practice of Tastemaker concerning the income, properties or operations of Tastemaker (including elections, accounting methods and conventions), except as otherwise required by law. (d) With respect to jurisdictions (i) in which Tastemaker is required to file a Tax Return and (ii) with respect to which Section 4.1(c) does not apply, Hercules shall timely prepare and file, or cause to be timely prepared and filed all such Tax Returns for all Pre-Closing Tax Periods and Straddle Periods, subject to the Roche's review and approval (which approval shall not be unreasonably withheld) of all Tax Returns for Straddle Periods. All Returns prepared pursuant to this Section 4.1(d) shall be prepared or completed in a manner consistent with prior practice of Tastemaker concerning the income, properties or operations of Tastemaker (including elections, accounting methods and conventions), except as otherwise required by law. Tastemaker shall pay all Taxes relating to Tax Returns required to be prepared and filed pursuant to this Section 4.1(d). Any Taxes of Tastemaker payable pursuant to such Tax Returns shall be estimated and apportioned for purposes of determining the Working Capital Adjustment, between the Owners, on the one hand, and the Interested Persons on the other hand, in accordance with the principles of Treasury Regulation Section 1.1502-76(b) applied as of the Adjustment Time. (e) With respect to jurisdictions in which any one or more of the Tastemaker Subsidiaries are required to file a Tax Return, the Owners shall timely prepare and file, or cause to be timely prepared and filed, all such Tax Returns for all Pre-Closing Tax Periods and the Interested Persons shall timely file prepare and file, or cause to be timely filed, all such Tax Returns for all 99 Straddle Periods, subject to the Owners' review and approval (which approval shall not be unreasonably withheld). All Tax Returns prepared pursuant to this Section 4.1(e) shall be prepared or completed in a manner consistent with prior practices of the Tastemaker Subsidiaries concerning the income, properties or operations of the Tastemaker Subsidiaries (including elections, accounting methods and conventions), except as otherwise required by law. The Tastemaker Subsidiaries shall pay all Taxes relating to Tax Returns required to be prepared and filed pursuant to this Section 4.1(e). Any Taxes of Tastemaker Subsidiaries payable pursuant to such Tax Returns shall be estimated and apportioned for purposes of determining the Working Capital Adjustment, between the Owners, on the one hand, and the Interested Persons on the other hand, in accordance with the principles of Treasury Regulation Section 1.1502-76(b) applied to a portion of such period ending as of the Adjustment time. (f) With respect to jurisdictions in which Tastemaker B.V. or any Tastemaker B.V. Subsidiary is required to file a Tax Return, the Owners shall timely prepare and file, or cause to be timely prepared and filed, all such Tax Returns for all Pre-Closing Tax Periods and GRI shall timely prepare and file, or cause to be timely prepared and filed, all such Tax Returns for all Straddle Periods, subject to Owners' review and approval (which approval shall not be unreasonably withheld). All Tax Returns prepared pursuant to this Section 4.1(f) shall be prepared or completed in a manner consistent with prior practices of Tastemaker B.V. and the Tastemaker B.V. Subsidiaries concerning the income, properties or operations of Tastemaker B.V. and the Tastemaker B.V. Subsidiaries (including elections, accounting methods and conventions), except as otherwise required by law. Tastemaker B.V. and the Tastemaker B.V. Subsidiaries shall pay all Taxes relating to Tax Returns required to be prepared and filed pursuant to this Section 4.1(f). Any Taxes of Tastemaker B.V. and the Tastemaker B.V. Subsidiaries payable pursuant to such Tax Returns shall be estimated and apportioned for purposes of determining the Working Capital Adjustment, between the Owners, on the one hand, and GRI on the other hand, in accordance with the principle of Treasury Regulation Section 1.1502-76(b) applied to the portion of such period ending as of the Adjustment Time. (g) No reference in this Section 4.1 to the principles of Treasury Regulation Section 1.1502-76(b) contemplates the application of such Regulation using the ratable allocation method described in Treasury Regulation Section 1.1502-76 (b)(2)(ii). 4.2. Refunds and Carrybacks. (a) Except as provided in Section 4.2(d), the Owners shall be entitled to any refunds of Taxes paid by or on behalf of the Companies (including refunds paid by means of a credit against other or future Tax liabilities) arising or accruing with respect to, or relating to, items in Pre-Closing Tax Periods or that portion of any Straddle 100 Period ending at the Adjustment Time, to the extent in excess of the amount shown, if any, as a Current Asset on the Accountants' Net Determination or a Final Net Determination, as the case may be. Except as provided in Section 4.2(d), Mallinckrodt shall be entitled to any refunds of Taxes paid by or on behalf of F&F (including refunds paid by means of a credit against other or future Tax liabilities) arising or accruing with respect to, or relating to, items in Pre-Closing Tax Periods or that portion of any Straddle Period ending at the Adjustment Time. (b) The Interested Persons shall be entitled to all other refunds of Taxes paid by or on behalf of F&F and the Companies (including refunds paid by means of a credit against other or future Tax liabilities). (c) The Interested Persons shall cause F&F and the Companies to forward to Owners or to reimburse Owners for any refunds due the Owners (pursuant to the terms of this Section 4.2) within fifteen days after receipt thereof, and the Owners shall forward to the Interested Persons or reimburse the Interested Persons for any refunds due the Interested Persons (pursuant to the terms of this Section 4.2) within fifteen days after receipt thereof. In the case of a refund received in the form of a credit against other or future Tax liabilities, reimbursement in respect of such refund shall be due in each case on the due date for payment of the Taxes against which such refund has been credited. (d) The Owners agree that if F&F or any of the Companies carries back any item of loss, deduction or credit that arises in any Post-Closing Tax Period (a "Subsequent Loss") into any taxable period beginning before the Closing Date, then the Interested Persons shall be entitled to receive from the Owners a payment in an amount equal to any Tax benefit or refund of Taxes received by the Owners as a result thereof within fifteen days after the receipt of such benefit or such refund. (e) References to the Companies in subsections (b), (c) and (d) of this Section 4.2 shall not include Tastemaker. 4.3. Responsibility for Taxable Periods Commencing After the Closing Date. Subject to the provisions of Section 5 of this Appendix D, for taxable periods commencing after the Closing Date (each a "Post-Closing Tax Period"), the Interested Persons shall (i) be liable solely for all Taxes of F&F and the Companies (other than Tastemaker) attributable thereto and (ii) pay or cause to be paid the Taxes described in clause (i) together with any related costs. The Interested Persons shall prepare and file or cause to be prepared and filed, all Tax Returns of F&F and the Companies (other than Tastemaker) for Post-Closing Tax Periods. 4.4. Cooperation. After the Closing Date, each of the 101 Interested Persons and the Owners shall make available to the other, as reasonably requested, and to any Governmental Authority, all information, records and documents relating to Tax liabilities or potential Tax liabilities relating to F&F and the Companies and shall preserve all such information, records and documents until the expiration of any applicable statute of limitations or extension thereof, or such longer period as is required by the Agreement. 4.5. Tax Sharing. Any and all existing Tax sharing, allocation, compensation or like agreements or arrangements that include F&F or any Company shall terminate with respect to F&F or such Company, as the case may be, as of the date hereof without liability to F&F or such Company. 4.6. No Real Property Holding Corporation; Partnership Election. Within 30 days prior to the Closing, the Owners shall deliver to the Interested Persons a certification for each Company and signed by such Company to the effect that the Company is not nor has it been within 5 years of the date hereof a "United States real property holding corporation" as defined in Section 897 of the Code. Prior to the Closing, the Owners shall deliver to the Interested Persons a copy of the Form 8832 filed by Tastemaker B.V. pursuant to Treasury Regulation 301.7701-3(c) and Section 5.10 of the Agreement. 4.7. Transfer Taxes. The Interested Persons and Owners, respectively, shall each bear 50% of the cost of all documentary, stamp, transfer, sales, excise or other similar Taxes or recording fees, including without limitation any real property transfer and real property gains Taxes ("Transfer Taxes") payable in respect of the transactions contemplated in the Transaction Documents, the D&F Transaction Agreements and the Partnership Agreement (including, without limitation, the Fries Withdrawal). 4.8 Contest Rights With Respect to Indemnified Taxes. (a) In the event any of the Interested Persons or any of their Affiliates (each a "Contestant") receives any written notice of any potential claim or proposed adjustment that could result in a Step-Up Tax or a Tax in respect of which either or both of the Owners, as the case may be, would be required to indemnify the Interested Persons or their Affiliates, as the case may be, pursuant to Section 5.1 of this Appendix D (a "Tax Claim") and such Tax Claim arises in connection with an audit of a Tax Return over which such Contestant has control by law or by agreement, then this Section 4.8 shall apply unless such Contestant offers to cede control of the audit of such Tax Claim to the Owners. In the event a Tax Claim is subject to this Section 4.8(a), the Contestant shall (i) promptly notify each Owner from whom an indemnity payment would be required (each such Owner being 102 referred to herein both individually and collectively as an "Indemnitor") of such Tax Claim and provide Indemnitor with relevant information thereto (including a copy of any written notices and information document requests received), provided that the failure to give such notice shall not diminish the Indemnitor's obligation hereunder except to the extent that such failure results in a material and adverse effect on the Indemnitor, (ii) forbear payment of the Tax claimed for at least 30 days after giving such notice (provided such forbearance is permitted by law), and (iii) advise Indemnitor of all action taken or proposed to be taken by the relevant Governmental Authority. In addition, to the extent such Tax Claim relates to an item or items which reasonably could be considered to constitute "partnership items" within the meaning of Section 6231 (a)(3) of the Internal Revenue Code and the Treasury Regulation thereunder, the parties shall use their best efforts to cause the Internal Revenue Service to remove such items from Contestant's audit (including forbearing from entering into an extension agreement under Section 6229(b) of the Code) and to instead treat such items as partnership items and determine the tax treatment thereof pursuant to an audit of Tastemaker, in which case such items shall no longer be subject to this Section 4.8(a). The decision regarding whether or not such Tax Claim shall be contested is solely that of the Contestant. If such Tax Claim is contested, the Contestant shall in good faith and using its best efforts contest the claim or proposed adjustment, shall keep the Indemnitor fully informed at all administrative and judicial stages of any contest, shall consult in good faith with Indemnitor and Indemnitor's counsel regarding the contest of such Tax Claim or proposed adjustment, and shall provide Indemnitor and Indemnitor's counsel, at the Indemnitor's expense, with the portions of drafts of all written petitions, briefs, and similar submissions relating to Tax Claims indemnified by the Indemnitor hereunder. Such proceedings, insofar as they relate to Tax Claims, shall be controlled jointly by the Contestant and Indemnitor. Contestant shall use its best efforts to permit Indemnitor to be present and represented by Indemnitor's counsel at any meetings or proceedings. Decisions regarding the contest of such Tax Claim with respect to tactics to be pursued in contesting such Tax Claim or substantive legal matters relating to such Tax Claim shall be made jointly by Contestant and Indemnitor. Notwithstanding any of the foregoing, a decision not to contest such Tax Claim, a decision to refrain from seeking to cause an item relating to such Tax Claim from being treated as a partnership item, a decision regarding the terms of any settlement of such Tax Claim with the Internal Revenue Service or other relevant Governmental Authority, a decision regarding whether to prosecute such Tax Claim in the United States Tax Court, the United States Court of Federal Claims, a United States District Court, or other available trial court or similar judicial forum, or a decision not to appeal an adverse judicial determination of a lower court, shall be made solely and exclusively by the Contestant. (b) (1) In the event that Indemnitor disagrees with any 103 decision made by Contestant pursuant to the last sentence of Section 4.8(a) above, Indemnitor's sole recourse is to elect the private contest resolution procedures outlined in this Section 4.8(b); provided, however, that any refusal or failure of Contestant to seek to cause an item giving rise to a Tax Claim to be treated as a partnership item shall not be the subject of a proceeding pursuant to this Section 4.8(b). If Indemnitor desires to proceed under this Section 4.8(b), it shall provide Contestant with written notice of such election (a "Private Contest Election") on or before the last date payment pursuant to Section 5.1 or 5.2 of this Appendix D may be made in compliance with Section 5.5 of this Appendix D (the "Election Deadline"). The making of a Private Contest Election shall cause the period during which payment may be made in compliance with Section 5.5 of this Appendix D to be tolled until ten (10) days after the date a final determination with respect to the amount of the Tax Claim is made by the Private Mediator pursuant to Section 4.8(b)(2) of this Appendix D. (2) Within 30 days of Contestant's receipt of such Private Contest Election, each of Contestant and Indemnitor shall submit to the other the names of 3 individuals qualified to serve, and whom they would consent to being appointed, as the Private Mediator, and which individuals have informed the submitting party that they would be willing to serve as such Private Mediator. Within 30 days of the end of the period during which the parties may submit names of potential Private Mediators to each other, the Contestant and Indemnitor shall jointly agree as to the appointment of one of the proposed Private Mediators. The Contestant and Indemnitor shall submit the Tax Claim to the Private Mediator in a proceeding that (i) with respect to a Tax Claim which does not arise out of a final judgment entered by the United States Tax Court, the United States Court of Federal Claims, a United States District Court or other available trial court or similar judicial forum will be governed by the Rules of the United States Tax Court (a "Private Trial") and (ii) with respect to a Tax Claim which does arise out of a final judgment entered by the United States Tax Court, the United States Court of Federal Claims, a United States District Court or other available trial court or similar judicial forum, an appeal of such judgment to the United States Court of Appeals for the Sixth Circuit (a "Private Appeal"). The Contestant shall present the case of the relevant Governmental Authority in support of the Tax Claim and Indemnitor shall present the case of the taxpayer in opposition to the Tax Claim. A Private Trial before the Private Mediator will be conducted in a manner consistent with a trial de novo in the United States Tax Court; provided, however, that notwithstanding any provision of the Rules of such Court to the contrary, (A) the parties shall engage in discovery only to the extent that each party may make discovery requests of the other party or its Affiliates to the extent such requests relate to documents in the possession of such other party and which documents are relevant to the Tax Claim and (B) the decision of the Private Mediator shall not be appealable. Subject to the powers granted the Private Mediator in this Section 4.8(b)), the 104 Contestant and the Indemnitor shall, with respect to a Private Trial conducted pursuant to this Section 4.8(b)), have the ability to present the testimony of witnesses, introduce documentary evidence, and otherwise fully develop a record in such proceeding. The Private Mediator (i) with respect to a Private Trial conducted pursuant to this Section 4.8(b)), shall have all powers exercisable by a judge of the United States Tax Court including, without limitation, the power to set the calendar for the proceeding, to set briefing schedules, to rule on motions, and to encourage and cause the parties to reach a settlement with respect to the Tax Claim and (ii) with respect to a Private Appeal conducted pursuant to this Section 4.8(b)), shall have all powers exercisable by a judge of the United States, Court of Appeals for the Sixth Circuit; provided, however, that the Private Mediator must have made a final determination as to the amount of the Tax Claim or the Contestant and Indemnitor must enter into a settlement regarding the amount of such Tax Claim no later than twelve months from the date the Private Mediator is appointed; and provided, further, that in rendering a final determination, the Private Mediator shall state in reasonable detail the factual and legal bases for his or her determination in a written opinion and shall endeavor to make clear the effect of the determination on the Recomputed Baseline, determined immediately prior to such determination. The determination of the Private Mediator shall be final in all respects and the indemnity payment required to be made by Indemnitor pursuant to Section 5.1 or 5.2 of this Appendix D shall be computed with reference to such final determination. (3) The Contestant and Indemnitor shall bear their own costs incurred in connection with a proceeding conducted pursuant to this Section 4.8(b). The costs incurred in connection with the conduct of the proceeding, including the cost of the Private Mediator, shall be borne, respectively, fifty percent (50%) by the Contestant or Contestants and fifty percent (50%) by the Indemnitor or Indemnitors. (c) In the event any potential claim or proposed adjustment that relates to a Restructuring Tax, or that could result in a Step-Up Tax, arises in or is made a part of an audit of Tastemaker or the Owners or any of their Affiliates (each an "Audited Party"), the Audited Party shall (i) promptly notify the Interested Persons of such claim or adjustment and provide the Interested Persons with relevant information thereto (including a copy of any relevant written notices and information or document requests received), (ii) advise the Interested Persons of the status of such audit insofar as is relevant to the Interested Persons' interests (including, to the extent relevant, providing copies to the Interested Persons of all correspondence, providing the Interests Persons with reasonable advance notice of meetings or significant telephone conferences with the relevant Governmental Authority, and consulting with the Interested Persons regarding strategy decisions with respect to such audit). The Audited Party and the Interested Persons shall jointly make 105 all decisions as to the substantive legal arguments to be set forth in the portion of any written petition, brief and similar submission relating to the claim or adjustment which is the subject of this Section 4.8(c), and the Audited Party shall provide to the Interested Persons for their review the portion of any draft of such petition, brief and other submission relating to such claim or adjustment. The Interested Persons shall have right to consent to any settlement by the Audited Party with the relevant Governmental Authority insofar as such settlement relates to a Step-Up Tax, which consent shall not be unreasonably withheld. Tastemaker and the Interested Persons will each use their reasonable best efforts to coordinate their efforts with respect to any simultaneous audit of Tastemaker, an Owner or any of its Affiliates or an Interested Person or any of its Affiliates, to the extent such audits involve identical or related issues. 4.9. Covenants of the Interested Persons (a) The Interested Persons covenant that any principal payments on or refinancing of the Tastemaker Debt within one year of the Fries Withdrawal Date shall be done solely with the proceeds of a liability of the then obligor on the Tastemaker Debt, the proceeds of which are allocable under the rules of Treasury Regulation Section 1.163-8T to payments discharging the Tastemaker Debt (the "Tastemaker Refinanced Debt," which term shall also include any liability of the then obligor on the Tastemaker Refinanced Debt, the proceeds of which are allocable under the rules of Treasury Regulation Section 1.163-8T to payments discharging such Tastemaker Refinanced Debt). The Tastemaker Debt and any Tastemaker Refinanced Debt shall have an aggregate term of, and will remain outstanding for, in the aggregate, at least four months after the Fries Withdrawal Date. (b) The Interested Persons covenant that none of F&F or any F&F Affiliate shall be liquidated or dissolved or otherwise suffer a termination of its corporate existence and none of F&F or any F&F Affiliate shall be a party to any reorganization (other than a reorganization in which F&F or such F&F Affiliate, as the case may be, is the surviving corporation) within two years of the Fries Withdrawal Date. (c) The Interested Persons covenant that none of the assets purchased from Tastemaker by the Interested Persons or any Affiliate of the Interested Persons shall be transferred to F&F or any F&F Affiliate within two years of the Fries Withdrawal Date. (d) The Interested Persons covenant that (i) except for assets transferred in the ordinary course of business, substantially all of the assets of Tastemaker immediately prior to the Fries Withdrawal which are received by F&F as part of the Fries Withdrawal shall remain in F&F for at least two years subsequent to the Fries Withdrawal Date and (ii) except for assets transferred in the ordinary course of business, none of 106 the assets distributed by Tastemaker to F&F or any F&F Affiliate as part of the Fries Withdrawal shall be transferred by F&F or such F&F Affiliate, as the case may be, within two years of the Fries Withdrawal Date to any Affiliate of the Interested Persons that received assets from Tastemaker by purchase pursuant to the Designated Transaction Agreements. (e) The Interested Persons covenant that F&F shall transfer a portion of its partnership interest in Tastemaker to one or more F&F Affiliates, each such F&F Affiliate shall receive distributions of one or more significant parcels of real property constituting substantially all of the real property held by Tastemaker immediately prior to the Fries Withdrawal, and that any lease of each such parcel of real property to F&F shall be pursuant to a lease agreement that constitutes a "true" lease for United States federal income tax purposes. (f) The Interested Persons and Owners each covenant that, subject to requirements of law, financial reporting requirements, and the provisions of Sections 2.4 and 4.8 of this Appendix D, with respect to all transactions executed in connection with or as contemplated by the Wrap Agreement, the F&F Transaction Agreement, the Hercules Transaction Agreement, the Contribution Agreement, and the Partnership Agreement (including, but not limited to, the Fries Withdrawal), such Interested Persons and Owners (i) will not take any action inconsistent with the separate legal status of all entities participating in such transactions and the legal ownership of assets as reflected in such agreements and (ii) will report the Transactions for Tax purposes in a manner consistent with the form of such transactions. 4.10. Taxing Jurisdictions. At or prior to the Closing, the Owners shall provide the Interested Persons with a list of all jurisdictions, whether foreign or domestic, to which any Tax is payable by F&F or any Company. 5. INDEMNITY 5.1. Tax Indemnity by the Owners. (a) Notwithstanding anything in the D&F Transaction Agreements, Transaction Documents or Partnership Agreement to the contrary, Mallinckrodt, with respect to Mallinckrodt Taxes (other than any Tax constituting a Section 351 Loss), Hercules, with respect to Hercules Taxes, and Mallinckrodt and Hercules, jointly and severally, with respect to all Taxes (including Restructuring Taxes) other than Mallinckrodt Taxes, Hercules Taxes, and any Tax constituting a Section 351 Loss, shall indemnify and hold harmless the Interested Persons and their Affiliates against (i) any Tax of F&F or a Company related to the Tax Indemnification Period, (ii) any Restructuring Tax regardless of the taxable period to which it relates, and (iii) any liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys' 107 fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any Tax described in (i) or (ii), including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Tax, and any liability as transferee (the sum of (i), (ii) and (iii) being referred to herein as a "Tax Loss"). (b) For purposes of this Section 5.1, in the case of any Tax that is payable for a Straddle Period, the portion of such Tax related to the corresponding Short Period shall be determined under the principles of Treasury Regulation Section 1.1502-76(b), applying such Regulation in the manner set forth in Section 4.1 of this Appendix D. 5.2 Indemnity by Owners and Interested Persons Relating to Basis Step-Up. (a) If after the Fries Withdrawal Date there shall be a Redetermination Event, then the Owners shall pay F&F, Roche or Roche's Affiliates, as directed by Roche, an amount (such amount, a "Step-Up Loss") equal to eighty-five percent (85%) of the sum of the following five items: (i) the excess, if any, of (A) the lower of (x) the Initial Baseline and (y) the Pre-Determination Recomputed Baseline, over (B) the Post-Determination Recomputed Baseline; (ii) the amount, if any, of interest and penalties actually assessed in connection with such Redetermination Event, multiplied by a fraction (such fraction, the "Adjustment Fraction"), (A) the numerator of which is the amount described in clause (i) and (B) the denominator of which is the excess of (x) the PreDetermination Recomputed Baseline over (y) the Post-Determination Recomputed Baseline; (iii) the product of: (A) interest (calculated by using the applicable United States federal income Tax underpayment rates in effect from time to time) on such additional Tax, if any, of F&F, Roche or a Roche Affiliate, as is, was, will be or would become due in respect of the net reduction in depreciation or amortization deductions relating to Other Open Years which occurs solely as a result of such Redetermination Event; and (B) the Adjustment Fraction; 108 (iv) interest (calculated by using a rate of 6 percent, compounded quarterly and running from the Fries Withdrawal Date through and including the date of payment pursuant to this Section 5.2(a)) on the portion of the amount described in clause (i) which is attributable to the net reduction in depreciation or amortization deductions relating to taxable periods of F&F, Roche or a Roche Affiliate subsequent to the last Other Open Year for, as the case may be, F&F, Roche or such Roche Affiliate; and (v) interest (calculated by using a rate of 6 percent, compounded quarterly) on each portion of the amount described in clause (i) which is attributable to a net reduction in depreciation or amortization deductions relating to an Other Open Year or a taxable period of F&F, Roche or a Roche Affiliate which is the subject of the Tax Claim resulting in such Redetermination Event; provided, in the case of each portion of the amount specified in clause (i) that is attributable to a particular quarter of such Other Open Year or taxable period of F&F, Roche or a Roche Affiliate, that interest on such portion of such amount shall run from the Fries Withdrawal Date through the end of such quarter. (b) If after the Fries Withdrawal Date there shall be a Redetermination Event, then the Interested Persons shall pay the Owners or the Owners' Affiliates, as directed by the Owners, an amount (such amount, a "Step-Up Gain") equal to eighty-five percent (85%) of the sum of the following four items: (i) the excess, if any, of (A) the lower of (x) the Initial Baseline and (y) the Post-Determination Recomputed Baseline, over (B) the Pre-Determination Recomputed Baseline; (ii) the product of: (A) interest (calculated by using the applicable United States federal income Tax overpayment rates in effect from time to time) on such refunds of Tax, if any, to which F&F, Roche or a Roche Affiliate, is, will be or would be entitled by reason of the net increase in depreciation or amortization deductions relating to Other Open Years which occurs as solely a result of the Redetermination Event; and (B) a fraction, (x) the numerator of which is the amount described in clause (i) of this Section 5.2(b) and (y) the denominator of 109 which is the excess of (I) the Post-Determination Recomputed Baseline over (II) the Pre-Determination Recomputed Baseline; (iii) interest (calculated by using a rate of 6 percent, compounded quarterly and running from the Fries Withdrawal Date through and including the date of payment pursuant to this Section 5.2(b,)) on the portion of the amount described in clause (i) of this Section 5.2(b,) which is attributable to an increase in depreciation or amortization deductions relating to taxable periods of F&F, Roche or a Roche Affiliate subsequent to the last Other Open Year for, as the case may be, F&F, Roche or such Roche Affiliate; and (iv) interest (calculated by using a rate of 6 percent, compounded quarterly) on each portion of the amount described in clause (i) which is attributable to a net increase in depreciation or amortization deductions relating to an Other Open Year or a taxable period of F&F, Roche or a Roche Affiliate which is the subject of the Tax Claim resulting in such Redetermination Event; provided, in the case of each portion of the amount specified in clause (i) that is attributable to a particular quarter of such Other Open Year or taxable period of F&F, Roche or a Roche Affiliate, that interest on such portion of such amount shall run from the Fries Withdrawal Date through the end of such quarter. (c) For purposes of this Appendix C, "Other Open Years" shall mean, in the case of a Redetermination Event subject to Section 5.2(a) or 5.2(b), all taxable periods of F&F, Roche or a Roche Affiliate (other than taxable periods which are the subject of the Tax Claim which resulted in such Redetermination Event), in respect of which, as of the date of such Redetermination Event, (x) a Tax Return was filed by or due from F&F, Roche or such Affiliate of Roche (as the case may be) and (y) the statute of limitations (giving effect to any waiver, mitigation or extension thereof) has not expired. 5.3. Reciprocal Indemnity by Roche and Mallinckrodt. If there shall be a Final Determination that, solely as a result of any breach by Roche or Mallinckrodt, as the case may be, of its covenant in Section 7.3 of the Contribution Agreement, the contribution by Roche of the G-R Stock, or by Mallinckrodt of the capital stock of F&F, to Newco pursuant to the terms of the Contribution Agreement fails to qualify as a tax-free contribution under Section 351 or, in the case of Roche, Section 368(a)(1)(B) of the Code, then Roche or Mallinckrodt, as the case may be, shall indemnify the other party or its Affiliates against (i) the amount of any Tax of such other party or its Affiliates resulting from such failure, and (ii) any liabilities, costs, 110 expenses (including, without limitation, reasonable expenses of investigation and attorneys' fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any Tax described in (i), including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Tax (the sum of (i) and (ii) being referred to herein as a "Section 351 Loss"); provided, that Roche shall not be obligated to indemnify Mallinckrodt or its affiliates if such failure results from (A) the terms of the Newco Preferred Stock, the Keepwell Agreement or the Letter of Credit, (B) any action taken by Roche, or which Roche causes to be taken by Newco, pursuant to or as required by the terms of the Newco Preferred Stock (including Roche's exercise of any right thereunder), the Keepwell Agreement or the Letter of Credit, or (C) Mallinckrodt's exercise of any right under the Newco Preferred Stock, the Keepwell Agreement or the Letter of Credit. 5.4. Amount of Recovery for Damages and Losses Relating to Taxes. (a) Subject to Section 5.4(b) of this Appendix D, but otherwise notwithstanding anything in the Partnership Agreement or any of the Transaction Documents or D&F Transaction Agreements to the contrary, with respect to any Tax Loss, Step-Up Loss, Step-Up Gain, or Section 351 Loss against which an Interested Person or its Affiliate or an Owner or its Affiliate is entitled to be indemnified pursuant to this Section 5, such party shall be indemnified against the full amount of such Tax Loss, Step-Up Loss, Step-Up Gain or Section 351 Loss, as the case may be, regardless of the amount of such Tax Loss, Step-Up Loss, Step-Up Gain, or Section 351 Loss or the total amount of all Tax Losses, Step-Up Losses, Step-Up Gains, or Section 351 Losses (or any categories thereof) incurred as of any date. (b) Notwithstanding anything in the Partnership Agreement or any of the Transaction Documents or D&F Transaction Agreements to the contrary: (i) with respect to any Tax Loss, the aggregate recovery to which the Interested Persons and their Affiliates are entitled under Section 5.1 of this Appendix D, Section 8 of the Agreement, Section 8 of the F&F Transaction Agreement, Section 8 of the Hercules Transaction Agreement, Article 11 of the Partnership Agreement and Section 8 of the Contribution Agreement shall be reduced to the extent that such Tax Loss has been taken into account in determining the Adjusted Aggregate Value; and (ii) with respect to any Tax Loss, Step-Up Loss, Step-Up Gain, or Section 351 Loss, the Owners and their Affiliates or the Interested Persons and their Affiliates, as the case may be, shall be entitled to an aggregate recovery under this Section 5, Section 8 of the Agreement, Section 8 of the F&F Transaction Agreement, Section 8 of the 111 Hercules Transaction Agreement, Article 11 of the Partnership Agreement and Section 8 of the Contribution Agreement no greater than the amount of such Loss or such Gain, as the case may be. (c) Each party shall bear its own costs incurred in connection with a Tax Claim relating to a Step-Up Tax (and, in the case of a Redetermination Event which is a determination by a Private Mediator, any costs incurred in connection with the Tax Claim with respect to which the Private Mediator made its determination); provided, that any cost of a proceeding before a Private Mediator shall be borne by the parties as provided in Section 4.8(b)(3) of this Appendix D. 5.5. Indemnification Procedure. (a) Any payment pursuant to Section 5.1 or 5.2 of this Appendix D shall be made not later than 30 days after receipt by, as the case may be, the Interested Persons, Owner or Owners obligated to make payment pursuant to such Section 5.1 or 5.2 of written notice from each Interested Person or Owner which is, or an Affiliate of which is, entitled to such payment pursuant to such Section 5.1 or 5.2. Such notice shall state (i) in the case of any Tax Loss, that such Loss has been paid by an Interested Person or its Affiliates and the amount thereof, and (ii) in the case of any Redetermination Event (other than a final determination described in clause (iii) of the definition of "Final Determination") or any event which would be described in clause (i) or (ii) of the definition of "Final Determination" if a timely Private Contest Election were not filed pursuant to Section 4.8(b)(1), that such Redetermination Event or other event, as the case may be, has occurred and the amount of the indemnity payment requested. (b) Any payment pursuant to Section 5.3 of this Appendix D shall be made not later than 30 days after receipt by Roche or Mallinckrodt, as the case may be, of written notice from the other party stating that a Section 351 Loss has been paid by such other party or its affiliates and the amount thereof. Roche agrees to give prompt notice to Mallinckrodt of any Section 351 Loss and the assertion of any claim, or the commencement of any suit, action or proceeding in respect of which indemnity may be sought hereunder which Roche deems to be within the ambit of Section 5.3 (specifying with reasonable particularity the basis therefor) and will give Mallinckrodt such information with respect thereto as Mallinckrodt may reasonably request. Mallinckrodt agrees to provide prompt notice to Roche of any Section 351 Loss and the assertion of any claim, or the commencement of any suit, action or proceeding in respect of which indemnity may be sought hereunder which Mallinckrodt deems to be within the ambit of Section 5.3 (specifying with reasonable particularity the basis therefor) and will give Roche such information with respect thereto as Roche may reasonably request. 6. SURVIVAL 112 Notwithstanding anything in the Partnership Agreement or any of the Transaction Documents or D&F Transaction Agreements to the contrary, the representations, warranties, covenants and agreements contained in the Partnership Agreement, Transaction Documents and D&F Transaction Agreements, to the extent that such representations, warranties, covenants and agreements relate to Taxes (including, without limitation, Section 3.13 of the Agreement, Section 7.3 of the Contribution Agreement, and all provisions of this Appendix D), shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof). 7. ITEMS TREATED AS AGGREGATE VALUE ADJUSTMENTS 7.1 Indemnity and Other Payments Treated as Aggregate Value Adjustments. For Tax purposes, the Owners and the Interested Persons shall treat, and shall cause their respective affiliates to treat, any amount paid by the Owners or the Interested Persons under Sections 2.3, 4.1, 4.2(d) or 5 of this Appendix D, Section 8 of the Agreement, Section 8 of the F&F Transaction Agreement, Section 8 of the Hercules Transaction Agreement, Article 11 of the Partnership Agreement or Section 8 of the Contribution Agreement as an adjustment to the amount of consideration paid or delivered pursuant to the D&F Transaction Agreements or the Transaction Documents or assets received by F&F or any F&F Affiliate or contributed to Tastemaker in connection with a Fries Withdrawal, as appropriate, unless a Final Determination causes any such amount not to be so treated. In the event of such a Final Determination, the Interested Persons or Owners, as the case may be, shall pay an amount that reflects the hypothetical Tax consequences of the receipt or accrual of such amount paid under Sections 2.3, 4.1, 4.2(d) and 5 of this Appendix D, Section 8 of the Agreement, Section 8 of the F&F Transaction Agreement, Section 8 of the Hercules Transaction Agreement, Article 11 of the Partnership Agreement and Section 8 of the Contribution Agreement listed in the preceding sentence, using the maximum statutory rate (or rates, in the case of an item that affects more than one Tax) applicable to the recipient of the payment for the relevant year, and reflecting, for example, the effect of deductions available for interest paid with respect to such amount or for state and local income Taxes. 7.2 Interest on Items Treated as Aggregate Value Adjustments. Any payment required to be made by the Interested Persons or Owners under Sections 4.1, 4.2(d) or 5 of this Appendix D that is not made when due shall bear interest at a rate per annum equal to the rate of interest announced by Morgan Guaranty Trust Company of New York from time to time as its Base Rate in New York City in effect from time to time during the period from the Fries Withdrawal Date to the date of payment. Such interest shall be payable at the same time as the payment to 113 which it relates and shall be calculated daily on the basis of a year of 365 days and the total number of days elapsed. EX-2.2 3 FIRST AMENDMENT TO AGREEMENT DATED MARCH 28, 1997 1 EXHIBIT 2.2 FIRST AMENDMENT TO WRAP AGREEMENT This FIRST AMENDMENT TO WRAP AGREEMENT (the "AMENDMENT"), dated as of March 28, 1997, is made and entered into by and among HERCULES INCORPORATED, a Delaware corporation ("HERCULES"), MALLINCKRODT INC., a New York corporation ("MALLINCKRODT"), GIVAUDAN-ROURE (INTERNATIONAL) SA, a Swiss corporation ("GRI"), and ROCHE HOLDINGS, INC., a Delaware corporation ("ROCHE" and, together with GRI, the "INTERESTED PERSONS" and each individually an "INTERESTED PERSON"). RECITALS A. The Owners and the Interested Persons are parties to that certain Agreement dated as of February 4, 1997 (the "AGREEMENT"), subject and pursuant to which the parties and their respective Affiliates intend to consummate various transactions more particularly described in the Agreement. B. The parties desire to amend the Agreement to more accurately reflect the mutual intentions of the parties with respect to certain defined terms and to make certain other changes, all as more particularly set forth in this Amendment. NOW, THEREFORE, in consideration of the premises and of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows: 1. DEFINITIONS Capitalized terms, when used in this Amendment and not otherwise defined, shall have meanings ascribed thereto in the Agreement. In addition, the definitions of "Agreement," "Current Assets," "Current Liabilities," "Long-Term Liabilities," "Long-Term Liabilities Baseline," "Partners' Representatives," and "Working Capital Baseline" set forth in Sections 1.1.9, 1.1.22, 1.1.23, 1.1.62, 1.1.64, 1.1.72 and 1.1.104, respectively, shall be, and hereby are, deleted and the following Sections 1.1.9, 1.1.22, 1.1.23, 1.1.62, 1.1.64, 1.1.72 and 1.1.104, respectively, shall be, and hereby are, inserted in their place: 1.1.9 Agreement shall mean this Agreement, as amended by that certain First Amendment to Wrap Agreement dated March 28, 1997, the Disclosure Schedule and all schedules, annexes, exhibits and appendices hereto. 1.1.22 Current Assets shall mean, as of any time, all items, excluding deferred taxes, the current portion, if any, of the Investment Assets (as defined in the Partnership Agreement), any accrued but unpaid interest receivable on the Investment Assets and the unamortized portion of any capitalized costs or expenses of obtaining the Tastemaker 2 Debt or the Investment Assets, which would be classified as a current asset under the heading "CURRENT ASSETS" on a combined consolidated balance sheet of Tastemaker and Tastemaker B.V. determined and prepared in accordance with GAAP applied on a basis consistent with the practices and methodologies used in preparing the December 31, 1995 audited combined consolidated balance sheet of Tastemaker and Tastemaker B.V. 1.1.23 Current Liabilities shall mean, as of any time, the sum of (A) the amount of accrued but unpaid interest, fees and other costs (but excluding principal) required to be paid to the Tastemaker Debt lender on the Closing Date in order to pay in full and discharge all of the Tastemaker Debt other than the principal thereof, and (B) all items, excluding deferred taxes, the Tastemaker Debt and any Tax that is the liability or obligation of Tastemaker, which would be classified as a current liability under the heading "CURRENT LIABILITIES" on a combined consolidated balance sheet of Tastemaker and Tastemaker B.V. determined and prepared in accordance with GAAP applied on a basis consistent with the practices and methodologies used in preparing the December 31, 1995 audited combined consolidated balance sheet of Tastemaker and Tastemaker B.V.; provided, that when determining whether any Tax is included as a Current Liability for purposes of calculating the Adjusted Aggregate Value, the principles of Treasury Regulations Section 1.1502-76(b), applied in the manner set forth in the Tax Annex, shall govern. 1.1.62 Long-Term Liabilities shall mean, at any time, the sum of (A) the amount of accrued but unpaid interest, fees and other costs (but excluding principal) required to be paid to the Tastemaker Debt lender on the Closing Date in order to pay in full and discharge all of the Tastemaker Debt other than the principal thereof, and (B) the liabilities of the Companies (other than Current Liabilities, the long-term component of pension liabilities, deferred taxes, the Tastemaker Debt and any Tax that is a liability or obligation of Tastemaker) which would be classified as a liability under the heading "TOTAL LIABILITIES" on a combined consolidated balance sheet of Tastemaker and Tastemaker B.V. determined and prepared in accordance with GAAP applied on a basis consistent with the practices and methodologies used in preparing the December 31, 1995 audited combined consolidated balance sheet of Tastemaker and Tastemaker B.V. 1.1.64 Long-Term Liabilities Baseline shall mean the total liabilities of the Companies (other than Current Liabilities, the long-term component of pension liabilities, deferred taxes, the Tastemaker Debt and any Tax that is the liability or obligation of Tastemaker) which were classified as a liability under the heading "TOTAL LIABILITIES" on the June 28, 1996 unaudited combined consolidated balance sheet 3 of Tastemaker and Tastemaker B.V. and their respective subsidiaries, which was an amount equal to Thirty Eight Million Four Hundred Fifty Thousand Twenty-Four Dollars ($38,450,024.00) plus any Tax on such balance sheet that is a long-term liability of Tastemaker. 1.1.72 Partners' Representatives shall mean Israel Floyd, George MacKenzie, M.G. Nichols and T.D. Meier. 1.1.104 Working Capital Baseline shall mean the Net Working Capital of the Companies on the June 28, 1996 unaudited combined consolidated balance sheet of Tastemaker and Tastemaker B.V., which was an amount equal to Seventy- Seven Million Seven Hundred Six Thousand Nine Hundred Thirteen Dollars ($77,706,913.00), plus any Tax on such balance sheet that is a current liability of Tastemaker. 2. EFFECT OF AMENDMENT Except as expressly set forth herein, the Agreement is unchanged and in full force and effect, and the parties hereby ratify and confirm the Agreement as amended hereby. The parties further agree that all references to the Agreement in the Transaction Documents, the D&F Transaction Agreements, the Fries Withdrawal Documents (as defined in the Partnership Agreement) and any other certificates, documents, instruments or agreements entered into pursuant thereto or delivered in connection therewith shall be deemed to mean and refer to the Agreement, as amended by this Amendment. 3. CONSENT OF OTHERS By signing in the spaces provided below, each of Givaudan- Roure (United States), Inc., Tastemaker, Hercules Flavor, Inc., Hercules Credit, Inc. and Fries & Fries, Inc. consent to this Amendment and to the effect hereof on the Contribution Agreement and the Fries Withdrawal Documents (as defined in the Partnership Agreement). 4 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date and year first written above. GIVAUDAN-ROURE (INTERNATIONAL) SA HERCULES INCORPORATED By_______________________ By_______________________ Name_____________________ Name_____________________ Title____________________ Title____________________ ROCHE HOLDINGS, INC. MALLINCKRODT INC. By_______________________ By_______________________ Name_____________________ Name_____________________ Title____________________ Title____________________ CONSENTED BY: GIVAUDAN-ROURE (INTERNATIONAL) SA TASTEMAKER By_______________________ By_______________________ Name_____________________ Name_____________________ Title____________________ Title____________________ HERCULES FLAVOR, INC. FRIES & FRIES, INC. By_______________________ By_______________________ Name_____________________ Name_____________________ Title____________________ Title____________________ HERCULES CREDIT, INC. By_______________________ Name_____________________ Title____________________ EX-2.3 4 CONTRIBUTION AGREEMENT DATED FEBRUARY 4, 1997 1 PURCHASE AND SALE AGREEMENT AMONG HERCULES INCORPORATED HERCULES NEDERLAND B.V. AND GIVAUDAN-ROURE (INTERNATIONAL) SA DATED AS OF FEBRUARY 4, 1997 2 Table of Contents Page ---- RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1. DEFINITIONS AND INTERPRETATION. . . . . . . . . . . . . . 4 1.1 Capitalized Terms. . . . . . . . . . . . . . . . . . 4 1.1.1 Consolidated Subsidiaries. . . . . . . . . 4 1.1.2 Downward Adjustment. . . . . . . . . . . . 4 1.1.3 HNBV Tastemaker B.V. Interest. . . . . . . 5 1.1.4 Upward Adjustment. . . . . . . . . . . . . 5 1.1.5 Voting Agreement . . . . . . . . . . . . . 5 1.1.6 Wrap Agreement . . . . . . . . . . . . . . 5 1.2 Accounting Terms . . . . . . . . . . . . . . . . . . 5 1.3 Construction . . . . . . . . . . . . . . . . . . . . 5 1.4 Captions and Headings. . . . . . . . . . . . . . . . 5 1.5 No Party Deemed Drafter. . . . . . . . . . . . . . . 6 1.6 Reformation. . . . . . . . . . . . . . . . . . . . . 6 1.7 Currency . . . . . . . . . . . . . . . . . . . . . . 6 1.8 Materiality. . . . . . . . . . . . . . . . . . . . . 6 2. PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . 8 2.1 Purchase and Sale Transaction. . . . . . . . . . . . 8 2.2 Consideration. . . . . . . . . . . . . . . . . . . . 8 2.3 Closing. . . . . . . . . . . . . . . . . . . . . . . 10 3. REPRESENTATIONS AND WARRANTIES OF HERCULES AND HNBV . . . 10 3.1. Organization, Standing and Power . . . . . . . . . . 10 3.2. Ownership of HFI and HCI; HFI and HCI Ownership of Tastemaker . . . . . . . . . . . . . . . . . . . . . 11 3.3. HNBV Interest in Tastemaker B.V. . . . . . . . . . . 11 3.4. Authority. . . . . . . . . . . . . . . . . . . . . . 12 3.5. Consents and Approvals; No Violation . . . . . . . . 13 3.6. Brokers. . . . . . . . . . . . . . . . . . . . . . . 15 3.7. Transactions with Affiliates . . . . . . . . . . . . 15 3.8. Agreements with Mallinckrodt . . . . . . . . . . . . 16 4. REPRESENTATIONS AND WARRANTIES OF GRI . . . . . . . . . . 16 4.1 Organization, Standing and Power . . . . . . . . . . 16 4.2 Authority. . . . . . . . . . . . . . . . . . . . . . 16 4.3 Consents and Approvals; No Violation . . . . . . . . 17 4.4 Financial Capabilities . . . . . . . . . . . . . . . 18 5. COVENANTS OF HERCULES . . . . . . . . . . . . . . . . . . 19 5.1 Documents to be delivered by Hercules and HNBV at Closing. . . . . . . . . . . . . . . . . . . . . . . 19 6. COVENANTS OF GRI. . . . . . . . . . . . . . . . . . . . . 20 6.1 Deliveries by GRI at Closing . . . . . . . . . . . . 20 6.2 Constructive Termination . . . . . . . . . . . . . . 20 3 7. MUTUAL COVENANTS OF HERCULES, HNBV AND GRI. . . . . . . . 21 7.1 Satisfaction of Conditions . . . . . . . . . . . . . 21 7.2 Further Assurances . . . . . . . . . . . . . . . . . 21 8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNITY FOR DAMAGES . . . . . . . . . . 22 8.1 Survival . . . . . . . . . . . . . . . . . . . . . . 22 8.2 Limitations of Remedies. . . . . . . . . . . . . . . 23 8.3 Indemnification Procedures . . . . . . . . . . . . . 23 8.4 Claims Made in Written Notice. . . . . . . . . . . . 23 9. RESOLUTION OF DISPUTES. . . . . . . . . . . . . . . . . . 24 9.1 Conclusive and Exclusive . . . . . . . . . . . . . . 24 9.2 Forum and Waivers. . . . . . . . . . . . . . . . . . 24 10. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . 25 10.1 Conditions to Obligations of GRI . . . . . . . . . . 25 10.1.1 Accuracy of Representations and Warranties. . . . . . . . . . . . . . . . . . . 25 10.1.2 Performance of Agreements. . . . . . . . . . . .25 10.1.3 Officers' Certificates . . . . . . . . . . . . .25 10.1.4 Wrap Agreement Conditions. . . . . . . . . . . .26 10.1.5 Legal Opinion. . . . . . . . . . . . . . . . . .26 10.2 Conditions to Obligations of Hercules. . . . . .26 10.2.1 Accuracy of Representations and Warranties. . . . . . . . . . . . . . . . . . . 26 10.2.2 Performance of Agreements. . . . . . . . . . . .26 10.2.3 Officer's Certificate. . . . . . . . . . . . . .27 10.2.4 Wrap Agreement Conditions. . . . . . . . . . . .27 10.2.5 Legal Opinion. . . . . . . . . . . . . . . . . .27 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 28 11.1 Termination and Cancellation . . . . . . . . . . . . 28 11.2 Effect of Termination. . . . . . . . . . . . . . . . 29 11.3 Notices. . . . . . . . . . . . . . . . . . . . . . . 29 11.3.1 Hercules Notice Address. . . . . . . . . . 30 11.3.2 HNBV Notice Address. . . . . . . . . . . . 31 11.3.3 GRI Notice Address . . . . . . . . . . . . 31 11.4 Assignment . . . . . . . . . . . . . . . . . . . . . 32 11.5 Waiver . . . . . . . . . . . . . . . . . . . . . . . 32 11.6 Amendments . . . . . . . . . . . . . . . . . . . . . 32 11.7 Limitations on Rights of Third Parties . . . . . . . 32 11.8 Counterparts . . . . . . . . . . . . . . . . . . . . 33 11.9 Governing Law. . . . . . . . . . . . . . . . . . . . 33 4 Table of Appendices Appendix A -- Form of Legal Opinion THE TABLE OF APPENDICES SET FORTH ABOVE BRIEFLY IDENTIFIES THE CONTENTS OF ALL OMITTED APPENDICES TO THE PURCHASE AND SALE AGREEMENT DATED AS OF FEBRUARY 4, 1997 AMONG HERCULES INCORPORATED, HERCULES NEDERLAND B.V., AND GIVAUDAN-ROURE (INTERNATIONAL) SA (THE "AGREEMENT"). A LIST BRIEFLY IDENTIFYING THE CONTENTS OF ALL OMITTED SCHEDULES TO THE AGREEMENT IS AS FOLLOWS: SCHEDULE 3.5 - CONTRACTS THAT REQUIRE CONSENT TO THE TRANSACTION SCHEDULE 3.7 - TRANSACTIONS BETWEEN HERCULES, HNBV, HFI OR HCI AND ANY OF THE COMPANIES SCHEDULE 3.8 - AGREEMENTS WITH MALLINCKRODT OR ITS AFFILIATES HERCULES INCORPORATED WILL FURNISH SUPPLEMENTALLY A COPY OF ANY OMITTED APPENDIX OR SCHEDULE TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST. 5 PURCHASE AND SALE AGREEMENT This Purchase and Sale Agreement (the "Purchase Agreement"), dated as of February 4, 1997, is made and entered into by and among HERCULES INCORPORATED, a Delaware corporation ("Hercules"), HERCULES NEDERLAND B.V., a Netherlands limited liability entity and wholly owned subsidiary of Hercules ("HNBV"), and GIVAUDAN-ROURE (INTERNATIONAL) SA, a Swiss corporation ("GRI"). RECITALS A. Tastemaker, a general partnership organized and existing under the laws of the State of Delaware ("Tastemaker"), and Tastemaker B.V., a limited liability entity organized and existing under the laws of The Netherlands ("Tastemaker B.V."), together are engaged globally, both directly and indirectly through their respective subsidiaries, in the development, manufacture and sale of ingredients and compounds used primarily to provide flavor or taste in food and beverage products (the "Business"). B. Tastemaker is owned forty percent (40%) by Hercules Flavor, Inc., a Delaware corporation ("HFI") and wholly owned subsidiary of Hercules, ten percent (10%) by Hercules Credit, Inc., a Delaware corporation ("HCI") and wholly owned subsidiary of Hercules, and fifty percent (50%) by Fries & Fries, Inc., a Delaware corporation ("F&F") and wholly owned subsidiary of Mallinckrodt Inc., a New York corporation ("Mallinckrodt"). C. Tastemaker B.V. is owned one percent (1%) by Tastemaker, forty-nine and one-half percent (49.5%) by F&F and forty-nine and one-half percent (49.5%) by HNBV. D. GRI or certain Affiliates of Roche Holdings, Inc., a Delaware corporation ("Roche" and, together with GRI, the "Interested Persons") and GRI, as the case may be, ("GRI" together with such Affiliates, the "Designated Buyers") and Tastemaker intend to enter into a series of Purchase and Sale Agreements (the "Designated Transaction Agreements"), subject and pursuant to which and prior to the consummation of the transactions contemplated by this Agreement, the F&F Transaction Agreement (as hereinafter defined) and the Contribution Agreement 6 (as hereinafter defined), Tastemaker shall transfer to the Designated Buyers, and the Designated Buyers shall acquire, all of Tastemaker's foreign subsidiaries, Tastemaker Finance, Inc., a Delaware corporation ("TFI"), and Tastemaker's one percent (1%) interest in Tastemaker B.V. in exchange for payment by the Designated Buyers of cash in the amounts specified in the Wrap Agreement (as hereinafter defined). E. Roche has organized a Delaware wholly owned subsidiary ("Newco"), which will be, prior to the consummation of the transactions contemplated by the Contribution Agreement (as hereinafter defined), capitalized with 100% of the issued and outstanding common stock of Givaudan-Roure Corporation, a Delaware corporation. F. Hercules, Mallinckrodt and the Interested Persons are parties to that certain Agreement as of the date hereof, which sets forth certain representations, warranties, covenants and agreements relating to, among other issues, the transfer by Hercules and HNBV to GRI of HNBV's interest in Tastemaker B.V. and the contribution by Mallinckrodt to Newco of Mallinckrodt's interest in F&F (the "Wrap Agreement"). G. Hercules and HNBV desire that HNBV transfer to GRI, and GRI desires to acquire, HNBV's interest in Tastemaker B.V. through the acquisition by GRI of HNBV's forty-nine and one-half percent (49.5%) interest in Tastemaker B.V. for cash, subject and pursuant to the terms and conditions of this Purchase Agreement and the Wrap Agreement. H. The transfer by F&F to GRI of F&F's interest in Tastemaker B.V. is covered by that certain Purchase and Sale Agreement as of the date hereof entered into between F&F and GRI (the "F&F Transaction Agreement"), and (i) neither Hercules nor HNBV shall have any liabilities, responsibilities or obligations with respect to any representation, warranty, covenant or agreement set forth in the F&F Transaction Agreement, and (ii) except as expressly provided in Section 5.5 of the Contribution Agreement (as hereinafter defined), Mallinckrodt shall have no liabilities, responsibilities or obligations with respect to any representation, warranty, covenant or agreement set forth in the F&F Transaction Agreement. I. The contribution by Mallinckrodt to Newco of Mallinckrodt's interest in F&F is covered by the Wrap Agreement and that certain Contribution Agreement entered into among Mallinckrodt, Roche, GRI and Newco concurrently herewith (the "Contribution Agreement"), and neither Hercules nor HNBV shall have any liabilities, responsibilities or obligations with respect to any representation, warranty, covenant or agreement set forth in the Contribution Agreement. NOW, THEREFORE, in consideration of the premises and of the mutual agreements, provisions and covenants contained herein, the parties hereto agree as follows: 7 1. DEFINITIONS AND INTERPRETATION 1.1 Capitalized Terms. Capitalized terms used in this Purchase Agreement and not otherwise defined shall have the meanings ascribed to such terms in the Wrap Agreement. In addition, the following capitalized terms, when used in this Purchase Agreement and not otherwise defined, shall have the following indicated meanings: 1.1.1 Consolidated Subsidiaries shall mean those persons and entities, the assets, liabilities or results of operations of which are included, or required by GAAP to be included, in the consolidated financial statements of GRI. 1.1.2 Downward Adjustment shall have the meaning ascribed to such term in Section 2.2 hereof. 1.1.3 HNBV Tastemaker B.V. Interest shall have the meaning ascribed to such term in Section 3.3 of this Purchase Agreement. 1.1.4 Upward Adjustment shall have the meaning ascribed to such term in Section 2.2 hereof. 1.1.5 Voting Agreement shall mean that certain power of attorney dated August 31, 1994 given to Tastemaker by HNBV and F&F, pursuant to which Tastemaker is given the power to represent, and vote the interests of, HNBV and F&F in the general meetings of shareholders of Tastemaker B.V. 1.1.6 Wrap Agreement shall have the meaning ascribed to such term in Recital F of this Purchase Agreement. 1.2 Accounting Terms. Accounting terms used in this Purchase Agreement and not otherwise defined shall have the meanings ascribed thereto under GAAP. 1.3 Construction. Unless the context clearly indicates to the contrary, words singular or plural in number shall be deemed to include the other and pronouns having a neuter, masculine or feminine gender shall be deemed to include and refer to any and all genders. Whenever the terms "herein," "hereunder," or words of like import are used in this Purchase Agreement, the intended reference is to the entire Purchase Agreement and not to the clause, sentence or section in which such word appears. 1.4 Captions and Headings. The captions and headings in this Purchase Agreement are inserted for convenience of reference only and shall not be considered a part of, or affect the construction or interpretation of, any provision of this Purchase Agreement. 1.5 No Party Deemed Drafter. This Purchase Agreement represents the culmination of extensive and arms length 8 negotiations between the parties. No party shall be deemed the drafter of this Purchase Agreement, and this Purchase Agreement shall not be construed for or against any party by reason of a particular party being deemed the drafter. 1.6 Reformation. Should any term or condition of this Purchase Agreement be determined by a court of competent jurisdiction to be unenforceable for any reason, including, without limitation, violation of statute or public policy, such provision shall, if possible, be reformed by the parties hereto or, if the parties cannot agree, by the appropriate court of competent jurisdiction to comply with applicable legal requirements in a manner that is as close in its intent and effect to the original provision as possible or, if such reformation cannot be accomplished, shall be stricken without affecting the validity of any other term or condition of this Purchase Agreement. 1.7 Currency. All references in this Purchase Agreement to "dollars" or "$" shall be deemed to mean and refer to United States dollars. 1.8 Materiality. Whenever the terms "material" or "material adverse effect" are used in Section 3 and Section 10.1 of this Purchase Agreement, such terms shall be interpreted and construed as meaning "material" to the business, assets, condition (financial or otherwise) or results of operations of HNBV, HFI or HCI, taken as a whole, or referencing a "material adverse effect" on the business, assets, condition (financial or otherwise) or results of operations of HNBV, HFI or HCI, taken as a whole; provided, however, that any such effect caused by or resulting from (i) any change in generally accepted accounting principles, (ii) the announcement or pendency of the transactions contemplated by the Transaction Documents or the D&F Transaction Agreements, (iii) fluctuations in the relative values of domestic and/or foreign currencies, or (iv) any change in economic conditions generally shall not be considered when determining whether a material adverse effect has occurred. Whenever the terms "material" or "material adverse effect" are used in Sections 4 and 6 and Section 10.2 of this Purchase Agreement, such terms shall be interpreted and construed as meaning "material" to the business, assets, condition (financial or otherwise) or results of operations of GRI and its Consolidated Subsidiaries, taken as a whole, or referencing a "material adverse effect" on the business, assets, condition (financial or otherwise) or results of operations of GRI and its Consolidated Subsidiaries, taken as a whole; provided, however, that any such effect caused by or resulting from (i) any change in generally accepted accounting principles, (ii) the announcement or pendency of the transactions contemplated by the Transaction Documents or the D&F Transaction Agreements, (iii) fluctuations in the relative values of domestic and/or foreign currencies, or (iv) any change in economic conditions generally shall not be considered when determining whether a material adverse effect has occurred. 9 2. PURCHASE AND SALE 2.1 Purchase and Sale Transaction. Subject and pursuant to the terms and conditions of this Purchase Agreement and the Wrap Agreement, HNBV shall transfer to GRI, and GRI shall acquire, HNBV's forty-nine and one-half percent (49.5%) interest in Tastemaker B.V. for cash, as provided in Section 2.2 below. Hercules and HNBV shall be solely responsible for all covenants, representations, warranties, liabilities and obligations of Hercules and HNBV under this Purchase Agreement, and neither Mallinckrodt nor F&F shall have any responsibilities, liabilities or obligations under this Purchase Agreement. 2.2 Consideration. On the Closing Date, GRI shall deliver to HNBV cash in an amount equal to forty-nine and one-half percent (49.5%) of the Estimated Tastemaker B.V. Value. The Tastemaker B.V. Value shall be determined in accordance with Section 2.6.2 of the Wrap Agreement. Within ten (10) days after the date upon which the Tastemaker B.V. Working Capital Adjustment and the Tastemaker B.V. Long-Term Liabilities Adjustment are finally determined pursuant to Section 2.6.2 of the Wrap Agreement (whether by agreement of the parties, dispute resolution or as a result of the failure to timely provide a required notice), then either (i) if the Tastemaker B.V. Working Capital Adjustment and the Tastemaker B.V. Long-Term Liabilities Adjustment as finally determined result in a Tastemaker B.V. Value that is higher than the Estimated Tastemaker B.V. Value determined and paid on the Closing Date (the amount by which the Tastemaker B.V. Value exceeds the Estimated Tastemaker B.V. Value being hereinafter referred to as the "Upward Adjustment"), GRI shall pay to HNBV cash in an amount equal to 49.5% of the Upward Adjustment, as well as interest on such amount, or (ii) if the Tastemaker B.V. Working Capital Adjustment and the Tastemaker B.V. Long-Term Liabilities Adjustment as finally determined result in a Tastemaker B.V. Value that is lower than the Estimated Tastemaker B.V. Value determined and paid on the Closing Date (the amount by which such Estimated Tastemaker B.V. Value exceeds the Tastemaker B.V. Value being hereinafter referred to as the "Downward Adjustment"), HNBV shall pay to GRI an amount equal to 49.5% of the Downward Adjustment, as well as interest on such amount. Interest shall be paid from and including the Closing Date through, but excluding, the date of payment at a rate per annum equal to the rate of interest announced by Morgan Guaranty Trust Company of New York from time to time as its Base Rate in New York City in effect from time to time during the period from the Closing Date to the date of payment. Such interest shall be payable at the same time as the payment to which it relates and shall be calculated daily on the basis of a year of 365 days and the actual number of days allowed. 2.3 Closing. The closing of the transactions contemplated 10 by this Purchase Agreement shall occur at the time and place, and on the Closing Date established by the parties under and pursuant to the Wrap Agreement. 3. REPRESENTATIONS AND WARRANTIES OF HERCULES AND HNBV Hercules and HNBV jointly and severally represent and warrant to GRI as of the date hereof and as of the Closing Date as follows: 3.1. Organization, Standing and Power. Hercules is a corporation duly organized and validly existing under the laws of the State of Delaware and has the requisite power and authority to carry on its business as conducted on the date hereof. HFI is a corporation duly organized and validly existing under the laws of the State of Delaware and has the requisite power and authority to carry on its business as conducted on the date hereof. HCI is a corporation duly organized and validly existing under the laws of the State of Delaware and has the requisite power and authority to carry on its business as conducted on the date hereof. HNBV is a limited liability entity duly organized and validly existing under the laws of The Netherlands and has the requisite power and authority to carry on its business as conducted on the date hereof. 3.2. Ownership of HFI and HCI; HFI and HCI Ownership of Tastemaker. Hercules owns all of the issued and outstanding shares of capital stock of HFI and HCI. HFI owns a forty percent (40%) partnership interest in Tastemaker, and HCI owns a ten percent (10%) partnership interest in Tastemaker. Except as provided in the Partnership Agreement, there are no options, warrants, calls, rights or agreements to which HFI or HCI is a party obligating HFI or HCI to issue, deliver, sell, repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold, repurchased, redeemed or otherwise acquired, any partnership interests in Tastemaker or obligating HFI or HCI to grant, extend or enter into any such option, warrant, call, right or agreement. 3.3. HNBV Interest in Tastemaker B.V. HNBV owns a forty- nine and one-half percent (49.5%) interest in Tastemaker B.V. (the "HNBV Tastemaker B.V. Interest"), free and clear of all security interests, liens, claims, pledges, voting rights, charges and encumbrances of any nature whatsoever except for the Voting Agreement. The HNBV Tastemaker B.V. Interest has been duly authorized and validly issued and is fully paid. HNBV will transfer and deliver to GRI at the Closing valid title to the HNBV Tastemaker B.V. Interest, free and clear of all security interests, liens, claims, pledges, voting rights, charges and encumbrances of any nature except for the Voting Agreement. Except for this Purchase Agreement, there are no options, warrants, calls, rights or agreements to which HNBV is a party obligating HNBV to issue, deliver, sell, repurchase, redeem or 11 otherwise acquire, or cause to be issued, delivered, sold, repurchased, redeemed or otherwise acquired, any ownership interests in Tastemaker B.V. or obligating HNBV to grant, extend or enter into any such option, warrant or agreement. A true and complete copy of the Voting Agreement has been made available to GRI. 3.4. Authority. Hercules has all requisite power and authority to enter into this Purchase Agreement and the Wrap Agreement and to consummate the transactions contemplated hereby and thereby. HNBV has all requisite power and authority to enter into this Purchase Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Purchase Agreement and the Wrap Agreement by Hercules and the consummation by Hercules of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Hercules. The execution and delivery of this Purchase Agreement by HNBV and the consummation by HNBV of the transactions contemplated hereby have been duly authorized by all necessary action on the part of HNBV. This Purchase Agreement and the Wrap Agreement have been duly executed and delivered by Hercules and (assuming the due authorization, execution and delivery thereof by GRI and, with respect to the Wrap Agreement, Mallinckrodt) constitute the valid and binding obligations of Hercules, enforceable against Hercules in accordance with their respective terms. This Purchase Agreement has been duly executed and delivered by HNBV and (assuming the due authorization, execution and delivery by GRI) constitutes the valid and binding obligation of HNBV, enforceable against HNBV in accordance with its terms. 3.5. Consents and Approvals; No Violation. Except as described on Schedule 3.5 to this Purchase Agreement, the execution and delivery of this Purchase Agreement and the Wrap Agreement do not, and the consummation of the transactions contemplated hereby and thereby and compliance with the provisions hereof and thereof will not, result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material right or benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of Hercules, HFI, HCI or HNBV under: (i) any provision of the Certificate of Incorporation or By-Laws of Hercules, HFI or HCI or any provisions of the charter or organizational documents of HNBV, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, agreement, instrument, permit, concession, franchise or license by which Hercules, HFI, HCI or HNBV is bound or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation by which Hercules, HFI, HCI or HNBV is bound or to which any of their respective properties or assets is subject, other than, in the case of clauses (ii) and (iii), any such violations, defaults, rights, liens, security interests, charges or encumbrances that would not reasonably be expected to 12 have a material adverse effect on HFI, HCI and HNBV and would not impair the ability of Hercules to perform its obligations under this Purchase Agreement and the Wrap Agreement or the ability of HNBV to perform its obligations under this Purchase Agreement, prevent the consummation by Hercules or HNBV of any of the transactions contemplated hereby or thereby or, other than by reason of any act or omission of GRI or its respective subsidiaries, materially and adversely affect the rights and benefits of GRI hereunder. No filing, declaration or registration with, or consent, approval, order or authorization of, any Governmental Authority is required by, or with respect to, Hercules, HFI, HCI or HNBV in connection with the execution and delivery by Hercules of the Wrap Agreement or this Purchase Agreement, the execution and delivery by HNBV of this Purchase Agreement, the consummation by Hercules of the transactions contemplated by the Wrap Agreement and this Purchase Agreement or the consummation by HNBV of the transactions contemplated under this Purchase Agreement, except: (a) in connection or compliance with the provisions of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (b) for such filings, declarations, registrations, consents, approvals, orders and authorizations of the countries disclosed in APPENDIX F of the Wrap Agreement and such filings, declarations, registrations, consents, approvals, orders and authorizations that may be required under the laws of any other foreign country in which any of the Companies is organized, conducts any business or owns any property or assets; and (c) for such other filings, declarations, registrations, consents, orders and authorizations the failure of which to obtain or make would not reasonably be expected to have a material adverse effect on Hercules, HFI, HCI or HNBV, and would not impair the ability of Hercules to perform its obligations under this Purchase Agreement or the Wrap Agreement, or impair the ability of HNBV to perform its obligations under this Purchase Agreement, prevent the consummation by Hercules and HNBV, or any of the transactions contemplated hereby or thereby or (other than by reason of any act or omission of GRI or its Affiliates), materially and adversely affect the rights and benefits of the Interested Persons hereunder and thereunder. 3.6. Brokers. No broker, investment banker or other person, other than Dillon, Read & Co., Inc., the fees and expenses of which will be paid by Hercules, is entitled to any broker's, finder's or other similar fee or commission in connection with the execution and delivery of, or the consummation of the transactions contemplated by, this Purchase Agreement or the Wrap Agreement based on agreements or arrangements made by Hercules, HFI, HCI or HNBV. 3.7. Transactions with Affiliates. Except as described on Schedule 3.7, there are no material transactions between Hercules, HFI, HCI or HNBV and any of the Companies other than any such transactions which have been entered into on an arms-length basis in the ordinary course of the Companies' business. True and complete copies of all of the agreements described on 13 Schedule 3.7 have been made available to GRI. All of the agreements described on Schedule 3.7 are in full force and effect, and there exists no material default by any of Hercules, HFI, HCI or HNBV or, to the knowledge of Hercules and HNBV, any other person or entity under such agreements. 3.8. Agreements with Mallinckrodt. Except as described on Schedule 3.8 to this Purchase Agreement, none of Hercules, HFI, HCI or HNBV is a party to any agreement with Mallinckrodt or F&F that is material to any of the Companies. True and complete copies of all agreements described on Schedule 3.8 have been made available to GRI. All agreements described on Schedule 3.8 are in full force and effect, and there exists no material default by any of Hercules, HFI, HCI or HNBV or, to the knowledge of Hercules and HNBV, Mallinckrodt or F&F under such agreements. 4. REPRESENTATIONS AND WARRANTIES OF GRI GRI represents and warrants to Hercules and HNBV as of the date hereof and on the Closing Date as follows: 4.1 Organization, Standing and Power. GRI is a corporation duly organized, validly existing and in good standing under the laws of Switzerland and has the requisite power and authority to carry on its business as conducted on the date hereof. 4.2 Authority. GRI has all requisite power and authority to enter into this Purchase Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Purchase Agreement by GRI and the consummation by GRI of the transactions contemplated hereby have been duly authorized by all necessary action on the part of GRI. This Purchase Agreement has been duly executed and delivered by GRI and (assuming the due authorization, execution and delivery hereof by Hercules and HNBV) constitutes the valid and binding obligation of GRI, enforceable against GRI in accordance with its terms. 4.3 Consents and Approvals; No Violation. The execution and delivery of this Purchase Agreement do not, and the consummation of the transactions hereby and compliance with the provisions hereof will not, result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material right or benefit under, (i) any provision of the charter or organizational documents of GRI, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease, agreement, instrument, permit, concession, franchise or license by which GRI is bound or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation by which GRI is bound or to which 14 any of its properties or assets is subject, other than, in the case of clauses (ii) and (iii), any such violations, defaults or rights that would not reasonably be expected to have a material adverse effect on GRI, and would not impair the ability of GRI to perform its obligations under this Purchase Agreement, prevent the consummation by GRI of any of the transactions contemplated by this Purchase Agreement or, other than by reason of any act or omission of Hercules and HNBV, materially and adversely affect the rights and benefits of Hercules and HNBV under this Purchase Agreement. No filing, declaration or registration with, or consent, approval, order or authorization of, any Governmental Authority is required by, or with respect to, GRI in connection with the execution and delivery by GRI of this Purchase Agreement or the consummation by GRI of the transactions contemplated by this Purchase Agreement except: (a) in connection, or in compliance, with the provisions of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, (b) for such filings, declarations, registrations, consents, approvals, orders and authorizations as are disclosed in APPENDIX F of the Wrap Agreement that may be required under the laws of any foreign country in which any of the Companies is organized, conducts any business or owns any property or assets, and (iii) for such other consents, orders, authorizations, registrations, declarations and filings the failure of which to obtain or make would not reasonably be expected to have a material adverse effect on GRI. 4.4 Financial Capabilities. GRI has, and on the Closing Date will have, readily available cash and credit, or access thereto, in an amount sufficient to enable GRI to satisfy its obligations to make cash payments to HNBV at the time and in the manner required under this Purchase Agreement. 5. COVENANTS OF HERCULES AND HNBV 5.1 Documents to be delivered by Hercules and HNBV at Closing. On the Closing Date, and in addition to any other documents required to be delivered pursuant to this Purchase Agreement or the Wrap Agreement, Hercules and HNBV shall deliver (or cause to be delivered) to GRI the following, in form and substance reasonably satisfactory to GRI: (A) such instrument or instruments as are in form and substance sufficient to transfer to GRI all of HNBV's rights, title and interest in and to the HNBV Tastemaker B.V. Interest; (B) a receipt for the cash delivered on the Closing Date by GRI pursuant to Section 2.2 hereof; (C) duly executed assignments of all Intellectual Property owned by the Companies, including, without limitations, all Intellectual Property listed in Schedule 3.18 of the Disclosure Schedule to the Wrap Agreement, and registered in the name of Hercules or an Affiliate of Hercules and which has not been previously formally 15 assigned to or registered in the name of any of the Companies; (D) a certificate of good standing for Hercules from the Secretary of State of the State of Delaware dated within twenty (20) days of the Closing Date; (E) a copy of the Certificate of Incorporation certified by the Secretary of State of the State of Delaware to be a true and complete copy thereof, which certification by said Secretary of State shall be dated within twenty (20) days of the Closing Date; (F) a copy of current Bylaws certified by the Secretary of Hercules to be true and complete copies of such documents and further certified to be in full force and effect without amendment; and (G) organizational documents of HNBV. 6. COVENANTS OF GRI 6.1 Deliveries by GRI at Closing. On the Closing Date, in addition to any other documents required to be delivered pursuant to this Purchase Agreement or the Wrap Agreement, GRI shall deliver or cause to be delivered to HNBV cash in the amount required under Section 2.2 hereof, and shall deliver (or cause to be delivered) to Hercules and HNBV a receipt for the items delivered pursuant to Section 5.2 hereof, in form and substance reasonably satisfactory to Hercules and HNBV. 6.2 Constructive Termination. Subsequent to the consummation of the transactions contemplated by the Contribution Agreement, and subject to Section 8.1.C. of the Partnership Agreement, GRI shall not make or permit F&F to make any transfer that will cause a constructive termination of Tastemaker as a general partnership under Section 708 of the Internal Revenue Code of 1986, as amended. 7. MUTUAL COVENANTS OF HERCULES, HNBV AND GRI 7.1 Satisfaction of Conditions. From and after the date hereof, each of Hercules, HNBV and GRI shall use their best efforts (individually or jointly, as the case may be) to cause all conditions precedent set forth in Sections 10.1 and 10.2 of this Purchase Agreement to be satisfied and fulfilled at the earliest practicable date, to the extent the satisfaction or fulfillment thereof is its responsibility hereunder or within its reasonable control. If any event should occur, either within or without the control of any party hereto, which would prevent fulfillment of the conditions precedent to the obligations of any party to consummate the transactions contemplated by this Purchase Agreement, each party shall use its best efforts to cure or remove the effect of the event as expeditiously as possible; provided, however, that (without limitation) nothing set forth in this Section 7.1 shall be construed as requiring any party to 16 institute litigation or expend any sums in the defense or settlement of litigation in order to cure or remove the effect of any such event. 7.2 Further Assurances. After the Closing Date, each of Hercules, HNBV and GRI shall, from time to time upon any other party's request, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, all such further assignments, documents, instruments, transfers, conveyances, discharges, releases, assurances and consents, and shall take or cause to be taken such further actions, as such other party may reasonably request to further evidence or carry out the transactions contemplated by, and the purposes of, this Purchase Agreement. 8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNITY FOR DAMAGES 8.1 Survival. All representations and warranties of the parties made in this Purchase Agreement, and all covenants and agreements of the parties made in this Purchase Agreement and required to be performed on or before the Closing Date, shall survive until 5:00 p.m. Eastern Standard Time on the second annual anniversary of the Closing Date, notwithstanding any investigation heretofore made or omitted by the parties, and shall expire and be of no further force and effect after such time; provided that the representations and warranties contained in Sections 3.1, 3.2, 3.3, 4.1 and 4.2 shall survive indefinitely. No party will have any liability to any other party arising out of a breach of any representation or warranty contained in this Purchase Agreement or of any covenant or agreement made in this Purchase Agreement and required to be performed on or before the Closing Date, unless the party claiming that such breach occurred gives to the other party hereto written notice and a detailed explanation of the alleged breach at or before 5:00 p.m. Eastern Standard Time on the last day of the applicable survival period; provided, however, that if notice of a claim is timely given, the claim specified in such notice, and the specific representation, warranty, covenant or agreement upon which any such claim is based, shall survive until such claim has been finally resolved. 8.2 Limitations of Remedies. The indemnification remedy set forth in this Section 8 and any injunctive or other equitable relief to which any party may be entitled from a court of appropriate jurisdiction shall be the sole remedies to which any party hereto is entitled for any breach or non-compliance with the provisions of this Purchase Agreement. Any recovery of Damages pursuant to the indemnification remedy set forth in this Section 8, shall be limited to a recovery of compensatory damages and shall not include any special, punitive, exemplary, incidental or consequential damages or damages of any similar type; provided that any such non-compensatory damages shall be 17 recoverable if and to the extent awarded by a court or other adjudicative body of appropriate jurisdiction and authority at an outcome of any third party claim for which indemnification is otherwise available hereunder. 8.3 Indemnification Procedures. The parties agree that the procedures for asserting claims for indemnification and recovery of Damages shall be as set forth in Section 8.8 of the Wrap Agreement. 8.4 Claims Made in Written Notice. All claims for indemnification hereunder shall be made in a written notice setting forth, with particularity, the nature of the claim for which indemnification is sought. All parties agree that no claim for indemnification shall be made hereunder unless the party requesting indemnification shall have a good faith belief that it is entitled to indemnification hereunder. 9. RESOLUTION OF DISPUTES 9.1 Conclusive and Exclusive. Each and all disputes under this Purchase Agreement shall be conclusively and exclusively resolved in accordance with the terms and conditions set forth in Section 9 of the Wrap Agreement. 9.2 Forum and Waivers. EACH OF GRI, HERCULES AND HNBV AGREES, EXCEPT TO THE EXTENT OTHERWISE PROVIDED IN THE TAX ANNEX TO THE WRAP AGREEMENT, THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS PURCHASE AGREEMENT, ITS VALIDITY OR PERFORMANCE, SHALL BE INITIATED AND PROSECUTED AS TO ALL PARTIES AND THEIR SUCCESSORS AND ASSIGNS AT NEW YORK, NEW YORK, WHICH SHALL BE THE EXCLUSIVE FORUM FOR ALL SUCH ACTIONS, SUITS OR PROCEEDINGS. EACH OF GRI, HERCULES AND HNBV CONSENTS TO AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER ITS PERSON BY ANY STATE OR FEDERAL COURT SITUATED AT NEW YORK, NEW YORK HAVING JURISDICTION OVER THE SUBJECT MATTER, WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL DIRECTED TO THE PARTIES AT THEIR RESPECTIVE ADDRESSES SET FORTH IN SECTION 11.3 OR AS OTHERWISE PROVIDED UNDER THE LAWS OF THE STATE OF NEW YORK. EACH OF GRI, HERCULES AND HNBV WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. EACH OF GRI, HERCULES AND HNBV HEREBY RECIPROCALLY AND IRREVOCABLY WAIVES TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE RELATING TO THIS PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 10. CONDITIONS PRECEDENT 10.1 Conditions to Obligations of GRI. The obligations of 18 GRI to consummate the transactions contemplated by this Purchase Agreement are subject to the satisfaction or waiver by GRI in writing of each of the following conditions precedent: 10.1.1 Accuracy of Representations and Warranties. The representations and warranties of Hercules and HNBV made in this Agreement shall be true and correct in all material respects on the Closing Date. 10.1.2 Performance of Agreements. Hercules and HNBV shall have performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Purchase Agreement to be performed and complied with by them at or prior to the Closing Date. 10.1.3 Officers' Certificates. GRI shall have received from each of Hercules and HNBV a certificate dated the Closing Date signed by a duly authorized responsible officer of Hercules or HNBV, as applicable, certifying to GRI that the representations and warranties of Hercules and HNBV made herein are true and correct in all material respects on the Closing Date as if made at and as of such date and that Hercules and HNBV have performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Purchase Agreement to be performed and complied with by them at or prior to the Closing Date. 10.1.4 Wrap Agreement Conditions. All of the conditions precedent to the obligations of GRI set forth in the Wrap Agreement shall have been satisfied or waived in writing by GRI. 10.1.5 Legal Opinion. GRI shall have received the legal opinion, dated as of the Closing Date, of Hercules' Assistant General Counsel and Secretary with respect to those matters set forth in APPENDIX A to this Purchase Agreement. 10.2 Conditions to Obligations of Hercules and HNBV. The obligations of Hercules and HNBV to consummate the transactions contemplated by this Purchase Agreement are subject to the satisfaction or waiver by Hercules and HNBV in writing of each of the following conditions precedent: 10.2.1 Accuracy of Representations and Warranties. The representations and warranties of GRI made in this Agreement shall be true and correct in all material respects on the Closing Date. 10.2.2 Performance of Agreements. GRI shall have performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Purchase Agreement to be performed and complied with by them at or prior to the Closing Date. 10.2.3 Officer's Certificate. Hercules and HNBV 19 shall have received from GRI a certificate dated the Closing Date signed by a duly authorized officer of GRI delivering such certification and certifying that the representations and warranties of GRI made herein are true and correct in all material respects on the Closing Date and that GRI has performed in all material respects all obligations and agreements and complied in all material respects with all covenants and conditions contained in this Purchase Agreement to be performed or complied with by them at or prior to the Closing Date. 10.2.4 Wrap Agreement Conditions. All of the conditions precedent to the obligations of Hercules and Mallinckrodt set forth in the Wrap Agreement shall have been satisfied or waived in writing by each of Hercules and Mallinckrodt. 10.2.5 Legal Opinion. Hercules and HNBV shall have received the legal opinion, dated as of the Closing Date, of Vice President and General Counsel of Hoffmann-LaRoche Inc. with respect to those matters set forth in APPENDIX A to this Purchase Agreement. 11. MISCELLANEOUS 11.1 Termination and Cancellation. This Purchase Agreement may be terminated and the transactions contemplated herein may be abandoned at any time prior to the Closing: 11.1.1 By the mutual written consent of the parties hereto; 11.1.2 By any party hereto if neither the terminating party nor an Affiliate of the terminating party is then in material breach of its obligations under any of the Transaction Documents or the D&F Transaction Agreements if the Closing Date has not occurred on or before the Closing Deadline; 11.1.3 By any of Hercules, HNBV or GRI if any of the Wrap Agreement, the Contribution Agreement or the D&F Transaction Agreements is terminated in accordance with the terms thereof prior to consummation of the transactions contemplated thereby; 11.1.4 By GRI if any of the conditions precedent set forth in Section 10.1 have not been satisfied on or before the date established as the Closing Date (as the same may be extended pursuant to Section 10.3 of the Wrap Agreement); 11.1.5 By Hercules or HNBV if any of the conditions precedent set forth in Section 10.2 have not been satisfied on or before the date established as the Closing Date (as the same may be extended pursuant to Section 10.3 of the Wrap Agreement); 11.1.6 By any party hereto not then in material breach of its obligations hereunder if another party hereto has materially breached any covenant herein, such breach is within the reasonable control of the breaching party and either (i) such breach is not capable of being cured or corrected, or (ii) the breaching party has not cured or corrected such breach within ten (10) days after receipt of notice of such breach; or 20 11.1.7 By either Hercules, HNBV or GRI if there shall be any law or regulation adopted subsequent to the date hereof that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent jurisdiction. 11.2 Effect of Termination. Upon any termination of this Purchase Agreement, each party hereto shall bear all expenses incurred by it in connection with the negotiation, preparation, execution and performance of this Purchase Agreement. No such termination shall relieve any party hereto of any liability for a breach of or default under this Purchase Agreement, which liability, including all expenses of each party hereto incurred in connection with the negotiation, preparation, execution and performance of this Purchase Agreement, shall continue notwithstanding such termination. The provisions of Section 5.2 shall survive any termination of this Purchase Agreement. 11.3 Notices. All notices, requests, consents, approvals, waivers and other communications hereunder shall be in writing and shall be deemed given or delivered on the earlier of (i) the date actually received if properly addressed and delivered to the addresses for notices set forth herein, regardless of how sent, or (ii) five (5) business days after being mailed by United States certified or registered mail, return receipt requested, with postage prepaid, in each case addressed in accordance with the following: 11.3.1 Hercules Notice Address. Notices and other communications to Hercules shall be sent to the following addresses: Hercules Incorporated Hercules Plaza 1313 North Market Street Wilmington, Delaware 19894-0001 Attention: George MacKenzie, Senior Vice President and CFO Telephone No.: 302-594-5175 Facsimile No.: 302-594-7032 with a required copy to: Hercules Incorporated Hercules Plaza 1313 North Market Street Wilmington, Delaware 19894-0001 Attention: Israel J. Floyd, Assistant General Counsel and Corporate Secretary Telephone No.: (302) 594-5128 Facsimile No.: (302) 594-7252 21 or to such other addresses as Hercules may from time to time designate in a notice pursuant to this Section 11.3. 11.3.2 HNBV Notice Address. Notices and other communications to HNBV shall be sent to the following addresses: Hercules Nederland B.V. c/o Hercules Incorporated Hercules Plaza 1313 North Market Street Wilmington, Delaware 19894-0001 Attention: George MacKenzie, Senior Vice President and CFO Telephone No.: 302-594-5175 Facsimile No.: 302-594-7032 with a required copy to: Hercules Incorporated Hercules Plaza 1313 North Market Street Wilmington, Delaware 19894-0001 Attention: Israel J. Floyd, Assistant General Counsel and Corporate Secretary Telephone No.: (302) 594-5128 Facsimile No.: (302) 594-7252 or to such other addresses as HNBV may from time to time designate in a notice pursuant to this Section 11.3. 11.3.3 GRI Notice Address. Notices and other communications to GRI shall be sent to the following addresses: Givaudan-Roure (International) SA 5, Chemin de la Parfumerie CH-1214 Vernier, Geneva Attention: Othmar Vock Telephone No.: 011-41-22-780-9440 Facsimile No.: 011-41-22-780-9152 with a required copy to: Davis, Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Attention: Phillip R. Mills Telephone No.: 212-450-4618 Facsimile No.: 212-450-5500 or to such other addresses as GRI may from time to time designate in a notice pursuant to this Section 11.3. 11.4 Assignment. None of Hercules, HNBV or GRI shall assign this Purchase Agreement, or any rights hereunder, by operation of law or otherwise, without the prior written consent of the other 22 parties hereto; provided, however, that GRI shall be entitled to assign its respective rights hereunder, in whole or from time to time in part, to one or more of its Affiliates, but no such assignment shall relieve GRI of any of its responsibilities or obligations hereunder. 11.5 Waiver. No waiver of any provision hereof shall be effective unless such waiver is set forth in a writing signed by the party to be charged thereby, and then such written waiver shall be effective only in the instance and for the purpose specified therein. No failure or delay on the part of any party in exercising any right, power or privilege under this Purchase Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 11.6 Amendments. This Purchase Agreement may be amended or modified in whole or in part only by a duly authorized written agreement that refers to this Purchase Agreement and is signed by all of the parties hereto. 11.7 Limitations on Rights of Third Parties. Nothing expressed or implied in this Purchase Agreement is intended or shall be construed to confer upon or give any person or entity other than Hercules, HNBV and GRI any rights under this Purchase Agreement; provided, however, that Roche shall be deemed a third party beneficiary of this Purchase Agreement with respect to the representations and warranties of Hercules and HNBV set forth in Article 3 hereof. Any claim brought by Roche against Hercules or HNBV with respect to such representations and warranties shall be subject to any defense which Hercules or HNBV, as the case may be, would have if it were GRI, rather than Roche, bringing such claim. 11.8 Counterparts. This Purchase Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 11.9 Governing Law. This Purchase Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York of the United States of America, without giving effect to its conflict of law principles. 11.10 Entire Agreement. This Purchase Agreement and the Wrap Agreement constitute and contain the entire agreements among Hercules, HNBV and GRI with respect to the subject matter hereof and thereof and supersede all other agreements, written or oral, made prior to the date hereof or contemporaneously herewith and relating to the transactions contemplated by the Transaction Documents. No representation, warranty, covenant or agreement relating to the transactions contemplated by this Purchase Agreement and the Wrap Agreement shall be binding upon any party hereto unless expressly set forth in this Purchase Agreement or 23 the Wrap Agreement, and then only to the extent so provided in such agreements. IN WITNESS WHEREOF, the parties have executed this Purchase Agreement as of the day and year first above written. HERCULES INCORPORATED By:__________________________ Name:________________________ Title:_______________________ HERCULES NEDERLAND B.V. By:__________________________ Name:________________________ Title:_______________________ GIVAUDAN-ROURE (INTERNATIONAL) SA By:___________________________ Name:_________________________ Title:________________________ EX-2.4 5 AMENDED AND RESTATED U.S. PARTNERSHIP AGREEMENT 1 ------------------------ AMENDED AND RESTATED U.S. PARTNERSHIP AGREEMENT AMONG HERCULES CREDIT, INC. HERCULES FLAVOR, INC. AND FRIES & FRIES, INC. ------------------------ DATED AS OF FEBRUARY 4, 1997 2 ARTICLE I. CERTAIN DEFINITIONS . . . . . . . . . . . . 3 DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . 4 1.1 "1995 FINANCIAL STATEMENTS". . . . . . . . . . 4 1.2 "ADJUSTED AGGREGATE VALUE" . . . . . . . . . . 4 1.3 "ADJUSTMENT TIME". . . . . . . . . . . . . . . 4 1.4 "AFFILIATES" . . . . . . . . . . . . . . . . . 4 1.5 "AGREED VALUE" . . . . . . . . . . . . . . . . 5 1.6 "CAPITAL ACCOUNT". . . . . . . . . . . . . . . 5 1.7 "CAPITAL CONTRIBUTION" . . . . . . . . . . . . 7 1.8 "C.E.O." . . . . . . . . . . . . . . . . . . . 8 1.9 "CITRUS SPECIALTIES" . . . . . . . . . . . . . 8 1.10 "CLAIM" or "CLAIMS". . . . . . . . . . . . . . 8 1.11 "COMPANIES". . . . . . . . . . . . . . . . . . 8 1.12 "CURRENT ASSETS" . . . . . . . . . . . . . . . 9 1.13 "CURRENT LIABILITIES". . . . . . . . . . . . . 9 1.14 "ESSENTIAL OIL". . . . . . . . . . . . . . . . 9 1.15 "ESTIMATED ADJUSTED AGGREGATE VALUE" . . . . . 9 1.16 "ESTIMATED TASTEMAKER U.S. VALUE". . . . . . . 9 1.17 "ESTIMATED TASTEMAKER B.V. VALUE". . . . . . . 10 1.18 "FINANCIAL ASSETS" . . . . . . . . . . . . . . 10 1.19 "FLAVOR" . . . . . . . . . . . . . . . . . . . 10 1.20 "FLAVOR AROMA CHEMICAL". . . . . . . . . . . . 10 1.21 "FLAVOR RELATED" . . . . . . . . . . . . . . . 11 1.22 "FRIES WITHDRAWAL" . . . . . . . . . . . . . . 11 1.23 "FRIES WITHDRAWAL DATE". . . . . . . . . . . . 11 1.24 "FRIES WITHDRAWAL DOCUMENTS" . . . . . . . . . 11 1.25 "GAAP" . . . . . . . . . . . . . . . . . . . . 11 1.26 "GOVERNMENTAL AUTHORITY" . . . . . . . . . . . 11 1.27 "HERCULES" . . . . . . . . . . . . . . . . . . 11 1.28 "HERCULES CONTRIBUTION". . . . . . . . . . . . 11 1.29 "HERCULES INDEMNITEES" . . . . . . . . . . . . 12 1.30 "INTERNAL REVENUE CODE". . . . . . . . . . . . 12 1.31 "INVESTMENT ASSET VALUE" . . . . . . . . . . . 12 1.32 "INVESTMENT ASSETS". . . . . . . . . . . . . . 12 1.33 "INVESTMENT GAIN". . . . . . . . . . . . . . . 12 1.34 "INVESTMENT LOSS". . . . . . . . . . . . . . . 13 1.35 "LONG-TERM LIABILITIES". . . . . . . . . . . . 13 1.36 "LONG-TERM LIABILITIES ADJUSTMENT" . . . . . . 13 1.37 "LONG-TERM LIABILITIES BASELINE" . . . . . . . 14 1.38 "MALLINCKRODT" . . . . . . . . . . . . . . . . 14 1.39 "NET WORKING CAPITAL". . . . . . . . . . . . . 14 1.40 "NOTICE" . . . . . . . . . . . . . . . . . . . 14 1.41 "OFFICERS" . . . . . . . . . . . . . . . . . . 14 1.42 "OLD PARTNERSHIP AGREEMENT". . . . . . . . . . 14 1.43 "PARTNERS' REPRESENTATIVES". . . . . . . . . . 15 1.44 "PARTNERSHIP INTEREST" . . . . . . . . . . . . 15 1.45 "SALE OF FRIES". . . . . . . . . . . . . . . . 15 1.46 "SUBSIDIARIES" . . . . . . . . . . . . . . . . 15 1.47 "TASTEMAKER BUSINESS". . . . . . . . . . . . . 16 1.48 "TASTEMAKER B.V. CURRENT ASSETS" . . . . . . . 16 1.49 "TASTEMAKER B.V. CURRENT LIABILITIES". . . . . 16 1.50 "TASTEMAKER B.V. LONG-TERM LIABILITIES". . . . 16 3 1.51 "TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT". . . . . . . . . . . . . . . . . . 17 1.52 "TASTEMAKER B.V. LONG-TERM LIABILITIES BASELINE". . . . . . . . . . . . . . . . . . . 17 1.53 "TASTEMAKER B.V. WORKING CAPITAL". . . . . . . 17 1.54 "TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT" . 18 1.55 "TASTEMAKER B.V. WORKING CAPITAL BASELINE" . . 18 1.56 "TASTEMAKER B.V. VALUE". . . . . . . . . . . . 18 1.57 "TASTEMAKER GROUP" . . . . . . . . . . . . . . 19 1.58 "TASTEMAKER U.S.". . . . . . . . . . . . . . . 19 1.59 "TASTEMAKER U.S. COMBINED AND CONSOLIDATED VALUE". . . . . . . . . . . . . . . . . . . . 19 1.60 "TASTEMAKER DEBT". . . . . . . . . . . . . . . 19 1.61 "TASTEMAKER U.S. LIABILITIES". . . . . . . . . 20 1.62 "TASTEMAKER U.S. OPERATING ASSETS" . . . . . . 20 1.63 "TASTEMAKER U.S. VALUE". . . . . . . . . . . . 21 1.64 "TAX". . . . . . . . . . . . . . . . . . . . . 21 1.65 "TREASURY REGULATION". . . . . . . . . . . . . 21 1.66 "U.S." . . . . . . . . . . . . . . . . . . . . 21 1.67 "WITHDRAWAL CLOSING" . . . . . . . . . . . . . 22 1.68 "WORKING CAPITAL ADJUSTMENT" . . . . . . . . . 22 1.69 "WORKING CAPITAL BASELINE" . . . . . . . . . . 22 ARTICLE II. FORMATION OF TASTEMAKER U.S. . . . . . . . . . 24 2.1 Formation. . . . . . . . . . . . . . . . . . . 24 2.2 Name.. . . . . . . . . . . . . . . . . . . . . 24 2.3 Principal Office and Place of Business.. . . . 24 2.4 Term.. . . . . . . . . . . . . . . . . . . . . 24 2.5 PARTNERSHIP INTEREST.. . . . . . . . . . . . . 24 ARTICLE III. PURPOSES OF TASTEMAKER U.S. . . . . . . . . . 26 3.1 TASTEMAKER U.S.. . . . . . . . . . . . . . . . 26 ARTICLE IV. CAPITAL CONTRIBUTIONS, PARTNERSHIP FINANCE AND DETERMINATION OF CAPITAL ACCOUNT ADJUSTMENT. . 27 4.1 CAPITAL CONTRIBUTIONS. . . . . . . . . . . . . 27 4.2 Capital Expenditures . . . . . . . . . . . . . 27 4.3 Future Borrowings. . . . . . . . . . . . . . . 27 4.4 CAPITAL ACCOUNTS . . . . . . . . . . . . . . . 27 4.5 ADJUSTED AGGREGATE VALUE . . . . . . . . . . . 27 4.6 TASTEMAKER B.V. VALUE. . . . . . . . . . . . . 31 4.7 Partnership Services . . . . . . . . . . . . . 32 ARTICLE V. CERTAIN TAX MATTERS. DISTRIBUTION OF PROFITS AND LOSSES, TAX ALLOCATIONS AND TERMINATION. . . . 33 5.1 Distribution of Profits and Losses . . . . . . 33 5.2 Section 704(c) Tax Allocations . . . . . . . . 33 5.3 Section 754 Adjustments. . . . . . . . . . . . 35 5.4 Tax Matters Partner. . . . . . . . . . . . . . 35 4 ARTICLE VI. The PARTNERS' REPRESENTATIVES. . . . . . . . . 36 6.1 Part Of TASTEMAKER GROUP . . . . . . . . . . . 36 6.2 Governance . . . . . . . . . . . . . . . . . . 36 6.3 Alternate Representatives. . . . . . . . . . . 39 6.4 Principal Functions and Responsibilities of the PARTNERS' REPRESENTATIVES. . . . . . . . . 39 6.5 Binding Signatories of the PARTIES . . . . . . 44 6.6 Action by Members Without a Meeting. . . . . . 50 6.7 Regular Meetings . . . . . . . . . . . . . . . 50 6.8 Special Meetings . . . . . . . . . . . . . . . 51 6.9 Waiver of Notice of Meetings . . . . . . . . . 51 6.10 Participation in Meetings by Conference Telephone Permitted. . . . . . . . . . . . . . 52 6.11 Interested Members . . . . . . . . . . . . . . 52 6.12 Indemnification. . . . . . . . . . . . . . . . 54 6.13 Advance of Expenses. . . . . . . . . . . . . . 55 6.14 Insurance. . . . . . . . . . . . . . . . . . . 55 6.15 The CHAIR and the VICE-CHAIR . . . . . . . . . 55 ARTICLE VII. PARTNERSHIP MANAGEMENT GROUP. . . . . . . . . 58 7.1 THE OFFICERS . . . . . . . . . . . . . . . . . 58 7.2 Delegations of Authorities . . . . . . . . . . 59 7.3 TASTEMAKER U.S. Staff. . . . . . . . . . . . . 60 7.4 Forecasts, Budgets, and Plans. . . . . . . . . 60 7.5 Effect of Approval . . . . . . . . . . . . . . 61 ARTICLE VIII. TRANSFER OF PARTNERSHIP INTEREST; FRIES WITHDRAWAL; SALE OF FRIES . . . . . . . . . 62 8.1 Transfer of PARTNERSHIP INTEREST . . . . . . . 62 8.2 Withdrawal from TASTEMAKER U.S. . . . . . . . 63 8.3 Right to Withdraw. . . . . . . . . . . . . . . 63 8.4 Notice of FRIES WITHDRAWAL . . . . . . . . . . 64 8.5 Date of FRIES WITHDRAWAL . . . . . . . . . . . 64 8.6 Redemption and Assumption of FRIES" Interest . 65 8.7 Deliveries by FRIES at the WITHDRAWAL CLOSING. 69 8.8 Deliveries by TASTEMAKER U.S. at the WITHDRAWAL CLOSING. . . . . . . . . . . . . . . . . . . . 71 8.9 Deliveries by HFI and HCI at the WITHDRAWAL CLOSING. . . . . . . . . . . . . . . . . . . . 73 8.10 Satisfaction of Delivery Requirements. . . . . 73 8.11 Approvals. . . . . . . . . . . . . . . . . . . 74 8.12 Further Assurances . . . . . . . . . . . . . . 74 8.13 SALE OF FRIES. . . . . . . . . . . . . . . . . 75 8.14 Representations And Covenants. . . . . . . . . 75 8.15 Assignment of Withdrawal Right . . . . . . . . 76 ARTICLE IX. TERMINATION AND DISSOLUTION. . . . . . . . . . 77 9.1 Termination. . . . . . . . . . . . . . . . . . 77 9.2 Final Audit. . . . . . . . . . . . . . . . . . 77 5 ARTICLE X. SECRECY. . . . . . . . . . . . . . . . . . . . 79 10.1 Confidential Information . . . . . . . . . . . 79 10.2 Confidentiality. . . . . . . . . . . . . . . . 79 ARTICLE XI. INDEMNIFICATION. . . . . . . . . . . . . . . . 82 11.1 Indemnification. . . . . . . . . . . . . . . . 82 ARTICLE XII. MISCELLANEOUS . . . . . . . . . . . . . . . . 83 12.1 Authorization. . . . . . . . . . . . . . . . . 83 12.2 Notices. . . . . . . . . . . . . . . . . . . . 83 12.3 Successors and Assigns . . . . . . . . . . . . 83 12.4 Discharge; Amendments; Etc.. . . . . . . . . . 84 12.5 Governing Law. . . . . . . . . . . . . . . . . 85 12.6 Resolution of Disputes . . . . . . . . . . . . 85 12.7 Severability . . . . . . . . . . . . . . . . . 85 12.8 Counterparts . . . . . . . . . . . . . . . . . 86 12.9 Entire Agreement . . . . . . . . . . . . . . . 87 6 Table of Appendices A LIST BRIEFLY IDENTIFYING THE CONTENTS OF ALL OMITTED APPENDICES TO THE AMENDED AND RESTATED U.S. PARTNERSHIP AGREEMENT DATED AS OF FEBRUARY 4, 1997 AMONG HERCULES FLAVOR, INC., HERCULES CREDIT, INC. AND FRIES AND FRIES, INC. IS A S FOLLOWS: APPENDIX A - List of Companies APPENDIX B - Applicable Tax Principles APPENDIX C - Form of Hercules Guaranty and Non-compete HERCULES INCORPORATED WILL FURNISH SUPPLEMENTALLY A COPY OF ANY OMITTED APPENDIX TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST. 7 AMENDED AND RESTATED U.S. PARTNERSHIP AGREEMENT THIS AMENDED AND RESTATED U.S. PARTNERSHIP AGREEMENT (the "AGREEMENT"), made this 4th day of February, 1997, is among HERCULES CREDIT, INC., a corporation organized under the laws of the State of Delaware, U.S.A., and having its offices at 1313 North Market Street, Wilmington, DE 19894-0001 (herein "HCI"), HERCULES FLAVOR, INC., a corporation organized under the laws of the State of Delaware, U.S.A., and having its offices at 1313 N. Market Street, Wilmington, DE 19894 (herein "HFI"), and FRIES & FRIES INC., a corporation organized under the laws of the State of Delaware and having offices at 16305 Swingley Ridge Drive, Chesterfield, MO 63017 (herein "FRIES"). HCI, HFI and FRIES are sometimes referred to herein individually as a "PARTNER" and collectively as the "PARTNERS". WITNESSETH: WHEREAS, HCI is a corporation organized under the laws of the State of Delaware, U.S.A., having offices at Hercules Plaza, 1313 North Market Street, Wilmington, Delaware 19894-0001, and HCI is a wholly-owned SUBSIDIARY of HERCULES. WHEREAS, HFI is a corporation organized under the laws of the State of Delaware, U.S.A., having offices at Hercules Plaza, 1313 North Market Street, Wilmington, Delaware 19894-0001, and HFI is a wholly-owned SUBSIDIARY of HERCULES; WHEREAS, FRIES, is a corporation organized under the laws of the State of Delaware, U.S.A., having offices at 16305 Swingley Ridge Drive, Chesterfield, MO 63017, and FRIES is a wholly-owned SUBSIDIARY of MALLINCKRODT; WHEREAS, HFI and FRIES entered into that certain Partnership Agreement, dated as of February 1, 1992, as amended by amendments dated May 15, 1992, and January 1, 1994 ( as amended and currently in effect, the "OLD PARTNERSHIP AGREEMENT") whereby a U.S. general partnership was formed under the Delaware Uniform Partnership Law, 6 Del. C. Section 1501 et. seq., and such U.S. general partnership is referred to herein as "TASTEMAKER U.S." WHEREAS, TASTEMAKER U.S. was formed pursuant to the OLD PARTNERSHIP AGREEMENT and has remained in effect since such formation. WHEREAS, HFI has contributed to HCI twenty percent (20%) of HFI"s ownership interest in TASTEMAKER U.S., in exchange for stock of HCI and therefore, HCI now holds a ten percent (10%) undivided ownership interest in TASTEMAKER U.S. with the remaining undivided ownership interest in TASTEMAKER U.S. being held fifty percent (50%) by FRIES and forty percent (40%) by HFI. WHEREAS, HCI, HFI and FRIES desire to amend and restate the OLD PARTNERSHIP AGREEMENT in its entirety. NOW, THEREFORE the PARTNERS agree that the OLD PARTNERSHIP AGREEMENT shall be, and hereby is, amended and restated in its entirety as follows: 8 I. ARTICLE I. CERTAIN DEFINITIONS The terms set forth in this Article when used in this AGREEMENT shall have, unless the context otherwise requires, the meaning ascribed to such terms in this Article. In the construction and interpretation of this AGREEMENT, the rules of construction set forth at the end of this Article shall be applicable and followed. 1. DEFINITIONS AND INTERPRETATION 1.1 "1995 FINANCIAL STATEMENTS" shall mean the December 31, 1995 audited combined consolidated financial statements of TASTEMAKER U.S. and TASTEMAKER B.V. 1.2 "ADJUSTED AGGREGATE VALUE" shall mean an amount equal to the TASTEMAKER U.S. COMBINED AND CONSOLIDATED VALUE, less $10,425,000 and (A) either (i) increased by the WORKING CAPITAL ADJUSTMENT, if the NET WORKING CAPITAL as of the ADJUSTMENT TIME exceeds the WORKING CAPITAL BASELINE or (ii) decreased by the WORKING CAPITAL ADJUSTMENT, if the WORKING CAPITAL BASELINE exceeds the NET WORKING CAPITAL as of the ADJUSTMENT TIME, and (B) either (i) decreased by the LONG-TERM LIABILITIES ADJUSTMENT if the LONG-TERM LIABILITIES as of the ADJUSTMENT TIME exceed the LONG-TERM LIABILITIES BASELINE, or (ii) increased by the LONG-TERM LIABILITIES ADJUSTMENT if the LONG-TERM LIABILITIES BASELINE exceeds the LONG-TERM LIABILITIES as of the ADJUSTMENT TIME. 1.3 "ADJUSTMENT TIME" shall mean the close of business on the business day immediately preceding the date NOTICE is given by FRIES pursuant to Section 8.4. 1.4 "AFFILIATES" of a specified person shall mean individually and collectively any and all entities (whether corporation, firm, partnership, joint venture or other business organization wherever incorporated or organized) controlling, controlled by or under common control with such specified person. 1.5 "AGREED VALUE" shall mean, with respect to any asset, the value of such asset as determined by the PARTNERS' REPRESENTATIVES or as otherwise determined as provided herein. 1.6 "CAPITAL ACCOUNT" shall mean with respect to any PARTNER the CAPITAL ACCOUNT maintained for such PARTNER in accordance with the following provisions: A. To each PARTNER"S CAPITAL ACCOUNT there shall be credited such PARTNER"S CAPITAL CONTRIBUTIONS, such PARTNER"S distributive share of profits and the amount of any TASTEMAKER U.S. liabilities that are assumed by such PARTNER or that are secured by any TASTEMAKER U.S. property distributed to such PARTNER. B. To each PARTNER"S CAPITAL ACCOUNT there shall be debited the amount of cash and AGREED VALUE of any TASTEMAKER U.S. property distributed to such PARTNER pursuant to any provision of this AGREEMENT, such PARTNER"S distributive share of losses and the amount of any labilities of such PARTNER that are assumed by TASTEMAKER U.S. or that are secured by any property contributed by such PARTNER to TASTEMAKER U.S. C. In the event any PARTNERSHIP INTEREST (as such term is defined in Section 1.44 hereof) is transferred in 9 accordance with the terms of this AGREEMENT, the transferee shall succeed to the CAPITAL ACCOUNT of the transferor to the extent it relates to the transferred interest, except as adjusted upon an election under Section 754 of the INTERNAL REVENUE CODE. The AGREED VALUE of all TASTEMAKER U.S. assets, other than the INVESTMENT ASSETS, shall be adjusted in accordance with Section 704 of the INTERNAL REVENUE CODE to equal their respective gross fair market values, as determined by the PARTNERS' REPRESENTATIVES, and the value of the INVESTMENT ASSETS shall be adjusted in accordance with Section 704 of the INTERNAL REVENUE CODE as described in Paragraph E of this Section 1.6 upon (1) the acquisition of an additional interest in TASTEMAKER U.S. by any new or existing partner in exchange for more than a de minimis CAPITAL CONTRIBUTION (as defined in Section 1.7), or (2) the redemption of an interest of an existing PARTNER, or (3) upon the distribution by TASTEMAKER U.S. to a PARTNER of more than a de minimis amount of TASTEMAKER U.S. property other than money, unless all PARTNERS receive simultaneous distributions of undivided interests in the distributed property in proportion to their interests in TASTEMAKER U.S. Any such adjustment made on or before August 31, 1997 shall be based upon the TASTEMAKER U.S. VALUE, and the PARTNERS hereby agree that the aggregate balances of all CAPITAL ACCOUNTS shall, immediately following such adjustment and notwithstanding any other provision of this AGREEMENT, equal the TASTEMAKER U.S. VALUE; provided, however, that the PARTNERS shall initially base such adjustment upon the ESTIMATED TASTEMAKER U.S. VALUE until the TASTEMAKER U.S. VALUE is finally determined pursuant to Section 4.4 hereof. D. In the event the AGREED VALUES of TASTEMAKER U.S. assets are adjusted pursuant to Paragraph C. of this Section 1.6, the CAPITAL ACCOUNTS of the PARTNERS shall be adjusted simultaneously to reflect the aggregate net adjustment as if TASTEMAKER U.S. recognized gain or loss equal to the amount of such aggregate net adjustment. E. For purposes of any adjustment of the value of the INVESTMENT ASSETS pursuant to Paragraph C. of this Section 1.6, in determining the CAPITAL ACCOUNTS of each PARTNER, the value ascribed to the INVESTMENT ASSETS shall be equal to the INVESTMENT ASSET VALUE. F. Subject to the last sentence of Paragraph C of this Section 1.6, (i) the foregoing provisions and the other provisions of this AGREEMENT relating to the maintenance of CAPITAL ACCOUNTS are intended to comply with Treasury Regulation Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Regulations, (ii) in the event that the PARTNERS shall determine that it is prudent to modify the manner in which the CAPITAL ACCOUNTS, or any debits or credits thereto, are computed in order to comply with such Regulations, the PARTNERS' REPRESENTATIVES may make such modification; provided that such modification is not likely to have a material effect on the amount distributable to any PARTNER pursuant to Section 9.1 hereof upon the dissolution of TASTEMAKER U.S., (iii) 10 the PARTNERS' REPRESENTATIVES shall adjust the amounts debited or credited to CAPITAL ACCOUNTS with respect to (a) any property contributed to TASTEMAKER U.S. or distributed to the PARTNERS and (b) any liabilities that are secured by such contributed or distributed property, or that are assumed by TASTEMAKER U.S. or the PARTNERS, in the event the PARTNERS' REPRESENTATIVES shall determine such adjustments are necessary or appropriate pursuant to Treasury Regulations Section 1.704-1(b) (2) (iv), and (iv) the PARTNERS' REPRESENTATIVES also shall make any appropriate modifications in the event unanticipated events might otherwise cause this AGREEMENT not to comply with Treasury Regulation Section 1.704-1(b). 1.7 "CAPITAL CONTRIBUTION" shall mean the total amount of money and the initial AGREED VALUE of any property (other than money) contributed or agreed to be contributed, as the content requires, to TASTEMAKER U.S. by each PARTNER or its AFFILIATES and SUBSIDIARIES pursuant to the terms of this AGREEMENT or pursuant to the terms of the OLD PARTNERSHIP AGREEMENT. Any reference to the Capital Contribution of a PARTNER shall include the Capital Contribution made by a predecessor holder of the PARTNERSHIP INTEREST of such PARTNER. The capital contribution of HCI was made by HFI as the predecessor holder of the PARTNERSHIP INTEREST in TASTEMAKER U.S. now held by HCI. 1.8 "C.E.O." shall have the meaning ascribed to such term in Section 6.2 A hereof. 1.9 "CITRUS SPECIALTIES" shall mean citrus derived products, including natural citrus aromas, essential oils, cold-pressed oils, folded oils and natural flavor fractions, but excluding non-flavoring materials derived from the albedo portion of the peel or the edible portion of the fruit. 1.10 "CLAIM" or "CLAIMS" shall mean any claim, cost, expense, loss, liability, fine, penalty, interest, payment, expense and/or damage (including reasonable attorneys' and accountants' fees and expenses) resulting from or arising out of any fact, event or circumstance with respect to which a party to this AGREEMENT is obligated to provide indemnification pursuant to Article XI hereof, including, without limitation, income tax liabilities of PARTNERS incurred as a result of a termination of TASTEMAKER U.S. under Section 708 of the INTERNAL REVENUE CODE as provided in Section 8.1.C hereof. 1.11 "COMPANIES" shall mean the collective reference to TASTEMAKER U.S. and TASTEMAKER B.V. and all entities set forth on APPENDIX A hereto. 1.12 "CURRENT ASSETS" shall mean, as of any time, all items, excluding deferred taxes and the current portion, if any, of INVESTMENT ASSETS, which would be classified as a current asset under the heading "CURRENT ASSETS" on a combined consolidated balance sheet of TASTEMAKER U.S. and TASTEMAKER B.V. determined and prepared in accordance with GAAP applied on a basis consistent with the practices and methodologies used in preparing the 1995 FINANCIAL STATEMENTS. 1.13 "CURRENT LIABILITIES" shall mean, as of any time, all items, excluding deferred taxes, the TASTEMAKER DEBT and any TAX that is a liability or obligation of TASTEMAKER U.S., which would be classified as a current liability under the heading "CURRENT 11 LIABILITIES" on a combined consolidated balance sheet of TASTEMAKER U.S. and TASTEMAKER B.V. determined and prepared in accordance with GAAP applied on a basis consistent with the practices and methodologies used in preparing the 1995 FINANCIAL STATEMENTS; provided, that when determining whether any TAX is included as CURRENT LIABILITIES for purposes of calculating the ADJUSTED AGGREGATE VALUE, the principles of Treasury Regulations Section 1.1502.76(b) applied in the manner set forth in Appendix B hereto shall govern. 1.14 "ESSENTIAL OIL" shall mean a volatile oil originating from plants and used as a raw material in the manufacture of flavor or which is sold as a flavor. 1.15 "ESTIMATED ADJUSTED AGGREGATE VALUE" shall mean the estimate of the ADJUSTED AGGREGATE VALUE delivered to the PARTNERS pursuant to Section 4.5 hereof. 1.16 "ESTIMATED TASTEMAKER U.S. VALUE" means an amount equal to the ESTIMATED ADJUSTED AGGREGATE VALUE, less ninety-nine percent (99%) of the ESTIMATED TASTEMAKER B.V. VALUE, less the INVESTMENT LOSS (if any) and plus the INVESTMENT GAIN (if any). 1.17 "ESTIMATED TASTEMAKER B.V. VALUE" shall mean the estimate of the TASTEMAKER B.V. VALUE delivered to the PARTNERS pursuant to Section 4.6 hereof. 1.18 "FINANCIAL ASSETS" shall mean collectively the INVESTMENT ASSETS and cash in an amount equal to the excess, if any, of the sum of HFI's and HCI's CAPITAL ACCOUNT balances (as adjusted under Section 1.6.C. as a result of the FRIES WITHDRAWAL) over the INVESTMENT ASSET VALUE. 1.19 "FLAVOR" shall mean an ingredient or compound whose primary function is to provide flavor or taste, but it is recognized that such products may also provide other functional properties to products, including a processed food, beverage, tobacco, or pharmaceutical product, including (1) basic materials, such as extracts, but excluding inorganic salts and mineral salts; and (2) ESSENTIAL OILS or FLAVOR AROMA CHEMICALS when sold to provide flavor or taste, but it is recognized that such products may also provide other functional properties to products. 1.20 "FLAVOR AROMA CHEMICAL" shall mean an aroma chemical sold primarily as a flavor or as a raw material or component of a flavor, particularly in a sale which may require meeting specific technical requirements of the purchaser; and such aroma chemical includes natural ethyl butyrate, citarus terpene fraction, natural C-6 acetate, natural acetic acid, natrualal butyric acid, fusal oil, isoamyl isovalerate, isovaleraldehyde, ethyl acetate, benzaldehyde, and acetaldehyde. 1.21 "FLAVOR RELATED" shall mean a product which is or contains a flavor and which is sold primarily for a function which includes flavors or taste, but it is recognized that such product may also provide other functional properties to products, including fruit preparations and food service items. 1.22 "FRIES WITHDRAWAL" shall have the meaning ascribed to such term in Section 8.3 hereof. 1.23 "FRIES WITHDRAWAL DATE" shall have the meaning ascribed to such term in Section 8.5 hereof. 1.24 "FRIES WITHDRAWAL DOCUMENTS" shall mean individually 12 and collectively the agreements, documents and instruments entered into or executed, delivered and performed to confirm, evidence or effectuate a FRIES WITHDRAWAL, including those agreements, documents and instruments delivered pursuant to Sections 8.7, 8.8 and 8.9 hereof. 1.25 "GAAP" shall mean generally accepted accounting principles as in effect in the United States of America at the time of the preparation of the financial statements with respect to which such term is used. 1.26 "GOVERNMENTAL AUTHORITY" shall mean any domestic (federal, state, or local) or foreign government or governmental agency, department, commission, authority, court, tribunal, or adjudicative body. 1.27 "HERCULES" shall mean Hercules Incorporated, a corporation organized under the laws of the State of Delaware and having its principal office at Hercules Plaza, 1313 North Market Street, Wilmington, Delaware 19894-0001. 1.28 "HERCULES CONTRIBUTION" shall mean an amount equal to the positive difference (if any) between (i) the INVESTMENT ASSET VALUE on the FRIES WITHDRAWAL DATE, and (ii) the sum of HFI's and HCI's CAPITAL ACCOUNT balances (as adjusted under Section 1.6.C. as a result of the FRIES WITHDRAWAL); provided, however, that if the amount set forth in clause (ii) above equals or exceeds the INVESTMENT ASSET VALUE on the FRIES WITHDRAWAL DATE, the HERCULES CONTRIBUTION shall be zero. 1.29 "HERCULES INDEMNITEES" shall mean individually and collectively HCI, HFI, and their respective directors, officers, employees, servants, agents and representatives. 1.30 "INTERNAL REVENUE CODE" shall mean the U.S. Internal Revenue Code of 1986 as amended. 1.31 "INVESTMENT ASSET VALUE" shall mean, as of any measurement date, the present value of the future cash flows owed to the holder of the INVESTMENT ASSETS using a discount rate (compounded in accordance with the interest payment dates of the INVESTMENT ASSETS) equal to nine (9) basis points plus the yield to maturity on U.S. Treasury Notes having an original duration as close to the original duration of the INVESTMENT ASSETS as possible and a maturity as close to the maturity of the INVESTMENT ASSETS as possible. Such INVESTMENT ASSET VALUE shall be determined as of the ADJUSTMENT TIME based upon yields of U.S. Treasury Notes. 1.32 "INVESTMENT ASSETS" shall mean Five Hundred Million Dollars ($500,000,000.00) aggregate principal amount Newflana fixed rate notes issued pursuant to an offering memorandum dated January 30, 1997. 1.33 "INVESTMENT GAIN" shall mean the amount by which the INVESTMENT ASSET VALUE as of the ADJUSTMENT TIME exceeds the aggregate face amount of all INVESTMENT ASSETS; provided, however, that the INVESTMENT GAIN shall be zero if the aggregate face amount of all INVESTMENT ASSETS equals or exceeds the INVESTMENT ASSET VALUE as of the ADJUSTMENT TIME. 1.34 "INVESTMENT LOSS" shall mean the amount by which the aggregate face amount of all INVESTMENT ASSETS exceeds the INVESTMENT ASSET VALUE as of the ADJUSTMENT TIME: provided, however, that the INVESTMENT LOSS shall be zero if the INVESTMENT 13 ASSET VALUE as of the ADJUSTMENT TIME equals or exceeds the aggregate face amount of all INVESTMENT ASSETS. 1.35 "LONG-TERM LIABILITIES" shall mean, at any time, the liabilities of the Companies (other than CURRENT LIABILITIES, the long-term component of pension liabilities, deferred taxes, the TASTEMAKER DEBT and any TAX that is a liability or obligation of TASTEMAKER U.S.) which would be classified as a liability under the heading "TOTAL LIABILITIES" on a combined consolidated balance sheet of TASTEMAKER U.S. and TASTEMAKER B.V. determined and prepared in accordance with GAAP applied on a basis consistent with the practices and methodologies used in preparing the 1995 FINANCIAL STATEMENTS. 1.36 "LONG-TERM LIABILITIES ADJUSTMENT" shall mean, at any time, an amount equal to either (i) if the LONG-TERM LIABILITIES at such time exceed the LONG-TERM LIABILITIES BASELINE, the amount by which the LONG-TERM LIABILITIES at such time exceed the LONG-TERM LIABILITIES BASELINE or (ii) if the LONG-TERM LIABILITIES BASELINE exceeds the LONG-TERM LIABILITIES at such time, the amount by which the LONG-TERM LIABILITIES BASELINE exceeds the LONG-TERM LIABILITIES at such time; provided, however, that if the LONG-TERM LIABILITIES at such time equal the LONG-TERM LIABILITIES BASELINE, the LONG-TERM LIABILITIES ADJUSTMENT shall be zero. 1.37 "LONG-TERM LIABILITIES BASELINE" shall mean the total liabilities of the Companies (other than CURRENT LIABILITIES, the long-term component of pension liabilities, deferred taxes, the TASTEMAKER DEBT and any TAX that is a liability or obligation of TASTEMAKER U.S.) which were classified as a liability under the heading "TOTAL LIABILITIES" on the June 28, 1996 unaudited combined consolidated balance sheet of TASTEMAKER U.S. and TASTEMAKER B.V. and their respective subsidiaries, which was an amount equal to Thirty Eight Million Four Hundred Fifty Thousand Twenty-Four Dollars ($38,450,024.00) less any TAX on such balance sheet that is a liability or obligation of TASTEMAKER U.S. 1.38 "MALLINCKRODT" shall mean Mallinckrodt Inc., a corporation organized under the laws of the State of New York and having offices at 7733 Forsyth Boulevard, St. Louis, MO 63105-1820. 1.39 "NET WORKING CAPITAL" shall mean, at any time, an amount equal to the difference between (i) the amount of CURRENT ASSETS at such time, and (ii) the amount of CURRENT LIABILITIES at such time. 1.40 "NOTICE" shall mean the notice of FRIES WITHDRAWAL given by FRIES pursuant to Section 8.4 hereof. 1.41 "OFFICERS" shall have the meaning ascribed to such term in Section 7. hereof. 1.42 "OLD PARTNERSHIP AGREEMENT" shall have the meaning ascribed to such terms in the fourth WHEREAS clause first written above. 1.43 "PARTNERS' REPRESENTATIVES" shall mean the persons appointed to manage the business and affairs of TASTEMAKER U.S. pursuant to Article VI hereof. 1.44 "PARTNERSHIP INTEREST" shall mean each PARTNER"S ownership interest in TASTEMAKER U.S. at any particular time, including the right of such PARTNER to any and all benefits to 14 which such PARTNER may be entitled hereunder together with such PARTNER"S obligation to comply with each provision hereof. 1.45 "SALE OF FRIES" shall mean and occur forthwith upon MALLINCKRODT ceasing to indirectly or directly own and control FRIES regardless of the reason, nature or manner of such cessation. Without limiting the generality or scope of the foregoing, such cessation shall occur when MALLINCKRODT indirectly or directly (i) transfers (whether by sale, disposition or otherwise) all or part of its interest in FRIES to a person or entity not controlled by, or under common control with, MALLINCKRODT; (ii) owns, controls or holds less than one hundred percent (100%) of the ownership interest of FRIES; or (iii) does not own, control, hold or exercise the power to direct the management and policies of FRIES (whether through the ownership of voting securities, by contract or otherwise) and/or the power to appoint or have elected the governing body (e.g., board of directors) of FRIES. 1.46 "SUBSIDIARIES" of a specified person shall mean individually and collectively, as the case may be, those entities (whether corporation, firm, partnership, joint venture or other business organization, wherever incorporated or organized) of which such person shall own directly or indirectly more than fifty percent (50%) of the ownership interest, or voting capital stock, or equivalent capital interest. 1.47 "TASTEMAKER BUSINESS" shall have the meaning ascribed to such term in Section 1.57 hereof. 1.48 "TASTEMAKER B.V. CURRENT ASSETS" shall mean, as of any time, all items, excluding deferred taxes, which would be classified as a current asset under the heading "CURRENT ASSETS" on a consolidated balance sheet of TASTEMAKER B.V. determined and prepared in accordance with the customary accounting practices, procedures and policies of TASTEMAKER B.V. used in connection with its regularly prepared internal financial statements. 1.49 "TASTEMAKER B.V. CURRENT LIABILITIES" shall mean, as of any time, all items, excluding deferred taxes, which would be classified as a current liability under the heading "CURRENT LIABILITIES" on a consolidated balance sheet of TASTEMAKER B.V. determined and prepared in accordance with the customary accounting practices, procedures and policies of TASTEMAKER B.V. used in connection with its regularly prepared internal financial statements. 1.50 "TASTEMAKER B.V. LONG-TERM LIABILITIES" shall mean, at any time, the liabilities of TASTEMAKER B.V. (other than the TASTEMAKER B.V. CURRENT LIABILITIES, the long-term component of pension liabilities and deferred taxes) which would be classified as a liability under the heading "TOTAL LIABILITIES" on a consolidated balance sheet of TASTEMAKER B.V. determined and prepared in accordance with the customary accounting practices, procedures and policies of TASTEMAKER B.V. used in connection with its regularly prepared internal financial statements. 1.51 "TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT" shall mean, at any time, an amount equal to either (i) if the TASTEMAKER B.V. LONG-TERM LIABILITIES at such time exceed the TASTEMAKER B.V. LONG-TERM LIABILITIES BASELINE, the amount by which the TASTEMAKER B.V. LONG-TERM LIABILITIES at such time 15 exceeds the TASTEMAKER B.V. LONG-TERM LIABILITIES BASELINE or (ii) if the TASTEMAKER B.V. LONG-TERM LIABILITIES BASELINE exceeds the TASTEMAKER B.V. LONG-TERM LIABILITIES at such time, the amount by which the TASTEMAKER B.V. LONG-TERM LIABILITIES BASELINE exceeds the TASTEMAKER B.V. LONG-TERM LIABILITIES at such time; provided, however, that if the TASTEMAKER B.V. LONG-TERM LIABILITIES at such time equal the TASTEMAKER B.V. LONG-TERM LIABILITIES BASELINE, the TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT shall be zero. 1.52 "TASTEMAKER B.V. LONG-TERM LIABILITIES BASELINE" shall mean the total liabilities of TASTEMAKER B.V. (other than the TASTEMAKER B.V. CURRENT LIABILITIES, the long term component of pension liabilities and deferred taxes) which were be classified as a liability under the heading "TOTAL LIABILITIES" on the June 28, 1996 unaudited consolidated balance sheet of TASTEMAKER B.V., which was an amount equal to Five Million Eight Hundred Sixty Thousand ($5,860,000.00). 1.53 "TASTEMAKER B.V. WORKING CAPITAL" shall mean, at any time, an amount equal to the difference between (i) the amount of TASTEMAKER B.V. CURRENT ASSETS at such time, and (ii) the amount of TASTEMAKER B.V. CURRENT LIABILITIES at such time. 1.54 "TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT" shall mean, at any time, an amount equal to either (i) if the TASTEMAKER B.V. WORKING CAPITAL at such time exceeds the TASTEMAKER B.V. WORKING CAPITAL BASELINE, the amount by which the TASTEMAKER B.V. WORKING CAPITAL at such time exceeds the TASTEMAKER B.V. WORKING CAPITAL BASELINE, or (ii) if the TASTEMAKER B.V. WORKING CAPITAL BASELINE exceeds the TASTEMAKER B.V. WORKING CAPITAL at such time, the amount by which the TASTEMAKER B.V. WORKING CAPITAL BASELINE exceeds the TASTEMAKER B.V. WORKING CAPITAL at such time; provided, however, that if the TASTEMAKER B.V. WORKING CAPITAL at such time equals the TASTEMAKER B.V. WORKING CAPITAL BASELINE the TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT shall be zero. 1.55 "TASTEMAKER B.V. WORKING CAPITAL BASELINE" shall mean the TASTEMAKER B.V. WORKING CAPITAL on the June 28, 1996 unaudited consolidated balance sheet of TASTEMAKER B.V., which was an amount equal to Nine Million Two Hundred Twenty-One Thousand One Hundred Ninety-Two Dollars ($9,221,192.00). 1.56 "TASTEMAKER B.V. VALUE" shall mean an amount equal to $150,000,000 and (A) either (i) increased by the TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT, if the TASTEMAKER B.V. WORKING CAPITAL as of the ADJUSTMENT TIME exceeds the TASTEMAKER B.V. WORKING CAPITAL BASELINE or (ii) decreased by the TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT, if the TASTEMAKER B.V. WORKING CAPITAL BASELINE exceeds the TASTEMAKER B.V. WORKING CAPITAL as of the ADJUSTMENT TIME, and (B) either (i) decreased by the TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT if the TASTEMAKER B.V. LONG-TERM LIABILITIES as of the ADJUSTMENT TIME exceed the TASTEMAKER B.V. LONG-TERM LIABILITIES BASELINE, or (ii) increased by the TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT if the TASTEMAKER B.V. LONG-TERM LIABILITIES BASELINE exceeds the TASTEMAKER B.V. LONG-TERM LIABILITIES as of the ADJUSTMENT TIME. 1.57 "TASTEMAKER GROUP" shall mean a worldwide group of 16 entities controlled by TASTEMAKER U.S. through ownership or by agreement of the PARTNERS and engaged in the research, development, manufacture, marketing and sale of and activities related to ingredients and compounds used primarily to provide flavor or taste in food and beverage products, including such activities as related to the FLAVOR, FLAVOR AROMA CHEMICAL, FLAVOR RELATED, CITRUS SPECIALTIES and ESSENTIAL OIL businesses. Such research, development, manufacture, marketing, sale and related activities are collectively referred to herein as the "TASTEMAKER BUSINESS". The TASTEMAKER GROUP includes TASTEMAKER U.S. 1.58 "TASTEMAKER U.S." shall mean the partnership formed pursuant to the OLD PARTNERSHIP AGREEMENT and continued pursuant to this AGREEMENT. 1.59 "TASTEMAKER U.S. COMBINED AND CONSOLIDATED VALUE" shall mean an amount equal to One Billion One Hundred Ninety Million Dollars ($1,190,000,000.00). 1.60 "TASTEMAKER DEBT" shall mean the amount of principal and accrued but unpaid interest, fees and other costs outstanding under that certain $600,000,000 Credit Agreement dated January 24, 1997. 1.61 "TASTEMAKER U.S. LIABILITIES" shall mean all liabilities and obligations of TASTEMAKER U.S. relating to or arising from the TASTEMAKER U.S. OPERATING ASSETS or otherwise relating to or arising from the TASTEMAKER BUSINESS of whatsoever nature, whether absolute, determined, determinable, contingent or otherwise; provided, however, that TASTEMAKER U.S. LIABILITIES shall not include any liability or obligations of TASTEMAKER U.S. for and in respect of any TAX that is a liability or obligation of TASTEMAKER U.S. or any contingent liability or obligation relating to or arising from the FINANCIAL ASSETS. 1.62 "TASTEMAKER U.S. OPERATING ASSETS" shall mean all assets, properties and business of TASTEMAKER U.S. of every kind and nature, wherever located, including all assets and properties used in and all of the ownership interest of TASTEMAKER U.S. in companies engaged in the FLAVOR, FLAVOR AROMA CHEMICAL, FLAVOR RELATED, CITRUS SPECIALTIES, and ESSENTIAL OIL businesses, and, except as may be included in the FINANCIAL ASSETS, all consideration received by TASTEMAKER U.S. in connection with the divestiture of any such ownership interest after the date hereof, and including, without limitation, all right, title and interest of TASTEMAKER U.S. in, to and under (i) the Tastemaker name; (ii) all rights under all contracts, agreements, leases, licenses, commitments, sales and purchase orders and other instruments; (iii) all accounts, notes and other receivables; (iv) all prepaid expenses, including but not limited to ad valorem taxes, leases and rentals; (v) all of TASTEMAKER U.S.'s cash and cash equivalents on land and in banks, except as may be included in the FINANCIAL ASSETS; (vi) all of TASTEMAKER U.S.'s rights, claims, credits, causes of action or rights of set-off against third parties relating to the TASTEMAKER U.S. OPERATING ASSETS, including, without limitation, unliquidated rights under manufacturers' and vendors' warranties; (vii) all intangible property and every application for the same, in each case owned 17 or licensed by TASTEMAKER U.S.; (viii) all transferable licenses, permits or other governmental authorizations affecting or relating in any way to the TASTEMAKER BUSINESS; (ix) all goodwill associated with the TASTEMAKER BUSINESS or the TASTEMAKER U.S. OPERATING ASSETS; and (x) all rights, title and interest in any trust agreement, insurance contract, fund or other vehicle funding employee benefits, any employment agreement or any collective bargaining agreement, but excluding the FINANCIAL ASSETS. 1.63 "TASTEMAKER U.S. VALUE" means an amount equal to the ADJUSTED AGGREGATE VALUE, less ninety-nine percent (99%) of the TASTEMAKER B.V. VALUE, less the INVESTMENT LOSS (if any) and plus the INVESTMENT GAIN (if any). 1.64 "TAX" means any federal, state, local or foreign income, profits, gross receipts, property, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add-on minimum, ad valorem, transfer, stamp, capital stock or excise tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalty or addition to tax imposed by any Governmental Authority. 1.65 "TREASURY REGULATION" shall mean the United States Income Tax Regulations including Temporary Regulations, promulgated under the INTERNAL REVENUE CODE. 1.66 "U.S." shall mean the United States of America. 1.67 "WITHDRAWAL CLOSING" shall have the meaning ascribed to such term in Section 8.5 hereof. 1.68 "WORKING CAPITAL ADJUSTMENT" shall mean, at any time, an amount equal to either (i) if the NET WORKING CAPITAL at such time exceeds the WORKING CAPITAL BASELINE, the amount by which the NET WORKING CAPITAL at such time exceeds the WORKING CAPITAL BASELINE, or (ii) if the WORKING CAPITAL BASELINE exceeds the NET WORKING CAPITAL at such time, the amount by which the WORKING CAPITAL BASELINE exceeds the NET WORKING CAPITAL at such time; provided, however, that if the NET WORKING CAPITAL at such time equals the WORKING CAPITAL BASELINE the WORKING CAPITAL ADJUSTMENT shall be zero. 1.69 "WORKING CAPITAL BASELINE" shall mean the NET WORKING CAPITAL of the Companies on the June 28, 1996 unaudited combined consolidated balance sheet of TASTEMAKER U.S. and TASTEMAKER B.V., which was an amount equal to Seventy-Seven Million Seven Hundred Six Thousand Nine Hundred Thirteen Dollars ($77,706,913.00) less any TAX on such balance sheet that is a liability or obligation of TASTEMAKER U.S. Construction of Certain Words and Phrases 1.70 The index, captions and headings of this AGREEMENT are for convenience only and shall not define, limit or affect the scope, intent, construction or interpretation of this AGREEMENT, or any provision hereof. 1.71 The words "herein", "hereof", "hereunder", "hereby", "hereto", "herewith", and words of similar import shall refer to this AGREEMENT as a whole and not to any particular Article, Section , paragraph, subsection and other subdivision. 18 1.72 The words "include", "includes", "including" and all forms and derivations thereof shall mean including without limitation. 1.73 Words of the singular number shall include correlative words of the plural number and vice versa. Words of one gender (e.g., masculine) shall include other genders (e.g., feminine and neuter). 1.74 In the interpretation and construction of this AGREEMENT no provision shall be construed against the drafting PARTY because of its drafting of this AGREEMENT or any part hereof. 19 2 ARTICLE II. FORMATION OF TASTEMAKER U.S. 2.1 Formation. Pursuant to the OLD PARTNERSHIP AGREEMENT, TASTEMAKER U.S. was formed as a general partnership under the Uniform Partnership Law, 6 Del. C. Section 1501 et. seq. This AGREEMENT completely amends, restates and supersedes the OLD PARTNERSHIP AGREEMENT. Simultaneous with the execution of this AGREEMENT, HCI is formally admitted to TASTEMAKER U.S. as a general partner. Each PARTNER shall use its best efforts to do all acts and things necessary to perfect and to continue the maintenance of TASTEMAKER U.S. as a general partnership under Delaware law. 2.2 Name. The name of the general partnership referred to in Section 2.1 hereof and covered by this AGREEMENT shall be "TASTEMAKER" and may be later changed to such other name(s) as may be agreed in writing from time to time by the PARTNERS. 2.3 Principal Office and Place of Business. The principal offices and place of business of TASTEMAKER U.S. shall be at 1199 Edison Drive, Cincinnati, OH 45216-2265, and/or other such location(s) as may be agreed in writing from time to time by the PARTNERS. 2.4 Term. TASTEMAKER U.S. shall continue in effect until December 31, 2031, unless terminated pursuant to the Delaware Uniform Partnership Law, 6 Del. C. Section 1501 et. seq. or Article IX hereof. 2.5 PARTNERSHIP INTEREST. Unless otherwise agreed to in writing by the PARTNERS or unless sold or transferred in accordance with this AGREEMENT, the ownership of TASTEMAKER U.S. shall be as follows: a fifty percent (50%) undivided PARTNERSHIP INTEREST shall be owned and held by FRIES, a forty percent (40%) undivided PARTNERSHIP INTEREST shall be owned and held by HFI, and ten percent (10%) undivided PARTNERSHIP INTEREST shall be owned and held by HCI. 20 3 ARTICLE III. PURPOSES OF TASTEMAKER U.S. 3.1 TASTEMAKER U.S. TASTEMAKER U.S. shall engage in the TASTEMAKER BUSINESS and other businesses and activities as are from time to time mutually agreed upon by the PARTNERS. 21 4 ARTICLE IV. CAPITAL CONTRIBUTIONS, PARTNERSHIP FINANCE AND DETERMINATION OF CAPITAL ACCOUNT ADJUSTMENT 4.1 CAPITAL CONTRIBUTIONS. The PARTNERS have made or have caused to be made, and shall make or cause to be made, CAPITAL CONTRIBUTIONS or transfers to TASTEMAKER U.S. required by any existing or future written agreement signed by all of the PARTNERS. Except as otherwise provided in Section 8.9 hereof, no PARTNER shall be obligated to make any CAPITAL CONTRIBUTION or transfer to TASTEMAKER U.S., except as required by any existing or future written agreement signed by all of the PARTNERS. 4.2 Capital Expenditures. The financing of capital expenditures shall be undertaken as directed by the PARTNERS' REPRESENTATIVES. 4.3 Future Borrowings. The PARTNERSHIP may, as directed by the PARTNERS' REPRESENTATIVES, borrow funds and create liens against the property of TASTEMAKER U.S., including borrowings and liens related to or in connection with the TASTEMAKER DEBT. 4.4 CAPITAL ACCOUNTS. TASTEMAKER U.S. shall maintain an individual CAPITAL ACCOUNT for each PARTNER. In the event on or before August 31, 1997 it is necessary to adjust the CAPITAL ACCOUNT of the PARTNERS pursuant to Section 1.6.C. hereof, the ADJUSTED AGGREGATE VALUE and the TASTEMAKER B.V. VALUE shall be determined in accordance with Sections 4.5 and 4.6, respectively, below. 4.5 ADJUSTED AGGREGATE VALUE. The PARTNERS shall cause TASTEMAKER U.S. to prepare and deliver to each of the PARTNERS TASTEMAKER U.S.' good-faith estimates of the amounts of CURRENT ASSETS, CURRENT LIABILITIES and LONG-TERM LIABILITIES as of the ADJUSTMENT TIME, together with a calculation of the ESTIMATED ADJUSTED AGGREGATE VALUE as of the ADJUSTMENT TIME. Any adjustment to the PARTNER'S CAPITAL ACCOUNT shall initially be based upon the ESTIMATED TASTEMAKER U.S. VALUE determined using such ESTIMATED ADJUSTED AGGREGATE VALUE. Promptly thereafter the other PARTNERS, as of the ADJUSTMENT TIME, including all parties who were PARTNERS, shall cause TASTEMAKER U.S. to engage Coopers & Lybrand L.L.P. (the "ACCOUNTANTS") to conduct an audit of the CURRENT ASSETS, the CURRENT LIABILITIES and the LONG-TERM LIABILITIES as of the ADJUSTMENT TIME, and such PARTNERS shall use their best efforts to cause the ACCOUNTANTS to complete such audit and deliver to each of such PARTNERS and any former PARTNER as of the ADJUSTMENT TIME within sixty (60) days the ACCOUNTANTS' determination of CURRENT ASSETS, CURRENT LIABILITIES and LONG-TERM LIABILITIES as of the ADJUSTMENT TIME, and the WORKING CAPITAL ADJUSTMENT and LONG-TERM LIABILITIES ADJUSTMENT as of the ADJUSTMENT TIME, (collectively, the "ACCOUNTANTS' NET DETERMINATION"), together with the certification of the 22 ACCOUNTANTS that the balances of CURRENT ASSETS, CURRENT LIABILITIES and LONG-TERM LIABILITIES were determined in accordance with the terms of this AGREEMENT (the "ACCOUNTANTS' REPORT"). The fees and expenses of the ACCOUNTANTS in preparing the ACCOUNTANTS' REPORT shall be paid one-half by FRIES and one- half by HFI AND HCI. The PARTNERS shall have a period of sixty (60) days following receipt of the ACCOUNTANTS' REPORT to review the books and records of the COMPANIES for purposes of determining whether they agree with the ACCOUNTANTS' REPORT and the determination of the WORKING CAPITAL ADJUSTMENT, the LONG-TERM LIABILITIES ADJUSTMENT, CURRENT ASSETS, CURRENT LIABILITIES and LONG-TERM LIABILITIES set forth therein. If any PARTNER disagrees with either the WORKING CAPITAL ADJUSTMENT or the LONG-TERM LIABILITIES ADJUSTMENT determined based upon the ACCOUNTANTS' REPORT, such PARTNER (whether one or more than one, each a "DISPUTING PARTY") shall, at or before the end of such sixty (60) day period, give to all other PARTNERS a written notice which shall set forth a detailed explanation of such DISPUTING PARTY'S disagreement with the determination of the WORKING CAPITAL ADJUSTMENT or the LONG-TERM LIABILITIES ADJUSTMENT set forth in the ACCOUNTANT'S REPORTS (or the amounts of CURRENT ASSETS, CURRENT LIABILITIES or LONG-TERM LIABILITIES used in the determination thereof), as well as an amount for each disputed item and a proposal based on such amounts for an amount that the DISPUTING PARTY believes to be more accurate than the ACCOUNTANTS' NET DETERMINATION. If both of HFI and HCI dispute the ACCOUNTANTS' REPORT, HFI and HCI may (but shall not be obligated to) submit a joint notice of dispute. If no PARTNER gives such notice within said sixty (60) day period, the WORKING CAPITAL ADJUSTMENT and the LONG-TERM LIABILITIES ADJUSTMENT determined by the ACCOUNTANTS and set forth in the ACCOUNTANTS' REPORT shall be deemed correct and conclusive for purposes of determining the ADJUSTED AGGREGATE VALUE. If any PARTNER timely disputes the ACCOUNTANTS' determination of either the WORKING CAPITAL ADJUSTMENT or the LONG-TERM LIABILITIES ADJUSTMENT (or the amounts of CURRENT ASSETS, CURRENT LIABILITIES or LONG-TERM LIABILITIES used in the determination thereof), the PARTNERS shall negotiate in good faith in an attempt to agree upon a resolution of such dispute for a period of thirty (30) days from the end of such sixty (60) day review period. If, notwithstanding the good faith efforts of the PARTNERS, the PARTNERS are unable to reach agreement, the items in the ACCOUNTANTS' REPORT that are in dispute (and only the disputed items) will be referred for final binding resolution to the United States national office of KPMG Peat Marwick LLP or, if KPMG Peat Marwick LLP is unwilling or unable, due to conflicts, to serve in such capacity, one of the six (6) largest United States certified public accounting firms which shall be mutually agreed upon by the PARTNERS hereto (or such other internationally recognized accounting firm as is agreed upon by the PARTNERS) and which shall exclude those firms that provide or have provided accounting services to any of the PARTNERS (the "ADJUSTMENT ARBITRATOR"). The items in dispute shall be determined by the ADJUSTMENT ARBITRATOR in accordance with the terms and provisions of this AGREEMENT, and the PARTNERS agree to use their best 23 efforts to cause the ADJUSTMENT ARBITRATOR to render its decision within sixty (60) days after the dispute has been referred to the ADJUSTMENT ARBITRATOR for resolution. The determination of the ADJUSTMENT ARBITRATOR shall be final and binding, and all PARTNERS shall be bound thereby and judgment upon such resolution may be entered in any court having requisite jurisdiction. The responsibility to pay the total fees and expenses (for the entire arbitration process described above as computed after the completion or termination of the arbitration) of the ADJUSTMENT ARBITRATOR shall be included as part of the award of the ADJUSTMENT ARBITRATOR, the PARTNERS hereby instructing the ADJUSTMENT ARBITRATOR to assess such fees and expenses to the PARTNER or PARTNERS whose position in such dispute was least supported by the determination of the ADJUSTMENT ARBITRATOR. 4.6 TASTEMAKER B.V. VALUE. The PARTNERS shall cause TASTEMAKER B.V. to prepare and deliver to each of the PARTNERS the TASTEMAKER B.V.'S good-faith estimate of the TASTEMAKER B.V. CURRENT ASSETS, TASTEMAKER B.V. CURRENT LIABILITIES and TASTEMAKER B.V. LONG-TERM LIABILITIES as of the ADJUSTMENT TIME, together with a calculation of the ESTIMATED TASTEMAKER B.V. VALUE based upon such estimates. Any adjustment to a PARTNER'S CAPITAL ACCOUNT shall initially be based upon the ESTIMATED TASTEMAKER U.S. VALUE determined using such ESTIMATED TASTEMAKER B.V. VALUE. Within thirty (30) days thereafter, the PARTNERS shall cause TASTEMAKER B.V. to prepare and deliver to the PARTNERS the balance sheet of TASTEMAKER B.V. as of the ADJUSTMENT TIME, together with a calculation of the TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT and the TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT, and the resulting TASTEMAKER B.V. VALUE. The PARTNERS shall have a period of thirty (30) days following receipt of such information to review the books and records of TASTEMAKER B.V. for purposes of determining whether they agree with the determination of the TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT and the TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT, and the TASTEMAKER B.V. VALUE calculated based thereon. If any of the PARTNERS disagrees with the TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT or the TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT, such PARTNER shall, at or before the end of such thirty (30) day review period, give to all other PARTNERS written notice which shall set forth a detailed explanation of such PARTNER'S disagreement with the determination of the TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT or the TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT. If a PARTNER timely disputes the determination of either the TASTEMAKER B.V. WORKING CAPITAL ADJUSTMENT or the TASTEMAKER B.V. LONG-TERM LIABILITIES ADJUSTMENT, the PARTNERS shall negotiate in good faith in an attempt to agree upon a resolution of such dispute for a period of thirty (30) days from the end of such thirty (30) day review period. If notwithstanding the good faith efforts of the PARTNERS, the PARTNERS are unable to reach agreement, such dispute shall be resolved in accordance with Section 6.5.B of this AGREEMENT. 4.7 Partnership Services. TASTEMAKER U.S. may obtain 24 services, not otherwise provided, under separate agreements with (1) any PARTNER or its respective AFFILIATES or SUBSIDIARIES; provided, however, that each such agreement shall be subject to the prior approval of the other PARTNERS; or (2) with third persons. All service agreements previously entered into with (1) any PARTNER or one of its AFFILIATES or SUBSIDIARIES (and approved by the other PARTNERS) or (2) a third person and in effect on the date hereof shall continue in effect in accordance with its terms. 25 5 ARTICLE V. CERTAIN TAX MATTERS. DISTRIBUTION OF PROFITS AND LOSSES, TAX ALLOCATIONS AND TERMINATION 5.1 Distribution of Profits and Losses. Except as provided in Sections 5.2 and 5.3 hereof, each PARTNER shall share, in proportion to its PARTNERSHIP INTEREST, TASTEMAKER U.S." profits, taxable income and losses, capital gains and capital losses, cash flow, foreign tax credit, and any other business tax credits. The foreign SUBSIDIARIES of TASTEMAKER U.S., except in Mexico, have adopted and adhered to written dividend/distribution policies determined by the PARTNERS' REPRESENTATIVES and shall continue to adhere to such policies. Distributions from TASTEMAKER U.S. or the retention and use of funds in TASTEMAKER U.S. shall be determined by the PARTNERS' REPRESENTATIVES. 5.2 Section 704(c) Tax Allocations. A. In accordance with Section 704(c) of the INTERNAL REVENUE CODE, except to the extent otherwise required by Treasury Regulations promulgated thereunder, gain or loss from the sale of any property contributed to the capital of TASTEMAKER U.S. shall, solely for tax purposes, be allocated first to the PARTNER contributing that property so as to take account of any remaining variation between the adjusted basis of such property to TASTEMAKER U.S. for federal income tax purposes and its AGREED VALUE; and depreciation deductions attributable to contributed property shall, solely for tax purposes, be allocated so as to take account of any variation between the adjusted basis of such property to TASTEMAKER U.S. for federal income purposes and its initial AGREED VALUE by allocating such depreciation deductions first to the PARTNER not contributing such property in an amount equal to the depreciation that would be allowable to that PARTNER were the adjusted basis of such property equal to its initial AGREED VALUE, and thereafter to the contributing PARTNER. Allocations of AGREED VALUE among subclasses of assets (primarily vintage accounts of fixed assets) shall be based upon the methodology agreed upon by the PARTNERS at the formation of TASTEMAKER U.S. B. Except as provided under Section 5.3 hereof, in the event the AGREED VALUE of any PARTNERSHIP property is adjusted pursuant to Section 1.3 C. hereof, subsequent allocations of gain, loss, and depreciation with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its AGREED VALUE in the same manner as under Section 5.2 A hereof. C. Any elections (including an election to adjust the basis of TASTEMAKER U.S. property in the manner provided under Sections 734(b) and 743(b) of the INTERNAL REVENUE CODE) or other decisions relating to such allocations shall be made by the PARTNERS' REPRESENTATIVES in any manner that reasonably reflects the purpose and intention of this AGREEMENT. Allocations pursuant to Sections 5.2 hereof are solely for purposes of federal, state and local taxes and shall not affect, or in any 26 way be taken into account in computing, any PARTNER"S CAPITAL ACCOUNT or share of profits, losses, other items, or distributions pursuant to any provision of this AGREEMENT. 5.3 Section 754 Adjustments. To the extent an adjustment to the tax basis of any asset pursuant to Sections 734(b) or 743(b) of the INTERNAL REVENUE CODE is required pursuant to Treasury Regulation Section 1.704-1(b) (2) (iv) (m) to be taken into account in determining CAPITAL ACCOUNTS, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such gain or loss shall be specifically allocated to the PARTNERS in a manner consistent with Treasury Regulations. 5.4 Tax Matters Partner. Subject to the provisions hereof, FRIES is designated as the Tax Matters Partner (as defined in Section 6231 of the INTERNAL REVENUE CODE) and is authorized and required to represent TASTEMAKER U.S. (at TASTEMAKER U.S." expense) in connection with all examinations of TASTEMAKER U.S." affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend TASTEMAKER U.S. funds for professional services and costs associated therewith. Each of HCI and HFI agrees to cooperate with FRIES and to do or refrain from doing any or all things reasonably required by FRIES to conduct such proceedings. To the extent practicable, FRIES shall provide HCI and HFI with copies of the relevant documents and communications related to such Tax Matters. Upon the earliest to occur of a FRIES WITHDRAWAL or a SALE OF FRIES, then forthwith FRIES shall cease being and serving as the Tax Matters Partner and HFI shall forthwith become and at all times thereafter serve as the Tax Matters Partner. 27 6 ARTICLE VI. The PARTNERS' REPRESENTATIVES 6.1 Part Of TASTEMAKER GROUP. The PARTNERS desire that TASTEMAKER U.S. continue to be conducted as part of the TASTEMAKER GROUP. In order to promote the efficiency, profitability and effectiveness of TASTEMAKER U.S. and in recognition of the integrated relationship of the members of the TASTEMAKER GROUP, the PARTNERS agree that their interests in TASTEMAKER U.S. shall continue to be managed and administered by the PARTNERS' REPRESENTATIVES, including providing input, guidance and whatever else may be required in connection with and in furtherance of the conduct of TASTEMAKER U.S. 6.2 Governance. A. Governance Prior To A FRIES WITHDRAWAL Or SALE OF FRIES: Prior to the FRIES WITHDRAWAL DATE and until the date that is two (2) days after a SALE OF FRIES, this Section 6.2 A shall govern and Sections 6.2 B and 6.2 C shall be of no force or effect. The business and affairs of TASTEMAKER U.S. shall be managed by and be under the general charge, control and direction of four (4) PARTNERS' REPRESENTATIVES. Two (2) PARTNERS' REPRESENTATIVES shall be appointed jointly by HCI and HFI acting jointly, and two (2) PARTNERS' REPRESENTATIVES shall be appointed by FRIES. Each of the PARTNERS' REPRESENTATIVES as of the date hereof shall continue to serve in such capacity until he retires, dies, resigns, is removed or otherwise ceases to be a PARTNERS' REPRESENTATIVE. Each PARTNERS' REPRESENTATIVE that was appointed by HFI prior to the date hereof shall be treated as having been appointed by HFI and HCI acting jointly. The Chief Executive Officer of TASTEMAKER U.S. (the "CEO") shall be invited to all meetings of the PARTNERS' REPRESENTATIVES; however, such officer shall be an ex-officio, non-voting attendee. Any PARTNERS' REPRESENTATIVE may place items on the agenda for consideration by the PARTNERS' REPRESENTATIVES. A quorum at all meetings of the PARTNERS' REPRESENTATIVES shall consist of at least one PARTNERS' REPRESENTATIVE appointed jointly by HCI and HFI and at least one PARTNERS' REPRESENTATIVE appointed by FRIES. The unanimous vote of PARTNERS' REPRESENTATIVES shall be necessary for the passage of any resolution or for any other action by the PARTNERS' REPRESENTATIVES (except adjournment of a meeting where less than a quorum is present). A vacancy in the PARTNERS' REPRESENTATIVES, whether caused by retirement, death, resignation, removal or other reason, shall be filled within sixty (60) days after the creation of such vacancy and shall be filled by appointment by the PARTNER or PARTNERS, as the case may be, that appointed the departed PARTNERS' REPRESENTATIVE to the position which has become vacant. B. Governance After SALE OF FRIES. Prior to the FRIES WITHDRAWAL DATE and from and after the date that is two (2) days after a SALE OF FRIES, this Section 6.2 B. shall become effective and operative for all purposes and Section 6.2 A. and 28 Section 6.2 C. shall be of no force and effect. The business and affairs of TASTEMAKER U.S. shall be managed by and be under the general charge, control and direction of the four (4) PARTNERS' REPRESENTATIVES. Three (3) PARTNERS' REPRESENTATIVES shall be appointed jointly by HCI and HFI, and one (1) PARTNERS' REPRESENTATIVE shall be appointed by FRIES. The CEO shall be invited to all meetings of the PARTNERS' REPRESENTATIVES; however, such officer shall be an ex-officio, non-voting attendee. Any PARTNERS' REPRESENTATIVE (with the prior approval of the CHAIR) may place items on the agenda for consideration by the PARTNERS' REPRESENTATIVES. A quorum at all meetings of the PARTNERS' REPRESENTATIVES shall consist of three PARTNERS' REPRESENTATIVES. The affirmative vote of three PARTNERS' REPRESENTATIVES shall be necessary for the passage of any resolution or for any other action by the PARTNERS' REPRESENTATIVES (except adjournment of a meeting where less than a quorum is present). A vacancy in the PARTNERS' REPRESENTATIVES, whether caused by retirement, death, resignation, removal or other reason, shall be filled within sixty (60) days after the creation of such vacancy and shall be filled by the PARTNER or PARTNERS, as the case may be, that appointed the departed PARTNERS' REPRESENTATIVE to the position which has become vacant. C. Governance After FRIES WITHDRAWAL DATE. Upon and after the FRIES WITHDRAWAL DATE, this Section 6.2 C. shall become effective and operative for all purposes, and Sections 6.2 A. and 6.2 B. shall be of no force and effect. The business and affairs of TASTEMAKER U.S. shall be managed by and be under the general charge, control and direction of four (4) PARTNERS' REPRESENTATIVES. Three (3) PARTNERS' REPRESENTATIVES shall be appointed by HFI, and one (1) PARTNERS' REPRESENTATIVE shall be appointed by HCI. The CEO shall be invited to all meetings of the PARTNERS' REPRESENTATIVES; however, such officer shall be an ex-officio, non-voting attendee. Any PARTNERS' REPRESENTATIVE (with the prior approval of the CHAIR) may place items on the agenda for consideration by the PARTNERS' REPRESENTATIVES. A quorum at all meetings of the PARTNERS' REPRESENTATIVES shall consist of three PARTNERS' REPRESENTATIVES. The affirmative vote of three PARTNERS' REPRESENTATIVES shall be necessary for the passage of any resolution or for any other action by the PARTNERS' REPRESENTATIVES (except adjournment of a meeting where less than a quorum is present). A vacancy in the PARTNERS' REPRESENTATIVES, whether caused by retirement, death, resignation, removal or other reason, shall be filled within sixty (60) days after the creation of such vacancy and shall be filled by appointment by the PARTNER that appointed the departed PARTNERS' REPRESENTATIVE to the position which has become vacant. 6.3 Alternate Representatives. HCI and HFI (acting individually or jointly) or FRIES, whichever may be the case pursuant to Section 6.2 hereof, may designate one or more persons to serve as alternates for each of their respective representatives on the PARTNERS' REPRESENTATIVES. The alternate PARTNERS' REPRESENTATIVE may act only in the absence of the 29 member for whom he is serving as an alternate. The alternate member shall be entitled to attend meetings of the PARTNERS' REPRESENTATIVES, to vote and to exercise all the powers and rights of the absent member. Except as the PARTNERS' REPRESENTATIVES may determine otherwise from time to time, in the absence of the CEO, any OFFICER designated by the CEO for this purpose may attend, as the alternate for the CEO, meetings of the PARTNERS' REPRESENTATIVES. 6.4 Principal Functions and Responsibilities of the PARTNERS' REPRESENTATIVES. The principal functions and responsibilities of the PARTNERS' REPRESENTATIVES on an on-going basis shall include the establishment, review, approval, amendment, adoption, termination, etc. of each and all aspects of the business, operation and activities of TASTEMAKER U.S. as the PARTNERS' REPRESENTATIVES may desire from time to time including: A. Major goals and policies of TASTEMAKER U.S., after full consideration of pertinent comments and recommendations of the officers and staff of TASTEMAKER U.S., including policies on investment, business ethics, finance and accounting, antitrust, health, safety and environment, government contracting and dealings, and such other policies as desired by the PARTNERS. B. The long-range and strategic plans of TASTEMAKER U.S. C. The business plan(s) of TASTEMAKER U.S., including financial forecasts, operating budgets and capital budgets. D. The performance of TASTEMAKER U.S. and each major division or subsidiary thereof. E. Any significant change in basic structure or direction of the business of PARTNERSHIP or any major division or subsidiary thereof, such as (1) getting into a new line of business and (2) getting out of an old line of business. F. Any significant matters, such as (1) dispositions, merger, liquidation, capitalization or decapitalization of any major division or subsidiary entity (whether corporation, partnership or other business organization form) of TASTEMAKER U.S.; (2) formation or acquisition of any entity or any equity interest, regardless of the form, manner, character or other aspect of such acquisition or entity, the contents of its charter and by-laws of such entity, and the election of its initial directors and their successors; (3) acquisition or divestiture of any business or real property, regardless of the form, manner, character or other aspect of such acquisition or divesture; and (4) granting or obtaining technology licenses, or for consideration to be paid, or received in a dollar amount or dollar equivalent in excess of U.S. $500,000 over the life of the license but not more than $1,000,000. G. Any human resource policy or plan, such as employee compensation policy, basic employee benefit plans, incentive plans, pension, profit sharing, stock purchase, stock option, management incentive compensation, performance shares, 30 etc. H. The disposition or acquisition of any asset with a fair market value or book value, whichever is higher, in excess of U.S. $500,000 but not more than $1,000,000. If a group of assets is disposed of or acquired as a result of the TASTEMAKER U.S. decision, the said dollar limit (or equivalent thereof in local currency) shall include all such assets. However, the foregoing is not intended to require or imply individual PARTNERS' REPRESENTATIVES approval of employee transfers and relocations and similar matters done in the ordinary course of business and pursuant to normal policies, procedures and practices of TASTEMAKER U.S. I. Agreements, understandings and arrangements which are (1) not in the ordinary course of business (including take or pay contracts), or (2) over three (3) years in duration, or (3) involve annual payments of more than U.S. $500,000 or aggregate payments of more than U.S. $500,000 over the life of such agreement, understanding or arrangement. J. Distributions, return of capital, or other comparable payments to a PARTNER and/or its AFFILIATES or SUBSIDIARIES. K. With respect to TASTEMAKER U.S. financial condition: (1) A (i) total annual maximum dollar limit for short-term indebtedness for borrowed money (i.e., maturity of one year or less), regardless of the form, manner, character or other aspect of such indebtedness (whether acquired through financial institutions, commercial paper, credit lines or otherwise); and (ii) preapproved list of banks and financial institutions. (2) A (i) total annual maximum dollar limit for long-term indebtedness for borrowed money (i.e., maturity of greater than one year), regardless of the form, manner, character or other aspect of such indebtedness and provided, however, that notwithstanding such limit, any one or more related items of long-term indebtedness of more than U.S. $5,000,000 must be specifically approved by the PARTNERS' REPRESENTATIVES prior to any commitment or obligation for such indebtedness being created; and (ii) preapproved list of banks and financial institutions. (3) The issuance of any new equity or equity equivalent, regardless of the form, or manner of such item or issuance; (4) Any increase of U.S. $500,000 or more in any budget, and any one or more related operating or capital expenditures of U.S. $500,000 or more which is not in the operating or capital expenditures budget; (5) The selection of the outside auditors for TASTEMAKER U.S. and review the performance of such auditors. L. Any agreement, understanding or arrangement and/or the terms and conditions for providing services between TASTEMAKER U.S. and one or more PARTNERS or their respective SUBSIDIARIES and AFFILIATES where such agreement, understanding or arrangement is either then outside the ordinary course of business, or involves annual payments of more than U.S. $500,000, or involves aggregate payments over its life of more than U.S. $500,000, or has a term greater than 36 months. 31 M. Any amendments to the charter, by-laws or other formation or governing instrument of TASTEMAKER U.S. or its SUBSIDIARIES. N. Any initiation or settlement of any litigation or similar proceeding (including arbitration, administrative, equitable and other) involving claims or settlements by or against TASTEMAKER U.S. or its SUBSIDIARIES and exceeding or reasonably expected to exceed U.S. $500,000 but not more than U.S. $1,000,000. O. Recommend to the PARTNERS amendments or changes to this AGREEMENT. P. Appoint, compensate, terminate and review performance of the OFFICERS. Q. TASTEMAKER U.S. entering, making, executing, delivering, amending, performing and/or terminating agreements, papers, documents, undertakings, arrangements and transactions covering or relating to secrecy obligations, use restrictions, or similar restrictions or obligations arising out of or incidental to the ordinary and usual course of business of TASTEMAKER U.S., provided that: (1) in the case of secrecy obligations or use restrictions imposed on others with respect to information that TASTEMAKER U.S. deems proprietary or confidential, such agreements, papers, documents, undertakings, arrangements and transactions may require the receiving party to hold such information in confidence and/or limit its use thereof for any period determined by the CEO or his designee(s) as being the period during which the information has value to TASTEMAKER U.S.; and (2) in the case of secrecy obligations or use of restrictions imposed on TASTEMAKER U.S. with respect to third-party information that TASTEMAKER U.S. deems proprietary or confidential, such agreements, papers, documents, undertakings, arrangements and transactions shall not require TASTEMAKER U.S. to hold such information in confidence and/or limit its use thereof for any period in excess of ten (10) years; provided, however, that as to the purchase, lease or licensing of computer software, commitments to maintain information in confidence or to restrict the use thereof may be for any period of time that the CEO or his designee(s) deems reasonable under the circumstances. 6.5 Binding Signatories of the PARTIES. A. Except as provided otherwise in this AGREEMENT and except as such powers and authorities may be limited or restricted from time to time in a NOTICE from the Chief Executive Officer of a PARTNER to the Chief Executive Officer of the other 32 PARTNERS, HCI and HFI (acting individually or jointly) and FRIES, whichever may be the case pursuant to Section 6.2 hereof, each hereby grants to its respective PARTNERS' REPRESENTATIVES and such PARTNERS' REPRESENTATIVES shall have and exercise (1) full power and authority to act on behalf of such granting PARTNER(S) in all matters related to TASTEMAKER U.S.; and (2) without limiting the generality of the foregoing (1), such ancillary power as may be necessary or convenient to exercise any powers or authorities described in the foregoing (1) or otherwise granted to the PARTNERS' REPRESENTATIVES by the PARTNERS. The powers of the PARTNERS' REPRESENTATIVES shall include the authority to do and perform, or cause to be done and performed, all such acts, deeds and things and to make, execute and deliver, or cause to be made, executed and delivered, all such agreements, undertakings, documents, instruments and certificates in the name and on behalf of TASTEMAKER U.S. and/or the PARTNERS in their respective capacity as general partners as the PARTNERS' REPRESENTATIVES may deem necessary or appropriate to effectuate or carry out fully the purpose or intent of any powers and authorities extended to the PARTNERS' REPRESENTATIVES hereunder. At all times while this AGREEMENT is in effect, any and all actions duly authorized, approved or taken by the PARTNERS' REPRESENTATIVES pursuant to this AGREEMENT shall be deemed to be the actions of the PARTNERS in their respective capacity as general partners. All powers and authorities of the PARTNERS' REPRESENTATIVES are additive and cumulative. The exercise, delegation or failure to exercise any power or authority shall not affect the right or ability of the PARTNERS' REPRESENTATIVES to exercise, delegate or fail to exercise the same or any other power or authority in a similar, dissimilar or other instance. B. Deadlock and Resolution Thereof. (i) Deadlock Definition . A deadlock shall be deemed to have occurred among the PARTNERS' REPRESENTATIVES only during the period prior to the FRIES WITHDRAWAL DATE and until the date that is two (2) days after a SALE OF FRIES and only if a PARTNERS' REPRESENTATIVE declares a deadlock after either (1) at two (2) successive duly called meetings (whether regular or special) of the PARTNERS' REPRESENTATIVES, with at least thirty (30) days between such meetings, the PARTNERS' REPRESENTATIVES have rejected or failed to pass a proposal for action by a vote in which the PARTNERS' REPRESENTATIVES of either of (i) FRIES or (ii) HCI and HFI voted for and the other PARTNERS' REPRESENTATIVES voted against such proposal; or (2) for two (2) successive duly called meetings of the PARTNERS' REPRESENTATIVES with at least thirty (30) days between such meetings all of the PARTNERS' REPRESENTATIVES (or alternates) of one PARTNER fail to attend such meetings. (ii) Deadlock Resolution. (a) Resolution Panel. Prior to the FRIES WITHDRAWAL DATE and until the date that is two (2) days after a SALE OF FRIES, this Section 6.5 B (ii) shall be effective and operative for all purposes and Section 6.5 B (iii) shall be of no force and effect. In the event of a dispute hereunder, including 33 any deadlock of the PARTNERS' REPRESENTATIVES, any PARTNER may give a NOTICE to the other PARTNERS requesting that the RESOLUTION PANEL (as defined below) try in good faith to negotiate a resolution of (but without any obligation to resolve) such dispute. Upon the receipt of such NOTICE by the other PARTNERS, the RESOLUTION PANEL shall promptly commence and diligently pursue such good faith negotiations for a period of not longer than sixty (60) days (unless the RESOLUTION PANEL agrees to a longer period). 1. The RESOLUTION PANEL shall consist of two members, of which one member shall be the Chief Executive Officer or Chief Operating Officer of HERCULES, and the other member shall be the Chief Executive Officer or Chief Operating Officer of MALLINCKRODT (the "RESOLUTION PANEL"). The RESOLUTION PANEL may only act by the affirmative vote of both its members. 2. Not later than fifteen (15) days after the said NOTICE, each PARTNER shall submit to the other PARTNERS a written statement of three to five single sided, single spaced, 8 1/2 by 11 pages, setting forth its description of the dispute and of the respective positions of the PARTNERS on such dispute; and its recommended resolution and the reasons why it feels its recommended resolution is fair and equitable in light of the letter and spirit of this AGREEMENT and the interests of the PARTNERS in the long term conduct of TASTEMAKER U.S. The submission and exchange of such written statements of the PARTNERS shall be simultaneous. 3. If the dispute continues unresolved for a period of fifteen (15) days (or such longer period as the RESOLUTION PANEL may otherwise agree upon) after the simultaneous exchange of such written statements, then the RESOLUTION PANEL shall promptly convene a hearing in Wilmington, Delaware, if FRIES sent the said NOTICE and in St. Louis, Missouri, if either HCI or HFI sent the said NOTICE; and at such hearing, each of FRIES and of HCI and HFI acting jointly shall have at least two (2) hours to present its or their case. 4. If the RESOLUTION PANEL renders an agreed resolution on the matter in dispute, then all PARTNERS shall be bound thereby, and if the RESOLUTION PANEL does not agree on a resolution, then the matter shall be submitted forthwith to binding arbitration under Section 6.5 B (ii) (b). (b) Binding Arbitration. 1. All disputes arising under or in connection with this AGREEMENT, including any deadlock of the PARTNERS' REPRESENTATIVES, shall first be subject to submission to the RESOLUTION PANEL pursuant to Section 6.5 B (ii) (a) and if the RESOLUTION PANEL does not agree on a resolution, then forthwith SUCH DISPUTE SHALL BE FINALLY SETTLED BY ARBITRATION IN ACCORDANCE WITH THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION, AND JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF, subject to (I) through (VIII) below. (I) Upon the request of any PARTNER, the Arbitration shall be conducted under the expedited rules of the American Arbitration Association for commercial arbitrations. 34 (II) The Arbitrators shall be three independent arbitrators, with one appointed by each of HFI and FRIES, and the two appointees selecting the third arbitrator in accordance with the said Rules. If either HFI or FRIES fails to select an arbitrator within ten (10) days after notice of such failure from the other or the American Arbitration Association, then the American Arbitration Association shall appoint such arbitrator, meeting the same qualification as that for the third arbitrator. The third arbitrator shall be someone who is then holding or within the immediately preceding three (3) years has held the position of Chief Executive Officer or Chief Financial Officer in a Fortune 500 company. If the two appointees are unable to agree on the third arbitrator, then the American Arbitration Association shall select the same using the foregoing qualification. (III) The arbitration hearing shall be held in New York, New York, at such date, time and place as established by the Arbitrators. (IV) The Arbitrators shall have power to rule on their own competency and on the validity of this AGREEMENT to make reference to arbitration. (V) Not later than forty-five (45) days after the conclusion of the arbitration hearing, but prior to the rendering of any arbitral award, each of FRIES and HCI and HFI acting jointly shall submit to the Arbitrators a written statement of its (i) understanding of and view of the PARTNERS' respective position on the disputes, and (ii) recommendation as to a fair and equitable resolution of the dispute and the reasons why it believes such resolution is fair and equitable. In reaching a decision on any dispute hereunder, the Arbitrators MUST fashion their arbitral award from the said recommendations submitted by the PARTNERS by accepting the recommendation of either the FRIES or HCI and HFI acting jointly in whole or by accepting some part of each recommendation. (VI) Each PARTNER shall take or cause to be taken all reasonable action to facilitate the conduct of the arbitration and the rendering of the arbitral award at the earliest possible date. (VII) The Arbitrators must give a written opinion setting forth the basis of their decision. (VIII) The cost of the Arbitration shall be borne and paid by the PARTNERS in proportion to their respective PARTNERSHIP INTERESTS. (iii) Dispute Resolution After FRIES WITHDRAWAL DATE or SALE OF FRIES. From and after the earlier of the FRIES WITHDRAWAL DATE or the date that is two (2) days after a SALE OF FRIES, the provisions of this Section 6.5 B (iii) shall become effective and operative for all purposes and Section 6.5 B (ii) shall be of no force and effect. Any and all disputes hereunder shall be submitted to and conclusively and exclusively resolved by the chief executive officer of HERCULES, and the decision of the chief executive officer of HERCULES shall be final and binding on all of the PARTNERS. C. Emergency Action. Notwithstanding anything to 35 the contrary in the powers and authorities granted by the PARTNERS to the CEO and the OFFICERS, in the event of an emergency involving the employees or facilities of TASTEMAKER U.S., the CEO or his designee OFFICERS with appropriate functional responsibility for the matter(s) in question may take, acting individually or jointly, all reasonable actions necessary to properly deal with such emergency. Immediately following the occurrence of any such emergency, the CEO or the OFFICERS so acting shall notify the PARTNERS' REPRESENTATIVES to detail the actions taken and the results thereof and to obtain further authority or ratification as may be reasonably required. 6.6 Action by Members Without a Meeting. Any action required or permitted to be taken at any meeting of the PARTNERS' REPRESENTATIVES may be taken without a meeting if the PARTNERS' REPRESENTATIVES necessary to take such action at a meeting of the PARTNERS' REPRESENTATIVES consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the PARTNERS' REPRESENTATIVES. 6.7 Regular Meetings. Regular meetings of the PARTNERS' REPRESENTATIVES shall be held not less than eight (8) times each year and at such dates, times and places as the PARTNERS' REPRESENTATIVES may determine from time to time. A NOTICE of the business to be considered at a meeting shall be given by the CHAIR (or, in his absence, the VICE-CHAIR) to the PARTNERS' REPRESENTATIVES at least seven (7) business days prior to the date of such meeting. 6.8 Special Meetings. Special meetings of the PARTNERS' REPRESENTATIVES may be held at any time or place whenever called by the CHAIR (or, in his absence, the VICE-CHAIR) of the PARTNERS' REPRESENTATIVES or any PARTNERS' REPRESENTATIVE. A NOTICE thereof shall be given by such CHAIR or VICE-CHAIR to the PARTNERS' REPRESENTATIVES at least seven (7) business days prior to the date of such special meeting. The NOTICE of the special meeting shall set forth the matters to be considered, and at such special meeting, only those matters can be considered; unless all of the PARTNERS' REPRESENTATIVES agree otherwise. 6.9 Waiver of Notice of Meetings. Whenever notice is required to be given by law or under any provisions of this Article, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. The matters to be considered, and the purpose of regular and special meetings of the PARTNERS' REPRESENTATIVES shall be indicated in any written waiver of notice to the extent such items must be specified in the notice. 6.10 Participation in Meetings by Conference Telephone 36 Permitted. The PARTNERS' REPRESENTATIVES may participate in a meeting of the PARTNERS' REPRESENTATIVES by means of conference telephone or similar communications equipment so long as all persons participating in the meeting can hear each other; and participation in a meeting pursuant to this Section shall constitute presence in person at such meeting. 6.11 Interested Members. A. The PARTNERS understand that each PARTNERS' REPRESENTATIVE is appointed by and is a representative of the PARTNER(s) appointing such member and may be an officer or director of such appointing PARTNER(s) or its AFFILIATES or SUBSIDIARIES. In serving as the PARTNERS' REPRESENTATIVES, such PARTNERS' REPRESENTATIVE may consider and represent the interests of such appointing PARTNER(s) and its AFFILIATES and SUBSIDIARIES, and no PARTNER or PARTNERS' REPRESENTATIVE shall have individual or personal liability to the other PARTNER(s) or TASTEMAKER U.S. because such member considers or represents such interests. B. No contract or transaction between TASTEMAKER U.S. and one or more PARTNERS' REPRESENTATIVES or members of TASTEMAKER U.S." management, or between the foregoing and any corporation, partnership, association or other organization in which one or more of such members serve in a similar capacity or have a financial interest, or between TASTEMAKER U.S. and any one or more of the PARTNERS, or any corporation, partnership, association or other organization in which such appointing PARTNER or its AFFILIATES or SUBSIDIARIES has a financial interest shall be void or voidable because of the positions or financial interests of any such PARTNERS' REPRESENTATIVE, or because of any such PARTNERS' REPRESENTATIVE is present at or participates in the meeting of the PARTNERS' REPRESENTATIVES, or because any such representative"s vote is counted for such purpose. Common or interested representatives may be counted in determining the presence of a quorum at a meeting of the PARTNERS' REPRESENTATIVES which authorizes any contract or any transaction. C. HCI, HFI and FRIES each shall be solely liable for the actions of the PARTNERS' REPRESENTATIVES appointed by such PARTNER. No PARTNER shall bring an action against any of the PARTNERS' REPRESENTATIVES for actions taken as a member or related to his position as a member, except for actions based on a knowing criminal act. D. In each and all instances where a matter comes before the PARTNERS' REPRESENTATIVES and a representative realizes or reasonably should realize that interests of TASTEMAKER U.S. are in conflict with the interest of the PARTNER(s) appointing such representative or of such PARTNER"s AFFILIATES and SUBSIDIARIES, then prior to acting on such matter, such representative shall inform each of the PARTNERS' REPRESENTATIVES of the existence (but not the details) of such conflict and indicate that in acting upon such matter, such representative will seek to protect, foster or further the interest of such PARTNER, AFFILIATES or SUBSIDIARIES. Upon such disclosure, the PARTNERS' REPRESENTATIVES of the other PARTNER(s) 37 shall have the right to have such matter tabled until the next meeting of the PARTNERS' REPRESENTATIVES, and the PARTNER making such disclosure shall vote in favor of such tabling of the matter. A PARTNERS' REPRESENTATIVE shall have no personal liability for a failure to make such disclosure, except for a knowing criminal act; however, the PARTNER appointing such representative shall be fully responsible and liable for such failure. No claims brought for breach of this Section shall be subject to indemnification by TASTEMAKER U.S. in any respect whether by insurance or otherwise. 6.12 Indemnification. A. TASTEMAKER U.S. shall, and is hereby obligated to, indemnify each PARTNERS' REPRESENTATIVE and each of the OFFICERS (such PARTNERS' REPRESENTATIVES and officers being individually and collectively, as the case may be, the "Indemnitees") to the full extent then permitted by governing law against expenses (including attorneys" fees), judgments, fines, and amounts paid in settlement, in each and every situation where TASTEMAKER U.S. is obligated or permitted to make such indemnification under such law; provided, however, that under all circumstance such indemnification shall not apply to any situation involving or arising from a failure to make a disclosure under or actions in breach of Section 6.11 hereof. B. The indemnification in the foregoing Paragraph A. shall inure to the benefit of the Indemnitees whether or not the claim asserted is based on matters which antedate the date of this AGREEMENT. Such right shall continue as to persons who have ceased to be such a member or officer and shall inure to the benefit of the heirs and personal representatives of such person. Such indemnification shall be primary to and called upon prior to any other indemnification which the Indemnitees may have or be entitled. 6.13 Advance of Expenses. Expenses incurred in defending any proceeding (other than a proceeding involving or arising from a failure to make a disclosure under or actions in breach of Section 6.11 hereof) shall be advanced by TASTEMAKER U.S. before the final disposition of the proceeding on receipt of an undertaking by or on behalf of the affected Indemnitees to repay the amount of the advance if it shall ultimately be determined that the Indemnitees are not entitled to be indemnified as authorized in Section 6.12 hereof. 6.14 Insurance. Initially, TASTEMAKER U.S. shall procure, purchase and maintain insurance (e.g. directors and officers liability) on behalf of the Indemnitees against any liability that may be asserted against or incurred by the Indemnitees in their respective capacity as such a member or officer or of the governing body of another enterprise, if serving at the request of TASTEMAKER U.S., whether or not TASTEMAKER U.S. would have the power to indemnify the Indemnitees against that liability under the provisions of Section 6.12 hereof. Such insurance shall be primary to and called upon prior to any other insurance which the Indemnitees may have or be entitled. 38 6.15 The CHAIR and the VICE-CHAIR. A. Prior To FRIES WITHDRAWAL DATE And SALE OF FRIES. Prior to the FRIES WITHDRAWAL DATE and the date that is two (2) days after a SALE OF FRIES, this Section 6.15 A. shall be operative and effective for all purposes and Section 6.15 B. shall be of no force and effect. As of the date hereof, the chairperson of the PARTNERS' REPRESENTATIVES (herein the "CHAIR") is Mack G. Nichols; who was appointed from among the PARTNERS' REPRESENTATIVES appointed by FRIES, and the vice-chairperson of the PARTNERS' REPRESENTATIVES (herein the "VICE-CHAIR") is R. Keith Elliott; who was appointed from among the PARTNERS' REPRESENTATIVES appointed by HFI. Upon the expiration of such current terms, the CHAIR shall be appointed from among PARTNERS' REPRESENTATIVES appointed by HCI and HFI acting jointly, and the VICE-CHAIR shall be appointed from among PARTNERS' REPRESENTATIVES appointed by FRIES and the term of such CHAIR and VICE-CHAIR each shall be four (4) years. Thereafter, this alternating pattern shall continue whereby the CHAIR and the VICE-CHAIR shall be appointed by the PARTNERS in an alternating fashion for four-year terms wherein either FRIES or HCI and HFI acting jointly ("A") selects the CHAIR and the other ("B") selects the VICE-CHAIR, and then for the next term, "A" selects the VICE-CHAIR and "B" selects the CHAIR. Notwithstanding anything to the contrary, the same PARTNER may not appoint the CHAIR in any two consecutive terms. B. After A SALE Of FRIES Or FRIES WITHDRAWAL DATE. From and after the earlier of the FRIES WITHDRAWAL DATE or the date that is two (2) days after a SALE OF FRIES, this Section 6.15 B. shall become effective and operative for all purposes and Section 6.15 A. shall be of no force and effect. The chairperson of the PARTNERS' REPRESENTATIVES (herein the "CHAIR") and the vice-chairperson of the PARTNERS' REPRESENTATIVES (hereinafter the "VICE-CHAIR") shall be appointed from among the PARTNERS' REPRESENTATIVES appointed by HCI and/or HFI. The term of the initial CHAIR and VICE-CHAIR each shall be four (4) years. After such initial four-year term, the respective term(s) of the CHAIR and the VICE-CHAIR shall be as determined by the PARTNERS' REPRESENTATIVES from time to time. If at the time this Section 6.15 B. becomes operative and effective, the incumbent CHAIR and/or VICE-CHAIR is a PARTNERS' REPRESENTATIVE appointed by FRIES then such incumbent(s) shall immediately resign or be expelled and shall be replaced in such office(s) by PARTNERS' REPRESENTATIVE(S) appointed by HCI and/or HFI. C. The CHAIR shall have such duties, responsibilities, powers and authorities as may, from time to time, be assigned to him by the PARTNERS' REPRESENTATIVES. All powers and authorities granted to the CHAIR are cumulative and may be delegated to other member(s) of the PARTNERS' REPRESENTATIVES as the CHAIR deems appropriate, and even if delegated, the CHAIR may still exercise such powers and 39 authorities. D. The VICE-CHAIR shall have such duties, responsibilities, powers and authorities as may, from time to time, be assigned to him by the PARTNERS' REPRESENTATIVES, as may be delegated or assigned to him by the CHAIR, or as may be provided by law. Except as the PARTNERS' REPRESENTATIVES or the CHAIR may from time to time determine otherwise, the VICE-CHAIR, in the absence of the CHAIR, shall exercise the authorities and powers and carry out the duties and responsibilities of the CHAIR until the return of the CHAIR. 6.16 Governing Documents. TASTEMAKER U.S. shall adopt such documents, resolutions, etc. that are consistent with the provisions of this AGREEMENT. Except to the extent prohibited by law, in the event of a conflict between such documents and this AGREEMENT, this AGREEMENT shall control. 40 7 ARTICLE VII. PARTNERSHIP MANAGEMENT GROUP 7.1 THE OFFICERS. A. The PARTNERS' REPRESENTATIVES, from time to time, shall appoint and/or terminate the OFFICERS of TASTEMAKER U.S. (individually and collectively herein the "OFFICERS") and determine the duties and powers of the OFFICERS in accordance with this Article. The OFFICERS as of the date hereof shall continue to serve in their present capacities. The OFFICERS (including the OFFICERS as of the date hereof) shall serve at the pleasure of the PARTNERS' REPRESENTATIVES and shall be the senior management of TASTEMAKER U.S. The OFFICERS consist of the following positions: (1) President, who shall be the Chief Executive Officer (the "CEO"); (2) Vice President, Finance and Control, who shall be the Chief Financial Officer (the "CFO")" (3) Vice President, International; and (4) Vice President, U.S. and Canada; and (5) Vice President, Secretary and General Counsel. B. The CEO and the CFO. The CEO and CFO as of the date hereof were appointed pursuant to the terms of the OLD PARTNERSHIP AGREEMENT and they shall continue to serve as CEO and CFO respectively until they retire, resign or are removed from such offices. Any successor or future CEO or CFO shall be appointed from time to time, at such times and from such persons as the PARTNERS' REPRESENTATIVES may desire or determine. C. The CEO has been and shall be given by the PARTNERS' REPRESENTATIVES such authority as the PARTNERS' REPRESENTATIVES deem adequate for the CEO to manage the day-to-day affairs of TASTEMAKER U.S. in the ordinary course of business. Except as the PARTNERS' REPRESENTATIVES may determine otherwise, the powers and authorities of the CEO shall be cumulative and may be delegated by the CEO as he reasonably deems appropriate, and even if delegated, the CEO may still exercise such delegated powers and authorities. It is expected that the CEO will delegate appropriate and adequate powers and authorities to the other OFFICERS to enable them to properly carry out their duties and responsibilities. At all times, the powers and authorities of the CEO and other OFFICERS shall be subject and subordinate to this AGREEMENT and the duties, powers and authorities of the PARTNERS' REPRESENTATIVES. The CEO shall report to the PARTNERS' REPRESENTATIVES and, except as the PARTNERS' REPRESENTATIVES may determine otherwise from time to time, the other OFFICERS shall report to the CEO. In the periods between the meetings of the PARTNERS' REPRESENTATIVES, the CEO shall report to and interface jointly with the CHAIR and the VICE-CHAIR. 7.2 Delegations of Authorities. The PARTNERS' REPRESENTATIVES have adopted and shall adopt from time to time delegation(s) of authorities to be granted by the PARTNERS' REPRESENTATIVES to the CEO and have approved and shall approve the delegations of authority to be granted by the CEO to the other OFFICERS. The delegation of authorities approved as of the 41 date hereof shall continue in force until otherwise modified pursuant to the terms of this Section 7.2. Changes in the authorities of the CEO may be made from time to time by the PARTNERS' REPRESENTATIVES. Changes in the authorities of the other OFFICERS may be made from time to time by the PARTNERS' REPRESENTATIVES or by the CEO after prior consultation with the CHAIR and the VICE-CHAIR. In the event of a conflict between the directions, instructions, powers, authorities, etc. given or granted by the PARTNERS' REPRESENTATIVES and the CEO, those of the PARTNERS' REPRESENTATIVES shall control. The PARTNERS REPRESENTATIVES shall cause the preparation and adoption of such corporate or PARTNERSHIP resolutions, and taking of such other action as the PARTNERS' REPRESENTATIVES deem necessary, appropriate or convenient to implement the respective delegations of authorities as are granted from time to time to the CEO and/or the other OFFICERS. 7.3 TASTEMAKER U.S. Staff. The CEO shall appoint or, through delegation to other OFFICERS, cause to be appointed an operating staff sufficient for the conduct of the day-to-day affairs of TASTEMAKER U.S. and, from time to time, shall delegate or cause or approve the delegation to such staff of such powers and authorities as the CEO reasonably deems appropriate and adequate to enable such staff to properly carry out their respective duties and responsibilities; provided, however, that in no event may the CEO grant or delegate or permit the granting or delegation of more or different powers or authorities than those granted or delegated to the CEO by the PARTNERS' REPRESENTATIVES. 7.4 Forecasts, Budgets, and Plans. The CEO shall be responsible for the preparation of forecasts and annual budgets, business plans and strategic plans (e.g., long-range plans) as the PARTNERS' REPRESENTATIVES may determine from time to time and shall submit such budgets and plans to the PARTNERS' REPRESENTATIVES for its approval. The form, level of detail, timing of submission and other details of such forecasts, budgets, plans and submission shall be as determined from time to time by the PARTNERS' REPRESENTATIVES. 7.5 Effect of Approval. Except as otherwise agreed or directed by the PARTNERS' REPRESENTATIVES, when the annual business plan(s) and annual capital budget(s) have been approved by the PARTNERS' REPRESENTATIVES, each and all the individual or line items therein shall still be subject to the delegations of authority from the PARTNERS' REPRESENTATIVES to the CEO. 42 8 ARTICLE VIII. TRANSFER OF PARTNERSHIP INTEREST; FRIES WITHDRAWAL; SALE OF FRIES 8.1 Transfer of PARTNERSHIP INTEREST. A. Subject to Paragraphs B and C of this Section and except in accordance with this AGREEMENT or with the prior written consent of the other PARTNERS in no event shall a PARTNER directly or indirectly undertake to, attempt or in fact (1) sell, assign, transfer or otherwise dispose of all or any part of its PARTNERSHIP INTEREST or (2) terminate or dissolve TASTEMAKER U.S. B. Subject to Paragraph C of this Section and notwithstanding Paragraph A of this Section , a PARTNER may transfer all or part of its PARTNERSHIP INTEREST to a person which owns one hundred percent of such PARTNER or which is owned one hundred percent by such PARTNER, at any time without the consent of the other PARTNERS provided that (i) such PARTNER shall give written notice of such transfer to the other PARTNERS prior to or within a reasonable period (but not more than thirty days) after the effective date of such transfer, and (ii) in case of a transfer of partial interest, then effective as of the date of such transfer, such PARTNER and its transferee shall be deemed to and must act jointly on all matters of governance of TASTEMAKER U.S. including matters referred to in or covered by Article VI hereof. C. Notwithstanding anything to the contrary including Paragraphs A and B of this Section , a PARTNER may not directly or indirectly sell, assign, transfer or otherwise dispose of all or, within any twelve month period, any part in excess of ten percent (10%) of its PARTNERSHIP INTEREST unless such sale, assignment, transfer or disposition will not cause TASTEMAKER U.S. to terminate as a partnership for U.S. income tax purposes pursuant to applicable income tax laws including Section 708 of the INTERNAL REVENUE CODE, and the transferor PARTNER shall furnish to TASTEMAKER U.S. an opinion of competent tax counsel (which counsel and opinion shall be satisfactory to TASTEMAKER U.S.) to such effect. A withdrawal of FRIES or of any AFFILIATE of FRIES in accordance with the provisions of Section 8.3 through 8.15 shall not constitute a sale, assignment, transfer or disposition of the PARTNERSHIP INTEREST of FRIES for purposes of this Paragraph C. If a PARTNER purports to make or makes a sale, assignment, transfer or disposal in violation of this Paragraph C and such action of such PARTNER causes a termination under the said income tax laws, such PARTNER shall defend, protect, indemnify and save harmless the other PARTNERS for any and all CLAIMS suffered by such other PARTNERS as a result of or relating to such termination including all income tax liabilities incurred by such other PARTNERS as a result of such termination. 8.2 Withdrawal from TASTEMAKER U.S. Except for the withdrawal of FRIES in accordance with the provisions of Sections 8.3 through 8.11 or with the prior written consent of the other PARTNERS, in no event shall any PARTNER directly or indirectly undertake to, attempt or in fact withdraw from 43 TASTEMAKER U.S. 8.3 Right to Withdraw. At any time prior to the earlier of (i) August 31, 1997, or (ii) the date that is thirty (30) days after the date of a SALE OF FRIES, FRIES and any AFFILIATE of FRIES to which FRIES assigned its PARTNERSHIP INTEREST in accordance with Sections 8.1 and 8.15 hereof, shall have and may exercise a right to withdraw from TASTEMAKER U.S. and have its entire PARTNERSHIP INTEREST redeemed as provided in Section 8.6 below; provided that such withdrawal and redemption are collective actions and one may not be taken without the other; such withdrawal and redemption are referred to herein as a "FRIES WITHDRAWAL." 8.4 Notice of FRIES WITHDRAWAL. The FRIES WITHDRAWAL right granted under Section 8.3 may be exercised only upon the giving by FRIES of a NOTICE thereof to the other PARTNERS. Such NOTICE must be received by such other PARTNERS on or before the earlier of (i) August 31, 1997 or (ii) the date that is thirty (30) days after the date of a SALE OF FRIES. Such NOTICE shall be delivered in accordance with Section 12.2 hereof. Any NOTICE of FRIES WITHDRAWAL not properly or timely given may nevertheless be accepted at the sole and absolute discretion of the intended recipient PARTNERS. 8.5 Date of FRIES WITHDRAWAL. A FRIES WITHDRAWAL shall be effectuated at a closing on the date NOTICE is given by FRIES pursuant to Section 8.4 above; provided that NOTICE is given within two (2) days of a SALE of FRIES, and in all other events as soon as practicable after the giving of such NOTICE (such closing is referred to herein as the "WITHDRAWAL CLOSING"). Such closing date is referred to herein as the "FRIES WITHDRAWAL DATE." The FRIES WITHDRAWAL shall be effective on the FRIES WITHDRAWAL DATE subject to and upon completion of the WITHDRAWAL CLOSING. 8.6 Redemption and Assumption of FRIES" Interest. If FRIES properly and timely exercises its right to withdraw from TASTEMAKER U.S., then at the WITHDRAWAL CLOSING and contemporaneous with and as part of such FRIES WITHDRAWAL, (i) TASTEMAKER U.S. shall transfer, assign and convey or cause to be transferred, assigned and conveyed to FRIES all title, rights and interest of TASTEMAKER U.S. of, in, under and to the TASTEMAKER U.S. OPERATING ASSETS and the full benefit of any funds set aside in trust or otherwise in connection with any employee benefit plan (including, but not limited to, pension plans), all as existing on the FRIES WITHDRAWAL DATE; (ii) FRIES shall transfer, assign and convey to TASTEMAKER U.S. all title, right and interests of FRIES of, in and to FRIES" entire PARTNERSHIP INTEREST; and (iii) FRIES shall assume all TASTEMAKER U.S. LIABILITIES existing on the FRIES WITHDRAWAL DATE. TASTEMAKER U.S. and FRIES shall cooperate to effect the orderly transfer from TASTEMAKER U.S. to FRIES of (i) all employees, (ii) all collective bargaining agreements, employment agreements and employee benefit plans or arrangements (collectively, the 44 "Employee Benefit Plans") and (iii) any assets held in trust, segregated, set aside or otherwise available to pay or satisfy benefits under such Employee Benefit Plans. Anything in this PARTNERSHIP AGREEMENT to the contrary notwithstanding, this Section shall not constitute an agreement to transfer, assign or convey any TASTEMAKER U.S. OPERATING ASSET or any claim or right or any benefit arising thereunder or resulting therefrom, if an attempted transfer, assignment or conveyance thereof, without the consent of a third party thereto, would constitute a breach or other contravention thereof or in any way adversely affect the rights of FRIES or TASTEMAKER U.S. thereunder. FRIES and TASTEMAKER U.S. will use their best efforts (but without any payment of money by FRIES or TASTEMAKER U.S.) to obtain the consent of the other parties to any such TASTEMAKER U.S. OPERATING ASSET or any claim or right or any benefit arising thereunder for the transfer, assignment and conveyance thereof to FRIES as FRIES may request. If such consent is not obtained, or if an attempted transfer, assignment or conveyance thereof would be ineffective or would adversely affect the rights of TASTEMAKER U.S. thereunder so that FRIES would not in fact receive all such rights, TASTEMAKER U.S. and FRIES will cooperate in a mutually agreeable arrangement under which FRIES would obtain the benefits and assume the obligations thereunder in accordance with this Section 8.6, including sub-contracting, sub-licensing, or sub-leasing to FRIES, or under which TASTEMAKER U.S. would enforce for the benefit of FRIES, with FRIES assuming TASTEMAKER U.S.'s obligations, any and all rights of FRIES against a third party thereto. TASTEMAKER U.S. will promptly pay to FRIES when received all monies received by TASTEMAKER U.S. under any TASTEMAKER U.S. OPERATING ASSET or any claim or right or any benefit arising thereunder. Except as provided otherwise in this Agreement or in any agreement among the PARTNERS or any of their AFFILIATES, any expenses, fees and other costs associated with the transferral, assignment and conveyance to FRIES of all title, rights and interest of TASTEMAKER U.S. of, in and under the TASTEMAKER U.S. OPERATING ASSETS and the assumption by FRIES of all TASTEMAKER LIABILITIES pursuant to this Section 8.6 shall be borne at fifty percent (50%) by FRIES and at fifty percent (50%) by HCI and HFI. In connection with the FRIES WITHDRAWAL, TASTEMAKER U.S. shall represent and warrant to FRIES (and to an AFFILIATE of FRIES, as the case may be) as follows: TASTEMAKER U.S. has all requisite power and authority to enter into the FRIES WITHDRAWAL DOCUMENTS and to consummate the transactions contemplated thereby. The execution, delivery and performance of the FRIES WITHDRAWAL DOCUMENTS and the consummation by TASTEMAKER U.S. of the transactions contemplated thereby have been duly authorized by all necessary partnership action on the part of FRIES and, as required, HFI and HCI. The FRIES WITHDRAWAL DOCUMENTS have been duly executed and delivered by TASTEMAKER U.S. and (assuming the due authorization, execution and delivery thereof by the other parties thereto) constitute the valid and binding obligations 45 of TASTEMAKER U.S., enforceable against TASTEMAKER U.S. in accordance with their respective terms. The transfer by TASTEMAKER U.S. to FRIES and any one or more of the FRIES AFFILIATES of the TASTEMAKER U.S. OPERATING ASSETS and TASTEMAKER U.S. LIABILITIES shall be without representation or warranty by TASTEMAKER U.S. of any kind or nature, all of which are hereby expressly disclaimed, and shall be subject to all liens, encumbrances and claims of whatever nature then existing or thereafter arising, but without prejudice to any representation or warranty made by the PARTNERS and their AFFILIATES with regard hereto. In connection with the FRIES WITHDRAWAL, FRIES and any one or more AFFILIATE of FRIES, as the case may be, shall represent and warrant to TASTEMAKER U.S. as follows (it being agreed that any such representation or warranty as to FRIES shall be deemed true and correct if any inaccuracy is due to any acts or omissions by the PARTNERS and their respective AFFILIATES, including, prior to the SALE OF FRIES, without limitation, FRIES, and any events or occurrences prior to the SALE OF FRIES): A. Organization, Standing and Power. FRIES and each AFFILIATE of FRIES is a corporation duly organized and validly existing under the laws of the State of Delaware and has the requisite power and authority to carry on its business as now being conducted. B. FRIES Interest in TASTEMAKER U.S. Immediately prior to the consummation of the FRIES WITHDRAWAL, FRIES, together with any one or more AFFILIATES of FRIES, owns a fifty percent (50%) undivided partnership interest in TASTEMAKER U.S. (the "FRIES TASTEMAKER PARTNERSHIP INTEREST"), free and clear of all security interests, liens, claims, pledges, voting rights, charges and encumbrances of any nature whatsoever except for those provided by applicable partnership law in the State of Delaware. There are no options, warrants, calls, rights or agreements to which FRIES or any one or more AFFILIATES of FRIES is a party obligating FRIES or any one or more AFFILIATES of FRIES to issue, deliver or sell, or cause to be issued, delivered or sold, any partnership interests in TASTEMAKER U.S. or obligating FRIES or any one or more AFFILIATES of FRIES to grant, extend or enter into any such option, warrant or agreement. C. Authority. FRIES, together with any one or more AFFILIATES of FRIES, has all requisite power and authority to enter into the FRIES WITHDRAWAL DOCUMENTS and to consummate the transactions contemplated thereby. The execution, delivery and performance of this AGREEMENT and the FRIES WITHDRAWAL DOCUMENTS and the consummation by FRIES or any one or more AFFILIATES of FRIES of the transactions contemplated thereby have been duly authorized by all necessary corporate action on the part of FRIES, together with any such AFFILIATES, and, as required, the owner(s) of FRIES. The FRIES WITHDRAWAL DOCUMENTS have been duly executed and delivered by FRIES or any one or more AFFILIATES of FRIES and (assuming the due authorization, 46 execution and delivery thereof by the other parties thereto) constitute the valid and binding obligations of FRIES or any one or more AFFILIATES of FRIES, enforceable against FRIES or any one or more AFFILIATES of FRIES in accordance with their respective terms. 8.7 Deliveries by FRIES at the WITHDRAWAL CLOSING. At the WITHDRAWAL CLOSING, FRIES shall deliver (or cause to be delivered) to TASTEMAKER U.S. the following, in form and substance reasonably satisfactory to TASTEMAKER U.S.: A. A duly executed instrument in form and substance consistent with Section 8.6 and sufficient to transfer to TASTEMAKER U.S. FRIES," together with any one or more AFFILIATES of FRIES; entire PARTNERSHIP INTEREST free and clear of all encumbrances of every kind and nature except for those provided by applicable partnership law in the State of Delaware, provided for or pursuant to this AGREEMENT or provided specifically in a written agreement signed by all the PARTNERS. B. A duly executed instrument in form and substance sufficient for and to effectuate the assumption by FRIES of the TASTEMAKER U.S. LIABILITIES. C. Evidence that (i) TASTEMAKER U.S. and all of the HERCULES INDEMNITEES have been fully and finally released from all CLAIMS with respect to borrowed monies, including those related to the TASTEMAKER DEBT and those related to the monies borrowed or otherwise obtained and used to acquire INVESTMENT ASSETS; and (ii) the FINANCIAL ASSETS have been fully and finally released from all liens and encumbrances securing any TASTEMAKER U.S. LIABILITIES. D. Duly executed instrument(s) pursuant to which FRIES agrees, subject to any rights of set-off of FRIES or any one AFFILIATE of FRIES against TASTEMAKER U.S. and its AFFILIATES, to protect, defend, indemnify and hold harmless TASTEMAKER U.S. and all of the HERCULES INDEMNITEES against all CLAIMS related to each of (i) the ownership, use, operation, possession, or sale of the TASTEMAKER U.S. OPERATING ASSETS or (ii) the TASTEMAKER U.S. LIABILITIES, in each case regardless of when such CLAIMS arose prior to the WITHDRAWAL CLOSING. E. Evidence that all consents, approvals and notices required in connection with the FRIES WITHDRAWAL by any applicable corporate or governing body (including the Board of Directors and shareholders of FRIES) or GOVERNMENTAL AUTHORITY have been obtained and are in full force and effect, where 47 the failure to obtain such consent or approval or give such notice would result in or could be reasonably expected to result in a material adverse effect upon the ability of FRIES or of any one or more AFFILIATE of FRIES to execute, deliver or perform its part of this AGREEMENT and the transactions contemplated herein or hereby. F. A certificate signed by a duly authorized officer of FRIES or of any one or more AFFILIATE OF FRIES, as the case may be, certifying that the representations and warranties of FRIES and of any AFFILIATE of FRIES made in connection with the FRIES WITHDRAWAL are true and correct in all material respects and that FRIES and any AFFILIATE of FRIES, as the case may be, has performed in all material respects all obligations and agreements and complied in all material respects with all conditions to be performed or complied with by it. G. A cash payment to TASTEMAKER U.S. in the amount necessary to ensure that the cash included in the FINANCIAL ASSETS equals the excess of the sum of HFI's and HCI's capital account (as adjusted under Section 1.6.C. hereof as a result of the FRIES WITHDRAWAL) balances over the Investment Asset Value. 8.8 Deliveries by TASTEMAKER U.S. at the WITHDRAWAL CLOSING. At the WITHDRAWAL CLOSING, TASTEMAKER U.S. shall deliver to FRIES the following, in form and substance reasonably satisfactory to FRIES: A. Such deeds, bills of sale, endorsements, assignments and other instruments of sale, assignment, conveyance and transfer as shall be in form and substance consistent with Section 8.6 and sufficient to convey, transfer and assign to FRIES all of TASTEMAKER U.S. title, rights and interest of, in, under and to the TASTEMAKER U.S. OPERATING ASSETS. B. Such items (keys, passwords, etc.) as shall be in form and substance sufficient to convey, transfer and assign to FRIES physical possession or the right to obtain (e.g., warehouse receipts) physical possession of the TASTEMAKER U.S. OPERATING ASSETS. C. Evidence that all consents, approvals and notices required in connection with the FRIES WITHDRAWAL by any applicable corporate or governing body (including the respective Boards of Directors and shareholders of HERCULES, HCI and HFI), where the failure to obtain such consent or approval or give such notice would 48 result in or could be reasonably expected to result in a material adverse effect upon the ability of TASTEMAKER U.S., HFI or HCI to execute, deliver or perform its part of this AGREEMENT and the transactions contemplated herein or hereby. D. Duly executed instrument(s) in the form of Appendix C hereto pursuant to which (i) HERCULES guaranties to FRIES the full and timely performance by HCI and HFI of all terms, conditions, liabilities and obligations applicable to or to be performed by HCI and/or HFI, as the case may be, under this AGREEMENT and the FRIES WITHDRAWAL DOCUMENTS, and (ii) HERCULES agrees to refrain from competing with the TASTEMAKER BUSINESS for a period of three (3) years following the FRIES WITHDRAWAL DATE. E. Duly executed instruments in form and substance satisfactory to FRIES pursuant to which TASTEMAKER U.S. and its AFFILIATES fully and finally release FRIES from any liability or obligation with respect to this PARTNERSHIP AGREEMENT other than with regard to such liabilities which are related to the TASTEMAKER U.S. OPERATING ASSETS or the TASTEMAKER U.S. LIABILITIES. 8.9 Deliveries by HFI and HCI at the WITHDRAWAL CLOSING. At the WITHDRAWAL CLOSING, HFI and HCI shall, and hereby jointly and severally agree to, contribute to the capital of TASTEMAKER U.S. an amount of cash (which cash shall be included in the TASTEMAKER U.S. OPERATING ASSETS transferred to FRIES but shall not be taken into account in determining the AGREED VALUE of the TASTEMAKER U.S. OPERATING ASSETS) equal to the HERCULES CONTRIBUTION. 8.10 Satisfaction of Delivery Requirements. At the date of receipt of timely NOTICE of FRIES WITHDRAWAL, each of FRIES and TASTEMAKER U.S. shall use its best efforts (individually or jointly, as the case may be) to cause all delivery requirements called for under or pursuant to Section 8.7 and 8.8 hereof to be satisfied and fulfilled, to the extent the satisfaction or fulfillment thereof is within its reasonable control. If any event should occur, either within or without the reasonable control of FRIES or TASTEMAKER U.S., which would prevent fulfillment of such delivery requirements, both parties shall use their respective best efforts to cure or remove the effect of the event as expeditiously as possible; provided, however, that (without limitation), the foregoing shall not be construed as requiring FRIES or TASTEMAKER U.S. to institute litigation or expend any sums in the defense or settlement of litigation in order to cure or remove the effect of any such event. 8.11 Approvals. Promptly following the receipt by the other PARTNERS of timely NOTICE of the FRIES WITHDRAWAL, each of 49 FRIES and TASTEMAKER U.S. shall take, prepare, make and/or file, or cause to be taken, prepared, made and/or filed, with such appropriate GOVERNMENTAL AUTHORITY and other third party, all actions, filings and requests for approvals, consents, permits, authorizations or waivers that are required from such GOVERNMENTAL AUTHORITY or third party for the effectuation of the FRIES WITHDRAWAL and shall diligently and expeditiously prosecute, and shall cooperate fully with each other in the prosecution of, such actions, filings and requests and all proceedings necessary to secure such approvals, consents, permits, authorizations and waivers. 8.12 Further Assurances. After the WITHDRAWAL CLOSING, each of FRIES and TASTEMAKER U.S. shall, from time to time upon any request by the other, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, all such further assignments, documents, instruments, transfers, conveyances, discharges, releases, assurances and consents, and shall take or cause to be taken such further actions, as such other may reasonably request to effect the FRIES WITHDRAWAL and the transactions (including the redemption and assumption referred to in Section 8.6 hereof) contemplated in connection therewith. Each of the PARTNERS agrees to cooperate with any acquiror of FRIES with regard to the change of the name of FRIES at the WITHDRAWAL CLOSING to a name which includes the word "Tastemaker"; and at the WITHDRAWAL CLOSING, each of HFI and HCI agrees to cause the name of TASTEMAKER U.S. to be changed from "Tastemaker" to "Hercules Financial Partnership." Each PARTNER agrees to pay, and indemnify and hold harmless the other PARTNERS from and against, the fee and expenses of any broker, investment banker or other person that is entitled to any broker"s, finder"s or other similar fee or commission based on agreements or arrangements made by such PARTNER in connection with the execution and delivery of, or the consummation of the transactions contemplated by the FRIES WITHDRAWAL DOCUMENTS. 8.13 SALE OF FRIES. In the event that prior to the FRIES WITHDRAWAL DATE a SALE OF FRIES occurs, then two (2) days after such SALE OF FRIES the provisions of Section 6.2 A., 6.5 B. (ii) and 6.15 A. hereof shall cease to be effective and operative and shall be replaced for all purposes by Sections 6.2 B., 6.5 B. (iii), and 6.15 B., respectively. From and after the FRIES WITHDRAWAL DATE the provisions of Sections 6.2 C., 6.5 B. (iii) and 6.15 B. shall be effective and operative and Sections 6.2 A., 6.2 B., 6.5 B. (ii) and 6.15 A. shall be of no force and effect. 8.14 Representations And Covenants. FRIES shall not have any rights or obligations under this AGREEMENT after the WITHDRAWAL CLOSING. The PARTNERS acknowledge and agree that the representations, warranties and agreements contained in Section 8.6, the covenants contained in Section 8.12, the terms and provisions of Sections 4.5 and 4.6 and the corresponding Definitions shall be incorporated into the FRIES WITHDRAWAL DOCUMENTS, and that the FRIES WITHDRAWAL DOCUMENTS shall provide for such payments to or by TASTEMAKER U.S., FRIES, HFI and HCI as 50 may be necessary to take into consideration any change in a PARTNER'S CAPITAL ACCOUNT resulting from any difference between the ESTIMATED TASTEMAKER U.S. VALUE and the TASTEMAKER U.S. VALUE as finally determined. The FRIES WITHDRAWAL DOCUMENTS shall also include provisions for negotiated resolutions of disputes. 8.15 Assignment of Withdrawal Right. FRIES shall have the right to assign a portion of its rights under Sections 8.3 through 8.14, including the right to receive specified assets, to any one or more AFFILIATES of FRIES, subject to Section 8.1. In the event of such an assignment, the withdrawal rights set forth in Section 8.3 through 8.14 are exercisable only in their entirety by FRIES and all such assignees. 51 9 ARTICLE IX. TERMINATION AND DISSOLUTION 9.1 Termination. Except as otherwise provided or permitted in this AGREEMENT or the Delaware Uniform Partnership Law, TASTEMAKER U.S. shall remain in full force and effect until December 31, 2031, and if the term of this AGREEMENT is extended by the PARTNERS, then TASTEMAKER U.S. shall continue for the period of such extension. Upon termination and dissolution of TASTEMAKER U.S., TASTEMAKER U.S. shall be wound up in accordance with this AGREEMENT and governing law and as rapidly as business circumstances will permit. Except as required otherwise by governing law, the assets shall be liquidated or distributed to the PARTNERS in kind, and the proceeds from any sale or sales shall be distributed in the following order of priority: A. to pay or provide for all amounts owing by TASTEMAKER U.S. to creditors other than PARTNERS and for expenses of winding up TASTEMAKER U.S., including establishing an adequate reserve for taxes, other than income taxes, and all contingent liabilities of any kind or character; B. to pay or provide for all amounts owing by TASTEMAKER U.S. to the PARTNERS other than for capital and profit; and C. to pay or distribute any remaining assets to the PARTNERS in accordance with their respective CAPITAL ACCOUNTS. 9.2 Final Audit. The PARTNERS shall, if at such time they determine such action shall be advisable and proper, employ a firm of certified public accountants to make a complete and final audit of the books, records and accounts of TASTEMAKER U.S. as herein provided, and all final adjustments between the PARTNERS shall be made on the basis of such certified audit. In the event the PARTNERS disagree about a choice of certified public accountants, the audit shall be performed by the outside auditors of TASTEMAKER U.S. and shall be accepted by the PARTNERS. 52 10 ARTICLE X. SECRECY 10.1 Confidential Information. For purposes hereof, "Confidential Information" means the information of any PARTNER or of TASTEMAKER U.S. that might reasonably be considered confidential, secret, sensitive, proprietary, or private, including but not limited to, the following: A. data, know-how, formulae, processes, designs, sketches, photographs, plans, drawings, specifications, samples, reports, lists, financial information, studies, findings, inventions and ideas, or proprietary information relating to any PARTNER or TASTEMAKER U.S., or the methods of techniques used by any PARTNER or TASTEMAKER U.S.; B. data, documents or proprietary information employed in connection with the marketing and implementation of each PARTNER"s products, including cost information, business policies and procedures, revenues and markets, distributor and customer lists, and similar items of information; and C. any other data or information obtained by any PARTNER or TASTEMAKER U.S. during the term of this AGREEMENT which is not generally known to, and not readily ascertainable by proper means by third persons who could obtain economic value from its use or disclosure. 10.2 Confidentiality. A. Receipt of CONFIDENTIAL INFORMATION by a PARTNER from a PARTNER: The receiving PARTNER shall treat as confidential all CONFIDENTIAL INFORMATION of any other PARTNER, or of the SUBSIDIARIES or AFFILIATES of such other PARTNER, that comes to the receiving PARTNER"s knowledge through its participation in TASTEMAKER U.S. The receiving PARTNER shall take such steps to prevent disclosure of such CONFIDENTIAL INFORMATION to any third person as it would take in protecting its own proprietary or confidential information and shall not use any portion of such CONFIDENTIAL INFORMATION for any purpose not authorized herein. B. Receipt of CONFIDENTIAL INFORMATION by a PARTNER from TASTEMAKER U.S.: The receiving PARTNER shall treat as confidential all CONFIDENTIAL INFORMATION of TASTEMAKER U.S. that comes to the receiving PARTNER"s knowledge through its participation in TASTEMAKER U.S. The receiving PARTNER shall take such steps to prevent disclosure of such CONFIDENTIAL INFORMATION to any third person as such PARTNER would take in protecting its own proprietary or confidential information; provided, however, such PARTNER may use such CONFIDENTIAL INFORMATION for such PARTNER"S internal purposes not involving a technology transfer. The receiving PARTNER shall endeavor, to the extent of reasonable efforts, to prevent the unauthorized disclosure of such CONFIDENTIAL INFORMATION by its SUBSIDIARIES and AFFILIATES. 53 C. Receipt of CONFIDENTIAL INFORMATION by TASTEMAKER U.S. from a PARTNER: TASTEMAKER U.S. shall treat as confidential all CONFIDENTIAL INFORMATION of a PARTNER, or of the SUBSIDIARIES or AFFILIATES of such PARTNER, that comes to TASTEMAKER U.S." knowledge. TASTEMAKER U.S. shall take all reasonable steps to prevent disclosure of such CONFIDENTIAL INFORMATION to any third person and shall not use any portion of such CONFIDENTIAL INFORMATION for any purpose not authorized herein. TASTEMAKER U.S. shall take all reasonable steps to prevent the unauthorized disclosure of such CONFIDENTIAL INFORMATION by its SUBSIDIARIES and AFFILIATES, including the requirement that all such entities execute obligations of confidence relating thereto consistent with this Section , and to limit the access to such CONFIDENTIAL INFORMATION to those SUBSIDIARIES and AFFILIATES on a need-to-know basis. To the extent that TASTEMAKER U.S. or its SUBSIDIARIES or AFFILIATES receiving CONFIDENTIAL INFORMATION has its respective employees execute secrecy and non-disclosure agreements to protect its own confidential or proprietary information, such agreements shall be intended and made to also protect such CONFIDENTIAL INFORMATION. D. Release of Obligations. No person receiving CONFIDENTIAL INFORMATION shall be under any obligation with respect to any CONFIDENTIAL INFORMATION: (1) which is, at the time of disclosure, available to the general public; (2) which becomes at a later date available to the general public through no fault of such receiving person and then only after said later date; (3) which such receiving person can demonstrate was in its possession before receipt from the disclosure; (4) which is disclosed to such receiving person without restriction on disclosure by a third party who has the lawful right to disclose such information; or (5) after fifteen (15) years from the date of disclosure. E. SUBJECT TO THE ABOVE PARAGRAPH D OF THIS SECTION, THE CONFIDENTIALITY AND NON-DISCLOSURE OBLIGATIONS OF THIS ARTICLE SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT. 54 11 ARTICLE XI. INDEMNIFICATION 11.1 Indemnification. Each PARTNER agrees to defend, protect, indemnify and save harmless the other PARTNERS, in proportion to the relative PARTNERSHIP INTEREST of each in TASTEMAKER U.S., prior to the FRIES WITHDRAWAL DATE from and against any and all judgments, liabilities, damages and losses, including attorney"s fees, imposed upon such other PARTNER in any way arising out of or relating to TASTEMAKER U.S., including but not limited to losses arising pursuant to (i) any product liability; (ii) any failure to comply with any federal, state and local law; (iii) any claim of patent, trademark or copyright infringement brought against TASTEMAKER U.S.; (iv) any breach of contract by TASTEMAKER U.S.; and (v) any transactions contemplated by this AGREEMENT or undertaken by TASTEMAKER U.S. prior to the FRIES WITHDRAWAL DATE; provided, that no PARTNER shall be required to indemnify and save harmless the other PARTNERS from any claims, liabilities and losses resulting from the gross negligence or willful misconduct of the other, or arising out of claims against the other as a result of the other PARTNERS failing to perform its obligations under this AGREEMENT or under any agreement relating to TASTEMAKER U.S; and provided further that this Section 11.1 and the obligations of the PARTNERS in this Section 11.1 shall terminate and be of no further force and effect from and after the FRIES WITHDRAWAL DATE; and provided further that HCI and HFI shall not be required to defend, protect, indemnify or save harmless the other PARTNERS from any CLAIMS arising out of or otherwise related to the TASTEMAKER DEBT. 55 12 ARTICLE XII. MISCELLANEOUS 12.1 Authorization. Each PARTNER hereby represents and warrants to the others that it has obtained all necessary corporate approvals or comparable authorities necessary to the execution, delivery or performance of its part of this AGREEMENT and that its signatory hereto is duly authorized to execute and deliver this AGREEMENT on behalf of such PARTNER, and the signing of this AGREEMENT by such signatory is and shall be the act of such PARTNER. 12.2 Notices. Each election, exercise of a right or remedy (e.g., right to terminate this AGREEMENT), communication, request, notice, waiver, approval and consent requested or given hereunder or in connection herewith or referred to herein (the foregoing items are individually and collectively referred to herein as a "NOTICE") shall be in writing. Each NOTICE to be given or communicated to a PARTNER shall be delivered by courier, hand, mail (postage prepaid) or by telex, telegraph, or cable or facsimile promptly confirmed by letter to the address indicated below the intended receiving PARTNER"S signature hereto or to such other address for notices as may be designated by such intended receiving PARTNER from time to time in a NOTICE to the other PARTNER. Each NOTICE shall be only for the specific instance and matters covered thereby and shall not affect any future or other instance or matter, whether of a similar or dissimilar nature or involving the same or any other provision of this AGREEMENT. 12.3 Successors and Assigns. THIS AGREEMENT shall be binding upon and shall inure to the benefit of the PARTNERS and their respective successors and assigns; provided, however, neither PARTNER may, directly or indirectly, assign or transfer all or any part of this AGREEMENT or any right, obligation or interest herein in whole or in part without the prior consent of the other PARTNER in each instance, except as expressly provided in Article 8. Regardless of any such consent which may be granted, no assignment or transfer shall be binding and valid until and unless the assignee or transferee shall have assumed in writing all of the duties and obligations of the assignor or transferor PARTNER hereunder and, furthermore, the assignor or transferor PARTNER shall remain primarily liable hereunder. Any attempted assignment or transfer in violation of this Section shall be null and void. 12.4 Discharge; Amendments; Etc. (1) THIS AGREEMENT may not be released, discharged, abandoned, changed, amended, or modified in any manner in any instance, except by a written document signed by the PARTNER sought to be charged thereby. (2) The failure of any PARTNER to enforce at any time any one or more of the provisions of this AGREEMENT shall in no way be construed to be a waiver of such provision(s), nor in any way to affect the validity of this AGREEMENT or any part thereof, or the right of any PARTNER thereafter to enforce each and every provision 56 hereof. (3) No waiver of any provision hereof (whether in whole or in part) in any instance shall be held to be a waiver of any other similar or dissimilar provisions, part or instance. (4) Each and all of the rights and remedies of a PARTNER provided hereunder shall be in addition to all rights and remedies (including the right to seek damages) which such PARTNER may have. Such rights and remedies shall be cumulative, and the use of any right or remedy at any time, or from time to time, shall not preclude or affect the use of any future or other similar or dissimilar right or remedy. (5) In no event, shall any PARTNER be liable for consequential, special or similar damages hereunder or in connection herewith. 12.5 Governing Law. THIS AGREEMENT shall be governed by the law of the State of Delaware without giving effect to any principle of law which would result in the application of the law of some other jurisdiction. 12.6 Resolution of Disputes. All disputes arising under or in connection with this AGREEMENT, including deadlocks of the PARTNERS' REPRESENTATIVES, shall be resolved under and in accordance with Section 6.5 B. of this AGREEMENT. 12.7 Severability. Any provision of this AGREEMENT which is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without affecting, impairing, or invalidating the remaining provisions hereof or the enforceability thereof. To the extent legally permissible, the PARTNERS shall negotiate in good faith such amendment of this AGREEMENT as may be necessary to fairly and equitably achieve in a legally permissible manner the substance of the provision which was so prohibited or unenforceable; provided, however, that if such prohibition or unenforceability causes the frustration or failure of an essential purpose of this AGREEMENT, then either PARTNER may terminate this AGREEMENT upon giving a NOTICE to the other PARTNER; and further provided, however, that such right to terminate is conditioned upon and subject to (1) the frustration or failure of an essential purpose being so material as to reasonably warrant termination of this AGREEMENT and the resultant dissolution of TASTEMAKER U.S. or disposal of a PARTNERSHIP INTEREST as being a fair, equitable remedy under the then circumstances; and (2) if there is a dispute as to such amendment, frustration, failure of an essential purpose and/or as to whether termination of this AGREEMENT is warranted, then such dispute shall be resolved in accordance with Section 6.5 B. of this AGREEMENT, and pending such resolution, neither PARTNER shall take directly or indirectly any action seeking or purporting to (i) terminate or in fact terminating this AGREEMENT, or (ii) prevent or materially hinder or in fact preventing or materially hindering the conduct of TASTEMAKER U.S. in the ordinary course of business. 12.8 Counterparts. THIS AGREEMENT may be executed in one or more counterparts, each of which shall be deemed to be an 57 original and all of which shall constitute one and the same instrument. 12.9 Entire Agreement. This AGREEMENT embodies the entire agreement among the PARTNERS with respect to the subject matter hereof and as of the date hereof and supersedes all prior discussions, writings or practice with respect thereto. 58 IN WITNESS WHEREOF, each PARTNER, with the intention of being legally bound, has duly executed this AGREEMENT by affixing its signature below as of the date first written above. HERCULES CREDIT, INC. HERCULES FLAVOR, INC. By: ______________________ By: _____________________ Name Name Printed: ______________________ Printed: _____________________ Title: ______________________ Title: _____________________ ADDRESS FOR NOTICES ADDRESS FOR NOTICES Hercules Credit, Inc. Hercules Flavor, Inc. _________________________ ___________________________ _________________________ ___________________________ Attention: _____________ Attention: _______________ Telephone: _____________ Telephone: _______________ Fax: _____________ Fax: _______________ With a copy to the following: With a copy to the following: _________________________ ___________________________ _________________________ ___________________________ _________________________ ___________________________ Attention: _____________ Attention: _______________ Telephone: _____________ Telephone: _______________ Fax: _____________ Fax: _______________ FRIES & FRIES, INC. By: ____________________ Name Printed: ____________________ Title: ____________________ ADDRESS FOR NOTICES Fries & Fries, Inc. ________________________ ________________________ Attention: _____________ Telephone: _____________ Fax: _____________ With a copy to the following: ________________________ ________________________ ________________________ Attention: _____________ Telephone: _____________ Fax: _____________ -----END PRIVACY-ENHANCED MESSAGE-----