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STOCK PURCHASE AGREEMENT
by and between
XXXXX XXXX PET FOOD COMPANY, INC.
and
THE SHAREHOLDERS
OF
ARMOUR CORPORATION
Dated as of April 22, 1997
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TABLE OF CONTENTS
(Not Part of the Agreement)
Page
ARTICLE I PURCHASE OF ARMOUR CAPITAL STOCK ................................. 1
1.01 GENERALLY ........................................................ 1
1.02 ALLOCATION OF PURCHASE PRICE ..................................... 2
1.03 SEPARATE AND SEVERAL OBLIGATIONS ................................. 2
ARTICLE II CLOSING, PAYMENT FOR SHARES AND RELATED MATTERS ................. 2
2.01 GENERALLY ........................................................ 2
2.02 PAYMENT FOR SHARES ............................................... 2
ARTICLE III REPRESENTATIONS AND WARRANTIES ................................. 5
3.01 REPRESENTATIONS AND WARRANTIES OF ARMOUR SHAREHOLDERS ............ 5
3.02 REPRESENTATIONS AND WARRANTIES OF BUYER .......................... 8
ARTICLE IV CONDUCT AND TRANSACTIONS PRIOR TO CLOSING ....................... 9
4.01 LIABILITIES ...................................................... 9
4.02 DIVIDENDS ........................................................ 9
4.03 ARMOUR CLOSING DATE BALANCE SHEET ................................ 9
ARTICLE V CONDITIONS PRECEDENT ............................................. 9
5.01 CONDITIONS TO THE OBLIGATIONS OF BUYER ........................... 9
5.02 CONDITIONS TO THE OBLIGATIONS OF ARMOUR SHAREHOLDERS ............. 11
ARTICLE VI TERMINATION AND ABANDONMENT ..................................... 13
6.01 GENERALLY ........................................................ 13
6.02 PROCEDURE AND EFFECT OF TERMINATION AND ABANDONMENT .............. 14
ARTICLE VII ARMOUR SHAREHOLDER REPRESENTATIVE .............................. 14
7.01 DESIGNATION ...................................................... 14
7.02 AUTHORITY ........................................................ 14
7.03 RESIGNATION ...................................................... 15
7.04 RELIANCE BY THIRD PARTIES ON THE ARMOUR SHAREHOLDER
REPRESENTATIVE'S AUTHORITY ............................................ 15
7.05 EXCULPATION AND INDEMNIFICATION .................................. 15
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ARTICLE VIII MISCELLANEOUS PROVISIONS ...................................... 16
8.01 LIMITATIONS ON SURVIVAL .......................................... 16
8.02 INDEMNIFICATION .................................................. 16
8.03 AMENDMENT AND MODIFICATION ....................................... 19
8.04 ALTERNATIVE DISPUTE RESOLUTION ................................... 19
8.05 INSURANCE COVERAGE ............................................... 20
8.06 FILING OF TAX RETURNS ............................................ 20
8.07 WAIVER OF COMPLIANCE; CONSENTS ................................... 20
8.08 EXPENSES ......................................................... 20
8.09 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS .......................... 20
8.10 ADDITIONAL AGREEMENTS ............................................ 21
8.11 NOTICES .......................................................... 21
8.12 ASSIGNMENT ....................................................... 22
8.13 GOVERNING LAW .................................................... 22
8.14 COUNTERPARTS ..................................................... 22
8.15 HEADINGS; INTERNAL REFERENCES .................................... 22
8.16 ENTIRE AGREEMENT ................................................. 22
8.17 SEVERABILITY ..................................................... 23
EXHIBITS
A Ownership of Armour Capital Stock
B Form of Opinion of Counsel to Armour Shareholders
C Form of Opinion of Counsel to Buyer
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STOCK PURCHASE AGREEMENT ("Agreement") dated as of April 22,
1997, by and between XXXXX XXXX PET FOOD COMPANY, INC., a Delaware
corporation ("Buyer"), and XXXXX X. XXXXXX, XXX X. XXXX, XXXXXXX X. XXXXXX,
XXXXX X. XXXXXXXXX, Xxxxxxx X. Xxxxxx and First Bank National Association as
Trustees of the XXXXXXXXX XXXX XXXXXX TRUST NO.2, and Xxxxxxx X. Xxxxxx and
First Bank National Association as Trustees of the XXXXX X. XXXXXX FAMILY
TRUST CREATED UNDER THE XXXXX X. XXXXXX TRUST AGREEMENT (collectively the
"Armour Shareholders", and individually an "Armour Shareholder").
WITNESSETH:
WHEREAS, the Armour Shareholders own beneficially and of record
all of the issued and outstanding shares of capital stock of Armour
Corporation, a Delaware corporation ("Armour");
WHEREAS, Buyer desires to purchase from the Armour Shareholders,
and the Armour Shareholders desire to sell to Buyer, all of the issued and
outstanding shares of capital stock of Armour;
WHEREAS, Armour owns and holds beneficially and of record 800,000
shares of Class A Common Stock of Xxxxxxx Milling Company, a Minnesota
corporation ("Xxxxxxx");
WHEREAS, Xxxxxxx, Buyer and Xxxxx Xxxx Pet Food Acquisition Co.
("Buyer Subsidiary") have entered into a Merger Agreement dated as of March
21, 1997 (the "Merger Agreement") providing for Buyer Subsidiary to be merged
with and into Xxxxxxx; and
WHEREAS, execution and delivery of this Agreement and
consummation of the transactions contemplated hereby are conditions precedent
to consummation of the transactions contemplated by the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, representations, warranties and agreements herein
contained, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASE OF ARMOUR CAPITAL STOCK
1.01 Generally. Subject to the conditions precedent hereinafter
contained, on the Closing Date (as defined in Section 2.01), Buyer shall
purchase from each of the Armour Shareholders, and each of the Armour
Shareholders shall sell to Buyer, the number
and class of shares of issued and outstanding capital stock of Armour
specified in Exhibit A (all such shares of issued and outstanding capital
stock of Armour being hereinafter called the "Armour Capital Stock"). The
aggregate purchase price (the "Purchase Price") for the Armour Capital Stock
shall be an amount equal to 800,000 (i.e. number of shares of Xxxxxxx Class A
Common Stock held by Armour) multiplied by the Common Stock Merger
Consideration Per Share (as defined in the Merger Agreement) plus (i) the
amount of any cash of Armour on the Closing Date after giving effect to the
payment of any dividends permitted by Section 4.02 as reflected on the Armour
Closing Date Balance Sheet (as defined in Section 4.03), and less (ii) the
amount of any accrued but unpaid tax liability of Armour on the Closing Date
as reflected in the Armour Closing Date Balance Sheet.
1.02 Allocation of Purchase Price. The Purchase Price shall be
allocated to the 9% Cumulative Voting Preferred Stock of Armour (the "Armour
Preferred Stock") in an amount equal to Ten Dollars ($10.00) per share, plus
accrued but unpaid dividends thereon through the Closing Date, and the
balance of such Purchase Price shall be allocated ratably to the shares of
Common Stock of Armour (the "Armour Common Stock").
1.03 Separate and Several Obligations. The obligations of the
Armour Shareholders under this Article I shall be separate and several.
ARTICLE II
CLOSING, PAYMENT FOR SHARES AND RELATED MATTERS
2.01 Generally. The closing (the "Closing") of the purchase and
sale of Armour Capital Stock in accordance with Article I shall occur on the
"Closing Date" specified in or otherwise determined in accordance with
Section 2.01 of the Merger Agreement (the "Closing Date"). The Closing shall
be held at the offices of Xxxxxxxx & O'Neil LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx or such other place as the Armour Shareholders and Buyer may
mutually agree.
2.02 Payment for Shares.(a) On the Closing Date, the Armour
Shareholders shall cause the Armour Shareholder Representative (as defined in
Section 7.01) to deliver to Buyer a written estimate of the Purchase Price,
such estimate to be prepared upon consultation with Buyer (the "Estimated
Purchase Price"), which shall be an amount equal to 800,000 (i.e. the number
of shares of Xxxxxxx Class A Common Stock held by Armour) multiplied by the
estimate of the Common Stock Merger Consideration Per Share delivered by
Xxxxxxx to Buyer pursuant to Section 2.02(a) of the Merger Agreement, plus
(i) the amount of any cash of Armour on the Closing Date after giving effect
of the payment of any dividends permitted by Section 4.02 as reflected on the
Armour Closing Date Balance Sheet, and less (ii) the amount of any accrued
but unpaid tax liability of Armour on the Closing Date as reflected in the
Armour Closing Date Balance Sheet. Such written estimate of the Purchase
Price shall reflect the allocation between the Armour Preferred Stock and the
Armour
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Common Stock (the amount so allocated to the Armour Common Stock hereinafter
called the "Estimated Armour Common Stock Purchase Price").
(b) On the Closing Date, subject to the terms and conditions herein
contained, upon surrendering the certificates evidencing the Armour Capital
Stock, duly endorsed or accompanied by duly executed assignments separate
from certificate, Buyer shall remit the Estimated Purchase Price to or for
the benefit of the Armour Shareholders as follows:
(i) Buyer shall pay by cashier's check to each holder of Armour
Preferred Stock an amount equal to the number of shares of Armour
Preferred Stock held by such holder as specified in Exhibit A
multiplied by an amount equal to the sum of (A) Ten Dollars ($10.00)
per share, plus (B) accrued but unpaid dividends thereon through the
Closing Date, which payment shall be in full and final satisfaction
of the portion of the Purchase Price allocable to the Armour
Preferred Stock in accordance with Section 1.02;
(ii) Buyer shall remit to the Disbursing Agent under the Disbursing
Agreement (as such terms are defined in Section 2.02 of the Merger
Agreement) in immediately available funds, and the Disbursing Agent
shall hold in escrow pursuant to the escrow provisions of the
Disbursing Agreement, an amount (the "Armour Escrow Amount) equal to
Thirteen Million Dollars ($13,000,000) or, if the Escrow Amount (as
defined in Section 2.02(a) of the Merger Agreement) is calculated
based on Ten Million Dollars ($10,000,000) pursuant to Section
2.02(a) of the Merger Agreement, Ten Million Dollars ($10,000,000),
in either case multiplied by a fraction, the numerator of which is
800,000 and the denominator of which is the aggregate number of
shares of Xxxxxxx Class A Common Stock and Xxxxxxx Class B Common
Stock issued and outstanding on the Closing Date (including the
800,000 shares of Xxxxxxx Class A Common Stock held by Armour);
(iii) Buyer shall remit to the Disbursing Agent under the Disbursing
Agreement in immediately available funds an amount (the "Reserve
Amount") equal to 5% of the Estimated Armour Common Stock Purchase
Price, such amount to be held by the Disbursing Agent pending a
final determination of the Common Stock Merger Consideration Per
Share under the Merger Agreement and a final determination of the
Purchase Price under this Agreement; and
(iv) Buyer shall remit the balance of the Estimated Purchase Price
remaining after the applications required by the foregoing clauses
(i), (ii) and (iii) by cashier's check to the holders of the Armour
Common Stock, pro rata based upon the number of shares of Armour
Common Stock held by each such holder as reflected in Exhibit A,
such application to constitute partial payment of the Purchase Price
allocable to the Armour Common Stock.
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(c) If the Armour Escrow Amount shall have been calculated under
Section 2.02(b)(ii) based upon Thirteen Million Dollars ($13,000,000) but
pursuant to Section 2.02(b) of the Merger Agreement the Escrow Amount under
the Merger Agreement is thereafter recalculated based on Ten Million Dollars
($10,000,000), then the Armour Escrow Amount shall be recalculated based on
Ten Million Dollars ($10,000,000), in which event the excess of the Armour
Escrow Amount as originally calculated pursuant to Section 2.02(b)(ii) over
the Armour Escrow Amount as recalculated pursuant to this Section 2.02(c)
shall be released from escrow and held by the Disbursing Agent for
distribution in accordance with Section 2.02(e).
(d) Upon delivery of the Closing Date Balance Sheet (as defined in
Section 1.03 of the Merger Agreement) and final determination of the Common
Stock Merger Consideration Per Share in accordance with the Merger Agreement,
the Armour Shareholders shall cause the Armour Shareholder Representative to
deliver to Buyer and the Disbursing Agent a final written calculation of the
Purchase Price allocable to the Armour Common Stock (the "Armour Common Stock
Purchase Price"). Within two (2) business days of delivery of such
calculation to Buyer, Buyer shall remit or cause to be remitted in
immediately available funds to the Disbursing Agent for application in
accordance with the Disbursing Agreement an amount equal to the excess (if
any) of (i) the Armour Common Stock Purchase Price over the Estimated Armour
Common Stock Purchase Price. Alternatively, if the Estimated Armour Common
Stock Purchase Price exceeds the Armour Stock Purchase Price, the Disbursing
Agreement shall provide for the Disbursing Agent to remit the amount of such
excess to Buyer within two (2) days of receipt of a written request from
Buyer.
(e) The Disbursing Agreement shall further provide that following the
remittance to or by the Disbursing Agent in accordance with Section 2.02(d),
the Disbursing Agent shall pay by cashier's check to the holders of Armour
Common Stock an amount equal to the Reserve Amount plus or minus as the case
may be, the amount of any payment by or to the Disbursing Agent pursuant to
Section 2.02(d), plus (if applicable) any amount released from escrow
pursuant to Section 2.02(c). Such payment shall be allocated among the
holders of Armour Stock pro rata based upon their ownership of Armour Common
Stock as set forth in Exhibit A.
(f) The Disbursing Agreement shall authorize the Disbursing Agent to
invest as therein provided any amounts from time to time held by the
Disbursing Agent under the Disbursing Agreement, and to apply as therein
provided any net profit resulting from, or interest or income produced by,
such investments.
(g) The Disbursing Agreement shall provide that any remaining Armour
Escrow Amount held by the Disbursing Agent under the Disbursing Agreement
eighteen (18) months after the Closing Date (subject to the provisions of the
Disbursing Agreement providing for the retention of the Armour Escrow Amount
in respect of escrow claims then pending) shall
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be paid by cashier's check to the holders of Armour Common Stock, such amount
to be allocated among the holders of Armour Common Stock pro rata based upon
their ownership of Armour Common Stock as set forth in Exhibit A, in final
settlement of the Armour Common Stock Purchase Price.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of Armour Shareholders. Each
Armour Shareholder (separately and severally) represents and warrants to
Buyer, and its successors and assigns, as follows:
(a) Organization and Good Standing. Armour is a corporation duly
incorporated, validly existing, and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to own
its assets and carry on its business as it is now being conducted.
(b) Certificate of Incorporation and By-Laws. The copy of the
certificate of incorporation and by-laws of Armour that has been delivered to
Buyer is complete and correct as of the date of this Agreement, and the
minute books of Armour that have been made available to Buyer are complete in
all material respects and accurately reflect all material action taken prior
to the date of this Agreement by the Board of Directors and the Armour
Shareholders.
(c) Capitalization. The authorized capital stock of Armour at the
date hereof consists of 25,000 shares of 9% Cumulative Voting Preferred
Stock, $10 par value, and 10,000 shares of Common Stock, $1 par value, all of
which are currently issued and outstanding.
(d) Ownership of Stock Such. Armour Shareholder owns and holds of
record, free and clear of any lien, claim or encumbrance, the shares of
Armour Capital Stock set forth adjacent to its name on Exhibit A, and such
shares are validly issued, fully paid and nonassessable. There are no
restrictions on such Armour Shareholder's ability to transfer such shares.
(e) Power and Authority; Execution and Enforceability. Such
Armour Shareholder has the legal right, power and authority to enter into
this Agreement and has the legal right, power and authority to transfer,
assign and deliver such Armour Shareholder's shares as provided in this
Agreement, and such delivery will convey to Buyer good and marketable title
to such shares, free and clear of all liens, claims, agreements and
encumbrances of any kind whatsoever. This Agreement constitutes the legal,
valid and
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binding obligation of such Armour Shareholder enforceable in accordance with
its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a court
of law or in equity).
(f) Assets. Armour is a holding company which holds as its sole
assets 800,000 shares of Xxxxxxx Class A Common Stock and cash from time to
time maintained in its corporate accounts. Armour has good and marketable
title to such shares of Xxxxxxx free and clear of all liens, claims and
encumbrances. Since its incorporation, Armour has not operated or otherwise
engaged in any business activity other than (i) ownership of such shares of
Xxxxxxx Class A Common Stock and the exercise of voting rights in respect
thereof; (ii) the payment of dividends, fees and disbursements of its counsel
and independent accountants, income taxes, franchise taxes and other fees
necessary to maintain in good standing its status as a corporation in the
state of Delaware; and (iii) other immaterial, incidental and administrative
matters directly related to the foregoing.
(g) Liabilities; Litigation. Armour has no debts or other
liabilities of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, except for (i) accrued and unpaid fees
and disbursements of its counsel and independent accountants, and (ii)
accrued and unpaid taxes. All dividends required to be paid on Armour 9%
Cumulative Voting Preferred Stock have been paid through December 31, 1996.
No litigation, arbitration, administrative proceeding, or investigation of
any kind is pending or, to the knowledge of such Armour Shareholder,
threatened against Armour or any of its officers or directors in connection
with the business or affairs of Armour. Armour is not currently, and has not
been since 1990, subject to any judgment, consent decree, binding arbitration
or regulatory order not generally applicable to similar businesses.
(h) Tax Matters.
(i) Armour has timely filed all Federal, state, local
and foreign tax returns ("Tax Returns") required to be filed by it
with respect to income, withholding, social security, unemployment,
franchise, property, excise and sales and use taxes (all such taxes,
together with any interest or penalties payable in respect thereof,
hereinafter collectively called "Taxes"), and has paid, reserved or
accrued for all Taxes.
(ii) All Tax Returns filed by Armour for any taxable
period were complete and accurate in all material respects. No Tax
Returns filed by Armour have ever been audited and no claims for
additional Taxes for any taxable period have ever been made by any
taxing authority. Armour has not received a notice of deficiency or
assessment of additional Taxes which notice or assessment remains
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unresolved. Armour has not extended the period for assessment or
payment of any Tax, which period has not since expired.
(iii) Armour has not been a member of an affiliated
group (as such term is defined in Section 1504 of the Internal
Revenue Code of 1986, as amended (the "Code")) filing a consolidated
federal income tax return for any tax year.
(iv) There are no liens for Taxes (other than current
Taxes not yet due and payable) upon the assets of Armour.
(v) Armour has not filed a consent under Code Section
341(f) concerning collapsible corporations.
(vi) Armour has not been a United States real property
holding corporation within the meaning of Code Section 897(c)(2)
during the applicable period specified in Code Section
897(c)(1)(A)(ii).
(vii) Armour is not a party to any Tax allocation or
sharing agreement.
(viii) Armour is not a party to any agreement, contract,
arrangement or plan that has resulted or would result, separately or
in the aggregate, in the payment of any "excess parachute payments"
within the meaning of Code Sec. 280G, or any other payment of
compensation which would be nondeductible under Code Sec. 162.
(i) No Undisclosed Liabilities. There are no liabilities of
Armour of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances which could reasonably be expected to
result in such a liability, other than liabilities provided for in the Armour
Closing Date Balance Sheet (as defined below) or disclosed in the notes
thereto.
(j) No Brokers or Finders. Such Armour Shareholder has not
engaged any investment banker, broker or finder in connection with the
transactions contemplated hereby.
(k) Full Disclosure. No representation or warranty contained in
this Agreement, the Merger Agreement or any Disclosure Schedule hereto or
thereto omits to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances under which they
were made, not misleading.
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3.02 Representations and Warranties of Buyer. Buyer represents
and warrants to each Armour Shareholder, and their respective successors and
assigns, as follows:
(a) Organization, Standing, Equity Ownership. Buyer is a
corporation duly incorporated, validly existing and in good standing under
the laws of its state of incorporation. Buyer has made available to each
Armour Shareholder a certified copy of the articles or certificate of
incorporation and by-laws of Buyer. Such copy is complete and correct as of
the date hereof.
(b) Authorization and Execution. Buyer has the corporate power
and authority to execute and deliver this Agreement and consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Buyer have been duly and effectively authorized by all
necessary corporate action of Buyer, and no further corporate action is
necessary on the part of Buyer to consummate the transactions contemplated
hereby. This Agreement constitutes a legal, valid and binding obligation of
Buyer, enforceable against it in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a court of law or equity).
(c) No Conflicts. Neither the execution and delivery of this
Agreement by Buyer, nor the consummation of the transactions contemplated
hereby, will (i) conflict with or result in a breach of its articles or
certificate of incorporation or by-laws, as currently in effect, of Buyer, or
(ii) except for the requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 (the "Xxxx-Xxxxx-Xxxxxx Act"), require any filing
with, or any consent or approval of any governmental authority having
jurisdiction over any of the business or assets of Buyer, or (iii) violate
any statute, regulation, injunction, judgment or order to which Buyer is
subject, or (iv) result in a breach of or constitute a default or an event
which, with the passage of time or the giving of notice, or both, would
constitute a default, give rise to a right of termination, cancellation or
acceleration, create any entitlement to any payment or benefit, require the
consent of any third party or result in the creation of any lien on the
assets of Buyer under any material instrument, contract or agreement to which
Buyer is a party or by which it is bound.
(d) No Brokers or Finders. Buyer has not engaged any investment
banker, broker or finder in connection with the transactions contemplated
hereby.
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ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR TO CLOSING
4.01 Liabilities. The Armour Shareholders shall cause Armour (i)
to obtain from its counsel, Faegre & Xxxxxx LLP, and its accountants, Xxxxx
Xxxxxxxx & Company, final statements for all services and disbursements to
and including the Closing Date, and (ii) to pay the statements so obtained on
or prior to the Closing Date. If Armour shall have any other liabilities,
other than for payment of income taxes, outstanding on the Closing Date, the
Armour Shareholders shall cause Armour to pay such other liabilities on the
Closing Date.
4.02 Dividends. The Armour Shareholders will not cause or permit
Armour to declare or pay any dividends between the date hereof and the
Closing Date which would impair the ability of Armour (i) to pay the
liabilities required to be paid pursuant to Section 4.01, or (ii) to pay
income taxes. Subject to the foregoing, Armour may declare and pay a final
dividend equal to the cash remaining on the Closing Date after payment of the
liabilities required to be paid pursuant to Section 4.01.
4.03 Armour Closing Date Balance Sheet. The Armour Shareholders
shall cause Armour's independent accountants to compile and deliver to the
Armour Shareholders and to Buyer on the Closing Date a pro forma balance
sheet reflecting the financial condition of Armour as of the Closing Date,
after giving effect to payment of the liabilities required to be paid
pursuant to Section 4.01 and payment of dividends permitted to be paid
pursuant to Section 4.02 (the "Armour Closing Date Balance Sheet"). The
Armour Closing Date Balance Sheet shall be prepared in accordance with
generally accepted accounting principles from the books and records of Armour
(which are accurate and complete in all material respects) and shall fairly
represent, in all material respects, the assets, liabilities and financial
position of Armour as of the Closing Date.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions to the Obligations of Buyer. The obligations of
Buyer to purchase the Armour Capital Stock pursuant to Article I shall be
subject to the fulfillment on or prior to the Closing Date of the following
conditions, any one or more of which (except for the conditions set forth in
Section 5.01(b), (c) and (d)) may be waived by Buyer:
(a) The representations and warranties of each Armour Shareholder
contained in Section 3.01 shall be true and correct in all material respects
with the same effect as if such representations and warranties had been made
on the Closing Date; each Armour Shareholder shall have performed and
complied in all material respects with the agreements
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and obligations contained in this Agreement required to be performed and
complied with by such Armour Shareholder on or prior to the Closing Date; and
Buyer shall have received a certificate signed by each Armour Shareholder to
the effects set forth in this Section 5.01(a) as it relates to such Armour
Shareholder.
(b) The Merger Agreement shall not have been terminated; all
conditions precedent set forth in the Merger Agreement to the merger of Buyer
Subsidiary with and into Xxxxxxx thereunder (the "Merger") shall have been
satisfied or waived; and arrangements reasonably satisfactory to Buyer and
Buyer Subsidiary shall have been made for the Merger to be consummated
immediately after the Closing hereunder.
(c) The amendment ("Amendment") to the Articles of Incorporation
of Xxxxxxx contemplated under the Merger Agreement shall have been adopted at
a Special Meeting of the Shareholders of Xxxxxxx by the vote required by the
Minnesota Business Corporation Act ("MBCA") and Xxxxxxx'x Articles of
Incorporation, and a Certificate of Amendment to the Articles of
Incorporation of Xxxxxxx containing such amendment shall have been duly
executed, filed with the Minnesota Secretary of State and effective prior to
the vote of the shareholders of Xxxxxxx at such meeting on the Plan of Merger
(as defined in the Merger Agreement).
(d) The Plan of Merger shall have been approved at the Special
Meeting of the Shareholders of Xxxxxxx referred to in Section 5.01(c) by the
vote required by the MBCA and Xxxxxxx'x Articles of Incorporation.
(e) There shall not be pending any suit, action, investigation,
inquiry or other proceeding by or before any court or governmental or other
regulatory or administrative agency or commission requesting or looking
toward an order, judgment or decree (except those in which Buyer is a
plaintiff directly or derivatively) which, in the reasonable judgment of
Buyer could, if issued, restrain or prohibit the consummation of the
transactions contemplated hereby or require rescission of this Agreement or
such transactions or result in damages to Buyer, if the transactions
contemplated hereby are consummated, nor shall there be in effect any
injunction, writ, preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction directing
that the transactions provided for herein, or any of them, not be consummated
as so provided.
(f) Buyer shall have received from Faegre & Xxxxxx LLP, counsel
to the Armour Shareholders, an opinion, dated the Closing Date and reasonably
satisfactory in form and substance to Buyer and its counsel, as to the
matters set forth in Exhibit B. In rendering such opinion, such counsel may
rely, to the extent such counsel deems such reliance necessary or
appropriate, as to matters of fact, upon certificates of the Armour
Shareholders.
(g) All applicable waiting periods (and any extensions thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated.
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(h) On the Closing Date, the Armour Shareholders will have
delivered to Buyer the following:
(i) A good standing certificate for Armour from the
state of Delaware, dated not earlier than 15 days prior to the
Closing Date;
(ii) The written resignations of the officers and
directors of Armour;
(iii) The minute books, stock records and stock ledgers
of Armour; and
(iv) Such other documents and instruments as Buyer may
reasonably request in connection with the transactions contemplated
hereby.
(i) The Disbursing Agreement shall have been executed and
delivered by the parties thereto other than Buyer.
5.02 Conditions to the Obligations of Armour Shareholders. The
obligation of each Armour Shareholder to sell its Armour Capital Stock shall
be subject to the fulfillment at or prior to the Closing Date of the
following conditions, any one or more of which (except for the conditions set
forth in Sections 5.02(b), (c) and (d)) may be waived by the Armour
Shareholders:
(a) The representations and warranties of Buyer contained in
Section 3.02 of this Agreement shall be true and correct in all material
respects on the Closing Date with the same effect as if such representations
and warranties had been made on the Closing Date; Buyer shall have performed
and complied in all material respects with the agreements and obligations
contained in this Agreement required to be performed and complied with by it
on or prior to the Closing Date; and the Armour Shareholders shall have each
received a certificate signed by an executive officer of Buyer to the effects
set forth in this Section 5.02(a).
(b) The Merger Agreement shall not have been terminated; all
conditions precedent set forth in the Merger Agreement to the Merger shall
have been satisfied or waived; and arrangements reasonably satisfactory to
the Armour Shareholders shall have been made for the Merger to be consummated
immediately after the Closing hereunder.
(c) The Amendment shall have been adopted at the Special Meeting
of the Shareholders of Xxxxxxx referred to in Section 5.01 (c) by the vote
required by the MBCA and Xxxxxxx'x Articles of Incorporation, and a
Certificate of Amendment to the Articles of Incorporation of Xxxxxxx
containing such amendment shall have been duly executed, filed
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with the Minnesota Secretary of State and effective prior to the vote of the
shareholders of Xxxxxxx at such meeting on the Plan of Merger.
(d) The Plan of Merger shall have been approved at the Special
Meeting of the Shareholders of Xxxxxxx referred to in Section 5.01(c) by the
vote required by the MBCA and Xxxxxxx'x Articles of Incorporation.
(e) All corporate action on the part of Buyer, necessary to
authorize the execution, delivery and consummation of this Agreement or any
agreement or instrument contemplated hereby to which Buyer is or is to be a
party or the transactions contemplated hereby or thereby shall have been duly
and validly taken.
(f) There shall not be pending any suit, action, investigation,
inquiry or other proceeding by or before any court or governmental or other
regulatory or administrative agency or commission requesting or looking
toward an order, judgment or decree (except those in which Armour or any
Armour Shareholder is a plaintiff directly or derivatively) which, in the
reasonable judgment of the Armour Shareholders, would, if issued, restrain or
prohibit the consummation of the transactions contemplated hereby or require
rescission of this Agreement or such transactions or result in damages to the
Armour Shareholders if the transactions contemplated hereby are consummated,
nor shall there be in effect any injunction, writ, preliminary restraining
order or any order of any nature issued by a court or governmental agency of
competent jurisdiction directing that the transactions provided for herein,
or any of them, not be consummated as so provided.
(g) The Armour Shareholders shall have received from Xxxxxxxx &
X'Xxxx, LLP, counsel to Buyer, an opinion, dated the Closing Date and
reasonably satisfactory in form and substance to the Armour Shareholders and
their counsel, as to the matters set forth in Exhibit C. In rendering such
opinion, such counsel may rely, to the extent such counsel deems such
reliance necessary or appropriate, as to matters of fact, upon certificates
of government officials and of any officer or officers of Buyer.
(h) All applicable waiting periods (and any extension thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated.
(i) On the Closing Date, Buyer will have delivered to the Armour
Shareholders the following:
(i) A good standing certificate for Buyer from the state
of Delaware, dated not earlier than 15 days prior to the Closing
Date;
(ii) Certified copies of the resolutions duly adopted by
the board of directors of Buyer authorizing the execution, delivery
and performance of this Agreement and the other agreements
contemplated hereby; and
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(iii) Such other documents and instruments as the Armour
Shareholders may reasonably request in connection with the
transactions contemplated hereby.
(j) The Disbursing Agreement shall have been executed and
delivered by the parties thereto other than the Armour Shareholder
Representative (as defined in Section 7.01).
ARTICLE VI
TERMINATION AND ABANDONMENT
6.01 Generally. This Agreement may be terminated and abandoned at
any time prior to Closing under the following circumstances:
(a) by mutual consent of the Board of Directors of Buyer and the
Armour Shareholders;
(b) by Buyer or the Armour Shareholders if the transactions
contemplated hereby shall not have been consummated on or before June 30,
1997 (which date may be extended by mutual agreement of the Board of
Directors of Buyer and the Armour Shareholders), provided that such failure
is not due solely to the failure of the party seeking to terminate this
Agreement to comply with its obligations under this Agreement;
(c) by Buyer if any of the conditions set forth in Section 5.01
shall become impossible to fulfill other than for reasons within the control
of Buyer, and such conditions shall not have been waived pursuant to Section
8.07;
(d) by any Armour Shareholder if any of the conditions set forth
in Section 5.02 shall become impossible to fulfill other than for reasons
within the control of the Armour Shareholders, or any of them, and such
conditions shall not have been waived pursuant to Section 8.07; or
(e) by Buyer if Buyer shall have failed to receive the proceeds
of the bridge financing under the Chase Bridge Financing Commitment or the
proceeds of the senior debt financing under the CSFB Senior Debt Financing
Commitment (as such terms are defined in the Merger Agreement), as the case
may be, as a result, in the case of the Chase Bridge Financing Commitment, of
any of the circumstances described in clauses (i) through (v) of the first
full paragraph on page 4 thereof, or as a result, in the case of the CSFB
Senior Debt Financing Commitment, of any of the circumstances described in
the first full paragraph of page 2 thereof.
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6.02 Procedure and Effect of Termination and Abandonment. In the
event of termination of this Agreement by one or more of Buyer or the Armour
Shareholders pursuant to Section 6.01, written notice thereof shall forthwith
be given to the other parties hereto and this Agreement shall terminate
without further action by any of the parties hereto. If this Agreement is
terminated as provided herein, no party hereto shall have any liability or
further obligation to any other party to this Agreement except to the extent
the termination is a direct result of a willful and material breach by a
party to this Agreement of any material representation, warranty or covenant
contained in this Agreement.
ARTICLE VII
ARMOUR SHAREHOLDER REPRESENTATIVE
7.01 Designation. Subject to the terms and conditions of this
Article VII, Xxxxxxx X. Xxxxxx is designated as the representative of the
Armour Shareholders (the "Armour Shareholder Representative") by the Armour
Shareholders to serve, and the Buyer hereby acknowledges that the Armour
Shareholder Representative shall serve, as the sole representative of the
Armour Shareholders from and after the Closing Date with respect to the
matters set forth in this Agreement, such service to be without compensation
except for the reimbursement of out-of-pocket expenses and indemnification
specifically provided herein. The Armour Shareholder Representative has
accepted such designation as of the date hereof. Notwithstanding anything to
the contrary contained in this Agreement, the Armour Shareholder
Representative shall have no duties or responsibilities except those
expressly set forth herein, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on behalf of any Armour
Shareholder shall otherwise exist against the Armour Shareholder
Representative.
7.02 Authority. Each Armour Shareholder, by executing this
Agreement, irrevocably appoints the Armour Shareholder Representative as the
agent, proxy and attorney-in-fact for such Armour Shareholder for all
purposes of this Agreement, including full power and authority on such Armour
Shareholder's behalf (i) to take all actions which the Armour Shareholder
Representative considers necessary or desirable in connection with the
defense, pursuit or settlement of any determinations relating to the payment
of the Armour Escrow Amount and any claims for indemnification pursuant to
Section 8.02, including to xxx, defend, negotiate, settle and compromise any
such claims for indemnification made by or against, and other disputes with,
the Buyer pursuant to this Agreement or any of the agreements or transactions
contemplated hereby, (ii) to engage and employ agents and representatives
(including accountants, legal counsel and other professionals) and to incur
such other expenses as he shall deem necessary or prudent in connection with
the administration of the foregoing, (iii) to provide for all expenses
incurred in connection with the administration of the foregoing to be paid by
directing the Disbursing Agent to reimburse
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the Armour Shareholder Representative for such expenses, (iv) to disburse to
the Armour Shareholders all indemnification payments received from the Buyer
under Section 8.02, (v) to accept and receive notices to the Armour
Shareholders pursuant to this Agreement, and (vi) to take all other actions
and exercise all other rights which the Armour Shareholder Representative (in
his sole discretion) considers necessary or appropriate in connection with
this Agreement. Each of the Armour Shareholders agrees that such agency and
proxy are coupled with an interest, and are therefore irrevocable without the
consent of the Armour Shareholder Representative and shall survive the death,
incapacity, bankruptcy, dissolution or liquidation of any Armour Shareholder.
All decisions and acts by the Armour Shareholder Representative shall be
binding upon all of the Armour Shareholders, and no Armour Shareholder shall
have the right to object, dissent, protest or otherwise contest the same.
7.03 Resignation. In the event that the Armour Shareholder
Representative shall die, become incapacitated, resign or otherwise fail to
act on behalf of the Armour Shareholders for any reason, the Armour
Shareholder Representative shall be Xxxxx X. Xxxxxx or, in the event of a
similar situation involving Xxxxx X. Xxxxxx, such other person as shall be
selected by a majority of the persons serving as directors of Armour
immediately prior to the Closing, and such substituted representative shall
be deemed to be the Armour Shareholder Representative for all purposes of
this Agreement. Notwithstanding anything to the contrary herein contained,
the Armour Shareholder Representative shall at all times be the same person
who serves as the Shareholder Representative (as defined in Section 8.01 of
the Merger Agreement).
7.04 Reliance by Third Parties on the Armour Shareholder
Representative's Authority. The Armour Shareholder Representative is
authorized to act on the Armour Shareholders' behalf notwithstanding any
dispute or disagreement among the Armour Shareholders and the other parties
hereto shall be entitled to rely on any and all action taken by the Armour
Shareholder Representative without any liability to, or obligation to inquire
of, any of the Armour Shareholders even if such party shall be aware of any
actual or potential dispute or disagreement among the Armour Shareholders.
Each of the other parties hereto and the Disbursing Agent is expressly
authorized to rely on the genuineness of the signature of the Armour
Shareholder Representative and, upon receipt of any writing which reasonably
appears to have been signed by the Armour Shareholder Representative, the
other parties hereto and the Disbursing Agent may act upon the same without
any further duty of inquiry as to the genuineness of the writing.
7.05 Exculpation and Indemnification. Neither the Armour
Shareholder Representative nor any agent employed by him shall be liable to
any Armour Shareholder relating to the performance of his duties under this
Agreement for any errors in judgment, negligence, oversight, breach of duty
or otherwise except to the extent it is finally determined in a court of
competent jurisdiction by clear and convincing evidence that the actions
taken or not taken by the Armour Shareholder Representative constituted fraud
or were taken or not taken in bad faith. The Armour Shareholder
Representative shall be indemnified and held
-15-
harmless by the Armour Shareholders against all Damages (as defined in
Section 8.02) paid or incurred in connection with any action, suit,
proceeding or claim to which the Armour Shareholder Representative is made a
party by reason of the fact that he was acting as the Armour Shareholder
Representative pursuant to this Agreement; provided, however, that the Armour
Shareholder Representative shall not be entitled to indemnification hereunder
to the extent it is finally determined in a court of competent jurisdiction
by clear and convincing evidence that the actions taken or not taken by the
Armour Shareholder Representative constituted fraud or were taken or not
taken in bad faith; and provided further, however, that the Armour
Shareholder Representative shall have recourse only against the unpaid Armour
Escrow Amount (fully subordinated in right of payment and otherwise to the
Buyer's claims thereto, whether or not then existing or known), with respect
to such Damages as provided in the next two sentences of this Section 7.05.
Any amount owing to the Armour Shareholder Representative from the Armour
Shareholders pursuant to this Section 7.05 shall be reduced on a pro rata
basis from the next succeeding distribution(s) of the Armour Escrow Amount by
the Disbursing Agent to the holders of Armour Common Stock, and shall be
payable solely from such source. The Armour Shareholder Representative shall
be protected in acting upon any notice, statement or certificate believed by
him to be genuine and to have been furnished by the appropriate person and in
acting or refusing to act in good faith or any matter.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.01 Limitations on Survival. Each of the representations and
warranties made by the parties in Article III, in Section 4.03 and in the
certificates delivered pursuant to Sections 5.01(a) and 5.02(a) shall survive
any examination made by or on behalf of any party hereto, the execution and
delivery of this Agreement, the Closing and the consummation of the
transactions contemplated by this Agreement to and until three (3) years
after the Closing Date, whereupon such representations and warranties shall
terminate, provided that no such termination shall occur with respect to any
representation or warranty made in a manner involving fraud or criminal
misrepresentation.
8.02 Indemnification. Subject to the limitations set forth in
this Section 8.02 the parties hereto agree as follows:
(a) Buyer and its successors and assigns shall be indemnified by
the Armour Shareholders, jointly and severally (except as hereinafter
expressly provided), and their successors and assigns against any loss,
claim, liability, cost or expense (including reasonable attorney's fees and
expenses) or other damage of any kind or nature (collectively, "Damages")
incurred by Buyer which is caused by or arises out of (i) any breach of any
representation or warranty of the Armour Shareholders contained in this
Agreement or any related document executed and delivered by the Armour
Shareholders (the "Armour Closing
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Documents"), other than those breaches, if any, of which Buyer has actual
knowledge at the time of Closing, provided, that the indemnification
obligation of each Armour Shareholder with respect to the representations and
warranties of such Armour Shareholder in Sections 3.01(d) and (e) shall be
several and not joint and several, (ii) the breach or other failure to
perform any covenant, agreement or other obligation of the Armour
Shareholders contained in this Agreement or any other Armour Closing
Documents, (iii) any breach of representation or warranty by Xxxxxxx
contained in the Merger Agreement or the Closing Documents (as defined in the
Merger Agreement), other than those breaches, if any, of which Buyer has
actual knowledge at the time of Closing, (iv) the breach or other failure to
perform any covenant, agreement or other obligation of Xxxxxxx contained in
the Merger Agreement or the Closing Documents, (v) the Indemnified
Environmental Liabilities (as defined in Section 9.02(a) of the Merger
Agreement), (vi) the Indemnified Litigation and Claims (as defined in Section
9.02(a) of the Merger Agreement), and (vii) the Indemnified Title Costs and
Expenses (as defined in Section 4.12 of the Merger Agreement); provided,
however, that in connection with any claim for indemnification for Damages
under this Section 8.02 (except in a case involving fraud or criminal
misrepresentation), (A) after the Closing Buyer shall have recourse only
against the Armour Escrow Amount with respect to Damages under clauses (iii)
through (vii), inclusive, of this Section 8.02(a), (B) indemnification owing
from any Armour Shareholder who is or was an officer or director of Armour
shall not be deemed for any purpose to be a claim covered by indemnification
owing to such Armour Shareholder by Armour under any law, by-law or agreement
whatsoever, (C) Buyer's rights to indemnification under clause (iii) and (iv)
of this Section 8.02 shall not arise until Damages, in the aggregate, under
clauses (iii) and (iv) of this Section 8.02(a) and clauses (i) and (ii) of
Section 9.02(a) of the Merger Agreement exceed $750,000 whereupon
indemnification shall arise with respect to the full amount of such Damages
in excess of $750,000, and (D) in the case of indemnification for Indemnified
Environmental Liabilities and Indemnified Litigation and Claims, the
indemnification under this Agreement and the Merger Agreement shall be
limited in the aggregate to 50% of any Damages. Any amount owing to Buyer
from the Armour Shareholders pursuant to clause (iii) and (iv) of this
Section 8.02(a) shall be deducted from the next distribution(s) of the Armour
Escrow Amount as provided in the Disbursing Agreement. Notwithstanding the
foregoing, Buyer shall not be indemnified for any Damages for which it
receives proceeds under any insurance policy maintained by Xxxxxxx, Buyer or
Buyer Subsidiary, including without limitation the title insurance policies
obtained by Buyer pursuant to Section 5.01(k) of the Merger Agreement, and no
Damages for which such proceds are received shall be included in calculating
the $750,000 threshold for indemnification set forth in this Section 8.02(a).
(b) The Armour Shareholders and their successors and assigns
severally but solely through the Armour Shareholder Representative shall be
indemnified by the Buyer against Damages incurred by them which are caused by
or arise out of (i) any breach of any representation or warranty of the Buyer
contained in this Agreement, other than those breaches, if any, of which the
Armour Shareholders have actual knowledge at the time of Closing and (ii) the
breach or other failure to perform any covenant or agreement or other
-17-
obligation of the Buyer contained in this Agreement; provided, however, that
after the Closing indemnification hereunder shall be limited in amount to
each Armour Shareholder to the portion of the Purchase Price remaining unpaid
and owing to such Armour Shareholder.
(c) Whenever any claims shall arise for indemnification
hereunder, (i) the party entitled to indemnification (or the Armour
Shareholder Representative in the case of indemnification owing to the Armour
Shareholders) (the "Indemnified Party") shall provide written notice to the
party from whom such indemnification is owing (or the Armour Shareholder
Representative in the case of indemnification owing from the Armour
Shareholders) (the "Indemnifying Party") within a reasonable period of
becoming aware of the right to indemnification and, as expeditiously as
possible thereafter, of the facts constituting the basis for such claim and
(ii) the Indemnifying Party and its representatives shall be given access to
all books and records in the possession or control of the Indemnified Party
which the Indemnifying Party reasonably determines to be related to such
claim, provided that any failure of the Indemnified Party to so notify the
Indemnifying Party within any such time period shall not waive the
Indemnified Party's indemnification rights hereunder except to the extent
that the Indemnifying Party has been damaged by such a failure.
(d) If any legal proceedings are instituted or any claim or
demand is asserted by any person in respect of which the Indemnified Party
determines it may seek indemnification pursuant to the provisions of this
Section 8.02, the Indemnified Party shall promptly after such determination
cause written notice of the assertion of any such claim to be made to the
Indemnifying Party. The Indemnifying Party shall have the right, at its
option and expense and upon written notice to the Indemnified Party, to
defend against, negotiate and, with the consent of the Indemnified Party
(which consent shall not be unreasonably withheld) settle any such claim, and
in such case, the Indemnified Party shall have the right to participate in
such defense, negotiation or settlement at his own expense. The Indemnified
Party and the Indemnifying Party agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such legal
proceeding, claim or demand. Upon the payment of any claim for indemnity, the
Indemnifying Party shall be subrogated to all rights and remedies of the
Indemnified Party against any third person. If the Indemnifying Party does
not so elect to defend any such third party claim, legal proceeding or
demand, the Indemnified Party may (but shall have no obligation to) defend
any such third party claim, legal proceeding or demand in such manner as he
may deem appropriate including, but not limited to, settling such claim,
legal proceeding or demand, after giving notice of the same to the
Indemnifying Party, on such terms as the Indemnified Party may deem
appropriate and no action taken by the Indemnified Party in accordance with
such defense and settlement shall relieve the Indemnifying Party of its
indemnification obligations herein provided with respect to any Damages
resulting therefrom.
(e) The parties desire that any indemnification claim against the
Armour Shareholders under clauses (iii) through (vii) of Section 8.02(a) be
coordinated with any indemnification claim against the Shareholders under
Section 9.02(a) of the Merger
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Agreement. Accordingly, notwithstanding anything to the contrary contained in
this Agreement or the Merger Agreement, Buyer and the Armour Shareholders
agree that any claim asserted by Buyer under clauses (iii) through (vii), as
applicable, of Section 8.02(a) of this Agreement shall also constitute a
corresponding claim under Section 9.02(a) of the Merger Agreement, and that
any claim by Buyer under Section 9.02(a) of the Merger Agreement shall also
constitute a corresponding claim under clauses (iii) through (vii) of Section
8.02(a) of this Agreement. The Disbursing Agreement shall provide for any
Damages recoverable in respect of any such claims to be allocated between the
Armour Escrow Amount under this Agreement and the Escrow Amount (as defined
in the Merger Agreement) under the Merger Agreement.
8.03 Amendment and Modification. To the extent permitted by
applicable law, this Agreement may be amended, modified or supplemented only
by written agreement of the parties hereto at any time prior to the Closing
with respect to any of the terms contained herein.
8.04 Alternative Dispute Resolution.
(a) The Armour Shareholders and Buyer recognize that a bona fide
dispute as to certain matters may from time to time arise after the Closing
Date relating to rights or obligations under this Agreement. In such
instance, the Armour Shareholder Representative or Buyer, as the case may be,
may by written notice to the other, have such dispute referred to the Armour
Shareholder Representative and the representative of Buyer designated below
or his successor, for attempted resolution by good faith negotiation within
thirty (30) days after such notice is received. The designated representative
of Buyer is Xxxxx X. Xxxxxx. Any settlement reached by the Armour Shareholder
Representative and the representative of Buyer under this Section 8.04(a)
shall not be binding until reduced to writing and signed by them. When
reduced to writing, such settlement agreement shall supersede all other
agreements, written or oral, to the extent such agreements specifically
pertain to the matters so settled. If the Armour Shareholder Representative
and the representative of Buyer are unable to resolve such dispute within
such 30-day period, either may demand arbitration pursuant to Section 8.04(b).
(b) Except as provided below, any controversy or claim arising
out of or relating to this Agreement shall be settled by arbitration in
Chicago, Illinois, at a time and location designated by the arbitrator, but
not exceeding ninety (90) days after a demand for arbitration has been made.
Arbitration shall be conducted by the American Arbitration Association in
accordance with its Rules of Commercial Arbitration, and judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator shall be a retired state or federal
judge experienced in business litigation or any attorney who has practiced
business litigation for at least ten (10) years. Arbitration will be
conducted pursuant to the provisions of this Agreement and the Commercial
Arbitration Rules of the American Arbitration Association. Limited civil
discovery shall be permitted for the
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production of documents and taking of depositions. Unresolved discovery
disputes may be brought to the attention of, and may be decided by, the
arbitrator. The arbitrator shall assess the costs and expenses of the
arbitration against the parties in such proportion as may be fair and
equitable. Nothing herein contained shall bar either party from seeking
equitable remedies in a court of appropriate jurisdiction.
8.05 Insurance Coverage. Buyer agrees from and after the Closing
to file all necessary claims under, and to exercise reasonable efforts to
collect the proceeds of any insurance maintained by Xxxxxxx, Buyer or Buyer
Subsidiary, including without limitation the title insurance policies
obtained by Buyer pursuant to Section 5.01(k) of the Merger Agreement, with
respect to any Damages within the scope of the indemnification provisions of
Section 8.02(a).
8.06 Filing of Tax Returns. Buyer agrees to cause Armour to file
all Tax Returns for any period including the Closing Date, or ending on or
before the Closing Date, on a basis consistent with prior filings by Armour,
unless the relevant taxing authority will not accept a Tax Return filed on
that basis.
8.07 Waiver of Compliance; Consents. Any failure of Buyer, on the
one hand, or the Armour Shareholders, on the other hand, to comply with any
obligation, covenant, agreement or condition herein (except the conditions in
Sections 5.01(b), (c) and (d) and 5.02(b), (c) and (d) of this Agreement) may
be waived in writing by the Armour Shareholders or by Buyer, respectively,
but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure. Whenever
this Agreement requires or permits consent by or on behalf of any party
hereto, such consent shall be given in writing in a manner consistent with
the requirements for a waiver of compliance as set forth in this Section 8.07.
8.08 Expenses. All expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated hereby shall
be paid by the party incurring such expenses.
8.09 Press Releases and Public Announcements. No party to this
Agreement shall issue any press release or make any public announcement
relating to the subject matter of this Agreement without prior written
approval of the other parties; provided, however, that each of the Armour
Shareholders and Buyer may make any public disclosure such person believes in
good faith to be required by applicable law or, in the case of Buyer, the
disclosure documents prepared in connection with the offering of its debt
securities (in which case the disclosing party will advise the other parties
to this Agreement prior to making the disclosure).
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8.10 Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agree to use all reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including without limitation the negotiation, execution and
delivery of the Disbursing Agreement. In case at any time after the Closing
Date any further action is necessary or desirable to carry out the purposes
of this Agreement, the proper officers and directors of Buyer and each Armour
Shareholder shall take all such necessary action.
8.11 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or
mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Buyer:
Xxxxx Xxxx Pet Food Company, Inc.
c/o Dartford Partnership
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxx
with a copy to:
Xxxxxxxx & O'Neil LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxx X. Xxxxxxxxxxx
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(b) If to any Armour Shareholder, in care of:
Xxxxxxx X. Xxxxxx
c/o Hubbard Milling Company
000 Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
with a copy to:
Faegre & Xxxxxx LLP
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
8.12 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and
permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other parties, nor is this Agreement
intended to confer upon any other person except the parties hereto any rights
or remedies hereunder. Notwithstanding the foregoing, Buyer may assign its
rights to indemnification hereunder to a lender or lenders providing
financing for the transaction contemplated hereby.
8.13 Governing Law. The Agreement shall be governed by the laws
of the state of Minnesota.
8.14 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.15 Headings; Internal References. The Article and Section
headings contained in this Agreement are solely for the purpose of reference,
and are not part of the agreement of the parties and shall not affect in any
way the meaning or interpretation of this Agreement. Any references in this
Agreement to an article, section, paragraph, clause, exhibit or schedule
shall be deemed to be a reference to the article, section, paragraph, clause,
exhibit or schedule contained in this Agreement unless expressly stated
otherwise.
8.16 Entire Agreement. This Agreement, including the exhibits
hereto and the documents and instruments referred to herein, embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other
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than those expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
8.17 Severability. If any term, provision, covenant, agreement or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants, agreements and restrictions of this Agreement will continue in
full force and effect and will in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto do execute and deliver
this Agreement as of the date first above written.
BUYER: XXXXX XXXX PET FOOD COMPANY, INC
By: /s/ Xxx Xxxxx
----------------------------
Its:
-----------------------
ARMOUR SHAREHOLDERS: /s/ Xxxxx X. Xxxxxx
----------------------------
Xxxxx X. Xxxxxx
/s/ Xxx X. Xxxx
----------------------------
Xxx X. Xxxx
/s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxxx
----------------------------
Xxxxx X. Xxxxxxxxx
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XXXXXXX X. XXXXXX AND FIRST BANK
NATIONAL ASSOCIATION AS
TRUSTEES OF THE XXXXXXXXX XXXX
XXXXXX TRUST NO.2
/s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
- and -
First Bank National Association,
By: /s/ Xxx X. Xxxxxxx
----------------------------
Vice President
Trustees
XXXXXXX X. XXXXXX AND FIRST BANK
NATIONAL ASSOCIATION AS
TRUSTEES OF THE XXXXX X. XXXXXX
FAMILY TRUST CREATED UNDER THE
XXXXX X. XXXXXX TRUST AGREEMENT
/s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
- and -
First Bank National Association,
By: /s/ Xxx X. Xxxxxxx
----------------------------
Vice President
Trustees
-24-
EXHIBIT A
Ownership of Armour Capital Stock
9% Cumulative Voting Preferred Stock
($10 par value, 25,000 authorized shares)
Shareholder No. of Shares Owned % of Outstanding Shares
----------- ------------------- -----------------------
Xxxxxxxxx Xxxx Xxxxxx Trust 25,000 100%
No.2, created under
agreement of Xxxxx X.
Xxxxxx dated August 26,
1982, as amended*
Common Stock
($1 par value, 10,000 authorized shares)
Shareholder No. of Shares Owned % of Outstanding Shares
----------- ------------------- -----------------------
Xxxxx X. Xxxxxx 2,425 24.25%
Xxx Xxxxxx Lamb 2,425 24.25%
Xxxxxxx X. Xxxxxx 2,425 24.25%
Xxxxx Xxxxxx Xxxxxxxxx 2,425 24.25%
Xxxxx X. Xxxxxx Family Trust, 300 3%
created under agreement dated ------------ --------------
August 26, 1982, as amended*
Total 10,000 100%
* Shares are held by Var & Company, acting as nominee.
EXHIBIT B
FORM OF OPINION OF COUNSEL TO ARMOUR SHAREHOLDERS
1. Armour is a corporation validly existing and in good standing
under the laws of the state of Delaware.
2. The authorized capital stock of Armour at the date hereof
consists of 25,000 shares of 9% Cumulative Voting Preferred Stock, $10 par
value, and 10,000 shares of Common Stock, $1 par value, all of which are
currently issued and outstanding and are owned of record, and to such
counsel's knowledge, beneficially by the Armour Shareholders. All of such
issued shares have been duly authorized and validly issued and are fully paid
and nonassessable. To our knowledge, there are no outstanding subscriptions,
options, warrants, calls or other agreements or commitments by which Armour
is bound in respect of the capital stock of Armour, whether issued or
unissued. There are no outstanding securities convertible into or
exchangeable for any such capital stock.
3. Each Armour Shareholder has the legal right, power and
authority to enter into the Agreement and to consummate the transactions
contemplated thereby. Upon execution by such Armour Shareholder, the
Agreement shall constitute the legal, valid and binding obligation of such
Armour Shareholder and shall be enforceable against such Armour Shareholder
in accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a court of law or equity).
4. Neither the execution, delivery or performance by the Armour
Shareholders of the Agreement nor the consummation of any of the transactions
provided for in the Agreement or contemplated thereby, (i) will violate the
Articles of Incorporation or Bylaws or other organizational documents of any
Armour Shareholder that is an entity, (ii) is prohibited by any federal, or
state of Minnesota statute, law, ordinance, regulation or rule, or (iii) to
our knowledge, will violate any contractual obligations of any Armour
Shareholder.
5. No approval, consent, order or authorization of, declaration
by or filing with any federal or state of Minnesota regulatory,
administrative or governmental body or other person is necessary on the party
of any Armour Shareholder in connection with the execution, delivery or
performance by such Armour Shareholder of the Agreement or the consummation
of the transactions contemplated thereby except compliance with the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
6. To such counsel's knowledge, except as set forth in the
Agreement, no litigation, arbitration, administrative proceeding, or
investigation of any kind is pending or threatened against Armour.
EXHIBIT C
FORM OF OPINION OF COUNSEL TO BUYER
1. Buyer is a corporation validly existing and in good
standing under the laws of the state of Delaware.
2. Buyer has the requisite corporate power and corporate
authority to execute, deliver and perform the Agreement and to consummate the
transactions contemplated thereby. The Agreement has been duly executed and
delivered by Buyer and constitutes the legal, valid and binding obligation of
Buyer and is enforceable against Buyer in accordance with its terms, except
to the extent that enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a court of law or equity).
3. Neither the execution, delivery or performance by Buyer of the
Agreement nor the consummation of any of the transactions provided for in the
Agreement or contemplated thereby, (i) will violate the Certificate of
Incorporation or Bylaws of Buyer; or (ii) is prohibited by any federal, or
state of New York statute, law, ordinance, regulation or rule.
4. No approval, consent, order or authorization of, declaration
by or filing with any federal or state of New York regulatory, administrative
or governmental body is necessary on the part of Buyer in connection with the
execution, delivery or performance by Buyer of the Agreement or the
consummation of the transactions contemplated thereby except compliance with
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
5. To such counsel's knowledge, no litigation, arbitration,
administrative proceeding, or investigation of any kind is pending or
threatened against Buyer in connection with this Agreement or the
transactions contemplated thereby.
