MEMBERSHIP INTEREST
PURCHASE AGREEMENT
AMONG
JBS S.A.,
NATIONAL BEEF PACKING COMPANY, LLC,
AND
U.S. PREMIUM BEEF, LLC; FRENCH BASIN LAND AND CATTLE CO., LLC;
TKK INVESTMENTS, LLC; S-B ENTERPRISES V, LLC; TMKCO, LLC; XXXX X. XXXXXX;
XXXXXXX X. XXXXX AND NBPCO HOLDINGS, LLC
DATED AS OF FEBRUARY 29, 2008
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TABLE OF CONTENTS
Page
ARTICLE I THE PURCHASE AND SALE.............................................................1
1.1 Basic Transaction.................................................................1
1.2 Purchase Price....................................................................1
1.3 Buyer Stock.......................................................................2
1.4 Time and Place of Closing.........................................................2
1.5 Deliveries at the Closing.........................................................3
1.6 Mechanics of Payments.............................................................3
1.7 Obligations of Sellers............................................................3
1.8 Supporting Agreements.............................................................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLERS.........................................4
2.1 Authorization of Sellers..........................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF NATIONAL........................................5
3.1 National Representations and Warranties...........................................5
3.2 Capital Structure of National.....................................................5
3.3 Capital Structure of Subsidiaries.................................................6
3.4 Non-Contravention.................................................................7
3.5 Financial Statements..............................................................8
3.6 Certain Developments..............................................................9
3.7 Real and Personal Property.......................................................10
3.8 Taxes............................................................................11
3.9 Contracts and Commitments........................................................13
3.10 Proprietary Rights...............................................................13
3.11 Litigation; Proceedings..........................................................14
3.12 U.S. Employee Benefit Plans......................................................15
3.13 Securities Laws..................................................................16
3.14 Compliance with Laws.............................................................17
3.15 Environmental Matters............................................................18
3.16 Employees........................................................................20
3.17 No Brokers.......................................................................21
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER..........................................21
4.1 Organization and Power...........................................................21
4.2 Authorization of Transaction.....................................................21
4.3 Absence of Conflicts.............................................................22
4.4 No Consents......................................................................22
4.5 Litigation.......................................................................22
4.6 Financial Ability................................................................23
4.7 Buyer Stock......................................................................23
4.8 No Knowledge of Misrepresentations or Omissions..................................23
ARTICLE V COVENANTS........................................................................23
5.1 Conduct of Business..............................................................23
5.2 Information......................................................................26
5.3 Consents.........................................................................27
5.4 Notification by National of Certain Matters......................................27
5.5 Notification by Buyer of Certain Matters.........................................28
5.6 Employee Matters.................................................................28
5.7 Access to Information............................................................30
5.8 Indemnification of Officers, Directors, Employees and Agents.....................30
5.9 Notification of Breach...........................................................33
5.10 Governmental Consents............................................................33
5.11 Antitrust Laws; Reasonable Efforts; Further Assurances...........................35
5.12 Investigation and Agreement by Buyer; No Other Representations or Warranties.....35
5.13 Other Acquisition Proposals......................................................36
5.14 Member Approval..................................................................38
5.15 Creation of Advisory Board.......................................................38
5.16 JBS Shareholder Approval.........................................................38
5.17 Consulting Contract..............................................................39
5.18 Supplementation and Amendment of Schedules.......................................39
5.19 USPB Noncompetition Agreement....................................................39
5.20 NBPCO Noncompetition Agreement...................................................39
5.21 Buyer Trading of JBS Stock.......................................................39
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ARTICLE VI CONDITIONS PRECEDENT.............................................................40
6.1 Conditions to Each Party's Obligation............................................40
6.2 Conditions to Obligation of Buyer................................................40
6.3 Conditions to Obligations of Sellers.............................................41
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER................................................42
7.1 Termination......................................................................42
7.2 Effect of Termination............................................................44
7.3 Termination Fee..................................................................45
7.4 Return of Documentation..........................................................46
ARTICLE VIII MISCELLANEOUS....................................................................46
8.1 Indemnification..................................................................46
8.2 Limited Survival of Representations, Warranties..................................48
8.3 Amendment and Waiver.............................................................49
8.4 Notices..........................................................................49
8.5 Binding Agreement Assignment.....................................................52
8.6 Severability.....................................................................52
8.7 Other Definitional Provisions....................................................52
8.8 Captions.........................................................................53
8.9 Entire Agreement.................................................................53
8.10 Counterparts and Facsimile Signatures............................................53
8.11 Waiver of Jury Trial.............................................................53
8.12 Public Announcements.............................................................53
8.13 Jurisdiction.....................................................................54
8.14 Governing Law....................................................................54
8.15 Attorneys' Fees..................................................................54
8.16 Parties in Interest..............................................................54
8.17 Expenses.........................................................................54
8.18 Rules of Construction............................................................55
8.19 Enforcement......................................................................57
8.20 Release..........................................................................57
8.21 Federal Income Tax Matters.......................................................57
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EXHIBITS
Exhibit A.........Defined Terms
Exhibit B.........Sellers' National Interests
Exhibit C.........[RESERVED]
Exhibit D.........Amended and Restated National Limited Liability Company Agreement
Exhibit E.........Assignment of National Interests
Exhibit F.........[RESERVED]
Exhibit G.........Cattle Purchase and Sale Agreement
Exhibit H.........Management Agreement
Exhibit I.........Permitted Transactions
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
INTRODUCTION
This MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is
entered into as of February 29, 2008, by and among JBS S.A., a Brazilian
sociedade anonima ("Buyer"), National Beef Packing Company, LLC, a Delaware
limited liability company ("National"), and (i) U.S. Premium Beef, LLC, a
Delaware limited liability company ("USPB"); (ii) French Basin Land and Cattle
Co., LLC, a Utah limited liability company ("French Basin"); (iii) TKK
Investments, LLC, a Missouri limited liability company ("TKK"); (iv) S-B
Enterprises V, LLC, a Utah limited liability company ("S-B"); (v) TMKCo, LLC, a
Missouri limited liability company ("TMK"); (vi) Xxxx X. Xxxxxx, an individual
("Xxxxxx"); (vii) Xxxxxxx X. Xxxxx, an individual ("Xxxxx"); and (viii) NBPCO
Holdings, LLC, a South Dakota limited liability company ("NBPCO"). USPB, French
Basin, TKK, S-B, TMK, Miller, Klein, and NBPCO are each at times referred to
herein as a "Seller," and collectively as the "Sellers." Buyer, National and
Sellers are referred to individually as a "Party" and collectively herein as the
"Parties." Unless defined herein, capitalized terms used in this Agreement are
defined in Exhibit A.
RECITALS
WHEREAS, Sellers in the aggregate own all of the outstanding membership
interests in National; and
WHEREAS, this Agreement contemplates a transaction between Buyer and
Sellers, in which Sellers will sell to Buyer all of the outstanding membership
interests in National in return for cash and Buyer Stock (the "Sale").
NOW, THEREFORE, in consideration of the Recitals, the mutual
representations, warranties, covenants, agreements and conditions contained in
this Agreement, and in order to set forth the terms and conditions of the Sale
of National Interests and the mode of carrying the same into effect, the Parties
agree as follows:
ARTICLE I
THE PURCHASE AND SALE
1.1 Basic Transaction. On and subject to the terms and conditions of this
Agreement, Buyer agrees to purchase from each of the Sellers, and each of the
Sellers agrees to sell to Buyer, his or its National Interests listed in Exhibit
B for the consideration specified below in this Article I.
1.2 Purchase Price. Buyer agrees to pay to each Seller at the Closing the
purchase price of the National Interests to be sold by each Seller based on an
aggregate value of $560,000,000 for all of the issued and outstanding National
Interests at the time of Closing. (The aggregate amount payable to all Sellers
hereunder is referred to as the "Purchase Price"; the
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amount payable to each Seller is sometimes referred to herein as each "Seller's
Purchase Price.") Buyer and Sellers acknowledge and agree that certain Sellers
other than USPB, NBPCO, TMK, TKK, and Xxxxx, will sell all of their National
Interests for cash in which case the amount in Exhibit B is the cash amount to
be paid to those Sellers at Closing. NBPCO, USPB, TMK, TKK and Xxxxx each will
sell their National Interests to Buyer for the Seller's Purchase Price in
Exhibit B to be paid in cash and Buyer Stock in proportion of 80% to be paid in
cash and 20% to be paid in Buyer Stock as provided in Section 1.3; provided,
however, NBPCO and Buyer anticipate entering into a separate unrelated
transaction at or about the time of execution of this Agreement pursuant to
which Buyer will agree that NBPCO will receive all cash and no Buyer Stock for
NBPCO's National Interests.
1.3 Buyer Stock. The amount of Buyer Stock to be issued to Sellers under
Section 1.2 will be determined as provided in this Section 1.3. The total U.S.
Dollar value of the Buyer Stock to be issued to Sellers from Exhibit B is
$94,964,869 (referred to as the "JBS Stock Payment Amount"). The "JBS Stock
Price" shall be the volume weighted average of the closing per share price of
Buyer Stock at the end of each trading day for Buyer Stock on the BOVESPA
Exchange for the 20 most recent trading days prior to the Closing, with the
share price each trading day, before averaging, adjusted to U.S. Dollars by the
United States - Brazil currency exchange rate, as quoted by the average buy/sell
rate for Dollars/Reais published by the Central Bank of Brazil on its SISBACEN
under PTAX 800, Option 5 the same day closest to the end of the trading day,
subject to Buyer's covenant in Section 5.21. The total number of shares of Buyer
Stock that will be issued to Sellers at the Closing (the "Sellers JBS Stock")
shall be obtained by dividing the JBS Stock Payment Amount by the JBS Stock
Price. Each Seller will receive a number of shares of JBS Stock equal to the
Sellers JBS Stock multiplied by the dollar amount of such Seller's JBS Stock set
forth on Exhibit B and divided by the JBS Stock Payment Amount. Any fractional
shares resulting from the calculation of the Sellers JBS Stock under this
Section 1.3 shall be rounded up to the next whole share. Buyer shall deliver the
Sellers JBS Stock in compliance with Section 4.7 at the Closing, through
delivery to the custodian bank of the Buyer Stock the relevant Order of Transfer
Stocks ("Ordem de Transfer encia de Acoes" or "OTA") duly executed by its legal
representatives evidencing the Order to Transfer the Sellers JBS Stock to each
of the Sellers receiving Buyer Stock as provided in Exhibit B, all of which is
to effect the registration and ownership of the Sellers JBS Stock in the names
and ownership of the applicable Sellers listed in Exhibit B on an unencumbered
and freely tradable basis at the consummation of the Closing. If Buyer is unable
to deliver Sellers JBS Stock to Sellers at Closing as provided in this Section
1.3, the Sellers entitled to receive Buyers Stock may demand to close provided
the other conditions to Closing are met and be paid the JBS Stock Payment Amount
in cash.
1.4 Time and Place of Closing. Unless otherwise agreed to by Buyer and
Sellers, the Closing will occur at 9:00 a.m. local time on the eleventh Business
Day after the date on which the conditions to Closing set forth in Section 6.1
(insofar as Section 6.1 relates to the Antitrust Laws of the United States of
America and applicable foreign jurisdictions) is satisfied or waived by the
Party entitled to do so (the "Clearance Date"); provided, that if on such date,
all conditions to the Closing (other than conditions the fulfillment of which
are to occur at the Closing) capable of satisfaction prior to the Closing are
not then satisfied or waived by the Party entitled to do so (it being understood
that the occurrence of the Closing shall remain subject to the satisfaction or
waiver of the conditions that by their terms are to be satisfied at the
Closing),
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then the Closing shall occur on the fifth Business Day after the date that all
such conditions are satisfied or waived by the Party entitled to do so. The
Closing shall take place at a location mutually agreed to by the Parties, but if
there is no agreement, then at the offices of Xxxxxxxxx Xxxxxxx, LLP at 0000
Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx. The date upon which the Closing
actually occurs is referred to as the "Closing Date."
1.5 Deliveries at the Closing. At the Closing:
(a) Sellers will deliver to Buyer the assignments of National
Interests in Exhibit E below and the various certificates, instruments, and
documents referred to in Section 6.2 To be delivered at the Closing;
(b) Buyer will deliver to Sellers the various certificates,
instruments, and documents referred to in Section 6.3 To be delivered at
the Closing; and
(c) Buyer will deliver to each of the Sellers the payment specified in
Sections 1.2 and 1.3.
1.6 Mechanics of Payments. All cash payments under or pursuant to this
Agreement shall be made by wire transfer of immediately available funds to one
or more accounts designated by the payee thereof or by certified check if
requested by the payee thereof. All cash payments to Sellers as contemplated by
Section 1.2 shall be made only after delivery to Buyer by such Seller of an
assignment of the applicable National Interests in the form attached hereto as
Exhibit E. All payments of Buyer Stock shall be made by delivery of Buyer Stock
at the Closing.
1.7 Obligations of Sellers. Unless expressly stated otherwise, any
liability or obligation of the Sellers collectively shall be several and
apportioned to each Seller according to the Seller's portion.
1.8 Supporting Agreements. Contemporaneously with the execution of this
Agreement:
(a) Buyer and NBPCO or NBPCO's affiliate, Beef Products, Inc. ("BPI"),
shall enter into and deliver a Raw Materials Supply Agreement in a form
acceptable to both of said Parties;
(b) Buyer and USPB shall enter into and deliver the Cattle Purchase
and Sale Agreement attached as Exhibit G; and
(c) Buyer and Xxxxx shall enter into and deliver the Management
Agreement attached as Exhibit H;
provided, that the agreements referenced in this Section 1.8 shall not be
effective until the Closing Date.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
2.1 Authorization of Sellers.
(a) Seller Representations. Each Seller separately represents and
warrants to Buyer, severally and not jointly, that the representations in
this Section 2.1 are true and correct as to that Seller as of the date of
this Agreement and as of the Closing Time. The representations and
warranties in this Section 2.1 terminate 180 days after the Closing Date or
upon the termination of this Agreement pursuant to Section 7.1, whichever
is earlier.
(b) Seller Authorization. Except as set forth in Section 2.1(e) below,
such Seller has full power and authority to:
(i) execute and deliver this Agreement;
(ii) execute and deliver all other Transaction Documents to which
Seller is or will be a party; and
(iii) perform Seller's obligations under this Agreement and the
Transaction Documents.
(c) Execution and Performance of Transaction Documents. The execution,
delivery and performance by Seller of the Transaction Documents to which
Seller is a party do not, and the consummation of the contemplated
transactions will not, subject to obtaining the Consents, approvals,
authorizations and permits and making the filings described in Section 3.4
or as set forth on Sellers Disclosure Schedule 2.1:
(i) violate, conflict with, or result in any breach of any of the
terms, conditions or provisions of Seller's certificate of formation
or operating agreement, in the case of an entity Seller;
(ii) except as set forth on Sellers Disclosure Schedule 2.1,
require a Consent or violate or result in any violation or breach of,
or constitute a default (with or without due notice or lapse of time
or both) under, or give rise to any right of termination under any of
the terms, conditions or provisions of any material contract of Seller
in existence as of the date of this Agreement; or
(iii) violate any order, writ, judgment, injunction, decree,
statute, law, rule or regulation of any Governmental Entity applicable
to Seller or by which or to which any portion of its respective
properties or assets is bound or subject.
(d) Other Seller Action Not Necessary. Prior to or simultaneously with
the execution and delivery of this Agreement, each entity Seller, other
than USPB, has obtained approval, by the requisite number of its members,
of this Agreement and the Transaction Documents, and no additional
authorization, approval, ratification or other action is required by the
members of any entity Seller, other than USPB, in order to complete the
transactions
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contemplated by this Agreement. Except as provided in Section 2.1(e), no
other proceeding or action on the part of Seller is necessary to approve
and authorize:
(i) Seller's execution and delivery of any other Transaction
Document to which Seller is or will be a party; or
(ii) the performance of Seller's obligations under this Agreement
or the Transaction Documents.
(e) USPB Member Approval. The approval by the members of USPB of this
Agreement and the contemplated transactions has not been obtained as of the
date this Agreement is executed and will be undertaken by USPB in
accordance with Section 5.14.
(f) Binding and Enforceable Agreement of Seller. Except as provided in
Section 2.1(e), this Agreement and all other Transaction Documents to which
Sellers are parties have been, or will be at Closing, duly executed and
delivered by each Seller and will constitute the valid and binding
agreements of each Seller, enforceable against each Seller in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights generally and
limitations on the availability of equitable remedies.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NATIONAL
Except as set forth in the National Disclosure Schedule as contemplated by
Section 8.18(b), National represents and warrants to Buyer that the statements
contained in this Article III are true and correct as of the date of this
Agreement and, subject to supplementation and delivery to Buyer of any additions
or changes, as of the Closing Time, except as specifically noted in each
representation.
3.1 National Representations and Warranties.
(a) Organization. Each of National and its Subsidiaries is validly
existing and in good standing under the laws of its respective jurisdiction
of incorporation, organization or formation, and has all requisite
organizational power and authority to own, lease and operate its assets and
properties and to carry on its business as now being conducted.
(b) Qualified, Good Standing. Each of National and its Subsidiaries is
duly qualified to transact business and is in good standing in each of
those jurisdictions set forth on National Disclosure Schedule 3.1, which
constitute all of the jurisdictions in which the nature of the business it
is conducting, or the operation, ownership or leasing of its assets or
properties, makes the qualification necessary, other than in jurisdictions
where the failure to be so duly qualified and in good standing would not
have a Material Adverse Effect.
3.2 Capital Structure of National.
(a) Capital Structure of National. As of the date of this Agreement,
the capital structure of National is as set forth on National Disclosure
Schedule 3.2(a).
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(b) No Other Voting Rights. Except as disclosed on the National
Disclosure Schedule 3.2(b), no bonds, debentures, notes or other
instruments or evidence of indebtedness having the right to vote (or
convertible into, or exercisable or exchangeable for, securities having the
right to vote) on any matters on which the holders of National Interests
may vote are issued or outstanding.
(c) Valid National Interests. All outstanding National Interests are
validly issued, fully paid and non-assessable, and were not issued in
violation of any preemptive or other similar rights. Except as provided in
National Disclosure Schedule 3.2(c), as of the date of this Agreement,
there:
(i) are no National Interests or other voting securities of
National, issued or outstanding;
(ii) are no securities of National or any Subsidiary of National
convertible into, or exchangeable or exercisable for, National
Interests or other voting securities of National or any Subsidiary of
National;
(iii) is no option, warrant, call, preemptive right, subscription
or other right, agreement, arrangement, understanding or commitment of
any character, relating to the issued or unissued National Interests
of National or any Subsidiary of National obligating National or any
Subsidiary of National to issue, transfer or sell or cause to be
issued, transferred or sold any National Interests or other equity
interest in National or any Subsidiary of National, or securities
convertible into or exchangeable for the interests, or obligating
National or any Subsidiary of National to grant, extend or enter into
any option, warrant, call, subscription or other right, commitment,
arrangement or agreement; and
(iv) Is no outstanding contractual obligation of National or any
Subsidiary of National to repurchase, redeem or otherwise acquire any
National Interests or other equity interests in National or any
Subsidiary or Affiliate of National or to provide funds to make any
investment (in the form of a loan, capital contribution or otherwise)
in any Subsidiary of National or any other Person.
3.3 Capital Structure of Subsidiaries.
(a) Capital Structure. Each of National's Subsidiaries is listed on
National Disclosure Schedule 3.3(a). The authorized equity and the issued
and outstanding equity of each Subsidiary is listed on National Disclosure
Schedule 3.3(a).
(b) National is Owner of All Subsidiaries' Equity. Except as disclosed
on National Disclosure Schedule 3.3(b):
(i) National directly or indirectly is the beneficial and record
owner of all issued and outstanding equity of each Subsidiary, and
National's ownership is free and clear of all Liens;
(ii) all equity of each Subsidiary has been duly and validly
authorized and issued and is fully paid and nonassessable;
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(iii) no equity of any Subsidiary has been issued in violation of
any preemptive or similar rights of any past or present equity holder
of Subsidiary;
(iv) no amounts of equity of any Subsidiary are reserved for
issuance, and there are no contracts, agreements, commitments or
arrangements obligating any Subsidiary to offer, sell, issue or grant
any equity of, or any options, warrants or rights of any kind to
acquire any equity of, or any securities that are convertible into or
exchangeable for any equity of the Subsidiary; and
(v) National does not own, directly or indirectly, as of the date
of this agreement, any capital stock of, or other voting securities or
equity interests in, any corporation, partnership, joint venture,
association or other entity.
3.4 Non-Contravention.
(a) Execution and Performance of Transaction Documents. To the
Knowledge of National, the execution, delivery and performance by National
of the Transaction Documents to which National is a party do not, and the
consummation of the contemplated transactions will not, subject to
obtaining the Consents, approvals, authorizations and permits and making
the filings described in this Section 3.4 Or as set forth on National
Disclosure Schedule 3.4(a):
(i) violate, conflict with, or result in any breach of any of the
terms, conditions or provisions of National's certificate of formation
or limited liability company agreement or operating agreement or its
Subsidiaries' respective certificates of incorporation or organization
and bylaws or operating agreements, or similar documents;
(ii) except for Material Contracts set forth on National
Disclosure Schedule 3.9 with an asterisk, if any, require a consent or
violate or result in any violation or breach of, or constitute a
default (with or without due notice or lapse of time or both) under,
or give rise to any right of termination, with a material loss of any
benefits by National or any Subsidiary of National under, or
acceleration or cancellation of, any of the terms, conditions or
provisions of any Material Contract in existence as of the date of
this agreement;
(iii) violate any order, writ, judgment, injunction, decree,
statute, law, rule or regulation of any Governmental Entity applicable
to National or any of its Subsidiaries or by which or to which any
portion of their respective properties or assets is bound or subject
where such violation would have a Material Adverse Effect; or
(iv) result in the creation or imposition of any Lien upon any
properties or assets of National or any Subsidiary of National except,
with respect to each of clauses (ii) and (iii), the violations,
conflicts, breaches or defaults as would not have a Material Adverse
Effect.
(b) Governmental Consents. To the Knowledge of National, no Consent,
registration, declaration or filing with any Governmental Entity is
required by National or any of its Subsidiaries in connection with the
execution, delivery and performance by National of this Agreement and the
other Transaction Documents to which it is a party or the consummation by
National of the contemplated transactions, except:
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(i) the filing of a notification and report form by USPB under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the expiration or termination of the applicable waiting period
thereunder, and to the extent that such may be applicable to the
transactions contemplated under this agreement, clearances, approvals,
Consents or the expiration of a waiting period under the Antitrust Laws of
applicable foreign jurisdictions;
(ii) the filings in connection with any state or local Tax authority,
if any;
(iii) the filings and Consents as may be required under any
environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval necessitated by the
contemplated transactions in this Agreement and the other Transaction
Documents to which National is a party;
(iv) the other Consents, approvals, orders, authorizations,
registrations, declarations, filings, notices or permits the failure of
which to be obtained or made would not have a Material Adverse Effect; and
(v) as disclosed in National Disclosure Schedule 3.4(b).
3.5 Financial Statements.
(a) Delivery. National has delivered to Buyer or otherwise made
available to Buyer through filings with the SEC the audited consolidated
balance sheets and the related consolidated statements of earnings, of
member's equity and of cash flows of National and its consolidated
Subsidiaries for the fiscal years ended August 27, 2005, August 26, 2006,
and August 25, 2007 and the unaudited consolidated balance sheet for the
quarter ended November 24, 2007 (including the notes thereto), accompanied
by the report of KPMG, independent registered public accounting firm
(collectively, the "Financial Statements").
(b) Prepared in Accordance With GAAP. The financial statements (in
each case including the notes thereto) were prepared from the books and
records of National (which are accurate and complete in all material
respects) and materially in accordance with GAAP applied on a consistent
basis during the periods involved, except as may be indicated in the notes
thereto or in the report of KPMG. To the Knowledge of National, the
Financial Statements fairly present, in all material respects, the assets
and liabilities and results of operations of National and its consolidated
Subsidiaries as of the respective dates thereof and for the periods then
ended (subject in the case of unaudited financial statements, to normal
adjustments).
(c) No Unreported Liabilities. Except as disclosed in National
Disclosure Schedule 3.5(c), to the Knowledge of National, National and its
consolidated Subsidiaries do not have any liability or obligation of any
kind, whether absolute, accrued, asserted or unasserted, contingent or
otherwise, required by GAAP to be set forth in a Financial Statement or in
the notes, except liabilities, obligations or contingencies that:
(i) have been incurred in the ordinary course of business;
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(ii) have been incurred in connection with the transactions
contemplated by this Agreement;
(iii) are accrued or reserved against in the Latest Balance
Sheet; or
(iv) would not be required to be presented in unaudited interim
Financial Statements prepared in conformity with GAAP or as otherwise
noted in the notes to the Financial Statements or the report of KPMG.
(d) Excludes Liability Subject to Other Sections. Notwithstanding the
foregoing, the representation and warranty contained in this Section 3.5
shall not apply to (and shall exclude) any liability arising out of or
related to facts, events, transactions, or actions or inactions, the
category of which is the subject of another representation or warranty set
forth in this Article III, whether or not the existence of the liability
would constitute a breach or inaccuracy of such representation or warranty.
(By way of example, as to the foregoing sentence, pending and threatened
litigation is addressed in the representations and warranties in Section
3.11 And therefore all pending and threatened litigation (regardless of
whether the litigation is covered by the representations and warranties in
Section 3.11) Is considered a "category" for the purpose of the foregoing
sentence.)
3.6 Certain Developments. Except as disclosed in National Disclosure
Schedule 3.6, other than pursuant to this Agreement, during the period
commencing on November 25, 2007 and expiring as of the date of this Agreement,
National and its Subsidiaries have not:
(a) sold, leased, assigned or transferred any material asset or any
material portion of its assets (other than dispositions of inventory in the
ordinary course of business, dispositions of obsolete or worn out assets in
the ordinary course of business, dispositions of assets which have been
replaced with assets of equal or greater value and utility, collection of
receivables in the ordinary course of business and certain lease financing
disclosed in National Disclosure Schedule 3.6(a));
(b) made any material deviation from any historical accounting
principle, procedure or practice followed by National or any of its
Subsidiaries or in the method of applying any such principle, procedure or
practice;
(c) made any issuance, sale or disposition of capital stock or any
other securities or grant of any options, warrants or other rights to
subscribe for or purchase any capital stock or any other securities of
National or any of its Subsidiaries;
(d) made or granted any bonus or any wage, salary or compensation
increase other than in the ordinary course of business to any employee or
independent contractor, except pursuant to the express terms of any written
contract or agreement which is described on National Disclosure Schedule
3.9 or 3.12; or
(e) authorized any of, or committed, resolved or agreed to take any
of, the foregoing actions, or any action that would be prohibited by
Section 5.1 if taken while this Agreement were in effect.
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3.7 Real and Personal Property.
(a) Title and Encumbrances. National Disclosure Schedule 3.7(a) sets
forth as of the date of this Agreement a list of all real property owned in
fee by National or its Subsidiaries material to the conduct of the business
conducted by National ("Owned Real Property") and the existing title
insurance polices and title reports given by a title insurance company for
each owned real property ("Title Reports"). Except as provided in National
Disclosure 3.7(a), to National's knowledge, National or a Subsidiary of
National has, and will have on the Closing Date, the title in and to the
Owned Real Property as disclosed in the Title Reports, free and clear of
all Liens other than Permitted Encumbrances.
(b) Material Improvements. To the Knowledge of National, except as set
forth on National Disclosure Schedule 3.7(b):
(i) the material improvements on the Owned Real Property have
access to such sewer, water, gas, electric, telephone and other
utilities as are necessary to allow the business of National and each
of its Subsidiaries operated thereon to be operated in the ordinary
course as currently operated except where the failure to have such
access would not have a Material Adverse Effect; and
(ii) the material improvements located on the Owned Real Property
are in sufficiently good condition (except for ordinary wear and tear)
to allow the business of National and its Subsidiaries to be operated
in the ordinary course as currently operated.
(c) Condemnation Proceedings. Except as set forth on National
Disclosure Schedule 3.7(c), as of the date of this Agreement, no
condemnation proceeding is pending or, to the Knowledge of National,
threatened, which would preclude or materially impair the use of any Owned
Real Property for the uses for which it is intended.
(d) Restrictive Covenants Not Violated. To National's Knowledge, the
current use of the Owned Real Property by National and its Subsidiaries
does not violate in any material respect any restrictive covenants in the
Title Reports that affect any of the Owned Real Property, where the
violation is likely to have a Material Adverse Effect.
(e) Real Property Leases. National Disclosure Schedule 3.7(e) sets
forth a list of all material real property leases to which National or any
of its Subsidiaries is a party as of the date of this Agreement. Each lease
set forth on National Disclosure Schedule 3.7(e) is a valid and binding
obligation of National or a Subsidiary of National (subject to any of such
leases being terminated in the ordinary course of business and in
accordance with the terms thereof) is in full force and effect. To the
Knowledge of National, neither National nor any of its Subsidiaries and no
other party, is, as of the date of this Agreement, in default in any
material respect under any lease set forth on National Disclosure Schedule
3.7(e). As of the date of this Agreement, no condemnation proceeding is
pending or, to the Knowledge of National, threatened by any Governmental
Authority in writing, which would preclude or materially impair the use of
any leased real property on National Disclosure Schedule 3.7(e) for the
uses for which it is intended, except as noted in the National Disclosure
Schedule.
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(f) Personal Property. Except as set forth in National Disclosure
Schedule 3.7(f), National or its Subsidiaries have good title to, or hold
pursuant to valid and enforceable leases, all the tangible properties and
assets of National and its Subsidiaries (excluding Real Property) that are
material to the conduct of the businesses of National and its Subsidiaries,
with only the exceptions as constitute Permitted Encumbrances, and the
tangible properties and assets of National and its Subsidiaries are
sufficient for the current conduct of National's businesses.
3.8 Taxes. Except as set forth on National Disclosure Schedule 3.8, and in
all cases since August 6, 2003:
(a) Filed and Paid. All Tax Returns required to be filed by or with
respect to National and its Subsidiaries have been filed when due. All such
Tax Returns are true, correct and complete in all respects. All Taxes due
and owing by National or its Subsidiaries (whether or not shown or required
to be shown on any Tax Return) have been paid. All Tax withholding and
deposit requirements imposed on or with respect to National and its
Subsidiaries have been satisfied in all respects. There are no Liens on any
of the assets of National or any of its Subsidiaries that arose in
connection with any failure to pay any Tax other than Permitted
Encumbrances.
(b) No Unpaid Taxes in Excess of Reserves. The unpaid Taxes of
National or its Subsidiaries:
(i) do not exceed the reserve for Tax Liability for National or
its Subsidiaries, as the case may be, on the Latest Balance Sheet
included in the Financial Statements (rather than any reserve for
deferred Taxes established to reflect timing differences between book
and Tax income), and
(ii) will not exceed the reserve as adjusted for the passage of
time through the Closing Date in accordance with the past custom and
practice of National or its Subsidiaries, as the case may be.
(c) No Arrangement Not Deductible Under Β§ 280G or 162(m). There is
no contract, agreement, plan or arrangement covering any Person that,
individually or collectively, as a consequence of the transactions
contemplated by this Agreement or otherwise, could give rise to the payment
of any amount that would not be deductible by National or any Subsidiary of
National as the case may be, by reason of:
(i) Section 280G of the Code (or any corresponding provision of
state, local or foreign tax law), or
(ii) Section 162(m) of the Code (or any corresponding provision
of state, local or foreign tax law).
(d) No Waivers or Extensions of Filing. Neither National nor any of
its Subsidiaries has granted (or is subject to) any waiver or extension
that is currently in effect of the period of limitations for the assessment
or payment of any Tax or the filing of any Tax Return.
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(e) No Unpaid Assessments. No material unpaid Tax assessment,
deficiency or adjustment has been assessed against or with respect to
National or any of its Subsidiaries by any Governmental Entity. No Tax
Return concerning or relating to National or its Subsidiaries or their
respective operations has been audited or examined by any Governmental
Entity for any period beginning after August 31, 2003, nor is any audit or
examination in process or pending, and neither National or its Subsidiaries
have been notified of any (i) request for such an audit or other
examination, or (ii) request for any information related to Tax matters.
None of the Sellers or the directors, managers and other officers of
National or any of its Subsidiaries reasonably expects any Governmental
Entity to assess any additional Taxes for any period for which Tax returns
have been filed. Neither National nor its Subsidiaries is a party to any
action or proceeding for assessment or collection of Taxes. Each of
National and its Subsidiaries have made available to Buyer correct and
complete copies of all income and other material Tax Returns, examination
reports and statements of deficiencies filed, assessed against or agreed to
by National or its Subsidiaries, as the case may be, since August 31, 2003.
(f) Partnership Status. Each of National and each of its Subsidiaries
has at all times since its formation been treated and taxed as either a
partnership or disregarded entity for United States federal income tax
purposes.
(g) No Tax Group. Neither National nor any of its Subsidiaries has
ever been a member of a combined, consolidated, affiliated or unitary group
for Tax filing purposes, other than the group in which it currently is a
member.
(h) Amounts Accounted for in Periods. Neither National nor any of its
Subsidiaries will be required to include any amount of income for any
taxable period ending after the Closing Date as a result of a change in
accounting method for any taxable period ending on or before the Closing
Date or pursuant to any agreement with any Governmental Entity with respect
to any taxable period, and will not be required to make such an adjustment
as a result of the transactions contemplated by this Agreement, and there
is no application pending with any Governmental Authority requesting
permission for any changes in any of its accounting methods for Tax
purposes. Neither National nor any of its Subsidiaries will be required to
include in any period ending after the Closing Date any income that accrued
in a prior period but was not recognized in any prior period as a result of
the installment method of accounting or otherwise. No Governmental Entity
has proposed any such adjustment or change in accounting period.
(i) No Unresolved Governmental Tax Claims. No written claim has ever
been made by any Governmental Entity in any jurisdiction in which National
or any of its Subsidiaries do not file Tax Returns that any Person is or
may be is subject to Taxation by that jurisdiction and that has not been
resolved.
(j) No Tax Agreements. Neither National nor any of its Subsidiaries is
party to or has any obligation under any Tax sharing, Tax indemnity, or Tax
allocation agreement.
(k) No Closing Agreements, etc. National and its Subsidiaries will not
be required to include any amount in taxable income or exclude any item of
deduction or loss from taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of (a) any "closing
agreement" as described in Section 7121 of the Code (or any
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corresponding or similar provision of state, local or foreign Income Tax
law) executed on or prior to the Closing Date, (b) installment sale or open
transaction disposition made on or prior to the Closing Date, or (c) any
prepaid amount received on or prior to the Closing Date.
(l) No Tax Shelters or Reportable Transactions. Neither National nor
its Subsidiaries has ever participated in a "potentially abusive tax
shelter" transaction or a "reportable transaction" within the meaning of
Treas. Reg. Section 1.6011-4 or any "tax shelter" within the meaning of
Section 6662 of the Code.
(m) No Code Section 355 or 361 Transactions. Neither National nor any
of its Subsidiaries has distributed stock of another Person, or has had its
stock distributed by another Person, in a transaction that was purported or
intended to be governed in whole or in part by Section 355 or Section 361
of the Code.
(n) No CFC or PFIC Status. None of National's Subsidiaries is, or has
been since its incorporation, a controlled foreign corporation within the
meaning of Section 957 of the Code or a passive foreign investment company
within the meaning of Section 1297 of the Code.
3.9 Contracts and Commitments.
(a) Material Contracts. National Disclosure Schedule 3.9(a) sets forth
as of the date of this Agreement all current written Material Contracts to
which either National or any of its Subsidiaries is a party or by which any
of them or their assets or properties are otherwise bound. Each written
Material Contract is:
(i) a legal, valid and binding obligation of National or its
Subsidiaries and, to the Knowledge of National, a legal, valid and
binding obligation of each other party thereto; and
(ii) to the Knowledge of National, is in full force and effect.
(b) Other Parties Have Performed Contracts. Except as disclosed on
National Disclosure Schedule 3.9(b), to the Knowledge of National, as of
the date of this Agreement, each other party to the Material Contracts is
not materially in default under or in breach of, nor in receipt of any
claim of default or breach from National under, any Material Contract.
Except as disclosed on National Disclosure Schedule 3.9(b), to the
Knowledge of National, since August 6, 2003, as to each current Material
Contract, there has not occurred any event or events that, with the lapse
of time or the giving of notice or both, would constitute a default by
National or any of its Subsidiaries thereunder, except for those defaults
that would not have a Material Adverse Effect.
3.10 Proprietary Rights.
(a) Registered Rights. National Disclosure Schedule 3.10(a) sets forth
all of the statutorily registered or issued Intellectual Property owned by
National and its Subsidiaries as of the date of this Agreement.
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(b) Rights to Use Intellectual Property. To the Knowledge of National,
National and its Subsidiaries own, or are licensed or otherwise have the
right or license to use, inventions that are the subject of the United
States and foreign patents and applications thereto, registered trademarks,
trademarks, registered service marks, service marks, trade names,
copyrights, trade secrets and know-how (the "Intellectual Property") used
by National and its Subsidiaries in their respective businesses as of the
date of this Agreement, except where the failure to so own, license or
otherwise have the right to use such Intellectual Property would not have a
Material Adverse Effect.
(c) No Infringement. Except as disclosed on National Disclosure
Schedule 3.10(c), to the Knowledge of National, the use of the Intellectual
Property by National and its Subsidiaries does not infringe upon or
misappropriate any Intellectual Property Rights of any other Person and, as
of the date of this Agreement and since August 6, 2003, National has not
received any demand, claim or notice from any Person with respect to the
Intellectual Property which challenges the validity of any Intellectual
Property. As of the date of this Agreement, to National's knowledge, no
other Person is infringing upon or misappropriating any Intellectual
Property of National or any of its Subsidiaries. No trademark or service
xxxx owned, or to National's Knowledge licensed, by National or its
Subsidiaries is involved in the United States in any opposition,
cancellation or equivalent proceeding, and, as of the date of this
Agreement, to National's Knowledge, no such action has been threatened. No
patent owned by National is involved in the United States in any
interference, reissue, reexamination or equivalent proceeding.
(d) No Licenses Granted to Others. Except as set forth on National
Disclosure Schedule 3.10(d), as of the date of this Agreement, National has
not granted a written license to any Person to use any Intellectual
Property other than licenses granted in the ordinary course of business.
3.11 Litigation; Proceedings. Except as set forth on National Disclosure
Schedule 3.11, to the Knowledge of National, there is no pending claim, charge,
complaint, or grievance (as evidenced by a written notice or charging document
against National or its Subsidiaries charging National or its Subsidiaries with
a failure to comply with a duty or obligation under an Applicable Law) or
action, suit, proceeding, hearing, or arbitration threatened against or
involving National or any of its Subsidiaries, whether at law or in equity,
whether civil or criminal in nature or by or before any arbitrator or
Governmental Entity except the claims, charges, complaints, grievances, actions,
suits, proceedings, hearings or arbitrations that, if resolved adversely to
National or a Subsidiary of National, would not have a Material Adverse Effect.
Except as set forth on National Disclosure Schedule 3.11, To the Knowledge of
National, as of the date of this Agreement, there are no investigations relating
to National or any of its Subsidiaries pending or threatened in writing by or
before any arbitrator or any Governmental Entity, except the investigations,
that, if resolved adversely to National or a Subsidiary of National, would not
have a Material Adverse Effect.
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3.12 U.S. Employee Benefit Plans. Except as set forth on National
Disclosure Schedule 3.12:
(a) No Obligations to Contribute. Neither National nor any of its
Subsidiaries has any current unfunded liability or any obligation to
contribute to:
(i) any "multiemployer plan" (as that term is defined in Section
3(37) of ERISA);
(ii) any plan or arrangement, whether or not terminated, which
provides medical, health, life insurance or other welfare type
benefits for current employees or current or future retired or
terminated employees (except for continued medical benefit coverage
required to be provided under Section 4980B of the Code or as required
under applicable state law);
(iii) any employee plan which is a "defined benefit plan" (as
that term is defined in Section 3(35) of ERISA), whether or not
terminated;
(iv) any employee plan which is "defined contribution plan" (as
that term is defined in Section 3(34) of ERISA), whether or not
terminated; or
(v) any bonus, incentive, deferred compensation, severance, stock
option, stock appreciation right, stock purchase, or other equity
compensation, change in control, employment, fringe benefit, or other
material plan.
(b) Material Compliance With Code. All plans set forth on National
Disclosure Schedule 3.12 (other than any "multiemployer plan" as previously
defined) shall be referred to this Agreement collectively as the "Employee
Benefit Plans." All Employee Benefit Plans (and related trusts and
insurance contracts) materially comply in form and in operation with their
terms and the applicable requirements of ERISA and the Code, including the
requirements of Section 4980B of the Code. Since August 6, 2003, with
respect to each Employee Benefit Plan, all contributions, premiums or
payments which are due on or before the date of this Agreement have been
paid to the Plan. There is no accumulated funding deficiency within the
meaning of ERISA or the Code in connection with any defined benefit plan
(other than any multiemployer plan), and no "prohibited transaction"
(within the meaning of Section 406 of ERISA and Section 4975 of the Code)
for any Employee Benefit Plans, and no reportable event, as defined in
ERISA, has occurred in connection with the Employee Benefit Plans.
(c) No Liability to PBGC. Neither National nor any of its Subsidiaries
has incurred any liability to the Pension Benefit Guaranty Corporation
(other than for premiums not yet payable), the Internal Revenue Service,
any multiemployer plan or otherwise with respect to any employee pension
benefit plan or with respect to any employee pension benefit plan currently
or previously maintained by members of any controlled group of companies
(as defined in Section 414 of the Code) that includes National or any of
its Subsidiary thereof that has not been satisfied in full, and no
condition exists that presents a material risk to National or any of its
Subsidiaries of incurring such a liability.
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(d) No Actions Pending. As of the date of this Agreement, no material
action, suit, or proceeding or investigation with respect to the Employee
Benefit Plans (other than routine claims for benefits) is pending.
(e) No Additional Plans. Except as authorized by the terms of this
Agreement (or Applicable Law), National has no commitment, whether formal
or informal, to create any additional Employee Benefit Plan, to modify or
terminate any employee benefit plan, or to maintain any employee benefit
plan for any period of time.
(f) No Severance or Accelerated Vesting or Payments. Except as
disclosed pursuant to Section 3.12(g) below, the execution of, and
consummation of the transactions contemplated by this Agreement will not
(either done alone or in conjunction with any other action by National
prior to the Closing):
(i) entitle any current or former employee, director, officer,
consultant, independent contractor, contingent worker, or leased
employee (or any of dependents, spouses or beneficiaries) of National
to severance pay or any other similar payment; or
(ii) accelerate the time of payment or vesting, or increase the
amount of compensation due to the individual.
(g) Retention Programs. National is instituting a retention pay
program for not more than 20 certain employees to be paid by National after
the Closing in an amount not to exceed $6,165,000 and upon such other terms
mutually acceptable to Buyer and NationaL.
3.13 Securities Laws. Except as set forth on National Disclosure Schedule
3.13:
(a) National has filed with the SEC all reports, schedules, forms,
statements and other documents required to be filed with the SEC in the
last 12 months (such documents, together with any documents filed during
such period by National to the SEC on a voluntary basis on Current Reports
on Form 8-K, the "National SEC Documents");
(b) Each of the National SEC documents, as amended prior to the date
of this Agreement, complied as to form in all material respects with, to
the extent in effect at the time of filing, the requirements of the
Securities Act or the Exchange Act, as the case may be, applicable to such
National SEC documents, and none of the National SEC documents when filed
or, if amended prior to the date hereof, as of the date of such amendment,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, which individually or in the aggregate would require
an amendment, supplement or correction to such National SEC documents;
(c) National maintains disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) to ensure that material
information relating to National and its Subsidiaries is made known to its
principal executive officer and principal financial officer. Each of the
financial statements (including the related notes) of National included in
the National SEC documents complied at the time it was filed as to form in
all
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material respects with the published rules and regulations of the SEC with
respect thereto in effect at the time of such filing;
(d) Neither National nor any of its Subsidiaries is a party to, or has
any commitment to become a party to, any joint venture, off-balance sheet
partnership or any similar contract or arrangement (including any contract
or arrangement relating to any transaction or relationship between or among
National and any of its Subsidiaries, on the one hand, and any
unconsolidated Affiliate, including any structured finance, special purpose
or limited purpose entity or person, on the other hand), or any
"off-balance sheet arrangement" (as defined in Item 303(a) of Regulation
S-K of the SEC), where the result, purpose or effect of such contract or
arrangement is to avoid disclosure of any material transaction involving,
or material liabilities of, National or any of its Subsidiaries in
National's or such Subsidiary's published financial statements or other
National SEC Documents; and
(e) None of the Subsidiaries of National are, or have at any time in
the last 12 months been, subject to the reporting requirements of Section
13(a) or 15(d) of the Exchange Act.
3.14 Compliance With Laws.
(a) Compliance and Permits. Except as disclosed in National Disclosure
Schedule 3.14, to the Knowledge of National, each of National and its
Subsidiaries since August 6, 2003:
(i) has complied with, is in compliance with and has operated its
business and maintained its assets in compliance with, all Applicable
Laws except, to the extent that any noncompliance would not have a
Material Adverse Effect; and
(ii) holds all permits, licenses, variances, exemptions, orders,
franchises and approvals of all Governmental Entities used or
necessary for the lawful conduct of its respective business as
presently conducted (the "National Permits"), except where the failure
to hold any National permits would not have a Material Adverse Effect.
The National Permits are valid and in full force and effect, except
for those the failure of which to be valid and in full force and
effect would not have a Material Adverse Effect. The National and its
Subsidiaries are in compliance with the terms of National Permits,
except where the failure to be in compliance would not have a Material
Adverse Effect.
(b) Representations Under Other Sections Excluded. Notwithstanding
Section 3.14(a), the representation and warranty contained in Section
3.14(a) will not apply to (and will exclude) any liability arising out of
or related to facts, events, transactions, or actions or inactions, the
category of which is the subject of another representation or warranty set
forth in this Article III, whether or not the existence of the liability
would constitute a breach or inaccuracy of the representation or warranty.
(By way of example, as to the foregoing sentence, environmental matters are
addressed in the representations and warranties in Section 3.15 And
therefore all environmental matters (regardless of whether such
environmental matters are covered by the representations and warranties in
Section 3.15) are considered a "category" for the purposes of the foregoing
sentence.)
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3.15 Environmental Matters.
(a) To National's Knowledge, except as set forth on National
Disclosure Schedule 3.15(a) which may include by reference the documents
contained in the data room, the real property and facilities owned or
leased and operated by National and its Subsidiaries and the operations of
National and its Subsidiaries thereon currently comply with those
Environmental Laws applicable to the real property and facilities owned or
leased and operated by National and the operations of National except where
noncompliance would not constitute a Material Adverse Effect.
(b) To National's Knowledge, except as set forth on National
Disclosure Schedule 3.15(b), since the Initial Date:
(i) no judicial or administrative proceedings are pending nor has
a Governmental Agency or any person threatened by written notice to
bring a proceeding against National or any Subsidiary alleging the
violation of any Environmental Law that applies to the real property
and facilities owned or leased and operated by National or any
Subsidiary that are reasonably likely to constitute a Material Adverse
Effect; and
(ii) no written notice from any Governmental Authority or any
person has been received by National or any Subsidiary claiming or
requiring under any Environmental Law any remediation or clean up as
to any real property or facility owned or leased and operated by
National or any Subsidiary, the costs of which are reasonably likely
to constitute a Material Adverse Effect.
(c) To National's Knowledge and except as set forth on National
Disclosure Schedule 3.15(c), since the Initial Date, all permits required
to conduct the operations of National pursuant to Environmental Laws have
been duly obtained or applications for such permits have been made, and
National and each Subsidiary is in compliance with such permits except to
the extent that failure to obtain a permit or comply with a permit would
not constitute a Material Adverse Effect.
(d) To National's Knowledge and except as set forth on National
Disclosure Schedule 3.15(d), since the initial date neither National nor
any of its Subsidiaries has stored, disposed of, arranged for or allowed
the disposal of, transported or handled any Hazardous Materials in
violation of Environmental Laws that would result in a Material Adverse
Effect.
(e) To National's Knowledge and except as set forth on National
Disclosure Schedule 3.15(e), since the Initial Date as to real property or
facilities now owned or leased and operated by National or any Subsidiary,
Hazardous Materials are not present in a condition that violates any
Environmental Law applicable to such Hazardous Material and to such
property or facility in a manner that would result in a Material Adverse
Effect.
(f) To National's Knowledge, Buyer has been given access to review all
Phase I Environmental Site Assessments for real property and facilities
owned or leased and operated by National and which were prepared after the
Initial Date in accordance with applicable ASTM Standards for Environmental
Site Assessments.
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(g) To National's Knowledge, except as set forth on National
Disclosure Schedule 3.15(g), since the Initial Date, neither National nor
any Subsidiary has received any written notification from any Governmental
Entity directing National or such Subsidiary that:
(i) it is a potentially responsible party under the Comprehensive
Environmental Response Compensation and Liability Act, 42 U.S.C.
sections 9601 et. seq.; and
(ii) any real property or facility owned or leased and operated
by National or any Subsidiary after the Initial Date is identified or
proposed for listing as a federal National Priorities List pursuant to
the Comprehensive Environmental Response, Compensation and Liability
Act.
(h) To National's Knowledge, except as set forth on National
Disclosure Schedule 3.15(h), since the Initial Date, neither National nor
any Subsidiary has been requested to share in the costs of upgrades or
expansions of publicly-owned treatment works beyond cost sharing that is
reflected in wastewater and sewer fees charged to National or any
Subsidiary for the treatment of wastewater by a publicly-owned works.
(i) "Environmental Laws" means: (i) all currently existing federal,
state and local laws, statutes, codes, ordinances, rules, and regulations
applicable to the real property and facilities owned or leased and operated
by National or any Subsidiary and (ii) all permits, orders, decrees,
determinations, judgments or binding agreements issued, promulgated or
entered into by or between National or a Subsidiary and any Governmental
Authority or issued by any Governmental Authority to National or to any
Subsidiary, relating to pollution, the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata) and natural
resources that control pollution or that protect the air, water, and
surface and subsurface land, including laws and regulations relating to
Releases or threatened Releases of Hazardous Materials, or otherwise
relating to the generation, manufacture, processing, distribution, use,
treatment, storage, transport, handling of or exposure to Hazardous
Materials. Environmental Laws include the Comprehensive Environmental
Response, Compensation and Liability Act, the Superfund Amendments and
Reauthorization Act, the Resource Conservation and Recovery Act, the Clean
Air Act, the Federal Water Pollution Control Act, the Oil Pollution Act,
the Safe Drinking Water Act, the Hazardous Material Transportation Act, the
Toxic Substances Control Act, and the Federal Insecticide Fungicide and
Rodenticide Act.
(j) "Hazardous Materials" means any Hazardous Substance as that term
is defined at 42 U.S.C. 9601(14) and petroleum or any fraction thereof.
(k) "Initial Date" means August 6, 2003, provided that, with respect
to any Subsidiary of National that was acquired or formed by National after
August 6, 2003, the Initial Date shall be the date such entity became a
Subsidiary of National.
(l) "Release" means any release as that term is defined at 42 U.S.C.
9601(22).
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
3.16 Employees.
(a) Wage and Employment Laws. Except as set forth on National
Disclosure Schedule 3.16(a), to the Knowledge of National each of National
and its Subsidiaries is in compliance in all material respects with all
Applicable Laws relating to the employment of personnel and labor,
including provisions thereof relating to wages and hours, equal
opportunity, collective bargaining, plant closing and mass layoff, health
and safety, immigration and the payment of social security and other taxes,
except where noncompliance with any Applicable Law by National or its
Subsidiaries would not have a Material Adverse Effect.
(b) Labor Unions. National Disclosure Schedule 3.16(b) lists each
collective bargaining agreement or other collective labor contract or
industrial instrument to which National or any Subsidiary is a party. To
the Knowledge of National all of the collective bargaining agreements or
other collective labor contracts or industrial instruments set forth on
National Disclosure Schedule 3.16(b) have, since August 6, 2003, been duly
ratified, certified or approved by the parties having authority to ratify,
certify or approve of the collective agreements or other collective labor
contracts or industrial instruments. To the Knowledge of National, except
for those unions which are parties to one or more of the listed collective
bargaining agreements or as otherwise listed on National Disclosure
Schedule 3.16(b):
(i) neither National nor any Subsidiary has agreed to recognize
any union or other collective bargaining representative; and
(ii) as of the date of this Agreement, no union or other
collective bargaining representative has been certified as the
exclusive bargaining representative of any of its employees.
All employees covered by the collective bargaining agreements or other
collective labor contracts or industrial instruments listed on National
Disclosure Schedule 3.16(b) are employees of National or its Subsidiaries as of
the date of this Agreement.
(c) No Strikes, Proceedings and Complaints. Except as set forth on
National Disclosure Schedule 3.16(c), as of the date of this Agreement, to
National's Knowledge there are no pending (including current) or threatened
in writing by a Governmental Agency against or affecting National or any
Subsidiary:
(i) labor strikes, slowdowns, lockouts, representation or
certification campaigns, or work stoppages with respect to employees
of National or any Subsidiary;
(ii) material grievance or arbitration proceedings, written
decisions, letter agreements or settlement agreements arising out of
collective bargaining agreements to which National or any Subsidiary
is a party;
(iii) material unfair labor practices or unfair labor practice
charges or complaints before the National Labor Relations Board or
other Governmental Authority responsible for regulating labor
relations; or
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(iv) charges, complaints or proceedings before the Equal
Employment Opportunity Commission, Department of Labor or any other
Governmental Authority responsible for regulating employment
practices.
(d) No Plant Closings and Layoffs. Since August 6, 2003, there have
not been any plant closings, mass layoffs or other terminations of
employees of National or any Subsidiary which would create any liabilities
for National or any Subsidiary under the Worker Adjustment and Retraining
Notification Act or similar Laws.
3.17 No Brokers. Except as disclosed in National Disclosure Schedule 3.17,
no broker, finder, financial advisor, investment banker or other Person is
entitled to any brokerage, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of National or any of its
Subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Except as disclosed in the Buyer Disclosure Schedule, as contemplated by
Section 8.18(e), Buyer represents and warrants to Sellers as follows:
4.1 Organization and Power. Buyer is a corporation validly existing and in
good standing under the laws of its respective jurisdiction of incorporation,
and has all requisite power and authority to carry on its business as now being
conducted and as presently proposed to be conducted by it. Buyer is duly
qualified or licensed to transact business as a foreign corporation and is in
good standing in each of those jurisdictions in which the nature of the business
it is conducting, or the operation, ownership or leasing of its assets or
properties, makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing would not materially adversely affect the ability of Buyer to timely
consummate any of the transactions contemplated under this Agreement or perform
its obligations under this Agreement.
4.2 Authorization of Transaction. Buyer has full power and authority to
execute and deliver this Agreement and all other Transaction Documents to which
it is a party and to perform its obligations under this Agreement and the
Transaction Documents. No other proceedings or actions on the part of Buyer are
necessary to approve and authorize Buyer's execution and delivery of this
Agreement or any other Transaction Documents to which it is or will be a party
or the performance of its obligations under this Agreement or the Transaction
Documents other than approval by the Buyer Shareholders Assembly. This Agreement
constitutes, and each of the other Transaction Documents to which Buyer is or
will be a party will when executed constitute, a valid and binding obligation of
Buyer, enforceable against Buyer in the United States in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or
other laws affecting creditors' rights generally and limitations on the
availability of equitable remedies.
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
4.3 Absence of Conflicts. The execution, delivery and performance by Buyer
of the Transaction Documents to which it is a party do not, and the consummation
of the transactions contemplated herein and therein will not, subject to
obtaining the Consents, approvals, authorizations and permits and making the
filings described in Section 4.4 or as set forth on Buyer Disclosure Schedule
4.3:
(a) violate, conflict with, or result in any breach of any of the
terms, conditions or provisions of Buyer's certificate of incorporation or
bylaws;
(b) violate any order, writ, judgment, injunction, decree, statute,
law, rule or regulation of any Governmental Entity applicable to Buyer or
by which or to which any portion of its respective properties or assets is
bound or subject;
(c) violate, conflict with, or result in any violation or breach of,
or constitute a default (with or without due notice or lapse of time or
both) under, or give rise to any right of termination, cancellation or
acceleration under, or a loss of any benefits by Buyer under any of the
terms, conditions or provisions of any material agreement; or
(d) result in the creation or imposition of any Lien upon any
properties or assets of Buyer which would, in each case, materially
adversely affect the ability of Buyer to timely consummate the sale or any
of the other transactions contemplated under this agreement.
4.4 No Consents. No consent, registration, declaration, or filing with any
Governmental Entity or any other Person is required by Buyer in connection with
the execution, delivery and performance by Buyer of this Agreement and the other
Transaction Documents to which either of them is a party or the consummation by
Buyer of the contemplated transactions, except for:
(a) the filings required under the HSR Act and the Antitrust Laws of
applicable foreign jurisdictions;
(b) the filings in connection with any state or local Tax authority,
if any;
(c) the other filings and Consents as may be required under any
regulation pertaining to any notification, disclosure or required approval
necessitated by the transactions contemplated by this Agreement and the
other Transaction Documents to which Buyer is a party; and
(d) other consents, approvals, orders, authorizations, registrations,
declarations, filings, notices or permits the failure of which to be
obtained or made would not materially adversely affect the ability of Buyer
to timely close the transactions under this Agreement or any of the other
contemplated transactions.
4.5 Litigation. As of the date of this Agreement, there are no actions,
suits, proceedings, orders or investigations pending (or, to Buyer's Knowledge,
threatened) against or affecting Buyer at law or in equity, or before or by any
Governmental Entity, which could reasonably be expected to adversely affect
Buyer's performance under this Agreement or the other Transaction Documents or
the consummation of the contemplated transactions.
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
4.6 Financial Ability. Buyer has the financial ability to consummate the
transactions contemplated by this Agreement using Buyer's existing credit
facilities and financial resources without delay or restriction.
4.7 Buyer Stock. The Buyer Stock delivered to Sellers at Closing shall be
duly authorized, validly issued, non-assessable, fully registered for trading on
BOVESPA, and fully registered for transfer to Sellers pursuant to the securities
and other applicable laws of Brazil. Sellers that will receive Buyer Stock are
so acquiring such Buyer Stock for investment only and not with a view to resale
or other disposition in the United States. Each Seller acknowledges that the
Buyer Stock is not being registered under the securities laws of the United
States or any state thereof in reliance upon one or more exemptions from the
registration requirements made available under such laws.
4.8 No Knowledge of Misrepresentations or Omissions. As of the date of this
Agreement and at Closing, Buyer has had the opportunity and has reviewed all due
diligence information of National and Sellers in the data room and otherwise
disclosed to Buyer and Buyer is not aware that any of the representations and
warranties of Sellers and National in this Agreement and National Disclosure
Schedule (including updated schedules to the extent delivered hereunder) is
untrue or incorrect in any respect, and Buyer is not aware of any errors in, or
omissions from, National Disclosure Schedule to this Agreement.
ARTICLE V
COVENANTS
5.1 Conduct of Business. Buyer acknowledges that it is the owner of
business operations that are engaged in the beef packing and processing sector
in the United States and further acknowledges that it is aware of the cyclical
nature of the beef packing and processing sectors in the United States. Except
as contemplated by or otherwise permitted or required under this Agreement or in
National Disclosure Schedule 5.1 or to the extent that Buyer shall otherwise
consent in writing (which consent will not be unreasonably withheld), from and
after the date of this Agreement until the Closing, National shall not:
(a) Ordinary Course of Business. Fail to act in the ordinary course of
business tO:
(i) preserve substantially intact National's and each of its
Subsidiaries' present business organizations; and
(ii) preserve their present relationships with employees, agents,
independent contractors, creditors, business partners, customers,
suppliers and others dealings with it, except, in each case, where
such failure would not have a Material Adverse Effect;
(b) Maintenance of Assets. Fail to use commercially reasonable efforts
to maintain the material tangible assets of National and each of its
Subsidiaries in their current physical condition except for ordinary wear
and tear;
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(c) Amendments of Material Contracts. Except for amendments,
terminations or non-renewals in the ordinary course of business, materially
modify, materially amend, terminate or fail to use its commercially
reasonable efforts to renew any Material Contract, or waive, release or
assign any material rights or material claims thereunder;
(d) Restructuring Plans. Adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of National or any of its material
Subsidiaries;
(e) Officer, Director, Employee Compensation. Except as set forth in
Section 3.12(g), (i) make or offer to make any change in the compensation
payable or to become payable to any of its officers, directors, employees,
agents or consultants (other than normal recurring increases in wages to
employees who are not officers or directors in the ordinary course of
business) or to Persons providing management services; (ii) enter into,
adopt, amend or terminate any employment, severance, consulting,
termination, collective bargaining, bonus, profit-sharing, compensation,
stock option, pension, retirement, vacation, deferred compensation or other
agreement or Employee Benefit Plan other than in the ordinary course of
business and consistent with past practices; or (iii) make any loans to any
of its officers, directors, employees, Affiliates, agents or consultants
(other than to comply with changes in Applicable Law) or make any change in
its existing borrowing or lending arrangements for or on behalf of any of
such Persons pursuant to an Employee Benefit Plan or otherwise; provided
that National may designate individuals for participation under its
disclosed Employee Benefit Plans in accordance with the terms thereof;
(f) Material Liens. Voluntarily mortgage, pledge or subject to any
material Lien, other than Permitted Encumbrances, any of its material
assets;
(g) Benefit Plans. Except pursuant to the terms of the Employee
Benefit Plans or other Agreement in effect as of the date of this
agreement: (i) pay any pension or retirement allowance to any officer,
director, employee of National or any of its Subsidiaries or (ii) pay,
offer to pay or agree to pay or make any arrangement for payment to any
officers, directors or employees of National or any of its Subsidiaries of
any amount relating to unused vacation days (except payments and accruals
made in the ordinary course of business);
(h) Intellectual Property Rights. Transfer or grant any rights or
licenses under, or enter into any settlement regarding the breach or
infringement of, any United States or foreign license of any Intellectual
Property, or modify any existing rights with respect thereto or enter into
any licensing or similar agreements or arrangements, except in the ordinary
course of business;
(i) Accounting Principles. Except as required by GAAP, change any of
the accounting principles or practices used by National or any of its
Subsidiaries;
(j) Billing and Collection Practices. Materially change any of its
practices, policies, procedures or timing of the collection of accounts
receivable, billing of its customers, payment terms, cash collections, cash
payments, or terms with vendors, other than in the ordinary course of
business;
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(k) Claim Settlement. Pay, discharge or satisfy any material claims,
liabilities or obligations (whether absolute, accrued, asserted or
unasserted, contingent or otherwise), other than in the ordinary course of
business;
(l) Distributions. Make any distributions to its Members, other than
distributions provided for in Section 5.2.1 Tax Distributions, and Section
5.2.2 Priority Return Distributions of the National limited liability
company agreement consistent with past practices of National and permitted
under the Credit Agreement, provided, however: (i) at the Closing Time
National Members shall have reimbursed National so that for tax
distributions after distributions to Class A Unitholders, the National tax
distribution to its Members does not exceed 42% of the National taxable
income reported on the Tax Returns for the applicable reporting period and
(ii) at the Closing Time National Members shall have reimbursed National
for the distributions made to Members for the first and second calendar
quarters for the current calendar year under Section 5.2.2 Priority Return
Distributions of the National limited liability company agreement which
were made prior to the Closing Time;
(m) Securities. Except for the issuance of member interests in
National issuable upon the exercise of any options outstanding on the date
of this Agreement and/or as required by the terms of any contracts or
agreements between National or any of its Subsidiaries and an employee
thereof as in existence on the date of this Agreement: (i) issue, sell,
pledge, dispose of, encumber or grant rights with respect to (whether
through the issuance or granting of any options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any member interests of any
class or any securities convertible into or exercisable or exchangeable for
member interests of any class (except for pledges of capital stock or
securities under the Credit Agreement and other than the issuance of
certificates in replacement of lost certificates); or (ii) adjust or
reclassify any of its equity securities or issue new equity securities or
any right, option, warrant or right to acquire any equity securities of
National, provided that National may issue to Xxxxxx and Xxxxx in advance
of the Closing the National Interests provided in their deferred
compensation agreements;
(n) Charter Documents. Change or amend its charter documents,
certificate of formation, operating agreement, constitution, bylaws or
other similar governing documents; provided that National may amend its
limited liability company agreement by the adoption of the Amended and
Restated Limited Liability Company Agreement effective as of the Closing
Time attached hereto as Exhibit D;
(o) Indebtedness. Except under the Credit Agreement in the ordinary
course of business, and except for current liabilities within the meaning
of GAAP incurred in the ordinary course of business, incur or assume any
indebtedness for borrowed money, assume, guarantee, endorse or otherwise
become liable or responsible for the obligations of any other Person (other
than endorsements of checks in the ordinary course) or make any loans,
advances or capital contributions to, or investments in, any Person (other
than among National and its Subsidiaries and among such Subsidiaries, and
other than advances to officers, directors and employees in the ordinary
course of business);
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(p) Tax Liabilities. Make any settlement of or compromise any Tax
liability, change in any material respect any Tax election or Tax method of
accounting or make any new Tax election or adopt any new Tax method of
accounting;
(q) Authorization of Above Actions. Authorize any of, or commit or
agree to take any of, the foregoing actions.
5.2 Information.
(a) Access to Information. From and after the date hereof until the
Closing and subject to the Applicable Laws, National and each of its
Subsidiaries shall afford to Buyer and its Affiliates and each of their
respective representatives (including accountants, consultants, counsel and
representatives of financing sources) access, in each case, during normal
business hours, upon reasonable prior notice and in a manner as will not
unreasonably interfere with the conduct of the business of National or any
of its Subsidiaries, to all properties, books, records (including Tax
Returns of National and each of its Subsidiaries), and all other
information with respect to their respective businesses, together with the
opportunity, at the sole cost and expense of Buyer, to make copies of such
books, records and other documents and to discuss the business of National
and each of its Subsidiaries with such members of management, officers,
directors, counsel and accountants for National as Buyer and its
representatives may reasonably request and National shall cause members of
management, officers, directors, counsel and accountants to reasonably
cooperate with Buyer and its representatives in connection therewith.
Notwithstanding the foregoing provisions of this Section 5.2:
(i) neither National nor any of its Subsidiaries shall be
required to grant access or furnish information to Buyer, its
Affiliates or any of their respective representatives to the extent
that:
(A) the information is of a competitively sensitive nature
or is subject to an attorney/client or attorney work product
privilege; or
(B) the access or the furnishing of the information is
prohibited by applicable laws or an existing contract;
(ii) Buyer shall not have access to personnel records of National
or any of its Subsidiaries relating to individual performance or
evaluation records, medical histories or other personal information
that in National's good faith opinion the disclosure of which could
subject National or any of its Subsidiaries to risk of liability or
non-compliance with Applicable Laws.
(b) No Contact With National Personnel. In addition, except as
otherwise expressly permitted pursuant to this Section 5.2, Buyer shall not
contact any personnel of National or its Subsidiaries regarding, or in
connection with, the transactions contemplated by this Agreement without
the express prior consent of National's general counsel or such other
Person as has been designated by him in writing. All information provided
pursuant to this Agreement shall remain subject in all respects to the
Confidentiality Agreement.
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
5.3 Consents. After the date of this Agreement and prior to the Closing,
National shall use its reasonable best efforts, but excluding making any
expenditures or payments to any third party, to obtain the Consent, in form and
substance reasonably satisfactory to Buyer, from any party to a Material
Contract to the extent that it is required to be obtained by National in
connection with the execution, delivery and performance of this Agreement and
the other Transaction Documents, and transactions contemplated by the
Transaction Documents. National shall assist Buyer in obtaining the Consent of
the lenders party to the Credit Agreement to continue the Credit Agreement
following the Closing. For the avoidance of doubt, the failure or inability of
any Parties to obtain any Consent referred to in this Section 5.3, including
without limitation any Consent from any lender to National, shall not constitute
grounds to terminate this Agreement or to refuse to complete the Closing.
5.4 Notification by National of Certain Matters. National shall give prompt
written notice to Buyer of:
(a) the occurrence, or failure to occur, of any event of which it has
Knowledge that would be reasonably likely to cause any representation or
warranty of National contained in this Agreement or in any other
Transaction Document to be untrue or inaccurate in any material respect at
any time from the date of this Agreement to the Closing determined as if
such representation or warranty were made at such time;
(b) the failure of National to comply with or satisfy in any material
respect any covenant to be complied with by it hereunder;
(c) any written notice or other written communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this agreement; and
(d) any written notice or other written communication from any
Governmental Entity in connection with the transactions contemplated by
this agreement.
Except as provided below, no such notification shall affect the representations
or warranties of the Parties or the conditions to their respective obligations
hereunder. As provided in Section 5.18, National shall be entitled to make such
notification in the form of updates and/or modifications to National Disclosure
Schedule and such notification shall amend and supplement the appropriate
schedules previously delivered. Notwithstanding any provision in this Agreement
to the contrary, unless Buyer provides National with a written termination
notice pursuant to Section 7.1(e) within ten calendar days after the expiration
of any applicable Cure Period in respect of a breach described in an updated
National Disclosure Schedule delivered pursuant to this Section 5.4 and which
uncured breach would otherwise give rise to a termination right by Buyer under
Section 7.1(e), then Buyer, in respect of such uncured breach, shall be deemed
to have waived its right to terminate this Agreement or prevent the consummation
of the transactions contemplated by this Agreement pursuant to Section 7.1(e) or
Section 6.2, as applicable, and to have accepted the updated National Disclosure
Schedule for all purposes under this Agreement. The delivery of any such updated
National Disclosure Schedule will be deemed to have cured any misrepresentation
or breach of warranty that otherwise might have existed hereunder by reason of
such variance or inaccuracy.
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
5.5 Notification by Buyer of Certain Matters. Buyer shall give to Sellers
prompt written notice of:
(a) the occurrence, or failure to occur, of any event of which Buyer
has Knowledge that would be reasonably likely to cause any representation
or warranty of Buyer contained in this Agreement or in any other
Transaction Document to be untrue or inaccurate in any respect at any time
until the Closing determined as if such representation or warranty were
made at such time;
(b) any occurrence or failure to occur of any event of which Buyer has
knowledge which will cause the failure of a condition to Closing;
(c) the failure of Buyer to comply with or satisfy in any material
respect any covenant or condition to Closing to be complied with by it
hereunder;
(d) any written notice or other written communication from any Person
alleging that the Consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement; and
(e) any written notice or other written communication from any
Governmental Entity in connection with the transactions contemplated by
this Agreement; provided, however, that notification under this Section 5.5
shall not affect the representations or warranties of the Parties or the
conditions to their respective obligations as set forth in this Agreement.
5.6 Employee Matters.
(a) Employment and Benefits. Except for those Persons whose terms of
employment are governed by one of the employment agreements listed on
National Disclosure Schedule 5.6 and except as set forth in Section
3.12(g), Buyer shall take such action as may be necessary so that at all
times prior to the first anniversary of the Closing Date, officers and
employees of National and its Subsidiaries whose employment is not covered
by any collective bargaining agreement who are in the employ of National or
its Subsidiaries immediately prior to the Closing ("Covered Employees") are
provided employee benefits, plans and programs (including but not limited
to incentive compensation, deferred compensation, pension, superannuation,
life insurance, welfare, profit sharing, 401(k), severance, salary
continuation and fringe benefits) which, in the aggregate, are not
materially less favorable than those made available by National and its
Subsidiaries to such officers and employees immediately prior to the
Closing. For purposes of eligibility to participate and vesting in all
benefits provided by Buyer, its Subsidiaries or National, the Covered
Employees will be credited with their years of service with National and
its Subsidiaries and prior employers to the extent service with Buyer and
its Subsidiaries and prior employers is taken into account under the plans
of Buyer and its Subsidiaries. For purposes of determining satisfaction of
any annual deductible limitation and out-of-pocket maximum that may apply
under the plans provided by Buyer, its Subsidiaries or National, each
Covered Employee will be credited for covered expenses paid by the covered
employee under Employee Benefit Plans during the then current annual period
of coverage. The eligibility of Covered Employees to participate in any
welfare benefit plan or program of Buyer,
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
National and its Subsidiaries shall not be subject to any exclusions or
limitations for any pre-existing conditions except to the extent such
individual was or would have been subject to such exclusion under similar
benefit plans and programs of National and its Subsidiaries. Nothing
contained in this Section 5.6(a) shall create any rights in any officer or
employee or former officer or employee (including any beneficiary or
dependent thereof) of National or its Subsidiaries in respect of continued
employment for any specified period of any nature or kind whatsoever.
(b) Employee Benefit Plans. Except as set forth in National Disclosure
Schedule 5.6(b) and subject to the other provisions set forth in this
Section 5.6, after the Closing and subject to applicable laws and the terms
of any Employee Benefit Plan, Buyer and National may amend, modify or
terminate any Employee Benefit Plan in existence prior to the Closing.
After the Closing, National and each of its respective Subsidiaries are and
shall remain liable for, and National and each of its respective
Subsidiaries shall be responsible for and shall promptly discharge, all
liabilities, duties and claims (to or by any of National's or its
Subsidiaries' employees or former employees, any beneficiary under any
Employee Benefit Plan, any Governmental Entity or otherwise) arising out of
or relating to the employment relationship between National or any of its
Subsidiaries and their respective employees and former employees, including
liabilities, duties and claims:
(i) for deferred compensation, incentive compensation, retirement
benefits, superannuation, health and life benefits, retention
arrangements, severance arrangements and benefits, disability benefits
and other fringe benefits under any Employee Benefit Plan, fund,
program, arrangement, policy or practice;
(ii) relating to continuation health coverage pursuant to Section
4980B of the Code and Title I, Subtitle B, Part 6 of ERISA;
(iii) for unemployment and workers' compensation or similar
benefits; and
(iv) to file any and all annual reports, filings or notices that
may be required to be filed with Governmental Entities or provided to
participants and beneficiaries after the Closing.
(c) Indemnification. After the Closing, Buyer and National and each of
their respective Subsidiaries hereby agree to indemnify each of the Sellers
and their respective officers, directors, employees, consultants, members,
stockholders and Affiliates for, and to hold each of them harmless from and
against, all damages, losses, claims, liabilities, penalties, costs and
expenses (including court costs and reasonable attorneys' fees and expenses
incurred in investigating and preparing for any litigation or proceeding)
that any of them may suffer by reason of or in connection with any claim,
proceeding or suit brought against any of them under the WARN act, or any
similar state or foreign law, which relate to actions taken by Buyer or
National or any of their respective Subsidiaries or Affiliates at, or at
any time after, the Closing (including any discharge or constructive
discharge of any the employees of National or any its Subsidiaries with
regard to any site of employment or one or more facilities or operating
units within any site of employment of National or any of its
Subsidiaries).
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(d) Plan Termination. The Parties agree that, at Buyer's sole
discretion, Buyer may ask National (and National shall promptly but in no
event later than immediately prior to Closing) to terminate any and all
qualified 401(k) retirement plans that National, or any of its Subsidiaries
or ERISA affiliates, sponsor prior to Closing. Any administrative costs
directly related to such terminations, or associated liability that may
arise from such termination and/or cessation of participation shall be
borne by Buyer. If Buyer requires National to terminate such 401(k)
retirement plans, then Buyer agrees to establish one or more new 401(k)
retirement plans effective immediately following the Closing and the
Covered Employees shall be offered the opportunity to enroll in such new
401(k) retirement plan or plans immediately following the Closing. Buyer
further agrees that it shall allow the Covered Employees to elect a tax
free rollover of all or any portion of their account balances under the
terminated 401(k) plans (including without limitation any outstanding
participant loans) to the new 401(k) plans established following the
Closing.
5.7 Access to Information. Buyer shall (and shall cause National to) hold
all the books and records of National and each Subsidiary of National existing
on the Closing Date and not to destroy or dispose of any such books or records
for a period of seven years from the Closing, and thereafter, if it desires to
destroy or dispose of such books and records, offer first in writing each of the
Sellers at least 90 days prior to such destruction or disposal to surrender them
to Sellers or their representatives. During that seven year period, Buyer shall
(and shall cause National and each of its Subsidiaries to), during normal
business hours, and upon reasonable notice, make available and provide Sellers
and their representatives (including counsel and independent auditors) with
access to the facilities and properties of National and each of its Subsidiaries
and to all information, files, documents and records (written and computer) that
are not otherwise protected by legal privilege relating to National and its
Subsidiaries or any of their businesses or operations for any and all periods
prior to or including the Closing Date that they may require with respect to any
reasonable business purpose (including, without limitation, any Tax matter) or
in connection with any claim, dispute, action, cause of action, investigation or
proceeding of any kind by or against any Person, and shall (and shall cause
National and each of its Subsidiaries to) cooperate fully with Sellers and their
representatives (including counsel and independent auditors) in connection with
the foregoing, at the sole cost and expense of Sellers, including, without
limitation, by making tax, accounting and financial personnel and other
appropriate employees and officers of National and each of its Subsidiaries
available to Sellers and their respective representatives (including counsel and
independent auditors), with regard to any reasonable business purpose.
5.8 Indemnification of Officers, Directors, Employees and Agents.
(a) Claims and Indemnified Parties. From and after the Closing Date,
Buyer shall, and shall cause National and any successor entity of National
and if none, Buyer itself, to jointly and severally indemnify (which shall
include the mandatory advancement of expenses as provided in this Section
5.8), defend and hold harmless each Person who is now, or has been at any
time or who becomes prior to the Closing Date, a director, manager,
officer, employee, member, or agent of National, any of its Subsidiaries or
any Seller, and such other Persons entitled to indemnification under the
Limited Liability Company Agreement of National as in effect on the date of
this Agreement (the "Indemnified National Parties") against all losses,
claims, damages, costs, expenses (including reasonable attorneys' and other
professionals' fees
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
and expenses), fines, liabilities or judgments or amounts that are paid in
settlement, arising out of or relating to (i) acts or omissions by them in
their capacities as such, which acts or omissions occurred at or prior to
the Closing Date, (ii) liabilities or obligations of the Company imposed on
such Person by virtue of such Person's position with the Company, and (iii)
any breach by the Company of any of the representations, warranties and
covenants of the Company contained in the Limited Liability Company
Agreement of National as in effect on the date of this Agreement, in each
case to the fullest extent permitted under Applicable Laws. In determining
whether an Indemnified National Party is entitled to indemnification under
this Section 5.8(a), if requested by the Indemnified National Party, the
determination shall be made by special, independent counsel selected by
National and approved by the Indemnified National Party (which approval
shall not be unreasonably withheld) and who has not otherwise performed
services for National or its Affiliates within the last three years (other
than in connection with such matters).
(b) Fees and Assistance. Without limiting the foregoing, in the event
of any claim for indemnification, Buyer and National shall, jointly and
severally;
(i) periodically advance reasonable fees and expenses (including
attorneys' and other professionals' fees and expenses) with respect to
the foregoing and pay the reasonable fees and expenses of counsel
selected by each Indemnified National Party, promptly after statements
therefor are received, provided that the Indemnified National Party to
whom fees and expenses are advanced or for which fees and expenses of
counsel are paid provides an undertaking to repay such advances and
payments if it is ultimately determined that such Indemnified National
Party is not entitled to indemnification; and
(ii) vigorously assist each Indemnified National Party in such
defense, and subject to the terms of this Section 5.8, shall cooperate
in the defense of any matter.
(c) Retention of Counsel. The Buyer and National shall have the right
to retain legal counsel of their choosing to represent an Indemnified
National Party (subject to the approval of such Indemnified National Party
which consent is not to be unreasonably withheld by the Indemnified
National Party). If Buyer or National retains legal counsel as provided
above, the Buyer and National will have no liability for any separate legal
counsel chosen by the Indemnified National Party. If the Buyer and
National, or either of them, assumes such defense, the Indemnified National
Party shall have the right to participate in the defense thereof, it being
understood that the Buyer and National shall control such defense, and in
any such action or proceeding, the Indemnified National Party shall have
the right to retain its own legal counsel, but the fees and expenses of
such legal counsel shall be at its own expense unless (i) the Buyer and
National and the Indemnified National Party mutually agree to the retention
of such legal counsel, or (ii) the named Parties to any such suit, action
or proceeding (including any impleaded Parties) include both the Buyer or
National and the Indemnified National Party, and in the opinion of
recognized outside legal counsel to National, representation of the Buyer
or National and the Indemnified National Party by the same legal counsel
would result in a conflict of interest between Buyer or National, and the
Indemnified National Party. Buyer and National shall be liable only for any
settlement of any claim against an Indemnified National Party made with
Buyer's written consent, which consent shall not be unreasonably withheld,
conditioned, or delayed. Buyer and National shall not, without the prior
written consent of an Indemnified National Party, settle or compromise any
claim, or permit a default or consent to the entry of any
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judgment in respect thereof, unless the settlement, compromise, or consent
includes, as an unconditional term thereof, the giving by the claimant to
the Indemnified National Party of an unconditional release from all
liability and obligations in respect of the claim.
(d) D & O Liability Insurance. For a period of three years after the
Closing Date, National shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance and fiduciary
liability insurance maintained by National and its Subsidiaries (provided
that National may substitute therefor policies with one or more reputable
unaffiliated third-party insurers of at least the same coverage and amounts
containing terms and conditions which are no less advantageous to the
insured) with respect to claims arising from facts or events which occurred
at or before the Closing Time.
(e) Successors and Assigns. If Buyer or National or any of their
successors or assigns (i) consolidates with or merges into any other Person
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or substantially
all of its properties and assets to any Person, then, and in each case, to
the extent not assumed by operation of law, proper provision shall be made
so that the successors and assigns of Buyer or National, as the case may
be, shall assume the obligations set forth in this Section 5.8.
(f) Survival. All rights to indemnification and/or advancement of
expenses contained in any agreement with any Indemnified National Party as
in effect on the date of this Agreement with respect to matters occurring
on or prior to the Closing Time (including the contemplated transactions)
shall survive the Closing and continue in full force and effect. Buyer and
National shall indemnify any Indemnified National Party against all
reasonable costs and expenses (including attorneys' and other
professionals' fees and expenses), the amount to be payable in advance upon
request as provided in Section 5.8, relating to the enforcement of the
Indemnified National Party's rights under this Section 5.8 or under any
charter, bylaw, operating, or company agreement other governing document or
other agreement, provided that the Indemnified National Party provides an
undertaking to repay any advances of costs and expenses if it is ultimately
determined that the Indemnified National Party is not entitled to
indemnification under these documents.
(g) No Impairment of Insurance Claims. Nothing in this Agreement is
intended to, shall be construed to or shall release, waive or impair any
rights to directors' and officers' insurance claims under any policy that
is or has been in existence with respect to National or any of its
officers, directors or employees, it being understood and agreed that the
indemnification provided for in this Section 5.8 is not prior to or in
substitution for any such claims under such policies.
(h) Binding on Successors. The provisions of this Section 5.8 shall
survive the Closing and are intended to be for the benefit of, and shall be
enforceable by, each of the Indemnified National Parties identified in
Section 5.8(a), their heirs and their personal representatives and shall be
binding on all successors and assigns of Buyer and National and may not be
terminated or amended in any manner adverse to such Indemnified National
Parties without their prior written consent.
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5.9 Notification of Breach. If Buyer becomes aware of a representation,
warranty, or covenant which is untrue, a misrepresentation or a material
omission, or a breach of an agreement, made by National contained in this
Agreement, Buyer shall promptly notify National of the false statement,
misrepresentation, or omission, or breach.
5.10 Governmental Consents.
(a) HSR Filing. Promptly following the execution of this Agreement,
the Parties shall file, or cause to be filed by their respective "ultimate
parent entities," with the FTC and the DOJ the notifications and other
information (if any) required to be filed under the HSR Act with respect to
the transactions contemplated in the Transaction Documents.
(b) Other Governmental Entities. In addition, National and Buyer shall
promptly proceed to prepare and file with the appropriate Governmental
Entities such additional requests, reports or notifications as may be
required or, in the opinion of Buyer or Sellers, advisable, in connection
with this Agreement including under the Antitrust Laws of applicable
foreign jurisdictions.
(c) Cooperation. With respect to each of the above filings, and any
other requests from Governmental Entities the Parties shall diligently and
expeditiously prosecute and use best efforts to obtain any clearance under
the Antitrust Laws for the Sale and to resolve any objections as may be
asserted by any Governmental Entity with respect to the sale, and cooperate
fully with each other in the prosecution of, such matters including,
subject to Applicable Law, by permitting counsel for the other Party to
review in advance (to the extent possible), and consider in good faith the
views of the other Party in connection with, any such filing or any
proposed or oral written communication with any Governmental Entity and by
providing counsel for the other Party with copies of all filings and
submissions made by such Party and all correspondence between such Party
(and its advisors) with any Governmental Entity and any other information
supplied by such Party and such Party's Subsidiaries to a Governmental
Entity or received from such a Governmental Entity in connection with the
transactions contemplated by this Agreement. Any competitively sensitive
information that is disclosed pursuant to this Section 5.10(c) will be
limited to each of Buyer's and National's respective outside counsel and
economists pursuant to a separate customary Confidentiality Agreement. Each
of Buyer and National shall furnish to the other such necessary information
and reasonable assistance as the other may reasonably request in connection
with its preparation of any such filing or submission.
(d) Status. Buyer and National shall keep each other apprised of the
status of any communications with, and any inquiries or requests for
additional information from, the FTC, the DOJ, any other Governmental
Entity or any third Party with respect to the Sale. In the event a suit or
other proceeding is threatened or instituted by a public or private entity
or individual challenging the Sale as violative of the HSR Act, the Xxxxxxx
Act, as amended, the Xxxxxxx Act, as amended, the Federal Trade Commission
Act, as amended, or any other federal, state or foreign law or regulation
or decree or an order designed to prohibit, restrict or regulate actions
for the purpose or effect of foreign ownership, monopolization or restraint
of trade (collectively, "Antitrust Laws"), Buyer shall use its best efforts
to avoid the filing of, or resist or resolve such suit or proceeding filed
by a Governmental Entity, and defend any such suit or
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proceeding brought by a private entity or individual, if such suit or
proceeding is likely to impede the Closing.
(e) Strategy. Buyer shall not require National or National's parent,
USPB, to, and National or National's parent, USPB shall not be required to,
take any action with respect to satisfying any Antitrust Laws that would
bind National or its Subsidiaries in the event the Closing does not occur.
(f) Avoidance of Injunctions. In addition, Buyer shall use its best
efforts to take all action to resolve any actual or threatened suit brought
by any Governmental Entity and resist any actual suit brought by any other
Person, challenging or threatening to challenge the transaction as
violative of the Antitrust Laws, in the form of a settlement, undertaking,
consent decree, stipulation, or the like, or compliance with any order of
any federal or state court in the United States or any foreign court or
tribunal, in order to avoid the entry of any preliminary injunction or
other order which has the effect of preventing the consummation of the
transaction prior to the Termination Date or delaying consummation beyond
the Termination Date, and in the event that any preliminary injunction or
other order is entered or becomes reasonably foreseeable to be entered in
any proceeding that would make consummation of the transactions
contemplated hereby in accordance with the terms of this Agreement unlawful
or that would prevent or delay consummation of the contemplated
transactions, Buyer shall use its best efforts to promptly, take any and
all steps necessary to vacate, modify or suspend such injunction or order
so as to permit such consummation prior to the Termination Date.
(g) Termination Fee. Buyer shall propose, negotiate, offer to commit
and effect (and if such offer is accepted, commit to and effect), by
consent decree, hold separate order or otherwise, the sale, divestiture or
disposition of such assets or businesses of Buyer or, effective as of the
Closing, National or their respective Subsidiaries, or otherwise shall
offer to take or offer to commit to take any action which it is capable of
taking and if the offer is accepted, take or commit to take such action
that limits its freedom of action with respect to, or its ability to
retain, any of the businesses, services or assets of Buyer, National or
their respective Subsidiaries, in order to avoid the entry of, or to effect
the dissolution of, any injunction or order described in the foregoing
paragraph, or, if no suit has been filed, to effect the resolution of
objections or concerns by a Government Entity, which would have the effect
of preventing or delaying the Closing beyond the Termination Date. If Buyer
fails to take any actions required under the preceding sentence, Buyer
shall pay or cause to be paid to Sellers, as Sellers' sole and exclusive
remedy for such failure, the Termination Fee on the fifth Business Day
following the date of termination of this Agreement, with the Termination
Fee to be allocated among Sellers in proportion to their respective
holdings of National Interests as set forth on Exhibit B. For the avoidance
of doubt, Buyer shall pay or cause to be paid to Sellers the Termination
Fee if Buyer does not take any and all actions necessary in order to ensure
that (i) no requirement for a waiver, consent or approval of the FTC, the
DOJ, any state attorney general or other Governmental Entity, or expiration
or termination of any waiting period; (ii) no decree, judgment, injunction,
temporary restraining order or any other order in any suit or proceeding,
involving such Governmental Entity and (iii) no other matter relating to
any antitrust or competition law or regulation would preclude consummation
of the Sale by the Termination Date. Nothing in this Section 5.10(g) is
intended to limit Sellers' remedies for Buyer's failure to fulfill any of
its other obligations under this Section 5.10(a) through (f).
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5.11 Antitrust Laws; Reasonable Efforts; Further Assurances.
(a) Antitrust Laws. Subject to other terms of this Agreement,
including the immediately following sentence, from the date of this
Agreement through the date clearance is obtained from all of the relevant
foreign and domestic antitrust authorities or the date of termination of
the required waiting period under the HSR Act and the Antitrust Laws of
applicable foreign jurisdictions, respectively, Buyer shall not, and shall
cause its Affiliates not to, take any action that could reasonably be
expected to hinder or delay the obtaining of clearance or the expiration of
the required waiting period under the HSR Act or any other applicable
Antitrust Law. Notwithstanding anything in this Agreement to the contrary,
including the immediately preceding sentence, Buyer and its Affiliates may
enter into, engage in, consummate, seek requisite approval of and take such
other actions necessary to consummate the transactions set forth on Exhibit
I. Nothing in this Section 5.11(a) shall be understood to contradict the
duties of the Parties outlined in Section 5.10(c).
(b) Take Actions To Consummate Transaction. Subject to Section 5.10
which shall govern the subject matter thereof, prior to the Closing, upon
the terms and subject to the conditions set forth in this Agreement, Buyer
and National shall use their reasonable best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable (subject to any Applicable Laws) to
consummate the transactions contemplated by this Agreement and make
effective the contemplated transactions as promptly as practicable. In
addition, no Party shall take any action after the date of this Agreement
to materially delay the obtaining of, or result in not obtaining, any
consent from any Governmental Entity necessary to be obtained prior to
Closing.
(c) Buyer's Rights In National Ownership Interests. At and after the
Closing Date, the officers and directors of National will be authorized to
execute and deliver, in the name and on behalf of National or Buyer, any
right of Buyer in the ownership interests transferred from Sellers to
Buyer.
5.12 Investigation and Agreement by Buyer; No Other Representations or
Warranties.
(a) Independent Investigation. Buyer acknowledges and agrees that it
has made its own inquiry and investigation into, and, based thereon, has
formed an independent judgment concerning, National and its Subsidiaries
and their businesses and operations, and Buyer has been furnished with or
given full access to such information about National and its Subsidiaries
and their businesses and operations as it requested and considered material
in determining whether to enter into this Agreement and to consummate the
transactions contemplated in this Agreement. Buyer acknowledges and agrees
that it has had an opportunity to ask all questions of and receive answers
from National with respect to any matter Buyer considers material in
determining whether to enter into this Agreement and to consummate the
transactions contemplated in this Agreement. In connection with Buyer's
investigation of National and its Subsidiaries and their businesses and
operations, Buyer and its respective representatives have received from
National or its representatives certain projections and other forecasts for
National and its Subsidiaries and certain estimates, plans and budget
information. Buyer acknowledges and agrees that: (i) there are
uncertainties inherent in attempting to make
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
such projections, forecasts, estimates, plans and budgets; (ii) Buyer is
familiar with such uncertainties; (iii) Buyer is taking full responsibility
for making its own evaluations of the adequacy and accuracy of all
estimates, projections, forecasts, plans and budgets so furnished to it or
its representatives; (iv) Buyer has not relied upon the estimates,
projections, forecasts, plans and budgets so furnished to it or its
representatives; and (v) Buyer will not (and will cause all of its
Subsidiaries and other Affiliates and all other Persons acting on its
behalf to not) assert any claim or cause of action against National, its
Subsidiaries or any of National's direct or indirect directors, officers,
employees, agents, stockholders, Affiliates, consultants, counsel,
accountants, investment bankers or representatives with respect thereto, or
hold any such other Person liable with respect thereto.
(b) Limitation of Representations and Warranties. Buyer agrees that,
except for the representations and warranties made by Sellers and National
that are expressly set forth in Article II and Article III of this
Agreement and as of the date of this Agreement, neither Seller nor National
nor any of their respective Affiliates or representatives has made and
shall not be deemed to have made to Buyer or to any of its representatives
any representation or warranty of any kind. Except as expressly set forth
in this Agreement, no Person has been authorized by any Seller or by
National to make any representation or warranty relating to National or any
Subsidiary of National or their respective businesses or operations, or
otherwise in connection with the transactions contemplated by the
Transaction Documents and, if made, the representation or warranty may not
be relied upon. Without limiting the generality of the foregoing, and
notwithstanding any otherwise express representations and warranties made
by National and Sellers in Articles II and III, Buyer agrees that none of
the Sellers or National, any of their Affiliates or any other Person makes
or has made any representation or warranty to Buyer or to any of its
representatives with respect to:
(i) any projections, forecasts, estimates, plans or budgets of
future revenues, expenses or expenditures, future results of
operations (or any component thereof), future cash flows (or any
component thereof) or future financial condition (or any component
thereof) of National or any of its Subsidiaries or the future
business, operations or affairs of National or any of its Subsidiaries
heretofore or hereafter delivered to or made available to Buyer or its
representatives, other than as described in Section 5.12(a); or
(ii) any other information, statements or documents heretofore or
hereafter delivered to or made available to Buyer or its
representatives, including the information in the on line data room
with respect to National or any of its Subsidiaries or the business,
operations or affairs of National or any of its Subsidiaries, except
to the extent and as expressly covered by a representation and
warranty made by National and contained in Article III, which
representations and warranties contained in Article III are the only
representations and warranties that Buyer is relying on in connection
with its execution of this Agreement.
5.13 Other Acquisition Proposals.
(a) No Solicitation. Neither any Seller, nor National nor any of its
Subsidiaries will, nor shall any Seller or National authorize any
investment bankers, consultants or other advisors to any Seller, National
or National Subsidiaries who are under control of Sellers, National, or any
National Subsidiary to, solicit, initiate, or encourage the submission of
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any proposal or offer from any Person relating to the acquisition of all or
substantially all of the membership interests or assets of National or any
of its Subsidiaries (including any acquisitions structured as a merger,
consolidation, or share exchange) (any such proposal or offer an
"Acquisition Proposal").
(b) Superior Proposal. Notwithstanding anything to the contrary, if
(i) any Seller or National receives a bona fide Acquisition Proposal and
Sellers disclose to Buyer the material terms and conditions of the
Acquisition Proposal and the identity of the Person making such Acquisition
Proposal and (ii) the Board of Directors of USPB determines that such
Acquisition Proposal is or is reasonably likely to lead to a Superior
Proposal (after taking into account any written binding offer by Buyer to
improve the terms of this Agreement in response to such Acquisition
Proposal), Sellers, National and their Representatives may:
(i) furnish information with respect to National and Sellers to
the Person making the Acquisition Proposal (and its representatives)
pursuant to a customary aonfidentiality agreement, and
(ii) participate in discussions or negotiations with the Person
making the Acquisition Proposal (and its representatives) regarding
the Acquisition Proposal.
(c) Recommendation of this Agreement. USPB agrees that neither its
Board of Directors nor any committee thereof shall:
(i) (A) withdraw (or modify in a manner adverse to Buyer), or
propose to withdraw (or modify in a manner adverse to Buyer), the
recommendation or declaration of advisability by the Board of
Directors or any committee thereof of this Agreement or (B) recommend,
adopt or approve, or propose publicly to recommend, adopt or approve,
any Acquisition Proposal; or
(ii) approve or recommend, or propose to approve or recommend, or
permit National to execute or enter into, any letter of intent,
memorandum of understanding, agreement in principle, merger agreement,
acquisition agreement, option agreement, joint venture agreement,
partnership agreement or other similar agreement constituting or
related to any Acquisition Proposal (other than a confidentiality
agreement pursuant to Section 5.13(b)(i)).
(d) Notwithstanding anything in this Section 5.13 to the contrary:
(i) in order to comply with its legal duties the Board of
Directors of USPB or any committee thereof may withdraw or modify its
recommendation of this Agreement (a "Change of Recommendation"),
cancel or postpone any meeting of USPB members, and otherwise
communicate with the members of USPB as the Board of Directors or any
committee thereof deems necessary or appropriate; and
(ii) in response to a Superior Proposal that did not result from
a breach of Section 5.13(a), the Board of Directors of USPB may
recommend to Sellers that Sellers terminate this Agreement pursuant to
Section 7.1(j)(ii). Concurrently with or after such termination,
National and/or Sellers may enter into any letter of intent,
memorandum of understanding, agreement in principle, merger agreement,
acquisition agreement, option
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agreement, joint venture agreement, partnership agreement or other
similar agreement with respect to such Superior Proposal.
(e) Superior Proposal. "Superior Proposal" means a bona fide
Acquisition Proposal on terms and conditions which the Board of Directors
of USPB determines in good faith are (considering such factors as the Board
of Directors deems appropriate, including the likelihood of completion)
more favorable to Sellers than those set forth in this Agreement.
(f) Fiduciary Termination Fee. If (i) Sellers or National receive a
Superior Proposal, (ii) the Board of Directors of USPB issue a Change of
Recommendation pursuant to this Section 5.13, and (iii) Sellers terminate
this Agreement pursuant to Section 7.1(j), then Sellers shall cause to be
paid by National to Buyer, within 60 days after the termination, the amount
of $25,000,000 plus all costs of Buyer incurred in the United States
related to the negotiation and implementation of the transactions under
this Agreement including costs of legal counsel, consultants, advisors, due
diligence, and printing.
5.14 Member Approval. USPB shall promptly after the date of this Agreement
give all required notices and take all action necessary to notify its members of
a meeting to seek approval of the contemplated transactions to mail to its
members information relevant to their vote and as required under the Applicable
Law. The Board of Directors of USPB shall:
(a) promptly and duly call, give notice of, convene and hold a meeting
of its members within 30 days after the date of this Agreement for the
purpose of obtaining approval of the transactions contemplated hereby;
(b) recommend to its members approval of the contemplated transactions
hereby; and
(c) take all commercially reasonable action to solicit and obtain such
member approval, subject to this Section 5.14.
5.15 Creation of Advisory Board. Buyer shall establish an Advisory Board to
consult with and advise the management of Buyer's United States beef processing
operations on matters pertaining to cattle procurement, processing operations
and strategy (the "Advisory Board"). The Advisory Board shall include one member
representing USPB so long as USPB owns interests in National, its successors or
JBS, S.A. Buyer agrees that the Advisory Board shall meet at least once per
quarter and more frequently to the extent appropriate.
5.16 JBS Shareholder Approval. Buyer shall promptly after the date of this
Agreement give all required notices and take all action necessary to notify its
shareholders of a meeting to seek approval of the transactions contemplated
hereby and mail to its shareholders information relevant to their vote and as
required under the Applicable Law. The Board of Directors of Buyer shall:
(a) promptly and duly call, give notice of, convene and hold a meeting
of its shareholders, which meeting shall be held within 30 days of the date
of the Agreement, for the purpose of obtaining approval of the transactions
contemplated hereby;
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(b) recommend to its shareholders approval of the contemplated
transactions under this Agreement; and
(c) take all commercially reasonable action to solicit and obtain
shareholder approval.
5.17 Consulting Contract. Buyer and Xxxxxx will negotiate in good faith to
establish a consulting contract upon mutually agreeable terms. Neither Buyer nor
Xxxxxx are obligated to enter into a consulting contract if the terms are not
agreeable. Inability to reach an agreement will not have any impact on any other
terms or conditions of the Sale.
5.18 Supplementation and Amendment of Schedules. From time to time prior to
the Closing, National shall have the right to supplement or amend the National
Disclosure Schedule with respect to any prior matter discovered after the
delivery of the National Disclosure Schedule pursuant to this Agreement; or any
matter arising subsequent to the date of this Agreement provided, however, no
such supplement or amendment shall have any effect on the satisfaction of the
conditions to Closing set forth in Section 6.2(a) except as provided therein.
5.19 USPB Noncompetition Agreement. For a period of five years, or the
maximum time permitted by law provided that such time does not exceed five
years, after Closing USPB agrees that it will not own or operate a cattle
xxxxxxxxx and processing facility in the United States, provided, however, USPB
may own publicly traded securities or other similar publicly traded investment
interests in a publicly traded company that slaughters and processes cattle.
Notwithstanding the foregoing, the ownership of the publicly traded interests
shall not be permitted if they allow USPB to materially control or influence the
operations of said publicly traded companies.
5.20 NBPCO Noncompetition Agreement. For a period of five years, or the
maximum time permitted by law provided that such time does not exceed five years
after Closing, NBPCO will not own or operate a cattle xxxxxxxxx and processing
facility in the United States other than those facilities acquired from Tyson
Foods, Inc., provided, however, NBPCO may own publicly traded securities or
other similar publicly traded investment interests in a publicly traded company
that slaughters and processes cattle. Notwithstanding the foregoing, the
ownership of the publicly traded interests shall not be permitted if they allow
NBPCO to materially control or influence the operations of the publicly traded
companies. If Buyer and NBPCO or its affiliate BPI, and/or any other affiliate
of BPI enter into other agreements with Buyer or Buyer's affiliates relating to
cattle xxxxxxxxx and processing facilities and those agreements contain
noncompetition provisions between NBPCO, BPI, and/or BPI's affiliates, and Buyer
or its affiliates, then the noncompetition provisions in those other agreements
shall supercede the provisions in this Section 5.20 without any further action
by the Parties to this Agreement.
5.21 Buyer Trading of JBS Stock. Buyer agrees that Buyer or Buyer's related
family owners holding Buyer Stock (all such Persons and entities referred to as
"Buyer Stockholders"), if allowed to trade shares during a period when the JBS
Stock Price is determined, may have the appearance of influencing the JBS Stock
Price. Buyer covenants that Buyer Stockholders will not buy or sell Buyer Stock
in the 30 day period prior to Closing and should any Buyer
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
Stockholders trade Buyer Stock in the 30 day period prior to Closing, Buyer
shall immediately, but not later than 24 hours after the close of the trading
day, report the trades to Sellers in writing. Buyer agrees that Sellers retain
all rights to obtain Sellers JBS Stock at the fair traded market value under
this Agreement free of any stock price manipulation.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation. The respective obligations of
Sellers and Buyer to effect the transactions contemplated under this Agreement
are subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(a) the waiting period (and any extension thereof) under any Antitrust
Laws, including the HSR Act, applicable to the transactions contemplated
under this Agreement shall have been terminated or shall have expired, and
all clearances, approvals, or Consents under any Antitrust Laws, including
under the Antitrust Laws of applicable foreign jurisdictions, as disclosed
to Seller upon execution of this Agreement shall have been obtained or
expired, as the case may be;
(b) no temporary restraining order, preliminary or permanent
injunction or other order issued by any Government Entity preventing the
consummation of the transactions contemplated by the Transaction Documents
shall be in effect; and
(c) no action shall have been taken nor any statute, rule or
regulation shall have been enacted or promulgated by any United States
Governmental Entity that prohibits consummation of the Sale or the other
transactions contemplated hereby.
6.2 Conditions to Obligation Of Buyer. The obligation of Buyer to effect
the transactions contemplated hereby is subject to the satisfaction, on or prior
to the Closing Date, of the following conditions unless waived, in whole or in
part, by Buyer:
(a) each of the representations and warranties of National set forth
in this Agreement shall be true and correct in all material respects as of
the date of this Agreement and, shall be true and correct in all material
respects as of the Closing Date (after giving effect to any supplements to
the National Disclosure Schedule pursuant to Sections 5.4 and 5.18) as
though made on and as of such time (other than such representations and
warranties that are made as of another date, which shall be true and
correct as of such date); provided, however, that this condition shall be
deemed to have been satisfied unless the individual or aggregate impact of
all inaccuracies of such representations and warranties would have a
Material Adverse Effect as of the time made. Buyer shall have received
certificates signed on behalf of National by an executive officer of
National to such effect.
(b) National shall have performed or complied in all material respects
with all covenants under Sections 5.1, 5.2, and 5.4 except where such
compliance or performance would not result in a Material Adverse Effect at
or prior to the Closing Date. Buyer shall have received a certificate
signed on behalf of National by an executive officer of National to such
effect;
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(c) each Seller shall have delivered to Buyer a duly executed and
acknowledged certificate, in compliance with the Code and Treasury
Regulations, certifying such facts as to establish that such Seller's sale
of its National Interests and any other transactions contemplated hereby
are exempt from withholding pursuant to Section 1445 of the Code;
(d) all documents, instruments, certificates or other items required
to be delivered at the Closing by National pursuant to this Agreement and
as listed on National Disclosure Schedule 6.2(d) shall have been delivered;
(e) the transactions contemplated hereby shall have been approved by
Buyer's Shareholders Assembly; and
(f) each Seller shall have executed an assignment of the applicable
National Interests in the form attached hereto as Exhibit E.
6.3 Conditions to Obligations of Sellers. The obligations of Sellers to
effect the transactions contemplated hereby is subject to the satisfaction, on
or prior to the Closing Date, of the following conditions unless waived, in
whole or in part, by Sellers:
(a) each of the representations and warranties of Buyer set forth in
this Agreement shall be true and correct in all material respects both as
of the date of this Agreement and as of the Closing Date as though made on
and as of such time (other than such representations and warranties that
are made as of another date, which shall be so true and correct as of such
date); provided, however, that this condition shall be deemed to have been
satisfied unless the individual or aggregate impact of all inaccuracies of
such representations and warranties materially adversely affect the ability
of Buyer to timely consummate the sale or any of the other transactions
contemplated hereby. Sellers shall have received certificates signed on
behalf of Buyer by an executive officer of Buyer to such effect;
(b) Buyer shall have performed or complied in all material respects
with all obligations and covenants required to have been performed or
complied with by it under this Agreement and the other Transaction
Documents at or prior to the Closing Date, and Sellers shall have received
a certificate signed on behalf of Buyer by an executive officer of Buyer,
respectively, to such effect;
(c) all documents, instruments, certificates or other items
(including, without limitation, the payments to be made at the Closing
pursuant hereto) required to be delivered at the Closing by Buyer and
listed on Buyer Disclosure Schedule 6.3(c) pursuant to this Agreement shall
have been delivered including without limitation the evidence of: (i)
clearance duly issued by CVM with respect to the Sellers JBS Stock to
Sellers listed on Exhibit B; and (ii) the OTA relating to Sellers JBS Stock
duly executed by its legal representatives and if the evidence in Section
6.3(c)(i) and (ii) is not delivered by Buyer to Sellers at Closing, Sellers
may demand a cash payment as provided in Section 1.3.
(d) the transactions contemplated by this Agreement shall have been
approved by the members of USPB.
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement and the transactions contemplated hereby
may be terminated prior to the Closing and the sale may be abandoned at any time
prior to the Closing Time:
(a) Mutual Consent. By mutual written consent of Buyer and Sellers;
(b) By Sellers: Breach. By Sellers, if there shall have been any
breach by Buyer, of any covenant or agreement set forth in this Agreement,
which breach:
(i) would give rise to the failure of a condition to the Closing
(testing each Closing condition as it pertains to the breach as if the
date of termination were the Closing Date) in the favor of the
terminating Party; and
(ii) cannot be cured by Buyer, or has not been cured by Buyer,
within 20 days (the "Cure Period") following receipt by Buyer of
written notice of such breach; provided, however, that the right to
terminate this Agreement under this Section 7.1(b)(ii) shall not be
available to Sellers if they have failed to perform or observe in any
material respect any covenant or obligation contained in this
Agreement where such breach or failure to perform at the time of the
exercise of the termination right would give rise to the failure of a
condition set forth in Section 6.2(a), (testing the Closing condition
as it pertains to the breach or failure to perform as if the date of
the exercise of the termination right were the Closing Date);
(c) By Sellers: Buyer's Failure To Provide Financing Notice. By
Sellers if Buyer has not delivered to Sellers by March 31, 2008, a written
confirmation representing that Buyer has the financing and approvals to pay
to Sellers the Buyer Stock and cash payable at Closing (the "Financing
Representation"). If Buyer does not provide such Financing Representation
to Sellers regarding adequate financing and approvals by March 31, 2008
(the "Financing Approval Date"), or such later Financing Approval Date
which Sellers in their sole discretion grant an extension, this Agreement
shall terminate and Buyer shall be subject to the payment obligations under
Section 7.3;
(d) Failure to Finance After Commitment. If Buyer provides the
Financing Representation under Section 7.1(c) and Buyer does not have the
financing at Closing, then: (i) Buyer agrees to pay Sellers the Termination
Fee (as defined in Section 7.3) within ten days after written notice from
Sellers; (ii) Sellers may enforce or terminate this Agreement; and (iii)
Sellers have all remedies available to them under this Agreement and at
law;
(e) By Buyer: Breach. By Buyer if:
(i) there shall have been any breach by National or Sellers of
any covenant or agreement set forth in this Agreement, which breach:
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(A) would give rise to the failure of a condition to the
Closing (testing each such Closing condition as it pertains to
such breach as if the date of termination were the Closing Date)
in the favor of Buyer; and
(B) cannot be cured by National or Sellers, or has not been
cured by National or Sellers, within the Cure Period, provided,
however, that the right to terminate this Agreement under this
Section 7.1(e) shall not be available to Buyer if Buyer has
failed to perform or observe in any material respect any covenant
or obligation contained in this Agreement where such breach or
failure to perform at the time of the exercise of the termination
right would give rise to the failure of a condition set forth in
Section 6.3(a) or 6.3(b), as applicable (testing each such
Closing condition as it pertains to such breach or failure to
perform as if the date of the exercise of the termination right
were the Closing Date);
(ii) there is a false representation or warranty given by
National under Article III, in which the difference at the time the
representation was given between a true representation and warranty
and the false representation and warranty would be a Material Adverse
Effect to National.
(f) By Buyer: Act of God. If an Act of God occurs after execution of
the agreement and before Closing that causes a Material Adverse Effect on
National or its Subsidiaries and is not fully covered and indemnified by
insurance (subject to customary deductibles) under which National or
Subsidiaries are the covered beneficiaries, then Buyer may terminate this
Agreement by written notice to National and Sellers within 10 days of
notice of the act of god;
(g) Either Party; failure of member/shareholder approval.
Buyer or Sellers may terminate this Agreement if:
(i) the members of USPB do not approve the transactions
contemplated under this Agreement by 30 days after execution of this
Agreement; or
(ii) the shareholders of JBS fail to approve the transactions
contemplated under this Agreement by 30 days after execution of this
Agreement.
Buyer and Sellers agree to promptly notify each other in writing upon
approval of the transactions by their respective shareholders and members, and
if the Party elects to terminate the Agreement as provided under this Section
7.1(g);
(h) Court Order. By either Buyer or Sellers if a court of competent
jurisdiction or other Governmental Entity shall have issued an order,
decree or ruling or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the consummation of the
sale or otherwise prohibiting the transactions contemplated by the
Transaction Documents and such order, decree, ruling or other action shall
have become final and nonappealable, or there shall be any statute, rule or
regulation enacted or promulgated by any Governmental Entity which
prohibits the consummation of the sale or otherwise prohibits the
transactions contemplated by the Transaction Documents;
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(i) Failure to Close Before Expiration. By either Buyer or Sellers if
the Closing shall not have occurred for any reason on or before the date
360 days after the date of execution of this Agreement unless that date is
extended by National at National's election; provided that if a Cure Period
has not expired prior to date, then the Party entitled to cure a breach
during the Cure Period shall have the right to extend the Termination Date
to the first Business Day after the last day of such Cure Period (the above
date as it may be extended in accordance with the terms of this Agreement,
the "Termination Date"); provided, however, that the right to terminate
this Agreement under this Section 7.1(i) shall not be available to any
Party whose failure to perform or observe in any material respect any
covenant or obligation contained in this Agreement has been the cause of or
resulted in the failure of the Closing of the transactions contemplated by
this Agreement to occur on or before the Termination Date; and
(j) Sellers Superior Proposal. By Sellers, to the extent permitted by
Section 5.13(d)(ii), if at any time before the Closing all of the following
conditions are met:
(i) the USPB Board of Directors recommends to Sellers that they
enter into an agreement with respect to a Superior Proposal and
Sellers notify Buyer in writing that they intend to enter into such an
agreement, attaching a summary of the material terms thereof; and
(ii) Buyer does not make, within 30 Business Days after the
receipt of Sellers' written notification of their or National's
intention to enter into a binding agreement for a Superior Proposal, a
written offer that the USPB Board of Directors determines, in good
faith consistent with its fiduciary obligations under Applicable Law
after consultation with its legal counsel and financial advisor, is at
least as favorable as the Superior Proposal. To the extent the 30 day
period in this Section 7.1(j) extends beyond the Termination Date
determined under other Sections of this Agreement, the Termination
Date shall be extended until the end of the 30 day period in this
Section 7.1(j)(ii).
(k) Notice of Termination. Any termination pursuant to this Section
7.1 (other than a termination pursuant to Section 7.1(a)) shall be effected
by written notice from the Party so terminating to the other Parties, which
notice shall specify the Section pursuant to which this Agreement is being
terminated.
7.2 Effect of Termination. In the event of the termination of this
Agreement by either Buyer or Sellers as provided in Section 7.1, this Agreement
shall forthwith become void and of no further force or effect with no liability
or obligation hereunder on the part of Buyer, National, Sellers or their
respective Affiliates, officers, directors, employees or stockholders, except:
(a) Articles VII and VIII (except Sections 8.1, 8.2, 8.12, 8.20, and
8.21) and Exhibit A shall survive such termination; and
(b) Except for Buyer's failure to provide the Financing Representation
as required by Section 7.1(c) and the corresponding payment to Sellers of
the Termination Fee in Section 7.3, in which case other than the payment of
fees and expenses under Section 8.17(c), Buyer has no further liability to
Sellers, the liability of any Party for any willful breach by such
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
Party of the covenants or agreements of such Party set forth in this
Agreement occurring prior to the termination of this Agreement shall
survive the termination of this Agreement and the non-breaching Party shall
be entitled to pursue any and all legally available remedies and to seek
the recovery of all losses, liabilities, damages, costs and expenses of
every kind and nature including reasonable attorneys' fees.
7.3 Termination Fee. Notwithstanding anything in this Agreement to the
contrary, if:
(a) the Closing does not occur and this Agreement is terminated;
(b) Buyer fails to provide to Sellers the Financing Representation as
provided in Section 7.1(c) by March 31, 2008 or a later date as extended by
Sellers in their sole discretion; or
(c) Buyer provides the Financing Representation to Sellers and then
Buyer does not have adequate financing to pay amounts due at the Closing
under Section 7.1(d);
then Buyer shall pay or cause to be paid to National by 60 days after occurrence
of an event in Section 7.3(a), (b), or (c) a cash amount equal to $25,000,000
plus all costs of National and Sellers incurred in the United States related to
the negotiation and implementation of the transactions under this Agreement
included in a written notice from Sellers to Buyer including costs of legal
counsel, consultants, advisors, data room, due diligence, and printing (the
"Termination Fee"), provided, however, that the Termination Fee shall not be
paid by Buyer in the event that:
(i) this Agreement is terminated pursuant to Section 7.1(a)
(mutual termination) or Section 7.1(e) (Buyer's termination);
(ii) the members of USPB fail to approve this Agreement and the
contemplated transactions under this Agreement by 30 days after
execution of the agreement;
(iii) the shareholders of JBS fail to approve this Agreement and
the contemplated transactions under this Agreement by 30 days after
execution of this Agreement;
(iv) the FTC or DOJ, in response to the notifications required
under Section 5.10(a), unconditionally disapprove the transactions
contemplated in the Transaction Documents such that no possible appeal
or remedy, including any sale, divestiture of disposition of assets or
businesses, remains available to Buyer to effect the resolution of
objections or concerns by the FTC or DOJ;
(v) Sellers terminate this Agreement after acceptance of a
Superior Proposal; or
(vi) an Act of God occurs and Buyer terminates this Agreement
pursuant to Section 7.1(f).
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
7.4 Return of Documentation. Following termination of this Agreement in
accordance with Section 7.1, Buyer shall return all agreements, documents,
contracts, instruments, books, records, materials and all other information
regarding National or any of its Subsidiaries or other Affiliates provided to
Buyer or any representatives of Buyer in connection with the transactions
contemplated by this Agreement or the other Transaction Documents. Nothing in
this Section 7.4 shall diminish any obligations of Buyer under the
Confidentiality Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Indemnification.
(a) Indemnification for Breach of National Representation or Warranty.
Sellers hereby agree to indemnify, hold harmless and defend Buyer and its
successors and assigns from and against, and to reimburse Buyer with
respect to, any and all losses incurred by Buyer by reason of or arising
out of or in connection with any material breach or inaccuracy of any
representation or warranty of National made in this Agreement or the
schedules or exhibits to this Agreement, provided, however, that such
indemnification shall be available only with respect to any representation
or warranty if:
(i) such breach or inaccuracy of the representation or warranty
was subject to National's Knowledge as of the date made;
(ii) such representation and warranty contained misstatements or
omissions resulting from negligence on the part of National, which
were not subsequently corrected or rendered accurate prior to the
Closing Time;
(iii) Buyer did not become aware of the breach or inaccuracy
until after the Closing Time; and
(iv) the breach or inaccuracy of such representation and warranty
gave rise to "Material Losses" as defined below.
(b) Indemnification for Breach of Seller Representation or Warranty.
Each Seller agrees to indemnify, hold harmless and defend Buyer and its
successors and assigns from and against, and to reimburse Buyer with
respect to, any and all losses incurred by Buyer by reason of or arising
out of or in connection with any material breach or inaccuracy of any
representation or warranty made by such Seller in Article II of this
Agreement or the Seller's Disclosure Schedule contemplated in Article II of
this Agreement, provided, however, that each Seller shall only have an
obligation to indemnify Buyer under this Section 8.1(b) if:
(i) such representation or warranty contained misstatements or
omissions resulting from negligence on the part of the Seller; and
(ii) Buyer did not become aware of the breach or inaccuracy of
the Seller's representation or warranty until after the Closing Date.
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(c) Definitions. As used in this Section 8.1, the term "Losses" means:
(i) all losses, damages, costs and expenses, including interest
from the date of any such loss to the time of payment, and penalties;
and
(ii) any and all out-of-pocket costs including without limitation
reasonable expenses of investigation, reasonable attorneys' fees (at
trial, on appeal, in connection with any petition for review and in
any agency proceedings) and reasonable consulting, expert and
accounting fees incurred in investigating, defending or prosecuting
any claim.
As used in this Section 8.1, the term "Material Losses" means losses
attributable to breaches or inaccuracies in any representation or warranty of
National which in the aggregate exceed $5,000,000.
(d) Limitations on Indemnification. Notwithstanding the foregoing, the
maximum aggregate liability of Sellers under Section 8.1(a) shall be
limited to $100,000,000. Any representation, warranty or schedule that is a
misrepresentation or omission by National constituting actual and knowing
fraud by National in the context in which it was given shall not be subject
to any limitation on liability in Sections 8.1(c) and 8.1(d).
(e) Seller's Obligations. The obligations of the various Sellers under
this Agreement shall be several and not joint. The maximum amount of each
Seller's obligation to indemnify Buyer under Section 8.1(a) is limited to
Seller's Portion of the total amount payable to Buyer under Section 8.1(a).
If a Seller is responsible for a breach of a representation and warranty
under Section 8.1(b) that breaching Seller is obligated to indemnify Buyer
under Section 8.1(b). The amount for each Seller's indemnification
obligation is defined as the "Seller's Obligation Amount."
(f) Procedure for Claims by Buyer. If Buyer intends to seek
indemnification under this Section 8.1, Buyer shall provide to each of the
Sellers written notice of the existence of such claim within the
appropriate claim period under Section 8.2(a) and Section 8.2(b) including
specific and detailed information regarding the alleged breach or
inaccuracy and information supporting the amount of such material loss. A
claim for indemnification by Buyer must be made in the appropriate Claim
Period and a claim for indemnification by Buyer from Sellers outside of the
appropriate Claim Period is not valid. Sellers shall have a period of 60
days in which to review the written notice and related information provided
by Buyer and to request reasonable additional information regarding Buyer's
claim for indemnification, which additional information Buyer shall
promptly provide. Within 15 Business Days following the end of the 60 day
review period specified above, either each Seller shall pay Buyer the
applicable Seller's obligation amount, or Sellers shall reject Buyer's
claim for indemnification hereunder. In the event of such a rejection,
Buyer shall have all rights and remedies under law to pursue the claim
subject to the limitations on liability in this Agreement.
(g) Sole Remedy. Except for any representation, warranty, or schedule
that is a misrepresentation or omission by National constituting actual and
knowing fraud by National in the context it was given, the Parties
acknowledge and agree that, the sole and exclusive remedy for any breach or
inaccuracy, or alleged breach or inaccuracy, of any representation or
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
warranty or certificates delivered by National to Buyer under this
Agreement will be indemnification in accordance with this Section 8.1. In
furtherance of the foregoing, Buyer hereby waives, to the fullest extent
permitted by Applicable Law, any and all other rights, claims, and causes
of action (including rights of contributions, if any) that may be based
upon, arise out of, or relate to this Agreement, or the negotiation,
execution, or performance of this Agreement (including any tort or breach
of contract claim or cause of action based upon, arising out of, or related
to any representation or warranty made in or in connection with this
Agreement or as an inducement to enter into this Agreement), known or
unknown, foreseen or unforeseen, which exist or may arise in the future,
that it may have against the other arising under or based upon any law
(including any such law under or relating to environmental matters), common
law, or otherwise.
(h) Indemnification For Xxxxxx, Xxxxx Employment Payments.
Notwithstanding the limitations of Sections 8.1(c) and 8.1(d), the Sellers
shall indemnify the Buyer upon ten days written notice of an obligation to
pay for claims made by Xxxxxx or Xxxxx for compensation in any form
resulting from obligations owed by National to Xxxxxx or Xxxxx other than
obligations under employment agreements between National and xxxxxx
(including the agreement between Xxxx X. Xxxxxx Enterprises III, LLC,
Xxxxxx and National regarding aircraft use, expense and reimbursement) and
National and Xxxxx at the date this Agreement is entered into. The
indemnification by Sellers to Buyer under this Section 8.1(h) shall be on a
dollar for dollar basis for each dollar of obligation determined to be owed
by National to Xxxxxx or Xxxxx. If Xxxxxx or Xxxxx make such a claim to
National, National shall notify Sellers in writing within ten days of
receipt of the claim and the Sellers (other than Xxxxxx or Xxxxx to the
extent they made the claim) shall be allowed to participate in the defense
of the claim and must consent to any settlement of the claim.
8.2 Limited Survival of Representations, Warranties.
(a) Sellers. Sellers representations, warranties and any certificate
delivered by Sellers pursuant to this Agreement are made as of the
execution of this Agreement and as of the Closing Date, and shall terminate
180 days after the Closing Date or upon the termination of this Agreement
pursuant to Section 7.1, whichever is earlier. The Claim Period for Buyer
to make a claim against any Seller for a breach of any Sellers
representations, warranties or certificates delivered by Sellers pursuant
to this Agreement is from after the Closing until the date 180 days after
the Closing Date.
(b) National. National representations, warranties, and any
certificates delivered by National or an officer of National are made as of
the execution of this Agreement and as of the Closing Date (with updates as
provided in Sections 5.4 and 5.18) and shall terminate two years after the
Closing Date or upon termination of this Agreement, whichever is earlier.
The Claim Period for Buyer to make a claim against Sellers for a breach of
any National representations, warranties, or certificate delivered by
National pursuant to this Agreement is from after the Closing until the
date two years after the Closing.
(c) No Limitation. Other than the representations, warranties and
certificates referred to in Section 8.2(a) and 8.2(b), this Section 8.2
shall not limit any covenant or agreement of the Parties which by its terms
contemplates performance, or creates rights or remedies, after:
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(i) the Closing Time, including without limitation, those contained in
Article I and this Article VIII, and Sections 5.6, 5.7, 5.8, 5.19, and
5.20; or (ii) the termination of this Agreement, pursuant to Article VII.
8.3 Amendment and Waiver. This Agreement may only be amended if the
amendment is set forth in a writing executed by the Parties. No waiver of any
provision of this Agreement shall be binding unless the waiver is in writing and
signed by the Party against whom such waiver is to be enforced. No failure by
any Party to insist upon the strict performance of any covenant, duty,
agreement, or condition of this Agreement or to exercise any right or remedy
with respect to a breach of this Agreement shall constitute a waiver of any
breach or any other covenant, duty, agreement, or condition.
8.4 Notices. All notices, demands, and other communications given or
delivered under this Agreement will be in writing and will be deemed to have
been given when personally delivered or sent by facsimile transmission, or other
electronic means of transmitting written documents, or sent to the Parties at
the respective addresses indicated below by registered or certified U.S. Mail,
return receipt requested and postage prepaid or by private overnight mail
courier service. Notices, demands, and communications sent by facsimile
transmission or other electronic means must also be sent by regular U.S. Mail or
by private overnight mail courier service to the Parties in order for the notice
to be effective. Notices, demands, and communications to the National, Sellers,
or Buyer, must, unless another address is specified in writing, be sent to the
address indicated below:
If to Buyer: JBS S.A.
Joesley Xxxxxxx
Chief Executive Officer
Av. Marginal Direita do Tiete, 500
Xxxx Xxxxxxx
Xxx Xxxxx - XX
Xxxxxx
00000-000
Fax: x000 00 00 000 00000
with a copy (which copy shall not constitute notice to
Buyer) to:
Francisco de Assis e Xxxxx
Xx. Marginal Direita do Tiete, 500
Xxxx Xxxxxxx
Xxx Xxxxx - XX
Xxxxxx
00000-000
Fax: x000 00 00 0000 0000
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
JBS USA:
Xxxxxx Xxxxxxx
Chief Executive Officer
JBS Swift & Company
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
with a copy (which copy shall not constitute notice to
Buyer) to:
Xxxx Xxxxxxxx
JBS Swift & Company
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to National: National Beef Packing Company, LLC
00000 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xx 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy (which copy shall not constitute notice to
National) to:
Xxxxxxxxx Xxxxxxx, LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xx 00000
Attention: Xxxx Xxxxxxxxx
Fax: (000) 000-0000
If to Sellers: U.S. Premium Beef, LLC
X.X. Xxx 00000
Xxxxxx Xxxx, Xx 00000
Attention: Xxxxxx X. Xxxx
Fax: (000) 000-0000
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NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
with a copy (which copy
shall not constitute notice
to USPB) to:
Xxxx X. Xxxxxx
Xxxxxx X. XxXxxx
Stoel Rives LLP
00 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
French Basin Land & Cattle Co., LLC
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Fax: (000) 000-0000
TKK Investments, LLC
00000 Xxx 00
Xxxxxxx, Xx 00000
Attention: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
TMKCO, LLC
00000 Xxx 00
Xxxxxxx, Xx 00000
Attention: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
S-B Enterprises V, LLC
0000 Xxxxxxxx Xxxxx
Xxxx Xxxx, Xx 00000
Attention: Xxxxx X. Xxxxx
Fax: (000) 000 0000
Xxxx X. Xxxxxx
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xx 00000
Fax: (000) 000-0000
SIGNATURE COPY
51
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
Xxxxxxx X. Xxxxx
00000 Xxx 00
Xxxxxxx, Xx 00000
Fax: (000) 000-0000
NBPCO Holdings, LLC
000 Xxx Xxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
Fax: (000) 000-0000
with a copy (which copy shall not constitute notice to
NBPCO):
Xxxxxxx X. Xxxx
Attention: Xxxxx Xxxxxx P.C., LLO
0000 X 000xx Xx., Xxx 000
Xxxxx, XX 00000
Fax: (000) 000-0000
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt.
8.5 Binding Agreement Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
Parties hereto, whether by operation of law or otherwise; provided, however,
Buyer may assign this Agreement to a wholly owned United States subsidiary
provided no such assignment shall effect a release of Buyer from its obligations
under this Agreement and Buyer shall remain fully liable for all such
obligations.
8.6 Severability. Whenever possible, each provision of this Agreement will
be interpreted in such a manner as to be effective and valid under Applicable
Laws, but if any provision of this Agreement is held to be prohibited by or
invalid under Applicable Laws, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
8.7 Other Definitional Provisions. The terms "hereof," "herein" and
"hereunder" and terms of similar import will refer to this Agreement as a whole
and not to any particular provision of this Agreement. Article, Section,
paragraph, clause, subsection, Exhibit and Schedule references contained in this
Agreement are references to Articles, Sections, clauses, subsections, Exhibits
and Schedules in or attached to this Agreement, unless otherwise specified. Each
defined term used in this Agreement has a comparable meaning when used in its
plural or singular form. Each gender specific term used in this Agreement has a
comparable meaning whether used in a masculine, feminine or gender neutral form.
Whenever the terms "include" or "including" are used in this Agreement (whether
or not such terms are followed by the phrase "but not limited to" or "without
limitation" or words of similar effect) in connection with a listing of items
within a particular classification, that listing will be interpreted to be
illustrative
SIGNATURE COPY
52
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
only and will not be interpreted as a limitation on, or an exclusive listing of,
the items within that classification. Each reference in this Agreement to any
Applicable Laws will be deemed to include such Applicable Laws as they hereafter
may be amended, supplemented or modified from time to time and any successor
thereto, unless such treatment would be contrary to the express terms of this
Agreement. Any term used but not defined in this Agreement shall have the
meaning given to the term in Exhibit A, which Exhibit A is incorporated into
this Agreement by reference. Whenever any amount is stated in this Agreement in
"dollars" or by reference to the "$" symbol, such amount shall be United States
dollars (unless a contrary intention appears) and will, when the context allows,
include equivalent amounts in other currencies.
8.8 Captions. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and will not be
deemed to limit, characterize, or in any way affect any provision of this
Agreement, and all provisions of this Agreement will be enforced and construed
as if no caption had been used in this Agreement.
8.9 Entire Agreement. This Agreement (including the Exhibits and the
Schedules), the agreements, documents, instruments, certificates referred to in
this Agreement or delivered pursuant to this Agreement, and the Confidentiality
Agreement contain the entire agreement between the Parties and supersede any
prior understandings, agreements or representations by or between the Parties,
written or oral, which may have related to the subject matter in any way.
8.10 Counterparts And Facsimile Signatures. This Agreement may be executed
and delivered (including by facsimile transmission) in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the Parties
and delivered to the other Parties, it being understood that all Parties need
not sign the same counterpart.
8.11 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAWS,
EACH OF THE PARTIES IRREVOCABLY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY
FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
IN WHOLE OR IN PART UNDER, RELATED TO, BASED ON OR IN CONNECTION WITH THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 8.11 WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT
TO TRIAL BY JURY.
8.12 Public Announcements. Prior to the Closing, no Party shall issue any
press release or make any public statement with respect to this Agreement or the
transactions contemplated hereby without the prior written consent of the other
Parties (which consent shall not be unreasonably withheld), except that any
Party may make any disclosure required by Applicable Laws (including federal
securities laws) if it determines in good faith that it, or any
SIGNATURE COPY
53
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
Subsidiary thereof, is required to do so. A Party, with respect to the each such
disclosure, shall provide the other Parties with prior notice and a reasonable
opportunity to review the disclosure.
8.13 Jurisdiction. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, THE PARTIES AGREE THAT ANY SUIT, ACTION OR PROCEEDING SEEKING TO
ENFORCE ANY PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION
WITH, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THIS AGREEMENT SHALL BE
BROUGHT IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE (OR, IN THE CASE OF
ANY CLAIM AS TO WHICH THE FEDERAL COURTS HAVE EXCLUSIVE SUBJECT MATTER
JURISDICTION, THE FEDERAL COURT OF THE UNITED STATES OF AMERICA) SITTING IN THE
STATE OF DELAWARE, AND EACH OF THE PARTIES CONSENTS TO THE EXCLUSIVE
JURISDICTION OF THOSE COURTS (AND OF THE APPROPRIATE APPELLATE COURTS) IN ANY
SUIT, ACTION OR PROCEEDING AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUIT, ACTION OR PROCEEDING IN ANY OF THOSE COURTS OR THAT
ANY SUIT, ACTION OR PROCEEDING WHICH IS BROUGHT IN ANY OF THOSE COURTS HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. PROCESS IN ANY SUIT, ACTION OR PROCEEDING MAY
BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD, WHETHER WITHIN OR WITHOUT THE
JURISDICTION OF ANY OF THE NAMED COURTS. WITHOUT LIMITING THE FOREGOING, EACH
PARTY AGREES THAT SERVICE OF PROCESS ON IT BY NOTICE AS PROVIDED IN SECTION 8.4
SHALL BE DEEMED EFFECTIVE SERVICE OF PROCESS.
8.14 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE
INTERNAL LAW OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE.
8.15 Attorneys' Fees. In any action or proceeding instituted by a Party
arising in whole or in part under, related to, based on or in connection with
this Agreement or the subject matter hereof, the prevailing Party shall be
entitled to receive from the losing Party reasonable attorneys' fees, costs and
expenses incurred in connection therewith, including any appeals therefrom.
8.16 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each Party hereto and its successors and permitted
assigns. Nothing in this Agreement is intended to confer upon any other Person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement except as expressly set forth herein.
8.17 Expenses.
SIGNATURE COPY
54
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(a) Fees for Agreement. Each Seller will pay the Seller's Portion of
the fees and expenses incurred by Sellers in connection with the drafting
of this Agreement.
(b) Fees for Proxy Statement. USPB will pay for all fees and expenses
incurred for the proxy statement in connection with the transactions
contemplated under this Agreement.
(c) Fees for Due Diligence Review. National will bear all fees and
expenses incurred for the due diligence review (including the establishment
of the data site and the preparation of the Schedules hereto).
(d) Antitrust Filing Fee. Buyer will bear (or to the extent paid by
USPB or National, Buyer will reimburse) the filing fees under the HSR Act
and the Antitrust Laws in connection with the transactions contemplated
under this Agreement.
(e) Antitrust Compliance. Sellers and Buyer agree to the extent
possible that Sellers (or USPB as the HSR Act filing entity) shall jointly
engage the same legal counsel, consultants and advisors and utilize the
same providers for printing, administrative and other services to
efficiently complete the compliance with the HSR Act and Antitrust Laws
provided, however, Sellers (or USPB) agree not to interfere with Buyer's
directives to such legal counsel, consultants and advisors to complete
government requirements needed to complete the Closing, providing such
directives do not adversely affect Sellers, USPB, or National. National
will pay all fees (including fees incurred by USPB), other than filing
fees, for legal counsel, consultants, advisors and other expenses of
compliance with the HSR Act and Antitrust Laws incurred by Sellers, USPB,
or National of which, at Closing, Sellers will reimburse National for those
fees and costs.
(f) Other Fees. Except as otherwise expressly provided in this
Agreement, the Parties shall each pay all of their own fees, costs, and
expenses (including fees, costs, and expenses of legal counsel, investment
bankers, advisors, accountants, brokers, or other representatives and
consultants and appraisal fees, costs, and expenses) incurred by such
Person in connection with the preparation, negotiation, execution, and
delivery of this Agreement and the other Transaction Documents, the
performance of their respective obligations under this Agreement, and the
consummation of the transactions contemplated under this Agreement.
8.18 Rules of Construction.
(a) Representation By Counsel. Each of the Parties acknowledges that
it has been represented by independent counsel of its choice throughout all
negotiations that have preceded the execution of this Agreement and that it
has executed the same with consent and upon the advice of said independent
counsel. Each Party and its counsel cooperated in the drafting and
preparation of this Agreement and the documents referred to in this
Agreement, and any and all drafts relating to this Agreement shall be
deemed the work product of the Parties and may not be construed against any
Party by reason of its preparation. Accordingly, any rule of law or any
legal decision that would require interpretation of any ambiguities in this
Agreement against any Party that drafted it is of no application and is
expressly waived.
SIGNATURE COPY
55
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(b) Limited Purpose of Disclosure Schedule. The inclusion of any
information in the National Disclosure Schedule shall not be deemed an
admission or acknowledgment, in and of itself and solely by virtue of the
inclusion of such information in the SEC Documents or the National
Disclosure Schedule, that such information is required to be listed in the
SEC Documents or the National Disclosure Schedule or that such items are
material to National. The headings, if any, of the individual sections of
the National Disclosure Schedule are inserted for convenience only and
shall not be deemed to constitute a part thereof or a part of this
Agreement. The National Disclosure Schedule is arranged in sections
corresponding to those contained in Article III merely for convenience, and
the disclosure of an item in one Section of the National Disclosure
Schedule as an exception to a particular representation or warranty shall
be deemed adequately disclosed as an exception with respect to all other
representations or warranties contained in Article III to the extent that
the relevance of such item to such representations or warranties is
reasonably apparent on the face of such item, notwithstanding the presence
or absence of an appropriate Section of the National Disclosure Schedule
with respect to such other representations or warranties or a reference
thereto in either the National Disclosure Schedule or in the particular
representation or warranty in Article III.
(c) Dollar Amounts Not An Admission of Materiality. The specification
of any dollar amount in the representations and warranties or otherwise in
this Agreement or in the SEC Documents or the National Disclosure Schedule
is not intended and shall not be deemed to be an admission or
acknowledgment of the materiality of those amounts or items, nor shall the
same be used in any dispute or controversy between the Parties to determine
whether any obligation, item or matter (whether or not described herein or
included in any schedule) is or is not material for purposes of this
Agreement (other than with respect to any representation, warranty or
provision of this Agreement in which such specification occurs).
(d) U.S. Dollar. The term "dollar," "U.S. Dollar," "United States
dollar," "$," "USD" and like expressions means United States dollars or (as
relevant) an equivalent amount in another currency. For purposes of this
Agreement, any debt, amount, liability, or obligation that is expressed in
a foreign currency pursuant to the underlying agreement or transaction
shall be converted into United States dollars:
(i) pursuant to the terms of the underlying agreement or
transaction if such conversion is expressly addressed thereby; or
(ii) if clause (i) is not applicable based on the 12 noon rate
for customs purposes as quoted by the Federal Reserve Bank of New York
on the last Business Day that is immediately prior to the date that
the determination of such conversion is required under this Agreement
or any successor rate quoted by the Federal Reserve Bank of New York.
(e) Buyer Disclosure Schedule Not Admission. The inclusion of any
information in the Buyer Disclosure Schedule shall not be deemed an
admission or acknowledgment, in and of itself and solely by virtue of the
inclusion of such information in the Buyer Disclosure Schedule, that such
information is required to be listed in the Buyer Disclosure Schedule or
that such items are material to Buyer. The headings, if any, of the
individual Sections of each of the Buyer Disclosure Schedules are inserted
for convenience only and shall not be deemed to constitute a part thereof
or a part of this Agreement. The Buyer Disclosure
SIGNATURE COPY
56
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
Schedule is arranged in Sections corresponding to those contained in
Article IV merely for convenience, and the disclosure of an item in one
Section of the Buyer Disclosure Schedule as an exception to a particular
representation or warranty shall be deemed adequately disclosed as an
exception with respect to all other representations or warranties contained
in Article IV to the extent that the relevance of such item to such
representations or warranties is reasonably apparent on the face of such
item, notwithstanding the presence or absence of an appropriate Section of
the Buyer Disclosure Schedule with respect to such other representations or
warranties or a reference thereto in either the Buyer Disclosure Schedule
or in the particular representation or warranty in Article IV.
8.19 Enforcement. The Parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms on a timely basis or were otherwise
breached. It is accordingly agreed that the Parties shall be entitled to an
injunction or other equitable relief to prevent breaches of this Agreement and
to enforce specifically the terms and provisions of this Agreement in any court
identified in Section 8.14, this being in addition to any other remedy to which
they are entitled at law or in equity.
8.20 Release. Effective as of immediately prior to the Closing Time,
National, for itself and on behalf of its Subsidiaries, members, successors and
assigns, fully and unconditionally releases, acquits and forever discharges all
Sellers (including all members, managers, officers, directors, and employees of
Sellers holding such position at any time prior to the Closing Time), managers,
members, employees and officers of National and its Subsidiaries holding such
position at any time prior to the Closing Time from any and all manner of
actions, causes of actions, claims, obligations, demands, damages, costs,
expenses, compensation, or other relief, whether known or unknown, whether in
law or equity, arising out of or relating to or accruing from their relationship
with National or its Subsidiaries other than with respect to any act of actual
fraud by such individual or their respective obligations under this Agreement
and the other Transaction Documents. The Sellers agree that the limitations on
liability found in the exculpations provisions of the current National Limited
Liability Company Agreement will continue to apply after the effective date with
regard to any claims among Sellers and any of the Persons identified in the
exculpation provisions.
8.21 Federal Income Tax Matters.
(a) The Parties agree that Buyer's purchase of the National Interests
will result in a termination of National for Federal income tax purposes
under Code Section 708. Sellers shall prepare and file National's income
Tax Returns, to the extent not filed prior to the Closing, for all taxable
periods through the Closing, including, without limitation the taxable
period January 1, 2008 through the Closing. Such Tax Returns shall be
prepared in accordance with revenue ruling 99-6, 1999-1 CB 432 where
applicable. Sellers shall be responsible for all income Taxes with respect
to such taxable periods (whether or not reflected on such tax returns).
Buyer shall prepare and file all other Tax Returns for National and shall
be responsible for all other Taxes of National for all periods.
(b) After the Closing, the Parties shall (i) provide, and shall cause
each of their Affiliates to provide, to the other Parties and their
Affiliates (at the expense of the
SIGNATURE COPY
57
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
requesting Party) such information relating to National as the Parties may
reasonably request with respect to Tax matters and (ii) cooperate with each
other in the conduct of any audit or other proceeding with respect to any
Tax relating to National for each taxable period or portion thereof ending
on or prior to the Closing Date until the expiration of the applicable
statute of limitations taking into account any and all extensions or
waivers.
(c) If Buyer or any of its Affiliates (including National) receives
any written notice from any taxing authority proposing any adjustment to
any income tax return relating to any period ending on or prior to the
Closing Date, Buyer shall provide Sellers prompt written notice thereof.
Sellers shall have the right to control any audit at their own expense with
respect to each taxable period or portion thereof ending on or prior to the
Closing Date for which a Seller has financial responsibility pursuant to
this Agreement or by law, and Buyer shall have the right to control all
audits not controlled by Seller at its expense; provided, however, that
neither Buyer nor Sellers (or their respective Affiliates) shall have right
to take a position that would have a Material Adverse Effect on the other
Party or Parties without the written consent of such Party (which consent
shall not be unreasonably withheld).
(d) Notwithstanding anything in this Agreement to the contrary, upon
completion of the Federal, state and local income tax returns described
above, National shall make a tax distribution to each Seller in an amount
equal to forty-two percent (42%) of the National taxable income reported on
the Tax Returns described in Section 8.21(a) and allocated to such Seller
reduced by any prior tax distributions made to such Seller with respect to
such income under the National Limited Liability Company Agreement in
effect prior to the Closing Date.
SIGNATURE COPY
58
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
SELLERS: U.S. PREMIUM BEEF, LLC
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxx X. Xxxx
----------------------------------
Title: CEO
---------------------------------
FRENCH BASIN LAND & CATTLE CO., LLC
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
----------------------------------
Title: Manager
---------------------------------
TKK INVESTMENTS, LLC
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------------
Title: Manager
---------------------------------
TMKCo, LLC
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------------
Title: Manager
---------------------------------
S-B ENTERPRISES V, LLC
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxx
----------------------------------
Title: Manager
---------------------------------
S-1
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
/s/ Xxxx X. Xxxxxx
---------------------------------------------
XXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxx
---------------------------------------------
XXXXXXX X. XXXXX
NBPCO HOLDINGS, LLC
By: /s/ Xxxxx Xxxx
-----------------------------------------
Name: Xxxxx Xxxx
----------------------------------
Title: President
---------------------------------
BUYER: JBS S.A.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title:
---------------------------------
NATIONAL: NATIONAL BEEF PACKING COMPANY, LLC
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
S-2
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
EXHIBIT A
DEFINED TERMS
As used in the Membership Interest Purchase Agreement to which this Exhibit
A is attached and incorporated by reference therein, the following terms will
have the meanings specified:
"Acquisition Proposal" has the meaning set forth in Section 5.13.
"Act of God" means an act occasioned exclusively by violence of nature
without interference by any human agency such as tornado, earthquake, fire, or
flood caused exclusively by nature.
"Advisory Board" has the meaning set forth in Section 5.15.
"Affiliate" of a Person means a Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned Person.
"Agreement" has the meaning set forth in the Introduction.
"Antitrust Laws" has the meaning set forth in Section 5.10(d).
"Applicable Laws" means all applicable federal, state, provincial, local or
foreign laws, statutes, rules, regulations, ordinances, directives, judgments,
order (judicial or administrative), decrees, injunctions and writs of any
Governmental Entity or any similar provisions having the force or effect of law.
"BPI" means Beef Products, Inc.
"Business Day" means any day other than: (a) a Saturday, Sunday or federal
holiday or (b) a day on which commercial banks in New York, New York are
authorized or required to be closed.
"Buyer" has the meaning set forth in the Introduction.
"Buyer Disclosure Schedule" means that certain disclosure schedule of even
date with this Agreement from Buyer to National delivered concurrently with the
execution and delivery of this Agreement.
"Buyer Stock" means shares of the common stock of Buyer.
"Buyer Stockholders" has the meaning set forth in Section 5.21.
"Change of Recommendation" has the meaning set forth in Section
5.13(d)(ii).
"Claim Period" has the meaning given in Section 8.2(a), with respect to a
claim against any Seller for a breach of any Sellers representations, warranties
or certificates and has the
Exhibit A-1
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
meaning given in Section 8.2(b) with respect to a claim against Sellers for
a breach of any National representation, warranties or certificates.
"Clearance Date" has the meaning set forth in Section 1.4.
"Closing" means the consummation of the transactions contemplated by this
Agreement and the other Transaction Documents.
"Closing Date" has the meaning set forth in Section 1.4.
"Closing Time" means the time at which the Closing is effective.
"Code" means the Internal Revenue Code of 1986, as amended (including,
where applicable, the Internal Revenue Code of 1954, as amended).
"Confidentiality Agreement" means the confidentiality agreement between
Buyer and National signed December 12, 2007.
"Consent" means any consent, order, approval, authorization or other action
of, or any filing with or notice to or other action with respect to, any
Governmental Entity or any other Person which is required for any of the
execution, delivery or performance of the Agreement or any other Transaction
Document or the consummation of transactions contemplated hereby or thereby,
whether such requirement arises pursuant to any Applicable Laws, contract or
agreement, including any of the foregoing which is required in order to prevent
a breach of or a default under or a termination or modification of any contract
or agreement, which right of breach, default, termination or modification
results from the consummation of the transaction contemplated under the
Agreement.
"Covered Employees" has the meaning set forth in Section 5.6(a).
"Credit Agreement" means the Sixth Amended and Restated Credit Agreement,
by and between National and the various issuers and lenders parties thereto
dated as of July 25, 2007.
"Cure Period" has the meaning set forth in Section 7.1(b)(ii).
"Debt" means, without duplication, as of immediately prior to the Closing,
the aggregate amount of:
(a) all indebtedness of National and its Subsidiaries (including the
principal amount thereof or, if applicable, the accreted amount thereof and the
amount of accrued and unpaid interest thereon), whether or not represented by
bonds, debentures, notes or other securities, for the repayment of money
borrowed;
(b) all deferred indebtedness of National and its Subsidiaries for the
payment of the purchase price of property or assets purchased;
Exhibit A-2
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(c) all obligations of National and its Subsidiaries to pay rent or
other payment amounts under a lease of real or personal property which is
classified as a capital lease on the face of the latest balance sheet;
(d) any outstanding reimbursement obligation of National and its
Subsidiaries with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of National or a Subsidiary thereof pursuant
to which the applicable bank or similar entity has paid thereunder obligations
for which National or a Subsidiary thereof is required to repay;
(e) any payment obligation of National and its Subsidiaries under any
interest rate swap agreement, forward rate agreement, interest rate cap or
collar agreement or other financial agreements or arrangements entered into for
the purpose of limiting or managing interest rate risks;
(f) all indebtedness for borrowed money secured by any Lien existing
on property owned by National or a Subsidiary thereof, whether or not
indebtedness secured thereby shall have been assumed;
(g) all guaranties, endorsements, assumptions and other contingent
obligations of National and its Subsidiaries in respect of, or to purchase or to
otherwise acquire, indebtedness for borrowed money of others the repayment of
which is guaranteed by National or a Subsidiary thereof; and
(h) all other short-term and long-term liabilities of National and its
Subsidiaries for borrowed money.
"Defined Benefit Plan" has the meaning set forth in Section 3.12(a)(iii).
"Defined Contribution Plan" has the meaning set forth in Section
3.12(a)(iv).
"DOJ" means the United States Department of Justice.
"Employee Benefit Plans" has the meaning set forth in Section 3.12(b).
"Environment" shall mean surface or subsurface soil or strata, surface
waters and sediments, navigable waters, groundwater, drinking water supply and
ambient air. The term also includes indoor air to the extent it is regulated
under any environmental and safety requirements.
"Environmental Laws" has the meaning set forth in Section 3.15(i).
"Environmental Site Assessments" means assessment of real property and
improvements in accordance with recognized standards such as that of the
American Standards for Testing and Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Financial Statements" has the meaning set forth in Section 3.5(a).
Exhibit A-3
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
"Financing Approval Date" has the meaning set forth in Section 7.1(c).
"Financing Representation" has the meaning set forth in Section 7.1(c).
"FTC" means the United States Federal Trade Commission.
"GAAP" means United States generally accepted accounting principles,
applied on a consistent basis.
"Governmental Entity" means any government, governmental department,
commission (including industrial development board authority), board, bureau,
agency, court legislative branch or other instrumentality, whether foreign or
domestic, of any country, nation, republic, federation or similar entity or any
state, province, county, parish or municipality, jurisdiction or other political
subdivision thereof.
"Hazardous Materials" has the meaning set forth in Section 3.15(j).
"HSR Act" has the meaning set forth in Section 3.4(b)(i).
"Indemnified National Parties" has the meaning set forth in Section 5.8(a).
"Initial Date" means the date in Section 3.15(k).
"Intellectual Property" has the meaning set forth in Section 3.10(b).
"JBS Stock Payment Amount" has the meaning set forth in Section 1.3.
"JBS Stock Price" has the meaning set forth in Section 1.3.
"Knowledge" (and any derivation thereof, whether or not capitalized) means
only the current, actual knowledge and awareness (and shall not include any
deemed or constructive knowledge or awareness) of the individuals specified in
clause (a) or (b) below, as the case may be: (a) in the case of Buyer, Joesley
Xxxxxxxx Xxxxxxx, Xxxxxx Xxxxxxxx Xxxxxxx, Xxxxxxxxx xx Xxxxx e Xxxxx and Xxxxxx
Xxxxx, and (b) in the case of National, Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, Xxx
Xxxxxxx and Xxxxx Xxxxx.
"Latest Balance Sheet" means the unaudited consolidated balance sheet of
National dated as of November 24, 2007.
"Lien" means any mortgage, pledge, hypothecation, lien (statutory or
otherwise), preference, priority, security agreement, easement, covenant,
restriction or other encumbrance of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any lease having
substantially the same effect as any of the foregoing and any assignment or
deposit arrangement in the nature of a security device).
"Losses" has the meaning set forth in Section 8.1(c).
"Management Agreement" is the employment agreement that is attached as
Exhibit H to this Agreement.
Exhibit A-4
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
"Material Adverse Effect" means a Material Adverse Effect or change in the
business, operations, financial condition or results of operations of National
and its Subsidiaries, taken as a whole; provided, however, that, in determining
whether there has been a Material Adverse Effect or whether a Material Adverse
Effect would occur, this definition shall exclude any Material Adverse Effect to
the extent arising out of, attributable to or resulting from:
(a) any generally applicable change in Applicable Laws or GAAP or
interpretation of any thereof;
(b) (i) any public announcement prior to the date of this Agreement of
discussions among the Parties hereto regarding the transactions contemplated
hereby, (ii) the announcement of this Agreement, (iii) the pendency of the
consummation of the sale or the transactions contemplated under this Agreement
or (iv) any suit, action or proceeding arising out of or in connection with this
Agreement or the transactions contemplated under this Agreement;
(c) actions or inactions taken by National or its Subsidiaries in
accordance with this Agreement;
(d) change in the interpretation or enforcement of Applicable Laws,
which if the changed enforcement or interpretation of Applicable Laws were
applied at other facilities of like kind would have similar enforcement
consequences;
(e) changes in conditions generally affecting the industries in which
National and its Subsidiaries conduct their business, provided that such changes
do not have an adverse effect solely on National and its Subsidiaries as
compared to other similarly situated facilities of like kind and operation;
(f) general economic, political or financial market conditions,
(g) any outbreak or escalation of hostilities (including, without
limitation, any declaration of war by the U.S. Congress) or acts of terrorism;
(h) the termination after the date of this Agreement of any employee's
or independent contractor's employment by, or independent contractor
relationship with, National or any of its Subsidiaries, or any notice thereof,
other than as a result of any breach by National or any of its Subsidiaries of
the terms of this Agreement;
(i) the failure of National or any National Subsidiary to obtain any
consent to any Material Contract set forth in the National Disclosure Schedule
6.2(d) arising out of or in connection with this Agreement or transactions
contemplated under this Agreement;
(j) any failure by National to meet internal projections or forecasts;
provided, that the underlying cause of any such failure may be taken into
consideration in making such determination;
(k) any expenses incurred in connection with the negotiation,
documentation and execution of this Agreement and the consummation of the
transaction contemplated by this Agreement and the other Transaction Documents,
including, as a result of National's entry into,
Exhibit A-5
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
and the payment of any amounts due to, or the provisions of any other benefits
(including benefits relating to acceleration of Options) to, any officers or
employees under employment contracts, non-competition agreements, Employee
Benefit Plans, severance, bonus or retention arrangements or other arrangements
in existence as of the date of this Agreement or as disclosed in this Agreement,
in each case to the extent that the foregoing as set forth in clause;
(l) Do not constitute a breach of any representation, warranty,
covenant or agreement set forth in this Agreement; and
(m) The closure, ban or curtailment by any Governmental Entity of the
importation, exportation or sale of beef, beef products, pork or pork products
provided that such changes do not have an adverse effect solely on National and
its Subsidiaries as compared to other similarly situated facilities of like kind
and operation.
"Material Contract" means:
(a) each contract or agreement having an unexpired term of more than
one year and that is executory in whole or in part and involves performance of
services or delivery of goods or materials by National or any Subsidiary thereof
of an amount or value in excess of $500,000;
(b) each contract or agreement having an unexpired term of more than
one year and that is executory in whole or in part and was not entered into in
the ordinary course of business and that involves expenditures or receipts of
National or any Subsidiary thereof in excess of $500,000;
(c) each lease, rental or occupancy agreement, installment and
conditional sale agreement, and any other contract or agreement affecting the
ownership of, leasing of, title to or use of any real property other than an
agreement the unexpired term of which is less than three months or a
month-to-month arrangement;
(d) each material licensing agreement or other contract or agreement
with respect to patents, trademarks, copyrights or other Intellectual Property,
including Material Contracts or agreements with current or former employees,
consultants or contractors regarding the appropriation or the non-disclosure of
any Intellectual Property;
(e) each collective bargaining agreement, including amendments and
side letter agreements thereto, and any other contract or agreement with any
labor union or other employee representative of a group of employees;
(f) each joint venture, partnership, franchise, joint research and
development and joint marketing agreement or any other similar contract or
agreement (including a sharing of profits, losses, costs or liabilities by
National or any Subsidiary thereof with any other Person);
(g) each contract or agreement containing covenants that in any way
purport to materially restrict or prohibit the business activity of National or
any Subsidiary thereof or limit the freedom of National or any Subsidiary
thereof to engage in any line of business or to compete with any Person;
Exhibit A-6
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(h) each contract or agreement with any consultant, advisor, agent,
employee, or affiliate of National or any Subsidiary thereof providing for the
payment of more than $500,000 and having a term of more than one year; and
(i) any indenture, mortgage, promissory note, loan agreement or other
agreement or commitment for the borrowing of money, for a line of credit or for
any capital leases having a value in excess of $5,000,000.
In no event shall a Material Contract include an Ordinary Course of
Business Contract.
"Material Losses" has the meaning set forth in Section 8.1.
"National Disclosure Schedule" means that certain disclosure schedule of
even date with this Agreement from National to Buyer delivered concurrently with
the execution and delivery of this Agreement. For purposes of the agreement, the
National Disclosure Schedule shall be deemed to include all information
disclosed in the National SEC Documents filed with the SEC for the 12 months
prior to the date of this Agreement with respect to information that is
reasonably apparent on its face relevant to the representations and warranties
contained in Article III, excluding any disclosures contained therein in any
risk factor Section, in any Section relating to forward looking statements or
any other disclosures to the extent that they are cautionary, predictive or
forward looking in nature.
"National Interest" means, with respect to a member of National, the entire
interest of such member, as a member, in National.
"National Permits" has the meaning set forth in Section 3.14(a)(ii).
"National SEC Documents" has the meaning set forth in Section 3.13.
"Ordinary Course of Business Contracts" means contracts and agreements used
in the beef processing industry such as:
(a) contracts or agreements for routine maintenance of the personal
property or real property of National or any of its Subsidiaries;
(b) any trade discount or rebate program implemented in the ordinary
course of National or any of its Subsidiaries' business;
(c) normal and routine open purchase orders or agreements for (i) the
purchase of raw materials or supplies used in the manufacture of products of
National or any of its Subsidiaries or (ii) services provided to National or any
of its Subsidiaries;
(d) agreements (on customer form documents), including, vendor
agreements, continuing product guarantees, policy letters, promotional
agreements, data access agreements and electronic data interchange agreements,
with customers that purchase products from National or any;
(e) Normal and routine commodity hedging contracts; and
Exhibit A-7
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(f) any other agreement entered into in the course of normal
day-to-day operations consistent with past practices of National or any of its
Subsidiaries.
"Owned Real Property" has the meaning set forth in Section 3.7(a).
"Party" and "Parties" has the meaning given in the Introduction.
"Permitted Encumbrances" means:
(a) statutory Liens for current Taxes not yet due and payable or being
contested in good faith by appropriate proceedings and for which there are
adequate reserves on the books of a Person;
(b) mechanics', carriers', workers', repairers' and other similar
liens imposed by law arising or incurred in the ordinary course of business for
obligations that are (i) not overdue or (ii) being contested in good faith by
appropriate proceedings and for which there are adequate reserves on the books
of a Person;
(c) in the case of leases of vehicles, rolling stock and other
personal property, encumbrances that do not materially impair the operation of
the business at the facility at which such leased equipment or other personal
property is located;
(d) other immaterial Liens that were not incurred in connection with
the borrowing of money or the advance of credit and that do not interfere with
the conduct of the business conducted by National and its Subsidiaries;
(e) Liens on leases of real property arising from the provisions of
such leases;
(f) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security;
(g) deposits to secure the performance of bids, contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(h) zoning regulations and restrictive covenants and easements of
record that do not detract in any material respect from the value of the
property and do not materially and adversely affect, impair or interfere with
the use of any property affected thereby;
(i) public utility easements of record, in customary form;
(j) Liens not otherwise included as Permitted Encumbrances that are of
record as of the date of this Agreement as shown in the Title Reports;
(k) Liens securing all or any portion of the existing Debt and
additional Debt which may be incurred without breach of this Agreement; and
Exhibit A-8
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
(l) mortgages, deeds of trust and other security instruments, and
ground leases or underlying leases covering the title, interest or estate of
landlords with respect to the leased real property and to which the leases with
respect to the leased real property are subordinate.
"Person" means an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or any Governmental Entity, or any other entity.
"Purchase Price" has the meaning set forth in Section 1.2.
"Real Property" means the Owned Real Property and the real property
described on National Disclosure Schedule 3.7(a).
"Release" has the meaning set forth in Section 3.15(l).
"Sale" has the meaning set forth in the recitals hereto.
"Schedules" means the National Disclosure Schedule and the Sellers
Disclosure Schedule to this Agreement.
"SEC" means the U.S. Securities and Exchange Commission.
"Seller's Portion" means the percentage of the Seller's total Purchase
Price to the total Purchase Price for all Sellers under Exhibit B.
"Seller's Purchase Price" has the meaning set forth in Section 1.2.
"Sellers" has the meaning set forth in the preamble to this Agreement.
"Sellers Disclosure Schedule" means the Sellers disclosure schedule
referenced in Section 2.1 of this Agreement.
"Sellers JBS Stock" has the meaning set forth in Section 1.3.
"Sellers Obligation Amount" has the meaning set forth in Section 8.1(e).
"Subsidiary" of a Person means any corporation or other legal entity of
which such Person (either alone or through or together with any other Subsidiary
or Subsidiaries) is the general partner or managing entity or of which at least
a majority of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the Board of Directors or others
performing similar functions of such corporation or other legal entity is
directly or indirectly owned or controlled by such Person (either alone or
through or together with any other Subsidiary or Subsidiaries).
"Superior Proposal" has the meaning set forth in Section 5.13(e).
"Tax" (and, with correlative meaning, "Taxes", "Taxable" and "Taxing")
means any (a) federal, state, local or foreign income, gross receipts,
franchise, estimated, alternative minimum, add on minimum, sales, use, transfer,
registration, value added, goods and services,
Exhibit A-9
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
capital gains, fringe benefits, excise, natural resources, severance, stamp,
occupation, premium, windfall profits, environmental (including under Section
59a of the Code), customs, duties, real property, real property gains, personal
property, capital stock, social security, unemployment, disability, payroll,
license, employee or other tax of any kind whatsoever, including any interest,
penalties or additions to tax or additional amounts in respect of the foregoing,
(b) liability of any Person for the payment of any amounts of the type described
in clause (a) arising as a result of being (or ceasing to be) a member of any
"affiliated group" (as that term is defined in Section 1504(a) of the Code) or
any combined, consolidated or unitary group under any similar provision of state
or local law (or being included in any tax return relating thereto), and (c)
liability for the payment of any amounts of the type described in clause (a) or
(b) as a result of any express or implied obligation to indemnify or otherwise
assume or succeed to the liability of any other Person.
"Tax Return" means any return, declaration, report, claim for refund or
credit, information return or other document' (including any related or
supporting schedules, statements or information) filed or required to be filed
in connection with the determination assessment or collection of taxes or the
administration of any Applicable Law relating to any taxes including any
amendment thereof.
"Termination Date" has the meaning set forth in Section 7.1(i).
"Termination Fee" has the meaning set forth in Section 7.3.
"Title Reports" has the meaning set forth in Section 3.7(a).
"Transaction Documents" means this Agreement and each other agreement,
document, certificate or instrument referred to herein or therein or delivered
pursuant hereto or thereto.
"WARN Act" means the Worker Adjustment and Retraining Notification Act of
1982.
Exhibit A-10
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
EXHIBIT B
------------- -------------------------------------------------------- -----------------------------------------------
Seller National Interests To Be Sold Sellers' Purchase Price
------------- -------------------------------------------------------- -----------------------------------------------
Class A Class B-1 Class B-2 Class C Cash JBS Stock Total
Units Units Units Units
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
USPB 94,680,681 10,664,475 $261,128,788 $65,282,197 $326,410,985
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
NBPCO 31,553,956 3,810,044 $ 91,474,472 $22,868,618 $114,343,090
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
French 2,247,619 $ 48,838,919 $ 48,838,919
Basin
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
Xxxxxx 6,057,143 609,524 609,524 $ 19,301,600 $ 19,301,600
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
TKK 1,123,810 $ 19,535,576 $ 4,883,894 $ 24,419,470
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
Xxxxx 3,028,571 304,762 $ 2,666,666 $ 666,667 $ 3,333,333
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
S-B 1,514,286 714,286 $ 17,035,136 $ 17,035,136
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
TMK 304,762 $ 5,053,974 $ 1,263,493 $ 6,317,467
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
Total 136,834,637 18,560,234 914,286 914,286 $465,035,131 $94,964,869 $560,000,000
------------- -------------- -------------- ------------- ------------ --------------- --------------- ---------------
Exhibit B-1
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
EXHIBIT C
[RESERVED]
Exhibit C-1
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
EXHIBIT D
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
NATIONAL BEEF PACKING COMPANY, LLC
This amended and restated limited liability company agreement (this
"agreement") of National Beef Packing Company, LLC is entered into as of the ___
day of _________, 2008 by [to be designated by JBS S.A. At or prior to Closing],
as its sole member (the "member").
The member has formed a limited liability company pursuant to and in
accordance with the Delaware limited liability company act (the "act"), as
amended from time to time (title 6, del. Code ss. 18 101, et seq.), and hereby
agrees as follows:
1. Name. The name of the limited liability company is National Beef Packing
Company, LLC (the "Company").
2. Purpose. The Company is formed for the sole purpose of, and the nature
of the business to be conducted and promoted by the Company is to engage in any
and all activities which are consistent with those set forth in the act.
3. Formation of the Company. The Company was formed as the result of a
statutory conversion of farmland National Beef Packing Company, L.P., under
Section 18-214 of the act and Section 17-219 of the Delaware Revised Uniform
Limited Partnership Act, as of August 6, 2003.
4. Registered Office. The initial registered office of the Company shall be
located [________________]. At any time, the member may designate another
registered office of the Company or may relocate the registered office of the
Company.
5. Registered Agent. The name and address of the registered agent of the
Company for service of process on the Company in the State of Delaware is
[___________________]. At any time, the Member may designate another registered
agent of the Company.
6. Member. The name and the business, residence or mailing address of the
Member is as follows:
Name Address
[to be designated by JBS S.A. [_____________________]
at or prior to Closing]
7. Powers. The business and affairs of the Company shall be managed by the
Member. The Member shall have the power and authority to do any and all acts
necessary or convenient to or for the furtherance of the purposes described
herein, including all powers and authorities, statutory or otherwise, possessed
by members of limited liability companies under the laws of the State of
Delaware.
Exhibit D-1
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
8. Dissolution. The Company shall dissolve, and its affairs shall be wound
up upon the first to occur of the following: (a) the written consent of the
Member, (b) the death, retirement, resignation, expulsion, bankruptcy or
dissolution of the Member or the occurrence of any other event which terminates
the continued membership of the Member in the Company, or (c) the entry of a
decree of judicial dissolution under Section 18-802 of the Act.
9. Capital Contributions. The initial capital contribution of the Member is
reflected on the books and records of the Company.
10. Additional Contributions. No Member is required to make any additional
capital contribution to the Company.
11. Allocation of Profits and Losses. The Company's profits and losses
shall be allocated 100% to the Member.
12. Distributions. Distributions shall be made to the Member at the times
and in the amounts determined by the member. Such distributions shall be
allocated 100% to the Member.
13. Assignments. The Member may assign, in whole or in part, its limited
liability company interest only to family members or to an affiliate.
14. Resignation. The Member may not resign from the Company.
15. Admission of Additional Members. One (1) or more additional members of
the Company may be admitted to the Company with the Consent of the Member.
16. Liability of Members. The Member shall not have any liability for the
obligations or liabilities of the Company.
17. Governing Law. This Agreement shall be governed by, and construed
under, the laws of the state of Delaware, all rights and remedies being governed
by said laws.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby,
has duly executed this Agreement as of the date and year first set forth above.
MEMBER:
By:
--------------------------------------
Name:
Title:
Exhibit D-2
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
EXHIBIT E
ASSIGNMENT OF MEMBERSHIP INTEREST
Effective as of the closing of the transactions contemplated under the
Membership Interest Purchase Agreement (the "Purchase Agreement") dated as of
February 29, 2008 by and among JBS S.A., a Brazilian sociedade anonima
("Assignee"), National Beef Packing Company, LLC, a Delaware limited liability
company ("National"), and the Sellers set forth in the Introduction of the
Purchase Agreement, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, U.S. Premium Beef, LLC, a Delaware
limited liability company ("Assignor"), hereby assigns, transfers and conveys to
Assignee, all right, title and interest in and to Assignor's membership interest
in National, consisting of 94,680,681 Class A Units and 10,664,475 Class B-1
Units, pursuant to the terms of the Purchase Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment of Membership
Interest as of the date first written above.
Date: ASSIGNOR:
-------------------
U.S. PREMIUM BEEF, LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit E-1
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
ASSIGNMENT OF MEMBERSHIP INTEREST
Effective as of the closing of the transactions contemplated under the
Membership Interest Purchase Agreement (the "Purchase Agreement") dated as of
February 29, 2008 by and among JBS S.A., a Brazilian sociedade anonima
("Assignee"), National Beef Packing Company, LLC, a Delaware limited liability
company ("National"), and the Sellers set forth in the Introduction of the
Purchase Agreement, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, NBPCO Holdings, LLC, a South Dakota
limited liability company ("Assignor"), hereby assigns, transfers and conveys to
Assignee, all right, title and interest in and to Assignor's membership interest
in National, consisting of 31,553,956 Class A Units And 3,810,044 Class B-1
Units, pursuant to the terms of the Purchase Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment of Membership
Interest as of the date first written above.
Date: ASSIGNOR:
-------------------
NBPCO HOLDINGS, LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit E-2
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
ASSIGNMENT OF MEMBERSHIP INTEREST
Effective as of the closing of the transactions contemplated under the
Membership Interest Purchase Agreement (the "Purchase Agreement") dated as of
February 29, 2008 by and among JBS S.A., a Brazilian sociedade anonima
("Assignee"), National Beef Packing Company, LLC, a Delaware limited liability
company ("National"), and the Sellers set forth in the Introduction of the
Purchase Agreement, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, French Basin Land And Cattle Co., LLC, a
Utah limited liability company ("Assignor"), hereby assigns, transfers and
conveys to Assignee, all right, title and interest in and to Assignor's
membership interest in National, consisting of 2,247,619 Class B-1 Units,
pursuant to the terms of the Purchase Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment of Membership
Interest as of the date first written above.
Date: ASSIGNOR:
-------------------
FRENCH BASIN LAND AND CATTLE CO., LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit E-3
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
ASSIGNMENT OF MEMBERSHIP INTEREST
Effective as of the closing of the transactions contemplated under the
Membership Interest Purchase Agreement (the "Purchase Agreement") dated as of
February 29, 2008 by and among JBS S.A., a Brazilian sociedade anonima
("Assignee"), National Beef Packing Company, LLC, a Delaware limited liability
company ("National"), and the Sellers set forth in the Introduction of the
Purchase Agreement, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Xxxx X. Xxxxxx, an individual
("Assignor"), hereby assigns, transfers and conveys to Assignee, all right,
title and interest in and to Assignor's membership interest in National,
consisting of 6,057,143 Class A Units, 609,524 Class B-2 units and 609,524 Class
C Units pursuant to the terms of the Purchase Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment of Membership
Interest as of the date first written above.
Date: ASSIGNOR:
-------------------
XXXX X. XXXXXX
Name:
------------------------------------
Title:
-----------------------------------
Exhibit E-4
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
ASSIGNMENT OF MEMBERSHIP INTEREST
Effective as of the closing of the transactions contemplated under the
Membership Interest Purchase Agreement (the "Purchase Agreement") dated as of
February 29, 2008 by and among JBS S.A., a Brazilian sociedade anonima
("Assignee"), National Beef Packing Company, LLC, a Delaware limited liability
company ("National"), and the Sellers set forth in the Introduction of the
Purchase Agreement, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, TKK Investments, LLC, a Missouri limited
liability company ("Assignor"), hereby assigns, transfers and conveys to
Assignee, all right, title and interest in and to Assignor's membership interest
in National, consisting of 1,123,810 Class B-1 Units, pursuant to the terms of
the Purchase Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment of Membership
Interest as of the date first written above.
Date: ASSIGNOR:
-------------------
TKK Investments, LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit E-5
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
ASSIGNMENT OF MEMBERSHIP INTEREST
Effective as of the closing of the transactions contemplated under the
Membership Interest Purchase Agreement (the "Purchase Agreement") dated as of
February 29, 2008 by and among JBS S.A., a Brazilian sociedade anonima
("Assignee"), National Beef Packing Company, LLC, a Delaware limited liability
company ("National"), and the Sellers set forth in the Introduction of the
Purchase Agreement, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Xxxxxxx X. Xxxxx, an individual
("Assignor"), hereby assigns, transfers and conveys to Assignee, all right,
title and interest in and to Assignor's membership interest in National,
consisting of 3,028,571 Class A Units and 304,762 Class C Units, pursuant to the
terms of the Purchase Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment of Membership
Interest as of the date first written above.
Date: ASSIGNOR:
-------------------
XXXXXXX X. XXXXX
Name:
------------------------------------
Title:
-----------------------------------
Exhibit E-6
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
ASSIGNMENT OF MEMBERSHIP INTEREST
Effective as of the closing of the transactions contemplated under the
Membership Interest Purchase Agreement (the "Purchase Agreement") dated as of
February 29, 2008 by and among JBS S.A., a Brazilian sociedade anonima
("Assignee"), National Beef Packing Company, LLC, a Delaware limited liability
company ("National"), and the Sellers set forth in the Introduction of the
Purchase Agreement, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, S-B Enterprises V, LLC, a Utah limited
liability company ("Assignor"), hereby assigns, transfers and conveys to
Assignee, all right, title and interest in and to Assignor's membership interest
in National, consisting of 1,514,286 Class A Units and 714,286 Class B-1 Units,
pursuant to the terms of the Purchase Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment of Membership
Interest as of the date first written above.
Date: ASSIGNOR:
-------------------
S-B ENTERPRISES V, LLC
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Exhibit E-7
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
ASSIGNMENT OF MEMBERSHIP INTEREST
Effective as of the closing of the transactions contemplated under the
Membership Interest Purchase Agreement (the "Purchase Agreement") dated as of
February 29, 2008 by and among JBS S.A., a Brazilian sociedade anonima
("Assignee"), National Beef Packing Company, LLC, a Delaware limited liability
company ("National"), and the Sellers set forth in the Introduction of the
Purchase Agreement, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, TMKCo, LLC, a Missouri limited liability
company ("Assignor"), hereby assigns, transfers and conveys to Assignee, all
right, title and interest in and to Assignor's membership interest in National,
consisting of 304,762 Class B-2 units, pursuant to the terms of the Purchase
Agreement.
IN WITNESS WHEREOF, Assignor has executed this Assignment of Membership
Interest as of the date first written above.
Date: ASSIGNOR:
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TMKCo, LLC
By:
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Name:
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Title:
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Exhibit E-8
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
EXHIBIT F
[RESERVED]
Exhibit F-1
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
EXHIBIT G
CATTLE PURCHASE AND SALE AGREEMENT
THIS CATTLE PURCHASE AND SALE AGREEMENT (this "agreement") is entered into
as of the 29th day of February, 2008, by and between NATIONAL BEEF PACKING
COMPANY, LLC, a Delaware limited liability company ("National Beef"), Swift &
Company, a Delaware corporation ("swift beef"), and U.S. PREMIUM BEEF, LLC, a
Delaware limited liability company ("USPB"). National Beef, Swift Beef, and USPB
are referred to individually as a "Party" and collectively as the "Parties."
RECITALS
A. USPB members are engaged in the production and marketing of cattle;
B. National Beef and Swift Beef (National Beef and Swift Beef are
hereinafter referred to as "Beef Co.") are engaged in the business of purchasing
and processing cattle and marketing beef and related products (the "Beef
Business"); and
C. Beef Co. desires to purchase cattle from USPB members, and USPB members
desire to sell and deliver cattle to Beef Co., on the terms and conditions in
this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained in this
Agreement, the Parties hereto agree as follows:
1. PURCHASE/SALE OF CATTLE.
(a) Purchase through USPB. Upon and subject to all terms and
conditions set forth in this Agreement, Beef Co. shall during the term of this
Agreement purchase through USPB from its members, and USPB shall cause to be
sold and delivered from its members to Beef Co., on an annual basis, a base
amount of 735,385 head of cattle per year subject to an annual mutually agreed
adjustment of plus or minus fifteen percent (15%).
(b) Additional cattle delivery rights. Beef Co. (or other United
States business operations of JBS, S.A.) agrees to discuss terms and conditions
for USPB to increase cattle delivery rights through cattle producers who would
deliver to Beef Co. processing facilities.
(c) Scheduling. Delivery schedules shall be determined by Beef Co. on
a reasonable basis, consistent with all other provisions of this Agreement,
taking into account operational practicalities. Delivery will be to Beef Co.'s
United States beef processing facilities. Upon receipt of a request by Beef Co.,
USPB will forecast USPB's anticipated deliveries thirty (30) days in advance of
any scheduled deliveries to Beef Co.
Exhibit G-1
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
2. PURCHASE PRICE OF CATTLE.
(a) Grid Pricing Criteria. The Purchase Price for cattle purchased by
Beef Co. under this Agreement shall be an amount determined pursuant to Beef
Co's pricing grid for cattle to be delivered by USPB and USPB members, as the
pricing grid may be modified or supplemented from time to time by Beef Co.
(provided that the pricing grid shall in any event be at all times no less
favorable than any other pricing grid being utilized by Beef Co. and is
competitive with Beef Co.'s major competitors for purchase of cattle). For
purposes of the pricing grid, Beef Co. shall grade beef derived from cattle
purchased under this Agreement in accordance with standard industry practice. An
example of grid pricing is given on Exhibit A.
(b) Carcass Data. Beef Co. shall provide USPB carcass data on all
cattle delivered by USPB members to Beef Co. in a manner similar to the
customary information provided by National to USPB, an example of which is in
Exhibit B, or as otherwise agreed to by the Parties.
3. PAYMENT OF PURCHASE PRICE. Cattle purchased under this Agreement
from USPB members shall be paid for by Beef Co. on a finish and grade basis
consistent with standard industry practice, or on any other basis that is
consistent with any other standard industry practice utilized by Beef Co. with
respect to cattle purchased from third Parties, and shall in any event be in
accordance with applicable law.
4. CATTLE QUALITY. For purposes of this Agreement, USPB agrees that
USPB members will not deliver to Beef Co. any cattle that have been condemned by
the United States department of agriculture or any other regulatory authority
over the Beef Business.
5. PERMITS. USPB members shall provide Beef Co. with all permits
necessary to qualify cattle for interstate shipment, if applicable, in the same
manner as required for other cattle purchased by Beef Co. each Party otherwise
covenants with the other Party to perform the Party's obligations under this
Agreement in accordance with all applicable laws.
6. WEIGHING AND TRANSPORTATION. All cattle purchased by Beef Co. from
USPB under this Agreement shall be weighed and transported according to standard
industry practice and on the same basis as other cattle purchased by Beef Co.
(or as otherwise mutually determined by the Parties through the pricing grid
determination process).
7. TERM OF AGREEMENT. The term of this Agreement shall commence on the
date first written above and shall continue for a minimum of five (5) years,
subject to the following:
(1) if there is a material breach of any agreement or covenant of USPB
contained in this Agreement, Beef Co. may give written notice of the breach to
USPB and, if the breach is not cured within a period ("USPB's Cure Period") of
thirty (30) days following the notice of breach by Beef Co. to USPB, Beef Co.
shall have the right to terminate all rights of USPB under this Agreement upon
written termination notice to USPB within thirty (30) days following USPB's Cure
Period. Beef Co. must continue to purchase and pay for cattle as
Exhibit G-2
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
provided in this Agreement that are delivered by USPB members to Beef Co. for a
period of six (6) months following any notice of termination given under this
Section 7(1);
(2) if there is a material breach of any agreement or covenant of Beef
Co. contained in this Agreement with respect to USPB, and delivery of cattle by
USPB members to Beef Co., USPB may give written notice of the breach to Beef Co.
and, if the breach is not cured within a period ("Beef Co. Cure Period") of
thirty (30) days following the notice of breach by USPB to Beef Co. or, in the
case of a failure of Beef Co. To make a payment to USPB or USPB members, ten
(10) days following the notice of breach by USPB to Beef Co., then USPB shall
have the right to terminate all obligations of USPB and its members under this
Agreement upon notice to Beef Co., provided that the notice of termination is
given by USPB to Beef Co. within thirty (30) days following the Beef Co. Cure
Period. USPB shall cause its members to continue to deliver cattle to Beef Co.
for a period of six (6) months following the termination if the USPB members are
paid as provided in this Agreement for the cattle delivered;
(3) if there is a change in control and JBS, S.A. or an affiliate is
no longer the controlling owner of any of the processing facilities where USPB
members deliver cattle under this Agreement, then USPB may terminate this
Agreement by providing written notice to Beef Co. USPB shall cause its members
to continue to deliver cattle to Beef Co. for a period of six (6) months
following the termination if the USPB members are paid as provided in this
Agreement for the cattle delivered;
(4) if, at any time after this Agreement has been in effect for a
minimum of five (5) years USPB divests completely of its ownership interest in
JBS, S.A., this Agreement shall terminate; provided, however, that the parties
may agree in writing to continue this Agreement under mutually acceptable terms.
USPB shall cause its members to continue to deliver cattle to Beef Co. for a
period of six (6) months following a termination under this Section 7(4) if the
USPB members are paid as provided in this Agreement for the cattle delivered;
and
(5) notwithstanding the foregoing clauses (1), (2), (3) and (4), the
obligation to purchase and pay for cattle and the obligation to deliver cattle
under this Section 7, and rights of either Party to collect applicable damages
and to exercise its remedies for failure to purchase and deliver cattle as
provided under this Agreement, shall survive any termination of this Agreement.
8. WARRANTIES. USPB MAKES NO WARRANTIES EITHER EXPRESS OR IMPLIED TO BEEF
CO. OTHER THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT AND, EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT, SPECIFICALLY MAKES NO WARRANTY AS TO ANY SPECIFIC
GRADE OF BEEF TO BE DERIVED FROM ANY CATTLE SOLD UNDER THIS AGREEMENT, AND
DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR
PURPOSE.
9. REMEDIES. If either Party is in default under this Agreement, the other
Party may exercise any and all rights and remedies available to the Party under
this Agreement, under any applicable uniform commercial code, or otherwise at
law or in equity. The rights and remedies
Exhibit G-3
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
afforded to either Party under this Agreement shall be cumulative and in
addition to, and not in limitation of, any rights and remedies which the Party
may otherwise have under Applicable Law, including any applicable Uniform
Commercial Code. The exercise or partial exercise of any right or remedy of
either Party under this Agreement or under applicable law shall not preclude or
prejudice the further exercise of that right or remedy or the exercise of any
other right or remedy of the Party. No delay or omission on the part of either
Party in exercising any right under this Agreement or otherwise shall operate as
a waiver of the right. A waiver on any one occasion shall not be construed as a
bar or waiver of any right or remedy on any future occasion. Notwithstanding
other provisions of this Section, if a force majeure event occurs precluding
Beef Co. from receiving and/or processing cattle, Beef Co. must still purchase
cattle from USPB and its members as provided under this Agreement. Cattle
available for delivery from USPB and its members during a force majeure event
are defined as "Force Majeure Cattle." Notwithstanding the foregoing, Beef Co.
Shall have no obligation to purchase force majeure cattle unless the logistics
and financial components of purchasing such cattle (such as delivering to
another plant within a reasonable distance to the plant affected by the force
majeure event) would be substantially the same to Beef Co. as they would have
been without the occurrence of the force majeure event. Beef Co. shall notify
USPB in writing if Beef Co. will not purchase Force Majeure Cattle and must
offer to purchase the force majeure cattle with the pricing adjustments to
compensate Beef Co. for the actual additional costs incurred over the purchase
without the Force Majeure Event.
10. NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered by
hand, five (5) days after mailed by certified mail with postage paid and return
receipt requested, or sent by facsimile transmission to the Parties at the
following addresses and facsimile numbers (or at another address or facsimile
number for a Party as the Party shall designate in a notice given pursuant to
this Section):
(a) If to Beef Co., to:
Chief Executive Officer
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
with a copy to:
General Counsel
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(b) If to USPB, to:
Xxxxxx X. Xxxx, CEO
U.S. Premium Beef, LLC
X.X. Xxx 00000
Xxxxxx Xxxx, Xx 00000
Facsimile: (000) 000-0000
Exhibit G-4
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
with a copy to:
Stoel Rives LLP
Attn: Xxxx X. Xxxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
11. ENTIRE AGREEMENT. This Agreement contains all of the terms agreed upon
by the Parties with respect to the subject matter of this Agreement and
supersedes all prior agreements of the Parties or their predecessors in interest
as to the subject matter of this Agreement. This Agreement may not be modified
except in writing, signed by the Parties hereto, that specifically references
this Agreement.
12. ASSIGNMENT. This Agreement may not be assigned by any Party without
prior written consent of the other Party. This Agreement shall be binding upon,
and inure to the benefit of, the Parties and their respective heirs, legal
representatives, successors, and permitted assigns. Notwithstanding the
foregoing, Beef Co may assign this Agreement to any wholly owned Subsidiary or
affiliate without any prior written consent.
13. CONSTRUCTION. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Kansas. The Parties agree that if any
part, term or provision of this Agreement is held by a court of competent
jurisdiction to be illegal or unenforceable or in conflict with any controlling
state law, the validity of the remaining parts, terms and provisions of this
Agreement shall not be affected, and the rights and obligations of the Parties
shall be construed and enforced as if this Agreement did not contain the
particular part, term or provision held to be illegal or unenforceable or in
conflict with any controlling state law.
[signature page follows]
Exhibit G-5
NBP MEMBERS/JBS S.A. MEMBERSHIP INTEREST PURCHASE AGREEMENT
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
29th day of February, 2008.
NATIONAL BEEF PACKING COMPANY, LLC
By
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Title:
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SWIFT & COMPANY.
By
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Title:
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U.S. PREMIUM BEEF, LLC
By
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Title:
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Exhibit G-6
