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