MEMBERSHIP INTERESTS PURCHASE AGREEMENT
Exhibit
2.1
This
Membership Interests Purchase Agreement (“Agreement”)
is
made as of November 28, 2008, by Tampa Farm Service, Inc., a Florida corporation
(“Seller”),
TFS
Holdings, Inc., a Florida corporation (“TFS
Holdings”),
and
Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxx and Xxxxxx X. Xxxxx (each, a “Shareholder,”
and
collectively, the “Shareholders”),
and
Cal-Maine Foods, Inc., a Delaware corporation (“Buyer”).
Background
Information
For
many
years, Seller has engaged, directly and through Okeechobee Egg Company, Inc.
(“Okeechobee
Egg”)
and
other Affiliates, in the production, grading, packaging and distribution of
shell eggs and related activities, including the production and milling of
feed
for laying hens and pullets, the distribution of third-party non-egg products
(including meat, dairy and juice) along with its own eggs (“Business”).
In
order to facilitate the sale of the Business, Seller desires to convey all
of
the assets but none of the liabilities of the Business to Tampa Farms, LLC,
a
Florida limited liability company (the “Company”).
Accordingly, Seller desires to sell, and Buyer desires to purchase, all of
the
issued and outstanding membership interests (the “Membership
Interests”)
of the
Company for the consideration and on the terms set forth in this Agreement.
Capitalized terms which are used in this Agreement and not defined shall have
the meaning ascribed to them in Section
11
of this
Agreement. The parties agree as follows:
Operative
Provisions
| Section 1. |
SALE
AND TRANSFER OF MEMBERSHIP INTERESTS;
CLOSING
|
|
1.1
|
MEMBERSHIP
INTERESTS
|
The
background information set forth above is hereby incorporated into the body
of
this Agreement. Subject to the terms and conditions of this Agreement, at the
Closing, Seller will sell and transfer the Membership Interests to Buyer free
and clear of all Encumbrances, and Buyer will purchase the Membership Interests
from Seller.
|
1.2
|
PURCHASE
PRICE
|
The
purchase price (the “Purchase
Price”)
for
the Membership Interests will be $60,672,000, reduced or increased by the
Adjustment Amount,
and
the
parties’ pro rata share of taxes, rent, utilities, and other expenses associated
with the Company which shall be prorated between Buyer and Seller as of the
Inventory Date as described in Section
1.9
below
|
1.3
|
CLOSING
|
The
purchase and sale (the “Closing”)
provided for in this Agreement will take place at the offices of Seller’s
counsel at 0000 Xxxxx Xxxxxxxx Xxx., Xxxxx, XX 00000, at 10:00 a.m. EST on
December 5, 2008 (the “Closing
Date”),
or at
such other time and place as the parties may agree in writing. Subject to the
provisions of Section
9,
failure
to consummate the purchase and sale provided for in this Agreement on the date
and time and at the place determined pursuant to this Section
1.3
will not
result in the termination of this Agreement and will not relieve any party
of
any obligation under this Agreement.
Notwithstanding
the foregoing or anything to the contrary herein, if the Adjustment Amount
causes the Purchase Price, in Buyer’s or Seller’s reasonable opinion, to meet
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act (“HSR
Act”)
reporting thresholds, then the Closing shall be delayed for a reasonable amount
of time to allow for an appropriate filing and clearance under the HSR
Act.
|
1.4
|
CLOSING
OBLIGATIONS
|
At
or
prior to the Closing:
|
(a)
|
Seller
will deliver to Buyer:
|
| (i) |
a
certificate representing the Membership Interests, duly endorsed
(or
accompanied by a duly executed stock power), for transfer to Buyer
free
and clear of all Encumbrances;
|
| (ii) |
a
release in the form of Exhibit
1.4(a)(ii)
executed by Seller, TFS Holdings and each Shareholder (collectively,
“Seller’s
Release”);
|
| (iii) |
a
consulting services agreement (the “Consulting
Agreement”)
executed by Xxxxxxx Xxxxx which shall have a term of two years and
shall
provide for an annual fee of $100,000, payable monthly; and a transition
services agreement between the Seller and the Company pursuant to
which
the Company will provide agreed upon accounting and other administrative
services for the Seller for a defined term (the “Transition
Services Agreement”),
the forms of which are attached hereto as composite Exhibit
1.4(a)(iii);
|
| (iv) |
noncompetition
agreements in the form of Exhibit
1.4(a)(iv),
executed by Seller, TFS Holdings and each Shareholder (collectively,
the
“Noncompetition
Agreements”);
|
| (v) |
a
certificate executed by Seller, TFS Holdings and the Shareholders
representing and warranting to Buyer that each of Seller’s, TFS Holdings’
and the Shareholders’ representations and warranties in this Agreement was
accurate in all respects as of the date of this Agreement and is
accurate
in all respects as of the Closing Date as if made on the Closing
Date
(giving full effect to any supplements to the Disclosure Letter that
were
delivered by Seller to Buyer and accepted by Buyer prior to the Closing
Date in accordance with Section
5.4);
|
| (vi) |
a
lease and option to purchase and sell the Indiantown Property in
the form
of Exhibit
5.12
(the “Indiantown
Lease”)
executed by Seller and the Company;
and
|
| (vii) |
the
Composting Agreement in the form of Exhibit 1.4(a)(vii)
pursuant to which the Company agrees to dispose of the chicken manure
generated at the Indiantown Property for the three-year period following
the Closing Date.
|
|
(b)
|
Buyer
will deliver:
|
| (i) |
To
the Escrow Agent (as defined below) on November 28, 2008, by wire
transfer
$60,672,000; and
|
2
| (ii) |
To
the Seller, a certificate executed by Buyer to the effect that, except
as
otherwise stated in such certificate, each of Buyer’s representations and
warranties in this Agreement was accurate in all respects as of the
date
of this Agreement and is accurate in all respects as of the Closing
Date
as if made on the Closing Date.
|
|
(c)
|
Buyer
and Seller will enter into an escrow agreement in the form of Exhibit 1.4(c)
(the “Escrow
Agreement”)
with SunTrust Banks, Inc. (the “Escrow
Agent”)
which shall provide for the
following:
|
|
(i)
|
The
Escrow Agent shall, on the Closing Date, release $51,972,000 of the
escrowed funds to the Seller, less the Seller’s portion of the prorated
items described in Section 1.9,
by wire transfer to the account specified in Part 1.4(b)(i) of the
Disclosure Letter. The Escrow Agent shall retain $1,000,000 to be
held in
escrow for the benefit of the Buyer as set forth in Section 1.4(c)(iii)
below and if the Buyer is entitled to receive any of the amount prorated
in accordance with Section
1.9
of
this Agreement, then such funds shall be released to the Buyer. The
Escrow
Agent shall also retain $2,000,000 to be held in escrow until Seller
has
conveyed good title to the Indiantown Property, by general warranty
deed,
to the Company, free and clear of all Encumbrances, and $5,700,000
to be
held in escrow until those certain bonds issued by the Xxxxxx County
Industrial Development Board have been fully paid and retired and
the
mortgage(s) on the Indiantown Property and Seller’s Indiantown Property
are released and satisfied in full.
|
|
(ii)
|
The
escrowed funds shall be deposited in an interest bearing account
and the
interest earned thereon shall enure to the benefit of the Buyer until
12:00 midnight on the Inventory Date, and thereafter shall enure
to the
benefit of the Seller.
|
|
(iii)
|
The
Escrow Agent will retain $1,000,000 in escrow as security for the
purchase
price adjustment described in Sections 1.5
and 1.6 below,
the proration of items described in Section 1.9,
as well as Seller’s indemnity obligations in this Agreement, to terminate
on the date 18 months after the Closing Date in accordance with the
terms
of the Escrow Agreement.
|
|
(iv)
|
The
Escrow Agent will retain $2,000,000 in escrow as security for the
Seller’s
obligations under Section 5.12
to
convey good title to the Indiantown Property to the Company in accordance
with the terms of the Escrow
Agreement.
|
|
1.5
|
ADJUSTMENT
AMOUNT
|
The
Adjustment Amount (which may be a positive or negative number) will be equal
to
(a) the actual Inventory and Other Current Assets Amount as of the Inventory
Date determined in accordance with the valuation methodology set forth in
Section 1.8
below,
minus (b) the Target Inventory and Other Current Assets Amount.
3
|
1.6
|
ADJUSTMENT
PROCEDURE
|
(a) On
the
Closing Date, the Seller will prepare a statement of the Company’s actual
Inventory and Other Current Assets Amount as of the Inventory Date (the
“Inventory
and Other Current Assets Amount Statement”)
in
accordance with Section
1.8
hereto.
Seller will deliver the Inventory and Other Current Assets Amount Statement
to
Buyer on the Closing Date. The parties will conduct a mutual physical count
of
the Company’s Inventory on Saturday, November 29, 2008. If within 30 days
following delivery of the Inventory and Other Current Assets Amount Statement,
Buyer has not given Seller notice of its objection to the Inventory and Other
Current Assets Amount Statement (such notice must contain a statement of the
basis of Buyer’s objection), then the Inventory and Other Current Assets Amount
reflected in the Inventory and Other Current Assets Amount Statement will be
used in computing the Adjustment Amount. If Buyer gives such notice of
objection, then the parties shall promptly meet (in any event within five days
of the notice of dispute) and attempt in good faith to resolve such dispute.
All
reasonable requests for information by one party to the other shall be honored.
If the matter has not been resolved within 72 hours of the beginning of Buyer
and Seller’s meeting, issues in dispute will be submitted to the Tampa office of
Ernst & Young, LLP Certified Public Accountants (the “Accountants”),
for
resolution. Accountants shall resolve such dispute as quickly as possible,
but
in any event within five business days of its receipt thereof. If issues in
dispute are submitted to the Accountants for resolution, (i) each party will
furnish to the Accountants such workpapers and other documents and information
relating to the disputed issues as the Accountants may request and are available
to that party (or its independent public accountants), and will be afforded
the
opportunity to present to the Accountants any material relating to the
determination and to discuss the determination with the Accountants; (ii) the
determination by the Accountants, as set forth in a notice delivered to both
parties by the Accountants, will be binding and conclusive on the parties;
and
(iii) Buyer and Seller will each bear 50% of the fees of the Accountants for
such determination.
(b) On
the
tenth business day following the final determination of the Adjustment Amount,
if the Purchase Price is greater than the aggregate of the payments made
pursuant to Sections
1.4(b)(i)
and
1.4(b)(ii),
Buyer
will pay the difference to Seller, and if the Purchase Price is less than such
aggregate amount, the Escrow Agent, to the extent of the Escrowed Funds, and
Seller will pay the difference to Buyer. Seller’s obligation to pay such
difference shall in no way be limited to the then current balance of such
Escrowed Funds. Payments must be made in immediately available funds. Payments
to Seller must be made by wire transfer to the bank account specified in Part
1.4(b)(i) of the Disclosure Letter. Payments to Buyer must be made by the Escrow
Agent and/or Seller, as applicable, by wire transfer to such bank account as
Buyer will specify.
|
1.7
|
ALLOCATION
OF PURCHASE PRICE
|
The
Purchase Price shall be allocated among the assets of the Company as set forth
on Schedule
1.7
to this
Agreement, and the amounts allocated to the assets on such schedule are deemed
to be the fair market value thereof by the parties. The parties acknowledge
and
agree that the allocations set forth on Schedule 1.7
shall
also control Buyer’s tax basis in the Membership Interests. The parties shall
each adopt and utilize the values on Schedule
1.7
for
purposes of filing IRS Form 8594 and all federal, state, and other tax returns
and elections filed by each of them (unless otherwise required by Law), and
each
of them will not voluntarily take any position inconsistent therewith upon
examination of any such tax return, in any audit, proceeding, or otherwise
with
respect to such returns. The parties each agree to provide promptly the other
with any other information required to complete IRS Form 8594 or such other
federal, state and other tax returns and elections that may apply.
|
1.8
|
EVALUATION
OF INVENTORY AND OTHER CURRENT
ASSETS
|
All
packaging materials, egg inventories, grain, finished feed, feed ingredients
and
additives, veterinary supplies/medicines, laying hen flocks, pullet flocks,
and
other inventory set forth below shall be jointly inventoried and valued by
Seller and Buyer on the Inventory
Date.
Such
inventory shall be valued by the parties using the valuation methods set forth
below. Additionally, the Company’s interest in American Egg Products, LLC
(“AEP”)
shall
be valued as of the Inventory Date, and the Company’s prepaid property insurance
shall be valued as of the Inventory Date, each in the manner set forth
below.
4
(a) Flock
Inventories.
The
price for all of the Company’s flocks of commercial layers and pullets shall be
the value of such flocks as shown on the Interim Balance Sheet amortized or
accreted to the Inventory Date, provided,
however,
that
such values are computed in a manner consistent in all respects with past
practices of Seller and the Company and the actual quantity of birds as of
the
Inventory Date is reasonably acceptable to Buyer. The quantity of birds may
be
established by a check of perpetual house records, actual count, or spot check,
as reasonably agreed to by the parties;
(b) Egg
Inventories.
The
price for the Company’s egg inventories shall be the market price thereof as of
the Inventory Date. The quantity of eggs present on the Inventory Date shall
be
established by joint inventory of Seller and Buyer, as reasonably agreed. As
used herein “market
price”
is
agreed to be the actual selling price of Seller adjusted to FOB Company plant,
less one cent per dozen;
(c) Packaging
Materials and Fuel.
The
price for all usable packing materials and fuel shall be the actual net cost
to
Seller which shall reflect any rebates or credits consistent with historical
records and practices, verified to Buyer’s satisfaction. The quantity shall be
determined by physical count/measurement, excluding obsolete inventories or
material that cannot be used in the normal course of business;
(d) Finished
Feed and Feed Ingredients.
All
finished feed and feed ingredients shall be valued at cost of ingredients plus
actual milling and delivery costs, verified to Buyer’s satisfaction. The
quantity of finished feed and feed ingredients shall be determined by Seller
and
Buyer by a physical count (or by using reasonable methods of estimation where
a
physical count is impractical) at mill and farm storage tanks and
bins;
(e) Veterinary
Supplies.
The
price for all current and usable vaccines, medications, and feed supplements
in
inventory as of the Inventory Date shall be Seller’s actual cost, net of all
rebates and credits, verified to Buyer’s satisfaction;
(f) Membership
Interests in AEP.
The
price for all of the Company’s membership interests in AEP shall be the
respective net book value of such interests on the books of AEP as of the
Inventory Date; and
(g) Prepaid
Property Insurance.
Prior
to the Closing Date, Seller shall assign its property insurance policies and
coverage and related boiler and machinery riders to the Company. Such prepaid
property insurance will be prorated as of the Inventory Date. No other insurance
shall be assigned, valued or prorated between the parties.
|
1.9
|
PRORATION
OF CERTAIN ITEMS.
|
(a) Taxes.
Ad
valorem, personal property taxes and any other taxes or assessments relating
to
the Company and its business for the year in which the Closing occurs shall
be
prorated to midnight as of the Inventory Date and Buyer will assume payment
of
all such unpaid taxes and assessments as of the Inventory Date. If the result
of
the prorations results in the Seller owing the Buyer money, then the Seller’s
portion of such taxes and assessments shall be withheld from the cash
portion of the Purchase Price payable under Section
1.2.
Conversely, if the result of the prorations results in the Buyer owing the
Seller money, then the Purchase Price shall be increased and the Buyer shall
pay
such additional amounts to the Seller in accordance with the procedures set
forth in Section
1.4.
If
the
Closing occurs before the tax rate is fixed for the year in which the Closing
occurs, the proration of taxes shall be made using the tax rate and the assessed
valuation of the next preceding tax year; but when the tax rate and the assessed
valuations are fixed for the year of Closing, the proration of taxes between
Seller and Buyer shall be adjusted, if necessary, so that such proration is
based on the actual taxes levied or assessed against the Company for the year
of
the Closing. Such adjustment, if required, shall be made in cash between Buyer
and Seller within 30 days after the tax rate and the assessed valuation have
been fixed by the applicable taxing authorities.
5
(b) Real
Property Tax Rebate.
The
Company receives an annual rebate of a portion of the real estate taxes that
it
pays on its real property located in Hillsborough County Florida (the
“Tax
Rebate”).
The
Tax Rebate for 2008 will be paid by Hillsborough County to the Company after
the
Closing and will be prorated between Buyer and Seller. Buyer shall, upon receipt
of the Rebate, promptly remit to Seller a pro rata portion of the Rebate based
upon the percentage of days that Seller owned the real property in
2008.
(c) Rent
and Utilities.
The
Company’s rent and utilities shall be
prorated to midnight on the Inventory
Date and
Seller’s
portion of such items shall be withheld from the cash
portion of the Purchase Price payable under Section
1.2.
(d) Deposits;
Rebates.
The
Seller shall be entitled to all deposits under the lease agreements and
contracts that it is transferring to the Company and any rebates accrued as
of
the Inventory Date, including, but not limited to the rebate from CSX for the
period ending on the Inventory Date.
|
1.10
|
OPERATION
OF THE BUSINESS AFTER INVENTORY
DATE
|
(a) Profit
and Loss.
The
parties agree that beginning at 12:00 midnight on the Inventory Date, Buyer
shall assume possession of, and shall operate the assets and Business of the
Company. All profit, losses and expenses after 12:00 midnight on the Inventory
Date generated by the Business shall be for the account of Buyer and shall
be
Buyer’s responsibility.
(b) Risk
of Loss; Insurance.
The
risk of loss as to the Company, except as otherwise provided for herein, shall
shift from Seller to Buyer at 12:00 midnight on the Inventory Date. Seller
alone
shall be responsible for maintaining insurance coverage on the Company and
the
operations of the Business until 12:00 midnight on the Inventory Date. Buyer
alone shall be responsible for maintaining insurance coverage on such the
Company and the operations of the Business after 12:00 midnight on the Inventory
Date.
(c) Conditions
Precedent to Closing.
Between
the Inventory Date and the Closing Date, notwithstanding any other provision
of
this Agreement, the Buyer shall be required to obtain the written consent of
the
Seller prior to taking any material action affecting the Business.
|
1.11
|
RETENTION
OF PRE-CLOSING OBLIGATIONS.
|
Neither
the Company nor the Buyer shall assume or be responsible for any liability
or
obligation of Seller or the Company arising prior to the Inventory Date, whether
by operation of law or otherwise, except as expressly set forth in Section
1.9.
Seller
shall retain and continue to be responsible for all its and the Company’s known
and unknown liabilities and obligations, whether arising prior to, on or
subsequent to the Inventory Date and, subject to the procedures and limitations
set forth in Section 10
of this
Agreement, shall indemnify, defend and hold harmless the Buyer and the Company
therefrom. Seller shall pay any and all earned but unpaid salaries, bonuses,
accrued vacation, holidays, sick days, other paid time off, and/or other
benefits arising under any Plans, or otherwise through Seller or the Company
prior to midnight on the Inventory Date, directly to the eligible
employee.
6
| Section 2. |
REPRESENTATIONS
AND WARRANTIES OF SELLER
|
Seller
represents and warrants to Buyer as follows:
|
2.1
|
ORGANIZATION
AND GOOD STANDING
|
(a) The
Company is a limited liability company and Seller and Okeechobee Egg are
corporations, each duly organized, validly existing, and in good standing under
the laws of Florida, with full power and authority to conduct the Business
as it
is now being conducted, to own or use the properties and assets that it purports
to own or use, and to perform all its obligations under this Agreement. The
Company, Okeechobee Egg and Seller are each duly qualified to do business as
a
foreign limited liability company and foreign corporations, respectively, and
are each in good standing under the laws of each state or other jurisdiction
in
which either the ownership or use of the properties owned or used by it, or
the
nature of the activities conducted by it, requires such
qualification.
(b) Seller
has delivered to Buyer copies of its, the Company’s and Okeechobee Egg’s
Organizational Documents, as currently in effect.
|
2.2
|
AUTHORITY;
NO CONFLICT
|
This
Agreement constitutes the legal, valid, and binding obligation of Seller, TFS
Holdings and the Shareholders, enforceable against Seller, TFS Holdings and
the
Shareholders in accordance with its terms. Upon the execution and delivery
by
Seller (and, where applicable, TFS Holdings and/or the Shareholders) of the
Escrow Agreement, Seller’s Release, the Transition Services Agreement and the
Noncompetition Agreements (collectively, the “Seller’s
Closing Documents”),
the
Seller’s Closing Documents will constitute the legal, valid, and binding
obligations of Seller, TFS Holdings and the Shareholders, enforceable against
Seller, TFS Holdings and the Shareholders, in accordance with their respective
terms. Seller, TFS Holdings and the Shareholders have the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and the Seller’s Closing Documents and to perform its, his or their
obligations under this Agreement and the Seller’s Closing Documents. Except as
set forth in Part 2.2 of the Disclosure Letter, neither the execution and
delivery of this Agreement nor the consummation or performance of any of the
Contemplated Transactions will require the consent of any third parties,
conflict with or constitute a violation of any provisions of the Organizational
Documents or any applicable law, regulation or contract to which Seller, the
Company or Okeechobee Egg is subject or a party.
|
2.3
|
CAPITALIZATION
|
The
authorized equity securities of the Company consist of 10,000 units of
membership interests, of which 1,000 membership units are issued and outstanding
and constitute the Membership Interests. The authorized equity securities of
Okeechobee Egg consist of 10,000 shares of common stock, of which 1,000 are
issued and outstanding (the “Okeechobee
Egg Stock”)
and
all of which are owned by the Company. Seller is and will be on the Closing
Date
the sole record and beneficial owner and holder of the Membership Interests
and
the Okeechobee Egg Stock, free and clear of all Encumbrances. All of the
outstanding equity securities of the Company and Okeechobee Egg have been duly
authorized and validly issued and are fully paid and nonassessable. There are
no
Contracts relating to the issuance, sale, or transfer of any equity securities
or other securities of the Company or Okeechobee Egg. None of the outstanding
equity securities or other securities of the Company or Okeechobee Egg was
issued or acquired in violation of the Securities Act or any other Legal
Requirement. Except as set forth in Part 2.3 of the Disclosure Letter, the
Company does not own, nor does it have any Contract to acquire, any equity
securities or other securities of any Person or any direct or indirect equity or
ownership interest in any other business.
7
|
2.4
|
FINANCIAL
STATEMENTS
|
Seller
has delivered to Buyer: (a) an unaudited balance sheet of the Business as
at December 31, 2007 (including the notes thereto, the “Balance
Sheet”),
and
the related unaudited statement of operations for the fiscal year then ended;
and (b) an unaudited balance sheet of the Business at November 1, 2008
(the “Interim
Balance Sheet”)
and
the related unaudited statement of operations for the ten months then ended.
Such financial statements and notes fairly present the financial condition
and
the results of operations, changes in stockholders’ equity, and cash flow of the
Business as at the respective dates of and for the periods referred to in such
financial statements, all in accordance with GAAP, subject, in the case of
interim financial statements, to normal recurring year-end adjustments (the
effect of which will not, individually or in the aggregate, be materially
adverse) and the absence of notes (that, if presented, would not differ
materially from those included in the Balance Sheet); the financial statements
referred to in this Section
2.4
reflect
the consistent application of such accounting principles throughout the periods
involved.
|
2.5
|
TITLE
TO PROPERTIES; ENCUMBRANCES
|
Part 2.5
of the Disclosure Letter contains a complete and accurate list of all real
property and material tangible personal property of the Company (other than
inventory acquired in the ordinary course of business). Seller has delivered
or
made available to Buyer copies of the deeds and other instruments (as recorded)
by which the Company acquired such real property and interests, and copies
of
all title insurance policies, opinions, abstracts, and surveys in the possession
of Seller, the Company, Okeechobee Egg, TFS Holdings or the Shareholders and
relating to such property or interests. The Company owns (with good and
marketable title in the case of real property, subject only to the matters
permitted by the following sentence) all the properties and assets (whether
real, personal, or mixed and whether tangible or intangible) that they purport
to own, including but not limited to all of the properties and assets reflected
in the Balance Sheet and the Interim Balance Sheet (except for assets held
under
capitalized leases disclosed in Part 2.5 of the Disclosure Letter and
personal property sold since the date of the Balance Sheet and the Interim
Balance Sheet, as the case may be, in the Ordinary Course of Business and
consistent with past practices), and all of the properties and assets purchased
or otherwise acquired by Seller or the Company since the date of the Balance
Sheet (except for personal property acquired and sold since the date of the
Balance Sheet in the Ordinary Course of Business and consistent with past
practices). All properties and assets reflected in the Balance Sheet, the
Interim Balance Sheet and Part 2.5 of the Disclosure Letter are free and
clear of all Encumbrances and are not, in the case of real property, subject
to
any rights of way, building use restrictions, exceptions, variances,
reservations, or limitations of any nature except, with respect to all such
properties and assets, (a) liens for current taxes not yet due, and
(b) with respect to real property, those matters set forth in the
Commitment, and zoning laws and other land use restrictions noted in the
Commitment delivered to and accepted by Buyer in accordance with Section 7.8
of this
Agreement. All buildings, plants, and structures owned by the Company lie wholly
within the boundaries of the real property owned by the Company and do not
encroach upon the property of any other Person.
|
2.6
|
CONDITION
AND SUFFICIENCY OF ASSETS
|
The
buildings, plants, structures, equipment and other property of the Company
are
structurally sound, in good operating condition and repair, and are adequate
for
the uses to which they are being put, and none of such buildings, plants,
structures, or equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that would be expected of buildings,
plants, structures and equipment of the age of the Company’s property, as
applicable. The building, plants, structures, equipment and other property
of
the Company are sufficient for the continued conduct of the Business after
the
Closing in substantially the same manner as conducted prior to the
Closing.
8
|
2.7
|
ACCOUNTS
RECEIVABLE
|
All
accounts receivable of the Company shall be assigned to Seller prior to the
Closing Date.
|
2.8
|
INVENTORY
|
Except
as
otherwise set forth in Part 2.8 of the Disclosure Letter: (a) all inventory
of
the Company reflected in the Interim Balance Sheet, consists of a quality and
quantity usable and salable in the Ordinary Course of Business; (b) all
inventories (other than laying hens and egg inventories) have been priced at
cost on a first in, first out basis; (c) all laying hen inventory have been
priced at cost, less depreciation, on a first in, first out basis; and (d)
all
egg inventories have been priced at market on a first in, first out basis.
The
quantities of each item of inventory (whether raw materials, work-in-process,
or
finished goods) are not excessive, but are reasonable in the present
circumstances of the Company.
|
2.9
|
TAXES
|
(a) Seller
and the Company have filed or caused to be filed on a timely basis all Tax
Returns that are or were required to be filed by or with respect to either
of
them, either separately or as a member of a group of business entities, pursuant
to applicable Legal Requirements. Part 2.9 of the Disclosure Letter
contains a complete and accurate list of, all such Tax Returns filed since
December 31, 2005. Seller and the Company have paid, or made provision for
the payment of, all Taxes shown on such Tax Returns, except such Taxes, if
any,
as are listed in Part 2.9 of the Disclosure Letter and are being contested
in good faith and as to which adequate reserves (determined in accordance with
GAAP) have been provided in the Balance Sheet and the Interim Balance
Sheet.
(b) Part
2.9
of the Disclosure Letter contains a complete and accurate list of all audits
of
any federal or state Tax Return filed by or on behalf of Seller or the Company
for any taxable year ending on or after December 31, 2004, including a
reasonably detailed description of the nature and outcome of each audit. All
deficiencies proposed as a result of such audits have been paid, reserved
against, settled, or, as described in Part 2.9 of the Disclosure Letter,
are being contested in good faith by appropriate proceedings. Part 2.9 of
the Disclosure Letter describes all adjustments to the United States federal
income Tax Returns filed by Seller and any company or any group of corporations
including any company for all taxable years since December 31, 2004, and the
resulting deficiencies proposed by the IRS. Except as described in Part 2.9
of the Disclosure Letter, neither Seller nor the Company has given or been
requested to give waivers or extensions (or is or would be subject to a waiver
or extension given by any other Person) of any statute of limitations relating
to the payment of Taxes of Seller, the Company or for which Seller or the
Company may be liable, except waivers or extensions that have expired prior
to
the date of this Agreement.
(c) To
the
Knowledge of Seller, TFS Holdings and the Shareholders the charges, accruals,
and reserves with respect to Taxes on the respective books of Seller and the
Company are adequate (determined in accordance with GAAP) and are at least
equal
to Seller’s or the Company’s liability for Taxes. There exists no proposed
written tax assessment against Seller or the Company except as disclosed in
the
Interim Balance Sheet or in Part 2.9 of the Disclosure Letter. No consent
to the application of Section 341(f)(2) of the IRC has been filed with
respect to any property or assets held, acquired, or to be acquired by Seller
or
the Company. All material Taxes that Seller or the Company is or was required
by
Legal Requirements to withhold or collect have been duly withheld or collected
and, to the extent required, have been paid to the proper Governmental Body
or
other Person.
9
(d) All
Tax
Returns filed by (or that include on a consolidated basis) Seller or the Company
are true, correct, and complete in all material respects. There is no tax
sharing agreement that will require any payment by Seller or the Company after
the date of this Agreement. Except as set forth on Part 2.9(d) of the Disclosure
Letter, neither Seller nor the Company is, or within the five-year period
preceding the Closing Date has been, an “S” corporation.
|
2.10
|
EMPLOYEE
BENEFITS
|
Part
2.10
of the Disclosure Letter sets forth a list of all pension plans, as defined
in
Section 3.2 of the Employment Retirement Income Security Act of 1974, as amended
(“ERISA”)
maintained by Seller or the Company or otherwise covering the employees of
the
Business and all bonus, profit sharing, option, or other types of employee
benefit plans, arrangements with employees for bonuses, incentive compensation,
deferred compensation, vacations, severance pay, retirement insurance, health
insurance, health plans or other employee benefits (the “Plans”)
maintained by Seller or the Company in which the employees of the Business
are
participating. Copies of all Plans described in the preceding sentence have
been
delivered to Buyer. Such Plans shall remain with or be transferred and assigned
to Seller prior to the Closing. Where applicable, the Plans are qualified under
§ 401(a) of the Internal Revenue Code of 1986 as amended (the “Code”)
and
the related Trusts are exempt under § 501(a) of the Code. None of the Plans have
accumulated any funding deficiency (as defined in ERISA and § 412 of the Code)
whether or not waived, and until the Closing Date all contributions to the
Plans
as necessary to satisfy the minimum funding requirements under ERISA have been
and will be made prior to the date they are due. Except as set forth in Part
2.10 of the Disclosure Letter: (a) there has been no violation of the reporting
and disclosure requirements imposed under ERISA or the Code for which any
penalty in a material amount has been or may be imposed with respect to any
Plan; (b) no Plan has any liability of any nature other than for routine
payments to be made in due course to participants and beneficiaries; (c) no
event has occurred which would constitute a prohibited transaction under Section
406 of ERISA; (d) there are no lawsuits or claims which have been or will be,
prior to Closing, asserted or instituted against the assets of any trust under
the Plans or against of the Plans; (e) there are no investigations pending
by
any governmental authority of the assets of any trust under the Plans or against
any of the Plans; and (f) none of the Plans is a “Multi-Employer
Plan”
as
defined in Section 3(37) of ERISA, as amended by the Multi-Employer Pension
Plan
Amendment Act of 1980.
|
2.11
|
LICENSES
AND PERMITS
|
|
(a)
|
Except
as set forth in Part 2.11 of the Disclosure
Letter:
|
| (i) |
Seller
and Company are, and at all times since November 30, 2005, have been,
in
material compliance with each Legal Requirement that is or was applicable
to it or to the conduct or operation of the Business or the ownership
or
use of any of its assets;
|
| (ii) |
to
the Knowledge of Seller, the Shareholders and the Company no event
has
occurred or circumstance exists that (with or without notice or lapse
of
time) (A) may constitute or result in a material violation by Seller
or
the Company of, or a failure on the part of Seller or the Company
to
comply with, any Legal Requirement, or (B) may give rise to any obligation
on the part of Seller or the Company to undertake, or to bear all
or any
portion of the cost of, any remedial action of any nature;
and
|
10
| (iii) |
to
the Knowledge of Seller, the Shareholders and the Company, neither
Seller
nor the Company has received, at any time since November 30, 2005,
any
notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any actual, alleged,
possible, or potential violation of, or failure to comply with, any
Legal
Requirement, or (B) any actual, alleged, possible, or potential obligation
on the part of Seller or the Company to undertake, or to bear all
or any
portion of the cost of, any remedial action of any
nature.
|
(b) Part
2.11
of the Disclosure Letter contains a complete and accurate list of all
governmental licenses, franchises, permits, privileges, immunities, approvals
and other governmental authorizations (the “Governmental
Authorizations”)
that
are held by the Company or that otherwise relates to the business of, or to
any
of the assets owned or used by, the Company. Each Governmental Authorization
listed or required to be listed in Part 2.11 of the Disclosure Letter is in
full
force and effect. Except as set forth in Part 2.11 of the Disclosure
Letter:
| (i) |
Seller
and the Company are, and at all times since November 30, 2005, have
been,
in material compliance with all of the terms and requirements of
each
Governmental Authorization identified or required to be identified
in Part
2.11 of the Disclosure Letter;
|
| (ii) |
To
the Knowledge of Seller, the Shareholders and the Company, no event
has
occurred or circumstance exists that may (with or without notice
or lapse
of time) (A) constitute or result directly or indirectly in a material
violation of or a failure to comply with any term or requirement
of any
Governmental Authorization listed or required to be listed in Part
2.11 of
the Disclosure Letter, or (B) to the Knowledge of Seller, the Shareholders
or the Company, result directly or indirectly in the revocation,
withdrawal, suspension, cancellation, or termination of, or any
modification to, any Governmental Authorization listed or required
to be
listed in Part 2.11 of the Disclosure
Letter;
|
| (iii) |
Neither
Seller nor the Company has received, at any time since November 30,
2005,
any notice or other communication (whether oral or written) from
any
Governmental Body or any other Person regarding (A) any actual, alleged,
possible, or potential violation of or failure to comply with any
term or
requirement of any Governmental Authorization, or (B) any actual,
proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any Governmental
Authorization; and
|
| (iv) |
To
the Knowledge of Seller, the Shareholders and the Company, all
applications required to have been filed for the renewal of the
Governmental Authorizations listed or required to be listed in Part
2.11
of the Disclosure Letter have been duly filed on a timely basis with
the
appropriate Governmental Bodies, and all other filings required to
have
been made with respect to such Governmental Authorizations have been
duly
made on a timely basis with the appropriate Governmental
Bodies.
|
| (v) |
The
Governmental Authorizations listed in Part 2.11 of the Disclosure
Letter
collectively constitute all of the Governmental Authorizations necessary
to permit Seller and the Company to lawfully conduct and operate
their
businesses in the manner they currently conduct and operate such
businesses and to permit Seller and the Company to own and use their
assets in the manner in which they currently own and use such
assets.
|
11
|
2.12
|
LITIGATION
|
Except
as
set forth and described in Part 2.12 of the Disclosure Letter, there is no
instance in which Seller or the Company (or any predecessor) is or, within
the
five years immediately preceding the Closing Date, was (a) subject to any
unsatisfied Order or (b) a party or, to the Knowledge of Seller, the
Shareholders or the Company, threatened to be made a party, to any Proceeding.
Except as set forth and described in Part 2.12 of the Disclosure Letter, to
the
Knowledge of Seller, the Shareholders and the Company, no event has occurred
or
circumstances exist that could give rise to or serve as a basis for the
commencement of any Proceeding. Except as set forth and described in Part 2.12
of the Disclosure Letter, there are no Proceedings pending or, to the Knowledge
of Seller, the Shareholders and the Company, threatened that question the
validity of or materially affect this Agreement, any of the Contemplated
Transactions, Seller or the Company. Seller has delivered to Buyer copies of
all
pleadings, correspondence, and other documents relating to each Proceeding
listed in Part 2.12 of the Disclosure Letter.
|
2.13
|
ABSENCE
OF CERTAIN CHANGES AND EVENTS
|
Except
as
set forth in Part 2.13 of the Disclosure Letter, since the date of the Interim
Balance Sheet, Seller, Okeechobee Egg and the Company have conducted the
Business only in the Ordinary Course of Business and there has not been
any:
(a) change
in
Seller’s, the Company’s or Okeechobee Egg’s authorized or issued equity
interests; grant of any option or right to purchase equity interests of Seller,
the Company or Okeechobee Egg; issuance of any security convertible into such
equity interests; grant of any registration rights; purchase, redemption,
retirement or other acquisition by Seller, the Company or Okeechobee Egg of
any
such equity interests or declaration or payment of any dividend or other
distribution or payment in respect of any such equity interests;
(b) change
in
the assets, liabilities, financial condition or operating results of the
Business or the Company from that reflected in the Interim Balance Sheet, except
in the Ordinary Course of Business;
(c) amendment
to the Organizational Documents of Seller, the Company or Okeechobee
Egg;
(d) payment
or increase by Seller, the Company or Okeechobee Egg of any bonuses, salaries,
or other compensation to any member, manager, director, officer or (except
in
the Ordinary Course of Business and consistent with past practices) employee
or
entry into any employment, severance, or similar Contract with any director,
manager, officer, or employee;
(e) adoption
of, or increase in the payments to or benefits under, any profit sharing, bonus,
deferred compensation, savings, insurance, pension, retirement or other Plan
for
or with any employees of the Company or Okeechobee Egg;
(f) damage
to
or destruction or loss of any asset or property of the Company or Okeechobee
Egg, whether or not covered by insurance, materially and adversely affecting
the
properties, assets, business, financial condition, or prospects of the Company
or Okeechobee Egg;
(g) entry
into, termination of, or receipt of notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit, or similar
agreement, or (ii) any Contract or transaction involving a total remaining
commitment by or to the Company of at least $10,000;
12
(h) sale
(other than sales of inventory in the Ordinary Course of Business), lease,
or
other disposition of any asset or property of the Company or Okeechobee Egg
or
mortgage, pledge, or imposition of any lien or other encumbrance on any asset
or
property of the Company or Okeechobee Egg, including but not limited to the
sale, lease, or other disposition of any of the Intellectual Property
Assets;
(i) cancellation
or waiver of any claims or rights with a value to the Company or Okeechobee
Egg
in excess of $10,000;
(j) agreement,
whether oral or written, by the Company or Okeechobee Egg to do any of the
foregoing;
(k) resignation
or termination of employment of any key employee of Seller, the Company or
Okeechobee Egg; and Seller, the Shareholders and the Company, to the best of
their Knowledge, do not know of the impending resignation or termination of
employment of any such employee; or
(l) receipt
by Seller, the Company or Okeechobee Egg of notice that there has been a loss
of, or material order cancellation by, any major customer of Seller or the
Company.
|
2.14
|
CONTRACTS
|
(a) Part
2.14
of the Disclosure Letter contains a complete and accurate list, and Seller
has
delivered to Buyer true and complete copies, of:
| (i) |
each
Applicable Contract that involves performance of services or delivery
of
goods or materials to the Company or Okeechobee Egg of an amount
or value
in excess of $10,000;
|
| (ii) |
each
lease, rental or occupancy agreement, license, installment and conditional
sale agreement, and other Applicable Contract affecting the ownership
of,
leasing of, title to, use of, or any leasehold or other interest
in, any
real or personal property (except personal property leases and installment
and conditional sales agreements having a value per item or aggregate
payments of less than $10,000 and with terms of less than one
year);
|
| (iii) |
each
licensing agreement or other Applicable Contract with respect to
patents,
trademarks, copyrights, or other intellectual property, including
agreements with current or former employees, consultants, or contractors
regarding the appropriation or the nondisclosure of any of the
Intellectual Property Assets;
|
| (iv) |
each
joint venture, partnership, and other Applicable Contract (however
named)
involving a sharing of profits, losses, costs, or liabilities by
the
Company or Okeechobee Egg with any other
Person;
|
| (v) |
each
Applicable Contract containing covenants that in any way purport
to
restrict the business activity of the Company or any Affiliate of
the
Company or limit the freedom of the Company or any Affiliate of the
Company to engage in any line of business or to compete with any
Person;
|
| (vi) |
each
Applicable Contract providing for payments to or by any Person based
on
sales, purchases, or profits, other than direct payments for
goods;
|
13
| (vii) |
each
Applicable Contract for capital expenditures in excess of $25,000;
and
|
| (viii) |
each
written warranty, guaranty, and or other similar undertaking with
respect
to contractual performance extended by the
Company.
|
Part
2.14(a) of the Disclosure Letter sets forth reasonably complete details
concerning such Contracts, including but not limited to, the name, date and
parties to the Contracts.
(b) Except
as
set forth in Part 2.14(b) of the Disclosure Letter, other than any being
assigned to the Company by Seller immediately prior to the date of this
Agreement, Seller (and no Related Person of Seller) does not have any rights
under, and Seller does not have any obligation or liability under, any Contract
that relates to the business of, or any of the assets owned or used by, the
Company or Okeechobee Egg.
(c) Except
as
set forth in Part 2.14(c) of the Disclosure Letter, each Contract identified
or
required to be identified in Part 2.14(a) of the Disclosure Letter is in full
force and effect and is valid and enforceable in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights generally
and general principles of equity (regardless of whether considered in a
proceeding in equity or at law).
(d) Except
as
set forth in Part 2.14(d) of the Disclosure Letter:
| (i) |
to
the Knowledge of Seller, the Shareholders and the Company, no event
has
occurred or circumstance exists that (with or without notice or lapse
of
time) may contravene, conflict with, or result in a material violation
or
material breach of, or give the Company or other Person the right
to
declare a default or exercise any remedy under, or to accelerate
the
maturity or performance of, or to cancel, terminate, or modify, any
Applicable Contract; and
|
| (ii) |
to
the Knowledge of Seller, the Shareholders and the Company, neither
Seller
nor the Company has given to or received from any other Person, at
any
time since November 30, 2005, any notice or other communication (whether
oral or written) regarding any actual, alleged, possible, or potential
material violation or material breach of, or default under, any Applicable
Contract.
|
(e) Except
as
set forth in Part 2.14(e) of the Disclosure Letter, there are no renegotiations
of, attempts to renegotiate, or outstanding rights to renegotiate any material
amounts paid or payable to the Company under current or completed Contracts
with
any Person and no such Person has made written demand for such
renegotiation.
(f) The
Contracts relating to the sale, design, marketing, production or provision
of
products or services by the Company have been entered into in the Ordinary
Course of Business and have been entered into without the commission of any
act
alone or in concert with any other Person, or any consideration having been
paid
or promised, that is or would be in violation of any Legal
Requirement.
14
|
2.15
|
ENVIRONMENTAL
MATTERS
|
Except
as
set forth in Part 2.15 of the Disclosure Letter:
(a) Seller,
the Company and Okeechobee Egg are, and at all times have been, in compliance
with, and have not been and are not in violation of or liable under, any
Environmental Law. Neither Seller, the Shareholders, the Company nor Okeechobee
Egg has any basis to expect, nor has any of them or any other Person for whose
conduct they are or may be held to be responsible received, any actual or,
to
the Knowledge of Seller, the Shareholders or the Company, Threatened order,
notice, or other communication from (i) any Governmental Body, or (ii) the
current or prior owner or operator of any Facilities, of any actual or potential
violation or failure to comply with any Environmental Law, or of any actual
or,
to the Knowledge of Seller, the Shareholders and the Company, Threatened
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets (whether real, personal, or mixed) in which Seller or the Company
has
had an interest, or with respect to any property or Facility at or to which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used, or processed by Seller, the Company, or any other Person for
whose conduct they are or may be held responsible, or from which Hazardous
Materials have been transported, treated, stored, handled, transferred,
disposed, recycled, or received.
(b) There
are
no pending or, to the Knowledge of Seller, the Shareholders and the Company,
Threatened claims, Encumbrances, or other restrictions of any nature, resulting
from any Environmental, Health, and Safety Liabilities or arising under or
pursuant to any Environmental Law, with respect to or affecting any of the
Facilities or any other properties and assets (whether real, personal, or mixed)
in which Seller or the Company has an interest and which is attributable to
Seller, the Company or any person for whose conduct they are
responsible.
(c) To
the
Knowledge of Seller, the Shareholders or the Company, neither Seller, the
Shareholders nor the Company has any reasonable basis to expect, nor has any
of
them or any other Person for whose conduct they are or may be held responsible,
received, any citation, directive, inquiry, notice, Order, summons, warning,
or
other communication from (x) any Governmental Body, including those
administering or enforcing any Environmental Law, or (y) the owner of any real
property or other facility that relates to Hazardous Activity, Hazardous
Materials, or any alleged, actual, or potential violation or failure to comply
with any Environmental Law, or of any alleged, actual, or potential obligation
to undertake or bear the cost of any Environmental, Health, and Safety
Liabilities with respect to any of the Facilities or any other properties or
assets (whether real, personal, or mixed) in which Seller or the Company had
an
interest, or with respect to any property or facility to which Hazardous
Materials generated, manufactured, refined, transferred, imported, used, or
processed by Seller, the Company or any other Person for whose conduct they
are
responsible, have been transported, treated, stored, handled, transferred,
disposed, recycled, or received.
(d) Neither
Seller nor the Company, or any other Person for whose conduct they are or may
be
held responsible, has any Environmental, Health, and Safety Liabilities with
respect to the Facilities or, to the Knowledge of Seller, the Shareholders
and
the Company, with respect to any other properties and assets (whether real,
personal, or mixed) in which Seller or the Company (or any predecessor), has
or
had an interest.
(e) There
are
no Hazardous Materials present on or in the Environment at the Facilities,
including but not limited to any Hazardous Materials contained in barrels,
above
or underground storage tanks, landfills, land deposits, dumps, equipment
(whether moveable or fixed) or other containers, either temporary or permanent,
and deposited or located in land, water, sumps, or any other part of the
Facilities or such adjoining property, or incorporated into any structure
therein or thereon, except for: (i) Hazardous Materials contained in
consumer products normally utilized for cleaning and maintenance purposes;
or
(ii) other Hazardous Materials which are contained in the raw materials or
equipment utilized by Seller or the Company in the Ordinary Course of Business.
Neither Seller, the Company nor any other Person for whose conduct they are
or
may be held responsible, or, to the Knowledge of Seller, the Shareholders and
the Company, any other Person, has permitted or conducted, or is aware of,
any
Hazardous Activity conducted with respect to the Facilities or any other
properties or assets (whether real, personal, or mixed) in which Seller or
the
Company has or had an interest except in full compliance with all applicable
Environmental Laws.
15
(f) There
has
been no Release or, to the Knowledge of Seller, the Shareholders and the
Company, Threat of Release, of any Hazardous Materials at or from the Facilities
or at any other locations where any Hazardous Materials were generated,
manufactured, refined, transferred, produced, imported, used, or processed
from
or by the Facilities, or from or by any other properties and assets (whether
real, personal, or mixed) in which Seller, the Company or Okeechobee Egg has
or
had an interest, whether by Seller, the Company or any other
Person.
(g) Seller
has delivered to Buyer true and complete copies and results of any reports,
studies, analyses, tests, or monitoring possessed or initiated by Seller or
the
Company pertaining to Hazardous Materials or Hazardous Activities in, on, or
under the Facilities, or concerning compliance by Seller, the Company or any
other Person for whose conduct they are or may be held responsible, with
Environmental Laws.
(h) At
least
seven days prior to Closing, the Company shall deliver to Buyer a phase 1
environmental survey from a company acceptable to Buyer showing the Company’s
real property to be in such environmental condition as to be acceptable to
Buyer. Such survey shall be addressed to Buyer and such other parties as Buyer
may subsequently designate.
|
2.16
|
LABOR
MATTERS
|
(a) Except
as
set forth in Part 2.16(a) of the Disclosure Letter (i) neither Seller, the
Company nor Okeechobee Egg is a party to or bound by any union contract,
collective bargaining agreement, employment contract, independent contractor
agreement, consultation agreement, or other similar type of Contract;
(ii) neither Seller, the Company nor Okeechobee Egg has agreed to recognize
any union or other collective bargaining unit; (iii) no union or collective
bargaining unit has been certified as representing the employees of Seller,
the
Company or Okeechobee Egg; and (iv) no organizational attempt has been made
or, to the Knowledge of Seller, the Shareholders and the Company, threatened
by
or on behalf of any labor union or collective bargaining unit with respect
to
any employees of Seller, the Company or Okeechobee Egg. Neither Seller, the
Company nor Okeechobee Egg has experienced any labor strike, dispute, slowdown,
stoppage, or other material labor difficulty during the three years immediately
preceding the Closing Date. To Seller’s, the Shareholders’ and the Company’s
Knowledge, Seller, the Company and Okeechobee Egg are in compliance with all
federal, state or other applicable laws, domestic or foreign, relating to
employment, equal employment opportunity, nondiscrimination, immigration, wages,
hours, benefits, collective bargaining, the payment of social security and
similar taxes, occupational safety and health, and plant closing. To Seller’s,
the Shareholders’ and the Company’s Knowledge, neither Seller, the Company nor
Okeechobee Egg is liable for the payment of any compensation, damages, taxes,
fines, penalties, or other amounts, however designated, for failure to comply
with any of the foregoing Legal Requirements.
(b) Part
2.16(b) of the Disclosure Letter sets forth a true, correct, and complete list
of all employees of the Company and Okeechobee Egg, the rate of all regular,
bonus, and special compensation payable to each such person in any and all
capacities, and any regular, bonus, or special compensation that will be payable
to each such person in any and all capacities as of the Closing Date other
than
the then current accrual of regular payroll compensation. Except as set forth
in
Part 2.16 of the Disclosure Letter, neither the Company nor Okeechobee Egg
employs any employee who cannot be dismissed immediately, whether currently
or
immediately after the consummation of the Contemplated Transactions, without
notice and without further liability to the Company or Okeechobee Egg, as
applicable, subject to any Legal Requirement relating to employment
discrimination.
16
|
2.17
|
INTELLECTUAL
PROPERTY
|
(a) Intellectual
Property Assets.
The
term “Intellectual
Property Assets”
includes:
| (i) |
the
names “Tampa Farm Service, Inc.,” “4-Grain Organic,” “4-Grain All
Natural,” “4-Grain Cage-Free,” “4-Grain Omega,” “4-Grain Vegetarian,” and
all other fictitious business names, trading names, registered and
unregistered trademarks, service marks, and applications used by
Seller,
the Company or Okeechobee Egg (collectively, “Marks”);
and
|
| (ii) |
all
know-how, trade secrets, confidential information, customer lists,
software, technical information, data, process technology, plans,
drawings, and blue prints (collectively, “Trade
Secrets”);
owned, used, or licensed by Seller, the Company or Okeechobee Egg
as
licensee or licensor.
|
(b) Agreements.
Part
2.17(b) of the Disclosure Letter contains a complete and accurate list and
summary description (including applicable registration or other identification
numbers), including any royalties paid or received by the Company or Okeechobee
Egg, of all Contracts relating to the Intellectual Property Assets to which
the
Company or Okeechobee Egg is a party or by which the Company or Okeechobee
Egg
is bound. There are no outstanding and, to Seller’s, TFS Holdings’ or
Shareholders’ Knowledge, no Threatened disputes or disagreements with respect to
any such agreement.
(c) Trademarks.
| (i) |
Part
2.17(c) of Disclosure Letter contains a complete and accurate list
and
summary description (including applicable registration or other
identification numbers) of all Marks. The Company is the owner of
all
right, title, and interest in and to each of the Marks, free and
clear of
all liens, security interests, charges, encumbrances, equities, and
other
adverse claims.
|
| (ii) |
All
Marks that have been registered with the United States Patent and
Trademark Office or any state trademark register are currently in
compliance with all formal legal requirements (including the timely
post-registration filing of affidavits of use and incontestability
and
renewal applications), are valid and enforceable, and are not subject
to
any maintenance fees or taxes or actions falling due within 90 days
after
the Closing Date.
|
| (iii) |
No
Xxxx has been or is now involved in any opposition, invalidation,
or
cancellation and, to Seller’s, TFS Holdings’ or Shareholders’ Knowledge,
no such action is Threatened with the respect to any of the
Marks.
|
| (iv) |
To
Seller’s, the Shareholders’ and the Company’s Knowledge, there is no
potentially interfering trademark or trademark application of any
third
party.
|
| (v) |
To
Seller’s, the Shareholders’ and the Company’s Knowledge, no Xxxx is
infringed or, to Seller’s, the Shareholders’ or the Company’s Knowledge,
has been challenged or threatened in any way. None of the Marks used
by
the Company infringes or is alleged to infringe any trade name, trademark,
or service xxxx of any third party.
|
| (vi) |
All
products and materials containing a registered Xxxx xxxx the proper
federal registration notice where permitted by
law.
|
17
|
2.18
|
DISCLOSURE
|
(a) No
representation or warranty of Seller, TFS Holdings, the Shareholders or the
Company in this Agreement and no statement in the Disclosure Letter omits to
state a material fact necessary to make the statements herein or therein, in
light of the circumstances in which they were made, not misleading.
(b) No
notice
given pursuant to Section 5.4
will
contain any untrue statement or omit to state a material fact necessary to
make
the statements therein or in this Agreement, in light of the circumstances
in
which they were made, not misleading.
(c) To
the
Knowledge of Seller, the Shareholders and the Company, there is no fact that
has
specific application to Seller, the Company or Okeechobee Egg and that
materially adversely affects or, as far as either Seller, the Shareholders
or
the Company can reasonably foresee, materially threatens, the assets, business,
prospects, financial condition, or results of operations of Seller, the Company
or Okeechobee Egg (on a consolidated basis) that has not been set forth in
this
Agreement or the Disclosure Letter.
|
2.19
|
BROKERS
OR FINDERS
|
Except
as
set forth in Part 2.19 of the Disclosure Letter, Seller has incurred no
obligation or liability, contingent or otherwise, for brokerage or finders’ fees
or agents’ commissions or other similar payment in connection with this
Agreement. Any obligation or liability of Seller disclosed in Part 2.19 of
the Disclosure Letter shall be borne solely by Seller.
|
2.20
|
CONFIDENTIAL
SUMMARY
|
In
connection with the Contemplated Transactions, Seller and Company have furnished
Buyer with a copy of a Confidential Information Memorandum dated August 2008
(the “Memorandum”)
which
was prepared with due care and sets forth a complete and accurate description
of
all historical and projected plans of Seller, the Company or Okeechobee Egg
and
their respective assets, properties and liabilities and certain financial and
other information concerning Seller, the Company and Okeechobee Egg. The
Memorandum does not contain any untrue statement of a material fact, nor does
it
omit to state any material fact necessary to make the statements in light of
the
circumstances under which they were made not misleading. Seller and the Company
have been advised that the information contained in the Memorandum has been
material to Buyer’s decision to purchase the Company.
|
2.21
|
BOOKS
AND RECORDS
|
(a) The
books
of account, minute books, membership record books, and other records of Seller,
the Company and Okeechobee Egg, all of which have been made available to Buyer,
are complete and correct in all material respects;
(b) The
minute and record books of the Company and Okeechobee Egg contain materially
accurate and complete records of all meetings held of, and action taken by,
the
members, the managers, shareholders, directors and any committees, as
applicable, of the Company and Okeechobee Egg, and no meeting of any such
members, managers, shareholders, directors or committee, as applicable, has
been
held for which minutes have not been prepared and are not contained in such
minute books; and
18
(c) At
the
Closing, all of those books and records will be in the possession of the
Company.
|
2.22
|
NO
LIABILITIES
|
The
Company and Okeechobee Egg have no liabilities or obligations of any nature
(whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved against
in the Balance Sheet or the Interim Balance Sheet, current liabilities incurred
in the Ordinary Course of Business since the respective dates thereof, and
matters described in the Disclosure Letter. Notwithstanding the foregoing,
Seller shall cause any and all liabilities, trade accounts payable and any
other
financial obligations of the Company and Okeechobee Egg to be transferred to
and
assumed by Seller prior to the Closing. As of the Closing, the Company and
Okeechobee Egg shall have a liabilities-free balance sheet.
|
2.23
|
NO
MATERIAL ADVERSE CHANGE
|
Since
December 31, 2007, there has not been any material adverse change in the
business, operations, properties, prospects, assets, or condition of Seller
or
the Company, and, to the Knowledge of Seller, the Shareholders and the Company,
no fact or condition exits or is contemplated or threatened which might result
in such a material adverse change, except as otherwise set forth in the
Disclosure Letter.
|
2.24
|
INSURANCE
|
(a) Seller
has delivered to Buyer:
| (i) |
true
and complete copies of all policies of insurance to which Seller,
the
Company or Okeechobee Egg is a party or under which Seller, the Company
or
Okeechobee Egg, or any officer or director of Seller or any manager
of the
Company or Okeechobee Egg, is or has been covered at any time within the
three policy years preceding the date of this
Agreement;
|
| (ii) |
true
and complete copies of all pending applications for policies of insurance;
and
|
| (iii) |
any
written statement by the auditor of the Company’s financial statements
with regard to the adequacy of the reserves for
claims.
|
(b) Part
2.24(b) of the Disclosure Letter describes any self-insurance arrangement by
or
affecting the Company or Okeechobee Egg, including any reserves established
thereunder.
(c) Part
2.24(c) of the Disclosure Letter sets forth, by year, for the current policy
year and each of the three preceding policy years:
| (i) |
a
summary of the loss experience under each
policy;
|
| (ii) |
a
statement describing each claim under an insurance policy for an
amount in
excess of $10,000, which sets
forth:
|
|
(A)
|
the
name of the claimant;
|
|
(B)
|
a
description of the policy by insurer, type of insurance, and period
of
coverage; and
|
|
(C)
|
the
amount and a brief description of the claim;
and
|
19
| (iii) |
a
statement describing the loss experience for all claims that were
self-insured, including the number and aggregate cost of such
claims.
|
(d) Except
as
set forth on Part 2.24(d) of the Disclosure Letter:
| (i) |
All
policies to which Seller, the Company or Okeechobee Egg is a party
or that
provide coverage to either Seller, the Company or Okeechobee Egg,
or any
director/manager or officer of Seller, the Company or Okeechobee
Egg:
|
|
(A)
|
are
valid, outstanding, and
enforceable;
|
|
(B)
|
are
issued by an insurer that, to the Knowledge of Seller and the Company,
is
financially sound and reputable;
|
|
(C)
|
to
the Knowledge of Seller, the Shareholders and the Company, taken
together,
provide adequate insurance coverage for the assets and the operations
of
Seller, the Company and Okeechobee Egg for all risks customarily
insured
against by a Person carrying on the same business as Seller, the
Company
or Okeechobee Egg;
|
|
(D)
|
to
the Knowledge of Seller, the Shareholders and the Company, are sufficient
for compliance with all Contracts to which Seller, the Company or
Okeechobee Egg is a party or by which any of them is
bound;
|
|
(E)
|
to
the Knowledge of Seller, the Shareholders and the Company, will continue
in full force and effect following the consummation of the Contemplated
Transactions; and
|
|
(F)
|
do
not provide for any retrospective premium adjustment or other
experienced-based liability on the part of the Company or Okeechobee
Egg.
|
| (ii) |
Neither
Seller, the Company nor Okeechobee Egg has received (A) any refusal
of
coverage or any notice that a defense will be afforded with reservation
of
rights, or (B) any notice of cancellation or any other indication
that any
insurance policy is no longer in full force or effect or will not
be
renewed or that the issuer of any policy is not willing or able to
perform
its obligations thereunder.
|
| (iii) |
Seller,
the Company and/or Okeechobee Egg have paid all premiums due, and
have
otherwise performed all of their respective obligations, under each
policy
to which the Company and/or Okeechobee Egg is a party or that provides
coverage to Seller, the Company or Okeechobee Egg or any director,
manager
or officer thereof, as applicable.
|
| (iv) |
Seller,
the Company or Okeechobee Egg has given notice to the insurer of
all
claims that may be insured thereby.
|
| Section 3. |
REPRESENTATIONS
AND WARRANTIES OF TFS HOLDINGS
|
TFS
Holdings and the Shareholders, jointly and severally, represent and warrant
to
Buyer as follows:
20
|
3.1
|
ORGANIZATION
AND GOOD STANDING
|
TFS
Holdings is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Florida.
|
3.2
|
AUTHORITY;
NO CONFLICT
|
This
Agreement constitutes the legal, valid, and binding obligation of Seller, TFS
Holdings and the Shareholders enforceable against Seller, TFS Holdings and
the
Shareholders in accordance with its terms. Upon the execution and delivery
by
Seller (and, where applicable, TFS Holdings and/or the Shareholders) of the
Seller’s Closing Documents,
the
Seller’s Closing Documents will constitute the legal, valid, and binding
obligations of Seller, TFS Holdings and the Shareholders, enforceable against
Seller, TFS Holdings and the Shareholders, in accordance with their respective
terms. Seller, TFS Holdings and the Shareholders have the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and the Seller’s Closing Documents and to perform its, his or their
obligations under this Agreement and the Seller’s Closing Documents. Except as
set forth in Part 2.2 of the Disclosure Letter, neither the execution and
delivery of this Agreement nor the consummation or performance of any of the
Contemplated Transactions will require the consent of any third parties,
conflict with or constitute a violation of any provisions of the Organizational
Documents or any applicable law, regulation or contract to which the Company
or
Okeechobee Egg is subject or a party.
|
3.3
|
CERTAIN
PROCEEDINGS
|
There
is
no pending Proceeding that has been commenced against Seller, the Company or
Okeechobee Egg that challenges, or may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the Contemplated
Transactions. Except as otherwise set forth in the Disclosure Letter, to TFS
Holdings’ and the Shareholders’ Knowledge, no such Proceeding has been
Threatened.
|
3.4
|
BROKERS
OR FINDERS
|
Except
as
set forth in Part 2.19 of the Disclosure Letter, neither TFS Holdings, its
officers and agents nor the Shareholders have incurred any obligation or
liability, contingent or otherwise, for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with this Agreement and
will
indemnify and hold Buyer and the Company harmless from any such payment alleged
to be due by or through TFS Holdings or the Shareholders as a result of the
action of TFS Holdings, its officers or agents or the Shareholders.
| Section 4. |
REPRESENTATIONS
AND WARRANTIES OF BUYER
|
Buyer
represents and warrants to Seller as follows:
|
4.1
|
ORGANIZATION
AND GOOD STANDING
|
Buyer
is
a corporation duly organized, validly existing, and in good standing under
the
laws of the State of Delaware.
21
|
4.2
|
AUTHORITY;
NO CONFLICT
|
This
Agreement constitutes the legal, valid, and binding obligation of Buyer
enforceable against Buyer in accordance with its terms. Upon the execution
and
delivery by Buyer of the Escrow Agreement and the Noncompetition Agreements
(collectively, the “Buyer’s
Closing Documents”),
the
Buyer’s Closing Documents will constitute the legal, valid, and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms. Buyer has the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and the Buyer’s
Closing Documents and to perform its obligations under this Agreement and the
Buyer’s Closing Documents. Except as set forth on Schedule 4.2,
neither
the execution and delivery of this Agreement nor the consummation or performance
of any of the Contemplated Transactions will conflict with nor constitute a
violation of any provisions of the Organizational Documents or any applicable
law, regulation or contract to which Buyer is subject or a party.
|
4.3
|
CERTAIN
PROCEEDINGS
|
There
is
no pending Proceeding that has been commenced against Buyer and that challenges,
or may have the effect of materially preventing, delaying, making illegal,
or
otherwise materially interfering with, any of the Contemplated Transactions.
To
Buyer’s Knowledge, no such Proceeding has been Threatened.
|
4.4
|
BROKERS
OR FINDERS
|
Buyer
and
its officers and agents have incurred no obligation or liability, contingent
or
otherwise, for brokerage or finders’ fees or agents’ commissions or other
similar payment in connection with this Agreement and will indemnify and hold
Seller harmless from any such payment alleged to be due by or through Buyer
as a
result of the action of Buyer or its officers or agents.
| Section 5. |
COVENANTS
OF SELLER
|
|
5.1
|
ACCESS
AND INVESTIGATION
|
Between
the date of this Agreement and the Closing Date, Seller will, and will cause
the
Company and its Representatives to, (a) afford Buyer and its Representatives
and
prospective lenders and their Representatives (collectively, “Buyer’s
Advisors”)
full
and free access to Seller’s and the Company’s personnel, properties (including
subsurface testing), contracts, books and records, and other documents and
data,
(b) furnish Buyer and Buyer’s Advisors with copies of all such contracts, books
and records, and other existing documents and data as Buyer may reasonably
request, and (c) furnish Buyer and Buyer’s Advisors with such additional
financial, operating, and other data and information, if any, as Buyer may
reasonably request.
|
5.2
|
OPERATION
OF THE BUSINESSES OF THE COMPANY
|
From
and
after the date of this Agreement and up to and including the Closing, Seller
will, and will cause the Company and Okeechobee Egg to:
(a) deal
with
the assets and properties of the Company and Okeechobee Egg and conduct the
Business only in the Ordinary Course of Business;
(b) use
their
Best Efforts to preserve intact the current Business and organization of the
Company and Okeechobee Egg, keep available the services of the current officers,
employees, and agents of the Company and Okeechobee Egg, and maintain the
relations and good will with suppliers, customers, landlords, creditors,
employees, agents, and others having business relationships with Seller, the
Company or Okeechobee Egg;
(c) comply
with the terms of this Agreement;
22
(d) use
its
Best Efforts to maintain the assets and properties of the Company in good
operating repair and condition and to maintain the Company’s level of inventory
in accordance with past practices;
(e) use
its
Best Efforts to maintain in effect all insurance policies with respect to the
Company and its assets and properties with coverage consistent with present
practices;
(f) confer
with Buyer concerning operational matters of a material nature; and
(g) otherwise
report periodically, or as and when requested by Buyer, to Buyer concerning
the
status of the Business, operations, and finances of the Company.
|
5.3
|
REQUIRED
APPROVALS
|
As
promptly as practicable after the date of this Agreement, Seller will, and
will
cause the Company to, make all filings required by Legal Requirements to be
made
by them in order to consummate the Contemplated Transactions. Between the date
of this Agreement and the Closing Date, Seller will, and will cause the Company
to, (a) cooperate with Buyer with respect to all filings that Buyer elects
to
make or is required by Legal Requirements to make in connection with the
Contemplated Transactions, and (b) cooperate with Buyer in obtaining all
consents identified in Part 4.2 of the Disclosure Letter.
|
5.4
|
NOTIFICATION
|
Between
the date of this Agreement and the Closing Date, Seller will promptly notify
Buyer in writing if Seller, the Company, TFS Holdings or the Shareholders become
aware of any fact or condition that causes or constitutes a Breach of any of
Seller’s, TFS Holdings’ or the Shareholders’ representations and warranties as
of the date of this Agreement, or if Seller, the Company, TFS Holdings or the
Shareholders become aware of the occurrence after the date of this Agreement
of
any fact or condition that would cause or constitute a Breach of any
representation or warranty had such representation or warranty been made as
of
the time of occurrence or discovery of such fact or condition. Should any such
fact or condition require any change in the Disclosure Letter or any material
change in the Balance Sheet or Interim Balance Sheet if the Disclosure Letter,
Balance Sheet or Interim Balance Sheet were dated the date of the occurrence
or
discovery of any such fact or condition, Seller will promptly deliver to Buyer
a
supplement to the Disclosure Letter specifying such change. Buyer may accept
or
reject any such supplement in its sole discretion. During the same period,
Seller will promptly notify Buyer of the occurrence of any Breach of any
covenant of Seller, TFS Holdings or the Shareholders in this Section
5
or of
the occurrence of any event that may make the satisfaction of the conditions
in
Section
7
impossible or unlikely.
|
5.5
|
PAYMENT
OF INDEBTEDNESS AND TRANSFER OF ASSETS BY
AFFILIATES
|
Except
as
expressly provided in this Agreement, Seller will cause, prior to the Closing
(i) all indebtedness owed to the Company or Okeechobee Egg by Seller or any
Affiliate of Seller to be paid in full and (ii) all assets of the Business
to be transferred to the Company.
|
5.6
|
NO
NEGOTIATION
|
Until
such time, if any, as this Agreement is terminated pursuant to Section
9,
Seller,
TFS Holdings and Shareholders will not, and will cause the Company and each
of
their Representatives not to, directly or indirectly solicit, initiate, or
encourage any inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any unsolicited
inquiries or proposals from, any Person (other than Buyer) relating to any
transaction involving the sale of the Business or assets (other than in the
Ordinary Course of Business) of Seller, the Company or Okeechobee Egg, or any
of
the membership interests of the Company, or any merger, consolidation, business
combination, or similar transaction involving the Company or
Seller.
23
|
5.7
|
COMMERCIALLY
REASONABLE EFFORTS
|
Between
the date of this Agreement and the Closing Date, Seller will use its
commercially reasonable efforts to cause the conditions in Sections
7
and
8
to be
satisfied.
|
5.8
|
NAME
CHANGE
|
Promptly
following the Closing, Seller shall amend its Governing Documents and take
all
other actions necessary to change its name to one sufficiently dissimilar to
Seller’s present name, in Buyer’s judgment, to avoid confusion.
|
5.9
|
2007
FYE AUDIT
|
Seller
shall use its Best Efforts to cause its independent public accountants to
complete their audit of Seller’s financial statements for the Business as at,
and for the fiscal year then ended, December 31, 2007, and to deliver such
audited financial statements to Buyer as soon as possible. Upon delivery of
such
financial statements and reports: (a) the term “Balance
Sheet”
shall
refer to the audited consolidated balance sheet of Seller as at December 31,
2007; and (b) the representations and warranties in Section
2.4
shall
also extend to such financial statements and reports.
|
5.10
|
PAYABLES
AND RECEIVABLES
|
Prior
to
the Closing, Seller shall cause any and all trade accounts payable or receivable
of the Company or Okeechobee Egg to be transferred to and assigned to Seller
or
one of its Affiliates other than the Company or Okeechobee Egg so that, as
of
12:00 midnight on the Inventory Date the Company has no trade accounts payable
or receivable.
|
5.11
|
RETENTION
OF ASSETS
|
Seller
owns real property unrelated to the Business in Xxxxxx and Pasco Counties,
Florida as more particularly described in Part 5.11 of the Disclosure Letter
(the “Retained
Parcel”),
free
and clear of all Encumbrances. Seller will not sell, transfer or encumber such
assets, and TFS Holdings will not transfer or encumber the shares of Seller
prior to the date 18 months following the Closing Date without the prior written
consent of Buyer, or in the alternative, escrowing the proceeds of the sale
of
such assets or shares for the benefit of Buyer until the date 18 months
following the Closing Date with an escrow agent and pursuant to an escrow
agreement reasonably satisfactory to Buyer and Seller. Contemporaneously with
the Closing, Seller will record a document describing the covenant in this
Section 5.11
in the
appropriate public land records for each Retained Parcel.
24
|
5.12
|
INDIANTOWN
PROPERTY
|
Seller
owns approximately 97 acres of land that is used in the Business located in
Indiantown, Florida (the “Indiantown
Property”)
as
well as adjacent land (approximately 607 acres) that is not used in Seller’s
Business (the “Seller’s
Indiantown Property”).
Due
to land use restrictions imposed on Seller by Xxxxxx County, Florida, Seller
is
not presently able to transfer the Indiantown Property to the Company without
also transferring the Seller’s Indiantown Property to the Company. Accordingly,
Seller and Buyer have agreed that Seller will lease to the Company the
Indiantown Property and the Seller’s Indiantown Property. Attached hereto as
Exhibit
5.12
is the
Indiantown Lease, between the Seller and the Company, which provides for the
use
of the entire parcel for the term specified in the lease, subject to certain
restrictions regarding the use of the Seller’s Indiantown Property. While the
lease will not require the Company to pay rent to the Seller, the Company must
pay for real and personal property taxes and insurance on the portion of the
parcel that is the Indiantown Property accruing during term of lease. The lease
will terminate and the Company will convey the Indiantown Property to the
Company, free and clear of all Encumbrances, in exchange for $2,000,000 to
be
released by the Escrow Agreement as provided for in Section 1.4(c)
above,
as soon as the plat for the entire Indiantown parcel is approved by the County
Commission of Xxxxxx County, Florida and thereafter filed in the public records
of Xxxxxx County. Upon approval and filing of the Plat, the Seller will convey
to the Company good title to the Indiantown Property, by general warranty deed,
free and clear of all Encumbrances. For purposes of such conveyance all of
the
representations and warranties, covenants and indemnification procedures and
limitations of Seller contained in this Agreement shall apply, and be deemed
to
be made, regarding the conveyance of the Indiantown Property to the Company
and
the Commitment and other deliverables set forth in Section
7.8
of this
Agreement shall be updated or revised to reflect the Indiantown Property
exclusively, as applicable, to the date the Indiantown Property is deeded to
the
Company. Seller will use its Best Efforts to have a plat approved and filed
with
Xxxxxx County, Florida that will permit the Indiantown parcel to be subdivided
so that the Seller will be permitted to convey to the Company the Indiantown
Property as soon as practicable. All costs associated with the platting, leasing
and the transfer of the Indiantown Property to the Company (including
documentary stamp taxes) shall be borne by Seller. For purposes of valuing
the
Indiantown Property for documentary stamp tax purposes, the Seller will use
the
assessed value of the Indiantown Property by the Xxxxxx County Property
Appraiser’s office. The Seller and the Company shall enter into a memorandum of
lease that will be recorded in the public records of Xxxxxx County. Seller
and
the Company will enter into the Composting Agreement and the Seller will
transfer all necessary licenses and permits to the Company in order for the
Company to operate the Business on the Indiantown Property.
|
5.13
|
VEGETATION
REMEDIATION
|
Notwithstanding
anything to the contrary contained in this Agreement, Seller shall, at its
sole
cost and expense, promptly take all actions to remediate the Indiantown Property
of the presence of the nuisance and exotic vegetation identified in Part 5.13
of
the Disclosure Letter as is required to bring the Indiantown Property into
compliance with the South Florida Water Management District Permit No.
43-01392-P. Such compliance will be indicated by an inspection and notice of
compliance provided by the South Florida Water Management District to be
performed and provided as soon as practical after the Closing Date. Such action
shall include, but not be limited to, the investigation of the condition of
the
Indiantown Property, the preparation of any studies, reports, or remedial plans,
and the performance of any cleanup, remediation, containment, operation,
maintenance, monitoring, or restoration work, whether on or off of the
Indiantown Property. Seller shall proceed continuously and diligently with
such
investigatory and remedial actions, provided that in all cases such actions
shall be in accordance with all applicable requirements of governmental
entities. All such actions shall be performed in a good, safe, and workmanlike
manner and shall minimize any impact on the business conducted at the Indiantown
Property. Seller shall pay all costs in connection with such investigatory
and
remedial activities, including but not limited to all power and utility costs,
and any and all taxes or fees that may be applicable to such activities. Seller
shall promptly provide to Buyer copies of all reports that are generated in
connection with the above activities and that are submitted to any governmental
entity. Should Seller fail to perform or observe any of its obligations or
agreements pertaining to such investigatory or remedial actions, then Buyer
shall have the right, but not the duty, without limitation upon any of the
rights of Buyer pursuant to this Agreement, to enter the property personally
or
through its agents, consultants, or contractors and perform the same provided
that it delivers written notice to the Seller of its intention to perform such
acts. Subject to the procedures and limitations set forth in Section 10 of
this
Agreement, Seller agrees to indemnify, defend, and hold Buyer from and against
any and all Damages arising therefrom. Once the Indiantown Property is properly
brought into compliance by Seller and a copy of such notice of compliance
provided to Buyer, Seller shall have no continued obligation to the Buyer
regarding the remediation of such nuisance and exotic vegetation.
25
| Section 6. |
COVENANTS
OF BUYER
|
|
6.1
|
APPROVALS
OF GOVERNMENTAL BODIES
|
As
promptly as practicable after the date of this Agreement, Buyer will, and will
cause each of its Affiliates to, make all filings required by Legal Requirements
to be made by them to consummate the Contemplated Transactions. Between the
date
of this Agreement and the Closing Date, Buyer will, and will cause each of
its
Affiliates to, (a) cooperate with Seller with respect to all filings that Seller
is required by Legal Requirements to make in connection with the Contemplated
Transactions, and (b) cooperate with Seller in obtaining all consents identified
in Part 2.2 of the Disclosure Letter.
|
6.2
|
COMMERCIALLY
REASONABLE EFFORTS
|
Between
the date of this Agreement and the Closing Date, Buyer will use its commercially
reasonable efforts to cause the conditions in Sections
7
and
8
to be
satisfied.
|
6.3
|
LITIGATION
EXPENSES
|
Buyer
will provide a reasonable defense to Seller and its Affiliates if Seller and/or
its Affiliates are named in the antitrust matters described in Section 10.3
or any
subsequent litigation growing out of the same facts and alleged conduct,
provided
such
action results from Seller’s egg operations conducted in the Ordinary Course of
Business prior to the Closing. The Seller and its Affiliates understand that
Xxxxxx & Xxxxxx represents the Buyer and that such firm will also represent
the Seller and its Affiliates. If Xxxxxx & Xxxxxx fails to continue to
represent the Seller and its Affiliates, for whatever reason, the Buyer shall
have the right to chose the law firm that will represent the Seller and its
Affiliates, the Buyer will bear the expenses associated with retaining such
law
firm and the law firm chosen by the Buyer must be reasonably acceptable to
the
Seller and its Affiliates. Seller and its Affiliates shall cooperate fully
in
such defense and shall have the right, at their sole cost and expense, to
participate in or monitor such proceedings with independent counsel. For
avoidance of doubt, Buyer is not assuming any liability of Seller or its
Affiliates for any damages, penalties, fines or other actions that may be
recovered by any governmental agency or private litigant from Seller or its
Affiliates.
| Section 7. |
CONDITIONS
PRECEDENT TO BUYER’S OBLIGATION TO
CLOSE
|
Buyer’s
obligation to purchase the Membership Interests and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction,
at
or prior to the Closing, of each of the following conditions (any of which
may
be waived by Buyer, in whole or in part in writing):
|
7.1
|
ACCURACY
OF REPRESENTATIONS
|
(a) All
of
Seller’s representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), must have been accurate in all material respects as of the date
of this Agreement, and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date, without giving effect to any
supplement to the Disclosure Letter.
26
(b) Each
of
Seller’s representations and warranties in Sections
2.3,
2.4,
2.18, 2.19,
2.22
and
2.23
must
have been accurate in all respects as of the date of this Agreement, and must
be
accurate in all respects as of the Closing Date as if made on the Closing Date,
without giving effect to any supplement to the Disclosure Letter.
(c) Notwithstanding
the foregoing, the impairment of one or more of the Company’s customer
relationships resulting solely from the customers being notified of the
Contemplated Transactions will not be deemed a material adverse change under
Section
2.23
of this
Agreement.
|
7.2
|
SELLER’S
PERFORMANCE
|
(a) All
of
the covenants and obligations that Seller is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), must have been duly performed and complied with in all material
respects.
(b) Each
document required to be delivered pursuant to Section 1.4
must
have been delivered, and each of the other covenants and obligations in
Sections 5.3,
5.5
and
5.7
must
have been performed and complied with in all respects.
|
7.3
|
CONSENTS
|
Each
of
the Consents identified in Part 2.2 of the Disclosure Letter, and each Consent
identified in Schedule 4.2,
must
have been obtained and must be in full force and effect.
|
7.4
|
ADDITIONAL
DOCUMENTS
|
Each
of
the following documents must have been delivered to Buyer:
(a) an
opinion of Xxxx Xxxx, P.A., dated the Closing Date, in the form of Exhibit 7.4(a),
which
opinion shall provide that the transactions described in Section 5.12
are
fully enforceable under and comply in all respects with all Legal Requirements
and are sufficient to convey good title to Buyer upon Xxxxxx County approval
of
plat. Alternatively, in lieu of giving the requested opinion regarding the
Xxxxxx County parcel as described above, the Seller can satisfy that condition
by delivering to the Buyer an opinion of Gunster, Yoakley & Xxxxxxx, P.A. to
the same effect;
(b) the
documents set forth and described in Section 1.4
and such
other documents as Buyer may reasonably request for the purpose of (i) enabling
its counsel to provide the opinion referred to in Section 8.3(a),
(ii)
evidencing the accuracy of any of Seller’s representations and warranties,
(iii) evidencing the performance by Seller of, or the compliance by Seller
with, any covenant or obligation required to be performed or complied with
by
Seller, (iv) evidencing the satisfaction of any condition referred to in
this Section 7,
or
(v) otherwise facilitating the consummation or performance of any of the
Contemplated Transactions; and
(c) a
certificate of the Secretary of Seller and the Company certifying, as complete
and accurate as of the Closing, attached copies of the Governing Documents
of
Seller, certifying and attaching all requisite resolutions or actions of
Seller’s board of directors and shareholders approving the execution and
delivery of this Agreement and the consummation of the Contemplated Transactions
and certifying to the incumbency and signatures of the officers of Seller
executing this Agreement and any other document relating to the Contemplated
Transactions.
27
|
7.5
|
NO
PROCEEDINGS
|
Since
the
date of this Agreement, there must not have been commenced or Threatened against
Buyer, or against any Person affiliated with Buyer, any Proceeding
(a) involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions, or (b) that may have
the effect of preventing, delaying, making illegal, or otherwise interfering
with any of the Contemplated Transactions.
|
7.6
|
NO
CLAIM REGARDING MEMBERSHIP UNIT OWNERSHIP OR SALE
PROCEEDS
|
There
must not have been made or Threatened by any Person any claim asserting that
such Person (a) is the holder or the beneficial owner of, or has the right
to acquire or to obtain beneficial ownership of, any Membership Interests of,
or
any other voting, equity, or ownership interest in, the Company or Okeechobee
Egg, or (b) is entitled to all or any portion of the Purchase
Price.
|
7.7
|
NO
PROHIBITION
|
Neither
the consummation nor the performance of any of the Contemplated Transactions
will, directly or indirectly (with or without notice or lapse of time),
materially contravene, or conflict with, or result in a material violation
of,
or cause Buyer or any Person affiliated with Buyer to suffer any material
adverse consequence under, (a) any applicable Legal Requirement or Order,
or (b) any Legal Requirement or Order that has been published, introduced,
or otherwise formally proposed by or before any Governmental Body.
|
7.8
|
SURVEYS,
CERTIFICATE OF TITLE, AND UCC
SEARCHES.
|
At
least
seven days prior to Closing, Seller shall deliver to Buyer the phase I
environmental survey required under Section
2.15,
an “as
built” land survey of all real property of the Company which shall meet the
requirements of the State of Florida for title insurance, without survey
exceptions, and an attorney’s binder for title insurance (each, a “Commitment”)
for
each parcel of real estate owned by the Company in an amount set by Buyer,
which
surveys and Commitment shall evidence good, merchantable and insurable title.
Seller shall also deliver to Buyer at the time of delivery of the Commitment,
certified results of UCC lien searches on Seller and the Company for the State
of Florida and the County(ies) of Hillsborough, Xxxxxx, Xxxxx and Okeechobee.
The surveys, Commitment(s), deeds and lien searches shall be in form and content
acceptable to Buyer and Seller shall remedy any deficiencies that render the
title unmarketable, at Buyer’s election, at Seller’s sole cost and
expense.
|
7.9
|
DUE
DILIGENCE
|
Buyer
shall be reasonably satisfied with the information regarding the Company which
it obtains pursuant to reviews and inspections under this Agreement and as
may
be otherwise conducted or engaged by Buyer or its representatives in connection
with this Agreement and the Contemplated Transactions. Prior to the Closing,
Buyer shall have been able to verify to its reasonable satisfaction the property
and assets of the Company.
28
|
7.10
|
DELIVERY
OF FYE 2007 AUDITED FINANCIAL STATEMENTS
|
Seller
shall have delivered the audited financial statements and reports referred
to in
Section
5.9
and
(a) such reports shall contain an opinion of the independent public
accounting firm which conducted the audit, and the only qualification to that
opinion shall regard the fact that the auditors did not observe the inventories
of Seller; and (b) except for write-downs of the recorded value of goodwill
or
customer lists, the financial position of Seller and its Subsidiaries as at
and
for the fiscal year ended December 31, 2007, shall be substantially the
same as is reflected in the unaudited financial statements at such date and
for
such period previously delivered to Buyer by Seller. Notwithstanding the
foregoing, if the auditors are unable to deliver the audited financial
statements as of the Closing Date, this condition shall be deemed satisfied
as
long as the auditors deliver to Buyer draft financial statements for the fiscal
year ended December 31, 2007 and the draft audit reflects that the financial
position of Seller and its Subsidiaries’ Business as at and for the fiscal year
ended December 31, 2007, shall be substantially the same as is reflected in
the unaudited financial statements at such date and for such period previously
delivered to Buyer by Seller; provided,
however,
that
such draft financial statements are accompanied by a letter from the Seller
addressed to and representing to Buyer that the Seller, TFS Holdings and the
Shareholders are not aware of any fact, condition, circumstance or occurrence
that would cause a material change in such draft.
| Section 8. |
CONDITIONS
PRECEDENT TO SELLER’S OBLIGATION TO
CLOSE
|
Seller’s
obligation to sell the Membership Interests and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction,
at
or prior to the Closing, of each of the following conditions (any of which
may
be waived by Seller, in whole or in part):
|
8.1
|
ACCURACY
OF REPRESENTATIONS
|
All
of
Buyer’s representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), must have been accurate in all material respects as of the date
of this Agreement and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date.
|
8.2
|
BUYER’S
PERFORMANCE
|
(a) All
of
the covenants and obligations that Buyer is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), must have been performed and complied with in all material
respects.
(b) Buyer
must have delivered each of the documents required to be delivered by Buyer
pursuant to Section
1.4
and must
have made the cash payments required to be made by Buyer pursuant to
Sections
1.4(b)(i)
and
1.4(b)(ii).
|
8.3
|
ADDITIONAL
DOCUMENTS
|
Buyer
must have caused the following documents to be delivered to Seller:
(a) an
opinion of YoungWilliams P.A., dated the Closing Date, in the form of
Exhibit 8.4(a), which opinion shall provide that as long as the total
Purchase Price computed for the purpose of the HSR Act does not meet or exceed
$63,100,000, the Company, Seller, TFS Holdings and the Shareholders had no
obligation or requirement to file a pre merger notification regarding this
Agreement or the Contemplated Transactions pursuant to the HSR Act;
and
(b) such
other documents as Seller may reasonably request for the purpose of
(i) enabling its counsel to provide the opinion referred to in Section 7.4(a),
(ii) evidencing the accuracy of any representation or warranty of Buyer,
(iii) evidencing the performance by Buyer of, or the compliance by Buyer
with, any covenant or obligation required to be performed or complied with
by
Buyer, (ii) evidencing the satisfaction of any condition referred to in
this Section 8,
or
(v) otherwise facilitating the consummation of any of the Contemplated
Transactions.
29
|
8.4
|
NO
INJUNCTION
|
There
must not be in effect any Legal Requirement or any injunction or other Order
that (a) prohibits the sale of the Membership Interests by Seller to Buyer,
and (b) has been adopted or issued, or has otherwise become effective,
since the date of this Agreement.
| Section 9. |
TERMINATION
|
|
9.1
|
TERMINATION
EVENTS
|
This
Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by
either
Buyer or Seller if a material Breach of any provision of this Agreement has
been
committed by the other party and such Breach has not been waived;
(b) (i)
by
Buyer if any of the conditions in Section
7
have not
been satisfied as of the Closing Date or if satisfaction of such a condition
is
or becomes impossible (other than through the failure of Buyer to comply with
its obligations under this Agreement) and Buyer has not waived such condition
in
writing on or before the Closing Date; or (ii) by Seller, if any of the
conditions in Section
8
have not
been satisfied as of the Closing Date or if satisfaction of such a condition
is
or becomes impossible (other than through the failure of Seller to comply with
its obligations under this Agreement) and Seller has not waived such condition
on or before the Closing Date;
(c) by
mutual
consent of Buyer and Seller; or
(d) by
either
Buyer or Seller if the Closing has not occurred (other than through the failure
of any party seeking to terminate this Agreement to comply fully with its
obligations under this Agreement) on or before December 31, 2008, or such later
date as the parties may agree upon.
|
9.2
|
EFFECT
OF TERMINATION
|
Each
party’s right of termination under Section
9.1
is in
addition to any other rights it may have under this Agreement or otherwise,
and
the exercise of a right of termination will not be an election of remedies.
If
this Agreement is terminated pursuant to Section 9.1,
all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections
12.1
and
12.3
will
survive; provided, however, that if this Agreement is terminated by a party
because of the Breach of the Agreement by the other party or because one or
more
of the conditions to the terminating party’s obligations under this Agreement is
not satisfied as a result of the other party’s failure to comply with its
obligations under this Agreement, the terminating party’s right to pursue all
legal remedies will survive such termination unimpaired.
| Section 10. |
INDEMNIFICATION;
REMEDIES
|
|
10.1
|
SURVIVAL;
RIGHT TO INDEMNIFICATION NOT AFFECTED BY
KNOWLEDGE
|
All
representations, warranties, covenants, and obligations in this Agreement,
the
Disclosure Letter, the supplements to the Disclosure Letter, the certificate
delivered pursuant to Section
1.4(a)(v),
and any
other certificate or document delivered pursuant to this Agreement will survive
the Closing and shall in no way be affected by any investigation of the subject
matter thereof by or on behalf of Seller, the Company or Buyer.
30
|
10.2
|
INDEMNIFICATION
AND PAYMENT OF DAMAGES BY SELLER
|
Seller
shall indemnify and hold harmless Buyer, the Company, Okeechobee Egg and their
respective Representatives, stockholders, controlling persons, and Affiliates
(collectively, the “Indemnified
Persons”)
for,
and shall pay to the Indemnified Persons the amount of, any loss, liability,
claim, damage, expense (including costs of investigation and defense and
reasonable attorneys’ fees) or diminution of value, whether or not involving a
third-party claim (collectively, “Damages”),
arising, directly or indirectly, from or in connection with:
(a) any
Breach of any representation or warranty made by Seller, the Company, TFS
Holdings or any Shareholder in this Agreement, the Disclosure Letter, the
supplements to the Disclosure Letter, or any other certificate or document
delivered pursuant to this Agreement;
(b) any
Breach by Seller, the Company, TFS Holdings or any Shareholder of any covenant
or obligation of any party in this Agreement;
(c) any
product produced, remarketed, sold or shipped by, services provided by, or
the
conduct of the Business or any other operations of Seller, the Company or any
of
their Affiliates prior to the Closing;
(d) any
claim
by any Person for brokerage or finder’s fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by any
such
Person with TFS Holdings, the Shareholders, Seller or the Company (or any Person
acting on their behalf) in connection with any of the Contemplated
Transactions;
(e) any
Breach of any representation or warranty made by Seller, TFS Holdings or the
Shareholders in this Agreement as if such representation or warranty were made
on and as of the Closing Date;
(f) any
matters disclosed or required to be disclosed in Parts 2.11, 2.12, 2.15, 2.16
or
5.13 of the Disclosure Letter;
(g) the
ownership and operation of Seller, the Company and/or any of their respective
Affiliates prior to the Closing; and
(h) any
Plan
established or maintained by or for the benefit of Seller or the
Company.
|
10.3
|
SPECIAL
INDEMNITY FOR ANTITRUST MATTERS
|
Several
lawsuits have been recently filed in various jurisdictions throughout the United
States against certain parties in the egg industry, including Buyer, alleging
violations of the antitrust laws of the United States. While neither Seller
nor
the Company are currently active parties to any such actions, a legitimate
possibility exists that the Company and/or Seller may be made a party to such
actions or could be made parties to new litigation subsequently filed and
related to acts or conduct prior to the Closing. Seller shall indemnify and
hold
harmless the Indemnified Persons for, and shall pay to the Indemnified Persons
the amount of, any Damages the Indemnified Persons sustain, arising, whether
directly or indirectly, from or in connection with any such litigation, provided
that such Damages result from events or actions of TFS Holdings, the
Shareholders, Seller, the Company or their Affiliates that occurred prior to
the
Closing. Buyer acknowledges that it has the obligation to provide a defense
for
Seller, TFS Holdings and the Shareholders defending such actions as more fully
set forth in Section
6.3
of this
Agreement. Notwithstanding the foregoing, the Indemnified Persons shall have
no
claim against the Shareholders, TFS Holdings or the Seller for Damages sustained
by the Buyer, if such Damages are based upon the fact that the Buyer acquired
the Company’s Membership Interests to further its alleged (but denied)
anticompetitive activity (as currently alleged in those lawsuits to which Buyer
is a party), including but not limited to any Damages that the Buyer may incur
if it is required to divest itself of all or any portion of the Company’s assets
after the Closing.
31
|
10.4
|
INDEMNIFICATION
AND PAYMENT OF DAMAGES BY BUYER
|
Buyer
will indemnify and hold harmless Seller and will pay to Seller the amount of
any
Damages arising, directly or indirectly, from or in connection with (a) any
Breach of any representation or warranty made by Buyer in this Agreement or
in
any certificate delivered by Buyer pursuant to this Agreement, (b) any Breach
by
Buyer of any covenant or obligation of Buyer in this Agreement (including
Section 6.3),
(c)
the Company’s negligent operation of the composting facility in Indiantown,
Florida after the Closing, including, but not limited to, any Damages resulting
from the Company’s failure to dispose of the chicken manure generated by the
Indiantown egg operations in the manner required in the Composting Agreement,
or
(d) any claim by any Person for brokerage or finder’s fees or commissions or
similar payments based upon any agreement or understanding alleged to have
been
made by such Person with Buyer (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions.
|
10.5
|
TIME
LIMITATIONS
|
If
the
Closing occurs, Seller will have no liability (for indemnification or otherwise)
with respect to any representation or warranty, or covenant or obligation,
other
than those related to title to the property of the Company, environmental
claims, or any matters arising under Sections 2.19,
3.4
or
5.13
, unless
on or before the date 18 months after the Closing, Buyer notifies Seller of
a
claim specifying the factual basis of that claim in reasonable detail to the
extent then known by Buyer. Seller’s obligations regarding title to the property
of the Company, environmental claims, or any matters arising under Sections 2.19,
3.4
or
5.13,
shall
terminate when the applicable statute of limitations for such matters has run.
If the Closing occurs, Buyer will have no liability (for indemnification or
otherwise) with respect to any representation or warranty, or covenant or
obligation to be performed and complied with prior to the Closing Date, unless
on or before the date 18 months after the Closing Seller notifies Buyer of
a
claim specifying the factual basis of that claim in reasonable detail to the
extent then known by Seller.
|
10.6
|
LIMITATIONS
ON AMOUNT – SELLER
|
(a) Except
as
set forth in Section
10.6(c)
below,
Seller will have no liability (for indemnification or otherwise) with respect
to
the matters described in Section
10.2
until
the aggregate total of all Damages with respect to such matters exceeds
$300,000, and then only for the amount by which such Damages exceed
$300,000.
(b) Except
as
set forth in Section
10.6(c)
below,
Seller shall not have any liability to Buyer (for indemnification or otherwise)
with respect to the matters described in Section 10.2
in
excess of $4,000,000.
(c) Notwithstanding
the foregoing or anything to the contrary herein, the limitations contained
in
this Section
10.6
shall
not apply to any Breach of any of Seller’s, TFS Holdings’ or the Shareholders’
representations, warranties, covenants or obligations resulting from fraud
or to
any matters arising under Section 2.12,
2.19,
3.4,
or
10.3,
or
disclosed or required to be disclosed on Part 2.12 of the Disclosure
Letter.
32
(d) The
remedies provided in this Section 10 are the exclusive remedies available to
the
Buyer and limit all other remedies that the Buyer or the other Indemnified
Persons may have against the Seller, TFS Holdings and the
Shareholders.
|
10.7
|
LIMITATIONS
ON AMOUNT – BUYER
|
(a) Buyer
will have no liability (for indemnification or otherwise) with respect to the
matters described in Section
10.4
until
the total of all Damages with respect to such matters exceeds $300,000, and
then
only for the amount by which such Damages exceed $300,000.
(b) Except
as
set forth in Section
10.7(c)
below,
Buyer shall not have any liability to Seller (for indemnification or otherwise)
with respect to the matters described in Section
10.4
in
excess of $4,000,000.
(c) Notwithstanding
the foregoing or anything to the contrary herein, the limitations contained
in
this Section
10.7
shall
not apply to any Breach of any of Buyer’s representations, warranties, covenants
or obligations resulting from fraud.
(d) The
remedies provided in this Section 10 are the exclusive remedies available to
the
Seller, TFS Holdings and the Shareholders, and limit all other remedies that
they may have against the Buyer.
|
10.8
|
ESCROW
|
Notwithstanding
anything to the contrary contained in this Section
10,
the
indemnification obligations of Seller to Buyer shall first be drawn from the
then-existing funds subject to the Escrow Agreement; provided,
however,
that
such obligations shall in no way be limited to the then current balance of
such
funds.
|
10.9
|
PROCEDURE
FOR INDEMNIFICATION – THIRD-PARTY
CLAIMS
|
(a) Promptly
after receipt by an indemnified party under Section
10.2,
10.3
or 10.4
of notice of the commencement of any Proceeding against it, such indemnified
party will, if a claim is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of the commencement of such
claim, but the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the defense
of such action is prejudiced by the indemnifying party’s failure to give such
notice.
33
(b) If
any
Proceeding referred to in Section
10.9(a)
is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party will be
entitled to participate in such Proceeding and, to the extent that it wishes,
to
assume the defense of such Proceeding with counsel reasonably satisfactory
to
the indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding,
the
indemnifying party will not, as long as it diligently conducts such defense,
be
liable to the indemnified party under this Section
10
for any
fees of other counsel or any other expenses with respect to the defense of
such
Proceeding, in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than reasonable costs
of
investigation. If the indemnifying party assumes the defense of a Proceeding,
(i) no compromise or settlement of such claims may be effected by the
indemnifying party without the indemnified party’s consent unless (A) there is
no finding or admission of any violation of Legal Requirements or any violation
of the rights of any Person and no effect on any other claims that may be made
against the indemnified party, and (B) the sole relief provided is monetary
damages that are paid in full by the indemnifying party; and (ii) the
indemnified party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If notice is given
to an
indemnifying party of the commencement of any Proceeding and the indemnifying
party does not, within 20 days after the indemnified party’s notice is given,
give notice to the indemnified party of its election to assume the defense
of
such Proceeding, the indemnifying party will be bound by any determination
made
in such Proceeding or any compromise or settlement effected by the indemnified
party.
(c) Seller
hereby consents to the nonexclusive jurisdiction of any court in which a
Proceeding is brought against any Indemnified Person for purposes of any claim
that an Indemnified Person may have under this Agreement with respect to such
Proceeding or the matters alleged therein, and agree that process may be served
on Seller with respect to such a claim anywhere in the world.
|
10.10
|
PROCEDURE
FOR INDEMNIFICATION – OTHER CLAIMS
|
A
claim
for indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is
sought.
| Section 11. |
DEFINITIONS
|
For
purposes of this Agreement, the following terms have the meanings specified
or
referred to in this Section
11:
“Adjustment
Amount”–
as
defined in Section
1.5.
“Affiliate”
of any
Person means any Person directly or indirectly controlling, controlled by,
or
under common control with, any such Person and any officer, manager, director,
or controlling Person of such Person. The term “Affiliate”
also
includes any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, of such
Person.
“Applicable
Contract”–
any
Contract (a) under which the Company has or may acquire any rights, (b) under
which the Company has or may become subject to any obligation or liability,
or
(c) by which the Company or any of the assets owned or used by it is or may
become bound.
“Balance
Sheet”–
as
defined in Section
2.4.
“Best
Efforts”–
the
efforts that a prudent Person desirous of achieving a result would use in
similar circumstances to ensure that such result is achieved as expeditiously
as
possible; provided,
however,
that an
obligation to use Best Efforts under this Agreement does not require the Person
subject to that obligation to take actions that would result in a materially
adverse change in the benefits to such Person of this Agreement and the
Contemplated Transactions.
“Breach”–
a
“Breach” of a representation, warranty, covenant, obligation, or other provision
of this Agreement or any instrument delivered pursuant to this Agreement will
be
deemed to have occurred if there is or has been (a) any inaccuracy in or breach
of, or any failure to perform or comply with, such representation, warranty,
covenant, obligation, or other provision, or (b) any claim (by any Person)
or
other occurrence or circumstance that is or was inconsistent with such
representation, warranty, covenant, obligation, or other provision, and the
term
“Breach” means any such inaccuracy, breach, failure, claim, occurrence, or
circumstance.
34
“Buyer”–
as
defined in the first paragraph of this Agreement.
“Closing”–
as
defined in Section
1.3.
“Closing
Date”–
the
date and time as of which the Closing actually takes place.
“COBRA”–
Consolidated Omnibus Budget Reconciliation Act of 1985.
“Commitment”–
as
defined in Section
7.8.
“Company”–
as
defined in the Background Information of this Agreement.
“Composting
Agreement”–
as
defined in Part 2.14(a) of the Disclosure Letter.
“Consent”–
any
approval, consent, ratification, waiver, or other authorization (including
any
Governmental Authorization).
“Contemplated
Transactions”–
all
of
the transactions contemplated by this Agreement, including, but not limited
to:
(a) the
sale
of the Membership Interests by Seller to Buyer;
(b) the
execution, delivery, and performance of the Transition Services Agreement,
the
Noncompetition Agreements, Seller’s Release, and the Escrow
Agreement;
(c) the
performance by Buyer and Seller of their respective covenants and obligations
under this Agreement; and
(d) Buyer’s
acquisition and ownership of the Membership Interests and exercise of control
over the Company.
“Contract”–
any
agreement, contract, obligation, promise, or undertaking (whether written or
oral and whether express or implied) that is legally binding.
“Damages”–
as
defined in Section
10.2.
“Disclosure
Letter”–
the
disclosure letter required to be delivered by Seller to Buyer concurrently
with
the execution and delivery of this Agreement, in form and content acceptable
to
Buyer in its sole discretion.
“Encumbrance”–
any
charge, claim, community property interest, condition, equitable interest,
lien,
option, pledge, security interest, right of first refusal, or restriction of
any
kind, including any restriction on use, voting, transfer, receipt of income,
or
exercise of any other attribute of ownership.
“Environmental,
Health, and Safety Liabilities”–
any
cost, damages, expense, liability, obligation, or other responsibility arising
from or under Environmental Law or Occupational Safety and Health Law and
consisting of or relating to:
35
(a) any
environmental, health, or safety matters or conditions (including on-site or
off-site contamination, occupational safety and health, and regulation of
chemical substances or products);
(b) fines,
penalties, judgments, awards, settlements, legal or administrative proceedings,
damages, losses, claims, demands and response, investigative, remedial, or
inspection costs and expenses arising under Environmental Law or Occupational
Safety and Health Law;
(c) financial
responsibility under Environmental Law or Occupational Safety and Health Law
for
cleanup costs or corrective action, including any investigation, cleanup,
removal, containment, or other remediation or response actions (“Cleanup”)
required by applicable Environmental Law or Occupational Safety and Health
Law
(whether or not such Cleanup has been required or requested by any Governmental
Body) and for any natural resource damages; or
(d)
any
other
compliance, corrective, investigative, or remedial measures required under
Environmental Law or Occupational Safety and Health Law.
The
terms
“removal,” “remedial,” and “response action,” include the types of activities
covered by the United States Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. § 9601 et seq., as amended (“CERCLA”).
“Environmental
Law”–
any
Legal Requirement that requires or relates to:
(a) advising
appropriate authorities, employees, and the public of intended or actual
releases of pollutants or hazardous substances or materials, violations of
discharge limits, or other prohibitions and of the commencements of activities,
such as resource extraction or construction, that require permits or other
approvals from a Governmental Body;
(b) preventing
or reducing to acceptable levels the release of pollutants or hazardous
substances or materials into the environment;
(c) reducing
the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated;
(d) assuring
that products are designed, formulated, packaged, and used so that they do
not
present unreasonable risks to human health or the environment when used or
disposed of;
(e) protecting
natural resources, or plant or animal species;
(f) reducing
to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, or oil;
(g) cleaning
up pollutants that have been released, preventing the threat of release, or
paying the costs of such clean up or prevention; or
(h) making
responsible parties pay for damages done to their health or the Environment,
or
permitting self-appointed representatives of the public interest to recover
for
injuries done to public assets.
“ERISA”–
the
Employee Retirement Income Security Act of 1974 or any successor law, and
regulations and rules issued pursuant to that Act or any successor
law.
36
“Escrow
Agreement”–
as
defined in Section
1.4.
“Facilities”–
any
real property, leaseholds, or other interests currently or formerly owned or
operated by Seller, the Company or Okeechobee Egg and any buildings, plants,
structures, or equipment (including motor vehicles and rolling stock) currently
or formerly owned or operated by Seller, the Company or Okeechobee
Egg.
“GAAP”–
generally accepted United States accounting principles, applied on a basis
consistent with the basis on which the Balance Sheet and the other financial
statements referred to in Section
2.4(b)
were
prepared.
“Governmental
Authorizations”–
any
approval, consent, license, permit, waiver, or other authorization issued,
granted, given, or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
“Governmental
Body”–
any:
(a) nation,
state, county, city, town, village, district, or other jurisdiction of any
nature;
(b) federal,
state, local, municipal, foreign, or other government;
(c) governmental
or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other
tribunal);
(d) multi-national
organization or body; or
(e) body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any
nature.
“Hazardous
Materials”—
(1)
hazardous substances as that term is defined by the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C.A. § 9601
et
seq.,
the
Resource Conservation and Recovery Act, 42 U.S.C.A. § 6901
et
seq.
, and
any other applicable Federal, State or local law, rule or regulation, ordinance
or requirement, all as amended or hereinafter amended; (2) petroleum, including
without limitation, crude oil; (3) any radioactive material; and (4) asbestos.
“Intellectual
Property Assets”–
as
defined in Section
2.22.
“Interim
Balance Sheet”–
as
defined in Section
2.4.
“IRC”–
the
Internal Revenue Code of 1986 or any successor law, and regulations issued
by
the IRS pursuant to the Internal Revenue Code or any successor law.
“IRS”–
the
United States Internal Revenue Service or any successor agency, and, to the
extent relevant, the United States Department of the Treasury.
“Inventory
and Other Current Assets Amount”–
the
sum
of: (a) the value of the Company’s packaging materials, fuel, egg inventories,
grain, finished feed, feed ingredients and additives, veterinary
supplies/medicines, laying hen flocks and pullet flocks, determined in
accordance with the provisions of Section
1.8
hereof,
on the Closing Date; (b) the net book value of the Company’s interest in AEP on
the Closing Date; and (c) the Company’s prepaid property insurance as of the
Closing Date.
37
“Knowledge”–
an
individual will be deemed to have “Knowledge” of a particular fact or other
matter if:
(a) such
individual is actually aware of such fact or other matter; or
(b) a
prudent
individual could be expected to discover or otherwise become aware of such
fact
or other matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other
matter.
A
Person
(other than an individual) will be deemed to have “Knowledge” of a particular
fact or other matter if any individual who is serving, or who has at any time
served, as a director, officer, partner, executor, or trustee of such Person
(or
in any similar capacity) has, or at any time had or should have had, Knowledge
of such fact or other matter.
“Legal
Requirement”–
any
federal, state, local, municipal, foreign, international, multinational, or
other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute, or treaty.
“Membership
Interests”–
as
defined in the Background Information of this Agreement.
“Noncompetition
Agreements”–
as
defined in Section
1.4(a)(iv).
“Occupational
Safety and Health Law”–
any
Legal Requirement designed to provide safe and healthful working conditions
and
to reduce occupational safety and health hazards, and any program, whether
governmental or private (including those promulgated or sponsored by industry
associations and insurance companies), designed to provide safe and healthful
working conditions.
“Order”–
any
award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency, or
other
Governmental Body or by any arbitrator.
“Ordinary
Course of Business”–
an
action taken by a Person will be deemed to have been taken in the “Ordinary
Course of Business” only if:
(a) such
action is consistent with the past practices of such Person and is taken in
the
ordinary course of the normal day-to-day operations of such Person;
(b) such
action is not required to be authorized by the board of directors of such Person
(or by any Person or group of Persons exercising similar authority);
and
(c) such
action is similar in nature and magnitude to actions customarily taken, without
any authorization by the board of directors (or by any Person or group of
Persons exercising similar authority), in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line of business
as
such Person.
“Organizational
Documents”–
(a) the articles or certificate of incorporation and the bylaws of a
corporation; (b) the partnership agreement and any statement of partnership
of a general partnership; (c) the limited partnership agreement and the
certificate of limited partnership of a limited partnership; (d) the articles
of
organization and the operating agreement of a limited liability company;
(e) any charter or similar document adopted or filed in connection with the
creation, formation, or organization of a Person; and (f) any amendment to
any of the foregoing.
38
“Person”–
any
individual, corporation (including any nonprofit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or Governmental
Body.
“Plans”–
as
defined in Section
2.10.
“Proceeding”–
any
action, arbitration, audit, hearing, investigation, litigation, or suit (whether
civil, criminal, administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental
Body,
mediator or arbitrator.
“Representative”–
with
respect to a particular Person, any director, officer, employee, agent,
consultant, advisor, or other representative of such Person, including legal
counsel, accountants, and financial advisors.
“Securities
Act”–
the
Securities Act of 1933 or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.
“Seller”–
as
defined in the first paragraph of this Agreement.
“Seller’s
Release”–
as
defined in Section
1.4.
“Shareholders”
–
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx and Xxxxx X. Xxxxx.
“Subsidiary”–
with
respect to any Person (the “Owner”),
any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation’s or other Person’s board of
directors or similar governing body, or otherwise having the power to direct
the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred) are held by the Owner or one or more of its
Subsidiaries.
“Target
Inventory and Current Assets Amount”–
$12,250,000.
“Tax”
or
“Taxes”–
means
(i) any and all federal, state, local or foreign taxes, charges, fees, imposts,
levies or other assessments, including, without limitation, all net income,
gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments and charges
of
any kind whatsoever, (ii) all interest, penalties, fines, additions to tax
or
additional amounts imposed by any taxing authority or Governmental Body in
connection with any item described in clause (i), and (iii) any liability in
respect of any items described in clauses (i) and/or (ii) payable by reason
of
contract, assumption, transferee liability, operation of law, Treasury
Regulation section 1.1502-6(a) (or any predecessor or successor thereof or
any
analogous or similar provision under law) or otherwise.
“Tax
Return”–
any
return (including any information return), report, statement, schedule, notice,
form, or other document or information filed with or submitted to, or required
to be filed with or submitted to, any Governmental Body in connection with
the
determination, assessment, collection, or payment of any Tax or in connection
with the administration, implementation, or enforcement of or compliance with
any Legal Requirement relating to any Tax.
39
“Threatened”–
a
claim, Proceeding, dispute, action, or other matter will be deemed to have
been
“Threatened” if any demand or statement has been made (orally or in writing) or
any notice has been given (orally or in writing), or if any other event has
occurred or any other circumstances exist, that would lead a prudent Person
to
conclude that such a claim, Proceeding, dispute, action, or other matter is
likely to be asserted, commenced, taken, or otherwise pursued in the
future.
“Transition
Services Agreement”–
as
defined in Section
1.4(a)(iii).
| Section 12. |
GENERAL
PROVISIONS
|
|
12.1
|
EXPENSES
|
Except
as
otherwise expressly provided in this Agreement, each party to this Agreement
will bear its respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the Contemplated Transactions,
including all fees and expenses of agents, representatives, counsel, and
accountants. In the event of termination of this Agreement, the obligation
of
each party to pay its own expenses will be subject to any rights of such party
arising from a breach of this Agreement by another party.
|
12.2
|
PUBLIC
ANNOUNCEMENTS
|
Buyer
is
a publicly traded company and is subject to stringent rules and regulations
promulgated by the United States Securities and Exchange Commission
(“SEC”)
concerning disclosure of certain material events and accounting related issues
by filings with the SEC and possible public announcements. The existence and
content of this Agreement constitute material nonpublic information concerning
Buyer. After closing of the NASDAQ market on the date this Agreement is
executed, the Buyer will publicly announce that it has entered into this
Agreement, provided,
however,
the
Buyer shall deliver a draft of the press release and any regulatory filing
to
Seller prior to such release. Subject to the foregoing, Seller and Buyer will
consult with each other concerning the means by which the Company’s employees,
customers, and suppliers and others having dealings with the Company will be
informed of the Contemplated Transactions, and Seller and Buyer will each have
the right to be present for any such communication.
|
12.3
|
CONFIDENTIALITY
|
The
parties have executed a confidentiality agreement which shall continue to govern
the parties’ responsibilities regarding the confidential nature of the
Contemplated Transactions and the materials that Seller has provided to Buyer.
Subject to the provisions of Section 12.2,
between
the date of this Agreement and the Closing Date, Buyer and Seller will continue
to maintain in confidence, and will cause the directors, officers, employees,
agents, and advisors of Buyer and the Company to continue to maintain in
confidence, and not use to the detriment of another party or the Company any
written, oral, or other information obtained in confidence from another party
or
the Company in connection with this Agreement or the Contemplated Transactions,
unless (a) such information is already known to such party or to others not
bound by a duty of confidentiality or such information becomes publicly
available through no fault of such party, (b) the use of such information is
necessary or appropriate in making any filing or obtaining any consent or
approval required for the consummation of the Contemplated Transactions, or
(c)
the furnishing or use of such information is required by legal proceedings.
If
the Contemplated Transactions are not consummated, each party will return or
destroy as much of such written information as the other party may reasonably
request.
40
|
12.4
|
NOTICES
|
All
notices, consents, waivers, and other communications under this Agreement must
be in writing and will be deemed to have been duly given when (a) delivered
by
hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt) or E-mail, provided that a copy is mailed
by
certified mail, return receipt requested, or (c) when received by the addressee,
if sent by a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses, telecopier numbers and/or
e-mail addresses set forth below (or to such other addresses and telecopier
numbers as a party may designate by notice to the other parties):
|
Seller:
|
Tampa
Farm Service, Inc.
|
|
|
Xxxx
Xxxxxx Xxx 000
|
||
|
Xxxxx,
Xxxxxxx 00000
|
||
|
Attention:
Xxxxxxx X. Xxxxx
|
||
|
E-Mail:
xxxxxx@xxxxxxxxxx.xxx
|
||
|
Facsimile
No.: (000) 000-0000
|
||
|
with
a copy to:
|
Xxxx
Xxxx, P.A.
|
|
|
Xxxx
Xxxxxx Xxx 0000
|
||
|
Xxxxx,
Xxxxxxx 00000
|
||
|
Attention:
Xxxx X. Xxxxxxxx
|
||
|
E-Mail:
xxxxxxxxx@xxxxxxxx.xxx
|
||
|
Facsimile
No.: (000) 000-0000
|
||
|
Buyer:
|
Cal-Maine
Foods, Inc.
|
|
|
Xxxx
Xxxxxx Xxx 0000
|
||
|
Xxxxxxx,
Xxxxxxxxxxx 00000
|
||
|
Attention:
Xxxxxxxx X. Xxxxx
|
||
|
E-Mail:
xxxxxx@xxxxxxx.xxx
|
||
|
Facsimile
No.: (000) 000-0000
|
||
|
with
a copy to:
|
YoungWilliams
P.A.
|
|
|
Xxxx
Xxxxxx Xxx 00000
|
||
|
Xxxxxxx,
Xxxxxxxxxxx 00000-0000
|
||
|
Attention:
Xxxxx X. Xxxxx, III
|
||
|
E-Mail:
xxxxxx0@xxxxxxxxxxxxx.xxx
|
||
|
Facsimile
No.: (000) 000-0000
|
|
12.5
|
JURISDICTION;
SERVICE OF PROCESS
|
Any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement must be brought against any of the parties in
the
courts of the State of Florida, County of Hillsborough, or, if it has or can
acquire jurisdiction, in the United States District Court for the Middle
District of Florida, and each of the parties consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to jurisdiction or venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may
be
served on any party anywhere in the world.
|
12.6
|
FURTHER
ASSURANCES
|
The
parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents,
and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.
41
|
12.7
|
WAIVER
|
The
rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power, or privilege under this Agreement or the documents referred to
in
this Agreement will operate as a waiver of such right, power, or privilege,
and
no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or
the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged
by
one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may
be given by a party will be applicable except in the specific instance for
which
it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this
Agreement.
|
12.8
|
ENTIRE
AGREEMENT AND MODIFICATION
|
This
Agreement supersedes all prior agreements between the parties with respect
to
its subject matter and constitutes (along with the documents referred to in
this
Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may
not
be amended except by a written agreement executed by the party to be charged
with the amendment.
|
12.9
|
DISCLOSURE
LETTER
|
(a) The
disclosures in the Disclosure Letter, and those in any Supplement thereto,
must
relate only to the representations and warranties in the section of the
Agreement to which they expressly relate and not to any other representation
or
warranty in this Agreement.
(b) In
the
event of any inconsistency between the statements in the body of this Agreement
and those in the Disclosure Letter (other than an exception expressly set forth
as such in the Disclosure Letter with respect to a specifically identified
representation or warranty), the statements in the body of this Agreement will
control.
(c) Seller
will deliver to Buyer the Disclosure Letter concurrently with the execution
of
this Agreement.
|
12.10
|
ASSIGNMENTS,
SUCCESSORS, AND NO THIRD-PARTY
RIGHTS
|
Neither
party may assign any of its rights under this Agreement without the prior
consent of the other parties, except that Buyer may assign any of its rights
under this Agreement to any Subsidiary of Buyer. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon, and
inure to the benefit of the successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed to give
any
Person other than the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and conditions are
for
the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
|
12.11
|
SEVERABILITY
|
If
any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain
in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to
the
extent not held invalid or unenforceable.
42
|
12.12
|
SECTION
HEADINGS, CONSTRUCTION
|
The
headings of sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to “Section”
or “Sections” refer to the corresponding Section or Sections of this Agreement.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word “including” does not limit the preceding words or terms.
|
12.13
|
TIME
OF ESSENCE
|
With
regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.
|
12.14
|
GOVERNING
LAW
|
This
Agreement will be governed by the laws of the State of Florida without regard
to
conflicts of laws principles.
|
12.15
|
COUNTERPARTS
|
This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
The
parties have executed and delivered this Agreement as of the date first written
above.
|
Cal-Maine
Foods, Inc.
|
Tampa
Farms, LLC
|
|||
|
By:
|
By:
|
|||
|
Name:
|
Name:
Xxxxxxx X. Xxxxx
|
|||
|
Title:
|
Title:
Manager
|
|||
|
Tampa
Farm Service, Inc.
|
TFS
Holdings, Inc.
|
|||
|
By:
|
By:
|
|||
|
Name:
Xxxxxxx X. Xxxxx
|
Name:
Xxxxxxx X. Xxxxx
|
|||
|
Title:
President
|
Title:
President
|
|||
|
Xxxxxxx
X. Xxxxx, individually
|
Xxxxxx
X. Xxxxx, individually
|
|||
|
Xxxxx
X. Xxxxx, individually
|
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43
