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JOINT VENTURE AGREEMENT
between
MFA, INC.
and
XXXXXXX MILLING COMPANY
Dated as of January 9, 1992
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TABLE OF CONTENTS
Section Page
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1. Formation of Joint Venture 1
2. Property Plant and Equipment 1
a. Initial Property, Plant and Equipment 1
b. Renovation of Facility 2
c. Additional Property, Plant and Equipment 2
d. Ownership of Facility 2
3. Trade Secrets 2
4. Trademarks, Etc. 3
5. Working Capital 3
6. Direct Expenses; Administrative Services Fee 3
a. Reimbursement of Direct Expenses 3
b. Examples of Direct Expenses 3
c. Administrative Services Fee 4
7. Transactions with the Venture 4
a. Purchases of Pet Food from the Venture 4
b. Sales of Pet Food to the Venture 4
8. Management and Operation; Personnel; Ancillary Services 4
a. Management Committee 4
b. Day-to-Day Operations 5
c. Limitations on Authority of Parties 5
d. Personnel 5
e. Management Personnel 6
f. Employment Matters 6
g. Ancillary Services 6
9. Accounting Matters 7
a. Fiscal Year 7
b. Books of Account 7
c. Bank Accounts 7
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Section Page
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10. Distribution of Net Income 7
11. Other Business Operations of Parties 7
a. MFA 7
x. Xxxxxxx 8
12. Certain Liabilities; Insurance 8
13. Representations and Warranties 9
a. Generally 9
b. Additional Representations and Warranties
of MFA 10
14. Initial Term and Renewal Terms 10
15. Early Termination 10
16. Disposition of Assets Following Termination 11
a. Generally 11
b. Option to Purchase Assets of Venture Following
Optional Termination 11
c. Option to Purchase Assets of Venture Following
Bankruptcy, Breach, Etc. 11
d. Other Disposition of Assets 12
e. Application of Cash 12
17. Purchase of Products Following Termination 13
18. Assignment 13
19. Successors and Assigns 13
20. Further Assurances 13
21. Waivers and Amendments 14
22. Arbitration 14
23. Indemnification, etc. 14
24. Liability of Parties to Venture 14
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Section Page
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25. Governing Law 15
26. Notices 15
27. Entire Agreement 15
28. Headings 15
29. Counterparts 15
EXHIBITS
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EXHIBIT A - Description of Facility
EXHIBIT B - Construction and Equipment Budget
EXHIBIT C - Forms of Periodic Financial Statements
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JOINT VENTURE AGREEMENT
Joint Venture Agreement, dated January 9, 1992 by and between MFA, Inc., a
Missouri corporation ("MFA"), and Xxxxxxx Milling Company, a Minnesota
corporation ("Xxxxxxx").
RECITALS
MFA owns an animal feed manufacturing facility in Xxxxxx, Missouri more
fully described in Exhibit A hereto (the "Facility") suitable for conversion to
a pet food manufacturing facility.
Xxxxxxx is engaged in the pet food business throughout the United States
and, in connection therewith, has developed substantial expertise in the pet
food business and has implemented an extensive sales, marketing and distribution
structure for the pet food business.
MFA and Xxxxxxx now desire to form a joint venture for the manufacture of
pet food at the Facility.
NOW, THEREFORE, in consideration of the foregoing recitals and the
agreements herein contained, MFA and Xxxxxxx agree as follows:
1. Formation of Joint Venture. MFA and Xxxxxxx hereby form a joint venture
(the "Venture") for the manufacture of pet food at the Facility and the sale,
marketing and distribution of pet food in connection therewith. The Venture
shall constitute a special purpose general partnership governed by the Uniform
Partnership Act, as adopted in the State of Missouri. The name of the Venture
shall be: MFA/Xxxxxxx Pet Food Venture.
2. Property Plant and Equipment.
a. Initial Property, Plant and Equipment. MFA will contribute on or
prior to April 30, 1992 the Facility to the Venture, free and clear
of all liens, claims and encumbrances, by warranty deed and xxxx of
sale; provided, however, that MFA shall remove from the Facility at
its expense any feed manufacturing equipment not necessary for or
useful in connection with the manufacture of pet food by the Venture
and any equipment so removed by MFA shall be deemed to have been
excluded from the contribution of the Facility to the Venture and
shall not constitute a part of the Facility. Prior to such
contribution of the Facility, the Facility shall be operated by MFA
for its own
account and shall not constitute property of the Venture.
b. Renovation of Facility. The parties recognize that substantial
renovation of the Facility, including the installation of additional
manufacturing and building equipment, will be required prior to the
commencement of operations at the Facility. Attached hereto as
Exhibit B is a preliminary construction and equipment budget
reflecting the projected costs of such renovation. The final budget,
together with plans and specifications for the renovation, shall be
prepared by Xxxxxxx subject to the approval of MFA, such approval
not to be unreasonably withheld. Each of MFA and Xxxxxxx shall
contribute to the Venture an amount equal to 50% of the costs of all
renovations, when and as such costs are payable by the Venture.
c. Additional Property, Plant and Equipment. If the Management
Committee (as defined in Section 8(a) hereof) shall determine after
the date hereof that any additional property, plant and equipment is
required for the Venture, each of MFA and Xxxxxxx shall contribute
to the Venture an amount equal to 50% of the costs thereof, when and
as such costs are payable by the Venture.
d. Ownership of Facility. The Facility, as initially contributed to the
Venture pursuant to Section 2(a) hereof and as renovated and
equipped pursuant to Section 2(b) hereof, together with any
additional property, plant and equipment acquired from time to time
pursuant to Section 2(c) hereof, shall constitute property of the
Venture and title thereto shall be in the name of the Venture.
3. Trade Secrets. Proprietary manufacturing processes, customer lists and
other similar confidential information (collectively, "Trade Secrets")
constituting the property of a party hereto prior to the date hereof shall
remain the property and Trade Secrets of such party and shall not constitute
property of the Venture notwithstanding disclosure to the other party in
connection with the Venture. Any such Trade Secrets may be used by the Venture
but shall not be used by the other party, disclosed to others, or any other
advantage taken thereof by such party in its own separate business activities.
Trade Secrets developed by the Venture shall be and become the property and
Trade Secrets of the Venture, but may be used by either party in its own
separate business activities.
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4. Trademarks, Etc. The Venture will employ the trademark(s), patent(s),
copyright(s), license(s) and other intellectual property rights presently being
used by MFA and Xxxxxxx in connection with their respective pet food businesses,
all of which are hereby made available on a non-exclusive basis to the Venture.
Such trademarks, patents, copyrights and other intellectual property rights
shall remain the property of MFA or Xxxxxxx, as the case may be, and shall not
constitute property of the Venture. Each of MFA and Xxxxxxx shall establish
quality control standards for all products sold using its trademarks, and shall
specify policies and programs to monitor compliance with such standards.
5. Working Capital. MFA and Xxxxxxx shall agree upon an initial equal
contribution of cash to the Venture for purposes of funding the initial working
capital of the Venture. To the extent cash proceeds of sales and collections on
accounts receivable by the Venture from time to time do not fund current working
capital requirements, each of MFA and Xxxxxxx will advance to the Venture on an
interest-free basis an amount equal to 50% of such working capital deficiency.
6. Direct Expenses: Administrative Services Fee.
a. Reimbursement of Direct Expenses. Each of Xxxxxxx and MFA shall from
time to time prepare and submit to the Management Committee a
written statement, the detail of which shall be determined by the
Management Committee, for the actual direct expenses incurred by
Xxxxxxx and MFA in connection with the Venture. The Venture shall
reimburse Xxxxxxx or MFA, as the case may be, for such expenses
immediately upon receipt of any such statement. In connection with
the submission of written statements for direct expenses to the
Management Committee, each of Xxxxxxx and MFA shall identify any
material variances in such expenses from the projected expenses
reflected in any operating budget for such period prepared by the
Management Committee.
b. Examples of Direct Expenses. Direct expenses for which Xxxxxxx and
MFA shall be paid include, without limitation, all direct
manufacturing expenses (e.g., labor, utilities, maintenance and
insurance expenses) and all direct sales expenses. General corporate
overhead and corporate administrative expense, interest or other
indirect expenses shall not constitute direct expenses for purposes
of this Section 6.
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c. Administrative Services Fee. In consideration of the accounting,
bookkeeping, computer and other administrative services to be
provided to the Venture by Xxxxxxx, the Venture shall pay to Xxxxxxx
an administrative services fee, the amount of which shall be
approved by the Management Committee.
7. Transactions with the Venture.
a. Purchases of Pet Food from the Venture. MFA agrees that during the
term of this Agreement it will purchase from the Venture, to the
extent available from the Venture, the entirety of its pet food and
fish food requirements. The price to be charged MFA for products
purchased from the Venture shall be established by the Management
Committee so as to yield to the Venture a per ton profit
substantially equivalent to the per ton profit then being realized
by the Venture on sales of products to others. The Venture shall
invoice MFA for all products sold to MFA, and MFA shall pay all such
invoices upon receipt thereof.
b. Sales of Pet Food to the Venture. In order to supplement the product
line of the Venture, Xxxxxxx will sell to the Venture pet food
products from time to time manufactured by Xxxxxxx but not
manufactured by the Venture ("Supplemental Products"). The price to
be charged to the Venture by Xxxxxxx for Supplemental Products shall
be established by Xxxxxxx, subject to the approval of the Management
Committee, and shall yield to the Venture a per ton profit
substantially equivalent to the average per ton profit of other pet
food products manufactured by the Venture. Xxxxxxx shall invoice the
Venture for all Supplemental Products sold to the Venture, and the
Venture shall pay all such invoices upon receipt thereof.
8. Management and Operation; Personnel; Ancillary Services.
a. Management Committee. Management of the Venture shall be vested in a
committee (the "Management Committee") consisting of one
representative of MFA and one representative of Xxxxxxx. Each party
will designate a representative who will serve on the Management
Committee and one alternate who shall act in the absence of such
representative. MFA has designated Xxx Xxxxxx as
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its representative and Xxxxx Xxxx as its alternate. Xxxxxxx has
designated Xxxx Xxxxxxxxxx as its representative and Xxxx Xxxxxxxx
as its alternate. Each party may from time to time, by written
notice to the other, designate a new representative or alternate.
b. Day-to-Day Operations. Xxxxxxx shall be responsible for conducting
the day-to-day operations of the Venture, subject to the management
authority of the Management Committee. In such capacity, Xxxxxxx
shall cause the Facility to be operated, and supply all basic
services to the Venture, including sales and marketing, research and
nutrition, quality assurance, purchasing of packaging, production
services and the like. Xxxxxxx shall coordinate ingredient
purchasing with MFA, with ingredient purchases for the Venture to be
made by the party that obtains the lowest cost. The Venture shall
purchase its requirements of corn and milo from the MFA elevator at
Passaic, Missouri, provided that the quality meets specifications
for the Venture and that the price is competitive with other
suppliers of corn and milo.
c. Limitations Upon Authority of Parties. Neither party, without the
consent of the other, shall (i) borrow money for or in the name of
the Venture or utilize any property of the Venture as collateral for
any such borrowing; (ii) as a partner in the Venture, make, execute
or deliver any assignment for the benefit of creditors, confession
of judgment, chattel mortgage, deed, guarantee, indemnity bond or
surety bond; (iii) buy, sell, encumber or lease any property of the
Venture, or any interest therein, other than in the ordinary course
of business; or (iv) undertake or authorize any construction of any
kind or nature other than necessary or appropriate repairs in the
ordinary course of business.
d. Personnel. Subject to such changes as from time to time approved by
the Management Committee, all employees at the Facility will be
employed by Xxxxxxx. The Venture shall reimburse Xxxxxxx in
accordance with Section 6 hereof as a direct expense of the Venture
for compensation and benefits to such employees.
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e. Management Personnel. Each of MFA and Xxxxxxx shall devote the
attention of their management personnel to the Venture from time to
time as appropriate, but except as expressly provided in Section
6(c) hereof, neither MFA nor Xxxxxxx shall charge a management fee
to the Venture or allocate to the Venture as a direct expense any
portion of the compensation and benefits paid to its management
personnel.
f. Employment Matters. Employees of MFA or Xxxxxxx who perform services
for the Venture shall remain employees of their respective employer,
which shall remain solely responsible for establishing the terms and
conditions of their employment, including hiring, discipline and
discharge. Neither MFA nor Xxxxxxx (or any of their respective
employees) shall have any responsibility for the development or
approval of personnel policies with respect to the employees of the
other party performing services for the Venture. MFA and Xxxxxxx
shall remain solely liable for the payment of compensation and any
employment benefits to their respective employees and for the
payment of any taxes, charges or assessments payable with respect to
their respective employees, including without limitation any such
payments made to governmental agencies or bodies. Neither the
Venture nor MFA shall be considered a successor employer of any
employees of Xxxxxxx, and neither the Venture nor Xxxxxxx shall be
considered a successor employer of any employees of MFA.
g. Ancillary Services. If the Management Committee shall from time to
time determine that ancillary services required for operation of the
Venture (e.g., lab analysis) can be provided to the Venture more
efficiently or more economically by MFA or Xxxxxxx than by having
such services provided by personnel regularly engaged in operation
of the Venture or by a third party contractor, then MFA or Xxxxxxx,
as the case may be, agrees to provide such ancillary services to the
Venture on such terms as may be agreed by such party and the
Management Committee; provided, however, that neither MFA nor
Xxxxxxx shall have any obligation to provide such ancillary services
to the Venture if, in the reasonable judgment of such party, to do
so would materially interfere with its other business operations or
is not otherwise practicable under the circumstances.
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9. Accounting Matters.
a. Fiscal Year. The fiscal year of the Venture shall end on April 30.
b. Books of Account. Xxxxxxx shall be responsible for maintaining books
of account for the Venture. In connection therewith, Xxxxxxx shall
prepare and distribute to the parties on or prior to the 15th
working day of each month an income statement and balance sheet for
the Venture for the preceding month substantially in the form of
Exhibit C hereto, with such changes in form as may from time to time
be approved by the Management Committee. Xxxxxxx and MFA shall cause
to be performed periodic audits of the books of account as from time
to time determined by the Management Committee.
c. Bank Accounts. Xxxxxxx shall maintain such separate bank account or
bank accounts for funds of the Venture as the Management Committee
determines necessary. Interest on any such accounts shall accrue to
the benefit of the Venture.
10. Distribution of Net Income. An amount equal to 50% of the
Distributable Net Income (as hereinafter defined) shall be distributed to each
party from time to time, as determined by the Management Committee.
"Distributable Net Income" for any period shall mean the excess, if any, of (i)
the net income for such period over (ii) the aggregate net losses for all prior
periods to the extent not offset against net income for prior periods in
computing "Distributable Net Income" for such prior periods.
11. Other Business Operations of Parties.
a. MFA. MFA has determined to withdraw from the business of
manufacturing pet food and fish food and agrees that it will not
engage in such business, other than through the Venture, during the
term of this Agreement. The Facility is located adjacent to the
fertilizer manufacturing business of MFA in Xxxxxx, Missouri, which
fertilizer manufacturing business does not constitute a part of the
Venture. MFA agrees to cooperate with the Venture, and the Venture
shall cooperate with MFA, to assure that continued operation of the
fertilizer manufacturing business of MFA does not materially
interfere with the pet food and fish food business of the Venture
and that operation of the pet food and fish food business of the
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Venture does not materially interfere with the fertilizer
manufacturing business of MFA. MFA agrees to a complete separation
of its fertilizer operation from the Facility and to take all steps
necessary to prevent the possibility of any cross-contamination.
x. Xxxxxxx. Xxxxxxx engages in the pet food and fish food business at
other locations throughout the United States, which other operations
do not constitute part of the Venture. MFA recognizes that such
other operations of Xxxxxxx may compete with the Venture. Xxxxxxx
agrees, however, that in the conduct of such other pet food and fish
food operations during the term of this Agreement it will not
solicit customers traditionally serviced primarily from the Facility
so as to capture such sales for its own account rather than the
account of the Venture. Xxxxxxx agrees that, during the term of this
Agreement, it will send orders from customers for pet food and fish
food produced at the Facility so long as such products can be
produced economically at the Facility, are of a quality satisfactory
to such customers of the Venture and can be produced consistent with
the delivery requirements. MFA acknowledges that decisions as to
which orders will be assigned by Xxxxxxx to the Facility are within
the discretion and control of Xxxxxxx, to be reasonably exercised.
12. Certain Liabilities: Insurance. Neither MFA nor Xxxxxxx shall, by
virtue of this Agreement, be deemed to have assumed any liability of any kind or
nature whatsoever arising with respect to activities or products of the other
not undertaken as part of the Venture. No party to this Agreement shall be
liable for workers' compensation or employment-related damages or actions
relating to the employees of the other party to this Agreement. The following
insurance coverages shall be obtained regarding the operations and assets of the
Venture:
(i) The Venture shall obtain property and casualty insurance with
respect to the Facility in such amounts and with such deductibles
as shall be determined by the Management Committee.
(ii) The Venture shall obtain property and casualty insurance with
respect to the inventory, packaging and supplies of the Venture in
such amounts and with such deductibles as shall be determined by the
Management Committee.
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(iii) The Venture shall obtain comprehensive general and products
liability insurance with respect to the Venture. All such policies
shall name each party and the Venture as insureds thereunder.
(iv) Each party shall obtain appropriate workers' compensation insurance
with respect to such party's employees.
(v) The Venture shall obtain such other insurance coverage as the
Management Committee shall deem appropriate in connection with the
activities of the Venture.
The premiums of any such insurance shall constitute a direct expense of
the Venture for purposes of Section 6 hereof.
13. Representations and Warranties.
a. Generally. Each of MFA and Xxxxxxx represents and warrants to the
other that:
(i) it is a corporation duly organized and in good standing under the
laws of the state of its incorporation;
(ii) it is duly qualified to do business in the State of Missouri;
(iii) it has obtained all necessary corporate approval to execute, deliver
and perform this Agreement and to engage in operation of the Venture
as contemplated hereby;
(iv) the execution, delivery and performance of this Agreement and
operation of the Venture as contemplated hereby does not violate the
terms of any agreement to which it is a party or by which it is
bound;
(v) there are no suits or proceedings pending or, to its knowledge,
threatened against it which, if decided adversely to such party,
would adversely affect its authority to execute, deliver and perform
this Agreement or to engage in operation of the Venture in
accordance herewith; and
(vi) it has all necessary licenses, permits and authorizations,
governmental or otherwise, necessary to execute, deliver and perform
this Agreement and to engage in operation of the Venture as
contemplated hereby.
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b. Additional Representations and Warranties of MFA. MFA has, and will
convey to the Venture, good and marketable title to the Facility,
free and clear of all liens, claims and encumbrances. MFA has not
discharged at the Facility or permitted or suffered the discharge at
the Facility any hazardous substances the release or disposal of
which is regulated by any law, regulation, ordinance or code, and to
the knowledge of MFA no such hazardous substances exist in, on or
under the Facility. Except as disclosed in writing to Xxxxxxx by
MFA, no storage tanks for petroleum, petroleum by-products or other
hazardous substances are present in, on or under the Facility.
14. Initial Term and Renewal Terms. The Venture shall have a term
commencing on the date hereof and continuing to and including April 30, 2022.
Thereafter the term of the Venture shall be automatically extended for
successive two-year renewal terms unless either party elects by written notice
to the other party given not less than twelve (12) months prior to expiration of
the initial term or any renewal term, to terminate the Venture upon expiration
of the initial term or renewal term, as the case may be.
15. Early Termination. The Venture shall terminate prior to expiration of
the initial term or any renewal term, as follows:
(i) by the mutual written agreement of MFA and Xxxxxxx;
(ii) by either party upon not less than twelve (12) months written notice
of its election to terminate the Venture; provided that the Venture
cannot be terminated prior to April 30, 1995 pursuant to this clause
(ii);
(iii) by either party upon written notice of its election to terminate the
Venture following the institution of any bankruptcy or insolvency
proceedings by or against the Venture or the other party (whether
voluntary or involuntary, and whether under federal or state law),
the dissolution, liquidation or winding up of the other party or the
assignment by the other party of any significant portion of its
property or assets for the benefit of creditors or claimants;
(iv) by either party upon written notice of its election to terminate the
Venture if there is a
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willful breach by the other party of a material term of this
Agreement and such breach has not been cured within sixty (60) days
after written notice of such breach; or
(v) upon one hundred eighty (180) days prior written notice by either
party (or its assignee) following the assignment by a party of its
interest in the Venture in accordance with Section 18 hereof;
provided, however, that such notice of termination may not be given
more than ninety (90) days after the effective date of such
assignment or transfer.
Nothing contained in this Section 15 shall affect or impair any rights or
obligations arising prior to or at the time of the termination of the Venture,
or which may arise by an event causing the termination of the Venture.
16. Disposition of Assets Following Termination.
a. Generally. Upon termination of the Venture, MFA and Xxxxxxx shall
proceed to wind up the affairs of the Venture in accordance with
this Section 16.
b. Option to Purchase Assets of Venture Following Optional Termination.
In the event a party (the "Terminating Party") gives notice of
termination pursuant to clause (ii) of Section 15 hereof, the other
party (the "Notified Party") shall have the option to purchase the
assets of the Venture at a mutually agreed upon price, or if the
parties cannot agree, at a price equal to the then current book
value, net of accumulated depreciation; provided that for such
purpose any remaining undepreciated book value of the Facility as
initially contributed to the Venture by MFA pursuant to Section 1(a)
hereof shall be excluded from such computation.
c. Option to Purchase Assets of Venture Following Bankruptcy, Breach,
Etc. In the event a party (the "Non-Defaulting Party") gives notice
of termination pursuant to clause (iii) or (iv) of Section 15 hereof
to the other party (the "Defaulting Party"), the Non-Defaulting
Party shall have the option to purchase the assets of the Venture at
a mutually agreed upon price, or if the parties cannot agree, at a
price equal to the then current book value, net of accumulated
depreciation; provided that for such purpose any remaining
undepreciated book value of the
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Facility as initially contributed to the Venture by MFA pursuant to
Section 1(a) hereof shall be excluded from such computation.
d. Other Disposition of Assets. Absent exercise of the purchase option
set forth in Section 16(b) or (c) hereof, as the case may be, upon
termination of the Venture, the assets of the Venture shall be sold
in an orderly fashion in such manner or the Management Committee
shall determine; provided, however, that if such termination of the
Venture is pursuant to clause (ii) of Section 15 hereof and the
Notified Party has not exercised its purchase option under Section
16(b) hereof, or pursuant to clause (iii) or (iv) of Section 15
hereof and the Non-Defaulting Party has not exercised its purchase
option under Section 16(c) hereof, then the Notified Party or
Non-Defaulting Party, as the case may be, shall have a right of
first refusal with respect to any sale of assets pursuant to this
Section 16(d) on such terms as shall be established by the
Management Committee.
e. Application of Cash. Any cash of the Venture, including without
limitation the proceeds of assets sold pursuant to Sections 16(b),
(c) or (d) hereof, shall be applied and distributed in the following
order of priority:
(i) to the payment of debts and liabilities of the Venture (other than
outstanding advances pursuant to Section 5 hereof) and expenses of
liquidation;
(ii) to the setting up of any reserves that the Management Committee
shall deem reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Venture arising out of or in
connection with the Venture, which reserves shall be paid over by
MFA and Xxxxxxx to a mutually designated party, as escrow agent, to
be held for the purpose of disbursing such reserves in payment of
any of the aforementioned contingencies; provided, however, that at
the expiration of such period of time as MFA and Xxxxxxx shall deem
mutually advisable, said escrow agent shall distribute the balance
thereof remaining in the manner set forth in subparagraph (iv)
hereof;
(iii) to outstanding advances pursuant to Section 5 hereof; and
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(iv) any balance remaining after the application in accordance with the
foregoing subparagraphs, equally to MFA and Xxxxxxx.
17. Purchases of Products Following Termination. In the event that either
party (the "Purchasing Party") purchases the Facility pursuant to Section 16(b)
or (c) upon termination of the Venture, then the other party agrees that for a
period of five years from and after termination of the Venture, it will purchase
from the Purchasing Party, to the extent available from the Facility, its
proprietary branded pet food and fish food requirements consistent with
purchases from the Facility made prior to the termination of the Venture. The
price for pet food and fish food products purchased from the Purchasing Party
shall be an amount that will yield to the Purchasing Party a per ton profit
substantially equivalent to the per ton profit then being realized by the
Purchasing Party on sales to others of products manufactured at the Facility.
The Purchasing Party shall provide invoices for all such pet food and food
products and such invoices shall be payable upon receipt thereof.
18. Assignment. Except as expressly permitted by this Section 18, neither
party shall assign or encumber its interest in the Venture. A party may assign
its interest in the Venture to another entity in connection with the sale of
substantially all of the assets of a division or component of its business to
another entity provided that (i) such party remains liable for observance and
performance of its obligations under this Agreement; (ii) the financial
condition of the transferee is reasonably satisfactory to the other party; (iii)
the transferee specifically agrees to be bound by the terms of this Agreement;
and (iv) such assignment or transfer does not, in the reasonable judgment of the
other party, materially adversely affect the Venture or its property for future
business operations or materially adversely affect such other party's other
business operations. Each and every provision in this Agreement shall survive
such assignment or transfer and remain in full force and effect.
19. Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties hereto, their successors and permitted assigns.
20. Further Assurances. The parties agree that they will perform such
other acts and execute and deliver such other documents as may be necessary or
appropriate from time to time to carry out the intent and purpose of this
Agreement. The parties recognize that issues may arise in connection with the
Venture which are not provided for in this Agreement and cannot be resolved by
the Management Committee. Subject to the early termination provisions of Section
15 hereof, the parties agree
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to negotiate in good faith the resolution of such issues by amendment or
modification of this Agreement in accordance with Section 21 hereof.
21. Waivers and Amendments. This Agreement may be amended or modified, and
the terms hereof may be waived, only by a written instrument executed by the
parties hereto or in the case of a waiver, by the party waiving compliance. The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect its right at a later time to enforce
the same. No waiver by either party of the breach of any term or covenant
contained in this Agreement or in any other such instrument, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any breach, or a waiver of the breach of
any other term or covenant contained herein.
22. Arbitration. All unresolved disputes or controversies arising out of
or in relation to this Agreement shall be determined and settled by arbitration
at a mutually convenient location in the State of Missouri in accordance with
the Commercial Rules of the American Arbitration Association in effect at the
time of said controversy, and judgment upon any award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction. The
expenses of the arbitration shall be borne by the Venture, provided that each of
MFA and Xxxxxxx shall pay for and bear the costs of its own experts, evidence,
and legal counsel. Whenever any action is required to be taken under this
Agreement within a specified period of time and the taking of such action is
materially affected by a matter submitted to arbitration, such period shall
automatically be extended for ten (10) days plus the number of days that are
taken for the determination of that matter by the arbitrator(s). Nothing herein
contained shall bar either party from seeking equitable remedies in a court of
competent jurisdiction.
23. Indemnification, etc. The Venture shall indemnify and hold harmless
each of MFA and Xxxxxxx for and against all claims, actions, suits and
proceedings asserted against such party in connection with the Venture or any
act or omission of such party in its capacity as a party to the Venture;
provided, however, that neither MFA nor Xxxxxxx shall be indemnified and held
harmless for its gross negligence or willful misconduct.
24. Liability of Parties to Venture. Neither MFA nor Xxxxxxx shall be
liable to the Venture or the other party for any act or omission of such party
in its capacity as a party to the Venture unless such act or omission
constitutes gross negligence or willful misconduct of such party.
-14-
25. Governing Law. This Agreement shall be interpreted in accordance with
the laws of the State of Missouri.
26. Notices. Any notice given pursuant to this Agreement shall be in
writing and shall be deemed to have been duly given if personally served or if
transmitted by registered or certified U.S. Mail, return receipt requested and
postage prepaid, addressed to the other party at its address hereinafter set
forth or at such other address as the other party shall theretofore have
designated by notice in accordance with this Section 26:
MFA, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Xxxxxxx Milling Company
000 Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
The date of giving such notice shall be the date received, if served
personally, or the date on which the notice is delivered to the other party as
indicated by the return receipt.
27. Entire Agreement. This Agreement and the Exhibits hereto set forth the
entire understanding and agreement between the parties hereto with respect to
the subject matter hereof and supersede all prior agreements, arrangements and
understandings, written or oral, relating to the subject matter hereof.
28. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
29. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which taken
together shall be one document.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
9th day of January, 1992.
MFA, INC.
By /s/ [ILLEGIBLE]
--------------------------------------
Its President
--------------------------------------
XXXXXXX MILLING COMPANY
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Its President
--------------------------------------
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EXHIBIT A
Description of Facility
AREA TO BE CONVEYED
FINAL LEGAL DESCRIPTION TO BE PREPARED
EXHIBIT B
Preliminary Construction and Equipment Budget
General $45,000
Site work 25,000
Concrete 35,000
Masonry 5,000
Structural steel 320,000
Thermal, Moist. Protec. 3,000
Finishes 10,000
Specialities 91,000
Equipment 1,088,000
Special Construction 10,000
Conveying Systems 199,000
Mechanical 207,000
Electrical 97,000
---------
Subtotal 2,135,000
General Contingency 65,000
---------
TOTAL $2,200,000
EXHIBIT C
Forms of Periodic Financial Statements
JOINT VENTURE
PET FOOD INCOME STATEMENT
________ 3l, 1992
CURRENT MONTH YEAR-TO-DATE
/31/92 /31/92
--------------------------- --------------------------
Actual Budget Variance Actual Budget Variance
--------------------------- --------------------------
CUSTOMER TONS
INTER-CO. TONS
TOTAL TONS
Plant Sales
Cost Of Sales
Gross Profit
Manufacturing (Xxxxxxx)
Manufacturing (MFA)
G&A Plant (Xxxxxxx)
G&A Plant (MFA)
G&A Non-Plant (Xxxxxxx)
G&A Non-Plant (MFA)
Operating Expenses
OPERATING INCOME
Freight Out
Product Liability
Allowances
Brokerage
Cash Discounts
Total Discounts
Bad Debt Provision
Selling
Advertising
Total Marketing
Interest Income
Misc. Income/Expense
Total Other Income
VENTURE NET INCOME
MFA SHARE
XXXXXXX SHARE
Forms of Periodic Financial Statements
BALANCE SHEET
(DATE)
BEGINNING OF CURRENT MONTH
YEAR BALANCE
--------------------------------------------------------------------------------
CASH
RECEIVABLES
OTHER RECEIVABLES
INVENTORIES
PREPAID EXPENSES
TOTAL CURRENT ASSETS
LAND, BUILDINGS & EQUIPMENT
NET OF DEPRECIATION
OTHER ASSETS
TOTAL ASSETS
ACCOUNTS PAYABLE & ACCRUED EXPENSES
PARTNER ADVANCES
MFA
XXXXXXX
TOTAL CURRENT LIABILITIES
LONG TERM LIABILITIES
TOTAL LIABILITIES
CAPITAL INVESTMENT
MFA
XXXXXXX
TOTAL VENTURE CAPITAL
TOTAL LIABILITIES AND CAPITAL
