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MERGER AGREEMENT
by and among
XXXXXXX MILLING COMPANY,
XXXXX XXXX PET FOOD CO., INC.
and
XXXXX XXXX PET FOOD ACQUISITION CO.
Dated as of March 21,1997
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TABLE OF CONTENTS
(Not Part of the Agreement)
Page
ARTICLE I THE MERGER ..................................................... 1
1.01 PLAN OF MERGER ............................................. 1
1.02 EFFECTIVE TIME OF THE MERGER ................................ 2
1.03 CONVERSION OF XXXXXXX SHARES. ............................... 2
1.04 DISSENTERS' RIGHTS .......................................... 5
ARTICLE II CLOSING, PAYMENT FOR SHARES AND RELATED MATTERS ............... 6
2.01 GENERALLY ................................................... 6
2.02 PAYMENT FOR SHARES .......................................... 6
2.03 DEFERRED COMPENSATION PLAN PAYMENTS ......................... 9
ARTICLE III REPRESENTATIONS AND WARRANTIES ............................... 9
3.01 REPRESENTATIONS AND WARRANTIES OF XXXXXXX ................... 9
3.02 REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER SUBSIDIARY. 28
ARTICLE IV CONDUCT AND TRANSACTIONS PRIOR TO THE EFFECTIVE TIME .......... 30
4.01 OPERATION OF BUSINESS OF XXXXXXX UNTIL EFFECTIVE TIME ....... 30
4.02 SHAREHOLDERS' MEETING; PROXY MATERIAL ....................... 32
4.03 NO SHOPPING ................................................. 32
4.04 ACCESS TO INFORMATION ....................................... 33
4.05 AMENDMENT OF XXXXXXX'X EMPLOYEE PLANS ....................... 33
4.06 XXXX-XXXXX-XXXXXX ACT ....................................... 33
4.07 SUPPLEMENTS TO DISCLOSURE SCHEDULE .......................... 34
4.08 ENGAGEMENT OF AUDITORS ...................................... 34
4.09 EMPLOYEE SAVINGS PLAN PAYMENTS .............................. 34
4.10 LANDLORD ESTOPPELS .......................................... 35
4.11 MONTHLY FINANCIAL STATEMENTS ................................ 35
4.12 PAYMENTS TO ELIMINATE OR LIMIT CERTAIN TIME EXCEPTIONS ...... 35
4.13 CONFIDENTIALITY ............................................. 35
ARTICLE V CONDITIONS PRECEDENT ........................................... 36
5.01 CONDITIONS TO THE OBLIGATIONS OF BUYER AND BUYER SUBSIDIARY . 36
5.02 CONDITIONS TO THE OBLIGATIONS OF XXXXXXX .................... 39
ARTICLE VI CONDUCT AND TRANSACTIONS AFTER THE EFFECTIVE TIME ............. 41
6.01 POST-CLOSING OPERATIONS ..................................... 41
6.02 EMPLOYEE BENEFIT PLANS ...................................... 41
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6.03 DIRECTOR AND OFFICER EXCULPATION AND INDEMNIFICATION ........ 42
6.04 FILING OF TAX RETURNS ....................................... 42
6.05 INSURANCE COVERAGE. ........................................ 43
ARTICLE VII TERMINATION AND ABANDONMENT .................................. 43
7.01 GENERALLY. .................................................. 43
7.02 PROCEDURE AND EFFECT OF TERMINATION AND ABANDONMENT ......... 44
ARTICLE VIII SHAREHOLDER REPRESENTATIVE .................................. 45
8.01 DESIGNATION ................................................. 45
8.02 AUTHORITY ................................................... 45
8.03 RESIGNATION ................................................. 46
8.04 RELIANCE BY THIRD PARTIES ON THE SHAREHOLDER
REPRESENTATIVE'S AUTHORITY ................................. 46
8.05 EXCULPATION AND INDEMNIFICATION ............................. 46
ARTICLE IX MISCELLANEOUS PROVISIONS ...................................... 47
9.01 LIMITATIONS ON SURVIVAL ..................................... 47
9.02 INDEMNIFICATION ............................................. 47
9.03 AMENDMENT AND MODIFICATION .................................. 50
9.04 ALTERNATIVE DISPUTE RESOLUTION .............................. 50
9.05 WAIVER OF COMPLIANCE; CONSENTS .............................. 51
9.O6 EXPENSES .................................................... 51
9.07 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS ..................... 51
9.08 ADDITIONAL AGREEMENTS ....................................... 51
9.O9 NOTICES ..................................................... 52
9.1O ASSIGNMENT .................................................. 53
9.11 GOVERNING LAW ............................................... 53
9.12 COUNTERPARTS ................................................ 53
9.13 KNOWLEDGE ................................................... 53
9.14 HEADINGS; INTERNAL REFERENCES ............................... 53
9.15 ENTIRE AGREEMENT ............................................ 53
9.16 SEVERABILITY ................................................ 53
EXHIBITS
A Armour Stock Purchase Agreement
B Plan of Merger
C Amendment to Xxxxxxx Articles of Incorporation
D Form of Opinion of Counsel to Xxxxxxx
E Environmental Reports to be Delivered
F Form of Opinion of Counsel to Buyer and Buyer Subsidiary
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INDEX OF DEFINED TERMS
(Not Part of the Agreement)
Section
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Active Subsidiaries ............................................ 3.01(b)
Active Subsidiary .............................................. 3.01(b)
Adjusted Working Capital ....................................... 1.03(b)
Agenda Items ................................................... 4.02
Annual Reports ................................................. 3.01(e)
Armour ......................................................... Recitals
Armour Capital Stock ........................................... Recitals
Armour Shareholders ............................................ Recitals
Armour Stock Purchase Agreement ................................ Recitals
Authorized Persons ............................................. 4.04
Balance Sheet .................................................. 3.01(g)
Buyer .......................................................... Introduction
Buyer Subsidiary ............................................... Introduction
Chase Bridge Financing Commitment .............................. 3.02(d)
Closing ........................................................ 2.01
Closing Date ................................................... 2.01
Closing Date Balance Sheet ..................................... 1.03(b)
Closing Documents .............................................. 9.02(a)
Code ........................................................... 3.0l(h)(iii)
Common Equity Amount ........................................... 1.03(b)
Common Stock Merger Consideration .............................. 2.02(c)
Common Stock Merger Consideration Per Share .................... 1.03(b)
Compensation Continuation Benefit Agreements ................... 1.03(b)
Confidentiality Agreement ...................................... 4.13
CSFB ........................................................... 3.01(o)
CSFB Bridge Financing Commitment ............................... 3.02(d)
Current Property ............................................... 3.01(q)(ii)(C)
Damages ........................................................ 9.02(a)
Disbursing Agent ............................................... 2.02(a)
Disbursing Agreement ........................................... 2.02(a)
Disclosure Schedule ............................................ 3.01
Dissenting Holders ............................................. 2.02(e)
Dissenting Share ............................................... 1.04(c)
Dissenting Shares .............................................. 1.04(c)
Effective Time ................................................. 1.02
Employee Benefit Plan .......................................... 3.01(p)(v)
Employee Pension Benefit Plan .................................. 3.01(p)(v)
Employee Welfare Benefit Plan .................................. 3.01(p)(v)
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Environmental Law .............................................. 3.01(q)(i)(A)
Environmental Liabilities ...................................... 9.02(a)
ERISA .......................................................... 3.01(p)(v)
ERISA Affiliate... ............................................. 3.01(p)(v)
Escrow Amount.... .............................................. 2.02(a)
Estimated Common Stock Merger Consideration .................... 2.02(a)
Extraordinary Expenditures ..................................... 1.03(b)
Fee Property ................................................... 3.01(i)(i)
Fiduciary ...................................................... 3.0l(p)(v)
Former Property ................................................ 3.01(q)(ii)(C)
Xxxx-Xxxxx-Xxxxxx Act .......................................... 3.01(d)
Hazardous Substance ............................................ 3.01(q)(i)(B)
Xxxxxxx ........................................................ Introduction
Xxxxxxx Capital Stock .......................................... Recitals
Xxxxxxx Class A Common Stock ................................... 3.01(b)
Xxxxxxx Class B Common Stock ................................... 3.01(b)
Xxxxxxx 5% Preferred Stock ..................................... 3.01(b)
Xxxxxxx Preferred Stock ........................................ 3.01(b)
Xxxxxxx Undesignated Preferred Stock ........................... 3.01(b)
Indemnified Environmental Liabilities .......................... 9.02(a)
Indemnified Litigation and Claims .............................. 9.02(a)
Indemnified Party .............................................. 9.02(c)
Indemnified Title Costs and Expenses ........................... 4.12
Indemnifying Party ............................................. 9.02(c)
Interim Audit Report ........................................... 4.08(a)
Leasehold Property ............................................. 3.01(i)(i)
Material Contracts ............................................. 3.01(k)
MBCA ........................................................... 1.02
Merger ......................................................... Recitals
Multiemployer Plan ............................................. 3.01(p)(v)
1997 Incentive Plan Program .................................... 1.03(b)
Normalizing Amount ............................................. 1.03(b)
PBGC ........................................................... 3.01(p)(v)
Permitted Exceptions ........................................... 3.01(i)(ii)
Plan of Merger ................................................. Recitals
Preferred Stock Merger Consideration ........................... 1.03(a)
Prohibited Transaction ......................................... 3.01(p)(v)
Proprietary Rights ............................................. 3.01(1)
Reportable Event ............................................... 3.01(p)(v)
Shareholder Representative ..................................... 8.01
Shareholders ................................................... 8.01
Statement ...................................................... 4.02
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Stay Pay Agreements ............................................. 1.03(b)
Subsidiaries .................................................... 3.01(b)
Subsidiary ...................................................... 3.01(b)
Tax Returns ..................................................... 3.01(h)(i)
Taxes ........................................................... 3.01(h)(i)
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MERGER AGREEMENT dated as of March 21, 1997, by and among XXXXXXX
MILLING COMPANY, a Minnesota corporation ("Xxxxxxx"), XXXXX XXXX PET FOOD CO.,
INC. a Delaware corporation ("Buyer"), and XXXXX XXXX PET FOOD ACQUISITION CO.,
a Minnesota corporation ("Buyer Subsidiary").
WITNESSETH:
WHEREAS, all of the issued and outstanding capital stock of Xxxxxxx
("Xxxxxxx Capital Stock") is owned by Armour Corporation, a Delaware corporation
("Armour"), and certain other persons;
WHEREAS, Buyer desires to acquire Xxxxxxx by (i) purchasing all of
the issued and outstanding capital stock of Armour (the "Armour Capital Stock")
from the holders thereof (the "Armour Shareholders") pursuant to a Stock
Purchase Agreement between Buyer and the Armour Shareholders in the form of
Exhibit A (the "Armour Stock Purchase Agreement"), and (ii) thereafter effecting
the merger (the "Merger") of Buyer Subsidiary, a wholly-owned subsidiary of
Buyer, with and into Xxxxxxx pursuant to a Plan of Merger in the form of Exhibit
B (the "Plan of Merger") whereby the shareholders of Xxxxxxx other than Armour
receive cash for their shares of Xxxxxxx Capital Stock;
WHEREAS, the Boards of Directors of Xxxxxxx and Buyer Subsidiary
deem the Merger desirable and in the best interests of their respective
corporations; the Boards of Directors of Xxxxxxx and Buyer Subsidiary have, by
resolutions duly adopted, approved this Agreement and directed that the Plan of
Merger be submitted to a vote of the shareholders of each of their respective
corporations in accordance with the laws of Minnesota; the sole shareholder of
Buyer Subsidiary has duly approved the Plan of Merger in accordance with the
laws of Minnesota; and Xxxxxxx will call a special meeting of its shareholders
to consider the approval of the Plan of Merger in accordance with the laws of
Minnesota.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
1.01 Plan of Merger. Subject to the conditions precedent hereinafter
contained, on the Closing Date (as defined in Section 2.01), after the purchase
of the Armour Capital Stock by Buyer in accordance with the Armour Stock
Purchase Agreement, Buyer Subsidiary shall be merged with and into Xxxxxxx in
accordance with the Plan of Merger.
1.02 Effective Time of the Merger. The Merger shall become effective
immediately upon filing of Articles of Merger with the Minnesota Secretary of
State in accordance with Section 302A.615 of the Minnesota Business Corporation
Act (the "MBCA"). The term "Effective Time" shall mean the date and time when
the Merger becomes effective.
1.03 Conversion of Xxxxxxx Shares.
(a) As provided in the Plan of Merger, at and as of the Effective
Time, (i) each share, other than a Dissenting Share (as defined in Section
1.04(c)), of Xxxxxxx 5% Preferred Stock (as defined in Section 3.01(b)) shall be
converted into the right to receive in cash an amount equal to Fifty Dollars
($50.00) per share, plus accrued but unpaid dividends thereon up to the
Effective Time (the "Preferred Stock Merger Consideration"); (ii) each share,
other than a Dissenting Share, of Xxxxxxx Class A Common Stock (as defined in
Section 3.01(b)) and Xxxxxxx Class B Common Stock (as defined in Section
3.01(b)) held by a person other than Armour shall be converted into the right to
receive in cash an amount equal to the Common Stock Merger Consideration Per
Share (as hereinafter defined); and (iii) each Dissenting Share shall be
converted into the right to receive in cash an amount equal to the fair value
thereof determined in accordance with Section 302A.473 of MBCA.
(b) For purposes of this Agreement, the terms set forth below are
defined as follows:
"Adjusted Working Capital" shall mean accounts and current notes
receivable (excluding the $3,000,000 note receivable due in January 1998), plus
inventories, prepaid expenses and the Normalizing Amount (as hereinafter
defined), less accounts payable, accrued expenses and income taxes payable, all
as reflected on, or determined by reference to, the Closing Date Balance Sheet.
"Normalizing Amount" shall mean the retiree health benefit obligation (to the
extent included in accounts payable and/or accrued expenses), plus self
insurance reserves (to the extent included in accounts payable and/or accrued
expenses), less the restricted insurance deposit.
"Closing Date Balance Sheet" shall mean the consolidated balance
sheet of Xxxxxxx and its Subsidiaries (as defined in Section 3.01(b)) as of the
Closing Date audited by KPMG Peat Marwick LLP in accordance with Section 4.08.
"Compensation Continuation Benefit Agreements" shall mean the letter
agreements between Xxxxxxx and each of Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xxxx
X. Xxxxxxxxxx, Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxxx dated as of September
12, 1996, as such letter agreements may be amended to provide for acceleration
and payment on or prior to the Closing Date of the compensation continuation
benefits established thereunder.
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"1997 Incentive Plan Program" shall mean the incentive compensation
program evidenced by letter agreements between Xxxxxxx and each of the employees
listed in the Disclosure Schedule (as defined in Section 3.01) under the caption
"Retirement and Benefit Plans -- 0000-00 Xxxxx Xxxx," copies of which have been
delivered to Buyer.
"Stay Pay Agreements" shall mean the letter agreements between
Xxxxxxx and each of the employees listed in the Disclosure Schedule under the
caption "No Undisclosed Liabilities -- Obligations triggered by the Merger under
'Stay Pay' Agreements," copies of which have been delivered to Buyer.
"Common Equity Amount" shall mean the amount calculated as follows--
(i) One Hundred Thirty Million Dollars ($130,000,000);
(ii) plus:
(A) the amount of "cash and short term investments"
reflected on the Closing Date Balance Sheet;
(B) the amount of any Extraordinary Expenditures (as
hereinafter defined) which are made by Xxxxxxx from and
after the date of this Agreement and on or prior to the
Closing Date;
(C) if Xxxxxxx shall have discharged on or prior to the
Closing Date all obligations under the Compensation
Continuation Benefit Agreements, an amount equal to 50%
of all payments made thereunder (net of any reduction in
taxes resulting from the deduction of such 50% of all
payments); and
(D) if Adjusted Working Capital exceeds $11,800,000
immediately prior to Closing, an amount equal to the
excess of Adjusted Working Capital immediately prior to
Closing over $11,800,000.
(iii) less:
(A) the Preferred Stock Merger Consideration;
(B) the amount of "long-term debt," including the "current
portion of long-term debt" reflected on the Closing Date
Balance Sheet and accrued interest thereon, together
with the amount of any prepayment premiums in respect
thereof applicable to prepayment of such debt on the
Closing Date;
(C) the amount (if any) of any undistributed balance of the
Xxxxxxx Employee Savings Plan and accrued interest
thereon reflected on the Closing Date Balance Sheet;
(D) the amount (if any) of fees and out-of-pocket expenses
of Xxxxxxx payable to financial advisors, lawyers,
accountants, environmental consultants and any other
service providers incurred in connection with the
transactions contemplated by this Agreement and not paid
on or prior to the Closing Date,
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including without limitation fees and expenses of Credit
Suisse First Boston, fees and disbursements of Faegre &
Xxxxxx LLP, fees and disbursements of KPMG Peat Marwick
LLP, and fees and disbursements of Xxxxx Intertec,
Xxxx & Associates, Inc. and X. Xxxxxxx Alley &
Associates, Inc.;
(E) if Xxxxxxx shall not have discharged such obligations on
or prior to the Closing Date, an amount equal to unpaid
contributions for fiscal year 1997 to the Xxxxxxx Profit
Sharing Plan, any unpaid incentive compensation under
the 1997 Incentive Plan Program, any unpaid "stay pay"
bonus payments under the Stay Pay Agreements, and any
unpaid deferred compensation under the Xxxxxxx Deferred
Compensation Plan, in each case reflected on the Closing
Date Balance Sheet;
(F) if Xxxxxxx shall not have discharged on or prior to the
Closing Date all obligations under the Compensation
Continuation Benefit Agreements, an amount equal to 50%
of all payments required to be made thereunder less any
amounts theretofore paid by Xxxxxxx in respect of the
Compensation Continuation Benefit Agreements (net of any
reduction in taxes resulting from the deduction of such
50% of all payments less any amounts theretofore paid);
(G) the amount (if any) of any unpaid commitments of Xxxxxxx
to the Xxxxxx X. Xxxxxx Foundation reflected on the
Closing Date Balance Sheet;
(H) if Adjusted Working Capital is less than $11,800,000
immediately prior to Closing, an amount equal to the
excess of $11,800,000 over Adjusted Working Capital
immediately prior to Closing; and
(I) $20,000 to defray the costs and expenses incurred or to
be incurred by Buyer for real estate surveys pursuant to
Section 5.01(K).
"Common Stock Merger Consideration Per Share" shall mean an amount
equal to (i) the Common Equity Amount, divided by (ii) the aggregate number of
shares of Xxxxxxx Class A Common Stock and Xxxxxxx Class B Common Stock
outstanding at the Effective Time (including, without limitation, the 800,000
shares of Xxxxxxx Class A Common Stock held by Armour).
"Extraordinary Expenditures" shall mean (i) cash payments for
capital assets purchased alter the date hereof not included in Xxxxxxx'x most
recent capital expenditures budget delivered to Buyer but approved in writing by
Buyer; (ii) cash payments for equity interests in D&D Partners XX XX required by
the Limited Partnership Agreement dated as of August 22, 1996, (iii) equity
investments in other customers of the Feed Division approved in
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writing by Buyer, (iv) loans to Vista Farms in an amount not to exceed
$1,000,000; and; (v) long term loans in excess of $20,000 to other customers of
the Feed Division approved in writing by Buyer.
1.04 Dissenters' Rights.
(a) If any holder of Xxxxxxx Capital Stock (i) prior to the taking
of the vote of the shareholders of Xxxxxxx on the Plan of Merger, shall file
with Xxxxxxx a written notice of intent to demand payment of the fair value for
such holder's shares of Xxxxxxx Capital Stock if the Merger is effected, (ii)
shall not vote in favor of the Plan of Merger, and (iii) after the taking of
such vote, shall make written demand for payment of the fair value for such
holder's shares of Xxxxxxx Capital Stock as provided in Section 302A.473 of the
MBCA and comply in all other respects with Sections 302A.471 and 302A.473 of the
MBCA, then such holder shall not be entitled to receive the consideration
described in the Plan of Merger unless and until the right of such holder to
payment for such holder's shares of Xxxxxxx Capital Stock under Section 302A.473
of the MBCA shall cease.
(b) If any holder of Xxxxxxx Capital Stock shall effectively
withdraw or lose (through failure to perfect or otherwise) such holder's right
to payment for such holder's shares of Xxxxxxx Capital Stock under Section
302A.473 of the MBCA, then as of the later of the Effective Time or the
occurrence of such event, such holder's shares of Xxxxxxx Capital Stock shall
automatically be converted into and represent only the right to receive the
consideration described in the Plan of Merger, without interest thereon.
(c) Each holder of Xxxxxxx Capital Stock who becomes entitled,
pursuant to the provisions of Section 302A.473 of the MBCA, to payment of the
fair value of such holder's shares (collectively the "Dissenting Shares," and
individually a "Dissenting Share") shall receive payment therefor from Xxxxxxx,
as the surviving corporation of the Merger, pursuant to such provisions.
(d) Xxxxxxx shall give Buyer prompt notice upon receipt by Xxxxxxx
at any time prior to the Effective Time of any notice of intent to demand
payment of the fair value for shares under Section 302A.473 of the MBCA and any
withdrawal of any such notice of intent to demand. Xxxxxxx agrees that it will
not, except with the prior written consent of Buyer, negotiate, voluntarily make
any payment with respect to, or settle or offer to settle, any such demands at
any time prior to the Effective Time.
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ARTICLE II
CLOSING, PAYMENT FOR SHARES
AND RELATED MATTERS
2.01 Generally. The closing (the "Closing") of the purchase and sale
of Armour Capital Stock in accordance with the Armour Stock Purchase Agreement
and the subsequent consummation of the Merger in accordance with Article I shall
occur on May 15, 1997, or at such other time as Xxxxxxx and Buyer may mutually
agree (the "Closing Date"). The Closing shall be held at the offices of Xxxxxxxx
& X'Xxxx LLP, 885 Third Avenue, New York, New York, or such other place as
Xxxxxxx and Buyer may mutually agree.
2.02 Payment for Shares.
(a) On the Closing Date, prior to the purchase by Buyer of the
Armour Capital Stock pursuant to the Armour Stock Purchase Agreement, (i)
Xxxxxxx shall deliver to Buyer a written estimate of the Common Equity Amount
and Common Stock Merger Consideration Per Share, such estimate to be prepared by
Xxxxxxx upon consultation with Buyer, and (ii) Buyer shall remit or cause to be
remitted in immediately available funds to Norwest Bank Minnesota, N.A.,
Minneapolis, Minnesota, or any other disbursing agent that is selected by
Xxxxxxx and reasonably satisfactory to Buyer (the "Disbursing Agent"), for
application in accordance with a Disbursing Agreement in form and substance
reasonably satisfactory to Xxxxxxx, Buyer and the Disbursing Agent (the
"Disbursing Agreement"), an amount equal to the sum of (A) the Preferred Stock
Merger Consideration, and (B) the estimated Common Stock Merger Consideration
Per Share multiplied by the number of shares of Xxxxxxx Class A Common Stock and
Xxxxxxx Class B Common Stock issued and outstanding on the Closing Date
(excluding the 800,000 shares of Xxxxxxx Class A Common Stock held by Armour)
(the "Estimated Common Stock Merger Consideration"). Of the amount remitted to
the Disbursing Agent by Buyer pursuant to this Section 2.02(a), the Disbursing
Agent shall hold in escrow, pursuant to the escrow provisions of the Disbursing
Agreement, an amount equal to Thirteen Million Dollars ($13,000,000) or, if the
Interim Audit Report (as defined in Section 4.08(a)) shall have been completed
prior to Closing and reflects no material adverse variance in financial
condition or results of operation for the nine-month period ended January 31,
1997 from that reflected in the financial statements for the nine-month period
ended January 31, 1997 and delivered to Buyer pursuant to Section 3.01(e), Ten
Million Dollars ($10,000,000), in either case multiplied by a fraction, the
numerator of which is the aggregate number of shares of Xxxxxxx Class A Common
Stock and Xxxxxxx Class B Common Stock issued and outstanding on the Closing
Date (excluding the 800,000 shares of Common Stock held by Armour), and the
denominator of which is the aggregate number of shares of Xxxxxxx Class A Common
Stock and Xxxxxxx Class B Common Stock issued and outstanding on the Closing
Date (including the 800,000 shares of Xxxxxxx Class A Common Stock held by
Armour). The amount so held in escrow by the
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Disbursing Agent pursuant to this Section 2.02(a), subject to reduction pursuant
to Section 2.02(b), is hereinafter called the "Escrow Amount."
(b) If the Escrow Amount shall have been calculated under Section
2.02 (a) based on Thirteen Million Dollars ($13,000,000) and the Interim Audit
Report was not completed prior to Closing, upon completion of the Interim Audit
Report the Escrow Amount shall be recalculated based on Ten Million Dollars
($10,000,000) if the Interim Audit Report reflects no material variance in
financial condition or results of operation for the nine-month period ended
January 31, 1997 from that reflected in the financial statements for the
nine-month period ended January 31, 1997 and delivered to Buyer pursuant to
Section 3.01(e), in which event the excess of the Escrow Amount as originally
calculated pursuant to Section 2.02(a) over the Escrow Amount as recalculated
pursuant to this Section 2.02(b) shall be released from escrow and held by the
Disbursing Agent for distribution in accordance with Section 2.02(f).
(c) Within two (2) business days of delivery of the Closing Date
Balance Sheet (as defined in Section 1.03) to Buyer, Buyer shall remit or cause
to be remitted in immediately available funds to the Disbursing Agent for
application in accordance with the Disbursing Agreement an amount equal to the
excess (if any) of (i) the Common Stock Merger Consideration Per Share (as
finally determined by reference to the Closing Date Balance Sheet) multiplied by
the number of shares of Xxxxxxx Class A Common Stock and Xxxxxxx Class B Common
Stock issued and outstanding on the Closing Date (excluding the 800,000 shares
of Xxxxxxx Class A Common Stock held by Armour) (the "Common Stock Merger
Consideration"), over (ii) the Estimated Common Stock Merger Consideration.
Alternatively, if the Estimated Common Stock Merger Consideration exceeds the
Common Stock Merger Consideration (as finally determined by reference to the
Closing Date Balance Sheet), the Disbursing Agreement shall provide for the
Disbursing Agent to remit the amount of such excess to Buyer within two (2) days
of receipt of a written request from Buyer.
(d) The Disbursing Agreement shall authorize the Disbursing Agent to
invest as therein provided any amounts from time to time held by the Disbursing
Agent under the Disbursing Agreement, and to apply as therein provided any net
profit resulting from, or interest or income produced by, such investments.
(e) The Disbursing Agreement shall provide that the Disbursing
Agent, upon receipt of (i) a certificate which immediately prior to the
Effective Time represented Xxxxxxx Capital Stock owned by persons other than
Armour or a holder who has exercised dissenters' rights pursuant to Section
302A.473 of the MBCA and has not subsequently withdrawn or lost such rights (all
such holders so exercising dissenter's rights not subsequently withdrawn or lost
hereinafter called "Dissenting Holders") and (ii) a letter of transmittal in
form and substance reasonably satisfactory to the Disbursing Agent, duly
executed and accompanied by any other items specified in the letter of
transmittal, shall pay by cashier's check to the person or persons entitled
thereto, the amount determined as
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hereinafter set forth with respect to such certificate: (A) in the case of a
certificate evidencing Xxxxxxx 5% Preferred Stock, an amount per share equal to
the quotient of (x) the Preferred Stock Merger Consideration, divided by (y) the
aggregate number of shares of Xxxxxxx 5% Preferred Stock issued and outstanding
on the Closing Date; and (B) in the case of a certificate evidencing Xxxxxxx
Class A Common Stock or Xxxxxxx Class B Common Stock, an amount per share equal
to 95% of the quotient of (x) the Estimated Common Stock Merger Consideration
less the Escrow Amount, divided by (y) the aggregate number of shares of Xxxxxxx
Class A Common Stock and Xxxxxxx Class B Common Stock issued and outstanding on
the Closing Date (excluding the 800,000 shares of Xxxxxxx Class A Common Stock
held by Armour). Said payment shall be made at the Effective Time with respect
to all certificates duly delivered to the Disbursing Agent at least two (2)
business days prior to the Effective Time and as soon as practicable following
receipt thereof with respect to all certificates thereafter duly delivered to
the Disbursing Agent. No interest will be paid or accrued on the cash payable
upon the surrender of a certificate.
(f) The Disbursing Agreement shall further provide that following
the remittance to or by the Disbursing Agent in accordance with Section 2.02(c),
the Disbursing Agent, upon receipt of a certificate and letter of transmittal
referred to in Section 2.02(e) (if not theretofore received by the Disbursing
Agent), shall pay by cashier's check to the person or persons entitled thereto,
the amount per share determined as hereinafter set forth with respect to the
shares of Xxxxxxx Class A Common Stock or Xxxxxxx Class B Common Stock evidenced
by such certificate: the excess of (i) the quotient of (A) the Common Stock
Merger Consideration (as finally determined by reference to the Closing Date
Balance Sheet) less the Escrow Amount (as originally calculated pursuant to
Section 2.02(a) or as recalculated pursuant to Section 2.02(b), as the case may
be), divided by (B) the aggregate number of shares of Xxxxxxx Class A Common
Stock and Xxxxxxx Class B Common Stock issued and outstanding on the Closing
Date (excluding the 800,000 shares of Xxxxxxx Class A Common Stock held by
Armour), over (ii) any amount theretofore distributed by the Disbursing Agent
per share of common stock evidenced by such certificate pursuant to Section
2.02(e). Said payment shall be made within two (2) business days following the
remittance by or to the Disbursing Agent pursuant to Section 2.02(c) with
respect to all certificates duly delivered to the Disbursing Agent at least two
(2) business days prior to the date of such remittance by or to the Disbursing
Agent, and as soon as practical following receipt of such certificates with
respect to all certificates thereafter duly delivered to the Disbursing Agent.
(g) In the event any certificate evidencing Xxxxxxx 5% Preferred
Stock, Xxxxxxx Class A Common Stock or Xxxxxxx Class B Common Stock shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such certificate to have been lost, stolen or destroyed, the
amount to which such person would have been entitled under this Article II but
for failure to deliver such certificate to the Disbursing Agent shall
nevertheless be paid to such person; provided, however, that Xxxxxxx, as the
surviving corporation of the Merger, or Buyer may, in their sole discretion and
as a condition precedent to such payment, require such person to give Xxxxxxx or
Buyer, as appropriate, a
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bond in such sum as it directs as indemnity against any claim that may be had
against Xxxxxxx or Buyer, respectively, with respect to the certificate alleged
to have been lost, stolen or destroyed.
(h) The Disbursing Agreement shall provide that any amount held by
the Disbursing Agent under the Disbursing Agreement (excluding the Escrow Amount
and any net profit resulting from, or interest income produced by the investment
thereof) six (6) months after the Effective Time shall be refunded to Xxxxxxx,
as the surviving corporation of the Merger, at its option; provided, however,
that Xxxxxxx, as the surviving corporation of the Merger, shall be liable for
any cash payments required to be made thereafter pursuant to the Plan of Merger.
(i) The Disbursing Agreement shall provide that any remaining Escrow
Amount held by the Disbursing Agent under the Disbursing Agreement eighteen (18)
months after the Effective Time (subject to the provisions of the Disbursing
Agreement providing for retention of the Escrow Amount in respect of any escrow
claims then pending) shall be distributed in respect of the Xxxxxxx Class A
Common Stock and Xxxxxxx Class B Common Stock issued and outstanding immediately
prior to the Effective Time (excluding shares of such common stock held by
Armour or by Dissenting Holders).
2.03 Deferred Compensation Plan Payments. At or prior to Closing,
Xxxxxxx shall pay by cashier's check to each participant in the Xxxxxxx Deferred
Compensation Plan an aggregate amount equal to the benefit payable to such
participant under Section 5 of such plan as a result of the "Extraordinary
Corporate Event" (as defined in such plan) occasioned by the transactions
contemplated by this Agreement. Xxxxxxx reserves the right to amend such plan to
the extent it deems necessary to provide for such aggregate payments at or prior
to Closing. In addition, in the event the Closing is prior to April 30, 1997,
Xxxxxxx reserves the right to further amend such plan prior to Closing to assure
that plan participants receive on the Closing Date (i) their respective
allocated percentages of the Bonus Fund (as defined in such plan) established
for the plan year ending April 30, 1997 (with the Bonus Fund for the partial
plan year to be calculated on plan year earnings for the period May 1, 1996 to
the date of Closing), and (ii) the benefit of any additional Incentive Units (as
defined in such plan) with respect to dividends paid on Xxxxxxx Class A Common
Stock and Xxxxxxx Class B Common Stock during the period May 1, 1996 to the date
of Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of Xxxxxxx. Except as otherwise
set forth in the disclosure schedule executed and delivered by Xxxxxxx to Buyer
immediately
-9-
prior to the execution and delivery of this Agreement (the "Disclosure
Schedule"), Xxxxxxx represents and warrants to Buyer and Buyer Subsidiary as
follows:
(a) Organization, Standing, Qualification. Xxxxxxx and each of its
Active Subsidiaries (as defined in Section 3.01(b)) is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation and has the requisite corporate power and authority to own,
lease and operate all of its properties and assets and to carry on its business
as it is now being conducted. Xxxxxxx and each Active Subsidiary is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction (which are listed on the Disclosure Schedule) where the
character of its properties owned, operated or leased, or the nature of its
activities, makes such qualification necessary, except such jurisdictions where
failure to be so qualified would not, individually or in the aggregate, have a
material adverse effect upon the business, operations, properties or financial
condition of Xxxxxxx and such Subsidiaries, taken as a whole. The copies of the
articles or certificate of incorporation and by-laws of Xxxxxxx and each Active
Subsidiary, which have been delivered to Buyer, are complete and correct as of
the date of this Agreement, and the minute books of Xxxxxxx and each Active
Subsidiary, which have been made available to Buyer, are complete in all
material respects and accurately reflect all material action taken prior to the
date of this Agreement by the Board of Directors and Shareholders of Xxxxxxx and
each Active Subsidiary.
(b) Capitalization. The authorized capital stock of Xxxxxxx consists
of 100,000 shares of 5% Preferred Stock, $50 par value (the "Xxxxxxx 5%
Preferred Stock"); 1,000,000 shares of Preferred Stock, $.05 par value,
undesignated as to series ("Xxxxxxx Undesignated Preferred Stock"); 2,500,000
shares of Class A Voting Common Stock, $.05 par value (the "Xxxxxxx Class A
Common Stock"); and 37,500,000 shares of Class B Non-Voting Common Stock, $.05
par value (the "Xxxxxxx Class B Common Stock"). The issued and outstanding
capital stock of Xxxxxxx consists of 18,329 shares of Xxxxxxx 5% Preferred
Stock, 1,145,050 shares of Xxxxxxx Class A Common Stock and 14,511,823 shares of
Xxxxxxx Class B Common Stock. The Disclosure Schedule contains a complete and
correct list of all record owners of shares of Xxxxxxx 5% Preferred Stock,
Xxxxxxx Class A Common Stock and Xxxxxxx Class B Common Stock and the number of
shares owned by each such person or entity. Xxxxxxx has no other issued or
outstanding shares of capital stock. The aggregate accrued but unpaid dividends
on the Xxxxxxx 5% Preferred Stock as of the date hereof are equal to $1,400.04.
Under the terms of the Xxxxxxx 5% Preferred Stock, each share of Xxxxxxx 5%
Preferred Stock is entitled to receive no more than $50 per share plus accrued
but unpaid dividends with respect thereto upon consummation of the Merger.
Except as otherwise specified in the Disclosure Schedule, Xxxxxxx owns 100% of
the issued and outstanding capital stock of every class of the corporations
listed in the Disclosure Schedule under the heading "Subsidiaries" (collectively
the "Subsidiaries," and individually a "Subsidiary"). The only Subsidiaries of
Xxxxxxx engaged in any trade or business or having any assets or liabilities are
designated on the Disclosure Schedule as "Active Subsidiaries" (collectively the
"Active Subsidiaries" and individually an "Active Subsidiary"). There are no
-10-
outstanding subscriptions, options, warrants, calls or other agreements or
commitments by which Xxxxxxx or any Subsidiary is bound in respect of the
capital stock of Xxxxxxx or such Subsidiary, whether issued or unissued, and no
outstanding securities convertible into or exchangeable for any such capital
stock. All of the outstanding shares of capital stock of Xxxxxxx and each
Subsidiary are validly issued, fully paid and nonassessable. The Disclosure
Schedule contains a complete and correct list of each corporation, partnership,
joint venture or other business association in which Xxxxxxx has any equity
ownership interest.
(c) Authorization and Execution. Xxxxxxx has the corporate power and
authority to execute and deliver this Agreement and, subject to obtaining the
approval of its shareholders, to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement have been duly
and effectively authorized by the Board of Directors of Xxxxxxx, and no further
corporate action of Xxxxxxx, other than the approval of its shareholders, is
necessary to consummate the transactions contemplated hereby. This Agreement
constitutes a legal, valid and binding obligation of Xxxxxxx, enforceable
against it in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally, and subject, as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a court of law or equity).
(d) No Conflicts. Neither the execution and delivery of this
Agreement by Xxxxxxx, nor the consummation by Xxxxxxx of the transactions
contemplated hereby, will (i) conflict with or result in a breach of the
articles of incorporation or by-laws, as currently in effect, of Xxxxxxx, or
(ii) except for the filing of articles of merger, the amendment to the articles
of incorporation of Xxxxxxx (as contemplated by Section 4.02), and for the
requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (the
"Xxxx-Xxxxx-Xxxxxx Act"), require any filing with, or consent or approval of any
governmental authority having jurisdiction over any of the business or assets of
Xxxxxxx, or (iii) violate any statute, regulation, injunction, judgment or order
to which Xxxxxxx or any of its Subsidiaries is subject, or (iv) result in a
breach of, or constitute a default or an event which, with the passage of time
or the giving of notice or both would constitute a default, which would give
rise to a right of termination, cancellation or acceleration, create any
entitlement to any payment or benefit, require the consent of any third party or
result in the creation of any lien on the assets of Xxxxxxx under any Material
Contract (as defined in Section 3.01(k)) or any certificate of occupancy,
license, permit, order or approval of any governmental authority of which
Xxxxxxx is a beneficiary.
(e) Financial Statements. Xxxxxxx has heretofore delivered to Buyer
its (i) Annual Report for each of the fiscal years ended April 30, 1994 through
April 30, 1996, inclusive (the "Annual Reports"), and (ii) unaudited monthly
financial statements for each of the months ended May 30, 1996, through
January 31, 1997 inclusive. Each of the consolidated financial statements
contained in the Annual Reports was prepared from the books and records of
Xxxxxxx (which are accurate and complete in all material respects) in
-11-
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto) and each fairly presents, in all material respects, the consolidated
assets, liabilities and financial position of Xxxxxxx and its Subsidiaries as at
the respective dates thereof and the consolidated results of operations and cash
flows of Xxxxxxx and its Subsidiaries for the periods indicated. Each of such
unaudited monthly financial statements was prepared, and each unaudited monthly
statement to be delivered by Xxxxxxx to Buyer pursuant to Section 4.11 will have
been prepared, by Xxxxxxx from the books and records of Xxxxxxx (which are
accurate and complete in all material respects) in accordance with generally
accepted accounting principles and consistent with the past practices of Xxxxxxx
and each fairly presents, or when delivered will fairly present, in all material
respects, the consolidated assets, liabilities and financial position of Xxxxxxx
and its Subsidiaries as at the respective dates thereof and the consolidated
results of operations for the periods indicated, except as reflected in the
notes accompanying the unaudited monthly financial statements for the month
ended December 31, 1996, and further except that all such unaudited monthly
financial statements are subject to normal year-end adjustments that are not
material in amount and do not contain all footnote disclosures required by
generally accepted accounting principles.
(f) Absence of Certain Changes or Events. Except as set forth in the
Disclosure Schedule or as expressly permitted by Section 4.01(d), since April
30, 1996 and to and including the date of this Agreement, (i) neither Xxxxxxx
nor its Subsidiaries have incurred any obligations or liabilities other than in
the ordinary course of business and have not incurred any indebtedness for money
borrowed; made any loans (other than any feeder financing or dealer operating
loan in the ordinary course of business which is not in excess of $20,000) to or
guaranteed any indebtedness of others; prepaid any indebtedness; changed or
modified any existing accounting method, principle or practice; sold, leased,
encumbered, mortgaged or otherwise disposed of any tangible assets or properties
which are material to Xxxxxxx or any of its Subsidiaries other than sales of
inventory and obsolete equipment in the ordinary course of business; sold,
assigned or transferred any patents, trademarks, trade names, or other
intangible assets; suffered any business interruption or disruption or labor
disputes, whether or not covered by insurance; entered into or modified any
agreement, contract or commitment outside the ordinary course of business or
involving payments or obligations in excess of $50,000 for each such agreement,
contract or commitment in any year or $500,000 for all such agreements in the
aggregate; purchased any capital assets in excess of $100,000 in the aggregate;
leased any assets as lessee or lessor; terminated or modified any lease to which
it is a party or by which it is bound, except for terminations of leases which
expired in accordance with their terms; suffered any material destruction of its
properties, whether or not covered by insurance; suffered any material and
adverse changes in its business, operations, properties or financial condition;
written down or written up any of its inventory other than in the ordinary
course of business; adopted, entered into or agreed to enter into, or amended or
agreed to amend any Employee Benefit Plans (as defined in Section 3.01(p)),
other than in the ordinary course of business and consistent with past practice;
made any changes in the customary methods used in operating Xxxxxxx'x business
(including its marketing, selling and pricing practices and policies); waived
any right
-12-
of material value under any Material Contract (as defined in Section 3.01(k));
failed to perform any of its obligations, or suffered or permitted to exist and
be continuing any default by it under any Material Contract; or entered into any
other transaction other than in the ordinary course of business; (ii) except for
regular quarterly dividends of $0.625 on Xxxxxxx 5% Preferred Stock and regular
quarterly dividends not in excess of $0.04 per share on Xxxxxxx Class A Common
Stock and Xxxxxxx Class B Common Stock, no dividends or other distributions have
been declared, set aside, made or paid; (iii) no shares of capital stock of
Xxxxxxx or any of its Subsidiaries have been purchased, redeemed or otherwise
acquired, directly or indirectly, by Xxxxxxx; (iv) no stocks, bonds or other
shares of capital stock of Xxxxxxx or any of its Subsidiaries, or options or
other rights to purchase the same have been issued or authorized for issuance;
(v) Xxxxxxx and its Subsidiaries have not increased or decreased the
compensation of any of their respective officers, directors or employees, except
pursuant to Xxxxxxx'x existing compensation plans and practices that are
referenced in the Disclosure Schedule, and no sums or other corporate assets
have been paid to or withdrawn by the directors or officers of Xxxxxxx or its
Subsidiaries, except for ordinary compensation and fees, payments under
established compensation or incentive plans, and ordinary expense reimbursement
and similar payments; (vi) Xxxxxxx has not changed its past practices with
respect to the maintenance and repair of its properties or deferred any such
maintenance or repair in a manner inconsistent with such past practices; and
(vii) neither Xxxxxxx nor any of its Subsidiaries have entered into any
commitment to do any of the foregoing.
(g) No Undisclosed Liabilities. Other than as and to the extent
disclosed or reserved against in the balance sheet dated as of December 31, 1996
(the "Balance Sheet"), set forth in the Disclosure Schedule or incurred in the
ordinary course of business since the date of the Balance Sheet, Xxxxxxx and its
Subsidiaries have no liabilities or obligations required to be disclosed or
reserved against on a balance sheet prepared in accordance with generally
accepted accounting principles. Except as set forth in the Disclosure Schedule,
neither Xxxxxxx nor any Subsidiary has any other liability of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and, to the knowledge of Xxxxxxx, there is no existing condition,
situation or set of circumstances which could reasonably be expected to result
in such a liability, other than:
(i) liabilities or obligations to perform or pay under the
executory portion of any Material Contract, or under the executory
portion of any other agreement or commitment of any kind by which
Xxxxxxx is bound and which was entered into in the ordinary course
of business, is on commercially reasonable terms, and is consistent
with Xxxxxxx'x past practices;
(ii) liabilities which are covered by any insurance policy
disclosed in the Disclosure Schedule;
(iii) any liability within the scope of the representations
and warranties of Sections 3.01(h), 3.01(i), 3.01(k), 3.01(1),
3.01(m), 3.01(n),
-13-
3.01(p), 3.01(q), 3.01(s), 3.01(u), and 3.01(x), the existence of
which would not constitute a breach of such representations and
warranties; or
(iv) other undisclosed liabilities which, individually or in
the aggregate, are not material to Xxxxxxx or any Subsidiary.
(h) Tax Matters.
(i) Xxxxxxx and its Subsidiaries have timely filed all
Federal, state, local and foreign tax returns ("Tax Returns")
required to be filed by them with respect to income, withholding,
social security, unemployment, franchise, property, excise and sales
and use taxes (all such taxes, together with any interest or
penalties payable in respect thereof hereinafter collectively called
"Taxes"), and have paid, accrued or reserved for all Taxes.
(ii) All Tax Returns filed by Xxxxxxx and its Subsidiaries for
any taxable period were complete and accurate in all material
respects. Except as set forth in the Disclosure Schedule, no Tax
Returns the due date of which was on or after December 31, 1987,
filed by Xxxxxxx or any of its Subsidiaries have been audited and no
claims for additional Taxes for any taxable period have been made by
any taxing authority and are pending. Neither Xxxxxxx nor any of its
Subsidiaries has received a notice of deficiency or assessment of
additional Taxes which notice or assessment remains unresolved.
Neither Xxxxxxx and nor any of its Subsidiaries has extended the
period for assessment or payment of any Tax, which period has not
since expired.
(iii) Neither Xxxxxxx nor any of its Subsidiaries has been a
member of an affiliated group (as such term is defined in Section
1504 of the Internal Revenue Code of 1986, as amended (the "Code"))
filing a consolidated federal income tax return for any tax year
other than a group the common parent of which was Xxxxxxx.
(iv) There are no liens for Taxes (other than current Taxes
not yet due and payable) upon the assets of Xxxxxxx or any of its
Subsidiaries.
(v) Neither Xxxxxxx nor any of its Subsidiaries has filed a
consent under Code Section 341(f) concerning collapsible
corporations.
(vi) Neither Xxxxxxx nor any of its Subsidiaries has been a
United States real property holding corporation within the meaning
of Code Section 897(c)(2) during the applicable period specified in
Code Section 897(c)(1)(A)(ii).
-14-
(vii) Neither Xxxxxxx nor any of its Subsidiaries is a party
to any Tax allocation or sharing agreement.
(viii) Neither Xxxxxxx nor any Subsidiary is a party to any
agreement, contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in the payment of any
"excess parachute payments" within the meaning of Code Sec. 280G, or
any other payment of compensation which would be nondeductible under
Code Sec. 162.
(ix) Except as set forth in the Disclosure Schedule, Xxxxxxx
and each of its Subsidiaries has collected and/or paid all sales and
use tax due with respect to all prior periods, and there exists no
potential liability for unpaid sales or use tax assessments with
respect to events or transactions occurring before such date which
has not been reserved against on the books and records of Xxxxxxx
and its Subsidiaries.
(x) Xxxxxxx has delivered to the Buyer true and correct copies
of all requested Federal and state income tax returns with respect
to Xxxxxxx and each of its Subsidiaries, together with true and
correct copies of all requested accountants' work papers relating to
the preparation thereof.
(i) Real Property.
(i) The Disclosure Schedule sets forth all of the real
property owned in fee simple (the "Fee Property") by Xxxxxxx, each
lease by Xxxxxxx as landlord of any of the Fee Property, each lease
by Xxxxxxx of real property as tenant, and each sublease in which
Xxxxxxx is either sublessor or sublessee (collectively the
"Leasehold Property"). No Subsidiary owns, leases or subleases any
real property.
(ii) Xxxxxxx has good title to the Fee Property, free and
clear of all easements, restrictions, mortgages, pledges, liens,
encumbrances or security interests, except (A) liens which may arise
for current taxes and assessments not yet due and payable or which
are being contested in good faith and in respect of which adequate
reserves have been established, (B) imperfections in title,
encumbrances, easements, restrictions and other liens, claims and
encumbrances which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit and which
do not materially interfere with the present use of the properties
subject thereto or affected thereby, and (C) all matters which are
disclosed (whether or not ultimately deleted or insured over) in the
commitments for title insurance and surveys listed in the Disclosure
Schedule, copies of which have been delivered to Buyer
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(the matters in clauses (A), (B) and (C), collectively, the
"Permitted Exceptions").
(iii) Xxxxxxx has not within the twelve month period preceding
the date hereof received written notice from any governmental
authority that such governmental authority has initiated or intends
to initiate changes in the zoning ordinances or building codes
applicable to the facilities identified in the Disclosure Schedule
as principal manufacturing facilities under the captions "Fee
Property" or "Leasehold Property -- Xxxxxxx Milling Company as
Tenant", which changes would materially interfere with the present
use of such facilities.
(iv) Xxxxxxx has not received written notice from any
governmental authority requiring work to be done or improvements to
be made by Xxxxxxx to the Fee Property and the Leasehold Property,
which work has not been completed.
(v) Except as set forth on the Disclosure Schedule, all leases
of Fee Property and Leasehold Property are in full force and effect.
(vi) Neither Xxxxxxx nor, to the knowledge of Xxxxxxx, any
other party thereto is in default under or in respect of any lease
of Leasehold Property, the result of which default could,
individually or in the aggregate together with all other such
defaults, materially interfere with the present use of the
properties subject thereto or affected thereby. Xxxxxxx has not
exercised any purchase option under a lease of any of the Leasehold
Property or any option to renew any such lease for a term beyond the
current term of said lease.
(j) Personal Property. Xxxxxxx and each Subsidiary owns or holds by
valid lease or license, all of its respective personal property reflected in the
Balance Sheet or acquired after December 31, 1996 (except for any assets sold in
accordance with Section 4.01 (d)(iii)), free and clear of all mortgages, claims,
liens, security interests, charges and encumbrances.
(k) Material Contracts. Except as set forth in the Disclosure
Schedule, neither Xxxxxxx nor any of its Subsidiaries is a party to or bound by
any of the following, either written or oral:
(i) contract with any labor union or any collective bargaining
agreement;
-16-
(ii) bonus, pension, profit sharing, retirement, deferred
compensation, savings, stock purchase, stock option,
hospitalization, medical, dental, vision, vacation, sick pay,
disability, severance, insurance or other plan providing similar
employee benefits or compensation;
(iii) employment, agency, consulting or similar personal
service contract;
(iv) agreement (including brokerage, correspondent, sales
representative or distributorship agreement) for the payment of
fees, commissions, or other compensation by Xxxxxxx or any of its
Subsidiaries in connection with the distribution or sale of
products;
(v) lease, whether as lessor or lessee, with respect to any
Fee Property, Leasehold Property or personal property (excluding any
lease of personal property as lessee providing for annual rentals
of $10,000 or less);
(vi) contract as licensor or licensee for the license of any
patent, know-how, trademark, trade name, service xxxx, copyright or
other intangible asset;
(vii) guaranty, suretyship, indemnification or contribution
agreement;
(viii) loan agreement, promissory note or other document
evidencing any indebtedness of or to Xxxxxxx or any of its
Subsidiaries (other than any feeder financing or dealer operating
loan in the ordinary course of business which is not in excess of
$20,000, trade accounts payable or receivable and other indebtedness
incurred in the ordinary course and not for money borrowed);
(ix) mortgage, security agreement, sale-leaseback agreement or
other agreement which effectively creates (or could, in the future,
create) a lien on any assets of Xxxxxxx or any of its Subsidiaries;
(x) contract for the purchase of capital assets or for
remodeling or construction which involves payment of $50,000 or
more;
(xi) contract for advertising or promotional services to be
rendered for Xxxxxxx or any of its Subsidiaries which involves
payment of $50,000 or more;
(xii) contract concerning confidentiality or restricting
Xxxxxxx or any of its Subsidiaries in any material respect from
engaging in business or from competing with any other parties or
providing that Xxxxxxx or any of its Subsidiaries shall be
restricted in any way from selling, marketing or distributing any
product or other merchandise;
-17-
(xiii) purchase or sale order for merchandise or supplies
which (A) was not entered into in the ordinary course of business,
involves payments of $50,000 or more and is not terminable by
Xxxxxxx or any of its Subsidiaries without cost or penalty upon
thirty (30) days' or less notice, or (B) is a standing or similar
order with a remaining term of more than one (1) year and is not
terminable by Xxxxxxx or any of its Subsidiaries without cost or
penalty upon (30) days' or less notice;
(xiv) plan of reorganization;
(xv) contract involving the acquisition or disposition of
$50,000 or more in assets, other than contracts involving the sale
of inventory in the ordinary course of business;
(xvi) partnership, limited liability company or joint venture
agreement;
(xvii) contract or commitment to loan money to any person
(other than any feeder financing or dealer operating loan in the
ordinary course of business which is not in excess of $20,000), to
guarantee indebtedness of any person, or to make an equity
investment in any person;
(xviii) contract under which the consequences of a default or
termination could have a material adverse effect on the financial
condition, results of operations, assets, business or prospects of
Xxxxxxx or any of its Subsidiaries;
(xix) any agreement which includes provisions regarding
minimum volumes or volume discounts with respect to the sale of any
product of Xxxxxxx;
(xx) any agreement with persons other than employees pursuant
to which a rebate, discount, bonus, commission or other payment with
respect to the sale of any product of Xxxxxxx will be payable or
required after the Closing;
(xxi) any contract or arrangement with any affiliate of
Xxxxxxx; or
(xxii) any other contract (excluding purchase and sale orders
not required by the terms of the foregoing clauses (xiii) or (xv) to
be set forth in the Disclosure Schedule) not otherwise set forth in
the Disclosure Schedule which involves payments of $50,000 or more a
year and is not terminable by Xxxxxxx or any of its Subsidiaries
without cost or penalty upon thirty (30) days' or less notice.
-18-
All of the foregoing are hereinafter collectively called "Material
Contracts." To the extent Material Contracts are evidenced by documents,
true and correct copies thereof have been delivered or made available to
the Buyer unless otherwise noted in the Disclosure Schedule and, if oral,
are summarized in the Disclosure Schedule.
Except as set forth on the Disclosure Schedule:
(w) all Material Contracts are in full force and effect and
are valid, binding and enforceable in accordance with their terms;
(x) Xxxxxxx is not and, to the knowledge of Xxxxxxx, no other
party to any Material Contract is, in breach of any material
provision of, in material violation of, or in material default under
the terms of any Material Contract;
(y) no event has occurred which, after the giving of notice or
passage of time or both, would constitute a material default under
or result in the material breach of any Material Contract by
Xxxxxxx, or to the knowledge of Xxxxxxx, by any other party; and
(z) Xxxxxxx has not given or received any notice of
termination under the joint venture agreements listed in the
Disclosure Schedule under the caption "Other Ownership Interests of
Xxxxxxx", nor has Xxxxxxx exercised any option to purchase contained
in any such joint venture agreement.
(1) Intellectual Property. The Disclosure Schedule contains a
complete and correct list of all patents, registered trademarks, registered
trade names, and applications for any of the foregoing owned or used to any
material extent by Xxxxxxx and its Subsidiaries ("Proprietary Rights"). All of
the Proprietary Rights are owned by Xxxxxxx, free and clear of any liens,
charges, pledges, security interests or other similar encumbrances, are
enforceable, valid and subsisting, constitute all Proprietary Rights used for
the operation of Xxxxxxx'x business in the ordinary course, and, to the
knowledge of Xxxxxxx, do not conflict with or infringe on the rights of others.
Except as set forth in the Disclosure Schedule, Xxxxxxx has not granted any
licenses or other rights and Xxxxxxx does not have any obligation to grant
licenses or other rights to any of the Proprietary Rights. Except as set forth
in the Disclosure Schedule, since January 1, 1992, neither Xxxxxxx nor any
Subsidiary has received any charge, complaint, claim, demand, or notice alleging
that Xxxxxxx or any Subsidiary has interfered, infringed upon, misappropriated
or otherwise come into conflict with the intellectual property rights of any
third party (including any claim that Xxxxxxx or any Subsidiary must license or
refrain from using any intellectual property rights of any third party) and, to
the knowledge of Xxxxxxx, in connection with the operation of Xxxxxxx'x
business, there are no current or past conditions upon which such charges or
claims reasonably could be based. To the knowledge of Xxxxxxx, no third party
has interfered with, infringed upon, misappropriated, or otherwise come into
conflict with the Proprietary Rights. Except as set forth in the Disclosure
Schedule,
-19-
as of the date of this Agreement Xxxxxxx does not use any unregistered trademark
for any product which generated more than $100,000 in gross sales during the
twelve-month period ended December 31, 1996.
(m) Litigation. Except as disclosed in the Disclosure Schedule, no
litigation, arbitration, or administrative proceeding or investigation is
pending or, to the knowledge of Xxxxxxx, threatened against Xxxxxxx or any
Subsidiary or any of their officers, employees or directors in connection with
(i) the business or affairs of Xxxxxxx or such Subsidiary and (ii) the
transactions contemplated by this Agreement. Except as set forth on the
Disclosure Schedule, Xxxxxxx is not currently, and has not been since 1990,
subject to any judgment (other than a monetary judgment heretofore discharged),
consent decree, binding arbitration or regulatory order not generally applicable
to similar businesses.
(n) Permits, Licenses, Authorizations; Compliance with Laws. Xxxxxxx
and each Subsidiary has all licenses, franchises, permits and other governmental
authorizations which are material and necessary to conduct its respective
business, and neither Xxxxxxx nor such Subsidiary is in violation in any
material respect of any such license, franchise, permit or other governmental
authorization, or any statute, law, ordinance, rule, regulation, judgment, order
or decree applicable to it or any of its properties.
(o) No Brokers or Finders. Except for Credit Suisse First Boston
("CSFB"), Xxxxxxx has not engaged any investment banker, broker or finder in
connection with the transactions contemplated hereby.
(p) Retirement and Benefit Plans.
(i) The Disclosure Schedule lists each employee pension,
retirement, profit sharing, stock bonus, stock option, stock
purchase, bonus, incentive, deferred compensation, hospitalization,
medical, dental, vision, vacation, insurance, sick pay, disability,
severance, or other plans, funds, programs, policies, contracts or
arrangements, including without limitation any Employee Benefit Plan
(as hereinafter defined), that Xxxxxxx or any ERISA Affiliate
maintains or to which Xxxxxxx or any ERISA Affiliate contributes or
in which any current or former employee of Xxxxxxx or any ERISA
Affiliate has accrued any benefits which they remain entitled to
receive.
(A) Each such Employee Benefit Plan (and each related
trust, insurance contract, or fund) complies in form and in
operation in all material respects with the applicable
requirements of ERISA (as hereinafter defined), the Code, and
other applicable laws.
(B) All required reports and descriptions (including
Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's,
and Summary Plan
-20-
Descriptions) have been timely filed or distributed
appropriately with respect to each such Employee Benefit Plan.
The requirements of Part 6 of Subtitle B of Title I of ERISA
and of Section 4980B of the Code have been met with respect to
each Employee Welfare Benefit Plan (as hereinafter defined).
(C) All contributions which are due have been paid to
each Employee Pension Benefit Plan (as hereinafter defined)
and all contributions for any period ending on or before the
Closing Date which are not yet due will have been paid to each
such Employee Pension Benefit Plan or accrued in accordance
with the past custom and practice of Xxxxxxx or any of its
Subsidiaries. All premiums or other payments for all periods
ending on or before the Closing Date have been paid with
respect to each Employee Welfare Benefit Plan.
(D) Each Employee Pension Benefit Plan which is intended
to be a "qualified plan" under Section 401(a) of the Code has
received, within the last two years, a favorable determination
letter from the Internal Revenue Service covering, without
limitation, the qualification requirements imposed under the
Tax Reform Act of 1986.
(E) Except as set forth in the Disclosure Schedule, the
market value of assets under each Employee Pension Benefit
Plan which is subject to Title IV of ERISA equals or exceeds
the present value of all vested and nonvested liabilities
thereunder determined in accordance with PBGC (as hereinafter
defined) methods, factors and assumptions applicable to an
Employee Pension Benefit Plan terminating on the Closing Date.
(F) Xxxxxxx has delivered or otherwise made available to
Buyer correct and complete copies of each and every Employee
Benefit Plan document and summary plan description, the most
recent determination letter received from the Internal Revenue
Service, if any, the three most recent IRS Form 5500 Annual
Reports and actuarial valuation reports, if any, and all
related trust agreements, insurance contracts and other
funding agreements which implement each such Employee Benefit
Plan.
(ii) Except as set forth in the Disclosure Schedule, with
respect to each Employee Benefit Plan that Xxxxxxx, each Subsidiary,
and/or an ERISA Affiliate (as hereinafter defined) maintains or ever
has maintained or to which any of them contributes, ever has
contributed, or ever has been required to contribute:
(A) No Employee Pension Benefit Plan has been completely
or partially terminated or been the subject of a Reportable
Event (as hereinafter
-21-
defined) as to which notices would be required to be filed
with the PBGC, except that consummation of the Merger may be a
Reportable Event under PBGC Regulation Section 4043.29. No
proceeding by the PBGC to terminate any such Employee Pension
Benefit Plan has been instituted or, to the knowledge of the
Shareholder, Xxxxxxx and its ERISA Affiliates, threatened.
(B) There has been no Prohibited Transaction (as
hereinafter defined) with respect to any Employee Benefit
Plan. Neither Xxxxxxx nor any ERISA Affiliate has any
liability for breach of fiduciary duty or any other failure to
act or comply in connection with any Employee Benefit Plan. No
action, suit, proceeding, hearing, or investigation with
respect to any Employee Benefit Plan (other than routine
claims for benefits) is pending or, to the knowledge of
Xxxxxxx and its ERISA Affiliates, threatened.
(C) Neither Xxxxxxx nor any of its ERISA Affiliates has
incurred or has any reason to believe that Xxxxxxx or any of
its ERISA Affiliates will incur, any liability to the PBGC
(other than PBGC premium payments) or otherwise (including any
withdrawal liability) under Title IV of ERISA or under the
Code with respect to any Employee Pension Benefit Plan.
(D) Each Employee Pension Benefit Plan of Xxxxxxx and
its ERISA Affiliates has fulfilled the obligations under the
minimum funding standards of ERISA and the Code.
(E) None of Xxxxxxx, its Subsidiaries or any ERISA
Affiliate has entered into any transaction which could subject
such entity to liability under ERISA other than for the
ordinary course payment of benefits under an Employee Benefit
Plan
(F) Except as set forth in the Disclosure Schedule, none
of Xxxxxxx, its Subsidiaries or any ERISA Affiliate maintains
any plan, arrangement or program which provides severance
benefits to current or former employees of Xxxxxxx or its
Subsidiaries and neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby will result in any liability for the
payment of severance benefits (other than liability resulting
from an actual termination of employment).
(G) Except as set forth in the Disclosure Schedule
neither the execution and delivery of this Agreement nor the
consummation of the
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transactions contemplated hereby constitutes a change in
control or has or will accelerate the vesting in or payment of
benefits under any Employee Benefit Plan, and none of Xxxxxxx,
its Subsidiaries or any ERISA Affiliate is a party to any
plan, program, arrangement or understanding that would result,
separately or in the aggregate, in the payment (whether in
connection with any termination of employment or otherwise) of
any "excess parachute payment" within the meaning of Section
280G of the Code with respect to a current or former employee
of Xxxxxxx or its Subsidiaries.
(H) Except as set forth in Section 6.02 or in the
Disclosure Schedule under the caption "Retirement and Benefit
Plans--Right to Amend", each Employee Benefit Plan may be
amended, modified or terminated subject to compliance with
applicable law and provided that such amendment, modification
or termination does not impair earned, accrued or vested
rights under such plan. Except as set forth in the Disclosure
Schedule, no rights to continued benefits provided under any
Employee Welfare Benefit Plan, including without limitation,
retiree medical, dental or life insurance benefits, have
vested.
(iii) Except as set forth in the Disclosure Schedule, neither
Xxxxxxx nor any ERISA Affiliate contributes to any Multiemployer
Plan or has any liability (including withdrawal liability) under any
Multiemployer Plan.
(iv) Except as set forth in the Disclosure Schedule, neither
Xxxxxxx nor any of its Subsidiaries maintains and has never
maintained or contributed, or ever has been required to contribute
to any Employee Welfare Benefit Plan providing medical, health or
life insurance or other welfare-type benefits for current or future
retired or terminated employees, their spouses or their dependents
(other than in accordance with Section 4980B of the Code). The
requirements of Section 4980B of the Code and Sections 601 through
608 of ERISA have been met for each Employee Welfare Benefit Plan
that is a group health plan. No such group health plan is a
"multiple employer welfare arrangement" within the meaning of
Section 3(40) of ERISA. None of Xxxxxxx, its Subsidiaries nor any
ERISA Affiliate maintains or has any obligation to contribute to any
"voluntary employees' beneficiary association" within the meaning of
Section 501(c)(9) of the Code for the provision of welfare benefits.
(v) For purposes of this Section 3.01(p):
(A) "Fiduciary" has the meaning set forth in ERISA Sec.
3(21).
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(B) "ERISA Affiliate" means any entity required to be
aggregated with Xxxxxxx, Armour and/or their respective
subsidiaries, trades or businesses under Sections 414(b), (c),
(m) or (o) of the Code or Section 4001 of ERISA.
(C) "Employee Benefit Plan" has the meaning set forth in
ERISA Sec. 3(3), including any such plan contributed to or
required to be contributed to by Xxxxxxx, each Subsidiary
and/or each ERISA Affiliate.
(D) "Employee Pension Benefit Plan" has the meaning set
forth in ERISA Sec. 3(2), including any such plan contributed
to or required to be contributed to by Xxxxxxx, each
Subsidiary and/or each ERISA Affiliate.
(E) "Employee Welfare Benefit Plan" has the meaning set
forth in ERISA Sec. 3(1), including any such plan contributed
to or required to be contributed to by Xxxxxxx, each
Subsidiary and/or each ERISA Affiliate.
(F) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
(G) "Multiemployer Plan" has the meaning set forth in
ERISA Sec. 3(37).
(H) "PBGC" means the Pension Benefit Guaranty
Corporation.
(I) "Prohibited Transaction" has the meaning set forth
in ERISA Sec. 406 and Code Sec. 4975.
(J) "Reportable Event" has the meaning set forth in
ERISA Sec. 4043.
(q) Environmental matters.
(i) For purposes of this Agreement,
(A) "Environmental Law" means the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. ss. 1201 et seq., the Clean
Water Act, 33 U.S.C. ss. 1321 et seq., the Clean Air Act, 42
U.S.C. ss. 7401 et seq., the Safe Drinking Water Act, the
Toxic Substance Control Act, the Emergency Planning and
Community Right-to-Know Act of 1986, the Hazardous Material
Transportation
-24-
Agreement, and the Occupational Safety and Health Act of 1976,
each as amended through the Closing Date, together with all
other laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments
(and all agencies thereof) concerning pollution or protection
of the environment, public health and safety, or employee
health and safety, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic
materials (including petroleum products and asbestos) or
wastes into ambient air, surface water, ground water, or lands
or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
(B) "Hazardous Substance" means any pollutant,
contaminant, hazardous substance or waste, solid waste,
petroleum or any fraction thereof, or any other chemical,
substance or material listed or identified in or regulated by
any Environmental Law.
(ii) Except as set forth in the Disclosure Schedule and the
environmental assessments performed since January 1, 1987 by it, at
its request or by any governmental agency with respect to the
current property, each of which is listed therein:
(A) Xxxxxxx and each Subsidiary comply, and have at all
times since January 1, 1992 complied, in all material respects
with all Environmental Laws applicable to the ownership and
operations of their respective assets and the conduct of their
respective businesses, and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand or
notice has been filed or commenced against any of them and is
now pending or, to the knowledge of Xxxxxxx, threatened,
alleging any such failure to comply;
(B) Xxxxxxx and each Subsidiary possess (or have timely
filed applications pending for) all material licenses and
permits required by all Environmental Laws applicable to the
ownership and operations of their respective assets and the
conduct of their respective businesses, and Xxxxxxx and each
Subsidiary comply in all material respects with the terms and
conditions of such licenses and permits;
(C) Xxxxxxx has not spilled, discharged, emitted,
injected, disposed of, dumped or released any Hazardous
Substances and, to the
-25-
knowledge of Xxxxxxx, there has been no spill, discharge, leak,
emission, injection, disposal, escape, dumping or release of any
Hazardous Substance by any other person, or any leaching or
migration of any Hazardous Substance of any kind, on, beneath, above
or into the environment from, onto, into or surrounding any of the
Fee Property or Leasehold Property (collectively, the "Current
Property"), or any of the real property formerly owned or leased by
Xxxxxxx or any of the Subsidiaries (collectively, the "Former
Property");
(D) No underground storage tanks are located on the Current
Property which contain or, to the knowledge of Xxxxxxx, heretofore
contained any Hazardous Substances;
(E) Xxxxxxx has delivered to Buyer true and complete copies of
all environmental assessments performed since January 1, 1987 by it,
at its request or by any governmental agency with respect to the
Current Property each of which is listed on the Disclosure Schedule;
(F) Since January 1, 1987, Xxxxxxx has not filed or received
any written notice of a release or threatened release of a Hazardous
Substance or been notified that it may be a potentially responsible
party at any waste disposal site or other location used for the
disposal of any Hazardous Substance, or any Former Property;
(G) Except as permitted by and in compliance with applicable
Environmental Laws, no Hazardous Substances, including, without
limitation, asbestos-containing materials and polychlorinated
biphenyls, are currently located at, on or within the Current
Property in such form or substance so as to create any material
liability on the part of Xxxxxxx; and
(H) To the knowledge of Xxxxxxx, no contaminated soil or
groundwater for which applicable Environmental Laws require a
response action or corrective action is located on or under the
Current Property or any Former Property or any real property
adjacent to such property.
(r) Suppliers and Customers. The Disclosure Schedule lists (i)
Xxxxxxx'x ten largest suppliers, and (ii) for each of the Feed Division and Pet
Food Division the ten largest customers, in each case by volume shipped for the
eight months ending December 31, 1996 together with the approximate dollar
volume by supplier and customer, as the case may be, and a general description
of the goods or services provided, and describes any substantial
-26-
change in the identity of, or the nature of the business conducted with, such
suppliers that has occurred since such date.
(s) Insurance. The Disclosure Schedule contains a complete and
correct list and summary description (including the name of the insurer,
coverage and expiration date) of all policies of insurance relating to Xxxxxxx'x
business which are in force, or which are still open for retroactive premium
adjustments, including the amounts thereof, maintained by Xxxxxxx or in which
Xxxxxxx is named insured or on which Xxxxxxx is directly or indirectly paying
premiums. Xxxxxxx has maintained and will continue to maintain through the
Closing Date a reasonable and customary program of casualty and property
insurance (which may include self-insurance) with respect to its business. The
Disclosure Schedule lists all property damage and personal injury claims against
Xxxxxxx with respect to its business since 1990 involving any claim in excess of
$50,000. Between the date of this Agreement and the Closing Date, Xxxxxxx shall
provide or make available to Buyer all information pertaining to its business as
reasonably requested by Buyer or Buyer's brokers or insurers to effect insurance
on Xxxxxxx'x business at the Closing Date.
(t) Motor Vehicles. All licensed motor vehicles used in Xxxxxxx'x
business, whether owned or leased, are listed on the Disclosure Schedule. All
licenses, permits, inspections and other authorizations necessary for the use of
such vehicles have been obtained and are in full force and effect.
(u) Adequacy of Xxxxxxx'x Assets/Related Party Transactions. Except
as described on the Disclosure Schedule:
(i) The assets owned, leased or licensed by Xxxxxxx and its
Subsidiaries are all of the assets, properties, rights and claims
used in the conduct of Xxxxxxx'x business and which are necessary or
used to operate Xxxxxxx'x business in the same manner as it is
currently being operated by Xxxxxxx and its Subsidiaries; and
(ii) There are no contracts or arrangements currently in
effect between Xxxxxxx and any of its officers, directors,
shareholders and their immediate families (excluding (A) the
employment arrangements with persons in the employ of Xxxxxxx, (B)
director fee arrangements with directors of Xxxxxxx who are neither
employed by, nor serve as counsel to Xxxxxxx, (C) officer and
director indemnification obligations under Xxxxxxx'x by-laws, and;
(D) agreements with certain employees holding shares of Xxxxxxx
Class B Common Stock obligating Xxxxxxx to repurchase shares held by
such employees upon termination of employment) in an amount,
individually or in the aggregate, greater than $100,000.
-27-
(v) Notes and Accounts Receivable. Except as set forth on the
Disclosure Schedule, all notes and accounts receivable of Xxxxxxx and its
Subsidiaries (a) are reflected properly on Xxxxxxx'x books and records, (b) are
valid receivables subject to no setoff or counterclaims, and (c) arose in the
ordinary course of business.
(w) Pet Food Packaging and Finished Goods Inventory. Xxxxxxx has
established and implemented procedures for monitoring the level of excess or
obsolete pet food packaging and finished goods inventory. Pursuant to such
procedures, Xxxxxxx periodically writes off such pet food packaging and finished
goods inventory as Xxxxxxx, in the exercise of its reasonable business judgment,
deems excess or obsolete. At the date hereof, the quantity of excess or obsolete
pet food packaging and finished goods inventory do not exceed historical levels
as set forth in the Disclosure Schedule.
(x) Labor Matters. Xxxxxxx (i) is in compliance in all material
respects with all laws, rules, regulations, ordinances, employment contracts,
and collective bargaining agreements respecting employment and employment
practices, terms and conditions of employment and wages and hours, (ii) is not
liable for any arrears of wages or penalties for failure to comply with any of
the foregoing, (iii) has not engaged in any unfair labor practice, breach of
contract, or discriminated on the basis of race, color religion, sex, national
origin, age or handicap in its employment practices, and except as set forth in
the Disclosure Schedule, no lawsuits, charges or complaints are pending or, to
the knowledge of Xxxxxxx, threatened against Xxxxxxx before any court, public or
governmental authority regarding any such unfair labor practice, breach of
contract or discrimination; (iv) except as set forth in the Disclosure Schedule,
has no grievance or arbitration regarding a dispute arising under a collective
bargaining agreement with any labor organization representing Xxxxxxx'x
employees pending or threatened against Xxxxxxx; and (v) has not, in the
ten-year period next preceding the date of this Agreement, experienced a labor
strike or a threatened labor strike. Except as set forth in the Disclosure
Schedule, no employees of Xxxxxxx are represented by any union, association,
labor organization or collective bargaining unit and, since January 1990,
Xxxxxxx has not received written notice that the employees of Xxxxxxx have any
intention to organize or join a union, association, labor organization or
collective bargaining unit. Without limiting the generality of the foregoing,
the restructuring by Xxxxxxx of its Feed Division in the fiscal year ended April
30, 1996 and the fiscal year ending April 30, 1997 did not result in any
violation of the Worker Adjustment Retraining Notification Act (WARN).
(y) Full Disclosure. No representation or warranty contained in this
Agreement or in the Disclosure Schedule omits to state a material fact necessary
to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
3.02 Representations and Warranties of Buyer and Buyer Subsidiary.
Buyer and Buyer Subsidiary represent and warrant to Xxxxxxx as follows:
-28-
(a) Organization, Standing, Equity Ownership. Each of Buyer and
Buyer Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its state of incorporation. Buyer owns all of
the issued and outstanding capital stock of Buyer Subsidiary. Buyer Subsidiary
does not own capital stock of any corporation. Buyer has delivered to Xxxxxxx a
certified copy of the respective articles or certificate or articles of
incorporation and by-laws of Buyer and Buyer Subsidiary. Each such copy is
complete and correct as of the date hereof.
(b) Authorization and Execution. Each of Buyer and Buyer Subsidiary
has the corporate power and authority to execute and deliver this Agreement and
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by each of Buyer and Buyer Subsidiary have been
duly and effectively authorized by the respective Boards of Directors and
shareholders of Buyer and Buyer Subsidiary, and no further corporate action is
necessary on the part of Buyer or Buyer Subsidiary to consummate the
transactions contemplated hereby. This Agreement constitutes a legal, valid and
binding obligation of each of Buyer and Buyer Subsidiary, enforceable against
each of them in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally, and subject, as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a court of law or equity).
(c) No Conflicts. Neither the execution and delivery of this
Agreement by Buyer and Buyer Subsidiary, nor the consummation of the
transactions contemplated hereby, will (i) conflict with or result in a breach
of the Articles of Incorporation or By-Laws, as currently in effect, of Buyer or
Buyer Subsidiary, or, (ii) except for the requirements under the
Xxxx-Xxxxx-Xxxxxx Act, require the consent or approval of any governmental
authority having jurisdiction over any of the business or assets of Buyer or
Buyer Subsidiary, or (iii) violate any statute, regulation, injunction, judgment
or order to which Buyer or Buyer Subsidiary is subject, or (iv) result in a
breach of, or constitute a default or an event which, with the passage of time
or the giving of notice, or both, would constitute a default, give rise to a
right of termination, cancellation or acceleration, create any entitlement to
any payment or benefit, require the consent of any third party or result in the
creation of any lien on the assets of Buyer or Buyer Subsidiary under any
material instrument, contract or agreement to which any of Buyer or Buyer
Subsidiary is a party or by which any of them is bound.
(d) Adequate Financing. Buyer has provided to Xxxxxxx copies of the
following commitment letters for the financing contemplated by Buyer to finance
the transactions contemplated by this Agreement: commitment letter of The Chase
Manhattan Bank, Chase Securities, Inc. and Credit Suisse First Boston dated
March 21, 1997 for bridge and subordinated debt financing (insofar as such
commitment letter provides for bridge financing, the "Chase Bridge Financing
Commitment"); and commitment letter of Credit Suisse First Boston and The Chase
Manhattan Bank dated March 21, 1997 for senior debt
-29-
financing (the "CSFB Senior Debt Financing Commitment"). Each such financing
commitment is in full force and effect at the date hereof and Buyer is not aware
of any fact or circumstance which could reasonably be expected to prevent Buyer
from consummating the transactions contemplated by this Agreement (including
receipt by Buyer of the financing). Buyer hereby covenants and agrees to deliver
to Xxxxxxx on March 31, 1997, and each 14 days thereafter until Closing, written
confirmations from The Chase Manhattan Bank and Credit Suisse First Boston that
their respective commitments remain in full force and effect.
(e) No Brokers or Finders. Neither Buyer nor Buyer Subsidiary has
engaged any investment banker, broker or finder in connection with the
transactions contemplated hereby.
ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR TO THE EFFECTIVE TIME
4.01 Operation of Business of Xxxxxxx Until Effective Time.
(a) Xxxxxxx will exercise commercially reasonable efforts to
preserve intact its business organization and that of its Subsidiaries, keep
available the services of the present officers and key employees of Xxxxxxx and
its Subsidiaries, and preserve the present relationships of Xxxxxxx and its
Subsidiaries with entities and persons having significant business dealings with
Xxxxxxx or any Subsidiary.
(b) Xxxxxxx will, and will cause each Subsidiary to conduct its
business and operations only in the ordinary and usual course, except as
expressly provided in this Agreement or otherwise consented to in writing by
Buyer.
(c) Except as expressly provided in this Agreement, the Plan of
Merger or otherwise consented to in writing by Buyer, Xxxxxxx will not (i) amend
its Articles of Incorporation or By-Laws; (ii) increase or decrease the number
of authorized shares of its capital stock; (iii) split, combine or reclassify
any shares of its capital stock or make any other changes in its equity capital
structure; (iv) purchase, redeem or cancel for value, directly or indirectly,
any shares of its capital stock; or (v) declare, set aside or pay any dividend
or other distribution or payment in cash, stock or property in respect of shares
of its capital stock, except for (A) Xxxxxxx 5% Preferred Stock quarterly
dividends of $0.625 per share per quarter, and (B) Xxxxxxx Class A Common Stock
and Xxxxxxx Class B Common Stock quarterly dividends not to exceed $0.04 per
share per quarter.
(d) Xxxxxxx will not, and will not permit any Subsidiary to, except
as otherwise consented to in writing by Buyer, (i) issue, grant, sell or pledge,
or agree or propose to issue, grant, sell or pledge, any shares of capital stock
of Xxxxxxx or any Subsidiary or any
-30-
options, rights or warrants to purchase any such capital stock or any securities
convertible into or exchangeable for such capital stock, or any stock
appreciation rights or performance shares based upon the value of any such
capital stock; (ii) purchase, lease or otherwise acquire (including without
limitation acquisition by merger, consolidation or stock or asset purchase) any
assets or properties, other than capital assets of substantially the nature
described in Xxxxxxx'x most recent capital improvements budget delivered to
Buyer, commitments for which (including the cost of capital assets acquired
between December 31, 1996 and the date of this Agreement) do not exceed $500,000
in the aggregate, inventory acquired in the ordinary course of business,
additional equity interests in D&D Partners XX XX not to exceed $300,000 in the
aggregate, and additional equity interests in other customers of the Feed
Division not to exceed $250,000 in the aggregate; (iii) sell, lease, encumber,
mortgage or otherwise dispose of any assets or properties which are material to
Xxxxxxx or any of its Subsidiaries, other than (A) sales of inventory and
obsolete equipment in the ordinary course of business, (B) sales of facilities
at which Xxxxxxx has discontinued operations prior to the date hereof and which
are sold other than as a going concern, (C) the sale of the Beechjet 400A
aircraft on contract terms (other than price) reasonably acceptable to Buyer,
(D) the sale of the "Country Pub" restaurant on contract terms (other than
price) reasonably acceptable to Buyer, and (E) the sale at cash surrender value
or surrender of the life insurance policies held by Xxxxxxx on the lives of
Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx; (iv) waive, release, grant or transfer
any rights of value or modify or change in any Material Contract, other than in
the ordinary course of business and in a manner that does not have a material
adverse effect on the business, operations, properties or financial condition,
of Xxxxxxx and its Subsidiaries, taken as a whole; (v) incur any indebtedness
for money borrowed; (vi) incur any other liability or obligation, other than in
the ordinary course of business, or assume, guarantee, endorse (other than
endorsements of checks in the ordinary course of business) or otherwise as an
accommodation become responsible for the obligations of, or make any loans to
any other individual or entity other than in the ordinary course of business,
except for any feeder financing or dealer operating loan not in excess of
$20,000 per loan, loans to Vista Farms not to exceed $1,000,000 in the aggregate
and loans and financial accommodations to other customers of the Feed Division
not to exceed $20,000 per loan or financial accommodation; (vii) except as
otherwise required or permitted by this Agreement, enter into any new employee
benefit plan, program or arrangement, or any new employment, severance or
consulting agreement, amend any existing employee benefit plan, program or
arrangement, or any existing employment, severance or consulting agreement, or,
other than in the ordinary course of business, grant any increases in
compensation or benefits; (viii) adopt any new or amend any existing collective
bargaining agreement except in the ordinary course of business; (ix) enter into
any other transaction, other than in the ordinary course of business and
consistent with past practices; (x) make any tax election or settle or
compromise any material federal, state, local or foreign income tax liability;
(xi) fail to replace any of Xxxxxxx'x assets that are destroyed or become
inoperable as a result of any casualty, loss or damage and are required for the
continued operation of the business; (xii) permit any physical assets to be
removed from the Fee Property and Leasehold Property except in the ordinary
course of business; (xiii) fail to maintain the validity and enforceability of
the Proprietary Rights;
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(xiv) engage in the sale of Xxxxxxx'x products except in the ordinary course of
its business; (xv) make any changes in the customary methods used in operating
Xxxxxxx'x business (including its marketing, selling and pricing practices and
policies); (xvi) make any change in list pricing except in the ordinary course
of business; or (xvii) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing; provided, however, that
nothing contained in this Section 4.01 shall prohibit Xxxxxxx from contributing
to a museum, historical society or lineal descendant of Xxxx Xxxxxx Xxxxxx any
historical records, works of art depicting family members or other items of
personal property which may be of historical or family interest but are not
material to the conduct of the business.
4.02 Shareholders' Meeting; Proxy Material. Xxxxxxx shall cause a
special meeting of its shareholders to be duly called and held as soon as
reasonably practicable after the execution of this Agreement for the purpose of
(i) voting on an amendment to the Articles of Incorporation of Xxxxxxx in the
form of Exhibit C providing that Xxxxxxx shall not be subject to Section
302A.671 of the MBCA governing control share acquisitions, and (ii) voting on
the approval of the Plan of Merger (such matters hereinafter called the "Agenda
Items"). Xxxxxxx shall use reasonable efforts to solicit proxies in connection
with the meeting of shareholders called pursuant to this Section 4.02 and,
except to the extent otherwise required by the fiduciary obligations of the
Board of Directors under applicable law, Xxxxxxx shall solicit such proxies in
favor of the Agenda Items. The Board of Directors of Xxxxxxx shall, except to
the extent otherwise required by their fiduciary obligations under applicable
law, recommend approval of the Plan of Merger by the shareholders of Xxxxxxx.
None of the information included in any statement furnished to the shareholders
of Xxxxxxx in connection with the solicitation of proxies at the meeting of
shareholders referred to above (the "Statement") (excluding information
furnished by Buyer or its representatives about Buyer and its affiliates
expressly for inclusion therein) will, at the time the Statement is mailed, be
false or misleading with respect to any material fact, or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or, at the time of the meeting of shareholders to which
the Statement relates or at the Effective Time, as then amended or supplemented,
necessary to correct any statement that has become false or misleading in any
earlier communication with respect to the solicitation of any proxy for such
meeting.
4.03 No Shopping.
(a) From the date hereof until the Effective Time, Xxxxxxx will not,
and will not permit any officer, director or other agent of Xxxxxxx, directly or
indirectly, to (i) take any action to seek, initiate or encourage any offer from
any person, entity or group to acquire any shares of capital stock of Xxxxxxx or
any Subsidiary, to merge or consolidate with Xxxxxxx or any Subsidiary, or to
otherwise acquire, except as expressly permitted by Section 4.01 (d)(iii)
hereof, any significant portion of the assets of Xxxxxxx or any Subsidiary, or
(ii) except to the extent otherwise required by their fiduciary obligations
under applicable law, engage in negotiations concerning, or disclose financial
information relating to, Xxxxxxx
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or any Subsidiary, or any confidential or proprietary trade or business
information relating to the business of Xxxxxxx or any Subsidiary, or afford
access to the properties, books or records of Xxxxxxx or any Subsidiary, to any
third party that may be considering any merger or consolidation with Xxxxxxx or
any Subsidiary or any acquisition of any shares of capital stock of Xxxxxxx or
any Subsidiary or any significant portion of the assets of Xxxxxxx or any
Subsidiary; provided, however, that if Xxxxxxx shall become legally obligated,
or if the officers or directors of Xxxxxxx shall be required by their fiduciary
obligations under applicable law to disclose any such information to any third
party, Xxxxxxx may disclose such information to such third party only if Xxxxxxx
has delivered to Buyer, at least 48 hours prior to such disclosure, a written
description, in reasonable detail, of the information Xxxxxxx intends to
disclose and the identity of such third party.
(b) Xxxxxxx will orally notify Buyer immediately, followed by prompt
written notice, of any offer from any person, entity or group or of any request
for information (other than from Buyer or Buyer Subsidiary), with respect to any
merger or consolidation with Xxxxxxx or any Subsidiary or any acquisition of any
shares of capital stock of Xxxxxxx or any Subsidiary or, except with respect to
sales of assets expressly permitted by Section 4.01(d)(iii), any significant
portion of the assets of Xxxxxxx or any Subsidiary.
4.04 Access to Information. Xxxxxxx will give (i) Buyer and Buyer
Subsidiary, and their respective counsel, financial advisors, auditors and other
authorized representatives, (ii) lenders and their counsel and other authorized
representatives, and (iii) prospective purchasers of Xxxxxxx properties and
their counsel and other authorized representatives (collectively, "Authorized
Persons"), reasonable access to the offices, properties, books and records of
Xxxxxxx and each Subsidiary, and will instruct the employees, counsel, financial
advisors and auditors of Xxxxxxx and such Subsidiary to cooperate with
Authorized Persons in their investigation of the business of Xxxxxxx and such
Subsidiary. Buyer and Buyer Subsidiary will, and will cause all other
Authorities Persons to conduct such investigation in a manner as not to
unreasonably interfere with the operations of Xxxxxxx and will take all
necessary precautions (including, without limitation, obtaining the written
agreement of Authorized Persons other than Buyer and Buyer Subsidiary involved
in such investigation) to protect the confidentiality of any information of
Xxxxxxx disclosed to such persons during such investigation.
4.05 Amendment of Xxxxxxx'x Employee Plans. Xxxxxxx will cause any
Employee Benefit Plans which it may have to be amended, to the extent, if any,
requested by Buyer, for the purpose of permitting such Employee Benefit Plan to
continue to operate in conformity with ERISA and the Code following the Merger.
4.06 Xxxx-Xxxxx-Xxxxxx Act. Each of Xxxxxxx, Buyer and Buyer
Subsidiary will file any Notification and Report Forms and related material that
it may be required to file with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the Xxxx-Xxxxx-Xxxxxx
Act, will exercise reasonable
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efforts to obtain an early termination of the applicable waiting period, and
will make any further filings pursuant thereto that may be necessary or
advisable.
4.07 Supplements to Disclosure Schedule. Xxxxxxx shall deliver to
Buyer a supplemental or amended Disclosure Schedule containing information that
supplements or amends the representations, warranties and/or disclosures in this
Agreement (including, without limitation, the Disclosure Schedule) in order to
make the information set forth therein timely, complete and accurate. Subject to
Section 7.01(f), any covenant, representation or warranty of Xxxxxxx herein
which is affected by such supplemental or amended information shall be deemed to
have been amended accordingly.
4.08 Engagement of Auditors.
(a) Pursuant to an engagement letter dated March 18, 1997, Xxxxxxx
has engaged the Minneapolis, Minnesota office of KPMG Peat Marwick LLP to
prepare an audit report (the "Interim Audit Report") including a consolidated
balance sheet of Xxxxxxx and its Subsidiaries as of January 31, 1997, and
consolidated statements of earnings and cash flows for the eight months then
ended, prepared in accordance with generally accepted accounting principles,
consistent with Xxxxxxx'x past practices in preparing the financial statements
contained in the Annual Reports. Buyer has executed such engagement letter as an
additional party and has agreed to pay the fees of KPMG Peat Marwick LLP for
such Interim Audit Report. Xxxxxxx shall instruct KPMG Peat Marwick to deliver a
copy of such Interim Audit Report to Buyer promptly upon completion thereof.
(b) Prior to Closing, Xxxxxxx shall engage the Minneapolis,
Minnesota office of KPMG Peat Marwick LLP to prepare an audit report including a
consolidated balance sheet of Xxxxxxx and its Subsidiaries as of the Closing
Date, prepared in accordance with generally accepted accounting principles,
consistent with Xxxxxxx'x past practices in preparing the financial statements
contained in the Annual Reports. Xxxxxxx acknowledges that the San Francisco,
California office of KPMG Peat Marwick LLP provides certain accounting services
to Buyer and that a certified public accountant from such office will
participate in the preparation of the audit report required by this Section
4.08(b) at the expense of, and on behalf of Buyer. Xxxxxxx shall instruct KPMG
Peat Marwick LLP to deliver a copy of such audit report to the Shareholder
Representative (as defined in Section 8.01), Buyer and the Disbursing Agent not
more than ninety (90) days after the Closing Date. Such audit report shall
reflect all transactions through the close of business on the Closing Date;
provided, however, that any extraordinary transactions not in the ordinary
course of business following the Effective Time shall not be taken into account
in preparing the audit report.
4.09 Employee Savings Plan Payments. Prior to Closing, Xxxxxxx shall
(i) give written notice to each participant in the Xxxxxxx Employee Savings Plan
that Xxxxxxx elects to repay to each participant ten (10) days thereafter all
outstanding amounts theretofore remitted by such participant to Xxxxxxx pursuant
to such plan, together with
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accrued interest thereon, and (ii) make such payments by cashier's check to the
participants in such plan, thereby discharging prior to Closing all liabilities
of Xxxxxxx under the Employee Savings Plan.
4.10 Landlord Estoppels. Xxxxxxx will request estoppel certificates
(in such form as Xxxxxxx and Buyer shall mutually agree, both acting reasonably)
for delivery on or prior to the Closing Date from the lessors of the facilities
identified in the Disclosure Schedule as principal leased facilities under the
caption "Leasehold Property--Xxxxxxx Milling Company as Tenant". The receipt of
such estoppel certificates shall not be a condition to Buyer's obligations under
this Agreement.
4.11 Monthly Financial Statements. Xxxxxxx shall deliver to Buyer,
promptly upon the completion thereof, a copy of the unaudited monthly financial
statements of Xxxxxxx prepared in the ordinary course of business for each month
ending after the date hereof and not less than twenty (20) days prior to the
Closing Date.
4.12 Payments to Eliminate or Limit Certain Title Exceptions.
Xxxxxxx agrees to pay up to an aggregate maximum of $100,000 of costs and
expenses reasonably incurred by Buyer to eliminate or appropriately limit the
adverse effect of those special exceptions, if any, on Schedule B of the title
insurance commitments which would permit Buyer not to close the transactions
contemplated by this Agreement pursuant to Section 5.01(k) and which Buyer
notifies Xxxxxxx prior to Closing qualify, in the opinion of Buyer, as such
special exceptions. Any such costs and expenses up to such aggregate maximum of
$100,000 which has not been paid by Xxxxxxx prior to Closing (the "Indemnified
Title Costs and Expenses") are included within the matters for which Buyer is
indemnified by the Shareholders under Section 9.02(a). Payment of the foregoing
costs and expenses shall be limited to those included in reasonably detailed
invoices therefor submitted by Buyer to Xxxxxxx, if prior to Closing, or to the
Shareholder Representative (as defined in Section 8.01) and the Disbursing
Agent, if submitted after Closing and within eighteen (18) months of the
Closing. Except with respect to any unpaid invoices theretofore submitted to the
Shareholder Representative, the payment and reimbursement obligation under this
Section 4.12 shall terminate eighteen (18) months after the Closing.
4.13 Confidentiality. Buyer will maintain in confidence and not
disclose to others prior to Closing any financial, customer or other
confidential information regarding Xxxxxxx except for (i) disclosures required
by law or legal process, (ii) disclosures reasonably required in connection with
the financing for the transactions contemplated by this Agreement, including
without limitation disclosures to prospective lenders and institutional
investors, and (iii) subject to obtaining confidentiality agreements in form and
substance reasonably satisfactory to Xxxxxxx, disclosure to prospective
purchasers of Xxxxxxx properties.
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ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions to the Obligations of Buyer and Buyer Subsidiary.
The obligations of Buyer and Buyer Subsidiary to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions, any one or more of which (except for the conditions set forth in
Section 5.01(b) and (c)) may be waived by Buyer and Buyer Subsidiary:
(a) The representations and warranties of Xxxxxxx contained in
Section 3.01 shall be true and correct in all material respects with the same
effect as if such representations and warranties had been made on the Closing
Date; Xxxxxxx shall have performed and complied in all material respects with
the agreements and obligations contained in this Agreement required to be
performed and complied with by it on or prior to the Closing Date; and Buyer and
Buyer Subsidiary shall have received a certificate signed by an executive
officer of Xxxxxxx to the effects set forth in this Section 5.01(a) and in
Section 5.01(f).
(b) The amendment to the Articles of Incorporation of Xxxxxxx set
forth in Exhibit D shall have been adopted at the meeting of the shareholders of
Xxxxxxx referred to in Section 4.02 by the vote required by the MBCA and
Xxxxxxx'x Articles of Incorporation, and a Certificate of Amendment to the
Articles of Incorporation of Xxxxxxx containing such amendment shall have been
duly executed, filed with the Minnesota Secretary of State and effective prior
to the vote of the shareholders of Xxxxxxx at such meeting on the Plan of
Merger.
(c) The Plan of Merger shall have been approved at the meeting of
shareholders of Xxxxxxx referred to in Section 4.02 by the vote required by the
MBCA and Xxxxxxx'x Articles of Incorporation and arrangements reasonably
satisfactory to Buyer and Buyer Subsidiary shall have been made for Articles of
Merger to be filed with the Minnesota Secretary of State on the Closing Date
immediately following the Closing.
(d) All other corporate action on the part of Xxxxxxx necessary to
authorize the execution, delivery and consummation of this Agreement or any
agreement or instrument contemplated hereby to which Xxxxxxx is or is to be a
party or the transactions contemplated hereby or thereby shall have been duly
and validly taken.
(e) There shall not be pending any suit, action, investigation,
inquiry or other proceeding by or before any court or governmental or other
regulatory or administrative agency or commission requesting or looking toward
an order, judgment or decree (except those in which Buyer or Buyer Subsidiary is
a plaintiff directly or derivatively) which, in the reasonable judgment of Buyer
could, if issued, restrain or prohibit the consummation of the
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transactions contemplated hereby or require rescission of this Agreement or such
transactions or result in damages to Buyer, Buyer Subsidiary or Xxxxxxx, as the
surviving corporation of the Merger, if the transactions contemplated hereby are
consummated, nor shall there be in effect any injunction, writ, preliminary
restraining order or any order of any nature issued by a court or governmental
agency of competent jurisdiction directing that the transactions provided for
herein, or any of them, not be consummated as so provided.
(f) Since December 31, 1996, there shall not have been any material
damage, destruction or loss, whether covered by insurance or not, or other
change materially and adversely affecting the business, operations, properties
or financial condition of Xxxxxxx and its Subsidiaries.
(g) Buyer shall have received from Faegre & Xxxxxx LLP, counsel to
Xxxxxxx, an opinion, dated the Closing Date and reasonably satisfactory in form
and substance to Buyer and its counsel, as to the matters set forth in Exhibit
D. In rendering such opinion, such counsel may rely, to the extent such counsel
deems such reliance necessary or appropriate, as to matters of fact, upon
certificates of government officials and of any officer or officers of Xxxxxxx.
(h) All applicable waiting periods (and any extensions thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated.
(i) Buyer and the Armour Shareholders shall have executed and
delivered the Armour Stock Purchase Agreement and such agreement shall not have
been terminated; all conditions precedent set forth in the Armour Stock Purchase
Agreement to the purchase and sale of the Armour Capital Stock thereunder shall
have been satisfied or waived; and the purchase and sale of the Armour Capital
Stock under the Armour Stock Purchase Agreement shall have been consummated
immediately prior to the Closing hereunder.
(j) On the Closing Date, Xxxxxxx will have delivered to Buyer the
following:
(i) A good standing certificate for each of Xxxxxxx and the
Active Subsidiaries from its state of organization and from each
other state it is qualified to do business as a foreign corporation,
dated not earlier than 15 days prior to the Closing Date;
(ii) Certified copies of the resolutions duly adopted by
Xxxxxxx'x board of directors authorizing the execution, delivery and
performance of this Agreement and the other agreements contemplated
hereby;
(iii) Certified resolutions duly adopted by the Xxxxxxx
shareholders entitled to vote thereon approving the Agenda Items;
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(iv) The written resignations of the directors of Xxxxxxx and
the written resignations of such officers of Xxxxxxx and the Active
Subsidiaries as Buyer may request;
(v) The minute books, stock records and stock ledgers of
Xxxxxxx and the Active Subsidiaries; and
(vi) Such other documents and instruments as Buyer may
reasonably request in connection with the transactions contemplated
hereby.
(k) Buyer, at its expense, shall obtain at the Closing owner title
insurance policies for each Fee Property and shall obtain on or before the
Closing such surveys of each Fee Property as it desires. It shall be a condition
to Buyer's obligation to close that the title insurance policies do not contain
as special exceptions under Schedule B easements, restrictions, mortgages,
pledges, liens, encumbrances, security interests or any other title exceptions
which do not constitute Permitted Exceptions under clauses (A) or (B) of Section
3.01(i)(ii), unless such special exceptions (i) are disclosed on the surveys
listed in the Disclosure Schedule except to the extent listed in the Disclosure
Schedule under the caption "Survey Matters As To Which Buyer Has Not Yet Made A
Determination", (ii) are matters contained in any title insurance commitment
listed in the Disclosure Schedule, provided that (x) Buyer has received as of
the date hereof copies of any instruments identified in such title commitment as
constituting such special exception (it being acknowledged that Buyer has not
received copies of those documents listed in the Disclosure Schedule under the
caption "Missing Documents") and (y) such matter does not require a survey
(other than the surveys in (i) above) to determine the effect thereof on the Fee
Property in question, or (iii) are matters listed in the Disclosure Schedule
under the caption "Title Exceptions As To Which Buyer Has Not Made a
Determination", but only if the same do not materially interfere with the
present use of the properties subject thereto. Buyer shall be obligated to close
notwithstanding any such matter if the title insurance company is willing to
insure over the exception or exceptions in question or against the effects
thereof on a basis generally consistent with accepted practice for such matters.
(l) Xxxxxxx agrees to provide such affidavits, certificates and
other instruments as the title insurance company may reasonably require at the
Closing (i) for deletion of the standard exceptions on Schedule B of the title
policies to be obtained by Buyer, (ii) for affirmative insurance with respect
to, or to delete, special exceptions based on facts known to Xxxxxxx, and (iii)
for limitation of the knowledge of the insured under said policies to the
knowledge of Buyer without imputation of the knowledge of Xxxxxxx immediately
prior to Closing (i.e. to obtain the equivalent of a non-imputation endorsement
in a merger transaction), all of which instruments shall be for the sole benefit
of the title company, shall contain such disclaimers, exculpation and other
provisions as Xxxxxxx'x legal counsel shall reasonably determine are necessary
of appropriate to assure that no person or
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entity, including the person executing the instrument in question, any Armour
Shareholder or Xxxxxxx, shall have any liability by reason of such instrument
(but without affecting the title insurer's rights of subrogation to Buyer's
rights under this Agreement), and shall otherwise be in form and substance
reasonably satisfactory to Xxxxxxx'x legal counsel. In addition, Xxxxxxx will
(i) provide copies of tax bills, tax receipts and other documentary evidence in
the possession of Xxxxxxx, and (ii) request such confirmations and other
informational statements and the like from third parties, in each case as from
time to time reasonably requested by Buyer in connection with the title policies
to be obtained by Buyer.
(m) Xxxxxxx shall have prepared and delivered to Buyer the
environmental reports described on Exhibit E hereto.
(n) The number of shares of Xxxxxxx Capital Stock in respect of
which a proper demand for payment of fair value pursuant to Section 302A.473 of
the MBCA shall have been made shall not exceed 5% of the outstanding shares of
Xxxxxxx Capital Stock.
(o) The Disbursing Agreement shall have been executed and delivered
by the parties thereto other than Buyer.
5.02 Conditions to the Obligations of Xxxxxxx. The obligations of
Xxxxxxx to effect the Merger shall be subject to the fulfillment at or prior to
the Closing Date of the following conditions, any one or more of which (except
for the conditions set forth in Sections 5.02(b) and (c)) may be waived by
Xxxxxxx:
(a) The representations and warranties of Buyer and Buyer Subsidiary
contained in Section 3.02 of this Agreement shall be true and correct in all
material respects on the Closing Date with the same effect as if such
representations and warranties had been made on the Closing Date; Buyer and
Buyer Subsidiary each shall have performed and complied in all material respects
with the agreements and obligations contained in this Agreement required to be
performed and complied with by them on or prior to the Closing Date; and Xxxxxxx
shall have received a certificate signed by an executive officer of Buyer to the
effects set forth in this Section 5.02(a).
(b) The amendment to the Articles of Incorporation of Xxxxxxx set
forth in Exhibit D shall have been adopted at the meeting of the shareholders of
Xxxxxxx referred to in Section 4.02 by the vote required by the MBCA and
Xxxxxxx'x Articles of Incorporation, and a Certificate of Amendment to the
Articles of Incorporation of Xxxxxxx containing such amendment shall have been
duly executed, filed with the Minnesota Secretary of State and effective prior
to the vote of the shareholders of Xxxxxxx at such meeting on the Plan of
Merger.
(c) The Plan of Merger shall have been approved at the meeting of
shareholders of Xxxxxxx referred to in Section 4.02 by the vote required by the
MBCA and
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Xxxxxxx'x Articles of Incorporation and arrangements reasonably satisfactory to
Xxxxxxx shall have been made for Articles of Merger to be filed with the
Minnesota Secretary of State on the Closing Date immediately following the
Closing.
(d) All corporate action on the part of Buyer, and Buyer Subsidiary
necessary to authorize the execution, delivery and consummation of this
Agreement or any agreement or instrument contemplated hereby to which Buyer or
Buyer Subsidiary is or is to be a party or the transactions contemplated hereby
or thereby shall have been duly and validly taken.
(e) There shall not be pending any suit, action, investigation,
inquiry or other proceeding by or before any court or governmental or other
regulatory or administrative agency or commission requesting or looking toward
an order, judgment or decree (except those in which Armour, its shareholders or
Xxxxxxx is a plaintiff directly or derivatively) which, in the reasonable
judgment of Xxxxxxx, would, if issued, restrain or prohibit the consummation of
the transactions contemplated hereby or require rescission of this Agreement or
such transactions or result in damages to Xxxxxxx if the transactions
contemplated hereby are consummated, nor shall there be in effect any
injunction, writ, preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction directing
that the transactions provided for herein, or any of them, not be consummated as
so provided.
(f) Xxxxxxx shall have received from Xxxxxxxx & X'Xxxx, LLP, counsel
to Buyer and Buyer Subsidiary, an opinion, dated the Closing Date and reasonably
satisfactory in form and substance to Xxxxxxx and its counsel as to the matters
set forth in Exhibit F. In rendering such opinion, such counsel may rely, to the
extent such counsel deems such reliance necessary or appropriate, as to matters
of fact, upon certificates of government officials and of any officer or
officers of Buyer or Buyer Subsidiary.
(g) All applicable waiting periods (and any extension thereof) under
the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated.
(h) Buyer and the Armour Shareholders shall have executed and
delivered the Armour Stock Purchase Agreement and such agreement shall not have
been terminated; all conditions precedent set forth in the Armour Stock Purchase
Agreement to the purchase and sale of the Armour Capital Stock thereunder shall
have been satisfied or waived; and the purchase and sale of the Armour Capital
Stock under the Armour Stock Purchase Agreement shall have been consummated
immediately prior to the Closing hereunder.
(i) On the Closing Date, Buyer will have delivered to Xxxxxxx the
following:
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(A) A good standing certificate for each of Buyer and Buyer
Subsidiary from its state of organization, dated not earlier than 15
days prior to the Closing Date;
(B) Certified copies of the resolutions duly adopted by the
board of directors of each of Buyer and Buyer Subsidiary authorizing
the execution, delivery and performance of this Agreement and the
other agreements contemplated hereby; and
(C) Such other documents and instruments as Buyer may
reasonably request in connection with the transactions contemplated
hereby.
(j) The Disbursing Agreement shall have been executed and delivered
by the parties thereto other than Xxxxxxx.
ARTICLE VI
CONDUCT AND TRANSACTIONS AFTER THE EFFECTIVE TIME
6.01 Post-Closing Operations. Buyer agrees following the Effective
Time to conduct business operations at Xxxxxxx'x executive office building in
Mankato, Minnesota for at least six (6) months after the Closing Date.
6.02 Employee Benefit Plans.
(a) For a period of one year following the Closing Date: (i) Buyer
will not cause Xxxxxxx to materially amend or modify any existing Employee
Benefit Plans (including vacation and holiday plans) or terminate any such plan,
(ii) Buyer will not cause Xxxxxxx to merge any such plan other than with another
like plan of Xxxxxxx, and (iii) Buyer will not cause Xxxxxxx to extend coverage
under any Employee Pension Benefit Plan to the employees of any plant or
business operation not operated by Xxxxxxx as of the date hereof; provided that
nothing contained herein shall prevent Buyer at any time following the Closing
Date from causing the spinoff or transfer of certain assets and liabilities of
any Employee Pension Benefit Plan to a like plan of a purchaser of a plant or
business operated by Xxxxxxx with respect to the present and/or former employees
of such plant or business; and further provided that nothing contained herein
shall require Buyer to cause Xxxxxxx to continue the Xxxxxxx Milling Company
Deferred Compensation Plan except to the extent necessary to make the payments
required by Section 2.03. Nothing herein contained shall prohibit Buyer from
amending, modifying or terminating any existing Employee Benefit Plan following
the first anniversary of the Closing Date.
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(b) In the event that Buyer shall cause Xxxxxxx to terminate an
Employee Pension Benefit Plan after the one year period described in Section
6.02(a) at a time when the assets of such plan exceed the termination
liabilities thereunder, Buyer agrees that it shall not cause such excess assets
to revert to Buyer, Xxxxxxx or any affiliate of either of them.
6.03 Director and Officer Exculpation and Indemnification. Neither
Buyer nor Buyer Subsidiary will take, or cause or permit Xxxxxxx to take, any
action to alter or impair any exculpation or indemnification now existing in the
Articles of Incorporation or By-Laws of Xxxxxxx for the benefit of any
individual who served as a director or officer of Xxxxxxx at any time prior to
the Effective Time; provided that indemnification owing from any Shareholder
under Section 9.02(a) of this Agreement or Section 8.02(a) of the Armour Stock
Purchase Agreement who is an officer or director of Xxxxxxx shall not be deemed
for any purpose to be a claim covered by indemnification owing to such
Shareholder by Xxxxxxx under any law, by-law or agreement whatsoever.
6.04 Filing of Tax Returns.
(a) Returns for Periods Prior to Closing. Required Tax Returns (and
all information required for inclusion in any consolidated or combined return)
which are due after Closing Date with respect to Taxes for Xxxxxxx and its
Subsidiaries for the taxable periods of such companies ending on or before the
Closing will be prepared by Buyer and timely filed, including extensions. The
returns prepared and filed or to be prepared and filed by or for Xxxxxxx and its
Subsidiaries are or will be true and correct, and will be prepared on a basis
upon which is consistent with the basis upon which similar Tax Returns for prior
periods have been prepared and filed, unless the relevant taxing authority will
not accept a Tax Return filed on that basis.
(b) Returns for Periods which Overlap Closing. Required Tax Returns
with respect to Taxes for Xxxxxxx and its Subsidiaries for taxable periods
beginning before and ending after the Closing Date will be prepared by Buyer and
timely filed, including extensions. Such returns will be true and correct, and
will be prepared on a basis consistent with the basis upon which similar returns
for prior periods have been prepared. For purposes of determining such Taxes
attributable to Xxxxxxx and its Subsidiaries through the Closing Date, it shall
be assumed that their taxable year will have ended at the close of business on
the Closing Date.
(c) Penalties and Interest. Any penalties and interest attributable
to any Tax Return prepared by Buyer, for any period ending on or before the
Closing Date, or including the Closing Date, shall be borne and paid by Buyer,
unless such returns are prepared on a basis consistent with the basis upon which
similar returns for prior periods have been prepared, in which case penalties
and interest will be proportionate to the Taxes allocated hereunder.
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6.05 Insurance Coverage. Buyer agrees from and after the Closing to
file all necessary claims under, and to exercise reasonable efforts to collect
the proceeds of any insurance maintained by Xxxxxxx, Buyer or Buyer Subsidiary,
including without limitation the title insurance policies obtained by Buyer
pursuant to Section 5.01(k), with respect to any Damages (as defined in Section
9.02(a)) within the scope of the indemnification provisions of Section 9.02(a).
ARTICLE VII
TERMINATION AND ABANDONMENT
7.01 Generally. This Agreement may be terminated and abandoned at
any time prior to the purchase of the Armour Capital Stock from the Armour
Shareholders pursuant to Article I hereof, whether before or after approval of
the Plan of Merger by the shareholders of Xxxxxxx:
(a) by mutual consent of the Boards of Directors of Buyer, Buyer
Subsidiary and Xxxxxxx;
(b) by Buyer, Buyer Subsidiary or Xxxxxxx if the transactions
contemplated hereby shall not have been consummated on or before June 30, 1997
(which date may be extended by mutual agreement of the Boards of Directors of
Buyer, Buyer Subsidiary and Xxxxxxx), provided that such failure is not due
solely to the failure of the party seeking to terminate this Agreement to comply
with its obligations under this Agreement;
(c) by Buyer or Buyer Subsidiary if any of the conditions set forth
in Section 5.01 shall become impossible to fulfill other than for reasons within
the control of Buyer or Buyer Subsidiary, and such conditions shall not have
been waived pursuant to Section 9.05;
(d) by Xxxxxxx if any of the conditions set forth in Section 5.02
shall become impossible to fulfill other than for reasons within the control of
the party seeking to terminate this Agreement, and such conditions shall not
have been waived pursuant to Section 9.05;
(e) by Buyer or Buyer Subsidiary, if the Board of Directors of
Xxxxxxx fails to call or hold a special meeting as soon as reasonably
practicable or to conduct the vote on the Agenda Items at the special meeting or
any adjournment thereof, or if the Board of Directors of Xxxxxxx fails to
recommend the Merger to shareholders of Xxxxxxx, withdraws or qualifies such
recommendation once given or takes any position or action that is inconsistent
with such recommendation, whether or not as a result of the Board's exercise of
its fiduciary duties, in which event, if there has been no material breach by
Buyer or Buyer
-43-
Subsidiary of any of their respective representations, warranties, covenants or
agreements contained in this Agreement, (i) Xxxxxxx shall promptly reimburse
Buyer and Buyer Subsidiary upon written request for all fees and out-of-pocket
expenses reasonably incurred by them in connection with the transactions
contemplated by this Agreement, and (ii) if there shall occur within one year of
the date of termination a merger, consolidation or acquisition of all or a
material portion of the stock or assets, including the Feed Division or the Pet
Food Division, of Xxxxxxx, or a recapitalization or restructuring of Xxxxxxx
which results in the effective sale of the principal business and operations of
Xxxxxxx by the current shareholders, then, and in any such event, Xxxxxxx shall
pay to Buyer within ten (10) days of Buyer's written request upon consummation
of such transaction a fee equal to Three Million Nine Hundred Thousand Dollars
($3,900,000);
(f) by Buyer if Buyer shall have failed to receive the proceeds of
the bridge financing under the Chase Bridge Financing Commitment or the proceeds
of senior debt financing under the CSFB Senior Debt Financing Commitment, as the
case may be, as a result, in the case of the Chase Bridge Financing Commitment,
of any of the circumstances described in clauses (i) through (v) of the first
full paragraph on page 4 thereof, or as a result, in the case of the CSFB Senior
Debt Financing Commitment, of any of the circumstances described in the first
full paragraph of page 2 thereof; provided, however, that if Xxxxxxx is not in
material default of any of its representations, warranties, covenants or
agreements contained in this Agreement and Buyer terminates this Agreement
pursuant to this clause (f), Buyer shall promptly reimburse Xxxxxxx upon written
request for all fees and out-of-pocket expenses reasonably incurred by Xxxxxxx
in connection with the auction conducted pursuant to the Credit Suisse First
Boston engagement letter dated September 29, 1996 (excluding any success fee
payable thereunder) and the preparation, negotiation, execution and delivery of
this Agreement; and
(g) in the event Buyer receives notice under Section 4.07 of a
supplement or amendment to the Disclosure Schedule which has disclosed, or which
together with any prior supplements or amendments pursuant to such Section
discloses, any change or effect which has had or could reasonably be expected to
have material adverse effect on Xxxxxxx, then Buyer and Xxxxxxx shall, for a
period of five (5) business days after the receipt by Buyer of any supplement or
amendment, negotiate in good faith as to adjustments, if any, to the terms of
this Agreement, and if Buyer and Xxxxxxx do not agree to any such adjustments,
Buyer may, prior to the tenth business day after its receipt of the applicable
supplement or amendment, terminate this Agreement, in which event Xxxxxxx shall
reimburse Buyer for all fees and out-of-pocket expenses reasonably incurred
prior to such termination date in connection with the transactions contemplated
by this Agreement.
7.02 Procedure and Effect of Termination and Abandonment. In the
event of termination of this Agreement by one or more of Xxxxxxx, Buyer, or
Buyer Subsidiary pursuant to Section 7.01, written notice thereof shall
forthwith be given to the other parties hereto and this Agreement shall
terminate and the Merger shall be abandoned
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without further action by any of the parties hereto. If this Agreement is
terminated pursuant to Section 7.01, then except as otherwise expressly therein
provided no party hereto shall have any liability or further obligation to any
other party to this Agreement except to the extent the termination is a direct
result of a willful and material breach by a party to this Agreement of any
material representation, warranty or covenant contained in this Agreement.
ARTICLE VIII
SHAREHOLDER REPRESENTATIVE
8.01 Designation. Subject to the terms and conditions of this
Article VIII, Xxxxxxx X. Xxxxxx is designated as the representative of the
Shareholders ("the Shareholder Representative") by Xxxxxxx on behalf of each of
the shareholders (the "Shareholders") to serve, and the Buyer hereby
acknowledges that the Shareholder Representative shall serve, as the sole
representative of the Shareholders from and after the Effective Time with
respect to the matters set forth in this Agreement, such service to be without
compensation except for the reimbursement of out-of-pocket expenses and
indemnification specifically provided herein. The Shareholder Representative has
accepted such designation as of the date hereof. Notwithstanding anything to the
contrary contained in this Agreement, the Shareholder Representative shall have
no duties or responsibilities except those expressly set forth herein, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on behalf of any Shareholder shall otherwise exist against the
Shareholder Representative.
8.02 Authority. Each of the Shareholders, by voting in favor of this
Agreement at the meeting of Shareholders referred to in Section 4.02 and/or by
accepting any portion of the consideration to be paid pursuant to Section 1.03
will, effective as of the Effective Time, irrevocably appoint the Shareholder
Representative as the agent, proxy and attorney-in-fact for such Shareholder for
all purposes of this Agreement, including full power and authority on such
Shareholder's behalf (i) to take all actions which the Shareholder
Representative considers necessary or desirable in connection with the defense,
pursuit or settlement of any determinations relating to the payment of the
Escrow Amount and any claims for indemnification pursuant to Section 9.02,
including to xxx, defend, negotiate, settle an compromise any such claims for
indemnification made by or against, and other disputes with, the Buyer pursuant
to this Agreement or any of the agreements or transactions contemplated hereby,
(ii) to engage and employ agents and representatives (including accountants,
legal counsel and other professionals) and to incur such other expenses as he
shall deem necessary or prudent in connection with the administration of the
foregoing, (iii) to provide for all expenses incurred in connection with the
administration of the foregoing to be paid by directing the Disbursing Agent to
reimburse the Shareholder Representative for such expenses, (iv) to disburse to
the Shareholders all indemnification payments received from the Buyer under
Section 9.02, (v) to accept and receive notices to the Shareholders pursuant to
this Agreement, and (vi) to take all other actions and exercise all other rights
which the
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Shareholder Representative (in his sole discretion) considers necessary or
appropriate in connection with this Agreement. Each of the Shareholders, by the
adoption of this Agreement at the meeting of Shareholders referred to in Section
4.02, agrees that such agency and proxy are coupled with an interest, and are
therefore irrevocable without the consent of the Shareholder Representative and
shall survive the death, incapacity, bankruptcy, dissolution or liquidation of
any Shareholder. All decisions and acts by the Shareholder Representative shall
be binding upon all of the Shareholders, and no Shareholder shall have the right
to object, dissent, protest or otherwise contest the same.
8.03 Resignation. In the event that the Shareholder Representative
shall die, become incapacitated, resign or otherwise fail to act on behalf of
the Shareholders for any reason, the Shareholder Representative shall be Xxxxx
X. Xxxxxx or, in the event of a similar situation involving Xxxxx X. Xxxxxx,
such other person as shall be selected by a majority of the persons serving as
directors of Xxxxxxx immediately prior to the Closing, and such substituted
representative shall be deemed to be the Shareholder Representative for all
purposes of this Agreement.
8.04 Reliance by Third Parties on the Shareholder Representative's
Authority. The Shareholder Representative is authorized to act on the
Shareholders' behalf notwithstanding any dispute or disagreement among the
Shareholders and the other parties hereto shall be entitled to rely on any and
all action taken by the Shareholder Representative without any liability to, or
obligation to inquire of, any of the Shareholders even if such party shall be
aware of any actual or potential dispute or disagreement among the Shareholders.
Each of the other parties hereto is expressly authorized to rely on the
genuineness of the signature of the Shareholder Representative and, upon receipt
of any writing which reasonably appears to have been signed by the Shareholder
Representative, the other parties hereto may act upon the same without any
further duty of inquiry as to the genuineness of the writing.
8.05 Exculpation and Indemnification. Neither the Shareholder
Representative nor any agent employed by him shall be liable to any Shareholder
relating to the performance of his duties under this Agreement for any errors in
judgment, negligence, oversight, breach of duty or otherwise except to the
extent it is finally determined in a court of competent jurisdiction by clear
and convincing evidence that the actions taken or not taken by the Shareholder
Representative constituted fraud or were taken or not taken in bad faith. The
Shareholder Representative shall be indemnified and held harmless by the
Shareholders against all Damages (as defined in Section 9.02) paid or incurred
in connection with any action, suit, proceeding or claim to which the
Shareholder Representative is made a party by reason of the fact that he was
acting as the Shareholder Representative pursuant to this Agreement; provided,
however, that the Shareholder Representative shall not be entitled to
indemnification hereunder to the extent it is finally determined in a court of
competent jurisdiction by clear and convincing evidence that the actions taken
or not taken by the Shareholder Representative constituted fraud or were taken
or not taken in bad faith; and
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provided further, however, that the Shareholder Representative shall have
recourse only against the unpaid Escrow Amount (fully subordinated in right of
payment and otherwise to the Buyer's claims thereto, whether or not then
existing or known), with respect to such Damages as provided in the next two
sentences of this Section 8.05. Any amount owing to the Shareholder
Representative from the Shareholders pursuant to this Section 8.05 shall be
reduced on a pro rata basis from the next succeeding distribution(s) of the
Escrow Amount by the Disbursing Agent to the Shareholders, and shall be payable
solely from such source. The Shareholder Representative shall be protected in
acting upon any notice, statement or certificate believed by him to be genuine
and to have been furnished by the appropriate person and in acting or refusing
to act in good faith or any matter.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.01 Limitations on Survival. Each of the representations and
warranties made by the parties in Article III and in the certificates delivered
pursuant to Sections 5.01(a) and 5.02(a) (and including the Disclosure Schedule
insofar as the Disclosure Schedule relates to such representations and
warranties) shall survive any examination made by or on behalf of any party
hereto, the execution and delivery of this Agreement, the Closing and the
consummation of the transactions called for by this Agreement to and until
eighteen (18) months after the Effective Time, whereupon such representations
and warranties shall terminate, provided that no such termination shall occur
with respect to any representation or warranty made in a manner involving fraud
or criminal misrepresentation. Notwithstanding the foregoing, the representation
and warranty contained in Section 3.01(i)(B) shall not survive Closing.
9.02 Indemnification. Subject to the limitations set forth in this
Section 9.02 the parties hereto agree as follows:
(a) Buyer, Buyer Subsidiary and their respective successors and
assigns shall be indemnified by Xxxxxxx and its successors and assigns if the
Closing shall not occur, and by the Shareholders and their successors and
assigns if the Closing shall occur, against any loss, claim, liability, cost or
expense (including reasonable attorney's fees and expenses) or other damage of
any kind or nature (collectively, "Damages") incurred by Buyer (or Xxxxxxx
following the Closing) which is caused by or arises out of (i) any breach of any
representation or warranty of Xxxxxxx contained in this Agreement or any related
agreement or other document (the "Closing Documents") other than those breaches,
if any, of which Buyer has actual knowledge at the time of Closing, (ii) the
breach or other failure to perform any covenant, agreement or other obligation
of Xxxxxxx contained in this Agreement or any other Closing Document, (iii) any
requirement of a local, state or federal administrative agency or court pursuant
to any Environmental Law that Xxxxxxx investigate or remediate
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Hazardous Substances, other environmental condition or failure to comply with
Environmental Law (or pay any fines or penalties in connection therewith) at any
Current Property if such Hazardous Substances, other environmental condition or
failure to comply with Environmental Law was identified in the Disclosure
Schedule under the caption "Environmental Matters--Miscellaneous Matters" or in
an environmental report prepared pursuant to Section 5.01(m) (collectively the
"Indemnified Environmental Liabilities"), (iv) the litigation and claims
identified in the Disclosure Schedule under the caption "Litigation" as
litigation and claims for which limited indemnification is provided under this
Section 9.02 (the "Indemnified Litigation and Claims"), and (v) Indemnified
Title Costs and Expenses as provided in Section 4.12; provided, however, that in
connection with any claim for indemnification for Damages under this Section
9.02 (except in a case involving fraud or criminal misrepresentation), (A) Buyer
shall have no recourse against Xxxxxxx'x officers, directors or agents other
than in their capacities as Shareholders otherwise entitled to receive
distributions from the Escrow Amount under the Disbursing Agreement, (B) after
the Closing Buyer shall have recourse only against the unpaid Escrow Amount with
respect to such Damages, (C) indemnification owing from any Shareholder who is
or was an officer or director of Xxxxxxx shall not be deemed for any purpose to
be a claim covered by indemnification owing to such by Xxxxxxx under any law,
by-law or agreement whatsoever, (D) except as expressly provided in clauses (E)
and (F) below, Buyer's rights to indemnification under this Section 9.02 and
clauses (iii) and (iv) of Section 8.02(a) of the Armour Stock Purchase Agreement
shall not arise until Damages, in the aggregate, exceed $750,000 whereupon
indemnification shall arise with respect to the full amount of such Damages in
excess of the $750,000 recoverable under this Section 9.02 and clauses (iii) and
(iv) of Section 8.02(a) of the Armour Stock Purchase Agreement, (E) in the case
of indemnification for Indemnified Environmental Liabilities and Indemnified
Litigation and Claims, the indemnification under this Agreement and the Armour
Stock Purchase Agreement shall be limited to 50% of any Damages and shall not be
subject to the $750,000 deductible set forth in clause (D) above, and (F) in the
case of indemnification for Indemnified Title Costs and Expenses, the
indemnification under this Agreement and the Armour Stock Purchase Agreement
shall not be subject to the $750,000 deductible set forth in clause (D). Any
amount owing to the Buyer or the Surviving Corporation from the Shareholders
pursuant to this Section 9.02 shall be deducted from the distributions of the
Escrow Amount to the Shareholders under the Disbursing Agreement.
Notwithstanding the foregoing, Buyer shall not be indemnified for any Damages
for which it receives proceeds under any insurance policy maintained by Xxxxxxx,
Buyer, or Buyer Subsidiary, including without limitation the title insurance
policies obtained by Buyer pursuant to Section 5.01(k), and no Damages for which
such proceeds are received shall be included in calculating the $750,000
threshold for indemnification set forth in this Section 9.02(a).
(b) Xxxxxxx and its successors and assigns, if the Closing shall not
occur, or the Shareholders and their successors and assigns severally but solely
through the Shareholder Representative, if the Closing shall occur, shall be
indemnified by the Buyer against Damages incurred by them which are caused by or
arise out of (i) any breach of any
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representation or warranty of Buyer contained in this Agreement or any of the
other Closing Documents, other than those breaches, if any, of which Xxxxxxx has
actual knowledge at the time of Closing, and (ii) the breach or other failure to
perform any covenant or agreement or other obligation of Buyer contained in this
Agreement or any other Closing Document; provided, however, that after the
Closing indemnification hereunder shall be limited in amount to each Shareholder
to the amount of any merger consideration remaining unpaid and owing to such
Shareholder.
(c) Whenever any claim shall arise for indemnification hereunder,
(i) the party entitled to indemnification (or the Shareholder Representative in
the case of indemnification owing to the Shareholders) (the "Indemnified Party")
shall provide written notice to the party from whom such indemnification is
owing (or the Shareholder Representative in the case of indemnification owing
from the Shareholders) (the "Indemnifying Party") within a reasonable period of
becoming aware of the right to indemnification and, as expeditiously as possible
thereafter, of the facts constituting the basis for such claim and (ii) the
Indemnifying Party and its agents shall be given access to all books and records
in the possession or control of the Indemnified Party which the Indemnifying
Party reasonably determines to be related to such claim; provided that any
failure of the Indemnified Party to so notify the Indemnifying Party within any
such time period shall not waive the Indemnified Party's indemnification rights
hereunder except to the extent that the Indemnifying Party has been damaged by
such a failure.
(d) If any legal proceedings are instituted or any claim or demand
is asserted by any person in respect of which the Indemnified Party determines
it may seek indemnification pursuant to the provisions of this Section 9.02, the
Indemnified Party shall promptly after such determination cause written notice
of the assertion of any such claim to be made to Indemnifying Party. The
Indemnifying Party shall have the right, at its option and expense and upon
written notice to the Indemnified Party, to defend against, negotiate and, with
the consent of the Indemnified Party (which consent shall not be unreasonably
withheld) settle any such claim, and in such case, the Indemnified Party shall
have the right to participate in such defense, negotiation or settlement at his
own expense. The Indemnified Party and the Indemnifying Party agree to cooperate
fully with each other in connection with the defense, negotiation or settlement
of any such legal proceeding, claim or demand. Upon the payment of any claim for
indemnity, the Indemnifying Party shall be subrogated to all rights and remedies
of the Indemnified Party against any third person. If the Indemnifying Party
does not so elect to defend any such third party claim, legal proceeding or
demand, the Indemnified Party may (but shall have no obligation to) defend any
such third party claim, legal proceeding or demand in such manner as he may deem
appropriate including, but not limited to, settling such claim, legal proceeding
or demand, after giving notice of the same to the Indemnifying Party, on such
terms as the Indemnified Party may deem appropriate and no action taken by the
Indemnified Party in accordance with such defense and settlement shall relieve
the Indemnifying Party of its indemnification obligations herein provided with
respect to any Damages resulting therefrom.
-49-
(e) The parties desire that any indemnification claim against the
Shareholders under Section 9.02(a) be coordinated with any indemnification claim
against the Armour Shareholders under clauses (iii) through (vii) of Section
8.02(a) of the Armour Stock Purchase Agreement. Accordingly, notwithstanding
anything to the contrary contained in this Agreement or the Armour Stock
Purchase Agreement, Buyer and Xxxxxxx agree that any claim asserted by Buyer
under Section 9.02(a) of this Agreement shall also constitute a corresponding
claim under clauses (iii) through (vii), as applicable, of Section 8.02(a) of
the Armour Stock Purchase Agreement, and that any claim by Buyer under clauses
(iii) through (vii) of Section 8.02(a) of the Armour Stock Purchase Agreement
shall also constitute a claim under Section 9.02(a) of this Agreement. The
Disbursing Agreement shall provide for any Damages recoverable in respect of any
such claims to be allocated between the Escrow Amount under this Agreement and
the Armour Escrow Amount (as defined in the Armour Stock Purchase Agreement)
under the Armour Stock Purchase Agreement.
9.03 Amendment and Modification. To the extent permitted by
applicable law, this Agreement may be amended, modified or supplemented only by
written agreement of the parties hereto at any time prior to the Closing with
respect to any of the terms contained herein, except that after the meeting of
shareholders contemplated by Section 4.02, the cash price per share to be paid
pursuant to the Plan of Merger for Xxxxxxx Capital Stock held by persons other
than Armour shall in no event be decreased except as expressly authorized by
Section 7.01(f) without the approval of such shareholders.
9.04 Alternative Dispute Resolution.
(a) Xxxxxxx and Buyer recognize that a bona fide dispute as to
certain matters may from time to time arise after the Closing Date relating to
rights or obligations under this Agreement. In such instance, the Shareholder
Representative or Buyer, as the case may be, may by written notice to the other,
have such dispute referred to the Shareholder Representative and the
representative of Buyer designated below or his successor, for attempted
resolution by good faith negotiation within thirty (30) days after such notice
is received. The designated representative of Buyer is Xxxxx X. Xxxxxx. Any
settlement reached by the Shareholder Representative and the representative of
Buyer under this Section 9.04(a) shall not be binding until reduced to writing
and signed by them. When reduced to writing, such settlement agreement shall
supersede all other agreements, written or oral, to the extent such agreements
specifically pertain to the matters so settled. If the Shareholder
Representative and the representative of Buyer are unable to resolve such
dispute within such 30-day period, either may demand arbitration pursuant to
Section 9.04(b).
(b) Except as provided below, any controversy or claim arising out
of or relating to this Agreement shall be settled by arbitration in Chicago,
Illinois, at a time and location designated by the arbitrator, but not exceeding
ninety (90) days after a demand for arbitration has been made. Arbitration shall
be conducted by the American Arbitration
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Association in accordance with its Rules of Commercial Arbitration, and judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator shall be a retired state or federal judge
experienced in business litigation or any attorney who has practiced business
litigation for at least ten (10) years. Arbitration will be conducted pursuant
to the provisions of this Agreement and the Commercial Arbitration Rules of the
American Arbitration Association. Limited civil discovery shall be permitted for
the production of documents and taking of depositions. Unresolved discovery
disputes may be brought to the attention of, and may be decided by, the
arbitrator. The arbitrator shall assess the costs and expenses of the
arbitration against the parties in such proportion as may be fair and equitable.
Nothing herein contained shall bar either party from seeking equitable remedies
in a court of appropriate jurisdiction.
9.05 Waiver of Compliance; Consents. Any failure of Buyer or Buyer
Subsidiary, on the one hand, or Xxxxxxx, on the other hand, to comply with any
obligation, covenant, agreement or condition herein (except the conditions in
Sections 5.01(b) and (c) and 5.02(b) and (c) of this Agreement) may be waived in
writing by Xxxxxxx or by Buyer and Buyer Subsidiary, respectively, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 9.05.
9.06 Expenses. Except as otherwise expressly provided in this
Agreement, all expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such expenses.
9.07 Press Releases and Public Announcements. No party to this
Agreement shall issue any press release or make any public announcement relating
to the subject matter of this Agreement without prior written approval of the
other parties; provided, however, that each of Xxxxxxx and Buyer may make any
public disclosure it believes in good faith is required by applicable law or, in
the case of Buyer, the disclosure documents prepared in connection with the
offering of its debt securities (in which case the disclosing party will advise
the other parties to this Agreement prior to making the disclosure).
9.08 Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action, and to 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 by this Agreement,
including without limitation the negotiation, execution and delivery of the
Disbursing Agreement. In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each corporation which is a party to this
Agreement shall take all such necessary action.
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9.09 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to Buyer or Buyer Subsidiary, to or, in the case of
Buyer Subsidiary, in care of:
Xxxxx Xxxx Pet Food Co., Inc.
c/o Dartford Partnership
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxx
with a copy to:
Xxxxxxxx & X'Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxx X. Xxxxxxxxxxx
(b) If to Xxxxxxx:
Xxxxxxx Milling Company
X.X. Xxx 0000
000 Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, President
with a copy to:
Faegre & Xxxxxx LLP
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
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9.10 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other parties, nor is this Agreement intended to confer
upon any other person except the parties any rights or remedies hereunder.
Notwithstanding the foregoing, Buyer and Buyer Subsidiary may assign their
respective rights to indemnification hereunder to a lender or lenders providing
financing for the transactions contemplated hereby.
9.11 Governing Law. The Agreement shall be governed by the laws of
the State of Minnesota.
9.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.13 Knowledge. All references in this Agreement to knowledge of a
corporation shall be deemed to mean knowledge of one or more of its executive
officers.
9.14 Headings; Internal References. The Article and Section headings
contained in this Agreement are solely for the purpose of reference, and are not
part of the agreement of the parties and shall not affect in any way the meaning
or interpretation of this Agreement. Any references in this Agreement to an
article, section, paragraph, clause, exhibit or schedule shall be deemed to be a
reference to the article, section, paragraph, clause, exhibit or schedule
contained in this Agreement unless expressly stated otherwise.
9.15 Entire Agreement. This Agreement, including the exhibits hereto
and the documents and instruments referred to herein, embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
9.16 Severability. If any term, provision, covenant, agreement or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants, agreements and restrictions of this Agreement will continue in full
force and effect and will in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties hereto do execute and deliver this
Agreement as of the date first above written.
XXXXXXX MILLING COMPANY
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
President
XXXXX XXXX PET FOOD CO., INC.
By /s/ Xxx Xxxxx
---------------------------------
Xxx Xxxxx
Executive Vice President
XXXXX XXXX PET FOOD ACQUISITION CO.
By /s/ Xxx Xxxxx
---------------------------------
Xxx Xxxxx
Executive Vice President
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EXHIBIT A
ARMOUR STOCK PURCHASE AGREEMENT
--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
by and between
XXXXX XXXX PET FOOD CO., INC.
and
THE SHAREHOLDERS
OF
ARMOUR CORPORATION
Dated as of April ____, 1997
--------------------------------------------------------------------------------
TABLE OF CONTENTS
(Not Part of the Agreement)
Page
ARTICLE I PURCHASE OF ARMOUR CAPITAL STOCK .................................. 1
1.01 GENERALLY ..................................................... 1
1.02 ALLOCATION OF PURCHASE PRICE .................................. 2
1.03 SEPARATE AND SEVERAL OBLIGATIONS .............................. 2
ARTICLE II CLOSING, PAYMENT FOR SHARES AND RELATED MATTERS .................. 2
2.01 GENERALLY ..................................................... 2
2.02 PAYMENT FOR SHARES ............................................ 2
ARTICLE III REPRESENTATIONS AND WARRANTIES .................................. 5
3.01 REPRESENTATIONS AND WARRANTIES OF ARMOUR SHAREHOLDERS ......... 5
3.02 REPRESENTATIONS AND WARRANTIES OF BUYER ....................... 8
ARTICLE IV CONDUCT AND TRANSACTIONS PRIOR TO CLOSING ........................ 9
4.01 LIABILITIES ................................................... 9
4.02 DIVIDENDS ..................................................... 9
4.03 ARMOUR CLOSING DATE BALANCE SHEET ............................. 9
ARTICLE V CONDITIONS PRECEDENT .............................................. 9
5.01 CONDITIONS TO THE OBLIGATIONS OF BUYER ........................ 9
5.02 CONDITIONS TO THE OBLIGATIONS OF ARMOUR SHAREHOLDERS .......... 11
ARTICLE VI TERMINATION AND ABANDONMENT ...................................... 13
6.01 GENERALLY ..................................................... 13
6.02 PROCEDURE AND EFFECT OF TERMINATION AND ABANDONMENT ........... 14
ARTICLE VII ARMOUR SHAREHOLDER REPRESENTATIVE ............................... 14
7.01 DESIGNATION ................................................... 14
7.02 AUTHORITY ..................................................... 14
7.03 RESIGNATION ................................................... 15
7.04 RELIANCE BY THIRD PARTIES ON THE ARMOUR SHAREHOLDER
REPRESENTATIVE'S AUTHORITY .................................... 15
7.05 EXCULPATION AND INDEMNIFICATION ............................... 15
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ARTICLE VIII MISCELLANEOUS PROVISIONS ....................................... 16
8.01 LIMITATIONS ON SURVIVAL ................................................ 16
8.02 INDEMNIFICATION ............................................... 16
8.03 AMENDMENT AND MODIFICATION .................................... 19
8.04 ALTERNATIVE DISPUTE RESOLUTION ................................ 19
8.05 INSURANCE COVERAGE ............................................ 20
8.06 FILING OF TAX RETURNS ......................................... 20
8.07 WAIVER OF COMPLIANCE; CONSENTS ................................ 20
8.O8 EXPENSES ...................................................... 20
8.09 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS ....................... 20
8.10 ADDITIONAL AGREEMENTS ......................................... 21
8.11 NOTICES ....................................................... 21
8.12 ASSIGNMENT .................................................... 22
8.13 GOVERNING LAW ................................................. 22
8.14 COUNTERPARTS .................................................. 22
8.15 HEADINGS; INTERNAL REFERENCES ................................. 22
8.16 ENTIRE AGREEMENT .............................................. 22
8.17 SEVBRABILITY .................................................. 23
EXHIBITS
A Ownership of Armour Capital Stock
B Form of Opinion of Counsel to Armour Shareholders
C Form of Opinion of Counsel to Buyer
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STOCK PURCHASE AGREEMENT ("Agreement") dated as of April _, 1997, by
and between XXXXX XXXX PET FOOD CO., INC., a Delaware corporation ("Buyer"), and
XXXXX X. XXXXXX, XXX X. XXXX, XXXXXXX X. XXXXXX, XXXXX X. XXXXXXXXX, Xxxxxxx X.
Xxxxxx and First Bank National Association as Trustees of the XXXXXXXXX XXXX
XXXXXX TRUST NO.2, and Xxxxxxx X. Xxxxxx and First Bank National Association as
Trustees of the XXXXX X. XXXXXX FAMILY TRUST CREATED UNDER THE XXXXX X. XXXXXX
TRUST AGREEMENT (collectively the "Armour Shareholders", and individually an
"Armour Shareholder").
WITNESSETH:
WHEREAS, the Armour Shareholders own beneficially and of record all
of the issued and outstanding shares of capital stock of Armour Corporation, a
Delaware corporation ("Armour");
WHEREAS, Buyer desires to purchase from the Armour Shareholders, and
the Armour Shareholders desire to sell to Buyer, all of the issued and
outstanding shares of capital stock of Armour;
WHEREAS, Armour owns and holds beneficially and of record 800,000
shares of Class A Common Stock of Xxxxxxx Milling Company, a Minnesota
corporation ("Xxxxxxx");
WHEREAS, Xxxxxxx, Buyer and Xxxxx Xxxx Pet Food Acquisition Co.
("Buyer Subsidiary") have entered into a Merger Agreement dated as of March 21,
1997 (the "Merger Agreement") providing for Buyer Subsidiary to be merged with
and into Xxxxxxx; and
WHEREAS, execution and delivery of this Agreement and consummation
of the transactions contemplated hereby are conditions precedent to consummation
of the transactions contemplated by the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto hereby agree as follows:
ARTICLE I
PURCHASE OF ARMOUR CAPITAL STOCK
1.01 Generally. Subject to the conditions precedent hereinafter
contained, on the Closing Date (as defined in Section 2.01), Buyer shall
purchase from each of the Armour Shareholders, and each of the Armour
Shareholders shall sell to Buyer, the number
and class of shares of issued and outstanding capital stock of Armour specified
in Exhibit A (all such shares of issued and outstanding capital stock of Armour
being hereinafter called the "Armour Capital Stock"). The aggregate purchase
price (the "Purchase Price") for the Armour Capital Stock shall be an amount
equal to 800,000 (i.e. number of shares of Xxxxxxx Class A Common Stock held by
Armour) multiplied by the Common Stock Merger Consideration Per Share (as
defined in the Merger Agreement) plus (i) the amount of any cash of Armour on
the Closing Date after giving effect to the payment of any dividends permitted
by Section 4.02 as reflected on the Armour Closing Date Balance Sheet (as
defined in Section 4.03), and less (ii) the amount of any accrued but unpaid tax
liability of Armour on the Closing Date as reflected in the Armour Closing Date
Balance Sheet.
1.02 Allocation of Purchase Price. The Purchase Price shall be
allocated to the 9% Cumulative Voting Preferred Stock of Armour (the "Armour
Preferred Stock") in an amount equal to Ten Dollars ($10.00) per share, plus
accrued but unpaid dividends thereon through the Closing Date, and the balance
of such Purchase Price shall be allocated ratably to the shares of Common Stock
of Armour (the "Armour Common Stock").
1.03 Separate and Several Obligations. The obligations of the Armour
Shareholders under this Article I shall be separate and several.
ARTICLE II
CLOSING, PAYMENT FOR SHARES AND RELATED MATTERS
2.01 Generally. The closing (the "Closing") of the purchase and sale
of Armour Capital Stock in accordance with Article I shall occur on the "Closing
Date" specified in or otherwise determined in accordance with Section 2.01 of
the Merger Agreement (the "Closing Date"). The Closing shall be held at the
offices of Xxxxxxxx & O'Neil LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx or such
other place as the Armour Shareholders and Buyer may mutually agree.
2.02 Payment for Shares. (a) On the Closing Date, the Armour
Shareholders shall cause the Armour Shareholder Representative (as defined in
Section 7.01) to deliver to Buyer a written estimate of the Purchase Price, such
estimate to be prepared upon consultation with Buyer (the "Estimated Purchase
Price"), which shall be an amount equal to 800,000 (i.e. the number of shares of
Xxxxxxx Class A Common Stock held by Armour) multiplied by the estimate of the
Common Stock Merger Consideration Per Share delivered by Xxxxxxx to Buyer
pursuant to Section 2.02(a) of the Merger Agreement, plus (i) the amount of any
cash of Armour on the Closing Date after giving effect of the payment of any
dividends permitted by Section 4.02 as reflected on the Armour Closing Date
Balance Sheet, and less (ii) the amount of any accrued but unpaid tax liability
of Armour on the Closing Date as reflected in the Armour Closing Date Balance
Sheet. Such written estimate of the Purchase Price shall reflect the allocation
between the Armour Preferred Stock and the Armour
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Common Stock (the amount so allocated to the Armour Common Stock hereinafter
called the "Estimated Armour Common Stock Purchase Price").
(b) On the Closing Date, subject to the terms and conditions herein
contained, upon surrendering the certificates evidencing the Armour Capital
Stock, duly endorsed or accompanied by duly executed assignments separate from
certificate, Buyer shall remit the Estimated Purchase Price to or for the
benefit of the Armour Shareholders as follows:
(i) Buyer shall pay by cashier's check to each holder of Armour
Preferred Stock an amount equal to the number of shares of Armour
Preferred Stock held by such holder as specified in Exhibit A
multiplied by an amount equal to the sum of (A) Ten Dollars ($10.00)
per share, plus (B) accrued but unpaid dividends thereon through the
Closing Date, which payment shall be in full and final satisfaction
of the portion of the Purchase Price allocable to the Armour
Preferred Stock in accordance with Section 1.02;
(ii) Buyer shall remit to the Disbursing Agent under the Disbursing
Agreement (as such terms are defined in Section 2.02 of the Merger
Agreement) in immediately available funds, and the Disbursing Agent
shall hold in escrow pursuant to the escrow provisions of the
Disbursing Agreement, an amount (the "Armour Escrow Amount) equal to
Thirteen Million Dollars ($13,000,000) or, if the Escrow Amount (as
defined in Section 2.02(a) of the Merger Agreement) is calculated
based on Ten Million Dollars ($10,000,000) pursuant to Section
2.02(a) of the Merger Agreement, Ten Million Dollars ($10,000,000),
in either case multiplied by a fraction, the numerator of which is
800,000 and the denominator of which is the aggregate number of
shares of Xxxxxxx Class A Common Stock and Xxxxxxx Class B Common
Stock issued and outstanding on the Closing Date (including the
800,000 shares of Xxxxxxx Class A Common Stock held by Armour);
(iii) Buyer shall remit to the Disbursing Agent under the Disbursing
Agreement in immediately available funds an amount (the "Reserve
Amount") equal to 5% of the Estimated Armour Common Stock Purchase
Price, such amount to be held by the Disbursing Agent pending a
final determination of the Common Stock Merger Consideration Per
Share under the Merger Agreement and a final determination of the
Purchase Price under this Agreement; and
(iv) Buyer shall remit the balance of the Estimated Purchase Price
remaining after the applications required by the foregoing clauses
(i), (ii) and (iii) by cashier's check to the holders of the Armour
Common Stock, pro rata based upon the number of shares of Armour
Common Stock held by each such holder as reflected in Exhibit A,
such application to constitute partial payment of the Purchase Price
allocable to the Armour Common Stock.
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(c) If the Armour Escrow Amount shall have been calculated under Section
2.02(b)(ii) based upon Thirteen Million Dollars ($13,000,000) but pursuant to
Section 2.02(b) of the Merger Agreement the Escrow Amount under the Merger
Agreement is thereafter recalculated based on Ten Million Dollars ($10,000,000),
then the Armour Escrow Amount shall be recalculated based on Ten Million Dollars
($10,000,000), in which event the excess of the Armour Escrow Amount as
originally calculated pursuant to Section 2.02(b)(ii) over the Armour Escrow
Amount as recalculated pursuant to this Section 2.02(c) shall be released from
escrow and held by the Disbursing Agent for distribution in accordance with
Section 2.02(e).
(d) Upon delivery of the Closing Date Balance Sheet (as defined in Section
1.03 of the Merger Agreement) and final determination of the Common Stock Merger
Consideration Per Share in accordance with the Merger Agreement, the Armour
Shareholders shall cause the Armour Shareholder Representative to deliver to
Buyer and the Disbursing Agent a final written calculation of the Purchase Price
allocable to the Armour Common Stock (the "Armour Common Stock Purchase Price").
Within two (2) business days of delivery of such calculation to Buyer, Buyer
shall remit or cause to be remitted in immediately available funds to the
Disbursing Agent for application in accordance with the Disbursing Agreement an
amount equal to the excess (if any) of (i) the Armour Common Stock Purchase
Price over the Estimated Armour Common Stock Purchase Price. Alternatively, if
the Estimated Armour Common Stock Purchase Price exceeds the Armour Stock
Purchase Price, the Disbursing Agreement shall provide for the Disbursing Agent
to remit the amount of such excess to Buyer within two (2) days of receipt of a
written request from Buyer.
(e) The Disbursing Agreement shall further provide that following the
remittance to or by the Disbursing Agent in accordance with Section 2.02(d), the
Disbursing Agent shall pay by cashier's check to the holders of Armour Common
Stock an amount equal to the Reserve Amount plus or minus as the case may be,
the amount of any payment by or to the Disbursing Agent pursuant to Section
2.02(d), plus (if applicable) any amount released from escrow pursuant to
Section 2.02(c). Such payment shall be allocated among the holders of Armour
Stock pro rata based upon their ownership of Armour Common Stock as set forth in
Exhibit A.
(f) The Disbursing Agreement shall authorize the Disbursing Agent to
invest as therein provided any amounts from time to time held by the Disbursing
Agent under the Disbursing Agreement, and to apply as therein provided any net
profit resulting from, or interest or income produced by, such investments.
(g) The Disbursing Agreement shall provide that any remaining Armour
Escrow Amount held by the Disbursing Agent under the Disbursing Agreement
eighteen (18) months after the Closing Date (subject to the provisions of the
Disbursing Agreement providing for the retention of the Armour Escrow Amount in
respect of escrow claims then pending) shall
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be paid by cashier's check to the holders of Armour Common Stock, such amount to
be allocated among the holders of Armour Common Stock pro rata based upon their
ownership of Armour Common Stock as set forth in Exhibit A, in final settlement
of the Armour Common Stock Purchase Price.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of Armour Shareholders. Each
Armour Shareholder (separately and severally) represents and warrants to Buyer,
and its successors and assigns, as follows:
(a) Organization and Good Standing. Armour is a corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of Delaware and has the requisite corporate power and authority to own its
assets and carry on its business as it is now being conducted.
(b) Certificate of Incorporation and By-Laws. The copy of the
certificate of incorporation and by-laws of Armour that has been delivered to
Buyer is complete and correct as of the date of this Agreement, and the minute
books of Armour that have been made available to Buyer are complete in all
material respects and accurately reflect all material action taken prior to the
date of this Agreement by the Board of Directors and the Armour Shareholders.
(c) Capitalization. The authorized capital stock of Armour at the
date hereof consists of 25,000 shares of 9% Cumulative Voting Preferred Stock,
$10 par value, and 10,000 shares of Common Stock, $1 par value, all of which are
currently issued and outstanding.
(d) Ownership of Stock. Such Armour Shareholder owns and holds of
record, free and clear of any lien, claim or encumbrance, the shares of Armour
Capital Stock set forth adjacent to its name on Exhibit A, and such shares are
validly issued, fully paid and nonassessable. There are no restrictions on such
Armour Shareholder's ability to transfer such shares.
(e) Power and Authority; Execution and Enforceability. Such Armour
Shareholder has the legal right, power and authority to enter into this
Agreement and has the legal right, power and authority to transfer, assign and
deliver such Armour Shareholder's shares as provided in this Agreement, and such
delivery will convey to Buyer good and marketable title to such shares, free and
clear of all liens, claims, agreements and encumbrances of any kind whatsoever.
This Agreement constitutes the legal, valid and
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binding obligation of such Armour Shareholder enforceable in accordance with its
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a court of law or in
equity).
(f) Assets. Armour is a holding company which holds as its sole
assets 800,000 shares of Xxxxxxx Class A Common Stock and cash from time to time
maintained in its corporate accounts. Armour has good and marketable title to
such shares of Xxxxxxx free and clear of all liens, claims and encumbrances.
Since its incorporation, Armour has not operated or otherwise engaged in any
business activity other than (i) ownership of such shares of Xxxxxxx Class A
Common Stock and the exercise of voting rights in respect thereof; (ii) the
payment of dividends, fees and disbursements of its counsel and independent
accountants, income taxes, franchise taxes and other fees necessary to maintain
in good standing its status as a corporation in the state of Delaware; and (iii)
other immaterial, incidental and administrative matters directly related to the
foregoing.
(g) Liabilities; Litigation. Armour has no debts or other
liabilities of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, except for (i) accrued and unpaid fees
and disbursements of its counsel and independent accountants, and (ii) accrued
and unpaid taxes. All dividends required to be paid on Armour 9% Cumulative
Voting Preferred Stock have been paid through December 31, 1996. No litigation,
arbitration, administrative proceeding, or investigation of any kind is pending
or, to the knowledge of such Armour Shareholder, threatened against Armour or
any of its officers or directors in connection with the business or affairs of
Armour. Armour is not currently, and has not been since 1990, subject to any
judgment, consent decree, binding arbitration or regulatory order not generally
applicable to similar businesses.
(h) Tax Matters.
(i) Armour has timely filed all Federal, state, local and
foreign tax returns ("Tax Returns") required to be filed by it with
respect to income, withholding, social security, unemployment,
franchise, property, excise and sales and use taxes (all such taxes,
together with any interest or penalties payable in respect thereof,
hereinafter collectively called "Taxes"), and has paid, reserved or
accrued for all Taxes.
(ii) All Tax Returns filed by Armour for any taxable period
were complete and accurate in all material respects. No Tax Returns
filed by Armour have ever been audited and no claims for additional
Taxes for any taxable period have ever been made by any taxing
authority. Armour has not received a notice of deficiency or
assessment of additional Taxes which notice or assessment remains
-6-
unresolved. Armour has not extended the period for assessment or
payment of any Tax, which period has not since expired.
(iii) Armour has not been a member of an affiliated group (as
such term is defined in Section 1504 of the Internal Revenue Code of
1986, as amended (the "Code")) filing a consolidated federal income
tax return for any tax year.
(iv) There are no liens for Taxes (other than current Taxes
not yet due and payable) upon the assets of Armour.
(v) Armour has not filed a consent under Code Section 341(f)
concerning collapsible corporations.
(vi) Armour has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii).
(vii) Armour is not a party to any Tax allocation or sharing
agreement.
(viii) Armour is not a party to any agreement, contract,
arrangement or plan that has resulted or would result, separately or
in the aggregate, in the payment of any "excess parachute payments"
within the meaning of Code Sec. 2809, or any other payment of
compensation which would be nondeductible under Code Sec. 162.
(i) No Undisclosed Liabilities. There are no liabilities of Armour
of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances which could reasonably be expected to result in such a
liability, other than liabilities provided for in the Armour Closing Date
Balance Sheet (as defined below) or disclosed in the notes thereto.
(j) No Brokers or Finders. Such Armour Shareholder has not engaged
any investment banker, broker or finder in connection with the transactions
contemplated hereby.
(k) Full Disclosure. No representation or warranty contained in this
Agreement, the Merger Agreement or any Disclosure Schedule hereto or thereto
omits to state a material fact necessary to make the statements contained herein
or therein, in light of the circumstances under which they were made, not
misleading.
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3.02 Representations and Warranties of Buyer. Buyer represents and
warrants to each Armour Shareholder, and their respective successors and
assigns, as follows:
(a) Organization, Standing, Equity Ownership. Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of its
state of incorporation. Buyer has made available to each Armour Shareholder a
certified copy of the articles or certificate of incorporation and by-laws of
Buyer. Such copy is complete and correct as of the date hereof.
(b) Authorization and Execution. Buyer has the corporate power and
authority to execute and deliver this Agreement and consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by Buyer have been duly and effectively authorized by all necessary corporate
action of Buyer, and no further corporate action is necessary on the part of
Buyer to consummate the transactions contemplated hereby. This Agreement
constitutes a legal, valid and binding obligation of Buyer, enforceable against
it in accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally, and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is sought in
a court of law or equity).
(c) No Conflicts. Neither the execution and delivery of this
Agreement by Buyer, nor the consummation of the transactions contemplated
hereby, will (i) conflict with or result in a breach of its articles or
certificate of incorporation or by-laws, as currently in effect, of Buyer, or
(ii) except for the requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 (the "Xxxx-Xxxxx-Xxxxxx Act"), require any filing with,
or any consent or approval of any governmental authority having jurisdiction
over any of the business or assets of Buyer, or (iii) violate any statute,
regulation, injunction, judgment or order to which Buyer is subject, or (iv)
result in a breach of or constitute a default or an event which, with the
passage of time or the giving of notice, or both, would constitute a default,
give rise to a right of termination, cancellation or acceleration, create any
entitlement to any payment or benefit, require the consent of any third party or
result in the creation of any lien on the assets of Buyer under any material
instrument, contract or agreement to which Buyer is a party or by which it is
bound.
(d) No Brokers or Finders. Buyer has not engaged any investment
banker, broker or finder in connection with the transactions contemplated
hereby.
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ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR TO CLOSING
4.01 Liabilities. The Armour Shareholders shall cause Armour (i) to
obtain from its counsel, Faegre & Xxxxxx LLP, and its accountants, Xxxxx
Xxxxxxxx & Company, final statements for all services and disbursements to and
including the Closing Date, and (ii) to pay the statements so obtained on or
prior to the Closing Date. If Armour shall have any other liabilities, other
than for payment of income taxes, outstanding on the Closing Date, the Armour
Shareholders shall cause Armour to pay such other liabilities on the Closing
Date.
4.02 Dividends. The Armour Shareholders will not cause or permit
Armour to declare or pay any dividends between the date hereof and the Closing
Date which would impair the ability of Armour (i) to pay the liabilities
required to be paid pursuant to Section 4.01, or (ii) to pay income taxes.
Subject to the foregoing, Armour may declare and pay a final dividend equal to
the cash remaining on the Closing Date after payment of the liabilities required
to be paid pursuant to Section 4.01.
4.03 Armour Closing Date Balance Sheet. The Armour Shareholders
shall cause Armour's independent accountants to compile and deliver to the
Armour Shareholders and to Buyer on the Closing Date a pro forma balance sheet
reflecting the financial condition of Armour as of the Closing Date, after
giving effect to payment of the liabilities required to be paid pursuant to
Section 4.01 and payment of dividends permitted to be paid pursuant to Section
4.02 (the "Armour Closing Date Balance Sheet"). The Armour Closing Date Balance
Sheet shall be prepared in accordance with generally accepted accounting
principles from the books and records of Armour (which are accurate and complete
in all material respects) and shall fairly represent, in all material respects,
the assets, liabilities and financial position of Armour as of the Closing Date.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions to the Obligations of Buyer. The obligations of
Buyer to purchase the Armour Capital Stock pursuant to Article I shall be
subject to the fulfillment on or prior to the Closing Date of the following
conditions, any one or more of which (except for the conditions set forth in
Section 5.01(b), (c) and (d)) may be waived by Buyer:
(a) The representations and warranties of each Armour Shareholder
contained in Section 3.01 shall be true and correct in all material respects
with the same effect as if such representations and warranties had been made on
the Closing Date; each Armour Shareholder shall have performed and complied in
all material respects with the agreements
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and obligations contained in this Agreement required to be performed and
complied with by such Armour Shareholder on or prior to the Closing Date; and
Buyer shall have received a certificate signed by each Armour Shareholder to the
effects set forth in this Section 5.01(a) as it relates to such Armour
Shareholder.
(b) The Merger Agreement shall not have been terminated; all
conditions precedent set forth in the Merger Agreement to the merger of Buyer
Subsidiary with and into Xxxxxxx thereunder (the "Merger") shall have been
satisfied or waived; and arrangements reasonably satisfactory to Buyer and Buyer
Subsidiary shall have been made for the Merger to be consummated immediately
after the Closing hereunder.
(c) The amendment ("Amendment") to the Articles of
Incorporation of Xxxxxxx contemplated under the Merger Agreement shall have been
adopted at a Special Meeting of the Shareholders of Xxxxxxx by the vote required
by the Minnesota Business Corporation Act ("MBCA") and Xxxxxxx'x Articles of
Incorporation, and a Certificate of Amendment to the Articles of Incorporation
of Xxxxxxx containing such amendment shall have been duly executed, filed with
the Minnesota Secretary of State and effective prior to the vote of the
shareholders of Xxxxxxx at such meeting on the Plan of Merger (as defined in the
Merger Agreement).
(d) The Plan of Merger shall have been approved at the Special
Meeting of the Shareholders of Xxxxxxx referred to in Section 5.01(c) by the
vote required by the MBCA and Xxxxxxx'x Articles of Incorporation.
(e) There shall not be pending any suit, action,
investigation, inquiry or other proceeding by or before any court or
governmental or other regulatory or administrative agency or commission
requesting or looking toward an order, judgment or decree (except those in which
Buyer is a plaintiff directly or derivatively) which, in the reasonable judgment
of Buyer could, if issued, restrain or prohibit the consummation of the
transactions contemplated hereby or require rescission of this Agreement or such
transactions or result in damages to Buyer, if the transactions contemplated
hereby are consummated, nor shall there be in effect any injunction, writ,
preliminary restraining order or any order of any nature issued by a court or
governmental agency of competent jurisdiction directing that the transactions
provided for herein, or any of them, not be consummated as so provided.
(f) Buyer shall have received from Faegre & Xxxxxx LLP,
counsel to the Armour Shareholders, an opinion, dated the Closing Date and
reasonably satisfactory in form and substance to Buyer and its counsel, as to
the matters set forth in Exhibit B. In rendering such opinion, such counsel may
rely, to the extent such counsel deems such reliance necessary or appropriate,
as to matters of fact, upon certificates of the Armour Shareholders.
(g) All applicable waiting periods (and any extensions
thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated.
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(h) On the Closing Date, the Armour Shareholders will have
delivered to Buyer the following:
(i) A good standing certificate for Armour from the
state of Delaware, dated not earlier than 15 days prior to the
Closing Date;
(ii) The written resignations of the officers and
directors of Armour;
(iii) The minute books, stock records and stock ledgers
of Armour; and
(iv) Such other documents and instruments as Buyer may
reasonably request in connection with the transactions
contemplated hereby.
(i) The Disbursing Agreement shall have been executed and
delivered by the parties thereto other than Buyer.
5.02 Conditions to the Obligations of Armour Shareholders. The
obligation of each Armour Shareholder to sell its Armour Capital Stock shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions, any one or more of which (except for the conditions set forth in
Sections 5.02(b), (c) and (d)) may be waived by the Armour Shareholders:
(a) The representations and warranties of Buyer contained in
Section 3.02 of this Agreement shall be true and correct in all material
respects on the Closing Date with the same effect as if such representations and
warranties had been made on the Closing Date; Buyer shall have performed and
complied in all material respects with the agreements and obligations contained
in this Agreement required to be performed and complied with by it on or prior
to the Closing Date; and the Armour Shareholders shall have each received a
certificate signed by an executive officer of Buyer to the effects set forth in
this Section 5.02(a).
(b) The Merger Agreement shall not have been terminated; all
conditions precedent set forth in the Merger Agreement to the Merger shall have
been satisfied or waived; and arrangements reasonably satisfactory to the Armour
Shareholders shall have been made for the Merger to be consummated immediately
after the Closing hereunder.
(c) The Amendment shall have been adopted at the Special
Meeting of the Shareholders of Xxxxxxx referred to in Section 5.01(c) by the
vote required by the MBCA and Xxxxxxx'x Articles of Incorporation, and a
Certificate of Amendment to the Articles of Incorporation of Xxxxxxx containing
such amendment shall have been duly executed, filed
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with the Minnesota Secretary of State and effective prior to the vote of the
shareholders of Xxxxxxx at such meeting on the Plan of Merger.
(d) The Plan of Merger shall have been approved at the Special
Meeting of the Shareholders of Xxxxxxx referred to in Section 5.01(c) by the
vote required by the MBCA and Xxxxxxx'x Articles of Incorporation.
(e) All corporate action on the part of Buyer, necessary to
authorize the execution, delivery and consummation of this Agreement or any
agreement or instrument contemplated hereby to which Buyer is or is to be a
party or the transactions contemplated hereby or thereby shall have been duly
and validly taken.
(f) There shall not be pending any suit, action,
investigation, inquiry or other proceeding by or before any court or
governmental or other regulatory or administrative agency or commission
requesting or looking toward an order, judgment or decree (except those in which
Armour or any Armour Shareholder is a plaintiff directly or derivatively) which,
in the reasonable judgment of the Armour Shareholders, would, if issued,
restrain or prohibit the consummation of the transactions contemplated hereby or
require rescission of this Agreement or such transactions or result in damages
to the Armour Shareholders if the transactions contemplated hereby are
consummated, nor shall there be in effect any injunction, writ, preliminary
restraining order or any order of any nature issued by a court or governmental
agency of competent jurisdiction directing that the transactions provided for
herein, or any of them, not be consummated as so provided.
(g) The Armour Shareholders shall have received from Xxxxxxxx
& X'Xxxx, LLP, counsel to Buyer, an opinion, dated the Closing Date and
reasonably satisfactory in form and substance to the Armour Shareholders and
their counsel, as to the matters set forth in Exhibit C. In rendering such
opinion, such counsel may rely, to the extent such counsel deems such reliance
necessary or appropriate, as to matters of fact, upon certificates of government
officials and of any officer or officers of Buyer.
(h) All applicable waiting periods (and any extension thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been terminated.
(i) On the Closing Date, Buyer will have delivered to the
Armour Shareholders the following:
(i) A good standing certificate for Buyer from the state
of Delaware, dated not earlier than 15 days prior to the
Closing Date;
(ii) Certified copies of the resolutions duly adopted by
the board of directors of Buyer authorizing the execution,
delivery and performance of this Agreement and the other
agreements contemplated hereby; and
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(iii) Such other documents and instruments as the Armour
Shareholders may reasonably request in connection with the
transactions contemplated hereby.
(j) The Disbursing Agreement shall have been executed and
delivered by the parties thereto other than the Armour Shareholder
Representative (as defined in Section 7.01).
ARTICLE VI
TERMINATION AND ABANDONMENT
6.01 Generally. This Agreement may be terminated and abandoned
at any time prior to Closing under the following circumstances:
(a) by mutual consent of the Board of Directors of Buyer and
the Armour Shareholders;
(b) by Buyer or the Armour Shareholders if the transactions
contemplated hereby shall not have been consummated on or before June 30, 1997
(which date may be extended by mutual agreement of the Board of Directors of
Buyer and the Armour Shareholders), provided that such failure is not due solely
to the failure of the party seeking to terminate this Agreement to comply with
its obligations under this Agreement;
(c) by Buyer if any of the conditions set forth in Section
5.01 shall become impossible to fulfill other than for reasons within the
control of Buyer, and such conditions shall not have been waived pursuant to
Section 8.07;
(d) by any Armour Shareholder if any of the conditions set
forth in Section 5.02 shall become impossible to fulfill other than for reasons
within the control of the Armour Shareholders, or any of them, and such
conditions shall not have been waived pursuant to Section 8.07; or
(e) by Buyer if Buyer shall have failed to receive the
proceeds of the bridge financing under the Chase Bridge Financing Commitment or
the proceeds of the senior debt financing under the CSFB Senior Debt Financing
Commitment (as such terms are defined in the Merger Agreement), as the case may
be, as a result, in the case of the Chase Bridge Financing Commitment, of any of
the circumstances described in clauses (i) through (v) of the first full
paragraph on page 4 thereof, or as a result, in the case of the CSFB Senior Debt
Financing Commitment, of any of the circumstances described in the first full
paragraph of page 2 thereof.
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6.02 Procedure and Effect of Termination and Abandonment. In
the event of termination of this Agreement by one or more of Buyer or the Armour
Shareholders pursuant to Section 6.01, written notice thereof shall forthwith be
given to the other parties hereto and this Agreement shall terminate without
further action by any of the parties hereto. If this Agreement is terminated as
provided herein, no party hereto shall have any liability or further obligation
to any other party to this Agreement except to the extent the termination is a
direct result of a willful and material breach by a party to this Agreement of
any material representation, warranty or covenant contained in this Agreement.
ARTICLE VII
ARMOUR SHAREHOLDER REPRESENTATIVE
7.01 Designation. Subject to the terms and conditions of this
Article VII, Xxxxxxx X. Xxxxxx is designated as the representative of the Armour
Shareholders (the "Armour Shareholder Representative") by the Armour
Shareholders to serve, and the Buyer hereby acknowledges that the Armour
Shareholder Representative shall serve, as the sole representative of the Armour
Shareholders from and after the Closing Date with respect to the matters set
forth in this Agreement, such service to be without compensation except for the
reimbursement of out-of-pocket expenses and indemnification specifically
provided herein. The Armour Shareholder Representative has accepted such
designation as of the date hereof. Notwithstanding anything to the contrary
contained in this Agreement, the Armour Shareholder Representative shall have no
duties or responsibilities except those expressly set forth herein, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on behalf of any Armour Shareholder shall otherwise exist against
the Armour Shareholder Representative.
7.02 Authority. Each Armour Shareholder, by executing this
Agreement, irrevocably appoints the Armour Shareholder Representative as the
agent, proxy and attorney-in-fact for such Armour Shareholder for all purposes
of this Agreement, including full power and authority on such Armour
Shareholder's behalf (i) to take all actions which the Armour Shareholder
Representative considers necessary or desirable in connection with the defense,
pursuit or settlement of any determinations relating to the payment of the
Armour Escrow Amount and any claims for indemnification pursuant to Section
8.02, including to xxx, defend, negotiate, settle and compromise any such claims
for indemnification made by or against, and other disputes with, the Buyer
pursuant to this Agreement or any of the agreements or transactions contemplated
hereby, (ii) to engage and employ agents and representatives (including
accountants, legal counsel and other professionals) and to incur such other
expenses as he shall deem necessary or prudent in connection with the
administration of the foregoing, (iii) to provide for all expenses incurred in
connection with the administration of the foregoing to be paid by directing the
Disbursing Agent to reimburse
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the Armour Shareholder Representative for such expenses, (iv) to disburse to the
Armour Shareholders all indemnification payments received from the Buyer under
Section 8.02, (v) to accept and receive notices to the Armour Shareholders
pursuant to this Agreement, and (vi) to take all other actions and exercise all
other rights which the Armour Shareholder Representative (in his sole
discretion) considers necessary or appropriate in connection with this
Agreement. Each of the Armour Shareholders agrees that such agency and proxy are
coupled with an interest, and are therefore irrevocable without the consent of
the Armour Shareholder Representative and shall survive the death, incapacity,
bankruptcy, dissolution or liquidation of any Armour Shareholder. All decisions
and acts by the Armour Shareholder Representative shall be binding upon all of
the Armour Shareholders, and no Armour Shareholder shall have the right to
object, dissent, protest or otherwise contest the same.
7.03 Resignation. In the event that the Armour Shareholder
Representative shall die, become incapacitated, resign or otherwise fail to act
on behalf of the Armour Shareholders for any reason, the Armour Shareholder
Representative shall be Xxxxx X. Xxxxxx or, in the event of a similar situation
involving Xxxxx X. Xxxxxx, such other person as shall be selected by a majority
of the persons serving as directors of Armour immediately prior to the Closing,
and such substituted representative shall be deemed to be the Armour Shareholder
Representative for all purposes of this Agreement. Notwithstanding anything to
the contrary herein contained, the Armour Shareholder Representative shall at
all times be the same person who serves as the Shareholder Representative (as
defined in Section 8.01 of the Merger Agreement).
7.04 Reliance by Third Parties on the Armour Shareholder
Representative's Authority. The Armour Shareholder Representative is authorized
to act on the Armour Shareholders' behalf notwithstanding any dispute or
disagreement among the Armour Shareholders and the other parties hereto shall be
entitled to rely on any and all action taken by the Armour Shareholder
Representative without any liability to, or obligation to inquire of, any of the
Armour Shareholders even if such party shall be aware of any actual or potential
dispute or disagreement among the Armour Shareholders. Each of the other parties
hereto and the Disbursing Agent is expressly authorized to rely on the
genuineness of the signature of the Armour Shareholder Representative and, upon
receipt of any writing which reasonably appears to have been signed by the
Armour Shareholder Representative, the other parties hereto and the Disbursing
Agent may act upon the same without any further duty of inquiry as to the
genuineness of the writing.
7.05 Exculpation and Indemnification. Neither the Armour
Shareholder Representative nor any agent employed by him shall be liable to any
Armour Shareholder relating to the performance of his duties under this
Agreement for any errors in judgment, negligence, oversight, breach of duty or
otherwise except to the extent it is finally determined in a court of competent
jurisdiction by clear and convincing evidence that the actions taken or not
taken by the Armour Shareholder Representative constituted fraud or were taken
or not taken in bad faith. The Armour Shareholder Representative shall be
indemnified and held
-15-
harmless by the Armour Shareholders against all Damages (as defined in Section
8.02) paid or incurred in connection with any action, suit, proceeding or claim
to which the Armour Shareholder Representative is made a party by reason of the
fact that he was acting as the Armour Shareholder Representative pursuant to
this Agreement; provided, however, that the Armour Shareholder Representative
shall not be entitled to indemnification hereunder to the extent it is finally
determined in a court of competent jurisdiction by clear and convincing evidence
that the actions taken or not taken by the Armour Shareholder Representative
constituted fraud or were taken or not taken in bad faith; and provided further,
however, that the Armour Shareholder Representative shall have recourse only
against the unpaid Armour Escrow Amount (fully subordinated in right of payment
and otherwise to the Buyer's claims thereto, whether or not then existing or
known), with respect to such Damages as provided in the next two sentences of
this Section 7.05. Any amount owing to the Armour Shareholder Representative
from the Armour Shareholders pursuant to this Section 7.05 shall be reduced on a
pro rata basis from the next succeeding distribution(s) of the Armour Escrow
Amount by the Disbursing Agent to the holders of Armour Common Stock, and shall
be payable solely from such source. The Armour Shareholder Representative shall
be protected in acting upon any notice, statement or certificate believed by him
to be genuine and to have been furnished by the appropriate person and in acting
or refusing to act in good faith or any matter.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.01 Limitations on Survival. Each of the representations and
warranties made by the parties in Article III, in Section 4.03 and in the
certificates delivered pursuant to Sections 5.01(a) and 5.02(a) shall survive
any examination made by or on behalf of any party hereto, the execution and
delivery of this Agreement, the Closing and the consummation of the transactions
contemplated by this Agreement to and until three (3) years after the Closing
Date, whereupon such representations and warranties shall terminate, provided
that no such termination shall occur with respect to any representation or
warranty made in a manner involving fraud or criminal misrepresentation.
8.02 Indemnification. Subject to the limitations set forth in
this Section 8.02 the parties hereto agree as follows:
(a) Buyer and its successors and assigns shall be indemnified
by the Armour Shareholders, jointly and severally (except as hereinafter
expressly provided), and their successors and assigns against any loss, claim,
liability, cost or expense (including reasonable attorney's fees and expenses)
or other damage of any kind or nature (collectively, "Damages") incurred by
Buyer which is caused by or arises out of (i) any breach of any representation
or warranty of the Armour Shareholders contained in this Agreement or any
related document executed and delivered by the Armour Shareholders (the "Armour
Closing
-16-
Documents"), other than those breaches, if any, of which Buyer has actual
knowledge at the time of Closing, provided, that the indemnification obligation
of each Armour Shareholder with respect to the representations and warranties of
such Armour Shareholder in Sections 3.01(d) and (e) shall be several and not
joint and several, (ii) the breach or other failure to perform any covenant,
agreement or other obligation of the Armour Shareholders contained in this
Agreement or any other Armour Closing Documents, (iii) any breach of
representation or warranty by Xxxxxxx contained in the Merger Agreement or the
Closing Documents (as defined in the Merger Agreement), other than those
breaches, if any, of which Buyer has actual knowledge at the time of Closing,
(iv) the breach or other failure to perform any covenant, agreement or other
obligation of Xxxxxxx contained in the Merger Agreement or the Closing
Documents, (v) the Indemnified Environmental Liabilities (as defined in Section
9.02(a) of the Merger Agreement), (vi) the Indemnified Litigation and Claims (as
defined in Section 9.02(a) of the Merger Agreement), and (vii) the Indemnified
Title Costs and Expenses (as defined in Section 4.12 of the Merger Agreement);
provided, however, that in connection with any claim for indemnification for
Damages under this Section 8.02 (except in a case involving fraud or criminal
misrepresentation), (A) after the Closing Buyer shall have recourse only against
the Armour Escrow Amount with respect to Damages under clauses (iii) through
(vii), inclusive, of this Section 8.02(a), (B) indemnification owing from any
Armour Shareholder who is or was an officer or director of Armour shall not be
deemed for any purpose to be a claim covered by indemnification owing to such
Armour Shareholder by Armour under any law, by-law or agreement whatsoever, (C)
Buyer's rights to indemnification under clause (iii) and (iv) of this Section
8.02 shall not arise until Damages, in the aggregate, under clauses (iii) and
(iv) of this Section 8.02(a) and clauses (i) and (ii) of Section 9.02(a) of the
Merger Agreement exceed $750,000 whereupon indemnification shall arise with
respect to the full amount of such Damages in excess of $750,000, and (D) in the
case of indemnification for Indemnified Environmental Liabilities and
Indemnified Litigation and Claims, the indemnification under this Agreement and
the Merger Agreement shall be limited in the aggregate to 50% of any Damages.
Any amount owing to Buyer from the Armour Shareholders pursuant to clause (iii)
and (iv) of this Section 8.02(a) shall be deducted from the next distribution(s)
of the Armour Escrow Amount as provided in the Disbursing Agreement.
Notwithstanding the foregoing, Buyer shall not be indemnified for any Damages
for which it receives proceeds under any insurance policy maintained by Xxxxxxx,
Buyer or Buyer Subsidiary, including without limitation the title insurance
policies obtained by Buyer pursuant to Section 5.01(k) of the Merger Agreement,
and no Damages for which such proceeds are received shall be included in
calculating the $750,000 threshold for indemnification set forth in this Section
8.02(a).
(b) The Armour Shareholders and their successors and assigns
severally but solely through the Armour Shareholder Representative shall be
indemnified by the Buyer against Damages incurred by them which are caused by or
arise out of (i) any breach of any representation or warranty of the Buyer
contained in this Agreement, other than those breaches, if any, of which the
Armour Shareholders have actual knowledge at the time of Closing and (ii) the
breach or other failure to perform any covenant or agreement or other
-17-
obligation of the Buyer contained in this Agreement; provided, however, that
after the Closing indemnification hereunder shall be limited in amount to each
Armour Shareholder to the portion of the Purchase Price remaining unpaid and
owing to such Armour Shareholder.
(c) Whenever any claims shall arise for indemnification
hereunder, (i) the party entitled to indemnification (or the Armour Shareholder
Representative in the case of indemnification owing to the Armour Shareholders)
(the "Indemnified Party") shall provide written notice to the party from whom
such indemnification is owing (or the Armour Shareholder Representative in the
case of indemnification owing from the Armour Shareholders) (the "Indemnifying
Party") within a reasonable period of becoming aware of the right to
indemnification and, as expeditiously as possible thereafter, of the facts
constituting the basis for such claim and (ii) the Indemnifying Party and its
representatives shall be given access to all books and records in the possession
or control of the Indemnified Party which the Indemnifying Party reasonably
determines to be related to such claim, provided that any failure of the
Indemnified Party to so notify the Indemnifying Party within any such time
period shall not waive the Indemnified Party's indemnification rights hereunder
except to the extent that the Indemnifying Party has been damaged by such a
failure.
(d) If any legal proceedings are instituted or any claim or
demand is asserted by any person in respect of which the Indemnified Party
determines it may seek indemnification pursuant to the provisions of this
Section 8.02, the Indemnified Party shall promptly after such determination
cause written notice of the assertion of any such claim to be made to the
Indemnifying Party. The Indemnifying Party shall have the right, at its option
and expense and upon written notice to the Indemnified Party, to defend against,
negotiate and, with the consent of the Indemnified Party (which consent shall
not be unreasonably withheld) settle any such claim, and in such case, the
Indemnified Party shall have the right to participate in such defense,
negotiation or settlement at his own expense. The Indemnified Party and the
Indemnifying Party agree to cooperate fully with each other in connection with
the defense, negotiation or settlement of any such legal proceeding, claim or
demand. Upon the payment of any claim for indemnity, the Indemnifying Party
shall be subrogated to all rights and remedies of the Indemnified Party against
any third person. If the Indemnifying Party does not so elect to defend any such
third party claim, legal proceeding or demand, the Indemnified Party may (but
shall have no obligation to) defend any such third party claim, legal proceeding
or demand in such manner as he may deem appropriate including, but not limited
to, settling such claim, legal proceeding or demand, after giving notice of the
same to the Indemnifying Party, on such terms as the Indemnified Party may deem
appropriate and no action taken by the Indemnified Party in accordance with such
defense and settlement shall relieve the Indemnifying Party of its
indemnification obligations herein provided with respect to any Damages
resulting therefrom.
(e) The parties desire that any indemnification claim against
the Armour Shareholders under clauses (iii) through (vii) of Section 8.02(a) be
coordinated with any indemnification claim against the Shareholders under
Section 9.02(a) of the Merger
-18-
Agreement. Accordingly, notwithstanding anything to the contrary contained in
this Agreement or the Merger Agreement, Buyer and the Armour Shareholders agree
that any claim asserted by Buyer under clauses (iii) through (vii), as
applicable, of Section 8.02(a) of this Agreement shall also constitute a
corresponding claim under Section 9.02(a) of the Merger Agreement, and that any
claim by Buyer under Section 9.02(a) of the Merger Agreement shall also
constitute a corresponding claim under clauses (iii) through (vii) of Section
8.02(a) of this Agreement. The Disbursing Agreement shall provide for any
Damages recoverable in respect of any such claims to be allocated between the
Armour Escrow Amount under this Agreement and the Escrow Amount (as defined in
the Merger Agreement) under the Merger Agreement.
8.03 Amendment and Modification. To the extent permitted by
applicable law, this Agreement may be amended, modified or supplemented only by
written agreement of the parties hereto at any time prior to the Closing with
respect to any of the terms contained herein.
8.04 Alternative Dispute Resolution.
(a) The Armour Shareholders and Buyer recognize that a bona
fide dispute as to certain matters may from time to time arise after the Closing
Date relating to rights or obligations under this Agreement. In such instance,
the Armour Shareholder Representative or Buyer, as the case may be, may by
written notice to the other, have such dispute referred to the Armour
Shareholder Representative and the representative of Buyer designated below or
his successor, for attempted resolution by good faith negotiation within thirty
(30) days after such notice is received. The designated representative of Buyer
is Xxxxx X. Xxxxxx. Any settlement reached by the Armour Shareholder
Representative and the representative of Buyer under this Section 8.04(a) shall
not be binding until reduced to writing and signed by them. When reduced to
writing, such settlement agreement shall supersede all other agreements, written
or oral, to the extent such agreements specifically pertain to the matters so
settled. If the Armour Shareholder Representative and the representative of
Buyer are unable to resolve such dispute within such 30-day period, either may
demand arbitration pursuant to Section 8.04(b).
(b) Except as provided below, any controversy or claim arising
out of or relating to this Agreement shall be settled by arbitration in Chicago,
Illinois, at a time and location designated by the arbitrator, but not exceeding
ninety (90) days after a demand for arbitration has been made. Arbitration shall
be conducted by the American Arbitration Association in accordance with its
Rules of Commercial Arbitration, and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall be a retired state or federal judge experienced in business
litigation or any attorney who has practiced business litigation for at least
ten (10) years. Arbitration will be conducted pursuant to the provisions of this
Agreement and the Commercial Arbitration Rules of the American Arbitration
Association. Limited civil discovery shall be permitted for the
-19-
production of documents and taking of depositions. Unresolved discovery disputes
may be brought to the attention of, and may be decided by, the arbitrator. The
arbitrator shall assess the costs and expenses of the arbitration against the
parties in such proportion as may be fair and equitable. Nothing herein
contained shall bar either party from seeking equitable remedies in a court of
appropriate jurisdiction.
8.05 Insurance Coverage. Buyer agrees from and after the
Closing to file all necessary claims under, and to exercise reasonable efforts
to collect the proceeds of any insurance maintained by Xxxxxxx, Buyer or Buyer
Subsidiary, including without limitation the title insurance policies obtained
by Buyer pursuant to Section 5.01(k) of the Merger Agreement, with respect to
any Damages within the scope of the indemnification provisions of Section
8.02(a).
8.06 Filing of Tax Returns. Buyer agrees to cause Armour to
file all Tax Returns for any period including the Closing Date, or ending on or
before the Closing Date, on a basis consistent with prior filings by Armour,
unless the relevant taxing authority will not accept a Tax Return filed on that
basis.
8.07 Waiver of Compliance; Consents. Any failure of Buyer, on
the one hand, or the Armour Shareholders, on the other hand, to comply with any
obligation, covenant, agreement or condition herein (except the conditions in
Sections 5.01(b), (c) and (d) and 5.02(b), (c) and (d) of this Agreement) may be
waived in writing by the Armour Shareholders or by Buyer, respectively, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 8.07.
8.08 Expenses. All expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated hereby shall be
paid by the party incurring such expenses.
8.09 Press Releases and Public Announcements. No party to this
Agreement shall issue any press release or make any public announcement relating
to the subject matter of this Agreement without prior written approval of the
other parties; provided, however, that each of the Armour Shareholders and Buyer
may make any public disclosure such person believes in good faith to be required
by applicable law or, in the case of Buyer, the disclosure documents prepared in
connection with the offering of its debt securities (in which case the
disclosing party will advise the other parties to this Agreement prior to making
the disclosure).
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8.10 Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto agree to use all
reasonable efforts to take, or cause to be taken, all action, and to 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 by this Agreement, including without limitation the negotiation,
execution and delivery of the Disbursing Agreement. In case at any time after
the Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of Buyer and each
Armour Shareholder shall take all such necessary action.
8.11 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or mailed
by registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to Buyer:
Xxxxx Xxxx Pet Food Co., Inc.
c/o Dartford Partnership
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxx
with a copy to:
Xxxxxxxx & O'Neil LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxx X. Xxxxxxxxxxx
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(b) If to any Armour Shareholder, in care of:
Xxxxxxx X. Xxxxxx
c/o Hubbard Milling Company
000 Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
with a copy to:
Faegre & Xxxxxx LLP
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
8.12 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other parties, nor is this Agreement intended to confer
upon any other person except the parties hereto any rights or remedies
hereunder. Notwithstanding the foregoing, Buyer may assign its rights to
indemnification hereunder to a lender or lenders providing financing for the
transaction contemplated hereby.
8.13 Governing Law. The Agreement shall be governed by the
laws of the state of Minnesota.
8.14 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.15 Headings; Internal References. The Article and Section
headings contained in this Agreement are solely for the purpose of reference,
and are not part of the agreement of the parties and shall not affect in any way
the meaning or interpretation of this Agreement. Any references in this
Agreement to an article, section, paragraph, clause, exhibit or schedule shall
be deemed to be a reference to the article, section, paragraph, clause, exhibit
or schedule contained in this Agreement unless expressly stated otherwise.
8.16 Entire Agreement. This Agreement, including the exhibits
hereto and the documents and instruments referred to herein, embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other
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than those expressly set forth or referred to herein. This Agreement supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.
8.17 Severability. If any term, provision, covenant, agreement
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants, agreements and restrictions of this Agreement will continue in full
force and effect and will in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto do execute and deliver
this Agreement as of the date first above written.
BUYER: XXXXX XXXX PET FOOD CO., INC
By:
----------------------------
Its:
--------------------------
ARMOUR SHAREHOLDERS:
----------------------------
Xxxxx X. Xxxxxx
----------------------------
Xxx X. Xxxx
----------------------------
Xxxxxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxxxxx
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XXXXXXX X. XXXXXX AND FIRST BANK
NATIONAL ASSOCIATION AS
TRUSTEES OF THE XXXXXXXXX XXXX
XXXXXX TRUST NO. 2
------------------------------
Xxxxxxx X. Xxxxxx
- and -
First Bank National Association,
By:
----------------------------
Vice President
Trustees
XXXXXXX X. XXXXXX AND FIRST BANK
NATIONAL ASSOCIATION AS
TRUSTEES OF THE XXXXX X. XXXXXX
FAMILY TRUST CREATED UNDER THE
XXXXX X. XXXXXX TRUST AGREEMENT
----------------------------
Xxxxxxx X. Xxxxxx
- and -
First Bank National Association,
By:
----------------------------
Vice President
Trustees
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EXHIBIT A
Ownership of Armour Capital Stock
9% Cumulative Voting Preferred Stock
($10 par value, 25,000 authorized shares)
Shareholder No. of Shares Owned % of Outstanding Shares
----------- ------------------- -----------------------
Xxxxxxxxx Xxxx Xxxxxx Trust 25,000 100%
No. 2, created under
agreement of Xxxxx X.
Xxxxxx dated August 26,
1982, as amended*
Common Stock
($1 par value, 10,000 authorized shares)
Shareholder No. of Shares Owned % of Outstanding Shares
----------- ------------------- -----------------------
Xxxxx X. Xxxxxx 2,425 24.25%
Xxx Xxxxxx Lamb 2,425 24.25%
Xxxxxxx X. Xxxxxx 2,425 24.25%
Xxxxx Xxxxxx Xxxxxxxxx 2,425 24.25%
Xxxxx X. Xxxxxx Family Trust, 300 3%
created under agreement dated ------ ------
August 26, 1982, as amended*
Total 10,000 100%
* Shares are held by Var & Company, acting as nominee.
EXHIBIT B
FORM OF OPINION OF COUNSEL TO ARMOUR SHAREHOLDERS
1. Armour is a corporation validly existing and in good
standing under the laws of the state of Delaware.
2. The authorized capital stock of Armour at the date hereof
consists of 25,000 shares of 9% Cumulative Voting Preferred Stock, $10 par
value, and 10,000 shares of Common Stock, $1 par value, all of which are
currently issued and outstanding and are owned of record, and to such counsel's
knowledge, beneficially by the Armour Shareholders. All of such issued shares
have been duly authorized and validly issued and are fully paid and
nonassessable. To our knowledge, there are no outstanding subscriptions,
options, warrants, calls or other agreements or commitments by which Armour is
bound in respect of the capital stock of Armour, whether issued or unissued.
There are no outstanding securities convertible into or exchangeable for any
such capital stock.
3. Each Armour Shareholder has the legal right, power and
authority to enter into the Agreement and to consummate the transactions
contemplated thereby. Upon execution by such Armour Shareholder, the Agreement
shall constitute the legal, valid and binding obligation of such Armour
Shareholder and shall be enforceable against such Armour Shareholder in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally, and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is sought in
a court of law or equity).
4. Neither the execution, delivery or performance by the
Armour Shareholders of the Agreement nor the consummation of any of the
transactions provided for in the Agreement or contemplated thereby, (i) will
violate the Articles of Incorporation or Bylaws or other organizational
documents of any Armour Shareholder that is an entity, (ii) is prohibited by any
federal, or state of Minnesota statute, law, ordinance, regulation or rule, or
(iii) to our knowledge, will violate any contractual obligations of any Armour
Shareholder.
5. No approval, consent, order or authorization of,
declaration by or filing with any federal or state of Minnesota regulatory,
administrative or governmental body or other person is necessary on the party of
any Armour Shareholder in connection with the execution, delivery or performance
by such Armour Shareholder of the Agreement or the consummation of the
transactions contemplated thereby except compliance with the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976.
6. To such counsel's knowledge, except as set forth in the
Agreement, no litigation, arbitration, administrative proceeding, or
investigation of any kind is pending or threatened against Armour.
EXHIBIT C
FORM OF OPINION OF COUNSEL TO BUYER
1. Buyer is a corporation validly existing and in good
standing under the laws of the state of Delaware.
2. Buyer has the requisite corporate power and corporate
authority to execute, deliver and perform the Agreement and to consummate the
transactions contemplated thereby. The Agreement has been duly executed and
delivered by Buyer and constitutes the legal, valid and binding obligation of
Buyer and is enforceable against Buyer in accordance with its terms, except to
the extent that enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a court of law or equity).
3. Neither the execution, delivery or performance by Buyer of
the Agreement nor the consummation of any of the transactions provided for in
the Agreement or contemplated thereby, (i) will violate the Certificate of
Incorporation or Bylaws of Buyer; or (ii) is prohibited by any federal, or state
of New York statute, law, ordinance, regulation or rule.
4. No approval, consent, order or authorization of,
declaration by or filing with any federal or state of New York regulatory,
administrative or governmental body is necessary on the part of Buyer in
connection with the execution, delivery or performance by Buyer of the Agreement
or the consummation of the transactions contemplated thereby except compliance
with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
5. To such counsel's knowledge, no litigation, arbitration,
administrative proceeding, or investigation of any kind is pending or threatened
against Buyer in connection with this Agreement or the transactions contemplated
thereby.
EXHIBIT B
PLAN OF MERGER
Merger of
XXXXX XXXX PET FOOD ACQUISITION CO.
with and into
XXXXXXX MILLING COMPANY
WHEREAS, Xxxxx Xxxx Pet Food Acquisition Co., a Minnesota corporation
("Buyer Subsidiary"), and Xxxxxxx Milling Company, a Minnesota corporation
("Xxxxxxx" and, together with Buyer Subsidiary, the "Constituent Corporations"),
have entered into that certain Merger Agreement (the "Merger Agreement") dated
as of March 21, 1997, by and among Xxxxxxx, Xxxxx Hill Pet Food Co., Inc., a
Delaware corporation, and Buyer Subsidiary; and
WHEREAS, the Merger Agreement provides for the merger of Buyer
Subsidiary with and into Xxxxxxx pursuant to Section 302A.611 of the Minnesota
Business Corporation Act ("MBCA") and in accordance with the terms of this Plan
of Merger, with Xxxxxxx being the surviving corporation of the merger;
NOW, THEREFORE, BE IT RESOLVED that at the Effective Time (as defined
below) and in accordance with this Plan of Merger and pursuant to Section
302A.611 of the MBCA, Buyer Subsidiary shall be merged with and into Xxxxxxx on
the terms and conditions contained in these resolutions, with Xxxxxxx being the
surviving corporation of such merger (the "Merger"), the name of which shall
continue to be Xxxxxxx Milling Company.
FURTHER RESOLVED, that the Merger shall be effective (the "Effective
Time") at 12:01 a.m. on the day immediately following the date of filing of the
Articles of Merger with the Secretary of State of the State of Minnesota, all in
the manner required by law.
FURTHER RESOLVED, that each share of Common Stock of Buyer Subsidiary
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into one (1) share of Class A Voting Common Stock of Xxxxxxx and each holder of
a stock certificate representing shares of Common Stock of Buyer Subsidiary
outstanding immediately prior to the Effective Time shall, upon surrender of
such certificate, be entitled to receive a stock certificate representing the
same number of shares of Class A Voting Common Stock of Xxxxxxx and until so
surrendered, each such stock certificate representing Common Stock
of Buyer Subsidiary shall, by virtue of the Merger, be deemed for all purposes
to evidence ownership of the same number of shares of Class A Voting Common
Stock of Xxxxxxx.
FURTHER RESOLVED, that (i) each share (other than a "Dissenting Share"
as defined below) of 5 % Preferred Stock, $50 par value, of Xxxxxxx outstanding
immediately prior to the Effective Time shall, by virtue of the Merger be
converted into the right to receive in cash an amount equal to Fifty Dollars
($50.00) per share, plus accrued but unpaid dividends thereon through the
Effective Time, (ii) each share (other than a Dissenting Share or a share owned
by Armour Corporation, a Delaware corporation) of Class A Voting Common Stock of
Xxxxxxx, $.05 par value, and Class B Non-Voting Common Stock of Xxxxxxx, $.05
par value, shall be converted into the right to receive in cash an amount equal
to the Common Stock Merger Consideration Per Share (as defined in Section 1.03
of the Merger Agreement), and (iii) each Dissenting Share shall be converted
into the right to receive in cash an amount equal to the fair value thereof
determined in accordance with Section 302A.473 of the MBCA. "Dissenting Share"
for purposes of this Plan of Merger means each share of capital stock of Xxxxxxx
owned by a shareholder who becomes entitled, pursuant to the provisions of
Section 302A.473 of the MBCA, to receive payment of the fair value of such
share.
FURTHER RESOLVED, that the articles of incorporation and by-laws of
Xxxxxxx shall be the articles of incorporation and by-laws of the surviving
corporation.
FURTHER RESOLVED, that no amendments to the Articles of Incorporation
of Xxxxxxx shall be effected by the Merger.
FURTHER RESOLVED, at the Effective Time, Xxxxxxx shall thereupon and
thereafter possess all the rights, privileges, immunities, powers and
franchises, of a public as well as of a private nature, of each of the
Constituent Corporations, and be subject to all the duties, liabilities and
obligations of each of the Constituent Corporations; and all property, real,
personal and mixed, and all debts due to any of the Constituent Corporations on
whatever account, including subscriptions to shares, and all other choses in
action and every other interest of or belonging to or due to each of the
Constituent Corporations shall vest in Xxxxxxx; and all and every other interest
shall be thereafter as effectually the property of Xxxxxxx as they were of the
several and respective Constituent Corporations; and the title to any real
estate or any interest therein, vested by deed or otherwise, in any of the
Constituent Corporations, shall not revert or be in any way impaired by reason
of the Merger; and all rights of creditors and all liens upon any property of
any of the Constituent Corporations shall be preserved unimpaired; and all
debts, duties, liabilities and obligations of any of the Constituent
Corporations shall thenceforth attach to Xxxxxxx, which shall assume all such
debts, duties, liabilities and obligations, and such debts, duties, liabilities
and obligations may be enforced against it to the same extent as if such debts,
duties, liabilities and obligations had been incurred or contracted by it.
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EXHIBIT C
ARTICLES OF AMENDMENT
OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
XXXXXXX MILLING COMPANY
The undersigned, Xxxxxxx X. Xxxxxx, President, and Xxxxx X.
Xxxxxx, Secretary, of Xxxxxxx Milling Company, a Minnesota corporation (the
"Corporation"), do hereby certify that the resolutions hereinafter set forth
were adopted pursuant to Section 302A.433 of the Minnesota Business Corporation
Act ("MBCA") at a special meeting of shareholders on April _, 1997 by a majority
of the holders of Class A Common Stock, in accordance with the MBCA:
RESOLVED, that the Amended and Restated Articles of
Incorporation of the Corporation, be and hereby are amended to add the following
Article XI:
"ARTICLE XI
The provisions of Section 302A.671 of the Minnesota Business
Corporation Act, as amended, shall not apply to this
corporation."
RESOLVED FURTHER, that the President or any Vice President and
the Secretary or any Assistant Secretary of the Corporation be and hereby are
authorized to execute and file with the Secretary of State of the State of
Minnesota Articles of Amendment embodying the foregoing resolution.
IN WITNESS WHEREOF, we, the undersigned, have subscribed our
names this _____ day of April, 1997.
-----------------------------
Xxxxxxx X. Xxxxxx, President
-----------------------------
Xxxxx X. Xxxxxx, Secretary
EXHIBIT D
FORM OF OPINION OF COUNSEL TO XXXXXXX
1. Xxxxxxx is a corporation validly existing and in good
standing under the laws of the state of Minnesota. Xxxxxxx is qualified to do
business as a foreign corporation in the states of California, Georgia,
Illinois, Indiana, Iowa, Kansas, Michigan, Missouri, Montana, Nebraska, New
York, North Dakota, Ohio, Pennsylvania, South Dakota, Texas, Washington,
Wisconsin and Wyoming.
2. The authorized capital stock of Xxxxxxx consists of 100,000
shares of 5% Preferred Stock, $50 par value ("Xxxxxxx 5% Preferred Stock");
1,000,000 shares of Preferred Stock, $.05 par value, undesignated as to series;
2,500,000 shares of Class A Voting Common Stock, par value $.05 ("Xxxxxxx Class
A Common Stock"); and 37,500,000 shares of Class B Non-Voting Common Stock, $.05
par value ("Xxxxxxx Class B Common Stock"). The issued and outstanding capital
stock of Xxxxxxx consists of **[18,329] shares of Xxxxxxx 5% Preferred Stock,
**[1,145,000] shares of Xxxxxxx Class A Common Stock, and **[14,511,823] shares
of Xxxxxxx Class B Common Stock. All of such issued shares have been duly
authorized and validly issued and are fully paid and nonassessable. To our
knowledge, there are no outstanding subscriptions, options, warrants, calls or
other agreements or commitments by which Xxxxxxx is bound in respect of the
capital stock of Xxxxxxx, whether issued or unissued. There are no outstanding
securities convertible into or exchangeable for any such capital stock.
3. Xxxxxxx has the requisite corporate power and corporate
authority to execute, deliver and perform the Agreement and to consummate the
transactions contemplated thereby, including, without limitation, the Merger.
The execution, delivery and performance of the Agreement have been duly
authorized by all necessary corporate action on the part of Xxxxxxx. The
Agreement has been duly executed and delivered by Xxxxxxx and constitutes the
legal, valid and binding obligation of Xxxxxxx and is enforceable against
Xxxxxxx in accordance with its terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a court of law or equity).
4. Neither the execution, delivery or performance by Xxxxxxx
of the Agreement nor the consummation of any of the transactions provided for in
the Agreement or contemplated thereby, including, without limitation, the
Merger, (i) will violate the Articles of Incorporation or Bylaws of Xxxxxxx;
(ii) is prohibited by any federal or state of Minnesota statute, law, ordinance,
regulation or rule or (iii) will constitute a default by Xxxxxxx under any joint
venture agreement listed in the Disclosure Schedule.
5. Upon the filing of the articles of merger with the
Secretary of State of the State of Minnesota, the Merger will be effective in
accordance with the terms and provisions of the articles of merger, the Plan of
Merger, and the laws of the state of Minnesota.
6. No approval, consent, order or authorization of,
declaration by or filing with any federal or state of Minnesota regulatory,
administrative or governmental body is necessary on the part of Xxxxxxx in
connection with the execution, delivery or performance by Xxxxxxx of the
Agreement or the consummation of the transactions contemplated thereby, except
for (i) the filing of articles of merger and the amendment to the articles of
incorporation of Xxxxxxx (as contemplated by Section 4.02 of the Agreement) with
the Secretary of State of the State of Minnesota, and (ii) compliance with the
Xxxx-Xxxxx-Xxxxxx Agreement Antitrust Improvements Act of 1976.
7. To our knowledge, except as set forth on the Disclosure
Schedule delivered by Xxxxxxx to Buyer and Buyer Subsidiary, no litigation,
arbitration, administrative proceeding, or investigation of any kind is pending
or threatened against Xxxxxxx.
EXHIBIT E
ENVIRONMENTAL REPORTS TO BE DELIVERED
1. St. Xxxxxx, MO - A comprehensive soil and groundwater investigation will
be performed to determine the current soil and groundwater condition with
respect to solvent use in the maintenance shop, the four underground
storage tanks at the site, the Amoco station across Xxxxxxxx Avenue and
the former Standard Oil Tank farm to the south.
2. Portland, IN - Two potential off-site sources of groundwater
contamination: an adjacent municipal landfill, and adjacent waste oil
dumping pits used by Teledyne Forge. USTs were removed from the site in
1989, although no soil sampling information was provided. A file review
will be conducted for the three concerns listed above. Based upon the file
review, soil and groundwater sampling may be necessary.
3. XxXxxxx; MN - A UST was removed from the site in 1989. No indication of
soil sampling. A soil and groundwater investigation will be conducted
around the former tank pit.
4. Xxxxxx, MO - Adjacent fertilizer plant could have impacted the
groundwater, depending upon the types of fertilizers produced. A file
review/further research will be conducted regarding the adjacent
fertilizer plant. Based upon the file review, soil and groundwater
sampling may be necessary.
5. Stockton, CA - The review of the historical information available
indicated that USTs and ASTs may have been located on site. A file
review/further research will be conducted for the former UST areas. Based
upon the file review, soil and groundwater sampling may be necessary.
6. Botkins, OH - Three USTs installed at the site in the 1960s remain
on-site. A file review/further research will be conducted for the UST
areas. Based upon the file review, soil and groundwater sampling may be
necessary.
7. Iowa City, IA - A UST was removed from the site in 1987. No indication of
soil sampling. A waste oil UST is located at the garage. The adjacent
Mesquackie Park is the location of a closed municipal landfill. The
landfill was closed before groundwater monitoring was required. A
comprehensive soil and groundwater investigation will be performed at the
site to determine the current soil and groundwater condition.
8. Rapid City, SD - The 1992 ESA on the southern parcel indicated that the
site had historically been used for automotive garages. A closed UST
(1984) is located on the
northern parcel. A comprehensive Soil and groundwater investigation will
be performed at the site to determine the current soil and groundwater
condition.
9. A chain-of-title will be prepared or reviewed for twelve sites. The
chain-of-title is a method for determining historical uses for a property
and will research the ownership and easements for a piece of property for
a minimum of 50 years. These twelve sites as identified as follows, in no
particular order. Fremont, NE, Shipshewana, IN; Watertown, SD; Whitewood,
SD; Sioux City, IA; XxXxxxx, MN; Cartersville, GA; Inman, KS; Delavan, WI;
Storm Lake, IA; Allentown, PA; and Alexandria, MN.
10. Watertown, SD - Three adjacent properties of concern - a scrap metal
recovery facility (west), a leaking UST site (north), and a UST site
(east). Fuel oil UST closed in place 1985. No indication of soil sampling.
As of March 13, 1997, we have not received the Phase II report. A report
of damaged asbestos-containing materials will be provided.
11. Whitewood, SD - Phase I indicated possible contamination due to use as a
railroad facility. During the Phase II, soil samples did not indicate soil
contamination. No groundwater samples were collected although groundwater
was encountered. Based upon Phase I results (use of solvents on site),
groundwater samples should have been collected and analyzed. A
comprehensive groundwater investigation will be performed at the site to
determine the current groundwater condition.
12. Cartersville, GA - A report of damaged asbestos-containing materials will
be provided.
13. Delavan, WI - A report of damaged asbestos-containing materials will be
provided.
14. Storm Lake, IA - A report of damaged asbestos-containing materials will be
provided.
15. Alexandria, MN - Several potential on-site sources of contamination
identified. Sources include abandoned diesel UST, the removal of a diesel
UST in 1989 with no soil sampling, historical evidence of gasoline USTs in
the gas house area, and bulk petroleum storage facility on the southern
portion of the property. Phase II work in both areas indicated the
presence of soil contamination on site. Groundwater samples were not
collected at the site. A comprehensive soil and groundwater investigation
will be performed of the "Northern Area" to determine the current soil and
groundwater condition. These investigations may need to be performed as
Initial Assessments under the Minnesota Pollution Control Agency
guidelines.
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16. In addition to the above work related to the current environmental
conditions at the site, a comprehensive environmental compliance audit
will be performed at each site to ensure that the plants are all in
compliance with applicable environmental regulations, including NPDES and
air permitting, and hazardous waste disposal.
17. Phase I Environmental Site Assessments for thirteen properties
(St. Xxxxxx, MO; Portland, IN; XxXxxxx, MN; Xxxxxx, MO; Hillburn, NY;
Mankato, MN (corporate); Stockton, CA; Worthington, MN; Mankato, MN;
Botkins, OH; Iowa City, IA; Rapid City, SD; and Bismark, ND) will be
updated to accurately determine the current environmental condition of
each of the sites. These assessments will include inspections for suspect
asbestos containing materials.
18. Phase II reports at each site at which the Phase I prepared in accordance
with this Exhibit G reasonably indicates a "recognized environmental
condition" (as defined in ASTM Standard El527) and additional
investigation of such condition is reasonably warranted.
EXHIBIT F
FORM OF OPINION OF COUNSEL TO BUYER AND BUYER SUBSIDIARY
1. Buyer is a corporation validly existing and in good
standing under the laws of the state of Delaware.
2. Buyer Subsidiary is a corporation validly existing and in
good standing under the laws of the state of Minnesota.
3. Each of Buyer and Buyer Subsidiary has the requisite
corporate power and corporate authority to execute, deliver and perform the
Agreement and to consummate the transactions contemplated thereby, including,
without limitation, the Merger. The execution and filing of the articles of
merger to effectuate the Merger have been duly authorized by all requisite
corporate action on the part of Buyer and Buyer Subsidiary. The Agreement has
been duly executed and delivered by each of Buyer and Buyer Subsidiary and
constitutes the legal, valid and binding obligation of Buyer and Buyer
Subsidiary and is enforceable against Buyer and Buyer Subsidiary in accordance
with its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a court of
law or equity).
4. Neither the execution, delivery or performance by either
Buyer or Buyer Subsidiary of the Agreement nor the consummation of any of the
transactions provided for in the Agreement or contemplated thereby, including,
without limitation, the Merger, (i) will violate the Certificate of
Incorporation or Bylaws of Buyer or the Articles of Incorporation or Bylaws of
Buyer Subsidiary; or (ii) is prohibited by any federal, state of Minnesota or
state of New York statute, law, ordinance, regulation or rule.
5. Upon the filing of articles of merger with the Secretary of
State of the State of Minnesota, the Merger will be effective in accordance with
the terms and provisions of the articles of merger, the Plan of Merger, and the
laws of the state of Minnesota.
6. No approval, consent, order or authorization of,
declaration by or filing with any federal or state of Minnesota or state of New
York regulatory, administrative or governmental body is necessary on the part of
either Buyer or Buyer Subsidiary in connection with the execution, delivery or
performance by Buyer and Buyer Subsidiary of the Agreement or the consummation
of the transactions contemplated thereby, except for (i) the filing of articles
of merger with the Secretary of State of the State of Minnesota, and (ii)
compliance with the Xxxx-Xxxxx-Xxxxxx Agreement Antitrust Improvements Act of
1976.
7. To our knowledge, no litigation, arbitration,
administrative proceeding, or investigation of any kind is pending or threatened
against Buyer or Buyer Subsidiary in connection with the Agreement or the
transactions contemplated thereby.
The following list briefly identifies the contents of the Schedules to
the Merger Agreement, dated as of March 21, 1997, by and among Xxxxxxx Milling
Company, Xxxxx Xxxx Pet Food Co., Inc. and Xxxxx Xxxx Pet Food Acquisition Co.
(Terms used but not defined have the meanings assigned to them in the Merger
Agreement.) In accordance with Regulation S-K under the Securities Act of 1933
the actual Schedules have not been filed with the Securities and Exchange
Commission (the "Commission"). The Company hereby agrees to furnish
supplementally a copy of any omitted Schedule to the Commission upon request.
1. 3.01(a) Organization, Standing, Qualification -- List of the standing of
Xxxxxxx and its active subsidiaries
2. 3.01(b) Capitalization -- List of Xxxxxxx'x shareholders for all classes
of stock
3. 3.01(d) No Conflicts -- List of contracts with which the execution and
delivery of the Merger Agreement will conflict
4. 3.01(e) Financial Statements -- Delivery of annual report for each of
the fiscal years ended April 30, 1994 through April 30, 1996 and the
unaudited monthly financial statements for each of the months ended May
30, 1996 through January 31, 1997
5. 3.01(f) Absence of Certain Changes or Events -- List of changes or
events (as defined in Section 3.01(f)) since April 30, 1996 through the
signing of the Merger Agreement
6. 3.01(g) No Undisclosed Liabilities -- List of liabilities or
obligations other than in the course of ordinary business since
December 31, 1996 required to be disclosed or reserved against on a
balance sheet prepared in accordance with GAAP
7. 3.01(h) Tax Matters -- List of income tax audits for last ten years and
sales tax audits for last ten years
8. 3.01(i) Real Property -- List of all the real property owned in fee
simple by Xxxxxxx, each lease by Xxxxxxx as landlord of any of the fee
property and each lease by Xxxxxxx of real property as tenant
9. 3.01(j) Personal Property -- List of all mortgages, claims, liens,
security interests, charges and encumbrances against the personal
property of Xxxxxxx
10. 3.01(k) Material Contracts -- List of all material contracts (as defined in
Section 3.01(k))
11. 3.01(l) Intellectual Property -- List of all registered trademarks,
registered trade names and applications for trademarks or trade names used
or owned by Xxxxxxx
12. 3.01(m) Litigation -- List of pending and threatened litigation,
arbitration or administration proceeding or investigation
13. 3.01(n) Permits, Licenses, Authorizations; Compliance with Laws -- NO
DISCLOSURE
14. 3.01(p) Retirement and Benefit Plans -- List of each employee pension,
retirement, profit sharing, stock bonus, stock option, stock purchase,
bonus, incentive, deferred compensation, hospitalization, medical, dental,
vision, vacation, insurance, sick pay, disability, severance or other
plans, funds, programs, policies, contracts or arrangements that Xxxxxxx or
any ERISA Affiliate maintains or to which either contributes or in which
any current or former employee of Xxxxxxx or any ERISA Affiliate has
accrued any benefits which they remain entitled to receive
15. 3.01(q) Environmental Matters -- List of environmental assessments by
location and miscellaneous environmental matters
16. 3.01(r) Suppliers and Customers -- List of Xxxxxxx'x ten largest suppliers
and, or each of the pet food and feed division, the ten largest customers
17. 3.01(s) Insurance -- List and summary description of all policies of
insurance relating to Xxxxxxx'x business
18. 3.01(t) Motor Vehicles -- List of all licensed motor vehicles used in
Xxxxxxx'x business
19. 3.01(u) Adequacy of Xxxxxxx'x Assets/Related Party Transactions --
Statement that aircraft owned by Xxxxxxx is not part of the sale
20. 3.01(v) Notes and Accounts Receivable -- List of loans not in the ordinary
course of business
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21. 3.01(w) Pet Food Packaging and Finished Goods Inventory -- List of
write-offs that Xxxxxxx formalized for obsolete Pet Food packaging and
finished goods inventory
22. 3.01(x) Labor Matters -- List of grievances and organizing drives
3
