EXHIBIT 10.1(a)
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of July 23, 1998, by and between Gold
Xxxx Inc., a Georgia cooperative marketing association ("Gold Xxxx") and
Southern States Cooperative, Inc., a Virginia agricultural cooperative
corporation ("Southern States").
WHEREAS, Gold Xxxx wishes to sell and assign to Southern States, and
Southern States wishes to purchase and assume from Gold Xxxx, for the
consideration and on the terms and conditions set forth herein, the business of
certain divisions of Gold Xxxx, and substantially all of the assets that are
primarily used in connection therewith (the "Inputs Business," as defined
herein), and certain liabilities of the Inputs Business.
NOW, THEREFORE, in consideration of the mutual agreements and the
representations and warranties, conditions and promises contained herein, and
intending to be legally bound hereby Gold Xxxx and Southern States hereby agree
as follows (capitalized terms having the meaning given in Article XIX or
elsewhere herein):
ARTICLE I
Sale and Purchase of the Purchased Assets and Assumption of the Assumed
Liabilities
At the Closing, and subject to the terms and conditions of this Agreement:
(a) Gold Xxxx shall sell, transfer, convey, assign and deliver to Southern
States, and Southern States shall purchase and acquire from Gold Xxxx, the
Purchased Assets free and clear of all Liens, and (b) Gold Xxxx shall assign to
Southern States, and Southern States shall assume from Gold Xxxx, the Assumed
Liabilities. No other liabilities of Gold Xxxx arising out of the Inputs
Business, the ownership or operation of any of the Purchased Assets, the
consummation of the transactions under this Agreement or otherwise, except as
expressly provided in this Agreement, shall be assumed by Southern States.
ARTICLE II
The Purchased Assets
2.1. The Purchased Assets. The "Purchased Assets" shall mean all
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right, title, interest and claims of Gold Xxxx in and to the following assets:
(a) all Inventory;
(b) all Owned Real Property as listed on Schedule 6.6.1;
(c) all Owned Personal Property as identified more particularly
on Schedule 6.9.1;
(d) all Accounts Receivable;
(e) all Prepaid Expenses;
(f) the Contracts;
(g) the Real Property Leases as listed on Schedule 6.6.2
(including all of Gold Xxxx'x right, title, and interest, if any, in and to the
Improvements located on the Leased Real Property);
(h) the Personal Property Leases listed on Schedule 6.9.3;
(i) Gold Xxxx'x 50% interest in Xxxxx X. Xxxxxxxx, LLC.;
(j) all equity interests (stock and patronage refund allocations)
of Southern States held by Gold Xxxx;
(k) all Assignable Permits;
(l) all Trademarks as listed on Schedule 6.11, and all other
Intellectual Property Rights of the Inputs Business;
(m) all of Gold Xxxx'x rights and obligations under the CFI
Product Purchase Agreement to the extent the same may be assignable; and,
(n) all of the books, records, computer files, and other files,
data or information, including membership lists or other membership records
(wherever located, and whether in printed form or stored in computer files,
tapes or other medium) of Gold Xxxx primarily relating to or primarily used in
connection with the Inputs Business and the Purchased Assets and the operations
thereof for all periods beginning on July 1, 1996, and ending on or before the
Closing Date which Gold Xxxx can reasonably make available to Southern States
without adversely impacting its own business operations (including its tax
obligations), and which are requested by Southern States in writing after the
Closing ("Records"), provided that Southern States will reimburse Gold Xxxx for
all expenses incurred in providing any such Records for periods ending before
June 27, 1998.
For purposes of this Agreement, the Inputs Business of Gold Xxxx
shall mean the following Gold Xxxx operating divisions: the Agri Services
Division, the Fertilizer and Chemical Division, and the Pet Food and Animal
Health Division (excluding Pork Operations), together with (a) the Morven,
Xxxxxxx xxxxxx gin and all machinery, equipment and other personal property used
in connection therewith and (b) all qualifying crop time notes receivables
(these to consist of notes made by Gold Xxxx patrons and dealers, excluding
Dealer Direct Notes) held by Agra Trade Financing, Inc., but not any other
business operations of Agra Trade Financing, Inc. or any other Gold Xxxx
operations.
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2.2. The Excluded Assets. The Purchased Assets shall not include (a)
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any of the assets, whether tangible or intangible, real or personal, of the Pork
Operations of Gold Xxxx'x Pet Food and Animal Health Division, (b) any cash, (c)
any insurance policies and the rights to refunds thereunder other than as the
parties may agree upon in writing (d) all assets of Gold Xxxx Plans and
Programs, (e) any tax refunds, (f) the trade names and trademarks containing the
name "Gold Xxxx", "GK" or any variations thereof, (g) any current assets of the
Inputs Business that are not included in the Post-Closing Statement of Net
Current Asset Value, including any intercompany or intracompany receivables or
claims, (h) any causes of action or claims that Gold Xxxx may have against third
parties with respect to matters occurring prior to Closing, (i) all assets other
than the Records that are located at the Gold Xxxx principal office located at
Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, (x) all assets of any business or business
activities of Gold Xxxx which are not part of the Inputs Business, (k) any
shares of common stock or patronage preferred stock of CF Industries, Inc. held
by Gold Xxxx at the Closing, or (l) any other equity interest or investments
(other than the Southern States equity referred to in Section 2.1(j) (the
"Excluded Assets").
ARTICLE III
The Assumed Liabilities
3.1. The Assumed Liabilities. The "Assumed Liabilities" shall mean
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the following obligations and liabilities of Gold Xxxx relating solely to the
Inputs Business:
(a) the accrued expenses (other than as the same may constitute
Excluded Liabilities) and trade accounts payable of the Inputs Business and
obligations with respect to customers' advance payments for products or services
reflected on the Post-Closing Statement of Net Current Asset Value;
(b) all of Gold Xxxx'x liabilities and obligations under and
pursuant to the Real Property Leases, including the Xxxxx Xxxxx Lease, and
Personal Property Leases existing on or arising after the Closing Date;
provided, that, Southern States will not assume any obligation or liability
resulting from or arising out of any default, or nonperformance by Gold Xxxx
prior to the Closing Date under or with respect thereto;
(c) all of Gold Xxxx'x liabilities and obligations under and
pursuant to the Contracts, the Operating Agreement of Xxxxx X. Xxxxxxxx, LLC.,
the Guaranty Agreement with respect to Xxxxx X. Xxxxxxxx, LLC., and the CFI
Product Purchase Agreement, provided, that, Southern States shall not assume any
obligation or liability resulting from or arising out of any default, or
nonperformance by Gold Xxxx prior to the Closing Date under or with respect
thereto;
(d) all of Gold Xxxx'x liabilities under and pursuant to the
Xxxxxxx County, Georgia XXX Xxxx; and
(e) any liability or obligation that arises from any Post-
Closing Environmental Condition.
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3.2. The Excluded Liabilities. Except for the Assumed Liabilities,
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and any obligations pursuant to this Agreement, Southern States shall not assume
any obligation, payment or liability of Gold Xxxx of any kind, whether fixed,
contingent, known, or unknown and whether existing as of the Closing or arising
thereafter, and no Excluded Liabilities will be included in the Post Closing
Statement of Net Current Asset Value even if required by GAAP. Without limiting
the generality of the foregoing, and regardless of whether any of the foregoing
may be disclosed to Southern States pursuant to Article VI hereof, or otherwise,
or whether Southern States may have knowledge of the same, Southern States shall
not be deemed to assume any liability, payment or obligation of Gold Xxxx
arising out of or relating to: (a) any workers' compensation claims related to
the operation of the Inputs Business prior to the Closing, or any other claims
or liabilities relating to the employment by Gold Xxxx of persons prior to the
Closing including but not limited to the claims and liabilities described in
Section 14.3.2 hereof; (b) any actual or alleged tortious conduct of Gold Xxxx
or any of its employees or agents; (c) any claim for products liability related
to the operation of the Inputs Business prior to the Closing; (d) any claim for
breach of warranty or contract versus Gold Xxxx related to the operation of the
Inputs Business prior to the Closing; (e) any claim predicated on strict
liability or any similar legal theory related to the operation of the Inputs
Business prior to the Closing; (f) the violation of any law, ordinance or
regulation in effect prior to the Closing related to the operation of the Inputs
Business prior to the Closing but not related to any Pre-Closing Environmental
Condition; (g) any business or business activities of Gold Xxxx which are not
part of the Inputs Business; (h) any tax liabilities, except as otherwise
expressly provided herein; (i) any liabilities under the Plans and Programs,
accrued vacation, or sick pay; (j) any intercompany or intracompany liabilities
or corporate charges; (k) any liability in any pending or threatened litigation,
governmental proceeding, or workers compensation claim; (l) mortgage loans or
any other indebtedness not listed as an Assumed Liability; (m) any liability
arising out of or secured by an Excluded Asset; (n) any liabilities or
obligations of Gold Xxxx under any collective bargaining agreements; (o) any
liability or obligation that arises from any Pre-Closing Environmental
Condition; or (p) any other liabilities of Gold Xxxx not within the scope of the
definition "Assumed Liabilities" (collectively, the "Excluded Liabilities").
ARTICLE IV
Purchase Price
4.1. Preparation of Pre-Closing Statement of Net Current Asset Value.
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As soon as practicable after the satisfaction of all conditions to Closing, Gold
Xxxx shall prepare the Pre-Closing Statement of Net Current Asset Value which
shall be based upon the most recent available unaudited month end financial
statement of Gold Xxxx (not more than 45 days old at Closing). Gold Xxxx shall
deliver the Pre-Closing Statement of Net Current Asset Value to Southern States
at least ten (10) days prior to the Closing Date, for review by Southern States
and its accountants.
4.2. Estimated Purchase Price. The aggregate estimated purchase price
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(the "Estimated Purchase Price") of the Purchased Assets shall be an amount
equal to (i) $41.4 million plus (ii) one hundred percent (100%) of the Net
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Current Asset Value, as set forth on the Pre-Closing Statement of Net Current
Asset Value less (x) the remaining principal balance on the
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Xxxxxxx County, Georgia XXX Xxxx and (y) the capitalized liability on the Gold
Xxxx books for the remaining lease payments under the Xxxxx Xxxxx Lease and less
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(z) $10 million. Unless otherwise agreed to in writing, however, the Estimated
Purchase Price shall in no event be an amount greater than $251.4 million and
the Purchased Assets shall be reduced to cause the Estimated Purchase Price to
be less than $251.4 million by reducing the Accounts Receivable with Gold Xxxx
retaining the Accounts Receivable that are most practicable for it to handle.
4.3. Payment of Estimated Purchase Price. The Estimated Purchase
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Price shall be payable at the Closing by wire transfer of immediately available
funds to Gold Xxxx'x account as provided to Southern States.
4.4. Final Purchase Price. The aggregate final purchase price (the
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"Final Purchase Price") of the Purchased Assets shall be an amount equal to (i)
$41.4 million plus (ii) one hundred percent (100%) of the Net Current Asset
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Value as set forth on the Post-Closing Statement of Net Current Asset Value less
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(x) the remaining principal balance on the Xxxxxxx County, Georgia XXX Xxxx as
of the Closing Date and (y) the capitalized liability on the Gold Xxxx books for
the remaining lease payments due on the Xxxxx Xxxxx Lease as of the Closing
Date. Notwithstanding anything else in this Article IV, unless Southern States
otherwise agrees in writing, the Final Purchase Price shall not exceed $251.4
million and the Purchased Assets shall be reduced to cause the Final Purchase
Price to be less than $251.4 million by reducing the Accounts Receivable, with
Gold Xxxx receiving the Accounts Receivable that are most practicable for it to
handle.
4.5. Post-Closing Adjustment and Payment of Final Purchase Price.
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(a) (i) On or before the Closing, Gold Xxxx and Southern
States shall jointly conduct a physical count and inspection of the Inventory.
Such physical count and inspection shall be conducted in accordance with the
Inventory Procedures (the "Inventory Procedures") attached as Exhibit A which
shall conform to GAAP except insofar as the Inventory Procedures may otherwise
provide in paragraph B(8) thereof. The results of such physical count and
inspection shall be used to determine the value of the Inventory to be set forth
on the Post-Closing Statement of Net Current Asset Value.
(ii) The Accounts Receivable shall be valued in accordance
with GAAP pursuant to the Accounts Receivables Valuation Procedures attached as
Exhibit B (the "Receivables Valuation Procedures").
(b) Southern States shall prepare the Post-Closing Statement of
Net Current Asset Value in accordance with GAAP and pursuant to the applicable
provisions of Section 3.2 and the Inventory Procedures and Receivables Valuation
Procedures. Not later than seventy-five (75) days after the Closing, Southern
States shall deliver the Post-Closing Statement of Net Current Asset Value to
Gold Xxxx and its accountants for review and verification of compliance with
GAAP, the applicable provisions of Section 3.2 and the Inventory Procedures and
Receivables Valuation Procedures. In connection with the preparation of the
Post-Closing Statement of Net Current Asset Value, Gold Xxxx shall be permitted
to observe the preparation thereof, and to review all work papers, books and
records of Southern States and its accountants associated with such preparation.
Gold Xxxx shall cooperate with Southern States and its
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accountants to the extent reasonable and practical in the course of preparing
the Post Closing Statement of Net Current Asset Value.
(c) If Gold Xxxx objects to the Post-Closing Statement of Net
Current Asset Value, it shall give written notice of such objection to Southern
States within thirty (30) days after its receipt thereof. Gold Xxxx shall, in
such notice, specify in reasonable detail the basis and reason for such
objection and the amount to which Gold Xxxx objects. If Gold Xxxx does not
object to the Post-Closing Statement of Net Current Asset Value within such
period, the Post-Closing Statement of Net Current Asset Value shall be final and
binding upon Southern States and Gold Xxxx. If Gold Xxxx objects to the Post-
Closing Statement of Net Current Asset Value within such period and Gold Xxxx
and Southern States are unable to resolve such objection within fifteen (15)
days after written notice of Gold Xxxx'x objection, then such objection shall be
submitted to a mutually agreed upon office of such nationally recognized
independent certified public accounting firm with recognized agricultural
production credit experience as may be jointly selected by Gold Xxxx and
Southern States, who shall act as an arbitrator. The arbitrator shall be
instructed to use its commercially reasonable efforts to perform such services
within thirty (30) days of the submission to it of the Post-Closing Statement of
Net Current Asset Value and the related dispute and, in any case, as soon as
practicable after such submission. In reaching its decisions hereunder, such
arbitrator shall be guided by GAAP and shall resolve any disputes by determining
what such values should be under GAAP and pursuant to the applicable provisions
of Section 3.2 and the Inventory Procedures and Receivables Valuation
Procedures. Each of the parties shall bear all costs and expenses incurred by it
(including legal and accounting fees) in connection with such arbitration;
provided, however, that the fees and expenses of the arbitrator shall be shared
equally by Southern States and Gold Xxxx. This provision for arbitration shall
be specifically enforceable by the parties and the decision of the arbitrator in
accordance with the provisions hereof shall be final and binding and there shall
be no right of appeal therefrom.
(d) If the Net Current Asset Value as shown on the Post-Closing
Statement of Net Current Asset Value, as finally determined in accordance with
Section 4.5(c), is greater than the Net Current Asset Value as shown on the Pre-
Closing Statement of Net Current Asset Value, then Southern States shall pay to
Gold Xxxx within two (2) business days after such determination, an amount equal
to the difference between the Final Purchase Price and the Estimated Purchase
Price, plus interest calculated in accordance with Section 4.5(g), by wire
transfer of immediately available funds to Gold Xxxx'x account as provided to
Southern States.
(e) If the Net Current Asset Value as shown on the Post-Closing
Statement of Net Current Asset Value, as finally determined in accordance with
Section 4.5 (c), is less than the Net Current Asset Value as shown on the Pre-
Closing Statement of Net Current Asset Value, but the Final Purchase Price is
nevertheless greater than or equal to the Estimated Purchase Price, then
Southern States shall pay to Gold Xxxx within two (2) business days after such
determination, an amount equal to the difference between the Final Purchase
Price and the Estimated Purchase Price, plus interest calculated in accordance
with Section 4.5(g), by wire transfer of immediately available funds to Gold
Xxxx'x account as provided to Southern States.
(f) If the Net Current Asset Value as shown on the Post-Closing
Statement of Net Current Asset Value, as finally determined in accordance with
Section 4.5 (c),
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is less than the Net Current Asset Value as shown on the Pre-Closing Statement
of Net Current Value, and as a result the Final Purchase Price is less than the
Estimated Purchase Price, then within two (2) business days following such
determination, Gold Xxxx shall pay to Southern States by wire transfer of
immediately available funds to an account designated by Southern States any
amount by which the Final Purchase Price is less than the Estimated Purchase
Price, plus interest calculated in accordance with Section 4.5(g).
(g) Interest shall accrue, from the Closing Date until paid, on
any amount paid pursuant to Section 4.5(d), Section 4.5(e) or Section 4.5(f) at
an annual rate, computed daily on the basis of an annual period of 360 days,
equal to LIBOR plus one-half percent (1/2%). LIBOR shall mean the London
interbank offered rate for deposits in U.S. dollars for an interest period of
one month as reported on the Telerate Service, determined as of 1:00 p.m. (New
York time) on the first business day of each month.
ARTICLE V
The Closing
5.1. Time and Place. The consummation of the transactions contemplated
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in this Agreement (the "Closing") shall take place at such location as Southern
States and Gold Xxxx may mutually agree, at 9:00 a.m., Eastern Standard Time, on
October 12, 1998, or such other date as Gold Xxxx and Southern States may agree
(the "Closing Date"). All actions at the Closing shall be deemed to be taken
simultaneously, and all documents executed at the Closing shall be effective as
of 12:01 a.m. on October 12, 1998.
5.2. Actions by Gold Xxxx at the Closing. At the Closing, Gold Xxxx
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shall deliver to Southern States the following:
(a) one or more special warranty deeds, in recordable form for
the appropriate jurisdiction, conveying good and marketable title, free and
clear of Liens, to each parcel of real property included in the Owned Real
Property;
(b) a xxxx of sale to the Owned Personal Property and the
Inventory as shall be effective to vest in Southern States good and sufficient
title to the Owned Personal Property and Inventory free and clear of Liens,
which shall be in substantially the form of Exhibit C attached hereto;
(c) an assignment and transfer of Accounts Receivable conveying
all of Gold Xxxx'x right, title, and interest in and to the Accounts Receivable
which shall be in substantially the form of Exhibit D attached hereto;
(d) such instruments of assignment and transfer of all of Gold
Xxxx'x right, title, and interest in the Trademarks, and the other Intellectual
Property Rights of the Inputs Business, the Assignable Permits, the Prepaid
Expenses, and the books and records of Gold Xxxx relating to the Inputs
Business, as may be reasonably requested by Southern States, including an
assignment of trademarks in the form of Exhibit E;
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(e) an Assignment and Assumption Agreement to: (i) the Contracts
(other than the CFI Product Purchase Agreement); (ii) the Real Property Leases;
(iii) the Personal Property Leases; and (iv) the other Assumed Liabilities in
substantially the form of Exhibit F attached hereto, or such other form of
assignment reasonably requested by Southern States or Gold Xxxx, which shall,
among other things, convey good and marketable title to the leasehold interests
in the Leased Real Property, free and clear of Liens;
(f) the Product Purchase Agreement Assignment and Assumption
Agreement, substantially in the form of Exhibit G attached hereto;
(g) the Operating Agreement Assignment and Amendment,
substantially in the form of Exhibit H attached hereto;
(h) the Transition Services Agreement, substantially in the form
of Exhibit I attached hereto;
(i) the certificate of Gold Xxxx described in Section 11.2;
(j) a certificate of good standing of Gold Xxxx from the
Secretary of State of Georgia, dated within thirty (30) days of the Closing
Date;
(k) a certificate of status of foreign corporation for Gold Xxxx
from the Secretary of State of South Carolina, Florida, Alabama, Mississippi,
Tennessee, Louisiana and Texas, each dated within sixty (60) days of the Closing
Date;
(l) copies, certified by the Secretary of Gold Xxxx of: (i) the
Certificate of Incorporation of Gold Xxxx; (ii) the Bylaws of Gold Xxxx; and
(iii) the resolutions of the board of directors of Gold Xxxx, approving the
transactions contemplated herein;
(m) the opinion of the General Counsel of Gold Xxxx described in
Section 11.4;
(n) the Closing Consents; and
(o) such other documents and instruments as may be reasonably
requested by Southern States, including, without limitation the documents,
instruments, and other items required to be delivered by Gold Xxxx to Southern
States pursuant to Article XI hereof.
5.3. Actions by Southern States at the Closing. At the Closing,
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Southern States shall deliver to Gold Xxxx the following:
(a) the Estimated Purchase Price in accordance with the
provisions of Section 4;
(b) the Transition Services Agreement;
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(c) an Assignment and Assumption Agreement to (i) the Contracts
(other than the CFI Product Purchase Agreement), (ii) the Real Property Leases,
(iii) the Personal Property Leases, and (iv) the other Assumed Liabilities in
substantially the form of Exhibit F attached hereto, or other form of assignment
reasonably requested by Southern States or Gold Xxxx;
(d) the Product Purchase Agreement Assignment and Assumption
Agreement;
(e) the Operating Agreement Assignment and Amendment;
(f) a certificate of good standing of Southern States from the
Virginia State Corporation Commission, dated within thirty (30) days of the
Closing Date;
(g) the certificate of Southern States described in Section
10.2;
(h) copies, certified by the Secretary of Southern States, of:
(i) the Articles of Incorporation of Southern States; (ii) the Bylaws of
Southern States; and (iii) the resolutions of the board of directors of Southern
States approving the transactions contemplated herein;
(i) the opinion of counsel to Southern States as described in
Section 10.4; and
(j) such other documents and instruments as may be reasonably
requested by Gold Xxxx, including, without limitation, the documents,
instruments, and other items required to be delivered by Southern States to Gold
Xxxx pursuant to Article X hereof.
ARTICLE VI
Representations and Warranties of Gold Xxxx
Gold Xxxx represents and warrants to Southern States as follows, and
acknowledges and confirms that Southern States is relying upon such
representations and warranties in connection with the execution, delivery and
performance of this Agreement:
6.1. Corporate Organization and Authority. Gold Xxxx is a cooperative
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marketing association duly organized, validly existing, and in good standing
under the laws of the State of Georgia. Gold Xxxx is duly qualified to conduct
business as a foreign corporation in the jurisdictions listed on Schedule 6.1,
which are all of the jurisdictions in which Gold Xxxx is required to be so
qualified in order to conduct the Inputs Business and in which the failure of
Gold Xxxx to so qualify would have a material adverse effect on the financial
condition or operations of the Inputs Business. Gold Xxxx has the requisite
corporate power and authority to own or lease the Purchased Assets, to carry on
the Inputs Business as it is now being conducted, to execute and deliver this
Agreement, and to consummate the transactions contemplated herein. The execution
and delivery of this Agreement by Gold Xxxx, and the consummation by Gold Xxxx
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of the transactions contemplated herein, have been duly and validly approved and
authorized by the board of directors of Gold Xxxx.
6.2. Validity of Agreement; No Violation; Consents.
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6.2.1. This Agreement has been duly authorized, executed and
delivered by Gold Xxxx and is a valid and binding obligation of Gold Xxxx,
enforceable against Gold Xxxx in accordance with its terms, except as may be
limited by bankruptcy, reorganization, insolvency and similar laws of general
application relating to or affecting the enforcement of rights of creditors or
the relief of debtors. Except as otherwise set forth herein or as set forth on
Schedule 6.2.1, the execution, delivery, and performance of this Agreement by
Gold Xxxx and the consummation of the transactions contemplated herein, will
not: (a) violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of Gold Xxxx; (b) violate or conflict in any material
respect with any provision of any law, rule, regulation, order, permit,
certificate, writ, judgment, injunction, decree, determination, award, or other
decision of any court, governmental agency or instrumentality binding upon Gold
Xxxx or to which the Purchased Assets are subject; (c) violate, conflict with,
or result in the breach of or a default under, or result in the acceleration of
any liability, or the cancellation or termination of any of the Contracts, Bond
Documents, or the Real Property Leases which have not been waived; or (d) result
in the creation, or imposition of, any Lien upon, or with respect to, any of the
Purchased Assets.
6.2.2. Gold Xxxx may execute, deliver and perform this Agreement
without the necessity of Gold Xxxx obtaining any consent, approval,
authorization or wavier or giving any notice or otherwise, except for the
expiration of any waiting period required under the HSR Act or such consents,
approvals, authorizations, waivers and notices (a) disclosed on Schedule 6.2.2
hereto (the "Required Consents"); or (b) which have been obtained and are
unconditional and are in full force and effect.
6.3. Inputs Financial Statements. The Inputs Financial Statements,
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when prepared, will present fairly, in all material respects, the financial
position of the Inputs Business as of June 27, 1998, and as of June 28, 1997,
and the results of operations of the Inputs Business for each of the three years
ended June 29, 1996, June 28, 1997, and June 27, 1998, in conformity with
generally accepted accounting principles.
6.4. Absence of Certain Changes.
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(a) Except as set forth on Schedule 6.4, since June 27, 1998,
Gold Xxxx has conducted the Inputs Business only in the usual and ordinary
course of business consistent with Gold Xxxx prior practices and there has not
been:
(i) any material adverse change in the financial condition,
operations, assets, or liabilities of the Inputs Business;
(ii) any damage, destruction, or loss, whether or not
covered by insurance, which has materially and adversely affected or will
materially and adversely affect the Purchased Assets or the Inputs Business;
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(iii) any other fact, event or condition of any character
that will materially and adversely affect the Purchased Assets or the Inputs
Business, or could reasonably be expected materially to disrupt, interrupt,
prevent or impair the conduct of the Inputs Business.
(b) Except as set forth on Schedule 6.4, since June 27, 1998,
Gold Xxxx has not, with respect to the Inputs Business or with respect to the
Purchased Assets:
(i) made or agreed to make with respect to the Inputs
Business any capital expenditure or commitment for additions to property, plant
or equipment, except for expenditures and commitments not exceeding $100,000 in
the aggregate;
(ii) made or agreed to make any increase in the
compensation payable to any Business Employees, except for normal and customary
increases made in the ordinary course of business pursuant to presently existing
policies and for severance and other arrangements related to this transaction;
(iii) entered into any transaction or contract, or amended
or terminated any transaction or contract, except normal transactions or
contracts consistent in nature and scope with prior practices and entered into
in the ordinary course of business in arms length transactions;
(iv) with respect to the Inputs Business, canceled or
waived any claim or right of substantial value, or sold, transferred,
distributed or otherwise disposed of any of the Purchased Assets, except in the
ordinary course of business;
(v) with respect to the Inputs Business, disposed of, or
permitted to lapse or disclosed to any third person any material proprietary
right (including without limitation any licensed right) listed or described on
Schedule 6.11.1;
(vi) agreed to do any of the foregoing.
6.5. Taxes. Gold Xxxx has prepared and timely filed with the
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appropriate governmental agencies all tax reports, filings and returns required
to be filed by it related to the Inputs Business, and Gold Xxxx has paid, or
made provision for the payment of, all such taxes which have become due pursuant
to said returns or pursuant to any assessment received by Gold Xxxx. All
federal, state, city, and foreign income, profits, franchise, sales, use,
occupation, property, excise, and other taxes due in connection with the Inputs
Business have been fully paid or shall be fully paid by Gold Xxxx as of the date
hereof or hereafter when due. Gold Xxxx has not received notice of any tax
deficiency outstanding, proposed or assessed against it with respect to the
Inputs Business, nor has it executed any waiver of any statute of limitations on
the assessment or collection of any tax. There are no tax liens upon, pending
against or, to the Best Knowledge of Gold Xxxx threatened against, any Purchased
Asset.
6.6. Real Property.
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6.6.1. Schedule 6.6.1 sets forth a complete list of all real
property owned in whole or in part by Gold Xxxx primarily used in the Inputs
Business and being purchased by Southern States in connection with its purchase
of the Inputs Business (the "Owned Real
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Property") and a list of all Liens thereon. Gold Xxxx has good and marketable
title in fee simple to all of the Owned Real Property, free and clear of all
Liens except for those set forth on Schedule 6.6.1.
6.6.2. Schedule 6.6.2 sets forth a complete list of all leases
or subleases (the "Real Property Leases"), of real property leased by Gold Xxxx
primarily used in the Inputs Business and being assumed by Southern States in
connection with its purchase of the Inputs Business (the "Leased Real
Property"). Except as disclosed on Schedule 6.6.2, the Real Property Leases are
in full force and effect, are valid and enforceable in accordance with their
terms and constitute the legal, valid and binding obligations of Gold Xxxx and,
to the Best Knowledge of Gold Xxxx, of the other parties thereto (except, in
each case, as may be limited by bankruptcy, reorganization, insolvency and
similar laws of general application relating to or affecting the enforcement of
rights of creditors or the relief of debtors), and, to the Best Knowledge of
Gold Xxxx, no condition exists or event, act or omission has occurred which,
with or without notice, lapse of time or both, would constitute a default or a
basis of force majeure or other claim of excusable delay or nonperformance
thereunder. Gold Xxxx has made available to Southern States a copy of each of
the Real Property Leases, and each such copy is correct and complete and
includes any and all modifications thereof. The interest of Gold Xxxx in and
under any of the Real Property Leases is unencumbered and subject to no present
Lien, except for any Lien listed in Schedule 6.6.2.
6.6.3. To the Best Knowledge of Gold Xxxx, except as described
on Schedule 6.6.3 hereto, (a) no improvement or structure on any Owned Real
Property or Leased Real Property encroaches on any adjacent property or
conflicts with the rights of any owner thereof, and (b) no improvement or
structure on any real property owned or leased by any other person encroaches on
any Owned Real Property or Leased Real Property.
6.6.4. Except as set forth on Schedule 6.6.4, to the Best
Knowledge of Gold Xxxx, all easements, rights of way, licenses, and other non-
ownership interests, if any, granted to or by Gold Xxxx in any of the Owned Real
Property (the "Realty Use Rights") are valid and effective in accordance with
their terms. Gold Xxxx has furnished Southern States with copies of all material
written Realty Use Rights which it has, all of which are identified on Schedule
6.6.4.
6.6.5. To the Best Knowledge of Gold Xxxx, the Improvements
located on the Owned Real Property and the Leased Real Property are in
substantial compliance with all applicable material building, fire, and other
regulatory laws, ordinances, and regulations. Gold Xxxx has not received any
written notice of any violation thereof.
6.6.6. To the Best Knowledge of Gold Xxxx, all requisite
certificates of occupancy and other material permits or approvals legally
required with respect to the Improvements located on the Owned Real Property and
the Leased Real Property and the occupancy and use thereof, have been obtained
and are currently in full force and effect.
6.7. Contracts and Agreements.
------------------------
12
6.7.1. Schedule 6.7 sets forth a list of all contracts,
agreements, leases (other than the Real Property Leases and the Personal
Property Leases), licenses, purchase orders, instruments and commitments,
whether written or oral, and whether or not in the ordinary course of business,
to which Gold Xxxx is a party or is bound, which primarily relate to the Inputs
Business and which Southern States agrees to assume in connection with the
purchase of the Inputs Business, except for the following: purchase orders and
other commitments, whether written or oral, to which Gold Xxxx is a party or is
bound, which were entered into by Gold Xxxx in the ordinary course of business,
which do not involve obligations following the Closing Date extending past June
30, 1999 or having a value of more than $50,000 individually, and which, in
every case, are related solely to the Inputs Business (the "Immaterial
Contracts"). The contracts listed on Schedule 6.7 are referred to herein as the
"Material Contracts". The Material Contracts and the Immaterial Contracts are
referred to collectively herein as the "Contracts". Gold Xxxx has furnished to
Southern States a copy of each of the Material Contracts, and each such copy is
correct and complete and includes all modifications thereof. The Contracts
constitute all existing contracts and commitments of Gold Xxxx, whether written
or oral: (a) which, together with the Transition Agreement, are necessary to
conduct the Inputs Business in the same manner and to the extent currently
conducted by Gold Xxxx; (b) by which the Purchased Assets may be bound or
affected; or (c) which primarily relate to or affect the Purchased Assets and
the Inputs Business.
6.7.2. All of the Material Contracts are in full force and
effect and constitute the legal, valid and binding obligations of Gold Xxxx and,
to the Best Knowledge of Gold Xxxx, of the other parties thereto (except, in
each case, as may be limited by bankruptcy, reorganization, insolvency and
similar laws of general application relating to or affecting the enforcement of
rights of creditors or the relief of debtors), and to the Best Knowledge of Gold
Xxxx, no condition exists or event, act or omission has occurred which, with or
without notice, or lapse of time or both, would constitute a default or a basis
of force majeure or other claim of excusable delay or nonperformance thereunder.
Except for the Required Consents, no consent of any party to the Material
Contracts is required to assign the Material Contracts, and Gold Xxxx'x rights
and obligations thereunder, to Southern States. No other party to any Material
Contract has notified Gold Xxxx of the assertion of its right to renegotiate the
terms or conditions of any Material Contract, and, to the Best Knowledge of Gold
Xxxx, no such basis exists.
6.8. Permits. Schedule 6.8 sets forth a list of all material
-------
governmental licenses, permits, consents, approvals, or certificates issued to
Gold Xxxx and which are primarily related to the Inputs Business (the
"Permits"). Gold Xxxx has furnished to Southern States a copy of each of the
Permits, and each such copy is correct and complete and includes any and all
modifications thereof. To the Best Knowledge of Gold Xxxx: (a) the Permits are
in full force and effect; (b) Gold Xxxx is not in material violation of any of
the Permits; (c) no proceedings for the suspension or cancellation of any of the
Permits is pending or threatened; (d) no condition exists which (with or without
notice, the passage of time or both) would constitute a material violation of
any of the Permits; and (e) the Permits constitute all material governmental
licenses, permits, consents, approvals or certificates required to be obtained
or held by Gold Xxxx in connection with operation of the Inputs Business as
presently conducted, the failure to obtain which would have a material adverse
effect on the financial condition or operations of the Inputs Business;
provided, however, that no representation is made in this sentence with respect
to "Environmental Permits", as to which all representations and warranties are
set forth in Section 6.16 hereof. Those Permits (including the Environmental
Permits) which are assignable
13
by Gold Xxxx to Southern States are marked with an asterisk on Schedule 6.8, and
are referred to herein as the "Assignable Permits", and the remaining Permits
are referred to herein as the "Nonassignable Permits".
6.9. Title to and Condition of Personal Property.
-------------------------------------------
6.9.1. Schedule 6.9.1 sets forth a computer list of machinery,
equipment, furniture, fixtures, vehicles and other items of tangible personal
property that are owned by Gold Xxxx and that are primarily used in connection
with the Inputs Business and that are being purchased by Southern States in
connection with the purchase of the Inputs Business (the "Owned Personal
Property"). The computer list is the list used by Gold Xxxx in its operations
and to the Best Knowledge of Gold Xxxx, is accurate in all material respects.
The Owned Personal Property, together with the other Purchased Assets,
constitute all assets of Gold Xxxx which, together with the Transition
Agreement, are necessary to conduct the Inputs Business in the same manner and
to the extent currently conducted by Gold Xxxx.
6.9.2. Except for the Liens on Schedule 6.9.2., all of which
will be removed prior to the Closing except as otherwise contemplated herein,
Gold Xxxx has good and sufficient title to the Owned Personal Property, free and
clear of any Liens.
6.9.3. Schedule 6.9.3 sets forth a list of all machinery,
equipment, furniture, fixtures, vehicles and other items of tangible personal
property that are leased by Gold Xxxx and that are primarily used in the Inputs
Business (the "Leased Personal Property"), the leases for which (the "Personal
Property Leases") are being assumed by Southern States in connection with the
purchase of the Inputs Business. Gold Xxxx has valid leasehold interests in all
the Leased Personal Property. The Personal Property Leases are valid and in full
force and effect.
6.9.4. All of the Owned Personal Property and Leased Personal
Property used by Gold Xxxx in the Inputs Business and the operations thereof is
owned or leased by Gold Xxxx and not owned or leased by any member, shareholder
or affiliate thereof. To the Best Knowledge of Gold Xxxx, the Owned Personal
Property and the Leased Personal Property is, collectively, in reasonable
operating condition, and has been appropriately maintained in the ordinary
course of business, conforms to all material requirements of law and is
substantially fit for use in accordance with and sufficient for Gold Xxxx'x
present operations, subject to ordinary wear and tear. To the Best Knowledge of
Gold Xxxx, the Inputs Business is not conducted under any material restriction
imposed upon Gold Xxxx (but not imposed upon other persons conducting similar
businesses or operating similar assets for similar purposes in the localities
where its businesses and assets are located) by any zoning, anti-pollution,
health or other law, ordinance or regulation.
6.10. Accounts Receivable. The Accounts Receivable are valid and bona
-------------------
fide obligations resulting from the operations of the Inputs Business prior to
the Closing and, to the Best Knowledge of Gold Xxxx arose out of arms-length
transactions free of known defenses and without right of set off or deduction on
the part of account debtors. To the Best Knowledge of Gold Xxxx, no basis
presently exists for the assertion of any defense, counterclaim or set-off.
14
6.11. Intellectual Property.
---------------------
6.11.1. Schedule 6.11 sets forth a list of all trademarks,
trademark registrations, pending applications for trademark registrations (the
"Trademarks") trade names, service marks, copyrights and fictitious business
names used or owned by Gold Xxxx, or in which Gold Xxxx has any proprietary
interest, primarily in connection with the Inputs Business and all license
agreements (excluding pre-packaged, mass marketed computer software licensed by
third parties at a cost of less than $2,500 per license) with respect to any of
the foregoing as to which Gold Xxxx is a licensor or licensee (collectively, the
"Intellectual Property Rights"). Gold Xxxx is the sole owner of each item listed
on Schedule 6.11, free and clear of all Liens. All assignments of the Trademarks
have been recorded at the United States Patent and Trademark Office. Except as
set forth on Schedule 6.11, the Trademarks are currently in compliance with all
legal requirements (including payment of filing, examination, maintenance fees,
and affidavits of use and incontestability), are valid and enforceable and are
not subject to any maintenance fees or taxes on actions or filings falling due
within ninety (90) days after the Closing Date.
6.11.2. To the Best Knowledge of Gold Xxxx, Gold Xxxx has the
right to use, free and clear of any claims or rights of others all Intellectual
Property Rights used by Gold Xxxx in connection with the Inputs Business.
6.11.3. There are no pending or, to the Best Knowledge of Gold
Xxxx, threatened claims against Gold Xxxx by any person with respect to any of
the Trademarks or claims of infringement by Gold Xxxx on the rights of any
person, and, to the Best Knowledge of Gold Xxxx, no valid basis exists for any
such claim. Gold Xxxx has not received any written notice: (a) that any of the
Trademarks or Intellectual Property Rights infringe upon or otherwise conflict
with any patent, invention, copyright, trademark, service xxxx, trade name, or
trade secret of any other person or (b) of any claim by any other person that it
has any adverse right, title, claim, or interest in and to any of the Trademarks
or Intellectual Property Rights. The Trademarks and Intellectual Property Rights
constitute all of the intellectual property or proprietary rights required by
Gold Xxxx for the operation of the Inputs Business as presently conducted.
6.12. Inventory. Gold Xxxx has good and sufficient title to the
---------
Inventory, free and clear of any Liens. Except as set forth in Schedule 6.12,
all Inventory consists of, and will at the Closing Date consist of, a quantity
and quality usable and saleable in the ordinary course of business, except for
obsolete items and items of below-standard quality, all of which shall be
appropriately written-off or written down in accordance with the Inventory
Procedures in the Post-Closing Statement of Net Current Asset Value.
6.13. Labor Relations.
---------------
6.13.1. Except for the agreement with Teamsters Local Union No.
612, relating to the Guntersville, Georgia, Feed Mill, which Southern States is
not assuming, Gold Xxxx is not a party to any collective bargaining agreements
related to the Inputs Business. Gold Xxxx has furnished to Southern States a
copy of the collective bargaining agreement with
15
Teamsters Local Union No. 612, and such copy is correct and complete and
includes any and all modifications thereof.
6.13.2. To the Best Knowledge of Gold Xxxx: (a) Gold Xxxx is in
compliance in all material respects with all Federal, state, and other
applicable laws regarding employment practices, terms and conditions of
employment, and wages and hours with respect to the Inputs Business; (b) since
June 27, 1998, Gold Xxxx has not engaged in any unfair labor practice with
respect to the Inputs Business; (c) there is no unfair labor practice complaint
against Gold Xxxx pending before the National Labor Relations Board or any
similar state or local labor agency with respect to the Inputs Business; (d)
there is no labor strike, dispute, slowdown, representation question or stoppage
pending or threatened against or involving the Inputs Business; (e) there exists
no grievance which may have a material adverse effect upon the Inputs Business;
(f) no arbitration proceeding arising out of or under any collective bargaining
agreement is pending or threatened with respect to the Inputs Business; and (g)
since June 27, 1998, Gold Xxxx has not experienced any strike, interruption, or
material work slowdown by its labor force due to employment problems of any
nature with respect to the Inputs Business.
6.14. Employees and Employee Benefits.
-------------------------------
6.14.1. Except as set forth on Schedule 6.14, there are no
employment contracts or severance agreements with any of the employees of Gold
Xxxx who are employed in the Inputs Business, including employees on leave of
absence (the "Business Employees"). Gold Xxxx has furnished to Southern States a
list of the Business Employees and will provide such additional information
concerning the Business Employees as Southern States may reasonably request,
subject to its existing policies with respect to providing information about its
employees to other potential employers.
6.14.2. Schedule 6.14 sets forth a complete list of all
employee benefit plans and programs to which Gold Xxxx is a party and in which
the Business Employees participate (the "Plans and Programs"). None of the Plans
and Programs are multiemployer plans (as defined in ERISA Section 3(37)).
6.15. Litigation. Except as set forth on Schedule 6.15, (a) Gold Xxxx
----------
is not subject to any judgment, award, order, or decree or involved in any
governmental action or any proceeding in which relief is sought or ordered
affecting the operation of the Inputs Business or the Purchased Assets or which
would prevent, delay, question or challenge the transactions contemplated by
this Agreement; (b) there are no actions, claims, suits, proceedings (whether in
equity or in law) or investigations pending or, to the Best Knowledge of Gold
Xxxx, threatened, involving or against the Inputs Business or the Purchased
Assets before any court or governmental or regulatory body which individually or
in the aggregate would have a material adverse effect on the condition,
financial or otherwise, of the Inputs Business or which question or challenge
the validity of this Agreement or any action taken or to be taken pursuant to
this Agreement; and (c) to the Best Knowledge of Gold Xxxx, no facts exist which
would serve as a basis under current laws or regulations, for the institution of
any actions, laws, audit investigation, claim, or procedure which might affect
materially and adversely the business or financial condition of the Inputs
Business.
16
6.16. Environmental. Except as set forth on Schedule 6.16, to the Best
-------------
Knowledge of Gold Xxxx with respect to the Purchased Assets and the Inputs
Business:
(a) all underground petroleum or chemical storage tanks located
under the Owned Real Property or the Leased Real Property are in compliance with
all Environmental Laws, including all regulations regarding petroleum
underground storage tanks that are scheduled to become effective in December
1998;
(b) Gold Xxxx is not the subject of any governmental
investigation or proceeding pertaining to the presence, generation, discharge,
emission, release or threatened release, spill, use, storage, processing,
receiving, containment, treatment, shipment, transportation, handling or
disposition of any Hazardous Material, nor has Gold Xxxx provided (or been
required to provide) nor received notice of any violation of any Environmental
Law or release or threat of release of Hazardous Materials or received any claim
or notice under any Environmental Laws with respect to the Owned Real Property,
the Leased Real Property or the other Purchased Assets;
(c) included within the list of Permits on Schedule 6.8 are all
Permits and other governmental authorizations currently held by Gold Xxxx
pursuant to or relating to any Environmental Law, including EPA product
registrations (the "Environmental Permits"), and Gold Xxxx is conducting the
Inputs Business in compliance with the Environmental Permits, which constitute
all of the permits, approvals, certificates, or other authorizations required to
be obtained from any public, governmental, regulatory or judicial authority to
conduct the Inputs Business in substantially the same manner and extent it is
presently conducted by Gold Xxxx; and
(d) there is no action, activity, circumstance, condition,
event, or incident, including without limitation, the release, emission,
discharge, presence, or disposal of any Hazardous Material, that could
reasonably be expected to form the basis of any environmental claim or result in
any liability, remedial action or penalties against Gold Xxxx with respect to
the Inputs Business, the Owned Real Property, the Leased Real Property or the
other Purchased Assets, including the properties of Xxxxx X. Xxxxxxxx LLC.
6.17. Insurance. Gold Xxxx maintains policies of insurance which
---------
insure the Purchased Assets and the Inputs Business in commercially reasonable
amounts for occurrences normally insured against. There are no claims by Gold
Xxxx pending or, to the Best Knowledge of Gold Xxxx, threatened with respect to
the Purchased Assets or the Inputs Business under said policies or disputes with
underwriters, and, to the Best Knowledge of Gold Xxxx, all premiums due and
payable have been paid and all such policies are in full force and effect in
accordance with their respective terms.
6.18. Membership Information. The membership information to be
----------------------
provided to Southern States by Gold Xxxx pursuant to Section 2.1(n) above, which
shall consist of the names and addresses of current members of Gold Xxxx as a
result of their doing business with one or more of the Inputs Divisions, will be
complete and correct to the Best Knowledge of Gold Xxxx.
17
ARTICLE VII
Representations and Warranties of Southern States
Southern States represents and warrants to Gold Xxxx as follows, and
acknowledges and confirms that Gold Xxxx is relying upon such representations
and warranties in connection with the execution, delivery and performance of
this Agreement:
7.1. Corporate Organization and Authority. Southern States is an
------------------------------------
agricultural cooperative corporation duly organized, validly existing, and in
good standing under the laws of the State of Virginia, and is (or will be at the
Closing Date) duly qualified to conduct business as a foreign corporation in the
States of Georgia, Alabama, South Carolina, Florida, Mississippi, Tennessee,
Louisiana, Texas and Arkansas. Southern States has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated herein and therein. The execution and delivery of this
Agreement by Southern States and the consummation by Southern States of the
transactions contemplated herein and therein have been duly and validly approved
and authorized by the board of directors of Southern States.
7.2. Validity of Agreement; No Violation. This Agreement has been duly
-----------------------------------
executed and delivered by Southern States. This Agreement is a valid and binding
obligation of Southern States, enforceable in accordance with its terms, except
as may be limited by bankruptcy, reorganization, insolvency and similar laws of
general application relating to or affecting the enforcement of rights of
creditors or the relief of debtors. The execution, delivery, and performance of
this Agreement by Southern States and the consummation of the transactions
contemplated hereby will not: (a) violate or conflict with any provision of the
Articles of Incorporation or Bylaws of Southern States or (b) violate or
conflict in any material respect with any provision of any law, rule,
regulation, order, permit, certificate, writ, judgment, injunction, decree,
determination, award, or other decision of any court, governmental agency or
instrumentality binding upon Southern States or to which Southern States is
subject.
7.3. Brokers or Finders. Southern States has not incurred any
------------------
obligation or liability, contingent or otherwise, for brokers or finders fees or
commissions or other similar payments in connection with this Agreement.
ARTICLE VIII
Covenants of Gold Xxxx
8.1. Access. Prior to the Closing, Gold Xxxx shall provide Southern
------
States with reasonable access during normal business hours to the Purchased
Assets and to Gold Xxxx'x employees, officers, agents and consultants, books and
records (including property or sales tax returns), compensation and employee
benefit plan documents, and such other information relating to the Inputs
Business and the Business Employees subject to its existing policies with
respect to providing information about its employees to other potential
employers, as Southern States may reasonably request. Gold Xxxx shall provide
Southern States with, or allow Southern States to make, copies, at Southern
States' expense, of any requested materials that are relevant
18
to the Inputs Business and do not contain any confidential or proprietary
information about Gold Xxxx or otherwise violate any internal procedures of Gold
Xxxx. Gold Xxxx shall authorize the independent accountants of Gold Xxxx to
allow the independent accountants of Southern States to review the work papers
and other accounting records of Gold Xxxx'x accountants prepared in connection
with the preparation of the Inputs Financial Statement as provided for in
Section 8.9 below. Southern States shall use its reasonable efforts to minimize
any disruption to Gold Xxxx'x business in connection with the conduct of the due
diligence process contemplated herein, and Gold Xxxx shall receive reasonable
advance notice of and shall have the right to participate in, any discussions
Southern States might have with any federal or state regulatory authorities
about Gold Xxxx or the Inputs Business. Prior to the Closing, Southern States
will not, without the consent of Gold Xxxx, conduct a "Phase II" environmental
assessment or any other environmental investigation of Gold Xxxx'x Owned or
Leased Real Property or any former real property of Gold Xxxx, other than visual
inspections of the properties; provided, however, that Gold Xxxx acknowledges
that Southern States may conduct any Phase II assessment, or any other
environmental investigation, with respect to those matters identified on
Schedule 14.12.
8.2. Conduct of Business.
-------------------
8.2.1. Affirmative Covenants. Prior to the Closing, except as
---------------------
may be agreed to in writing by Gold Xxxx and Southern States, Gold Xxxx shall
conduct the Inputs Business, in all material respects, according to its ordinary
and usual course of business and consistent with Gold Xxxx'x prior practice.
Without limiting the generality of the foregoing, Gold Xxxx shall: (a) maintain
in effect and fully perform all of its obligations under the Contracts and the
Real Property Leases in accordance with the terms thereof; (b) give prompt
written notice to Southern States of any notice given or received by Gold Xxxx
of any default or breach or alleged default or breach under any of the Material
Contracts, the Real Property Leases or the Personal Property Leases and of any
claim or threat to commence any action, suit, proceeding, or investigation
against Gold Xxxx with respect to the Inputs Business; (c) maintain the Owned
Personal Property, the Leased Personal Property and Improvements on the Owned
Real Property and the Leased Real Property in the same condition and repair as
on the date of this Agreement, ordinary wear and tear excepted; (d) protect and
maintain in effect the Trademarks and the Trade Secrets; (e) comply, in all
material respects, with all laws applicable to it in the conduct of the Inputs
Business; (f) preserve the business of the Inputs Business; (g) maintain in full
force and effect all insurance policies currently in effect with respect to the
Purchased Assets, or policies that provide coverage that is comparable to such
insurance policies; and (h) promptly advise Southern States of any breach of any
representation or warranty, covenant, condition or obligation of Gold Xxxx
hereunder.
8.2.2. Negative Covenants.
------------------
(a) Prior to the Closing, except as may be agreed in writing
by Gold Xxxx and Southern States, Gold Xxxx shall not: (i) make or commit to
make any capital expenditures with respect to the Inputs Business, individually
or in the aggregate, in excess of $100,000; (ii) enter into or agree to enter
into any lease, contract, commitment, transaction or understanding of any kind
with respect to the Inputs Business, outside of the ordinary course of business,
or to amend or agree to amend any of the Material Contracts, the Personal
Property Leases or the Real Property Leases except in the ordinary course of
business; (iii) enter into any
19
hedging contract, forward purchase or forward delivery contract, or other
similar contract, arrangement, or agreement relating to the Inputs Business
involving any commitment extending beyond the Closing Date; or (iv) voluntarily
take any action which would render any representation and warranty of Gold Xxxx
contained in Article VI hereof inaccurate at any time between the date hereof
and the Closing Date, including as of the Closing Date.
(b) If Gold Xxxx proposes to Southern States in writing that
Gold Xxxx enter into any hedging contract, forward purchase or forward delivery
contract, or other similar contract, arrangement, or agreement relating to the
Inputs Business involving a commitment extending beyond October 12, 1998, which
written proposal (x) sets forth the basic terms of such contract or agreement,
including the proposed product, delivery date and price, (y) states that such
contract or agreement is subject to the provisions of this Section 8.2.2(b), and
(z) is not approved by Southern States (a "Rejected Proposed Contract"), then,
if the Closing does not occur (i) Southern States will pay to Gold Xxxx an
amount equal to any net profit which Gold Xxxx would have realized on all of
such Rejected Proposed Contracts in the aggregate on or before the Rejected
Proposed Contract Termination Date had Gold Xxxx entered into all of the
Rejected Proposed Contracts, and (ii) Gold Xxxx will pay to Southern States an
amount equal to any net loss which Gold Xxxx would have realized on all of such
Rejected Proposed Contracts in the aggregate on or before the Rejected Proposed
Contract Termination Date had Gold Xxxx entered into all of the Rejected
Proposed Contracts (such calculation to be made and such amount to be paid in
either event as soon as may be practicable after the Rejected Proposed Contract
Termination Date). For purposes of this paragraph, the "Rejected Proposed
Contract Termination Date" shall mean the date as of which all of the Rejected
Proposed Contracts would have matured had they been entered into.
8.2.3. Railroad Agreements. Notwithstanding any other provisions
-------------------
in this Agreement, Gold Xxxx may cancel any and all Railroad Agreements used in
the Inputs Business, listed on Schedule 8.2.3 hereof, at any time on or before
Closing, and Southern States acknowledges that Gold Xxxx will not obtain any
consents from the Railroads to the assignment of the Railroad Agreements as a
part of this transaction.
8.3. Consents of Third Parties. Gold Xxxx shall use its commercially
-------------------------
reasonable efforts to obtain the Closing Consents prior to the Closing Date, and
to obtain the remaining Required Consents as soon as practicable following the
Closing Date, or to continue in effect and to assure that the Inputs Business
and Southern States shall be entitled to all of the benefits of the Contracts,
including without limitation: (i) as required, the consent of the landlords or
lessors of the Leased Real Property and the lessors of the Leased Personal
Property to the assignment to, and assumption by, Southern States of the Real
Property Leases and the Personal Property Leases; (ii) as required, the consent
of third parties to the assignment to, and assumption by, Southern States of the
Contracts; (iii) as required, the consent of any governmental, public or
regulatory authority to the assignment to Southern States of the Assignable
Permits; and (iv) the consent of the other member of Xxxxx X. Xxxxxxxx, LLC. to
the Operating Agreement Assignment and Amendment.
8.4. Cooperation. Gold Xxxx shall cooperate with Southern States to
-----------
effect the consummation of the transactions contemplated herein on the Closing
Date.
20
8.5. Industrial Revenue Bond. Prior to the Closing, Gold Xxxx shall
-----------------------
use commercially reasonable efforts to permit Southern States to assume Gold
Xxxx'x obligations under the Xxxxxxx County, Georgia XXX Xxxx.
8.6. Supplement to Schedules. After the date hereof, Gold Xxxx shall,
-----------------------
from time to time prior to or at the Closing, by notice to Southern States,
supplement or amend any Schedule, including without limitation, one or more
supplements or amendments thereto, to correct any matter which would constitute
a breach of any representation or warranty set forth herein. Such supplemental
or amended Schedule shall not be deemed to cure any willful and intentional
breach of such representation or warranty for the purposes of Article XVI
hereof. If, however, the Closing occurs, such supplemental or amended Schedule
shall be effective to cure and correct for all purposes any breach of any
representation or warranty that would have existed by reason of Gold Xxxx not
having made such supplement or amendment.
8.7. Satisfaction of Conditions. Gold Xxxx shall use its best efforts
--------------------------
(not to include the expenditure of any substantial sums) to cause the conditions
to the obligations of Southern States contained in Article XI to be satisfied to
the extent that the satisfaction of such conditions is in the control of Gold
Xxxx; however, the foregoing shall not constitute a limitation upon the
covenants and obligations of Gold Xxxx otherwise expressly set forth in this
Agreement.
8.8. No Other Negotiations. In consideration of the time and expense
---------------------
that will be incurred by Southern States in connection with the transaction
contemplated by this Agreement, Gold Xxxx agrees that following the execution of
this Agreement or until termination of this Agreement pursuant to Article XVI
hereof, it shall not, nor shall it permit any of its subsidiaries to, nor shall
it authorize or permit any officer, director or employee of, or any investment
banker, attorney, accountant or other advisor or representative of, Gold Xxxx or
any of its subsidiaries to, directly or indirectly, (i) solicit, initiate or
encourage the submission of any Acquisition Proposal (as hereinafter defined) or
(ii) participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or agree to or endorse, or take any
other action to facilitate any Acquisition Proposal or any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal. Gold Xxxx shall as promptly as practicable advise
Southern States orally and in writing of the receipt by it (or any of the other
entities of persons referred to above) after the date hereof of any Acquisition
Proposal, or any inquiry which could lead to any Acquisition Proposal, the
material terms and conditions of such Acquisition Proposal or inquiry, and the
identity of the person making any such Acquisition Proposal or inquiry. Gold
Xxxx will keep Southern States fully informed of the status and details of any
such Acquisition Proposal or inquiry. The term "Acquisition Proposal" as used
herein means any offer or proposal involving the purchase of all or any portion
of all the assets of the Gold Xxxx Inputs Business as defined and specified in
Article II of this Agreement.
8.9. Audit of Gold Xxxx Inputs Business. In contemplation of the
----------------------------------
consummation of the transaction contemplated by this Agreement, Gold Xxxx will
develop in connection with the preparation of its audited financial statements
for its fiscal year ending June 27, 1998, a separate audited financial statement
for the Gold Xxxx Inputs Business (the "Inputs Financial Statement"), which
shall include a balance sheet as of June 27, 1998 and June 28, 1997, and a
related statement of operations, cash flows and, if and to the extent mutually
21
agreed, a statement of divisional equity, in any case for each of the three
years ended June 29, 1996, June 28, 1997, and June 27, 1998. Southern States and
Gold Xxxx agree to share equally the cost of preparing the Inputs Financial
Statement. Gold Xxxx will use its best efforts to have the Inputs Financial
Statement completed within 60 days of the end of its fiscal year and will make
the Inputs Financial Statement for the Inputs Business available to Southern
States for use in arranging any financing required by Southern States in
connection with the Purchase Transaction.
ARTICLE IX
Covenants of Southern States
9.1. Cooperation. Southern States shall cooperate with Gold Xxxx to
-----------
effect the consummation of the transactions contemplated herein on the Closing
Date and will use its reasonable efforts to obtain the necessary financing.
Southern States shall also use its reasonable efforts to cause Gold Xxxx to be
relieved at Closing, or as soon thereafter as may be practicable, from any and
all liabilities with respect to the Assumed Liabilities.
9.2. Negative Covenant. Southern States shall not take any action
-----------------
which would render any representation and warranty of Southern States contained
in Article VII hereof inaccurate at any time between the date hereof and the
Closing Date, including as of the Closing Date, and shall promptly advise Gold
Xxxx of any breach of any representation or warranty, covenant, condition or
obligation of Southern States hereunder.
9.3. Satisfaction of Conditions. Southern States shall use its best
--------------------------
efforts (not to include the expenditure of any substantial sums) to cause the
conditions to the obligations of Gold Xxxx contained in Article X to be
satisfied to the extent that the satisfaction of such conditions is in the
control of Southern States; however, the foregoing shall not constitute a
limitation upon the covenants and obligations of Southern States otherwise
expressly set forth in this Agreement.
9.4. Amendment of Bylaws and Board Resolutions. As of the Closing,
-----------------------------------------
Southern States shall have amended its Bylaws to the extent any such amendment
shall be necessary to carry out the intent of this Section 9.4 and Section 14.1,
and its Board of Directors shall have adopted appropriate resolutions, to
provide for (i) the establishment and maintenance for up to two years following
the Closing of a separate allocation unit of Southern States for the operation
of the retail facilities of the Inputs Business for purposes of operations and
patronage; and (ii) the addition of six (6) seats on the Southern States Board
of Directors to proportionately represent the members who will be served by
Southern States through its acquisition of the Purchased Assets and its
operation of the Inputs Business. Southern States will provide that initially
the six additional seats on its Board of Directors will be filled for staggered
terms by designees of Gold Xxxx serving on the Gold Xxxx Board of Directors. A
copy of such Bylaws as proposed to be amended to the extent necessary for this
Section 9.4 and Section 14.1 and proposed resolutions referred to above are
attached to this Agreement as Schedule 9.4.
22
ARTICLE X
Conditions Precedent to the Obligations of Gold Xxxx
The obligations of Gold Xxxx hereunder are subject to the fulfillment of
each of the following conditions prior to or at the Closing any one of which may
be waived in whole or in part by the Gold Xxxx:
10.1. Performance of Obligations. Southern States shall have
--------------------------
performed, or complied with, in all respects, all of its agreements and
covenants hereunder.
10.2. Representations and Warranties. The representations and
------------------------------
warranties of Southern States made herein shall be deemed to have been made
again at and as of the Closing Date and shall then be true in all material
respects, and Southern States shall deliver to Gold Xxxx a Certificate of an
officer of Southern States dated as of the Closing Date, certifying to that
effect.
10.3. Closing Consents. Gold Xxxx and Southern States shall have
----------------
received the Closing Consents, and any HSR Act waiting period with respect to
the transaction contemplated hereby shall have expired or been terminated.
10.4. Opinion of Counsel to Southern States. Southern States shall
-------------------------------------
have delivered to Gold Xxxx the opinion of its counsel, Xxxx & Valentine,
L.L.P., dated the Closing Date, in form and substance satisfactory to Gold Xxxx
and its counsel.
10.5. Miscellaneous. Gold Xxxx shall have received such other
-------------
instruments and documents as Gold Xxxx and its counsel may reasonably request,
including but not limited to the instruments and documents to be delivered by
Southern States to Gold Xxxx pursuant to Section 5.3 hereof.
10.6. Absence of Litigation. No temporary restraining order,
---------------------
preliminary injunction or permanent injunction or other order preventing the
consummation of the transactions and other actions contemplated under this
Agreement shall have been issued by any Federal or state court and remain in
effect. Southern States agrees to use commercially reasonable efforts to have
any such injunction or order lifted.
10.7. No Change In Law. No law, order or regulation shall have been
----------------
enacted which prohibits the Closing or the satisfaction of any of the conditions
to the obligations of Gold Xxxx contained in this Article X.
23
ARTICLE XI
Conditions Precedent to the Obligations of Southern States
The obligations of Southern States hereunder are subject to the fulfillment
of each of the following conditions prior to or at the Closing, any one of which
may be waived in whole or in part by Southern States:
11.1. Performance of Obligations. Gold Xxxx shall have performed, or
--------------------------
complied with, in all respects all of its agreements and covenants hereunder.
11.2. Representations and Warranties. The representations and
------------------------------
warranties of Gold Xxxx made herein shall be deemed to have been made again at
and as of the Closing Date and shall then be true in all material respects, and
Gold Xxxx shall deliver to Southern States a Certificate of an officer of Gold
Xxxx, dated as of the Closing Date, certifying to that effect.
11.3. Closing Consents. Gold Xxxx and Southern States shall have
----------------
received the Closing Consents, (including the Operating Agreement Assignment and
Amendment) and any HSR Act waiting period with respect to the transaction
contemplated hereby shall have expired or been terminated.
11.4. Opinion of Counsel to Gold Xxxx. Gold Xxxx shall have delivered
-------------------------------
to Southern States the opinion of its General Counsel, dated the Closing Date,
in form and substance satisfactory to Southern States and its counsel.
11.5. No Material Adverse Change. There shall be no material adverse
--------------------------
change in the assets, liabilities, the business or condition, financial or
otherwise, or the results of operations of the Inputs Business.
11.6. Transition Services. On or before the Closing, Gold Xxxx and
-------------------
Southern States shall have entered into a Transition Services Agreement in
substantially the same form as Exhibit I hereto, pursuant to which Gold Xxxx
shall provide to Southern States the services specified therein and on the terms
and conditions set forth therein.
11.7. Financing. Southern States shall have obtained the financing
---------
necessary to consummate the transactions contemplated in this Agreement, on
terms and conditions reasonably satisfactory to Southern States.
11.8. CFI Product Purchase Agreement. Southern States shall have
------------------------------
received the consent of CF Industries, Inc. to the assumption of Gold Xxxx'x
member purchase rights and obligations under the CFI Product Purchase Agreement.
11.9. Miscellaneous. Southern States shall have received such other
-------------
instruments and documents as Southern States and its counsel may reasonably
request, including but not limited to the instruments and documents to be
delivered by Gold Xxxx to Southern States pursuant to Section 5.2 hereof.
24
11.10. Absence of Litigation. No temporary restraining order,
---------------------
preliminary injunction or permanent injunction or other order preventing the
consummation of the transactions and other actions contemplated under this
Agreement shall have been issued by any Federal or state court and remain in
effect. Gold Xxxx agrees to use commercially reasonable efforts to have any such
injunction or order lifted.
11.11. No Change in Law. No law, order or regulation shall have been
----------------
enacted which prohibits the Closing or the satisfaction of any of the conditions
to the obligations of Southern States contained in this Article XI.
ARTICLE XII
Confidentiality
12.1. Confidentiality. Each party shall continue to abide by the
---------------
terms of the confidentiality agreement between Gold Xxxx and Southern States,
dated February 3, 1998 (the "Confidentiality Agreement") subject to Southern
States' and Gold Xxxx'x right to make such disclosures as either may deem
appropriate to their lenders or other parties who are involved in arranging
financing for either Southern States or Gold Xxxx. No public announcement of the
execution of or relating to this Agreement shall be made by either party without
the prior consent of the other, provided, however, that either party shall be
entitled to make such disclosures as may in the opinion of its counsel be
required to comply with applicable laws or the requirements of the Securities
and Exchange Commission or the National Association of Securities Dealers. Also,
until termination of this Agreement as provided for in Article XVI, Gold Xxxx
agrees it will not reveal the terms of the Southern States proposal set out
herein or in the letter of intent between the parties dated May 15, 1998, to any
person other than those directors, officers, agents and employees, including
attorneys, accountants and business or financial advisors, who need to know such
information, except as contemplated by this Section 12.1.
12.2. Equitable Remedies. The parties acknowledge and agree that in
------------------
the event of a default or breach by either party of the provisions of this
Article XII, the other party shall sustain irreparable injury and damages, the
amount and extent of which cannot be measured in money and for which there does
not and shall not exist any adequate remedy at law. Accordingly, each of the
parties hereby agrees that in the event of a default or breach by either party
of the provisions of this Article XII, the other party shall be entitled to
injunctive relief and to specific performance and that in any legal action or
proceeding for injunctive relief and specific performance the party against whom
such action or proceeding is instituted shall be deemed to have hereby been
waived, and shall not assert in such action or proceeding, the defense or claim
that the party instituting such action or proceeding has an adequate remedy at
law or that an adequate remedy at law exists. The foregoing shall not, however,
be deemed to limit or restrict the remedies at law or in equity of either party
for any default or breach of the provisions of this Article XII.
25
ARTICLE XIII
Destruction of Tangible Assets
13.1. Condition of Tangible Assets. At the Closing, Gold Xxxx shall
----------------------------
use its commercially reasonable efforts to deliver physical possession of the
Owned Personal Property, the Leased Personal Property and the Improvements
(collectively, the "Tangible Assets") to Southern States in substantially the
same physical condition as they exist as of the date hereof, except for normal
wear and tear and changes occurring in the usual and ordinary course of business
or incident to the customary use of the same. Gold Xxxx will amend its schedules
to reflect any material damage to or destruction of Purchased Assets that is
inconsistent with the foregoing sentence.
13.2. Risk of Loss. All risk of loss as a result of any destruction,
------------
damage, or depletion of or to the Tangible Assets prior to the Closing, whether
by reason of fire, theft, accident or other cause, shall be borne by Gold Xxxx,
and all insurance proceeds payable as a result thereof shall be paid and belong
solely to Gold Xxxx.
13.3. Destruction. If, prior to the Closing, the Tangible Assets
-----------
other than Inventory, are destroyed or damaged to an extent that (a) their value
or physical condition differs in any material respect from the value or physical
condition as it exists as of the date hereof, or (b) the destruction or damage
has a material adverse effect on the operation of the Inputs Business (either
(a) or (b) referred to herein as a "Material Loss"), Southern States may in its
sole discretion, by written notice to Gold Xxxx, terminate this Agreement. If,
prior to the Closing, the Tangible Assets, other than Inventory, are destroyed
or damaged, to an extent that does not result in a Material Loss, or in the
event that Southern States in its sole discretion elects to proceed to Closing
notwithstanding the occurrence of a Material Loss, Gold Xxxx and Southern States
shall consummate the transactions contemplated in this Agreement, and at the
Closing Gold Xxxx shall deliver physical possession of the Tangible Assets to
Southern States in such physical condition as the same may then exist, but in
that event Gold Xxxx will pay to Southern States any net insurance proceeds
received for the property damage to the Purchased Assets, but not any proceeds
for business interruption or other kinds of insurance that may be payable with
respect to any period prior to the Closing Date with respect to such damage or
destruction. For purposes of this Section, the value or physical condition of
the Owned Personal Property shall be deemed to differ materially from the date
hereof if the sum of the book value, as shown on the Gold Xxxx'x books and
records, of the Owned Personal Property destroyed or damaged, or the aggregate
costs of all necessary repairs to, and replacements of, the Owned Personal
Property, is greater than ten percent (10%) of its book value as shown on the
Gold Xxxx'x books and records.
13.4. Liability Upon Termination. If this Agreement is terminated by
--------------------------
Southern States pursuant to this Article XIII, neither Gold Xxxx nor Southern
States shall be liable or obligated to the other except and to the extent as may
be expressly provided in this Agreement.
26
ARTICLE XIV
Post-Closing and Other Matters
14.1. Operations of Inputs Business After the Closing. Subject
-----------------------------------------------
to appropriate amendments to the bylaws of Southern States to the extent any
such amendment shall be necessary, after the Closing, the retail facilities of
the Gold Xxxx Inputs Business shall be maintained and operated for a period of
up to two (2) years as the "Southern Retail" allocation unit of Southern States.
14.2. Gold Xxxx Inputs Business-Members and Patrons. Promptly
---------------------------------------------
following the Closing, Southern States will undertake to add as members of
Southern States those agricultural producers eligible for membership in Southern
States who are members of Gold Xxxx and who have been, or are, doing business
with the Gold Xxxx Inputs Divisions. Southern States will undertake to do
business with such persons on a cooperative basis under the articles of
incorporation and bylaws of Southern States as the same shall exist from time to
time. Southern States will, as soon as practical after the Closing, issue to
each such person one share of membership common stock ($1 par value) which
shares shall be deemed to be fully paid at the time of issuance as a result of
the transfer of the Purchased Assets to Southern States by Gold Xxxx. Patronage
refund allocations or "notified equities" of Gold Xxxx held by such members of
Gold Xxxx at the time of Closing shall remain as equity interests of Gold Xxxx
and Southern States shall have no rights or obligations with respect thereto.
14.3. Employees and Employee Benefits.
-------------------------------
14.3.1. Southern States will undertake to take
applications and consider for employment in connection with its acquisition of
the Inputs Business as many of the Business Employees who are able to work and
are employed on a full-time basis as of the Closing Date, except where there is
a redundancy of position or process or where positions do not fit within the
Southern States organization. The Business Employees to whom Southern States
offers employment and who elect to become employees of Southern States are
hereinafter referred to as the "Transferred Employees". The Transferred
Employees shall become employees of Southern States effective at 12:01 a.m.
Eastern Standard Time on the Closing Date or such later date as may be mutually
agreed upon by the parties. If Gold Xxxx and Southern States agree that the
Transferred Employees will not become employees of Southern States on the
Closing Date, Gold Xxxx will lease the Transferred Employees to Southern States
pursuant to a mutually agreed upon employee lease agreement. Nothing in this
Agreement shall be construed as giving any person any right to employment or to
any terms or conditions of employment including but not limited to any type or
levels of compensation or benefits, with Southern States.
14.3.2. Gold Xxxx shall be and remain liable and
responsible for any and all liabilities or payments arising, prior to the
Closing, in respect to the employment by Gold Xxxx of the Business Employees or
the termination of that employment, including but not limited to (i) all claims
relating to workers' compensation whether incurred or made by the Business
Employees arising out of events or circumstances which occurred prior to the
Closing Date; (ii) all health expenses incurred by the Business Employees prior
to the Closing Date, whether or not claims for such expenses have been filed
prior to the Closing Date; (iii) any bonus or incentive
27
plans maintained by Gold Xxxx; (iv) any severance payable to any of the Business
Employees by reason of the termination of their employment with Gold Xxxx,
whether such severance is payable under any policy, Plan or Program of Gold Xxxx
or any collective bargaining agreement referenced in Section 6.13.1, and whether
or not such Business Employees become Transferred Employees; (v) any vacation
accrual which is or becomes payable upon the termination of employment with Gold
Xxxx; (vi) any benefits payable to the Business Employees under any of Gold
Xxxx'x Plans and Programs; and (vii) any salary, wages or other compensation
payable to the Business Employees for any period of employment prior to the
Closing.
14.3.3. Southern States shall not assume, and Gold
Xxxx shall retain all obligations to fund or otherwise shall provide all
benefits in respect of or payable under, Gold Xxxx'x Plans and Programs. No
assets or liabilities of any of Gold Xxxx'x Plans and Programs shall be
transferred from such Plans and Programs to any plan maintained or established
by Southern States.
14.3.4. Subject to restrictions and limitations
imposed by applicable law, Southern States agrees to make available to the
Transferred Employees its employee pension benefit plans and programs and for
purposes of determining eligibility to become a participant, to treat service
with Gold Xxxx or any of its affiliates through the Closing Date as service with
Southern States. In addition, for purposes of determining vesting in the
Southern States employee pension benefit plans, Southern States agrees to treat
service, up to 5 years, with Gold Xxxx or any of its affiliates through the
Closing Date as service with Southern States.
14.3.5. Subject to restrictions and limitations
imposed by applicable law or by limitations imposed by insurance companies
providing plan benefits or stop loss insurance with respect to the plans,
Southern States agrees to make available to the Transferred Employees its
employee welfare benefit plans and programs and for purposes of determining
eligibility to become a participant, to treat service with Gold Xxxx or any of
its affiliates through the Closing Date as service with Southern States.
Southern States shall use its best efforts to provide such coverage without
regard to any waiting period, evidence and requirement of insurability,
preexisting condition, actively at work requirement or exclusion or limitation
(except to the extent and in the manner any such waiting period, evidence and
requirement of insurability, preexisting condition, actively at work requirement
or exclusion or limitation applies immediately prior to the Closing). In
addition Southern States will treat service with Gold Xxxx by the Transferred
Employees as service with Southern States for purposes of vacations, seniority
and the like.
14.3.6. Gold Xxxx agrees to provide Southern States
with such records as Southern States may reasonably request regarding service of
and participation by employees prior to the Closing Date in employee benefit
plans and programs maintained or participated in by Gold Xxxx.
14.4. Allocation of Purchase Price. Gold Xxxx and Southern
States shall allocate the Estimated Purchase Price, when determined, among the
Purchased Assets and the Assumed Liabilities in accordance with an allocation
schedule substantially in the form set forth on Exhibit J. As soon as may be
practicable after the Closing, Gold Xxxx and Southern States shall amend Exhibit
J to reflect any adjustments to the Estimated Purchase Price made pursuant to
28
Section 4.5. As soon as may be practicable after the Closing and prior to filing
any tax return which includes information related to the transactions
contemplated in this Agreement, Gold Xxxx and Southern States employing the
allocation of the Purchase Price made pursuant to this Section 14.4 shall
prepare mutually acceptable IRS Forms 8594 which they shall use to report the
transactions contemplated in this Agreement to the Internal Revenue Service and
to all other taxing authorities. Neither Gold Xxxx nor Southern States shall
take a position in any tax proceeding, tax audit or otherwise inconsistent with
such allocation; provided, however, that nothing contained herein shall require
Gold Xxxx or Southern States to contest any proposed deficiency or adjustment by
any taxing authority or agency which challenges such allocation of the Purchase
Price, or exhaust administrative remedies before any taxing authority or agency
in connection therewith, and Gold Xxxx and Southern States shall not be required
to litigate before any court (including without limitation the United States Tax
Court), any proposed deficiency or adjustment by any taxing authority or agency
which challenges such allocation of the Purchase Price. Gold Xxxx and Southern
States shall give prompt notice to the other of the commencement of any tax
audit or the assertion of any proposed deficiency or adjustment by any taxing
authority or agency which challenges such allocation of the Purchase Price.
14.5. Transition Services Agreement. As a condition to the
-------------------------------
Closing, Gold Xxxx and Southern States shall enter into a transition services
agreement substantially in the form of Exhibit I hereto (the "Transition
Services Agreement"), pursuant to which Gold Xxxx agrees to use reasonable
commercial efforts to provide Southern States with certain accounting, computer
and related information support services relating to the operations of the
Inputs Business at a fee equivalent to Gold Xxxx'x costs of providing such
services. Such costs shall include all direct and indirect costs of such
services, including, but not limited to, a reasonable allocation of overhead of
Gold Xxxx, all stay bonuses, hiring costs and other expenses associated with the
employees providing such services, any costs related to assets used in providing
the services, interest on advances made for the services at Gold Xxxx'x cost of
funds, and any costs associated with any errors of Gold Xxxx except errors that
reflect the gross negligence of Gold Xxxx.
14.6. Use of the Gold Xxxx Name by Southern States after
-------------------------------------------------------
Closing. Gold Xxxx acknowledges and agrees that Southern States shall have the
-------
right (i) until the close of business on June 30, 1999, to utilize the packaging
included in the Inventory or replacement packaging therefor, that is imprinted
with the words "Gold Xxxx" or the initials or trade symbol "GK" (or words or
symbols to similar effect), (ii) until the close of business on September 30,
1999, to sell products or supplies that utilize such packaging and (iii) until
the close of business on the date which is six (6) months after the Closing Date
to utilize trucks and other rolling stock and signage imprinted with the words
"Gold Xxxx" or the initials or trade symbol "GK" (or words or symbols to similar
effect). At Closing, Gold Xxxx will abandon the trademarks listed on Schedule
14.6 which utilize the symbol "GK" as a part of the xxxx. Except as otherwise
provided herein, any use of the name "Gold Xxxx" or the trade symbol "GK" by
Southern States after the Closing shall only be as authorized in writing by Gold
Xxxx. Southern States shall be responsible for and shall ensure that all goods
provided and offered by Southern States under the name "Gold Xxxx" or the trade
symbol "GK" shall be advertised, offered and provided in a high quality manner
and consistent with the quality control standards established by Gold Xxxx.
Southern States shall cooperate with Gold Xxxx in facilitating Gold Xxxx'x
control of the quality of goods offered under the name "Gold Xxxx" or the trade
symbol "GK", to permit reasonable, periodic inspection of
29
Southern State's operations, at reasonable times and with reasonable notice, and
to supply Gold Xxxx with specimens of all uses of the name "Gold Xxxx" or the
trade symbol "GK" upon request.
14.7. Post-Closing Rebates and Annual Volume Discounts. To
------------------------------------------------
the extent any Inputs Business product purchase refund, rebate, annual volume
discount or similar payment is made to Gold Xxxx after the Closing by any vendor
or supplier of products or supplies, such refund, rebate, annual volume discount
or similar payment shall be paid over to Southern States to the extent such
payment shall be attributable to Inventory purchased by Southern States pursuant
to this Agreement; provided, however, that none of such refunds, rebates, annual
volume discounts or similar payments will be used to reduce Gold Xxxx'x costs of
the Inventory in determining the Net Current Asset Value. To the extent any
Inputs Business product purchase refund, rebate, annual volume discount or
similar payment made to Gold Xxxx after the Closing shall be based upon sales
volume, such payment shall be paid over to Southern States to the extent any
portion of such payment shall be attributable to sales by Southern States on or
after the Closing Date; provided, however, that the Inventory that is sold by
Southern States will not be counted as both Inventory and sales by Southern
States for purposes of acquiring portions of the same payments under this
Section 14.7. Gold Xxxx shall provide Southern States upon request with a copy
of any supporting information furnished to Gold Xxxx by any vendor or supplier
of products in connection with any such refund, rebate, annual volume discount
or similar payment. To the extent any Inputs Business product purchase refund,
rebate, annual volume discount or similar payment made to Southern States after
the Closing shall be based upon sales volume, such payment shall be paid over to
Gold Xxxx to the extent any portion of such payment shall be attributable to
sales by Gold Xxxx on or before the Closing Date. Southern States shall provide
Gold Xxxx upon request with a copy of any supporting information furnished to
Southern States by any vendor or supplier of products in connection with any
such refund, rebate, annual volume discount or similar payment. Gold Xxxx and
Southern States shall use their reasonable commercial efforts to have each
supplier combine the respective sales where the combination will produce more
rebate, annual volume discount or similar payment. The parties shall share
proportionately in any overall such payments, with all sales sharing equally in
the payments.
14.8. WARN Act. If a plant closing or a mass layoff occurs or
--------
is deemed to occur with respect to the Inputs Business in connection with the
transactions contemplated in this Agreement or after the Closing, Southern
States shall be solely responsible for providing all notices required under the
Work Adjustment and Retraining Notification Act, 29 U.S.C. ss.2109 et seq. or
the regulations promulgated thereunder (the "WARN Act") and for taking all
remedial measures, including without limitation, the payment of all amounts,
penalties, liabilities, costs and expenses if such notices are not provided.
14.9. Additional Documents. From and after the Closing Date,
--------------------
each of the parties shall, at the request of the other, prepare, execute, and
deliver to the other such additional documents and instruments and take such
action as the other may deem reasonably necessary to further evidence or effect
any of the transactions contemplated herein.
14.10. Non-Competition. In consideration of Southern States'
----------------
purchase of the Inputs Business pursuant to this Agreement, Gold Xxxx agrees
that for a period of five (5) years following the Closing Date, it will not,
directly or indirectly, for itself or on behalf of any
30
individual, partnership, corporation or any other legal entity, as principal,
agent, or otherwise, engage in, control, manage or otherwise participate in the
ownership, control or management of a business in direct competition with any
portion of the Inputs Business within any part of the "Trade Area," as defined
herein, it being acknowledged that none of Gold Xxxx'x other businesses,
including but not limited to its feed production for its poultry and aquaculture
operations, are in competition with any portion of the Inputs Business and that
Gold Xxxx may acquire up to 5% of the outstanding securities of any competitor
of the Inputs Business whose securities are publicly traded. For purposes of
this Section 14.10, "Trade Area" shall mean the states of Georgia, South
Carolina, Florida, Alabama, Mississippi, Louisiana, Texas, Arkansas, and
Tennessee. Gold Xxxx recognizes that irreparable injury may result to Southern
States if Gold Xxxx breaches this Section 14.10, and Gold Xxxx agrees that if it
engages in any act in violation of the provisions hereof, Southern States shall
be entitled, in addition to any actual damages proved, to injunctive relief
prohibiting Gold Xxxx from engaging in any such act.
14.11. Cooperation Regarding Tax Filings. Gold Xxxx and
---------------------------------
Southern States shall reasonably cooperate, and shall use reasonable efforts to
cause their respective affiliates, officers, employees, agents, auditors and
Representatives reasonably to cooperate, in preparing and filing all tax
returns, including, but not limited to, maintaining and making available to each
other all records necessary in connection with taxes and in resolving all
disputes and audits with respect to all taxable periods relating to taxes.
"Representatives" means, with respect to any person, the officers, employees,
counsel, accountants, financial advisers, consultants, agents, auditors and
other representatives of such person.
14.12. Investigations After Closing. For a period of ten (10)
----------------------------
years following the Closing, Southern States agrees that it will not conduct
environmental investigations of any Owned Real Property or Leased Real Property
for the purpose of triggering coverage under the indemnity provided pursuant to
Article XV below; provided, however, that Gold Xxxx acknowledges that (i)
Southern States may conduct any such environmental investigations with respect
to those matters identified on Schedule 14.12, and (ii) as to any other
properties, Southern States may conduct any environmental investigation to the
extent that such investigation is consistent with Prudent Environmental
Management Practice. For the purposes of this Agreement, an environmental
investigation shall be considered to be conducted consistent with Prudent
Environmental Management Practice only if it is necessary for expansion,
renovation, or sale of any property, is necessary to prevent adverse impacts to
human health or the environment, or is otherwise required by law. If a dispute
arises with respect to whether an investigation constitutes a Prudent
Environmental Management Practice, Gold Xxxx and Southern States agree to
negotiate in good faith in an attempt to resolve such dispute. In the event such
dispute cannot be resolved within twenty (20) days of written notice of a
dispute (or shorter period as exigent circumstances may warrant), Gold Xxxx and
Southern States shall sel ect within fourteen (14) days thereafter a mutually
satisfactory Environmental Arbitrator, who shall review the information relevant
to the dispute provided by the parties. The Environmental Arbitrator shall,
within thirty (30) days, render a decision binding upon the parties hereto
(absent mutual agreement of the parties to an alternate resolution) and the
parties may enforce any final determination of the Environmental Arbitrator in
any court of competent jurisdiction. If the parties cannot agree on the
selection of an Environmental Arbitrator, the provisions of Section 18.12 of
this Agreement shall apply.
31
ARTICLE XV
Indemnification
15.1. Survival. Each of the covenants, agreements, and
--------
representations and warranties of Gold Xxxx and Southern States herein shall
survive the Closing until 5:00 p.m. Eastern Standard Time on June 30, 2001, at
which time, such covenants, agreements, representations and warranties shall
expire and terminate, provided, however, that (i) the representations and
warranties of Gold Xxxx respecting taxes set forth in Section 6.5 shall survive
the Closing for the applicable statute of limitations; (ii) the representations
and warranties of Gold Xxxx respecting environmental matters set forth in
Section 6.16 shall survive the Closing until 5:00 p.m. Eastern Standard Time on
the first anniversary of the Closing Date, at which time such representations
and warranties shall expire and terminate; (iii) the representations and
warranties of Gold Xxxx to the extent they apply solely to title to the
Purchased Assets set forth in Sections 6.6.1, 6.9.2 and 6.12, and the obligation
of Gold Xxxx to indemnify Southern States for any loss arising out of any
Excluded Liabilities pursuant to Section 15.2(iii), shall survive the Closing
without limitation as to time; (iv) the obligations of Gold Xxxx to indemnify
Southern States for any loss arising out of any Pre-Closing Environmental
Condition pursuant to Section 15.2(iv), shall survive the Closing until 5:00
p.m. Eastern Standard Time on the tenth anniversary of the Closing Date, at
which time such representations and warranties shall expire and terminate; (v)
the representations and warranties of Gold Xxxx set forth in the second sentence
of Section 6.12 shall expire and terminate at Closing; and (vi) the covenants
and agreements of Gold Xxxx or Southern States to be performed after Closing
Date shall survive the Closing without limitation as to time (the "Survival
Period").
15.2. Indemnification by Gold Xxxx. Subject to the provisions
----------------------------
of Sections 15.3 and 15.6, Gold Xxxx shall indemnify, defend and hold harmless
Southern States and the directors, officers, employees and shareholders of
Southern States (the "Southern States Indemnified Persons") against and in
respect of all losses, costs, and expenses suffered or incurred or required to
be paid by Southern States Indemnified Persons as a result of: (i) the breach by
Gold Xxxx of any representation and warranty made by Gold Xxxx to Southern
States Indemnified Persons in Article VI of this Agreement and the Schedules
including therewith hereto that is executed and delivered pursuant hereto or in
connection with the closing of the transactions hereunder; (ii) the non-
fulfillment by Gold Xxxx of any agreement or covenant of Gold Xxxx contained
herein; (iii) the Excluded Liabilities but not including any liability or
obligation arising from any Pre-Closing Environmental Condition; (iv) any
liability or obligation arising from any Pre-Closing Environmental Condition;
(v) the waiver by Gold Xxxx and Southern States of compliance with the Bulk
Transfers Laws; and (vi) all actions, suits, proceedings, demands, assessments,
judgments, costs, including reasonable attorney's fees, and expenses incident to
any of the foregoing.
15.3. Limitations on Indemnification by Gold Xxxx.
-------------------------------------------
(a) Notwithstanding the provisions of Section 15.2,
Gold Xxxx shall have no liability to indemnify Southern States Indemnified
Persons hereunder until the aggregate amount of Southern States Indemnified
Persons' indemnifiable losses exceeds $500,000 (the
32
"Gold Xxxx Minimum Amount"). If the aggregate amount of Southern States
Indemnified Persons' indemnifiable losses exceeds the Gold Xxxx Minimum Amount,
Gold Xxxx shall Indemnify Southern States Indemnified Persons for the amount
that such indemnifiable losses exceed the Gold Xxxx Minimum Amount and are less
than or equal to $10,000,000. The foregoing limitations shall not apply to Gold
Xxxx'x indemnification obligations with respect to the following: (i) the
Excluded Liabilities; (ii) the representations and warranties of Gold Xxxx to
the extent they apply solely to title to the Purchased Assets set forth in
Sections 6.6.1, 6.9.2 and 6.12; (iii) any liability or obligation arising from
any Pre-Closing Environmental Condition or the representations and warranties of
Gold Xxxx respecting environmental matters contained in Section 6.16 (all of
which matters shall be subject to the limitation of paragraph (b) of this
Section 15.3); (iv) the representations and warranties of Gold Xxxx respecting
taxes set forth in Section 6.5; (v) the covenants or agreements of Gold Xxxx to
be performed after Closing Date; or (vi) the failure to comply with the Bulk
Transfer Laws.
(b) Notwithstanding the provisions of Section 15.2.,
Gold Xxxx shall have no liability to indemnify Southern States Indemnified
Persons hereunder with respect to the matters referenced in clause (iii) of
Section 15.3(a) above with respect to any individual claim until the aggregate
amount of Southern States Indemnified Persons' indemnifiable losses exceed
$15,000 for such claim; provided however, that if the aggregate amount of any
such losses with respect to a claim exceeds $15,000, Gold Xxxx shall indemnify
Southern States for the entire amount of such claim, including the initial
$15,000 amount.
(c) Notwithstanding the provisions of Sections 15.2
and 15.3(b), Gold Xxxx shall have no liability to indemnify Southern States
Indemnified Persons hereunder with respect to the matters referenced in clause
(iii) of Section 15.3(a) above for the amount that such indemnifiable losses are
in excess of $35 million.
(d) Notwithstanding the provisions of Section 15.2,
Gold Xxxx'x liability to indemnify Southern States Indemnified Persons shall not
include any costs incurred by Southern States Indemnified Persons in the conduct
of any Site Remediation that was not required to be conducted (i) under any
lawful government order or directive; (ii) under any Environmental Law,
including any action levels or cleanup standards enforced thereunder; or (iii)
to prevent significant risk to human health.
(e) Subject to the provisions of this Article XV,
Southern States agrees that it will not make any new claim or file any new legal
action against Gold Xxxx for the cost of any Site Remediation claim that first
arises more than ten (10) years after the Closing Date.
15.4. Indemnification by Southern States. Subject to the
-----------------------------------
provisions of Sections 15.5 and 15.6, Southern States shall indemnify and hold
harmless Gold Xxxx and the directors, officers, employees and shareholders of
Gold Xxxx (the "Gold Xxxx Indemnified Persons") against and in respect of all
losses, costs, and expenses suffered or incurred or required to be paid by Gold
Xxxx Indemnified Persons as a result of: (i) the breach by Southern States of
any representation and warranty made by Southern States to Gold Xxxx in Article
VII hereof; (ii) the nonfulfillment by Southern States of any agreement or
covenant of Southern States contained herein; (iii) the failure of Southern
States to discharge, when due, the Assumed Liabilities; (iv) the operations by
Southern States from and after the Closing of the Inputs Business, including
33
but not limited to any liability or obligation arising from any Post-Closing
Environmental Condition; and (v) all actions, suits, proceedings, demands,
assessments, judgments, costs, including reasonable attorney's fees, and
expenses incident to the foregoing.
15.5. Limitations on Indemnification by Southern States.
-------------------------------------------------
Notwithstanding the provisions of Xxxxxxx 00.0, Xxxxxxxx Xxxxxx shall have no
liability to indemnify Gold Xxxx Indemnified Persons hereunder until the
aggregate amount of Gold Xxxx Indemnified Persons' indemnifiable issues exceeds
$500,000 (the "SSC Minimum Amount"). If the aggregate amount of Gold Xxxx
Indemnified Persons' indemnifiable losses exceeds the SSC Minimum Amount,
Southern States shall indemnify Gold Xxxx Indemnified Persons for the amount
that such indemnifiable losses exceed the SSC Minimum Amount and are less than
or equal to $10,000,000. The foregoing limitations shall not apply to Southern
States' indemnification obligations with respect to (a) the Assumed Liabilities;
(b) the covenants or agreements of Southern States to be performed after Closing
Date; (c) the operations by Southern States from and after the Closing of any
Inputs Business, including but not limited to any liability or obligation
arising from any Post-Closing Environmental Condition.
15.6. Procedures for Indemnification.
------------------------------
15.6.1. If Southern States Indemnified Persons seek
indemnification from Gold Xxxx for indemnifiable losses, Southern States
Indemnified Persons shall give notice to Gold Xxxx of such loss, specifying in
reasonable detail the nature and basis for the claim and the amount thereof (the
"Notice of Loss"). If, within sixty days after the date on which Gold Xxxx
receives the Notice of Loss, Gold Xxxx has not delivered to Southern States a
notice objecting to all or any portion of the claimed loss and setting forth the
amount of such claimed loss objected to and the reasons for such objection,
Southern States Indemnified Persons shall be entitled to indemnification for
such loss unless Gold Xxxx'x failure to object was inadvertent, and Gold Xxxx
shall promptly pay such loss. If the failure of Gold Xxxx was inadvertent, the
process should be begun again but the Survival Period with respect to the Claim
shall be extended if the First Notice of Loss was within the Survival Period.
If, within sixty days after the date on which Gold Xxxx receives a Notice of
Loss, Gold Xxxx delivers to Southern States an objection to all or any portion
of the claimed loss, setting forth the amount of such loss objected to and the
reasons for such objection, Southern States Indemnified Persons shall be
entitled to reimbursement for the portion of such loss not objected to by Gold
Xxxx and Gold Xxxx shall promptly pay such amount. Southern States Indemnified
Persons shall be entitled to indemnification for the portion of such claimed
loss to which Gold Xxxx objected to upon the earlier of: (a) the Gold Xxxx'x and
Southern States' written agreement with respect to the indemnification of such
loss or (b) a final judgment or award of an arbitrator as provided in Section
18.12.
15.6.2. If Gold Xxxx Indemnified Persons seek
indemnification from Southern States for indemnifiable losses, Gold Xxxx
Indemnified Persons shall give a Notice of Loss to Southern States, specifying
in reasonable detail the nature and basis for the claim and the amount thereof.
If, within sixty days after the date on which Southern States receives the
Notice of Loss, Southern States has not delivered to Gold Xxxx a notice
objecting to all or any portion of the claimed loss and setting forth the amount
of such claimed loss objected to and the reasons for such objection, Gold Xxxx
Indemnified Persons shall be entitled to indemnification for such loss unless
Southern States' failure to object was inadvertent, and Southern States shall
promptly pay
34
such loss. If the failure of Southern States was inadvertent, the process should
be begun again but the Survival Period with respect to the Claim shall be
extended if the first Notice of Loss was within the Survival Period. If, within
sixty days after the date on which Southern States receives a Notice of Loss,
Southern States delivers to Gold Xxxx an objection to all or any portion of the
claimed loss, setting forth the amount of such loss objected to and the reasons
for such objection, Gold Xxxx Indemnified Persons shall be entitled to
reimbursement for the portion of such loss not objected to by Southern States
and Southern States shall promptly pay such amount. Gold Xxxx Indemnified
Persons shall be entitled to indemnification for the portion of such claimed
loss to which Southern States objected to upon the earlier of: (a) the Gold
Xxxx'x and Southern States' written agreement with respect to the
indemnification of such loss or (b) a final judgment or award of an arbitrator
pursuant to Section 18.12.
15.6.3. The obligations and liabilities of an
Indemnifying Person with respect to losses resulting from the assertion of
liability by third parties (each, a "Third Party Claim") shall be subject to the
following terms and conditions:
(a) The Indemnified Persons shall promptly give
written notice to the Indemnifying Persons of any Third Party Claim which might
give rise to any loss by the Indemnified Persons, stating the nature and basis
of such Third Party Claim, and the amount thereof to the extent known; provided,
however, that no delay on the part of the Indemnified Persons in notifying any
Indemnifying Persons shall relieve the Indemnifying Persons from any liability
or obligation hereunder unless (and then solely to the extent) the Indemnifying
Person thereby is prejudiced by the delay. Such notice shall be accompanied by
copies of all relevant documentation with respect to such Third Party Claim,
including, without limitation, any summons, complaint or other pleading which
may have been served, any written demand or any other document or instrument.
(b) If the Indemnifying Persons shall acknowledge in
a writing delivered to the Indemnified Persons that such Third Party Claim is
properly subject to their indemnification obligations hereunder, then the
Indemnifying Persons shall have the right to assume the defense of any Third
Party Claim at their own expense and by their own counsel, which counsel shall
be reasonably satisfactory to the Indemnified Persons; provided, however, that
-------- -------
the Indemnifying Persons shall not have the right to assume the defense of any
Third Party Claim, notwithstanding the giving of such written acknowledgment, if
(i) the Indemnified Persons shall have been advised by counsel that there are
one or more legal or equitable defenses available to them which are different
from or in addition to those available to the Indemnifying Persons, and, in the
reasonable opinion of the Indemnified Persons, counsel for the Indemnifying
Persons could not adequately represent the interests of the Indemnified Persons
because such interests could be in conflict with those of the Indemnifying
Persons, (ii) such action or proceeding involves, or could have a material
effect on, any material matter beyond the scope of the indemnification
obligation of the Indemnifying Persons or (iii) the Indemnifying Persons shall
not have assumed the defense of the Third Party Claim in a timely fashion.
(c) If the Indemnifying Persons shall assume the
defense of a Third Party Claim (under circumstances in which the proviso to
Section 15.6.3(b) is not applicable), the Indemnifying Persons shall not be
responsible for any legal or other defense costs subsequently incurred by the
Indemnified Persons in connection with the defense thereof. If the
35
Indemnifying Persons do not exercise their right to assume the defense of a
Third Party Claim by giving the written acknowledgment referred to in Section
15.6.3(b), or are otherwise restricted from so assuming by the proviso to
Section 15.6.3(b), the Indemnifying Persons shall nevertheless be entitled to
participate in such defense with their own counsel and at their own expense. If
the defense of a Third Party Claim is assumed by the Indemnified Persons
pursuant to clause (i) or (ii) of the proviso of Section 15.6.3(b), the
Indemnified Persons shall not be entitled to settle such Third Party Claim
without the prior written consent of the Indemnifying Persons, which consent
shall not be unreasonably withheld or delayed.
(d) If the Indemnifying Persons exercise their right
to assume the defense of a Third Party Claim pursuant to clauses (i) or (ii) of
Section 15.6.3(b), (i) the Indemnified Persons shall be entitled to participate
in such defense with their own counsel at their own expense and (ii) the
Indemnifying Persons shall not make any settlement of any claims without the
written consent of the Indemnified Persons, which consent shall not be
unreasonably withheld or delayed.
15.6.4. Notwithstanding any other provisions of this
Agreement, neither Gold Xxxx nor Southern States shall have any claim for
indemnification hereunder unless such claim is asserted, as provided herein,
against the other within the Survival Period (in which event the party's right
to indemnification for such matters shall continue until liability is finally
determined), it being acknowledged that the Survival Period of certain
indemnities is without limitation as to time as provided in Sections 15.1, 15.2
and 15.4.
15.6.5. Notwithstanding any other provision in this
Article XV, the following procedures shall apply to any claim arising under
clause (iv) of Section 15.2. above or with respect to a breach of the
representations and warranties set forth in Section 6.16. (collectively
"Environmental Claims").
(a) Any Environmental Claim that is of the nature of
a third party claim shall also be governed by the notification procedures set
forth in Section 15.6.1., provided, however, that Southern States shall be
deemed to have provided notice to Gold Xxxx of the matters identified in
Schedule 14.12. as of the Closing Date. In the event of any inconsistency
between the Section 15.6.1. procedures and the procedures set forth in this
Section 15.6.5., the procedures set forth in this Section 15.6.5. shall govern.
(b) Gold Xxxx shall assume Principal Management for
the matters identified in Schedule 14.12.
(c) Upon assertion of any Environmental Claim other
than claims arising from the matters identified in Schedule 14.12., Gold Xxxx
shall be entitled to assume Principal Management. To assume Principal
Management, Gold Xxxx must notify Southern States within thirty days of notice
to Gold Xxxx of the Environmental Claim, or such other period as the parties may
agree to in writing, that it intends to assume Principal Management. In the
event Gold Xxxx does not undertake Principal Management, Southern States may
assume Principal Management of the subject matter of the Environmental Claim.
36
(d) The party that does not have Principal Management
for an Environmental Claim shall be entitled, at its sole cost and expense, to
reasonably participate in the management of such Environmental Claim. Such
participation shall include: (i) receiving copies of all reports, work plans and
analytical data submitted to governmental agencies, all notices or other letters
or documents received from governmental agencies, any other non-privileged
documents and correspondence materially bearing on the Environmental Claim, and
notices of material meetings; (ii) the opportunity to attend and participate in
such material meetings; (iii) the right of reasonable consultation with the
party exercising Principal Management; and (iv) the right to approve in writing
in advance all budgets for the Environmental Claim, all material contracts
related thereto, the submission of any cleanup plan or any similar material
action relating to the Environmental Claim and any amendment or modification
thereof, and the acceptance of any consensual governmental orders or
requirements (which approval shall not be unreasonably withheld or delayed).
(e) The party undertaking Principal Management
hereunder for any matter shall manage the matter in good faith and in a
responsible manner, and any activities conducted in connection therewith shall
be undertaken promptly and concluded as expeditiously and as economically as
practicable using commercially reasonable efforts, subject to the schedules and
approvals required by the applicable governmental authorities. The parties agree
to reasonably cooperate with one another in connection with addressing any
Environmental Claim. Either party may take such action as is reasonable under
the circumstances to respond to an actual or threatened emergency or imminent
endangerment situation arising from an Environmental Claim.
(f) Any action with respect to an Environmental Claim
shall be deemed adequate for purposes of satisfying the obligations of this
Section 15.6.5. to the extent such action: (i) attains compliance with any
lawful government order or directive and with applicable Environmental Laws,
including any action levels or cleanup standards enforced thereunder; (ii)
mitigates any significant risk to human health and (iii) achieves such actions
as economically as practicable.
(g) The parties agree to negotiate in good faith
regarding any dispute arising under this section 15.6.5. In the event such
dispute cannot be resolved within twenty (20) days of written notice of a
dispute (or shorter period as exigent circumstances may warrant), Gold Xxxx and
Southern States shall select within fourteen (14) days thereafter a mutually
satisfactory Environmental Arbitrator, who shall review the information relevant
to the dispute provided by the parties. The Environmental Arbitrator shall
within thirty (30) days render a decision binding upon the parties hereto
(absent mutual agreement of the parties to an alternate resolution) and the
parties may enforce any final determination of the Environmental Arbitrator in
any court of competent jurisdiction. If the parties cannot agree on the
selection of an Environmental Arbitrator, the provisions of Section 18.12 of
this Agreement shall apply.
(h) Gold Xxxx intends to acquire insurance against
Environmental Claims other than the matters identified in Schedule 14.12 and to
comply with the procedures required by the insurance company pursuant to the
insurance policy in handling any such Environmental Claim. Southern States shall
cooperate in good faith with Gold Xxxx in connection with such compliance,
including providing reasonable access to the properties related
37
to the Environmental Claims; provided, however, Gold Xxxx expressly acknowledges
that Gold Xxxx'x indemnity to Southern States under this Agreement will not be
affected by any provisions under any such insurance policy and that the
procedures required by such insurance policy will in no way affect the financial
obligations of Gold Xxxx under this Agreement with respect to any Environmental
Claim by Southern States and will not be relevant in determining whether or to
what extent any action with respect to an Environmental Claim is deemed
adequate, appropriate, responsible, commercially reasonable or timely for
purposes of satisfying the obligations of this Section 15.6.5.
15.7. Computation of Losses. In determining the amount of any
---------------------
indemnifiable loss hereunder, the aggregate amount of any insurance proceeds
received by or benefiting the indemnified party and any tax deduction or tax
benefit received by the indemnified party in connection with the facts giving
rise to the right to indemnification shall be deducted from the amount to be
paid by the indemnifying party. If, with respect to any indemnifiable loss paid
by an indemnifying party, the indemnified party subsequently receives insurance
proceeds, a tax deduction, or a tax benefit, the indemnified party shall, as
soon as may be practicable, pay to the indemnifying party an amount equal to
such insurance proceeds, tax deduction, or tax benefit.
15.8. Exclusive Remedy. Notwithstanding anything to the
----------------
contrary contained herein, except in the case of fraud or willful misconduct,
the indemnity provisions of this Article XV shall be the sole and exclusive
remedy against Southern States or Gold Xxxx for any breach of the
representations, warranties, agreements and covenants contained in this
Agreement.
ARTICLE XVI
Termination
16.1. Procedure for Termination. This Agreement may be
-------------------------
terminated at any time on or before the Closing Date as follows:
(a) by the mutual agreement of Gold Xxxx and Southern
States;
(b) by Gold Xxxx (provided that Gold Xxxx is not in
breach of its obligations under this Agreement): (i) if Gold Xxxx reasonably
determines that the transactions contemplated hereby cannot be consummated
because of any nonfulfillment of any condition set forth in Article X hereof
which, as determined by Gold Xxxx, cannot be cured or rectified on or before the
Closing or such other prior date required by this Agreement for the fulfillment
of such condition; (ii) if Southern States breaches any representation or
warranty made by Southern States in this Agreement and such breach has a
material adverse effect on Gold Xxxx; or (iii) if Southern States fails to
comply with any of Southern States' covenants or agreements contained in this
Agreement; and
(c) by Southern States (provided that Southern States
is not in breach of its obligations under this Agreement): (i) if Southern
States reasonably determines that the transactions contemplated hereby cannot be
consummated because of any nonfulfillment of any condition set forth in Article
XI hereof which, as determined by Southern States, cannot be cured
38
or rectified on or before the Closing or such other prior date required by this
Agreement for the fulfillment of such condition; (ii) if Gold Xxxx breaches any
representation or warranty made by Gold Xxxx in this Agreement and such breach
has a material adverse effect on the Purchased Assets or the Inputs Business;
(iii) if Gold Xxxx fails to comply with any of its covenants or agreements
contained in this Agreement; or (iv) pursuant to Article XIII hereof.
(d) by either Gold Xxxx or Southern States if the
Closing shall not have occurred on or before November 15, 1998; provided,
however, that the right to terminate this Agreement pursuant to this Section
16.1(d) shall not be available to any parties whose failure to fulfill any
obligation of this Agreement has been the cause of, or resulted in, the failure
of the Closing to have occurred on or before the aforesaid date.
16.2. Effect of Termination. If this Agreement is terminated
---------------------
as provided in Section 16.1, the obligations of the parties hereunder shall
terminate; provided however, that if this Agreement is terminated by a party as
a result of the other party's willful failure to comply with its agreements or
covenants hereunder, then the party that terminated this Agreement shall have
the right to pursue all legal and equitable remedies available to it.
39
ARTICLE XVII
Bulk Transfer Laws, Expenses and Taxes
17.1. Bulk Transfer Laws. Gold Xxxx and Southern States hereby waive
------------------
compliance with the provisions of any applicable bulk transfer laws, or any
other similar laws ("Bulk Transfer Laws"), and Gold Xxxx hereby agrees to
defend, indemnify, and hold harmless Southern States from and against any costs,
expenses, liability or claims by any person arising out of or due to the failure
to comply with such Bulk Transfer Laws, including, without limitation, any
claims by any person against all or any part of the Purchased Assets, but
excluding any Assumed Liabilities.
17.2. Costs and Expenses. Except as otherwise specifically provided
------------------
herein, all costs and expenses incurred by or on behalf of Gold Xxxx and
Southern States, including, without limitation, all fees and expenses of agents,
representatives, counsel, and accountants employed in connection with the
authorization, preparation, execution, and performance of this Agreement or
other matters relating thereto shall be borne solely by the party that incurred
the same and the other party shall have no liability with respect thereof.
17.3. Transfer Taxes. All sales, use, and transfer taxes and
--------------
recording, filing, title, and registration fees or other charges imposed upon or
incurred in connection with or as a result of the transfer of the Purchased
Assets to Southern States and the consummation of the transactions contemplated
herein shall be borne and paid by Southern States.
17.4. Real Estate and Other Taxes. To the extent such amounts are
---------------------------
not reflected in the calculation of the Estimated Purchase Price pursuant to
Section 4.2 hereof, real estate and ad valorem taxes imposed upon or assessed
against the Owned Real Property or the Leased Real Property or other Purchased
Assets shall be prorated as of the Closing Date.
17.5. Utilities and Other Charges. To the extent such amounts are
---------------------------
not reflected in the calculation of the Estimated Purchase Price pursuant to
Section 4.2 hereof, (a) charges for electricity, water, gas, and other utilities
and for telephone services related to the Purchased Assets as of or for the
calendar month in which the Closing occurs shall be prorated as of the Closing
Date; (b) payments under the Contracts and the Real Property Leases and the
Personal Property Leases as of or for the calendar month in which the Closing
occurs shall be prorated as of the Closing Date; and (c) other similar prepaid
expenses and other charges of Gold Xxxx related to the Inputs Business shall be
prorated as of the Closing Date as mutually agreed by Gold Xxxx and Southern
States.
ARTICLE XVIII
Miscellaneous
18.1. Entire Agreement. This Agreement, together with the Schedules
----------------
and the Exhibits hereto, constitutes the entire agreement between the parties
with respect to the matters
40
set forth herein and supersedes all prior agreements, arrangements, and
understandings between the parties with respect to the same.
18.2. Modification. No provision of this Agreement, including the
------------
provisions of this Section, may be modified, deleted, or amended in any manner
except by an agreement in writing executed by Gold Xxxx and Southern States.
18.3. Notices. All notices, requests, consents, and other
-------
communications to, upon, or between the parties shall be in writing and shall be
deemed to have been given, delivered, or made when personally delivered, sent by
telecopy, or when sent or mailed by certified mail, postage prepaid and return
receipt requested to the parties at the address set forth below or to such other
address as any party may specify by notice to the other party:
If to Southern States:
Southern States Cooperative, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: X. Xxxxxx Xxxxxxxx, Jr.
Vice President and General Counsel
Phone: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxx & Valentine, L.L.P.
Post Office Box 1122
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: F. Xxxxxxxxx Xxxxxxxx, Xx., Esq.
Phone: 000-000-0000
Fax: 000-000-0000
If to Gold Xxxx:
Gold Xxxx Inc.
P. O. Xxx 0000
Xxxxxxx, XX 00000-0000
Attn: J. Xxxxx Xxxxx,
General Counsel, Vice President and Secretary
Phone: 000-000-0000
Fax: 000-000-0000
41
With a copy to:
Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: B. Xxxxxx Xxxx, Xx., Esq.
Phone: 000-000-0000
Fax: 000-000-0000
18.4. Severability. The invalidity or unenforceability of any
------------
provision of this Agreement shall not affect the validity or enforceability of
any other provision.
18.5. No Assignment. Neither this Agreement nor any interest herein
-------------
may be assigned by either party without the consent of the other party;
provided, however, that Southern States may assign any rights (but not the
obligations) of Southern States under the Agreement to any person providing
financing to Southern States; and provided further, that, upon written notice to
Gold Xxxx, Southern States may assign its rights and obligations under this
Agreement to an entity organized by Southern States for the purpose of acquiring
the Purchased Assets, provided that Southern States retains all obligations
hereunder pursuant to an agreement that is reasonably satisfactory to Gold Xxxx
and such assignment is conditioned upon the prior approval and execution of such
agreement.
18.6. Waiver. No waiver of any provision hereof shall be effective
------
against the party waiving such provision unless such waiver is in a writing
executed by such party. The failure, at any time, of any party hereto to require
the performance of any provision hereof shall not affect the right of such party
to enforce the same. The waiver by any party hereto of any condition or of the
breach of any representation, warranty, covenant, or agreement shall not be
deemed to be a further or continuing waiver of such condition or such breach or
of any other condition or the breach of any other representation, warranty,
covenant, or agreement.
18.7. Benefit. This Agreement shall be binding on and inure to the
-------
respective benefit of Southern States and Gold Xxxx and their respective
successors and permitted assigns.
18.8. Construction. This Agreement shall be construed and enforced
------------
in accordance with the laws of the State of Georgia, other than its rules with
respect to choice of laws.
18.9. Counterparts. This Agreement may be executed in more than one
------------
counterpart, each of which shall be deemed an original and all of which shall
constitute a single instrument and agreement.
18.10. Headings. The underlined headings provided herein are for
--------
convenience only and shall not affect the interpretation of this Agreement.
18.11. Third Party Beneficiaries. None of the provisions of this
-------------------------
Agreement or any document contemplated hereby is intended to grant any right or
benefit to any person or entity which is not a party to this Agreement.
42
18.12. Arbitration. Except as otherwise set forth herein, any dispute
-----------
hereunder between Gold Xxxx and Southern States, or any of their successors or
assigns, shall be settled by binding arbitration conducted on a confidential
basis, under the US Arbitration Act, if applicable, and the then-current
Commercial Arbitration Rules of the American Arbitration Association strictly in
accordance with the terms of this Agreement and the substantive law of the State
of Georgia. The arbitration shall be conducted at the Association's regional
office located in the Charlotte, North Carolina area by three independent
arbitrators, at least one of whom shall be knowledgeable in the agricultural
industry, one of whom shall be an attorney and one of whom shall be a member of
a nationally recognized accounting firm familiar with business engaged in
agriculture. Judgment upon the arbitrators' award is binding and final upon all
parties and may be entered and enforced in any court of competent jurisdiction.
Neither party shall institute a proceeding hereunder unless at least 60 days
prior thereto such party shall have given written notice to the other party of
its intent to do so.
ARTICLE XIX
Definitions
In addition to the other terms defined herein, the following shall apply
throughout this Agreement:
19.1. Accounts Receivable. The term "Accounts Receivable" shall mean
-------------------
(a) all accounts receivable and notes receivable of the Gold Xxxx Inputs
Business (excluding intercompany or intracompany accounts receivable) and (b)
all crop time notes receivable held by Agra Trade Financing, Inc. (to include
notes of Gold Xxxx patrons and Gold Xxxx dealers, but to exclude any and all
Dealer Direct Notes), in each case existing as of the Closing Date, as set forth
on the books and records of Gold Xxxx as of the Closing Date, which books and
records shall detail the account name, address, the amount due, and the aging of
all such accounts receivable.
19.2. Assignable Permits. The term "Assignable Permits" shall have
------------------
the meaning set forth in Section 6.8.
19.3. Assumed Liabilities. The term "Assumed Liabilities" shall have
-------------------
the meaning set forth in Section 3.1.
19.4. Best Knowledge of Gold Xxxx. The term "Best Knowledge of Gold
---------------------------
Xxxx", including "Gold Xxxx'x knowledge" and all similar terms or expressions in
this Agreement, shall mean the actual knowledge of the officers and employees of
Gold Xxxx listed in Schedule 19.4, and the knowledge of any other officers or
employees of Gold Xxxx shall not be the Best Knowledge of Gold Xxxx.
19.5. Bond Documents. The term "Bond Documents" shall mean all
--------------
documents and instruments executed in connection with the Xxxxxxx County,
Georgia XXX Xxxx.
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19.6. Xxxxxxx County, Georgia XXX Xxxx. The term "Xxxxxxx County,
--------------------------------
Georgia XXX Xxxx" shall mean the Industrial Revenue Bond, in the original
principal amount of $6,700,000 issued by the Industrial Development Authority of
Xxxxxxx County, Georgia, due 2016 (Statesboro Cotton Gin Project).
19.7. Bulk Transfer Laws. The term "Bulk Transfer Laws" shall have
------------------
the meaning set forth in Section 17.1.
19.8. Business Employees. The term "Business Employees" shall have
------------------
the meaning set forth in Section 6.14.1.
19.9. CFI Product Purchase Agreement. The term "CFI Product Purchase
------------------------------
Agreement" shall mean the Gold Xxxx Member Product Purchase Agreement dated
September 16, 1975 with CF Industries, Inc.
19.10. Closing. The term "Closing" shall have the meaning set forth
-------
in Section 5.1.
19.11. Closing Consents. "Closing Consents" shall mean those third
----------------
party consents included within the Required Consents that are marked by an
asterisk on Schedule 6.2.2.
19.12. Closing Date. The term "Closing Date" shall have the meaning
------------
set forth in Section 5.1.
19.13. Contracts. The term "Contracts" shall have the meaning set
---------
forth in Section 6.7.1; and shall specifically include the CFI Product Purchase
Agreement, to the extent Gold Xxxx'x rights and duties thereunder may be
assignable, but shall specifically exclude any collective bargaining agreements
and any other contracts containing obligations or liabilities excluded in
Section 3.2.
19.14. Dealer Direct Notes. The term "Dealer Direct Notes" shall mean
-------------------
the notes with fertilizer or chemical dealers who are not retail customers of
Gold Xxxx, but not any notes of customers of such dealers.
19.15. Environmental Arbitrator. The term "Environmental Arbitrator"
------------------------
shall mean a mutually satisfactory technical consultant, lawyer, or other person
selected by Southern States and Gold Xxxx as an Environmental Arbitrator
pursuant to Section 14.12 or Section 15.6.5(g).
19.16. Environmental Claims. The term "Environmental Claims" shall
--------------------
have the meaning set forth in Section 15.6.5.
19.17. Environmental Laws. The term "Environmental Laws" shall mean
------------------
any and all federal, state or local statutes, laws, regulation, ordinances,
court decisions, orders or rules relating to the environment; occupational
safety and health; the effect of Hazardous Materials on the environment or human
health; emissions, discharges or releases of Hazardous Materials into the
environment, including without limitation into ambient air, surface water,
44
groundwater or land; or otherwise relating to the handling of Hazardous
Materials or the clean-up or other remediation of Hazardous Materials.
19.18. Environmental Permits. The term "Environmental Permits" shall
---------------------
have the meaning set forth in Section 6.16.
19.19. Estimated Purchase Price. The term "Estimated Purchase Price"
------------------------
shall have the meaning set forth in Section 4.2.
19.20. Excluded Liabilities. The term "Excluded Liabilities" shall
--------------------
have the meaning set forth in Section 3.2.
19.21. Final Purchase Price. The term "Final Purchase Price" shall
--------------------
have the meaning set forth in Section 4.4.
19.22. GAAP. The term "GAAP" shall mean generally accepted accounting
----
principles as applied in the United States.
19.23. Gold Xxxx Indemnification Person. The term "Gold Xxxx
--------------------------------
Indemnification Person" shall have the meaning set forth in Section 15.4.
19.24. Gold Xxxx Minimum Amount. The term "Gold Xxxx Minimum Amount"
------------------------
shall have the meaning set forth in Section 15.3.
19.25. Guaranty Agreement. The term "Guaranty Agreement" shall mean
------------------
the guaranty by Gold Xxxx of obligations of Xxxxx X. Xxxxxxxx, LLC. to Sun Trust
Bank.
19.26. Hazardous Materials. The term "Hazardous Materials shall mean
-------------------
any and all "hazardous substances," "hazardous wastes," "pollutants,"
"contaminants" or "toxic substances," as defined by the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42
U.S.C. Section 7401 et seq., or the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., and regulations promulgated thereunder, or any analogous
federal, state or local laws and regulations; including but not limited to
petroleum and petroleum products, polychlorinated biphenyls ("PCBs"),
radioactive materials and asbestos.
19.27. HSR Act. The terms "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx
-------
Antitrust Improvements Act of 1996, as amended, or any successor law, and
regulations and rules issues pursuant to that Act or any successor law.
19.28. Improvements. The term "Improvements" shall mean all of the
------------
buildings, structures, improvements, fixtures, and appurtenances, including
construction in progress, located on the "Owned Real Property," as defined
herein, or the "Leased Real Property," as defined herein, as the case may be.
19.29. Inputs Business. The term "Inputs Business" shall have the
---------------
meaning set forth in Section 2.1.
45
19.30. Inputs Financial Statement. The term "Inputs Financial
--------------------------
Statement" shall have the meaning set forth in Section 8.9.
19.31. Intellectual Property Rights. The term "Intellectual Property
----------------------------
Rights" shall have the meaning set forth in section 6.11.1.
19.32. Inventory. The term "Inventory" shall mean all inventory of
---------
operating supplies, raw materials, work-in-process, and finished goods related
to the Inputs Business, counted pursuant to this Agreement.
19.33. Inventory Procedures. The term "Inventory Procedures" shall
--------------------
mean the Inventory Procedures as set forth in Exhibit A hereto.
19.34. Leased Personal Property. The term "Leased Personal Property"
------------------------
shall have the meaning set forth in Section 6.9.3.
19.35. Leased Real Property. The term "Leased Real Property" shall
--------------------
have the meaning set forth in Section 6.6.2.
19.36. Liens. The term "Liens" shall mean all liens, encumbrances.
-----
leases, casements, covenants, licenses, defects of title, claims, security
interests, mortgages, pledges, charges, restrictions, equities, agreements and
rights of others of every nature and description whatsoever; provided, however,
that the term "Liens" shall not include any "Permitted Liens" as defined below.
19.37. Net Current Asset Value. The term "Net Current Asset Value"
-----------------------
shall mean the book value (lower of Gold Xxxx cost or market) of the Inventory,
net of usual and customary reserves, computed on a first-in first-out basis in
accordance with GAAP and the Inventory Procedures, plus the Accounts Receivable
----
as valued pursuant to GAAP and the Receivables Valuation Procedures, and plus
the Prepaid Expenses, as defined herein, less the accrued expenses and the trade
----
accounts payable of the Inputs Business, all as calculated in accordance with
GAAP; provided, however, that neither the current portion of the Xxxxxxx County,
Georgia XXX Xxxx nor the current portion of the Xxxxx Xxxxx Lease will be
included as a liability in this computation if and to the extent that any such
current portion is included in the total amount of such respective obligation
deducted in the calculations of the Estimated Purchase Price pursuant to Section
4.2. and the Final Purchase Price pursuant to Section 4.4.
19.38. Nonassignable Permits. The term "Nonassignable Permits" shall
---------------------
have the meaning set forth in Section 6.8.
19.39. Operating Agreement Assignment and Amendment. The term
--------------------------------------------
"Operating Agreement Assignment and Amendment" shall mean the Assignment of
Interest and Amendment to Operating Agreement of the Xxxxx X. Xxxxxxxx, LLC.,
delivered at closing pursuant to Section 5.2(g) and 5.3(e), substantially in the
form of Exhibit H attached hereto.
19.40. Owned Personal Property. The term "Owned Personal Property"
-----------------------
shall have the meaning set forth in Section 6.9.1.
46
19.41. Owned Real Property. The term "Owned Real Property" shall have
-------------------
the meaning set forth in Section 6.6.1.
19.42. Permitted Lien. The term "Permitted Liens" shall mean (a) all
--------------
liens, encumbrances, leases, easements, covenants, licenses, defects of title,
claims, security interests, mortgages, pledges, charges, restrictions, equities,
agreements and rights of others of every nature and description whatsoever which
arise in the ordinary course of business and do not materially adversely affect
the full use and enjoyment of the assets subject thereto for the purposes for
which they are currently used, or materially detract from their value; (b) liens
for taxes not yet due and payable; and (c) liens existing in connection with the
Xxxxxxx County, Georgia XXX Xxxx and the Xxxxx Xxxxx Lease.
19.43. Permits. The term "Permits" shall have the meaning set forth
-------
in Section 6.8.
19.44. Personal Property Leases. The term "Personal Property Leases"
------------------------
shall have the meaning set forth in Section 6.9.3.
19.45. Plans and Programs. The term "Plans and Programs" shall have
------------------
the meaning set forth in Section 6.14.2.
19.46. Post-Closing Environmental Conditions. The term "Post-Closing
-------------------------------------
Environmental Conditions" shall mean any and all conditions of any Owned Real
Property or Leased Real Property acquired by Southern States, including soil,
surface water and groundwater contamination, resulting from the disposal or
release of Hazardous Materials by Southern States after the Closing Date; or
that is attributable to the operation of the Inputs Business by Southern States
after the Closing Date; provided, however, that any migration of contamination
first released prior to the Closing Date shall constitute a Pre-Closing
Environmental Condition to the extent applicable to such migration and shall
constitute a Post-Closing Environmental Condition to the extent caused after the
Closing Date by operations of the Inputs Business.
19.47. Post-Closing Statement of Net Current Asset Value. The term
-------------------------------------------------
"Post-Closing Statement of Net Current Asset Value" shall mean the statement of
Net Current Asset Value, calculated as of the Closing Date.
19.48. Pre-Closing Environmental Conditions. The term "Pre-Closing
------------------------------------
Environmental Conditions" shall mean any and all conditions of any Owned Real
Property, Leased Real Property, or any other property formerly owned or leased
by Gold Xxxx as a part of the Inputs Business, or that is attributable to the
operations or properties of Xxxxx X. Xxxxxxxx LLC., (to the extent of Southern
States' interest in Xxxxx X. Xxxxxxxx, LLC.), including soil, surface water and
groundwater contamination, resulting from the disposal or release of Hazardous
Materials, which condition was in existence on, or arose from, such property on
or before the Closing Date; or that is attributable to the operation of the
Inputs Business or the Purchased Assets on or before the Closing Date,
including, but not limited to, the scheduled conditions under Section 6.16 of
the Agreement.
47
19.49. Pre-Closing Statement of Net Current Asset Value. The term
------------------------------------------------
"Pre-Closing Statement of Net Current Asset Value" shall mean the statement of
"Net Current Asset Value," as defined herein, calculated as of the Closing Date
as provided for in Section 4.1.
19.50. Prepaid Expenses. The term "Prepaid Expenses" shall mean those
----------------
accounts relating to the Inputs Business which benefit Southern States and are
included in the Post-Closing Statement of Net Current Asset Value.
19.51. Principal Management. The term "Principal Management" shall
--------------------
mean the authority to direct the handling of the subject matter of an
Environmental Claim as provided in Section 15.6.5.
19.52. Product Purchase Agreement Assignment and Assumption
----------------------------------------------------
Agreement. The term "Product Purchase Agreement Assignment and Assumption
---------
Agreement" shall mean the CF Industries, Inc. Product Purchase Agreement
Assignment and Assumption Agreement, delivered at Closing pursuant to Sections
5.2(f) and 5.3(d) as set forth substantially in the form of Exhibit G.
19.53. Purchased Assets. The term "Purchased Assets" shall have the
----------------
meaning set forth in Section 2.1.
19.54. Purchase Transaction. The term "Purchase Transaction" shall
--------------------
mean the asset purchase transaction contemplated by this Agreement and any and
all transactions related thereto.
19.55. Real Property Leases. The term "Real Property Leases" shall
--------------------
have the meaning set forth in Section 6.6.2.
19.56. Receivables Valuation Procedures. The term "Receivables
--------------------------------
Valuation Procedures" shall mean the Accounts Receivable Valuation Procedures as
set forth in Exhibit B hereto.
19.57. Records. The term "Records" shall have the meaning set forth
-------
in Section 2.1(n).
19.58. Rejected Proposed Contract. The term "Rejected Proposed
--------------------------
Contract" shall have the meaning set forth in Section 8.2.2.(b).
19.59. Rejected Proposed Contract Termination Date. The term
-------------------------------------------
"Rejected Proposed Contract Termination Date" shall have the meaning set forth
in Section 8.2.2(b).
19.60. Required Consents. The term "Required Consents" shall have the
-----------------
meaning set forth in Section 6.2.2.
19.61. Xxxxx X. Xxxxxxxx, LLC. The term "Xxxxx X. Xxxxxxxx, LLC."
----------------------
shall mean the Georgia limited liability company established under that name
under articles of organization dated June 27, 1997.
48
19.62. Site Remediation. The term "Site Remediation" shall mean the
----------------
remediation of environmental conditions on any Owned Real Property or Leased
Real Property, including the investigation, cleanup, and monitoring of such
remediation.
19.63. Xxxxx Xxxxx Lease. The term "Xxxxx Xxxxx Lease" shall mean the
-----------------
Lease Agreement with Purchase Option dated January 5, 1995 between Gold Xxxx and
Xxxxx Petroleum Corporation, a Mississippi corporation.
19.64. Southern States Indemnified Persons. The term "Southern States
-----------------------------------
Indemnified Persons" shall have the meaning set forth in Section 15.2.
19.65. SSC Minimum Amount. The term "SSC Minimum Amount" shall have
------------------
the meaning set forth in Section 15.5.
19.66. Survival Period. The term "Survival Period" shall have the
---------------
meaning set forth in Section 15.1.
19.67. Tangible Assets. The term "Tangible Assets" shall have the
---------------
meaning set forth in Section 13.1.
19.68. Trademarks. The term "Trademarks" shall have the meaning set
----------
forth in Section 6.11.1.
19.69. Transition Services Agreement. The term "Transition Services
-----------------------------
Agreement" shall have the meaning set forth in Section 14.5.
19.70. Transferred Employees. The term "Transferred Employees" shall
---------------------
have the meaning set forth in Section 14.3.1.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
SOUTHERN STATES COOPERATIVE,
INCORPORATED
By: _________________________________________
Xxxxx X. Xxxxxxxx
Chief Executive Officer and President
GOLD XXXX INC.
By: _________________________________________
Xxxxxxx X. Xxxx
Chief Executive Officer and Chairman
49
