EXHIBIT 99.2
Execution Copy
ASSET PURCHASE AGREEMENT
by and among
XXXXX SUGAR CORPORATION
and
IMPERIAL SUGAR COMPANY
and
XXXXXX SUGARS INCORPORATED
Dated: October 7, 2002
Table of Contents
Page
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RECITALS...................................................................... 1
DEFINITIONS................................................................... 1
ARTICLE I PURCHASE AND SALE OF ASSETS............................................ 6
1.1 Transfer of Assets...................................................... 6
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1.2 Marketing Allocation.................................................... 7
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1.3 Excluded Assets......................................................... 7
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1.4 Assumption of Liabilities............................................... 8
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1.5 Specifically Excluded Liabilities....................................... 9
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1.6 Purchase Price.......................................................... 10
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1.7 Payment of the Purchase Price........................................... 10
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1.8 Final Determination of Purchase Price................................... 10
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1.9 Allocation of Purchase Price............................................ 11
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1.10 Taxes................................................................... 11
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1.11 Closing Costs, Transfer Taxes and Fees.................................. 11
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ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER.............................. 11
2.1 Organization............................................................ 11
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2.2 Authorization........................................................... 12
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2.3 Consents and Approvals.................................................. 12
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2.4 Absence of Specified Changes............................................ 12
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2.5 Non-Contravention....................................................... 13
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2.6 Financial Information................................................... 13
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2.7 Employment Matters...................................................... 14
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2.8 Labor Matters........................................................... 14
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2.9 Employee Benefit Plans.................................................. 14
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2.10 No Brokers.............................................................. 15
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2.11 No Other Agreements to Sell the Assets.................................. 15
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2.12 Environmental........................................................... 15
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2.13 Title to Assets......................................................... 17
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2.14 Tax Returns and Audits.................................................. 17
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2.15 Grower Agreements....................................................... 17
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2.16 Intellectual Property; Software......................................... 17
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2.17 Litigation.............................................................. 18
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2.18 Permits................................................................. 18
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2.19 Contracts............................................................... 18
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2.20 Inventory............................................................... 19
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2.21 Insurance............................................................... 19
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2.22 Real Property Matters................................................... 19
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2.23 Pressure Vessels and Boilers............................................ 21
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2.24 Scope of Representations and Warranties of Seller....................... 22
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2.25 Reasonable Disclosure................................................... 22
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER.............................. 22
3.1 Organization of Buyer................................................... 23
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3.2 Authorization........................................................... 23
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3.3 No Conflict or Violation................................................ 23
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3.4 Consents and Approvals.................................................. 23
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3.5 No Brokers.............................................................. 23
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ARTICLE IV COVENANTS OF SELLER AND BUYER......................................... 23
4.1 Further Assurances...................................................... 23
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4.2 Notification of Certain Matters......................................... 24
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4.3 Confidentiality......................................................... 24
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4.4 Access to Information................................................... 24
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4.5 Employee Matters........................................................ 24
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4.6 Consents and Best Efforts............................................... 25
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4.7 Conduct of Business..................................................... 25
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4.8 Updated Disclosure Letter............................................... 25
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4.9 Accounts Receivable..................................................... 25
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4.10 Escrow Account.......................................................... 25
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4.11 Xxxxxx Tolling Agreement................................................ 26
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4.12 Grower Seed Receivables................................................. 26
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4.13 Government Sugar........................................................ 26
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ARTICLE V JOINT CONDITIONS TO BUYER AND SELLER'S OBLIGATIONS..................... 26
5.1 Hereford Facility Lease................................................. 26
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5.2 No Actions or Court Orders.............................................. 26
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ARTICLE VI CONDITIONS TO SELLER'S OBLIGATIONS.................................... 26
6.1 Representations, Warranties and Covenants............................... 26
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6.2 Consents, Regulatory Compliance and Approval............................ 27
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6.3 Certificates............................................................ 27
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6.4 Corporate Documents..................................................... 27
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6.5 Creditor Approval....................................................... 27
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6.6 USDA Assurances......................................................... 27
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6.7 Ancillary Documents..................................................... 27
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ARTICLE VII CONDITIONS TO BUYER'S OBLIGATIONS.................................... 27
7.1 Representations, Warranties and Covenants............................... 27
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7.2 Consents, Regulatory Compliance and Approval............................ 27
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7.3 No Material Adverse Change.............................................. 27
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7.4 Certificates............................................................ 28
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7.5 Corporate Documents..................................................... 28
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7.6 Creditor Approval....................................................... 28
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7.7 Operating Permits....................................................... 28
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7.8 USDA Assurances......................................................... 28
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7.9 Transition Agreement.................................................... 28
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7.10 Rocky Mountain Silo Agreements.......................................... 28
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7.11 Ancillary Agreements.................................................... 28
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ARTICLE VIII CLOSING............................................................. 28
8.1 Closing................................................................. 28
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8.2 Seller's Deliveries..................................................... 28
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8.3 Buyer's Deliveries...................................................... 29
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8.4 Joint Deliveries........................................................ 29
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8.5 Ancillary Agreements.................................................... 29
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ARTICLE IX ACTIONS BY SELLER AND BUYER AFTER THE CLOSING......................... 29
9.1 Tax Matters............................................................. 29
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ARTICLE X SURVIVAL AND INDEMNIFICATION........................................... 30
10.1 Survival Periods........................................................ 30
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10.2 Seller's Agreement to Indemnify......................................... 30
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10.3 Buyer's Agreement to Indemnify.......................................... 31
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10.4 Third-Party Indemnification............................................. 32
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10.5 Insurance............................................................... 33
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10.6 No Duplication.......................................................... 33
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10.7 Sole Remedy............................................................. 33
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10.8 No Special Damages...................................................... 33
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ARTICLE XI TERMINATION........................................................... 33
11.1 Termination............................................................. 33
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11.2 In the Event of Termination............................................. 34
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ARTICLE XII ASSIGMENT OF RIGHTS.................................................. 34
ARTICLE XIII MISCELLANEOUS....................................................... 35
13.1 Assignment.............................................................. 35
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13.2 Notices................................................................. 35
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13.3 Choice of Law........................................................... 36
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13.4 Entire Agreement: Amendments and Waivers................................ 36
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13.5 Multiple Counterparts................................................... 36
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13.6 Expenses................................................................ 36
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13.7 Invalidity.............................................................. 36
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13.8 Titles.................................................................. 36
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13.9 Representation of Counsel; Mutual Negotiation........................... 36
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Execution Copy
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of the 7th day of October, 2002, by and among IMPERIAL SUGAR COMPANY, a Texas
corporation ("Imperial"), XXXXX SUGAR CORPORATION, a New York corporation and
wholly-owned subsidiary of Imperial ("Seller") and XXXXXX SUGARS INCORPORATED, a
Minnesota corporation ("Buyer").
RECITALS
WHEREAS, Imperial is the sole stockholder of Seller, the owner of sugarbeet
processing facilities located at Hereford, Texas (the "Hereford Facility"),
Sidney, Montana (the "Xxxxxx Facility") and Torrington, Wyoming (the "Torrington
Facility"), with such facilities collectively referred to as the "Acquired
Factories";
WHEREAS, Buyer is a wholly-owned subsidiary of American Crystal Sugar
Company, a Minnesota cooperative corporation ("American Crystal");
WHEREAS, Imperial wishes to cause Seller to sell the Acquired Factories,
together with all of the assets associated with such Acquired Factories (as more
particularly described herein), and Buyer wishes to purchase such Acquired
Factories and the associated assets from Seller, all upon and subject to the
terms of this Agreement; and
WHEREAS, immediately upon Closing the transactions contemplated hereunder,
Buyer shall lease to Western Sugar Cooperative, a Colorado cooperative
("Western"), the Torrington Facility pursuant to a lease agreement (the "Lease
Agreement").
NOW THEREFORE, in consideration of the respective covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows.
DEFINITIONS
The capitalized terms used in this Agreement shall have the following
definitions:
"Accrued Vacation" shall have the meaning set forth in Section 1.4(c)
hereof.
"Acquired Factories" shall mean the Hereford Facility, Xxxxxx Facility and
the Torrington Facility collectively.
"Agreement" shall mean this Asset Purchase Agreement dated as of the date
hereof.
"American Crystal" shall mean American Crystal Sugar Company, a Minnesota
cooperative and the sole shareholder of Buyer.
"Ancillary Agreements" shall include the documents set forth in Section 8.5
hereof.
"Assets" shall have the meaning set forth in Section 1.1 hereof.
"Assumed Liabilities" shall have the meaning set forth in Section 1.4
hereof.
"Assignment and Assumption Agreement" shall have the meaning set forth in
Section 8.3(b) hereof.
"Authorities" shall have the meaning set forth in Section 2.5 hereof.
"Beet Piling Sites" shall mean those locations, whether leased or owned,
associated with the Acquired Factories where the Seller has stored
sugarbeets prior to processing at the Acquired Factories as set forth on
Schedule 1.1(a). For purposes of this Agreement, a reference to the
Acquired Factories shall include the Beet Piling Sites.
"Benefit Plans" shall have the meaning set forth in Section 2.9(a) hereof.
"Xxxx of Sale" shall have the meaning set forth in Section 8.2(a) hereof.
"Books and Records" shall have the meaning set forth in Section 1.1(g)
hereof.
"Buyer" shall mean Xxxxxx Sugars Incorporated, a Minnesota corporation.
"Buyer Damages" shall have the meaning set forth in Section 10.2.
"Buyer Indemnitees" shall have the meaning set forth in Section 10.2.
"Byproducts" shall mean pulp, molasses and other byproducts that result
from the processing of the sugarbeets at the Acquired Factories.
"Campaign" means the periods beginning in September and October 2002 during
which the Torrington Facility and the Xxxxxx Facility are processing
sugarbeets from the 2002 crop.
"Claims" shall mean any actions, suits, prosecutions, claims or any civil,
criminal or administrative proceedings.
"Closing" shall have the meaning set forth in Section 8.1 hereof.
"Closing Date" shall have the meaning set forth in Section 8.1 hereof.
"Closing Date Payment" shall have the meaning set forth in Section 1.7
hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Contracts" shall have the meaning set forth in Section 1.1(i) hereof.
"Confidentiality Agreement" shall have the meaning set forth in the Section
4.3.
"Employee" shall have the meaning set forth in Section 2.7 hereof.
"Employee Lease Agreement" shall have the meaning set forth in Section 4.5.
"Environmental Law(s)" shall mean and include any and all present federal,
state or local laws, statutes, ordinances, rules, regulations, orders,
judgments, restrictions, or determinations or other requirements of any
governmental authority, including, without
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limitation, all common law and judicial principles of liability,
regulating, relating to or imposing liability or standards of conduct
concerning, human health or safety, or any Environmental matters, as in
effect on the date of execution of this Agreement, including, without
limitation, the National Environmental Policy Act, the Clean Water Act, the
Clean Air Act, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("CERCLA"), the Federal Water Pollution Control
Act, the Occupational Safety and Health Act of 1970, the Resource
Conservation and Recovery Act of 1976 as amended by the Hazardous and Solid
Waste Amendments Act of 1984 ("RCRA"), the Hazardous Materials
Transportation Act of 1975, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide
Act, as amended by the Federal Environmental Pesticide Control Act of 1972
and by the Federal Pesticide Act of 1978, the Emergency Planning and
Community Right-To-Know Act of 1986, the United States Environmental
Protection Agency's Technical Standards and Corrective Action Requirements
for Owners and Operators of Underground Storage Tanks, 40 C.F.R. Part 280,
The Atomic Energy Act of 1954, the Acid Precipitation Act of 1980, the
Low-Level Radioactive Waste Policy Act, the Nuclear Waste Policy Act of
1982 and the Solid Waste Disposal Act and any so-called "Superfund" or
"Superlien" law and any comparable or similar Environmental laws (whether
local, state or federal), together with all amendments in effect, and all
rules and regulations presently promulgated, under or with respect to any
or all of the foregoing laws, all as currently interpreted and enforced.
"Endorsements" shall have the meaning set forth in Section 2.22(b).
"Equipment" shall have the meaning set forth in Section 1.1(b) hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall have the meaning set forth in Section 2.9(a)
hereof.
"Escrow Agreement" shall have the meaning set forth in Section 4.10 hereof.
"Escrow Fund" shall have the meaning set forth in Section 4.10 hereof.
"Excluded Assets" shall have the meaning set forth in Section 1.3 hereof.
"Excluded Equipment" shall have the meaning set forth in Section 1.3(c)
hereof.
"Excluded Finished Product Inventory" shall have the meaning set forth in
Section 1.3(a) hereof.
"Excluded Sugarbeets" shall have the meaning set forth in Section 1.3(b).
"Final Payment Determination" shall have the meaning set forth in Section
1.8(a) hereof.
"Financial Schedules" shall have the meaning set forth in Section 2.6
hereof.
"GAAP" shall mean Generally Accepted Accounting Principles.
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"Governmental Orders" shall mean any agreements, consent orders, decrees,
writs, judgments, injunctions, license or permit conditions, fine or
penalty assessments, or other orders, directives, determinations, findings
or requirements of any federal, state or local court, governmental agency
or authority.
"Grower Seed Receivables" shall have the meaning set forth in Section 4.12.
"Hazardous Substance" shall mean, without limitation, any flammable
substances, explosives, radon, radioactive materials, asbestos (and any
substance or material containing asbestos), urea formaldehyde foam
insulation, the group of organic compounds known as polychlorinated
biphenyls, lead (and any substance or material containing lead), chemicals
known to cause cancer or reproductive toxicity, pollutants, effluents,
contaminants, emissions or other materials (including, without limitation,
raw materials, final or intermediate products, and wastes) that may cause
or pose a present or potential hazard to human health or safety or the
environment, when Released (as defined herein) or during manufacture,
processing, generation, treatment, storage, transportation, disposal,
abatement, removal, remediation, or any other use or handling, petroleum
and petroleum-based products, including crude oil and any fraction thereof,
natural gas or synthetic gas used for fuel, methane, hazardous materials,
hazardous wastes, underground storage tanks or storage facilities and other
substances or related materials defined as hazardous or toxic in, or
otherwise included within the scope of, any Environmental Law.
"Hereford Employees" shall mean those employees of the Seller employed at
the Hereford Facility on the Closing Date.
"Hereford Facility" shall have the meaning set forth in the recitals to
this Agreement.
"Hereford Facility Lease" shall have the meaning set forth in Section 5.1
hereof.
"Imperial" shall mean Imperial Sugar Company, a Texas corporation.
"Intellectual Property" shall have the meaning set forth in Section 1.1(l)
hereof.
"Knowledge" for the Seller shall mean the actual knowledge of Xxxxxxx X.
Xxxxxx, H. P. Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X.
Xxxxxx, the Xxxxxx Facility manager, Xxxxx X. Xxxxxxx, the Torrington
Facility manager, Xxxxx X. Xxxxxx, the Hereford Facility manager, Xxxxx
Xxxx, Xxxxxx X. Xxxxxx and Xxx Xxxxxxxxxx; provided, however, the actual
knowledge of Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxxx shall
be specifically limited to the Xxxxxx Facility, Torrington Facility and the
Hereford Facility, respectively.
"Lien" shall have the meaning set forth in Section 2.5 hereof.
"Lease Agreement" shall have the meaning set forth in the recitals hereto.
"Marketing Allocation" shall have the meaning set forth in Section 1.2
hereof.
"Material Adverse Effect" shall have the meaning set forth in Section 2.1
hereof.
"Notice of Objection" shall have the meaning set forth in Section 1.8(a)
hereof.
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"Operating Supplies" shall have the meaning set forth in Section 1.1(h)
hereof.
"Permits" shall have the meaning set forth in Section 1.1(f) hereof.
"Prepaid Expenses" shall have the meaning set forth in Section 1.1(d)
hereof.
"Pressure Vessel" shall have the meaning set forth in Section 2.23 hereof.
"Purchase Price" shall have the meaning set forth in Section 1.6 hereof.
"Real Property" shall have the meaning set forth in Section 1.1(a) hereof.
"Release(d)" shall have the same meaning as given to that term under CERCLA
or any other applicable Environmental Law or under the regulations
promulgated under CERCLA or any other applicable Environmental Law and
includes, without limitation, any contamination or spillage governed by any
Environmental Law.
"Rocky Mountain Agreements" shall have the meaning set forth in Section
7.10 hereof.
"Seller" shall mean Xxxxx Sugar Corporation, a New York corporation.
"Seller Damages" shall have the meaning set forth in Section 10.3.
"Seller Indemnitees" shall have the meaning set forth in Section 10.3.
"Xxxxxx Employees" shall mean those employees of the Seller employed at the
Xxxxxx Facility on the Closing Date, except for Xxxxxx X. Xxxxxx..
"Xxxxxx Facility" shall have the meaning set forth in the recitals to this
Agreement.
"Xxxxxx Byproducts" shall have the meaning set forth in Section 1.1(j)
hereof.
"Xxxxxx Silo LLC" shall have the meaning set forth in Section 1.1(m).
"Xxxxxx Tolling Agreement" shall have the meaning set forth in Section
4.11.
"Sugar" means the sugar extracted from sugarbeets processed at the Acquired
Factories.
"Survey" shall have the meaning set forth in Section 2.22(b) hereof.
"Survival Period" shall have the meaning set forth in Section 10.1 hereof.
"Taxes" shall have the meaning set forth in Section 1.10 hereof.
"Title Company" shall have the meaning set forth in Section 2.22(b) hereof.
"Torrington Employees" shall mean those employees of the Seller employed at
the Torrington Facility on the Closing Date.
"Torrington Facility" shall have the meaning set forth in the recitals of
this Agreement.
"Transition Agreement" shall have the meaning set forth in Section 7.9
hereof.
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"Updated Survey" shall have the meaning set forth in Section 2.22.
"USDA" shall mean United States Department of Agriculture.
"Water Rights" shall have the meaning set forth in Section 1.1(c) hereof.
"Western" shall mean Western Sugar Cooperative, a Colorado cooperative.
"Work-In-Process Inventory" shall mean all of Seller's work-in-process
inventory, including sweepings at the Acquired Factories.
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Transfer of Assets. Seller, upon the terms and subject to the
conditions contained herein, at the Closing, agrees to sell, convey, transfer,
assign and deliver all of Seller's right, title and interest in, to and under
the following assets (with such rights, title and interest referred to as the
"Assets"), and Buyer agrees to purchase from Seller such Assets:
(a) Real Property. The real property of Seller located at, adjacent or
related to the Acquired Factories as set forth on Schedule 1.1(a),
with such Schedule 1.1(a) subject to change after the Closing Date
upon mutual agreement of the parties hereto, and the real property of
Seller located at, adjacent or related to the Beet Piling Sites also
as set forth on Schedule 1.1(a) (collectively, the "Real Property"),
together with such of the following in the Seller's possession and
control namely all mineral rights, utility plans, grading plans,
signage agreements, development agreements, street development plans,
surveys, title evidence, studies, real estate tax bills, notices of
assessments and information and documentation regarding any assessment
protests, other plans and specifications relating to such real
property, all existing soils, geotechnical, environmental assessments,
engineering reports or any other reports relating to the real property
in Seller's possession and control, and copies of all guarantees and
warranties in Seller's possession and control that were given to and
for the benefit of Seller in connection with the construction of the
improvements or the purchase of any fixtures.
(b) Equipment. Except for the Excluded Equipment, all machinery, tools,
fixtures, equipment, vehicles, computers, computer networking
equipment and other tangible personal property owned, leased or used
by Seller primarily in the operation of the Acquired Factories and all
pilers, scales, ventilation tubes, loaders and other equipment
primarily related to the Beet Piling Sites, including, but not limited
to the items and tangible personal property set forth on Schedule
1.1(b) (the "Equipment").
(c) Water Rights. To the extent assignable, all water rights related to
the Acquired Factories, including but not limited to those set forth
on Schedule 1.1(c), together with all agreements, leases, information
and documentation regarding such rights and specifications relating to
such rights (the "Water Rights").
(d) Prepaid Expenses. All those prepayments or prepaid expenses relating
to the Acquired Factories set forth on Schedule 1.1(d) (the "Prepaid
Expenses").
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(e) Deferred Maintenance. All deferred maintenance related to the Acquired
Factories set forth on Schedule 1.1(e) (the "Deferred Maintenance").
(f) Permits. To the extent assignable, all governmental licenses, permits
or approvals used primarily in the conduct of business at the Acquired
Factories, as currently conducted, including without limitation the
licenses and permits set forth on Schedule 1.1(f) (the "Permits").
(g) Books and Records. Except for customer sales records, all business
records, files, supplier lists, documents, specifications, personnel
records for any Xxxxxx Employee or Torrington Employee (to the extent
permitted by applicable law), grower records, repair records,
transferable warranties, equipment operating logs, owner's manuals and
all other books and records which relate primarily to the Assets and
the Acquired Factories (the "Books and Records"); provided, however,
that Seller may retain copies of any such Books and Records as it may
deem advisable for uses not inconsistent with this Agreement.
(h) Operating Supplies. All coal, coke, natural gas, limerock, chemicals,
supplies, non-proprietary packaging supplies and other consumables
owned by Seller at the Xxxxxx Facility and Beet Piling Sites related
to the Xxxxxx Facility (the "Operating Supplies").
(i) Contracts. Those contracts, leases and agreements set forth on
Schedule 1.1(i) (the "Contracts").
(j) Xxxxxx Byproducts. The inventory of Byproducts produced by Seller at
the Xxxxxx Facility from the commencement of the Campaign to the
Closing Date (the "Xxxxxx Byproducts").
(k) Xxxxxx Sugarbeets. All sugarbeets to be processed at the Xxxxxx
Facility, except the Excluded Sugarbeets.
(l) Intellectual Property. A royalty-free, non-exclusive, non-transferable
(except to American Crystal and its affiliates) license for the grower
accounting software and associated source code, software, patents and
licenses related to the operation of the Acquired Factories set forth
on Schedule 1.1(l) (the "Intellectual Property").
(m) Xxxxxx Silo LLC. All of Seller's membership interest in the Xxxxxx
Silo LLC, which constitutes 100% percent of the membership interests
of Xxxxxx Silo, LLC, a Delaware limited liability company.
1.2 Marketing Allocation. Buyer will receive the marketing allocation
associated with the Acquired Factories, which are mutually agreed upon between
the parties hereto to be 42% of Imperial's initial United States Department of
Agriculture ("USDA") allocation for the domestic sugarbeet segment (currently
estimated to represent 4.8673% of the total allocation for the domestic
sugarbeet segment) (the "Marketing Allocation"), subject to final review and
determination by the USDA.
1.3 Excluded Assets. The Assets exclude any assets other than the Assets
specifically listed or described in Section 1.1 and, without limiting the
generality of the foregoing, expressly exclude the following (collectively, the
"Excluded Assets"):
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(a) Excluded Inventory. Finished product inventory of Sugar,
Work-In-Process Inventory, and Byproducts from prior to the start of
the Campaign, located at the Xxxxxx Facility or the Torrington
Facility as of the Closing Date (the "Excluded Finished Product
Inventory").
(b) Excluded Sugarbeets. Fifty-Five Thousand Two Hundred and Sixty-Seven
(55,267) tons of sugarbeets to be processed at the Xxxxxx Facility
(the "Excluded Sugarbeets").
(c) Excluded Equipment. That certain equipment of Seller which is set
forth on Schedule 1.3(c) (the "Excluded Equipment").
(d) Operating Supplies. Operating Supplies at the Torrington Facility and
the Hereford Facility.
(e) Cash and Receivables. All cash, cash equivalents, accounts (including
Grower Seed Receivables) and notes receivable of Seller.
(f) Proprietary Packaging Materials. All proprietary packaging materials
at the Acquired Factories.
(g) Insurance, Taxes and Legal Matters. All insurance policies and claims
thereunder, claims for rights to receive tax refunds for periods prior
to the Closing Date, all tax returns relating to the Acquired
Factories that do not include periods after the Closing and any notes,
worksheets, files or documents relating thereto, and any legal files
or documents covered by an evidentiary privilege that are not related
to the Acquired Factories or Assumed Liabilities.
(h) Transaction Records. All books, documents, records and files prepared
in connection with or related to the transactions contemplated by this
Agreement, including bids received from other parties and analyses
relating to the Assets, the Acquired Factories or the Assumed
Liabilities.
(i) Corporate Records. All minute books and stockholder and stock transfer
records and similar corporate records of Seller.
(j) Peoplesoft Software. The Peoplesoft software and any related license
thereto
1.4 Assumption of Liabilities. Buyer is not assuming any liability of
Seller except for the following liabilities (the "Assumed Liabilities"), which
Buyer shall assume on the Closing Date and pay, perform and discharge when due:
(a) Contracts. All of Seller's obligations under the Contracts, except for
those described in Section 1.5(c) hereof.
(b) Beet Grower Obligations. Liability, estimated to be $9,219,388,
pursuant to any beet grower contract assumed for sugarbeets delivered
to the Xxxxxx Facility through the Closing Date, excluding liability
to the growers under the contracts for the Excluded Sugarbeets.
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(c) Accrued Vacation. Accrued Vacation pay for the Seller's employees at
the Xxxxxx Facility (the "Xxxxxx Employees") and at the Torrington
Facility (the "Torrington Employees") as of the Closing Date as set
forth on Schedule 1.4(c).
1.5 Specifically Excluded Liabilities. Except for the Assumed Liabilities,
Buyer shall assume no liabilities or obligations of Seller of any nature
whatsoever, contingent or otherwise including, but not limited to, any
liabilities pertaining to the Hereford Employees, the Torrington Employees, the
Xxxxxx Employees, the Acquired Factories and/or the Assets. Without limiting the
foregoing, it is specifically agreed and understood that excluded from the
Assumed Liabilities are any liabilities, obligations, or commitments set forth
below:
(a) Taxes. Seller's liability for any Taxes (as such term is defined
herein) of Seller (without limiting the generality of the foregoing,
whether payable, collected or collectible by Seller, but not including
Taxes collected or collectible by Seller that are the liability of
Buyer pursuant to Section 1.11 hereof) for any period and any
liabilities for any Taxes levied, imposed upon or related to the
Acquired Factories, the Assets, the Xxxxxx Employees or the Torrington
Employees for any period (or any portion of any period) ending on or
prior to the Closing Date;
(b) Employee and Employee Benefit Plan Liabilities. Except as provided for
in the Employee Lease Agreement or as otherwise provided for herein,
Seller's liabilities:
(i) to any of the Xxxxxx Employees, Torrington Employees or
Hereford Employees;
(ii) with regard to any termination pay, pay in lieu of notice,
severance pay or any other notice payments or other payments
due to the Hereford Employees, the Torrington Employees or the
Xxxxxx Employees on or prior to Closing;
(iii) relating to any employee claims in existence as of the Closing
Date or arising or accruing after the Closing Date, where such
liability, obligation or commitment is based on an action,
event or transaction that occurred on or before the Closing
Date or an omission or an act which did or should have occurred
on or before the Closing Date;
(iv) arising under or relating to any current or former Benefit Plan
(as such term is defined herein) or any other employee benefit
plan.
(c) Contract Liability. Any liability arising from the breach of any
Contract by Seller that occurred before the Closing Date.
(d) Claims. Any and all liabilities, actions, suits, claims and other
proceedings which arise directly or indirectly out of the operation of
the Acquired Factories or use of the Assets before the Closing Date.
(e) Hereford Employees. Any and all liabilities, actions, suits or claims
associated with the Hereford Employees.
9
1.6 Purchase Price. The consideration for the sale, transfer, assignment,
conveyance and delivery of the Acquired Facilities and the Assets shall be paid
by Buyer to Seller as a cash payment equal to Thirty Four Million Dollars
($34,000,000); plus the book value of the Operating Supplies in excess of
$1,000,000; less the agreed-upon value of the Excluded Equipment; and less the
value of any Xxxxxx Byproducts sold by Seller prior to the Closing Date at the
Closing Date (collectively the "Purchase Price").
1.7 Payment of the Purchase Price. At the Closing, Buyer shall pay to
Seller an estimated Purchase Price computed as follows: (i) $34,000,000; plus
(ii) $0, the agreed-upon book value of Operating Supplies in excess of
$1,000,000; less (iii) $261,000, the agreed-upon value of the Excluded
Equipment; less (iv) the value of any Xxxxxx Byproducts sold by Seller prior to
the Closing Date; and less (v) $925,000 to be placed in the Escrow Fund as
provided in Section 4.10 (the "Closing Date Payment") The Closing Date Payment
shall be made on the Closing Date by wire transfer or other mutually agreeable
means in immediately available funds to an account or accounts designated by
Seller, or as Seller may otherwise direct in writing.
1.8 Final Determination of Purchase Price.
(a) The determination of the actual Purchase Price shall be accomplished
after the Closing Date. Buyer shall take an inventory and prepare a
valuation of the Xxxxxx Byproducts and a statement of the amount of
the final payment payable by Buyer and deliver the same to Seller
within sixty (60) days of the Closing Date (the "Final Payment
Determination"). Seller shall have thirty (30) calendar days following
the date of receipt of the Final Payment Determination to give a
notice to Buyer of any objection(s) to the Final Payment Determination
or the computation of the actual Purchase Price ("Notice of
Objection"). The Notice of Objection shall identify, in detail, that
aspect of the Final Payment Determination or the computation of the
actual Purchase Price to which objection is made, and in terms of the
actual Purchase Price, the amount(s), if any, in dispute. If no Notice
of Objection is delivered by Seller within the 30-day period, the
Final Payment Determination and computation of the actual Purchase
Price shall be deemed accepted and binding upon the parties on the
last day of such period.
(b) If Seller issues a Notice of Objection regarding the Final Payment
Determination, the Seller and Buyer, together with their
representatives, shall promptly meet, confer and negotiate in good
faith with a view to resolving any and all differences. If such
negotiations fail to resolve all differences or disputes within
fifteen (15) calendar days after Notice of Objection, either party may
submit the dispute or controversy arising out of or related to a
Notice of Objection to PriceWaterhouseCoopers or another mutually
agreed upon accounting firm of national reputation, who shall
determine the book value of the Xxxxxx Byproducts on behalf of the
Buyer and Seller and the parties shall be bound by such determination.
Buyer and Seller shall equally bear the cost of such valuation.
(c) Differences in the estimated and final Purchase Price shall be
addressed as follows:
(i) To the extent it is determined pursuant to Section 1.8(a) and
(b), that the final Purchase Price exceeds the Closing Date
Payment, the difference shall be paid to Seller within five (5)
business days of determination
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(ii) To the extent it is determined pursuant to Section 1.8(a) and
(b), that the final Purchase Price is less than Closing Date
Payment, and the difference shall be refunded by the Seller to
the Buyer from the Escrow Fund within five (5) business days of
determination.
1.9 Allocation of Purchase Price. The Purchase Price shall be allocated as
set forth in Schedule 1.9. This allocation shall be binding upon the parties who
shall file their tax returns in accordance with this allocation.
1.10 Taxes. Except as otherwise provided in this Agreement, all federal,
state, local, foreign or other taxes, assessments, levies or other government
charges (collectively, "Taxes") with respect of the Assets and income of the
Acquired Factories for the period or portions of periods ending prior to the
Closing Date shall be borne by Seller. Except as otherwise provided in this
Agreement and under the Hereford Lease (as such term is defined herein), all
Taxes with respect of the Acquired Factories and the Assets for the period or
portions of periods beginning on and after the Closing Date shall be borne by
Buyer.
1.11 Closing Costs, Transfer Taxes and Fees.
(a) Except as may be specified in the Hereford Lease, the party normally
obligated by law to pay such taxes and fees shall be responsible for
any sales, use, transfer or documentary taxes and recording fees
applicable to the transfer contemplated by this Agreement. The sales,
use and transfer tax returns required by reason of said transfers
shall be timely prepared and filed by the party normally obligated by
law or regulation to make such filing. The parties agree to cooperate
with each other in connection with the preparation and filing of such
returns, in obtaining all available exemptions from such sales, use
and transfer Taxes, and in timely providing each other with resale
certificates and any other documents necessary to satisfy any such
exemptions. Buyer acknowledges it is ultimately responsible for any
taxes under this Section 1.11(a), even if such taxes are required to
be withheld and paid by Seller from funds it receives from Buyer.
(b) If Buyer or Seller pays any Tax agreed to be borne by the other party
under this Agreement, such other party shall promptly (within 30
business days after written notice of the payment is received from the
paying party) reimburse the paying party for the amounts so paid. If
any party receives any refund or credit of Tax to which another party
is entitled under this Agreement, the receiving party shall promptly
(within 30 days after receipt of such payment) pay such amounts to the
party entitled thereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Imperial and Seller, jointly and severally hereby represent and warrant to
Buyer as of the date hereof, and except as otherwise set forth in the disclosure
letter (the "Disclosure Letter") delivered in final form by Seller to Buyer on
the date of this Agreement, as follows:
2.1 Organization. Imperial is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
has full corporate power and authority to carry on its business activities as
currently being conducted. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the state of its
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incorporation, has full corporate power and authority to carry on the business
activities now being conducted at the Acquired Facilities and to own, lease and
operate the properties and assets related to the Acquired Facilities, and is
duly qualified or licensed to do business as a foreign corporation in good
standing in Montana, Texas and Wyoming. For purposes of this Agreement, a
"Material Adverse Effect" with respect to the Acquired Facilities or the Assets
shall mean an effect that is, or is reasonably expected to be, materially
adverse to the business, operations, condition (financial or otherwise),
properties or liabilities of the Acquired Factories or the Assets, taken as a
whole, or would prevent Seller from consummating the transactions contemplated
hereby other than changes related to the U.S. economy or the U.S. sugar industry
in general and not specifically related to the Acquired Factories.
2.2 Authorization. Both Imperial and Seller have all requisite corporate
power and authority, and have taken, or prior to the Closing Date shall have
taken, all corporate action necessary, to execute and deliver this Agreement and
all other agreements it has or will execute in connection herewith, to
consummate the transactions contemplated hereby, and to perform its obligations
hereunder. This Agreement and all other agreements they have or will execute in
connection herewith, have been duly executed and delivered by Imperial and
Seller, as applicable, and each such agreement constitutes a legal, valid and
binding obligation of Imperial and Seller enforceable against both in accordance
with its terms except as limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditor's rights generally or by
equitable principles (whether considered in an action at law or in equity).
2.3 Consents and Approvals. Except as set forth on Section 2.3 of the
Disclosure Letter, no notice to, declaration, filing or registration with, or
authorization, consent or approval of, or permit from, any domestic or foreign
governmental or regulatory body or authority, or any other person or entity, is
required to be made or obtained by Seller in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby. Except as set forth on Section 2.3 of the
Disclosure Letter, all consents, permits or approvals required in connection
with the execution, delivery and performance of this Agreement have been or will
be obtained as of the Closing Date.
2.4 Absence of Specified Changes. Except as set forth on Section 2.4 of the
Disclosure Letter, to Seller's Knowledge since September 30, 2001, there has not
been any:
(a) Material breach or violation of, or default under any of the
Contracts, which breach would have a Material Adverse Effect on the
Acquired Factories or the Assets;
(b) Transaction by the Seller related the Acquired Factories except in the
ordinary course of business as conducted at the Acquired Factories or
except as would not reasonably be expected to have a Material Adverse
Effect;
(c) Change in accounting methods or practices (including, without
limitation, any change in revenue recognition, research and
development capitalization, depreciation or amortization policies or
rates) of the Acquired Factories;
(d) Increase in the salary or other compensation payable or to become
payable by the Seller to any of Xxxxxx Employees or the Torrington
Employees, or the declaration, payment, or commitment or obligation of
any kind for the payment by the Seller as relates to the Xxxxxx
Employees and the Torrington Employees, of a bonus or other additional
salary or compensation to any such person except in the ordinary
course of business;
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(e) Sale or transfer of any Asset, except in the ordinary course of
business or as would not reasonably be expected to have a Material
Adverse Effect;
(f) Amendment or termination of any contract, agreement, or license that
relates to the Assets and/or the Acquired Factories, except in the
ordinary course of business or except as would not reasonably be
expected to have a Material Adverse Effect;
(g) Commencement or notice or threat of commencement of any governmental
proceeding against or investigation of the Seller that is related to
or impacts the Assets and/or the Acquired Factories, or its affairs;
(h) Unlawful labor practice or action related to the Acquired Factories
except as would not reasonably be expected to have a Material Adverse
Effect;
(i) Waiver or release of any right or claim of the Acquired Factories,
except in the ordinary course of business or except as would not
reasonably be expected to have a Material Adverse Effect; or
(j) Agreement by the Seller as it relates to the Assets or the Acquired
Factories to do any of the things described in the preceding clauses
(a) through (i).
2.5 Non-Contravention. Neither the execution, delivery and performance of
this Agreement nor the consummation of the transactions contemplated herein
will: (i) violate or be in conflict with any provision of the organizational
documents of Seller; or (ii) be in conflict with, or constitute a default,
however defined (or an event which, with the giving of due notice or lapse of
time, or both, would constitute such a default), under, or cause or permit the
acceleration of the maturity of, or give rise to any right of termination,
cancellation, imposition of fees or penalties under, any debt, note, bond,
lease, mortgage, indenture, license, obligation, contract, commitment,
franchise, Permit, instrument or other agreement or obligation to which Seller
is a party or by which its properties or assets (including the Assets and the
Acquired Factories) are or may be bound (unless with respect to which defaults
or other rights, requisite waivers or consents shall have been obtained at or
prior to the Closing); or (iii) result in the creation or imposition of any
mortgage, hypothecate, pledge, lien, security interest, encumbrance,
restriction, prior claim, adverse claim, easement, servitude, right-of-way,
tenancy, lease, encroachment or charge of any kind, whether or not of record (a
"Lien") upon the Acquired Factories or Assets of Seller, under any debt,
obligation, contract, agreement or commitment to which Seller is party or by
which any of the Assets or properties are or may be bound; or (iv) violate or
cause a violation of any statute, treaty, Law, judgment, writ, injunction,
decision, decree, order, regulation, ordinance or other similar authoritative
matters of any domestic or foreign government including federal, provincial,
state, municipal, or local government or any quasi-government, administrative,
regulatory or judicial court, tribunal, arbitrator, official, department,
commission, agency, board, bureau, instrumentality or other authority
(hereinafter sometimes separately referred to as an "Authority" and sometimes
collectively as "Authorities") or except as would not reasonably be expected to
have a Material Adverse Effect.
2.6 Financial Information. Section 2.6 of the Disclosure Letter contains
true and complete copies of (i) schedules of revenues and expenses for Acquired
Factories for the most recent four (4) fiscal years; (ii) a schedule of revenues
and expenses for the Acquired Factories starting from September 30, 2001 to
date, and (iii) schedules of assets for the Acquired Factories as of June 30,
2002 (the "Financial Schedules"). Except as disclosed therein, the Financial
Schedules are in accordance with the books and records of Seller and are taken
from books and records of the Seller that were prepared in such a manner as to
allow Seller to prepare financial statements in conformity with GAAP
consistently applied for all periods, and (b) fairly present the financial
information of Seller as of the respective dates thereof as presented therein.
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2.7 Employment Matters. Section 2.7 of the Disclosure Letter contains a
complete list of all Xxxxxx Employees and Torrington Employees, with their
addresses, phone numbers, dates of hire, current job titles and dates begin
current job titles, job rankings/level, current compensation, accrued vacation,
sick days, bonus commitments, if any, and a summary of any contractual
obligation to or from them for employment, severance, bonus, incentive, if any.
Seller: (i) is in compliance in all material respects within all applicable
foreign, federal, state and local laws, rules and regulations respecting
employment, employment practices, terms and conditions of employment and wages
and hours, in each case, with respect to the Xxxxxx Employees and the Torrington
Employees and all other employees of the Acquired Factories (collectively, the
"Employees" and each, individually, an "Employee"); (ii) has withheld, reported,
and paid all material amounts required by law or by agreement to be withheld and
reported with respect to wages, salaries and other payments to Employees; (iii)
is not liable for any arrears of wages or any taxes or any penalty for failure
to comply with any of the foregoing in any material respects; and (iv) except as
otherwise set forth in Section 2.7 of the Disclosure Letter, is not liable for
any material payment to any Employee, trust or other fund or to any governmental
or administrative authority, with respect to unemployment compensation benefits,
workers' compensation benefits, civil damages, fines, penalties, social security
or other benefits or obligations for Employees (other than routine payments to
be made in the normal course of business and consistent with past practice).
Except as set forth on Section 2.7 to the Disclosure Letter, there are no
pending, or to the Knowledge of the Seller threatened, claims or actions against
Seller under any workers' compensation policy or long-term disability policy
other than routine claims for policy coverage.
2.8 Labor Matters. There is no labor strike pending or, to Seller's
Knowledge, threatened or reasonably anticipated against, Seller in connection
with the Acquired Factories nor is Seller experiencing a work stoppage,
slowdown, picketing or employee grievance or arbitration process in connection
with the Acquired Factories. There is no unfair labor practice charge or
complaint against Seller pending before the National Labor Relations Board or
any other governmental agency arising out of Seller's activities in connection
with the Acquired Factories.
2.9 Employee Benefit Plans.
(a) Section 2.9 of the Disclosure Letter sets forth each employee benefit,
employment agreement, severance plan or policy, incentive
compensation, deferred compensation, equity-based compensation or
perquisite plan, policy or practice which Seller or any ERISA
Affiliate maintains or contributes to with respect to Xxxxxx
Employees, the Torrington Employees or their spouses, dependents or
beneficiaries (the "Benefit Plans"). An "ERISA Affiliate" is any
"person" within the meaning of Section 7701(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"), that together with the
Seller is considered a single employer pursuant to Section 414(b),
(c), (m) or (o) of the Code or Section 3(5) or 4001(b)(1) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
(b) Each Benefit Plan, to the extent applicable, is identified in Section
2.9 of the Disclosure Letter as one or more of the following: an
"employee pension plan" (as defined in Section 3(2) of ERISA); a plan
subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of
the Code and applicable Treasury regulations thereunder; a
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA); and
an "employee welfare plan" (as defined in Section 3(2) of ERISA).
14
(c) Except as set forth in Section 2.9 of the Disclosure Letter, neither
Seller nor any ERISA Affiliate has or could have any liability arising
directly or indirectly under Section 412 the Code or Section 302 or
Title IV of ERISA.
(d) Except as set forth in Section 2.9 of the Disclosure Letter, neither
Seller nor any ERISA Affiliate has or could have any liability arising
directly or indirectly to or with respect to any "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA.
(e) Seller does not and could not have any material liability arising
directly or indirectly in connection with any failure of Seller or any
ERISA Affiliate to comply with Section 4980B of the Code or Part 6 of
Subtitle B of Title I of ERISA.
(f) There are no facts or circumstances which could, directly or
indirectly, subject Buyer or any of its affiliates, the Acquired
Factories or the Assets to any liability of any nature with respect to
any Benefit Plan or any pension, multiemployer, welfare, incentive,
perquisite, paid time off, severance or other benefit plan, policy,
practice or agreement sponsored, maintained or contributed to by the
Seller or any ERISA Affiliate, to which the Seller or any ERISA
Affiliate is a party or with respect to which the Seller or any ERISA
Affiliate could have any liability, other than as contemplated under
the Master Agreement between Xxxxx Sugar Corporation and the Bakery
and Confectionery Workers and Grain Millers International Union,
AFL-CIO dated May 1, 1999.
(g) Seller has delivered to Buyer with respect to each Benefit Plan a copy
of the summary plan description required under ERISA (or, if a summary
plan description is not required, a complete and accurate description
of the Benefit Plan).
2.10 No Brokers. Seller has not employed or made any agreement with any
broker, finder or similar agent or any person or firm which will result in the
obligation of Buyer to pay any finder's fee, brokerage fees or commission or
similar payment in connection with the transactions contemplated hereby.
2.11 No Other Agreements to Sell the Assets. Neither Seller nor any of its
representatives has any legal obligation to any other person or firm other than
Buyer and/or American Crystal to sell, assign, lease, license, transfer or
effect a sale of any of the Acquired Factories and/or the Assets (other than
inventory in the ordinary course of business), or to enter into any agreement or
cause the entering into of an agreement with respect to any of the foregoing.
2.12 Environmental. Except as set forth in Section 2.12 of the Disclosure
Letter:
(a) To Seller's Knowledge, the Assets and/or the Acquired Factories are
not being and have not been used for the storage, treatment,
generation, transportation, processing, handling, production or
disposal of any Hazardous Substance, or as a landfill or other waste
disposal site, in violation of any Environmental Laws that has or will
have a Material Adverse Effect.
(b) To Seller's Knowledge underground storage tanks are not, and have not
been, located on the Assets or Acquired Factories.
15
(c) To Seller's Knowledge, the soil, subsoil, bedrock, surface water and
groundwater of the Assets and/or the Acquired Factories are free of
any Hazardous Substances in amounts or concentrations that violate
Environmental Laws.
(d) To Seller's Knowledge, there has been no Release or threatened Release
of any Hazardous Substance on, at or from the Assets and/or the
Acquired Factories or any property adjacent to or within the immediate
vicinity of the Assets and/or the Acquired Factories which through
soil, subsoil, bedrock, surface water, groundwater or other migration
is reasonably likely to come to be located on the Assets and/or the
Acquired Factories in amounts or concentrations that violate
Environmental Laws.
(e) Seller has not, within the past five (5) years, received any written
form of notice, inquiry, request for information or records, or other
information from any federal, state or local court or governmental
agency or authority, any operator, tenant, subtenant, licensee or
occupant of the Assets and/or the Acquired Factories or any other
person with regard to any investigation, evaluation, Governmental
Order or Claim relating to (i) any potential non-compliance with, or
liability or obligation under, any Environmental Law, or (ii) any
Release or threatened Release of any Hazardous Substance on, at or
from the Assets and/or the Acquired Factories, or any property
adjacent to or within the immediate vicinity of the Assets and/or the
Acquired Factories with respect to any matter that has not been
resolved or waived.
(f) To Seller's Knowledge, no event has occurred with respect to the
Assets and/or the Acquired Factories which with the passage of time or
the giving of notice, or both, would constitute a violation of any
applicable Environmental Law .
(g) To Seller's Knowledge, there are no Governmental Orders relating to
the past, present or future ownership, use, operation, sale, transfer
or conveyance of the Assets and/or the Acquired Factories, which
Governmental Orders require any change in the present condition of the
Assets and/or the Acquired Factories or any work, repairs,
construction, containment, clean up, investigations, studies, removal
or other remedial action of capital expenditures with respect to the
Assets and/or the Acquired Factories.
(h) To Seller's Knowledge, there are no Claims, pending or threatened
against Seller, against the Seller which seek money damages, fines or
penalties, injunctive relief, remedial action or any other remedy or
could cause the incurrence of expenses, costs, obligations or
restrictions of any name or description and which arise out of, relate
to or result from (i) a violation or alleged violation of, or
liabilities or obligations arising or allegedly arising under, any
applicable Environmental Law, or (ii) the presence of or exposure to
any Hazardous Substance or a Release or the threat of a Release of any
Hazardous Substance on, at or from the Assets and/or the Acquired
Factories.
(i) To Seller's Knowledge, the transactions that are the subject of this
Agreement do not give rise to any requirement under any Environmental
Law of investigation or clean-up of the Assets and/or the Acquired
Factories, or restrictions on use in lieu thereof.
16
(j) The Assets and/or the Acquired Factories are not subject to any lien
or other restriction on ownership, occupancy, use, or transferability
resulting from or pursuant to any Environmental Law, or any Release,
threatened Release or disposal of a Hazardous Substance, and Seller
has no Knowledge that any such lien or restriction will be imposed.
(k) To Seller's Knowledge, no part of the Assets and/or the Acquired
Factories is listed or proposed for listing under CERCLA or any
similar state law, or the subject of any federal, state or local
enforcement action under any Environmental Law.
2.13 Title to Assets. Seller has good and marketable title to all of the
Assets except for the Assets located in the State of Texas as to which Seller
has good and indefeasible title. As of the Closing Date, the Assets will be free
and clear of mortgages, liens, pledges, charges, encumbrances, equities, claims,
easements, rights of way covenants, conditions, or restrictions, except for (i)
those disclosed in Section 2.13 of the Disclosure Letter, (ii) mechanics',
carriers', workmen's, repairmen's or other like liens arising or incurred in the
ordinary course of business, and liens for taxes and other governmental charges
which are not yet due and payable and will not be due and payable prior to the
Closing and (iii) other imperfections of title, restrictions or encumbrances, if
any, which imperfections of title, restrictions or encumbrances are not material
in amount or do not, individually or in the aggregate, impair the continued use
and operation of the Assets to which they relate in any material respect in the
operation of the Acquired Factories as currently conducted.
2.14 Tax Returns and Audits. With regard to the Acquired Factories, the
Seller has accurately prepared and timely filed all federal, state and other Tax
returns required by law to be filed, has paid or made provision for the payment
of all Taxes shown to be due and all additional assessments where any nonpayment
would result in a Material Adverse Effect on the Assets or the Acquired
Factories. To Seller's Knowledge, no additional assessments or adjustments are
pending or threatened against the Acquired Factories or the Assets for any
period, nor is there any basis for any such assessment or adjustment. With
respect to the Torrington Facility, Seller has paid all Wyoming sales tax for
any tangible personal property purchased three (3) years prior to the Closing
Date that the Seller was required to pay, and in the event the Wyoming
Department of Revenue demands proof of such payment, Seller will provide Buyer
with such proof, and with respect to tangible personal property purchased
outside of such three (3) year period, Seller will provide Buyer with proof that
such tangible personal property was acquired outside of such three (3) year
period, if so requested.
2.15 Grower Agreements. There are no grower agreements under which Seller
is obligated to purchase and process sugarbeets at the Acquired Factories after
the 2002 crop year.
2.16 Intellectual Property; Software.
(a) Section 2.16 of the Disclosure Letter contains a list and description
of all copyrights, patents, industrial design, trademarks, software
owned by, licensed to or used by Seller in the conduct of the Acquired
Factories (excluding "shrink-wrap" license agreements, or software
imbedded in any equipment used by Seller), agreements, contracts,
licenses, sublicenses, assignments and indemnities which relate to the
above, that relate to the Acquired Factories or Assets.
17
(b) Except as set forth in Section 2.16 of the Disclosure Letter, Seller
either: (i) owns the entire right, title and interest in and to the
Intellectual Property and software included in the Assets, free and
clear of any encumbrance; or (ii) has the perpetual, royalty-free
right to use the same.
(c) Except as set forth in Section 2.16 of the Disclosure Letter: (i) the
Intellectual Property to be transferred hereunder by Seller is valid
and enforceable; and (iii) Seller has the sole and exclusive right to
bring actions for infringement or unauthorized use of the Intellectual
Property owned by Seller and included in the Assets, and to the best
Knowledge of Seller, there is no basis for any such action. Correct
and complete copies of: (x) registrations for all registered
copyrights, patent rights and trademarks identified in Section 2.16 as
being owned by Seller; and (y) all pending applications to register
unregistered copyrights, patent rights, industrial design rights, and
trademarks identified in Section 2.16 as being owned by Seller
(together with any subsequent correspondence or filings relating to
the foregoing) have heretofore been delivered by Seller to Buyer.
(d) Except as set forth on Section 2.16 of the Disclosure Letter, no
infringement of any intellectual property right of any other person
has occurred or results in any way from the operations of the Acquired
Factories, no claim of any infringement of any intellectual property
right of any other person has been made or asserted in respect of the
operations of the Acquired Factories and Seller has had no notice of,
or Knowledge of any basis for, a claim against Seller that the
operations, activities, products, equipment, machinery or processes of
the Acquired Factories infringe any intellectual property right of any
other person.
2.17 Litigation. Except as set forth in Section 2.17 of the Disclosure
Letter (and except as may exist with respect to Environmental Law or
environmental matters, Seller's representations as to which are contained
exclusively in Section 2.12 hereof), there is no legal, administrative,
arbitration or other proceeding, suit, claim or action of any nature, or
investigation, review or audit of any kind, or judgment, decree, decision,
injunction, writ or order pending, noticed, scheduled or, to the Knowledge of
Seller, threatened or contemplated by or against or involving the Assets or the
Acquired Factories whether at law or in equity, before or by any person or
entity or authority, or against Seller or its directors, officers, agents or
employees that questions or challenges the validity of this Agreement or any
action taken or to be taken by the parties hereto pursuant to this Agreement or
in connection with the transactions contemplated herein.
2.18 Permits. All Permits are in good standing, are in full force and
effect, and not subject to any notice of violation, citation or other
enforcement action, known to the Seller, which would have a Material Adverse
Effect on the ownership, use or operation of the Acquired Factories and/or the
Assets by Buyer. Seller has obtained all Permits necessary to operate the
Acquired Factories and is operating the Acquired Factories in compliance
therewith in all material respects. No Permits have been refused, suspended,
cancelled or threatened to be refused, suspended or cancelled by any
Authorities. Complete and correct copies of all Permits have been provided to
Buyer.
2.19 Contracts. Each of the Contracts listed on Schedule 1.1(i) remain in
full force and effect, there is no material default by Seller under the terms of
any of the Contracts that would reasonably be expected to have a Material
Adverse Effect on the ownership, use or operation of the Acquired Factories by
Buyer. Except as set forth on Section 2.19 of the Disclosure Letter, the
Contracts are assignable to Buyer.
18
2.20 Inventory. The Operating Supplies are of a quality and quantity
useable by the Buyer at the Acquired Factories in the ordinary course of
business. The Xxxxxx Byproducts are salable in the ordinary course of business.
2.21 Insurance. Section 2.21 of the Disclosure Letter sets forth a list and
brief description (including nature of coverage, limits, deductibles, premiums
and the loss experience for the most recent five (5) years with respect to each
type of coverage) of all policies of insurance maintained, owned or held by
Seller on the date hereof with respect to the Acquired Factories and the Assets.
Seller shall keep or cause such insurance or comparable insurance to be kept in
full force and effect through the Closing Date. Seller has complied with each of
such insurance policies and has not failed to give any notice or present any
claim thereunder in a due and timely manner. Seller has delivered to Buyer
correct and complete copies of the most recent inspection reports, if any,
received from insurance underwriters as to the condition of the Acquired
Factories or the Assets.
2.22 Real Property Matters.
(a) In addition to the general representations and warranties set forth
elsewhere in this Agreement, Seller hereby makes the following
representations and warranties to Buyer with the intention that Buyer
may rely upon the same, with respect to the Real Property.
(i) Peaceful Possession. Seller has been in peaceful possession of
the Acquired Factories and the Wheatland Receiving Station
(Platte County, Wyoming), Silver Tip Receiving Station (Goshen
Count, Wyoming) and Xxxxx Piling Ground (Scotts Bluff County,
Nebraska) Beet Piling Sites since Seller obtained title to them.
Seller's title to the Acquired Factories and the owned Beet
Piling Sites is in fee simple, and Seller's interest in all
other Beet Piling Sites is pursuant to valid leases. Seller's
interest in the Real Property has not been disputed or
questioned and to Seller's Knowledge, no encroachments affect
the Real Property. To Seller's Knowledge, all improvements used
by Seller in the conduct of its business on the Real Property
are within the boundary lines of such Real Property and no
boundary line has been disputed or questioned.
(ii) Access. There is direct vehicular access to and from public
highways and roads to the Real Property; utility services are
provided to the Real Property; and Seller has no Knowledge of
any fact or existing condition that could result in termination
or limitation of such access or services.
(iii) Assessments. No assessments for public improvements have been
made against the Real Property for which Seller is responsible
and which are currently due and which will remain unpaid at
Closing. Seller has no written notice or Knowledge of any
planned or contemplated public improvements that may result in
special assessments against the Real Property.
(iv) Zoning. To Seller's Knowledge, the current use and improvements
on the Real Property are permitted under the governing zoning
laws and ordinances and are not nonconforming or special uses or
special
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exceptions; to Seller's Knowledge the current use and
improvements on the Real Property are not "grandfathered" under
any previous zoning laws or ordinances; and Seller has no notice
or Knowledge of any contemplated change in the current zoning
classification.
(v) Laws. No government agency or court order has required repairs,
alterations, or corrections of any existing conditions in the
improvements located on the Real Property during Seller's period
of ownership, and Seller has no Knowledge of any condition which
might be cause for any such order; and to Seller's Knowledge,
the improvements located on the Real Property comply with all
federal, state, and municipal laws, ordinances, orders,
regulations, or requirements. Further, Seller has no written
notice or Knowledge of any violation of any law or any building,
zoning, environmental, or other ordinance, code, rule, or
regulation and no notice from any governmental body or other
person has been served upon the Seller or upon the improvements
located on the Real Property during the period of Seller's
ownership claiming a violation of any law, ordinance, code,
rule, or regulation; and there are no legal actions, suits, or
administrative proceedings, including condemnation cases,
pending or, to Seller's Knowledge, threatened against the Real
Property or any improvements located thereon.
(vi) Real Property Taxes. Seller has not received any written
information or written notice of any increase in the assessed
value of the improvements located on the Real Property from any
tax assessing authorities which would increase the estimated
real estate taxes for the improvements located on the Real
Property.
(vii) Floodplain. To Seller's Knowledge, no part of the Real Property
is located in a governmentally recognized flood plain, wetland,
or similarly restricted area, except as disclosed on the
Surveys.
(b) Evidence of Title. On the date of Closing, Seller shall cause to be
delivered to Buyer, at Seller's sole cost and expense, a commitment
for title insurance ("Title Commitment") issued by Xxxxxxx Title
Guaranty Company (hereinafter the "Title Company") committing it to
issue a policy of owner's title insurance (the cost of which is to be
paid by Seller), insuring marketable title to the Acquired Factories
(except the Acquired Factory located in the State of Texas as to which
the policy shall insure indefeasible title) in the name of Buyer, free
and clear of all liens and encumbrances, except only to the extent the
same do not (in the reasonable judgment of Buyer) materially impair
the usefulness of such property and containing affirmative coverage
for appurtenant easements, if any, and zoning, access, contiguity, tax
parcel and comprehensive endorsements, to the extent available in the
jurisdictions in which the Acquired Factories are located
("Endorsements"). The Title Commitment shall state that the Title
Company shall delete standard survey exceptions from the Title
Commitment and the policy upon Title Company's receipt of satisfactory
Updated Surveys of the Real Property, a Seller's affidavit and a
Buyer's affidavit. On the date of Closing, Buyer shall advise Seller
in writing of the title exceptions which are unacceptable,
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acknowledging that Buyer has not received an Updated Survey, nor has
it received two (2) out or three (3) pages of the Survey for the
Torrington Facility, and the parties shall mutually agree as to the
resolution of such unacceptable exceptions.
As of the Closing Date Seller has delivered to Buyer a existing, prior
Survey of the Acquired Factories (the "Survey"). Seller shall use
commercially reasonable efforts to cause to be delivered to Buyer no later
than thirty (30) days after the Closing, at Seller's sole cost and expense,
updated surveys of the Acquired Factories prepared by surveyors registered
under the laws of the states where such Acquired Factories exist
(collectively "Updated Survey"). Each Updated Survey shall be certified to
Buyer and Title Company, and the certification language shall be reasonably
acceptable to Buyer and shall set forth: the complete and correct legal
description of the Acquired Factories as shown on the title commitment; the
location of all improvements on the Acquired Factories; the location of any
improvements encroaching onto the Acquired Factories from adjacent property
or located on the Acquired Factories which encroach onto adjacent property;
the location of all adjoining public streets, roads, highways adjoining the
Acquired Factories; and interior parcel boundaries, if any.
Within seven (7) days of Buyer's receipt of all Updated Surveys, Buyer
shall make objections to items disclosed in the Title Commitment and
Updated Survey which were not included in the Title Commitment or Surveys
and which materially impair the usefulness of the Acquired Factories based
on the Updated Survey, said objections to be made in writing or to be
deemed to have been waived. Any such objections to updated title and
Updated Survey so made must be cured by the Seller within thirty (30) days
of Buyer's written notice to Seller. However, if the title objections
cannot be cured within said thirty (30) day period, Buyer shall have the
right to reconvey a specific parcel to Seller and receive a proportionate
refund of the Purchase Price at a value to be mutually agreed upon by the
parties or, if the parties are unable to reach agreement, a value to be
determined by an independent appraiser mutually agreed upon by the parties.
Seller shall cause to be delivered to Buyer no later than thirty (30) days
after the Closing, at Seller's sole cost and expense, a policy of owner's
title insurance issued by Title Company, insuring marketable title to the
Acquired Factories (except the Acquired Factory located in the State of
Texas as to which the policy shall insure indefeasible title) in the name
of the Buyer free and clear of all liens and encumbrances identified by
Buyer to Seller on the date of Closing as unacceptable and those items
objected in writing to after receipt of the Updated Survey referenced
above. The title policy shall delete the standard exceptions and shall
include the Endorsements to the extent the Title Company is willing to
delete such standard exceptions and include such Endorsements, with the
expense of such exceptions and Endorsements to be borne equally by the
Buyer and Seller.
2.23 Pressure Vessels and Boilers.
(a) Pressure Vessels. All Pressure Vessels have been maintained, in all
material respects, in accordance with the Seller's pressure vessel
repair and maintenance policy. To Seller's Knowledge, all Pressure
Vessels are currently mechanically sound if operated at normal
operating pressures under normal beet sugar factory operating
21
conditions. For purposes of this Agreement, a "Pressure Vessel" shall
be defined as any vessel or tank which contains steam or compressed
gas that is or could be subject to pressures in excess of 40 psig,
including but not limited to evaporators and pressure filters.
(b) Boilers. All natural gas or coal fired power boilers were designed and
constructed to ASME code. The boilers have been maintained in
accordance with appropriate boiler codes. All repairs and or
alterations to the boilers have been properly documented in accordance
with National Board of Inspectors Code.
2.24 Scope of Representations and Warranties of Seller. ASIDE FROM THE
REPRESENTATIONS AND WARRANTIES PROVIDED IN THIS ARTICLE II OF THIS AGREEMENT,
THE SELLER MAKES NO, AND DISCLAIMS ANY, WARRANTY OR REPRESENTATION OF ANY KIND,
EITHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION,
ANY REPRESENTATION OR WARRANTY AS TO (i) ENVIRONMENTAL COMPLIANCE OR CONDITION,
(ii) MERCHANTABILITY OF ANY ASSETS, (iii) FITNESS OF ANY ASSETS FOR ANY
PARTICULAR PURPOSE OR (iv) CONFORMITY OF ANY ASSETS TO MODELS OR SAMPLES OF
MATERIALS. EXCEPT AS PROVIDED IN ARTICLE II OF THIS AGREEMENT, THE SELLER MAKES
NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AS TO
THE ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS,
INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE
AVAILABLE TO THE BUYER IN CONNECTION WITH THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, ANY DESCRIPTION OF ASSETS. Except as and to the extent set forth in
Article II to this Agreement, the Seller makes no representations or warranties
whatsoever, and disclaims all liability and responsibility for, any
representation, warranty, statement or information made or communicated (orally
or in writing) to the Buyer (including, but not limited to, any opinion,
information or advice that may have been provided to the Buyer by any officer,
stockholder, director, employee, agent, consultant or representative of the
Seller or any affiliate of Seller, or by any accounting firm, any engineering
firm, Seller's counsel or any other agent, consultant or representative of
Seller) other than any intentional misrepresentation or statement furnished to
the Buyer by any of such persons not subsequently corrected by such persons. The
Buyer acknowledges and affirms that it had full access to the information
provided by the Seller and its affiliates to assist Buyer in its investigation
of the Assets and that the Buyer has made its own independent investigation,
analysis and evaluation of the Assets and the business, financial condition and
operations of the Acquired Factories. No party to this Agreement shall be
entitled to make a claim for indemnification pursuant to Article X for the
breach of a representation or warranty if such party had knowledge of such
breach prior to the Closing Date or if such breach is disclosed in the documents
provided or made available to such party prior to the Closing Date.
2.25 Reasonable Disclosure. Seller has made reasonable efforts to cause to
be delivered or has delivered to Buyer correct and complete copies of all
documentation and material requested by the Buyer as part of the due diligence
process.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller, as of the date hereof, as
follows:
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3.1 Organization of Buyer. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota with full
power and authority to own and lease its properties and conduct its business as
its is presently being conducted.
3.2 Authorization. Buyer has all requisite corporate power and authority,
and has taken all corporate action necessary, to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform its
obligations hereunder. The execution and delivery of this Agreement and the
consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all necessary corporate action by Buyer. No other corporate
proceedings on the part of Buyer are necessary to authorize this Agreement and
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditor's rights generally or by equitable principles (whether
considered in an action at law or in equity).
3.3 No Conflict or Violation. Neither the execution, delivery or
performance of this Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance by Buyer with any of the provisions hereof,
will (a) violate or conflict with any provision of the Articles of Incorporation
or Bylaws of Buyer, (b) violate, conflict with, or result in or constitute a
default under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
result in the creation of any encumbrance upon any of Buyer's assets under, any
of the terms, conditions or provisions of any contract, indebtedness, note,
bond, indenture, security or pledge agreement, commitment, license, lease,
franchise, permit, agreement, authorization, concession, or other instrument or
obligation to which Buyer is a party, (c) violate any statute, rule or other
governmental regulation except, in the case of each of clauses (a), (b) and (c)
above, for such violations, defaults, terminations, accelerations or creations
of encumbrances which, in the aggregate, would not have a Material Adverse
Effect on the business of Buyer or its ability to consummate the transactions
contemplated hereby or thereby.
3.4 Consents and Approvals. No notice to, declaration, filing or
registration with, or authorization, consent or approval of, or permit from, any
domestic or foreign governmental or regulatory body or authority, or any other
person or entity, is required to be made or obtained by Buyer in connection with
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby.
3.5 No Brokers. Buyer has not employed or made any agreement with any
broker, finder or similar agent or any person or firm which will result in the
obligation of Seller to pay any finder's fee, brokerage fees or commission or
similar payment in connection with the transactions contemplated hereby.
ARTICLE IV
COVENANTS OF SELLER AND BUYER
Seller and Buyer each covenant with the other as follows:
4.1 Further Assurances. Upon the terms and subject to the conditions
contained herein, the parties agree, both before and after the Closing, (i) to
use all reasonable efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement and the Ancillary
Agreements, (ii) to execute any documents, instruments or conveyances of any
kind which may be reasonably necessary or advisable to carry out any of the
transactions
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contemplated hereunder or thereunder, (iii) to cooperate with each other in
connection with obtaining USDA approval regarding the transfer of the Marketing
Allotments and (iv) to cooperate with each other in connection with the
foregoing.
4.2 Notification of Certain Matters. From the date hereof through the
Closing, Seller shall give prompt notice to Buyer, or Buyer shall give prompt
notice to Seller, to the extent known by Buyer and Seller, as applicable, of (a)
the occurrence, or failure to occur, of any event which occurrence or failure
would in its reasonable judgment be likely to cause any representation or
warranty contained in this Agreement, or in any Exhibit, Schedule or Disclose
Letter hereto, to be untrue or inaccurate in any material respect and (b) any
material failure of Seller, on the one hand, and Buyer on the other, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement or any Exhibit, Schedule or Disclosure
Letter hereto, and each party shall use all reasonable efforts to remedy the
same.
4.3 Confidentiality. American Crystal and Seller have executed a
Confidentiality Agreement, dated June 7, 2002 (the "Confidentiality Agreement")
and the parties hereto hereby agree to comply with such Confidentiality
Agreement with respect to the transactions contemplated by this Agreement.
4.4 Access to Information. Seller shall cooperate with Buyer and provide
Buyer and its authorized agents and representatives for a period of time until
the Closing Date reasonable access to the Assets and the Acquired Facilities,
and shall permit Buyer and its authorized agents and representatives to make
such inspections and testing and conduct such interviews and inquiries as Buyer
may reasonably require in connection with Buyer's review of the Acquired
Facilities and the Assets, including, without limitation, financial information.
Buyer shall conduct all such inspections, testing and other information
gathering described above only (a) at Buyer's sole cost and expense, (b) during
regular business hours, and (c) in a manner which will not unduly interfere with
the operation of the Acquired Facilities. Any and all such information gathered
by Buyer as a result of, or in connection with, such information gathering shall
be treated as confidential information and shall be subject to the
Confidentiality Agreement. Buyer agrees that if Buyer undertakes invasive
testing in connection with an environmental review or otherwise, Buyer shall
enter into a customary entry and indemnification agreement with Seller.
4.5 Employee Matters.
(a) Xxxxxx Employees. Effective as of the Closing, the Buyer shall engage
the Seller to provide the Xxxxxx Employees to work at the Xxxxxx
Facility pursuant to an employee lease agreement between the Seller
and the Buyer (the "Employee Lease Agreement"). From and after the
Closing Date, Buyer shall be responsible for severance pay and accrued
vacation, if any, due to the Xxxxxx Employees.
(b) Hereford Employees. Buyer shall have no obligations as to the Hereford
Employees.
(c) Torrington Employees. Effective as of the Closing, Western shall
engage the Seller to provide a substantial number of the Torrington
Employees to work at the Torrington Facility pursuant to an employee
lease agreement between the Seller and Western. Buyer's only
obligation as to the Torrington Employees shall be for severance pay
or accrued vacation for any Torrington Employee who is not providing
services to Western, either as an employee of Western or pursuant to
an employee lease, as of October 7, 2002.
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4.6 Consents and Best Efforts. Buyer and Seller shall, as soon as
practicable, commence to take all action required to obtain all consents,
approvals and agreements of, and to give all notices and make all other filings
with, any third parties, including governmental authorities, necessary to
authorize, approve or permit the full and complete sale, conveyance, assignment
or transfer of the Acquired Factories and the Assets, and Seller and Buyer shall
cooperate with each other with respect thereto. In addition, subject to the
terms and conditions herein provided, each of the parties hereto covenants and
agrees to use its commercially reasonable best efforts to take, or cause to be
taken, all action or do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated hereby and to cause the fulfillment of the
parties' obligations hereunder.
4.7 Conduct of Business. From the date hereof through the Closing, Seller
shall, except as contemplated by this Agreement, or as consented to by Buyer in
writing, use reasonable efforts to operate the Acquired Factories substantially
in accordance with past practice and shall not take any action that would
reasonably be expected to have a Material Adverse Effect. Seller shall use
commercially reasonable best efforts to preserve all of its present business
relationships relating to the Acquired Factories to ensure the successful
transition of such relationships to Buyer. Without limiting the generality of
the foregoing, Seller shall not, except as specifically contemplated by this
Agreement or as consented to by Buyer in writing to sell, assign, transfer,
convey, lease, mortgage, pledge or otherwise dispose of or encumber any of the
Assets or the Acquired Factories, or any interests therein, except in the
ordinary course of business or mortgages, pledges or encumbrances under the
Seller's existing credit facility.
4.8 Updated Disclosure Letter. Seller shall have the right, from time to
time prior to the Closing, to supplement or amend any schedule delivered under
this Agreement or the Disclosure Letter with respect to any matter hereafter
arising or discovered which, if existing or known at the date of this Agreement,
would have been required to be set forth or described in such schedule or
Disclosure Letter. Any such supplemental or amended disclosure shall not be
deemed to have cured any breach of any representation or warranty made in this
Agreement as of the date hereof for purposes of Article X, but will be deemed to
have cured any such breach of representation or warranty made in this Agreement
for purposes of determining whether or not the conditions set forth in Articles
V, VI and VII of this Agreement have been satisfied. Such updated or
supplemented Disclosure Letter is not final until accepted by Buyer and the
parties hereto agreement that there is no obligation of Buyer to accept such
updated Disclosure Letter.
4.9 Accounts Receivable. Any payment on accounts receivable (including
Grower Seed Receivables to the extent not collected set forth in Section 4.12 of
this Agreement) received by Buyer after Closing shall be remitted to Seller
within five business days following such receipt. Following the Closing, Buyer
may receive and open all mail addressed to Seller and, to the extent that such
mail and the contents thereof relate to the Assets, deal with the contents
thereof in its discretion. Buyer shall promptly notify Seller of (and provide
Seller complete copies of) any mail that obliges Seller or any of its affiliates
to take any action or indicates that action may be taken against any of them.
4.10 Escrow Account. Buyer and Seller agree that $925,000 of the Cash
Consideration shall be deposited in a escrow account at Xxxxx Fargo Minnesota,
N.A. (the "Escrow Fund") until such funds shall be released pursuant to the
terms of escrow agreement between Buyer, Seller and an escrow agent
substantially in the form of Exhibit A (the "Escrow Agreement"). Buyer and
Seller shall bear the expense of the Escrow Fund equally.
25
4.11 Xxxxxx Tolling Agreement. Seller and Buyer agree and acknowledge that
Seller and Buyer shall enter into a tolling services agreement as of the date
hereof (the "Xxxxxx Tolling Agreement") whereby Buyer agrees to process Seller's
sugarbeets at the Xxxxxx Facility in exchange for a tolling fee.
4.12 Grower Seed Receivables. Seller and Buyer hereby acknowledge that
Seller sold sugarbeet seed on credit to certain sugarbeet growers (the "Grower
Seed Receivables"). After the Closing, Seller shall provide Buyer a list of the
Grower Seed Receivables which shall include the name of the grower and the
amount due from such grower. Buyer agrees to withhold from the first beet
payment the amounts set forth on such list from the specific growers and remit
such amount to Seller. Seller agrees to indemnify and hold Buyer harmless from
any Claims resulting from the collection of the Grower Seed Receivables by the
Buyer for the benefit of the Seller.
4.13 Government Sugar. Seller and Buyer agree that Seller is obligated to
store and ship certain sugar located at the Acquired Factories (the "Government
Sugar") in accordance with contracts with the United States government that are
not assignable. Buyer agrees to perform Seller's obligations to store and ship
the Government Sugar and in exchange for such performance, Buyer shall receive
all amounts paid to Seller for the storage and shipment of the Government Sugar.
ARTICLE V
JOINT CONDITIONS TO BUYER AND SELLER'S OBLIGATIONS
The obligations of Buyer and Seller to consummate the transactions provided
for hereby are subject to the satisfaction, on or prior to the Closing Date, of
each of the following conditions, any of which may be waived by Seller and Buyer
together:
5.1 Hereford Facility Lease. The Buyer and the Seller shall have reached
substantial agreement on the terms of a lease by which the Seller shall (a)
lease the processing factory located at the Hereford Facility for a term
starting with the Closing Date and with the end of such lease term to be
determined by Seller, but to occur no later than March 31, 2003; and (b) lease
the bulk and flat sugar storage facilities located at the Hereford Facility for
a period of 10 years at a rental rate of $1.00 for the term of the lease;
provided, Buyer shall have the right to terminate the lease at any time with the
consent of Seller, with such consent to not be unreasonably withheld (with such
leases collectively referred to as the "Hereford Facility Lease").
5.2 No Actions or Court Orders. No court order shall have been issued, or
no action by any governmental authority or court order shall have been
instituted, or threatened, seeking to enjoin or otherwise prevent the
transactions contemplated by this Agreement.
ARTICLE VI
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transactions provided for
hereby are subject to the satisfaction, on or prior to the Closing Date, of each
of the following conditions, any of which may be waived by Seller:
6.1 Representations, Warranties and Covenants. All representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
material respects at and as of the date of this Agreement and at and as of the
Closing Date except for representations and warranties that speak as of a
specific date or time (which need only be true and correct as of such
26
date or time), and Buyer shall have performed and satisfied in all material
respects all agreements and covenants required hereby to be performed by it
prior to or on the Closing Date.
6.2 Consents, Regulatory Compliance and Approval. All consents, approvals
and waivers from governmental authorities and other parties necessary to permit
Seller to transfer the Acquired Facilities and the Assets to Buyer as
contemplated hereby shall have been obtained, unless the failure to obtain any
such consent, approval or waiver would not have a Material Adverse Effect on the
operations of Acquired Factories by Buyer or Western immediately following the
Closing.
6.3 Certificates. Seller shall have received from Buyer such certificates
of Buyer's officers and others to evidence compliance with the conditions set
forth in Articles V and VI as may be reasonably requested by Seller.
6.4 Corporate Documents. Seller shall have received from Buyer resolutions
adopted by the Board of Directors of Buyer approving this Agreement and the
transactions contemplated hereby, certified by Buyer's corporate secretary.
6.5 Creditor Approval. Seller shall have received all consents and
approvals for the transactions contemplated hereby from its creditors.
6.6 USDA Assurances. Seller shall have received reasonable assurances from
the USDA that its marketing allocation will not be reduced by more than the
Marketing Allocation being transferred to Buyer under this Agreement due to the
transactions contemplated hereunder.
6.7 Ancillary Documents. Buyer shall have executed and delivered each of
the documents described in Section 8.3 and 8.4.
ARTICLE VII
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to consummate the transactions provided for hereby
are subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, any of which may be waived by Buyer:
7.1 Representations, Warranties and Covenants. All representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects at and as of the date of this Agreement and at and as of
the Closing Date, and Seller shall have performed and satisfied in all material
respects all agreements and covenants required hereby to be performed by it
prior to or on the Closing Date.
7.2 Consents, Regulatory Compliance and Approval. Seller shall have
obtained all consents, approvals and waivers from governmental authorities and
other parties necessary to the consummation of the transactions contemplated
hereby, unless the failure to obtain any such consent, approval or waiver would
not have a Material Adverse Effect on the Acquired Factories or the Assets.
7.3 No Material Adverse Change. Prior to the Closing Date, there shall
have been no Material Adverse Effect on the Assets, liabilities, business,
condition (financial or otherwise) or results of operations of the Acquired
Factories.
27
7.4 Certificates. Buyer shall have received from Seller such certificates
of Seller's officers and others to evidence compliance with the conditions set
forth in Articles V and VII as may be reasonably requested by Buyer.
7.5 Corporate Documents. Buyer shall have received from Seller resolutions
adopted by the Boards of Directors of Seller, approving this Agreement to which
it is a party and the transactions contemplated hereby, certified by Seller's
corporate secretary.
7.6 Creditor Approval. Seller shall have received all consents and
approvals for the transactions contemplated hereunder from its creditors and
presented Buyer with proof thereof.
7.7 Operating Permits. Buyer shall have (i) received all environmental and
operating permits, licenses, etc. necessary to operate the Acquired Factories or
(ii) received reasonable assurances, as determined in Buyer's sole discretion,
that all environmental and operational permits, licenses, etc. necessary to
operate the Acquired Factories will be granted.
7.8 USDA Assurances. Buyer shall have received, in its sole opinion,
reasonable assurances from the USDA that the Marketing Allocations will be
transferred to Buyer as of the Closing Date.
7.9 Transition Agreement. Seller and Buyer shall have entered into an
agreement whereby Seller agrees to provide transition services to the Buyer
including administrative, information systems and other mutually agreed upon
services (the "Transition Agreement").
7.10 Rocky Mountain Silo Agreements. Seller and Buyer shall have reached
agreement on the disposition of the Seller's interested in Rocky Mountain Silo,
LLC and Buyer's continued use of storage facilities at the Xxxxxx Facility after
the Closing (the "Rocky Mountain Agreements").
7.11 Ancillary Agreements. Seller shall have executed and delivered each of
the documents set forth in Section 8.2 and 8.4.
ARTICLE VIII
CLOSING
8.1 Closing. The closing of the transactions contemplated herein (the
"Closing") shall be held on October 7, 2002 or at such other time and date as
the parties hereto may agree (the "Closing Date"). For the purpose of any
calculation or determination required to be made by any of the parties following
the Closing, the Closing shall be deemed to have been effective as of 12:01 a.m.
on the Closing Date.
8.2 Seller's Deliveries. At the Closing, Seller shall deliver to Buyer:
(a) An executed original of a Xxxx of Sale and Assignment and Assumption
Agreement relating to the Assets in the form of Exhibit B (the "Xxxx
of Sale");
(b) Warranty Deed conveying all Real Property associated with the Xxxxxx
Facility, Warranty Deed conveying all Real Property associated with
the Hereford Facility and a Special Warranty Deed conveying all Real
Property associated with the Torrington Facility;
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(c) All consents, certificates and other documents required by Article VII
in form reasonably satisfactory to Buyer (unless the obligation to
deliver any such consent, certificate or document is waived by Buyer);
8.3 Buyer's Deliveries. At the Closing, Buyer shall deliver to Seller:
(a) The Closing Date Payment via certified funds.
(b) An executed original of an Assignment and Assumption Agreement
relating to the Assumed Liabilities, in the form of Exhibit C (the
"Assignment and Assumption Agreement");
(c) All consents, certificates and other documents required by Article VI
in form reasonably satisfactory to Seller (unless the obligation to
deliver any such consent, certificate or document is waived by
Seller);
8.4 Joint Deliveries. At the Closing, Buyer and Seller shall deliver to
each other:
(a) An executed Escrow Agreement;
(b) An executed Transition Agreement;
(c) Executed Hereford Leases;
(d) Executed Rocky Mountain Agreements;
(e) An executed Xxxxxx Tolling Agreement; and
(f) An executed Employee Lease Agreement.
8.5 Ancillary Agreements. The Xxxx of Sale, the Assignment and Assumption
Agreement, the Escrow Agreement, the Transition Agreement, the Hereford Leases,
the Employee Lease Agreement, and the Xxxxxx Tolling Agreement are collectively
referred to herein as the "Ancillary Agreements."
ARTICLE IX
ACTIONS BY SELLER AND BUYER AFTER THE CLOSING
9.1 Tax Matters. Seller and Buyer shall, with respect to the Assets and/or
the Acquired Factories (i) each provide the other with such assistance as may
reasonably be requested by any of them in connection with the preparation of any
return, audit, or other examination by any taxing authority or judicial or
administrative proceedings relating to any liability for Taxes, (ii) each retain
and provide the other with any records or other information that may be relevant
to such return, audit or examination, proceeding or determination, and (iii)
each provide the other with any final determination of any such audit or
examination, proceeding, or determination that affects any amount required to be
shown on any tax return of the other for any period. Without limiting the
generality of the foregoing, Buyer and Seller shall each retain, until the
applicable statutes of limitations (including any extensions) have expired,
copies of all tax returns, supporting work schedules, and other records or
information that may be relevant to such returns for all tax periods or portions
thereof ending on or before the Closing Date.
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ARTICLE X
SURVIVAL AND INDEMNIFICATION
10.1 Survival Periods. Except for the representations and warranty set
forth in Sections 2.2, 2.3, 2.9, 2.13 and 2.14 hereof which shall survive for
the applicable statute of limitation, the representations and warranties of the
parties contained in this Agreement shall survive the Closing for a period of
eighteen (18) months (the "Survival Period") but shall not survive any
termination of this Agreement in accordance with Article X hereof. Except for
Section 2.2, 2.3, 2.9, 2.13 and 2.14 the parties intend to shorten the statute
of limitations and agree that no claims or causes of action may be brought
against Seller or Buyer based upon, directly or indirectly, any of the
representations, warranties or agreements contained in Articles II and III of
this Agreement after the Survival Period. This Section 10.1 shall not limit any
covenant or agreement of the parties which contemplates performance after the
Closing.
10.2 Seller's Agreement to Indemnify.
(a) Subject to the terms and conditions set forth in this Agreement, from
and after the Closing, Seller shall indemnify and hold harmless Buyer
and its shareholders, directors, officers, employees, affiliates,
controlling persons, agents and representatives and their successors
and assigns (collectively, the "Buyer Indemnitees") from and against
all liability, demands, claims, actions or causes of action,
assessments, losses, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) (collectively,
"Buyer Damages") asserted against or incurred by any Buyer Indemnitee
as a result of or arising out of (i) any breach of any representation
or warranty made by the Seller in this Agreement and the Ancillary
Agreements; or (ii) any failure by the Seller to perform any
agreement, covenant or obligation of the Seller pursuant to this
Agreement or (iii) any liability of Seller existing as of, or
resulting from acts occurring prior to, the Closing Date (including,
but not limited to, any environmental liability of Seller affecting
the Acquired Factories or the Assets on or before the Closing Date),
other than the Assumed Liabilities.
(b) Seller's obligation to indemnify the Buyer Indemnitees under Section
10.2(a) of this Agreement is subject to the following limitations:
(i) No indemnification shall be made by Seller unless the aggregate
amount of Buyer Damages exceeds $375,000 and, in such event,
indemnification shall be made by Seller only to the extent Buyer
Damages exceed $375,000;
(ii) In no event shall Seller's aggregate obligation to indemnify the
Buyer Indemnitees exceed $5,000,000;
(iii) The amount of any Buyer Damages shall be reduced by (A) any
amount received by a Buyer Indemnitee with respect to such Buyer
Damages from any other party (excluding insurance coverage
except as set forth herein) alleged to be responsible for such
Buyer Damages and (B) the amount of any Tax benefit available to
the Buyer Indemnitee relating to such Buyer Damages;
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(iv) Buyer agrees that Buyer shall pursue any claim pursuant to this
Section 10.2 that is potentially payable under the owner's
policy of the title insurance issued pursuant to Section 2.22 of
this Agreement against such title insurance policies before a
claim is made against Seller pursuant to this Section. Buyer
Damages shall be reduced by the amount of any such proceeds
received under such title insurance policy.
(v) Seller shall be obligated to indemnify the Buyer Indemnitees
only for those claims giving rise to Buyer Damages as to which
the Buyer Indemnitees have given Seller written notice of prior
to the end of the Survival Period. Any written notice delivered
by a Buyer Indemnitee to Seller with respect to Buyer Damages
shall set forth with as much specificity as is reasonably
practicable the basis of the claim for Buyer Damages and, to the
extent reasonably practicable, a reasonable estimate of the
amount of such claim.
10.3 Buyer's Agreement to Indemnify.
Subject to the terms and conditions set forth in this Agreement, from and after
the Closing, Buyer shall indemnify and hold harmless Seller and its directors,
officers, employees, affiliates, controlling persons, agents and representatives
and their successors and assigns (collectively, the "Seller Indemnitees") from
and against all liability, demands, claims, actions or causes of action,
assessments, losses, damages, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) (collectively, "Seller Damages")
asserted against or incurred by any Seller Indemnitee as a result of or arising
out of (i) any breach of any representation or warranty made by the Buyer in
this Agreement and the Ancillary Agreements; (ii) any failure by the Buyer to
perform any agreement, covenant or obligation of the Buyer pursuant to this
Agreement; or (iii) or any liability of Buyer resulting from acts occurring on
or after the Closing Date related to its ownership and use of the Assets or the
Acquired Factories including the Assumed Liabilities.
(a) Buyer's obligation to indemnify the Seller Indemnitees under Section
10.3(a) of this Agreement is subject to the following limitations:
(i) No indemnification shall be made by Buyer unless the aggregate
amount of Seller Damages exceeds $375,000 and, in such event,
indemnification shall be made by Buyer only to the extent that
the aggregate amount of Seller Damages exceeds $375,000;
(ii) In no event shall Buyer's aggregate obligation to indemnify the
Seller Indemnitees exceed $5,000,000;
(iii) The amount of any Seller Damages shall be reduced by (A) any
amount received by a Seller Indemnitee with respect to such
Seller Damages from any other party (excluding insurance
coverage) alleged to be responsible for such Seller Damages and
(B) the amount of any Tax benefit available to the Seller
Indemnitee relating to such Seller Damages; and
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(iv) Buyer shall be obligated to indemnify the Seller Indemnitees only
for those claims giving rise to Seller Damages as to which the
Seller Indemnitees have given Buyer written notice of prior to
the end of the Survival Period. Any written notice delivered by a
Seller Indemnitee to the Indemnifying Party with respect to
Seller Damages shall set forth with as much specificity as is
reasonably practicable the basis of the claim for Seller Damages
and, to the extent reasonably practicable, a reasonable estimate
of the amount of such claim.
10.4 Third-Party Indemnification. The obligations of Seller to indemnify
the Buyer Indemnitees under Section 10.2 of this Agreement with respect to Buyer
Damages and the obligations of Buyer to indemnify the Seller Indemnitees under
Section 10.3 of this Agreement with respect to Seller Damages, in either case
resulting from the assertion of liability by third parties (each, as the case
may be, a "Claim"), will be subject to the following terms and conditions:
(a) Any party against whom any Claim is asserted will give the
indemnifying party written notice of any such Claim promptly after
learning of such Claim, and the indemnifying party may, at its option,
undertake the defense of such Claim by representatives of its own
choosing. Failure to give prompt notice of a Claim under this
Agreement shall not affect the indemnifying party obligations under
this Article X, except to the extent the indemnifying party is
materially prejudiced by such failure to give prompt notice. If the
indemnifying party, within 30 days after notice of any such Claim, or
such shorter period as is reasonably required, fails to assume the
defense of such Claim, the Buyer Indemnitee or the Seller Indemnitee,
as the case may be, against whom such Claim has been made will (upon
further notice to the indemnifying party) have the right to undertake
the defense, compromise or settlement of such Claim on behalf of and
for the account and risk, and at the expense, of the indemnifying
party, subject to the right of the indemnifying party to assume the
defense of such Claim at any time prior to settlement, compromise or
final determination of such Claim.
(b) Anything in this Section 10.4 to the contrary notwithstanding, the
indemnifying party shall not enter into any settlement or compromise
of any action, suit or proceeding or consent to the entry of any
judgment (i) which does not include as an unconditional term of the
delivery by the claimant or plaintiff to the Seller Indemnitee or the
Buyer Indemnitee, as the case may be, of a written release from all
liability in respect of such action, suit or proceeding or (ii) for
other than monetary damages to be borne by the indemnifying party,
without the prior written consent of the Seller Indemnitee or the
Buyer Indemnitee, as the case may be, which consent shall not be
unreasonably withheld.
(c) The indemnifying party and the indemnified party shall cooperate fully
in all aspects of any investigation, defense, pretrial activities,
trial, compromise, settlement or discharge of any claim in respect of
which indemnity is sought under this Article X, including, but not
limited to, by providing the other party with reasonable access to
employees and officers (including as witnesses) and other information.
32
10.5 Insurance. The indemnifying party waives any right to subrogation to
the rights of the indemnified party in respect of any insurance relating to
damages to the extent of any indemnification payments made under this Agreement.
10.6 No Duplication. Any liability for indemnification under this Agreement
shall be determined without duplication of recovery by reason of the state of
facts (i) giving rise to such liability constituting a breach of more than one
representation, warranty, covenant or agreement or (ii) taken into account in
determining any adjustment to the Purchase Price under Section 1.8.
10.7 Sole Remedy.
(a) The parties agree that the sole and exclusive remedy of any party to
this Agreement or their respective affiliates with respect to this
Agreement or any other claims relating to the Assets, the events
giving rise to this Agreement and the transactions provided for in
this Agreement or contemplated by this Agreement or by any other such
claims relating to the Assets, events giving rise to this Agreement
and the transactions provided for in this Agreement shall be limited
to specific performance and the indemnification provisions set forth
in this Article X and, in furtherance of the foregoing, each of the
parties, on behalf of itself and its affiliates, waives and releases
the other parties to this Agreement (and such other parties'
affiliates) from, to the fullest extent permitted under any applicable
law, any and all rights, claims and causes of action, except for
specific performance, it or its affiliates may have against the other
party to this Agreement except as provided by this Agreement.
(b) The parties intend that, even though indemnification and other
obligations appear in various sections and articles of this Agreement,
the indemnification procedures and limitations contained in this
Article X shall apply to all indemnity and other obligations of the
parties under this Agreement except to the extent expressly excluded
in this Article X.
10.8 No Special Damages. IN NO EVENT SHALL ANY PARTY BE LIABLE UNDER THIS
ARTICLE X OR OTHERWISE IN RESPECT OF THIS AGREEMENT FOR EXEMPLARY, SPECIAL,
PUNITIVE, INDIRECT, REMOTE, SPECULATIVE OR CONSEQUENTIAL DAMAGES EXCEPT TO THE
EXTENT ANY SUCH PARTY SUFFERS SUCH DAMAGES TO AN UNAFFILIATED THIRD PARTY IN
CONNECTION WITH A THIRD PARTY CLAIM, IN WHICH EVENT SUCH DAMAGES SHALL BE
RECOVERABLE.
ARTICLE XI
TERMINATION
11.1 Termination. This Agreement may be terminated at any time prior to
Closing:
(a) By mutual written consent of Buyer and Seller;
(b) By Buyer or Seller if the Closing shall not have occurred on or before
December 31, 2002; provided however, that this provision shall not be
available to Buyer if Seller has the right to terminate this Agreement
under clause (d) of this Section 11.1, and this provision shall not be
available to Seller if Buyer has the right to terminate this Agreement
under clause (c) of this Section 11.1;
33
(c) By Buyer if there is a material breach of any representation, or
warranty set forth in Article II hereof or any covenant or agreement
to be complied with or performed by Seller pursuant to the terms of
this Agreement or the failure of a condition set forth in Article VI
to be satisfied (and such condition is not waived in writing by Buyer)
on or prior to the Closing Date, or the occurrence of any event which
results or would result in the failure of a condition set forth in
Article V and VII to be satisfied on or prior to the Closing Date,
provided that Buyer may not terminate this Agreement prior to the
Closing if Buyer has not provided Seller with written notice of the
failure of the condition, and Seller has not had at least ten (10)
business days thereafter to cure such failure; or
(d) By Seller if there is a material breach of any representation or
warranty set forth in Article III hereof or of any covenant or
agreement to be complied with or performed by Buyer pursuant to the
terms of this Agreement or the failure of a condition set forth in
Article V and VI to be satisfied (and such condition is not waived in
writing by Seller) on or prior to the Closing Date, or the occurrence
of any event which results or would result in the failure of a
condition set forth in Article V to be satisfied on or prior to the
Closing Date; provided that, Seller may not terminate this Agreement
prior to the Closing Date if Seller has not provided Buyer with
written notice of the failure of the condition, and Buyer has not had
at least ten (10) business days thereafter to cure such failure.
(e) By Buyer if Seller provides Buyer with an updated Disclosure Letter
pursuant to Section 4.8 which discloses a fact or event which would
have a material impact, in Buyer's sole judgment, on the Acquired
Factories or the Assets.
11.2 In the Event of Termination. In the event of termination of this
Agreement:
(a) Each party shall promptly redeliver all documents, work papers and
other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution
hereof to the party furnishing the same;
(b) The provisions of Section 4.3 hereof shall continue in full force and
effect; and
(c) No party hereto shall have any liability to any other party to this
Agreement, except as stated in subsections (a), (b) and (c) of this
Section 11.2, except for any willful breach of this Agreement
occurring prior to the proper termination of this Agreement.
ARTICLE XII
ASSIGMENT OF RIGHTS
The parties hereto agree and acknowledge that substantially all of Seller's
rights, title and interests to the Torrington Facility acquired by Buyer
hereunder will, upon Closing, be leased to Western pursuant to the Lease
Agreement. Seller hereby agrees and acknowledges that the representations,
warranties, covenants and agreements made and agreed to by Seller hereunder, as
such relate to the Torrington Facility, shall be assigned to Western by the
Buyer. Further, Seller hereby acknowledges and agrees that Western shall have
the same rights as to indemnification as Buyer hereunder as relates to the
Torrington Facility.
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ARTICLE XIII
MISCELLANEOUS
13.1 Assignment. Except for the assignment of the set forth in Article XII,
neither this Agreement nor any of the rights or obligations hereunder may be
assigned by any party without the prior written consent of the other parties.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, and no other person shall have any right, benefit or obligation under
this Agreement as a third party beneficiary or otherwise.
13.2 Notices. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when received if personally delivered; when
transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
If to Seller, addressed to:
Imperial Sugar Company
0000 Xxxxxxx 00X
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: 000-000-0000
With a copy to
Xxxxx Xxxxx L.L.P.
One Shell Plaza
000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: J. Xxxxx Xxxxxxxx, Jr.
Facsimile: 000-000-0000
If to Buyer, addressed to:
Xxxxxx Sugars Incorporated
000 Xxxxx 0/xx/ Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
With a copy to:
Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile: 000-000-0000
35
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
13.3 Choice of Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of New
York (without reference to its choice of law provisions).
13.4 Entire Agreement: Amendments and Waivers. This Agreement, together
with the Confidentiality Agreement, all Exhibits and Schedules hereto (including
the Disclosure Letter) and the Ancillary Agreements, constitute the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. No
amendment, supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by the party to be bound thereby.
13.5 Multiple Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.6 Expenses. Except as otherwise specified in this Agreement, each party
hereto shall pay its own legal, accounting, out-of-pocket and other expenses
incident to this Agreement and to any action taken by such party in preparation
for carrying this Agreement into effect.
13.7 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
13.8 Titles. The titles, captions or headings of the Articles and Sections
herein are for convenience of reference only and are not intended to be a pan of
or to affect or restrict the meaning or interpretation of this Agreement.
13.9 Representation of Counsel; Mutual Negotiation. Each party has had the
opportunity to be represented by counsel of its choice in negotiating this
Agreement. This Agreement shall therefore be deemed to have been negotiated and
prepared at the joint request, direction, and construction of the parties, at
arm's-length, with the advice and participation of counsel, and will be
interpreted in accordance with its terms without favor to any party. The
parties' respective counsel may not be disqualified from representing their
clients in indemnification or other disputes arising out of this transaction by
virtue of such counsel's prior representation of the other party in an unrelated
matter.
(The remainder of this page intentionally left blank).
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their respective behalf by their respective officers thereunto
duly authorized, all as of the day and year first above written.
IMPERIAL SUGAR COMPANY XXXXXX SUGARS INCORPORATED
/s/ H.P. Xxxxxxx, /s/ Xxxxx X. Xxxxxxx
By:_________________________________ By:__________________________________
H.P. Xxxxxxx Xxxxx X. Xxxxxxx
Name:_______________________________ Name:________________________________
Vice President/Accounting President and CEO
Its:________________________________ Its:_________________________________
XXXXX SUGAR CORPORATION
/s/ H.P. Xxxxxxx
By:_________________________________
H.P. Xxxxxxx
Name:_______________________________
Vice President
Its:________________________________
ACKNOWLEDGEMENT AND AGREEMENT:
American Crystal Sugar Company agrees that it will cause Buyer, its
wholly-owned subsidiary, to perform all Buyer's obligations hereunder.
AMERICAN CRYSTAL SUGAR COMPANY
/s/ Xxxxx X. Xxxxxxx
By:_________________________________
Xxxxx X. Xxxxxxx
Name:_______________________________
President and CEO
Its:________________________________
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