Exhibit 10.19
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement") is made this
27th day of December, 2002, by and among SMITHFIELD FOODS, INC., a Virginia
corporation ("Smithfield"), XXXXX X. XXXXX, an individual, XXXXXXX X. XXXXX, an
individual (Xxxxx X. Xxxxx and Xxxxxxx X. Xxxxx are collectively referred to as
the "Shareholders") and PENNEXX FOODS, INC. (formerly known as PINNACLE FOODS,
INC.), a Pennsylvania corporation ("Pennexx").
BACKGROUND:
WHEREAS, Smithfield purchased from Pennexx and Pennexx sold
and issued to Smithfield 13,003,494 shares of Pennexx common stock, par value
$0.01 per share ("Pennexx Common Stock") pursuant to that certain Stock Purchase
Agreement dated May 31, 2001 (the "Stock Purchase Agreement");
WHEREAS, the intent of the parties in executing the Stock
Purchase Agreement was for Smithfield to acquire exactly fifty percent (50%) of
the equity interests of Pennexx through the issuance and sale to Smithfield of
that number of shares of Pennexx Common Stock equal to the number of shares of
Pennexx Common Stock issued and outstanding immediately prior to consummation of
the transactions contemplated by the Stock Purchase Agreement;
WHEREAS, Pennexx discovered after the closing under the Stock
Purchase Agreement that 493,333 shares of Pennexx Common Stock were erroneously
issued and outstanding as of May 31, 2001, and therefore Smithfield was sold and
issued 493,333 shares of Pennexx Common Stock in excess of the number of shares
of Pennexx Common Stock representing exactly fifty percent (50%) of the equity
interests of Pennexx as of May 31, 2001; and
WHEREAS, Smithfield desires to contribute 493,333 shares of
Pennexx Common Stock to Pennexx and thereby cause Smithfield to own 12,510,161
shares of Pennexx Common Stock, the number of shares of Pennexx Common Stock
representing exactly fifty percent (50%) of the outstanding Pennexx Common Stock
as of May 31, 2001.
NOW THEREFORE, for and in consideration of the premises and of
the mutual covenants, agreements, representations and warranties set forth
herein, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. Definitions. Capitalized terms used herein without definition shall have
the respective meanings given to them in the Stock Purchase Agreement.
2. Pennexx Common Stock Outstanding. Pennexx and Shareholders represent and
warrant to Smithfield that the number of shares of Pennexx Common Stock
outstanding on June 27, 2001 (the closing date of the Stock Purchase
Agreement), exclusive of shares of Pennexx Common Stock owned by
Smithfield, was 12,510,161. Subject to the
following sentence, Pennexx and Shareholders further represent and warrant
to Smithfield that the number of shares of Pennexx Common Stock
representing exactly fifty percent (50%) of the equity ownership of Pennexx
as of the date of this Agreement is 13,510,161. Such number does not
include 304,500 shares of Pennexx Common Stock that have been issued in the
name of but not delivered to Xxxxxx Xxxxxxxx, and which may be delivered to
Xx. Xxxxxxxx in cancellation of a former $300,000 obligation of Pennexx to
Xx. Xxxxxxxx and in connection with the settlement of certain litigation
that Xx. Xxxxxxxx has brought against Pennexx. If such shares of Pennexx
Common Stock are ultimately delivered to Xx. Xxxxxxxx, the parties agree
that Smithfield will have right, for a period of thirty (30) days after
notice of such delivery is given to Smithfield, to acquire 304,500 shares
of Pennexx Common Stock for a purchase price of $300,000. If shares of
Pennexx Common Stock are issued to Xxxxxx Xxxxxxxx in settlement of such
litigation in excess of 304,500 shares of Pennexx Common Stock, Smithfield
shall also have the right, for a period of thirty (30) days after notice of
such delivery is given to Smithfield, to purchase such excess number of
shares of Pennexx Common Stock at a price of One Dollar ($1.00) per share.
3. Contribution to Pennexx. In reliance upon the representations and
warranties provided by Pennexx and Shareholders herein, and in order to
reduce Smithfield's ownership of Pennexx Common Stock to exactly fifty
percent (50%) of the outstanding equity interests of Pennexx as of May 31,
2001, Smithfield shall and hereby agrees to contribute, transfer and assign
its entire right, title and interest in and to 493,333 shares of Pennexx
Common Stock to Pennexx. Smithfield and Pennexx shall take all appropriate
steps to have the transfer agent for Pennexx deliver to Smithfield a
certificate representing Smithfield's ownership of 12,510,161 shares of
Pennexx Common Stock, and Smithfield shall tender for cancellation in
exchange therefor and Pennexx shall cause to be cancelled, the certificate
Smithfield currently holds representing ownership of 13,003,494 shares of
Pennexx Common Stock together with such stock powers executed in blank as
Pennexx may reasonably request.
4. Further Assurances. Smithfield, Pennexx and Shareholders covenant to each
other and agree that each will execute and deliver all such instruments,
agreements or documents as may be necessary to evidence the transactions
contemplated by this Agreement. Smithfield, Pennexx and Shareholders
further covenant to each other and agree that if any party hereafter
reasonably believes that an amendment to any document executed in
connection with the Stock Purchase Agreement or this Agreement is necessary
to carry out the intent of the Stock Purchase Agreement and this Agreement,
then each party will execute and deliver all such instruments, agreements
or documents as necessary to evidence any such reasonably requested
amendment.
5. Miscellaneous. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against
any party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding
when one or more counterparts hereof, individually or taken together, shall
bear the signatures of all the parties reflected hereon as the signatories.
6. Governing Law. This Contribution Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their proper and duly authorized officers, as of the
date first above written.
Attest: PENNEXX FOODS, INC.
/s/ Xxxxxx Xxxxxxxx By:/s/ Xxxxxxx X. Xxxxx
--------------------- ---------------------------
Title: President
[Corporate Seal]
Attest: SMITHFIELD FOODS, INC.
By: /s/ Xxxxxxx X. Xxxx
--------------------- --------------------------------
Title: Secretary and Associate
General Counsel
[Corporate Seal]
Witness:
---------------------- /s/ Xxxxx X. Xxxxx (Seal)
--------------------------------
Xxxxx X. Xxxxx
Witness:
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxxxx X. Xxxxx (Seal)
--------------------- --------------------------------
Xxxxxxx X. Xxxxx
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