EXHIBIT 10.1
TERMINATION AND DISSOLUTION AGREEMENT
This Agreement, dated as of the 25th day of March, 1998, is entered into
by and among FRM/Xxxxxxx Pet Food Venture, a Georgia general partnership (the
"VENTURE"),Flint River Xxxxx, Inc., a Georgia corporation ("FLINT RIVER"), and
Xxxxx Xxxx Pet Food Company, Inc., a Minnesota corporation ("XXXXX XXXX").
W I T N E S S E T H
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WHEREAS, the parties have engaged in business as a joint venture known as
FRM/Xxxxxxx Pet Food Venture pursuant to the Joint Venture Agreement, dated as
of April 7, 1995, between Flint River and Xxxxx Xxxx (the "JOINT VENTURE
AGREEMENT"); and
WHEREAS, the parties desire to dissolve and terminate the Venture and the
Joint Venture Agreement.
NOW, THEREFORE, for good and valuable consideration the sufficiency of
which is hereby acknowledged, the parties hereto, intending to be bound hereby,
agree as follows:
1. Dissolution.
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(a) Pursuant to Section 16(a) of the Joint Venture Agreement, the Venture,
Xxxxx Xxxx and Flint River hereby agree to wind up liquidate the affairs and
assets of the Venture effective as of February 28, 1998 (the "TERMINATION
DATE").
(b) Pursuant to Section 16(b) of the Joint Venture Agreement, Xxxxx Xxxx
hereby elects to purchase the assets of the Venture at a price equal to the book
value as of the Termination Date, net of accumulated depreciation (the "NET BOOK
VALUE") determined in accordance with Section 2 hereof; provided, however, that
the terms of the Joint Venture Agreement requiring Xxxxx Xxxx to pay the entire
price to the Venture will be modified as follows:
(i) In lieu of paying the price equal to the Net Book Value to the
Venture, Xxxxx Xxxx hereby agrees to pay $1,229,660 to Flint River (the
"INITIAL PRICE"), on account of Flint River's right to receive one-half of
the net assets of the Venture upon dissolution of the Venture in accordance
with Section 16(e)(iv) of the Joint Venture Agreement plus $17,500 in full
payment of Flint River's one-half of the Bruno's Packaging (as defined
below). The Initial Purchase Price represents Xxxxx Xxxx'x good faith
estimate of one-half of the Net Book Value.
(ii) Upon the final determination of Net Book Value (as provided in
Section 2 below, (x) if the Initial Price is greater than such final
determination, Flint River shall pay the difference thereof to Xxxxx Xxxx
within ten days of such final determination, and (y) if the Initial Price
is less than such final determination, Xxxxx Xxxx shall pay the difference
thereof to Flint River within ten days of the delivery of such final
determination.
(iii) The Initial Purchase Price shall be paid to Flint River
simultaneously with the execution and delivery of this Agreement. At the
time the Initial Purchase Price is paid, Xxxxx Xxxx shall also pay to Flint
River the sum of $41,777 which Flint River and Xxxxx Xxxx agree constitute
full payment for certain unamortized packaging development costs incurred
by Flint River for the Venture's behalf and not reimbursed by the Venture
to Flint River.
2. Determination of Net Book Value. Xxxxx Xxxx shall make an unaudited
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determination of Net Book Value ("INITIAL DETERMINATION "). In determining the
Net Book Value, no value shall be attributed to the accounts receivable owing to
the Venture by Bruno's (the "BRUNO'S A/R's") or to the Bruno's packaging
included in the Venture's inventory (the "BRUNO'S PACKAGING"). Flint River shall
have 30 days from delivery of the Initial Determination to object thereto and
unless Flint River gives written notice to Xxxxx Xxxx of such objection within
such 30-day period, the Initial Determination shall be final and binding upon
the parties hereto. Both Flint River and Xxxxx Xxxx shall have access to the
Venture's books and records and work papers in connection with their
preparation and review of Initial Determination. In the event that Flint River
gives such written notice of objection, and if the dispute cannot be resolved by
negotiations between the parties, the dispute shall be arbitrated as provided in
Section 22 of the Joint Venture Agreement.
3. Future Claims, Liabilities and Recoveries. Xxxxx Xxxx shall be
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entitled to all of the Venture's assets and shall be subject to those
liabilities reflected or reserved against in the calculation of Net Book Value
as provided in Section 2. For clarification, if a liability is reflected at $100
in the Net Book Value calculation and later turns out to cost $95 or $105, Xxxxx
Xxxx shall obtain the benefit (in case the liability is $95) or absorb the
detriment (in case the liability is $105). Similarly, if an asset, such as a
receivable that has been written off, is subsequently collected, Xxxxx Xxxx
shall be entitled to such asset. Liabilities that were not reflected in the
calculation of Net Book Value because they would not have been required to have
been reflected on a balance sheet prepared in accordance with the accounting
practices used by the Venture shall continue to be shared on an equal basis by
Flint River and Xxxxx Xxxx after the Termination Date. For clarification, if a
litigation exists or is commenced after the Termination Date. For clarification,
if a litigation exists or is commenced after the Termination Date for which no
accrual was made in the calculation of Net Book Value, Flint River and Xxxxx
Xxxx shall share the costs of such litigation equally. No adjustments shall be
made with respect to the Bruno's Packaging or the Bruno's A/R's.
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4. Deliveries. On the date hereof and from time to time hereafter as may
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be reasonably requested by Xxxxx Xxxx, Xxxxx River and Xxxxx Xxxx shall each
execute and deliver, in their own names and/or in the name of the Venture, such
other documents, assignments and instruments as are reasonably necessary to
convey all of the Venture's assets to Xxxxx Xxxx including, but not limited to,
(a) an executed Xxxx of Sale transferring the assets of the Venture from
the Venture to Xxxxx Xxxx;
(b) an Assignment of Trademarks, transferring all trademarks from the
Venture to Xxxxx Xxxx;
(c) an executed Warranty Deed, conveying the Facility (as defined in the
Joint Venture Agreement) from the Venture to Xxxxx Xxxx.
5. Payment of Debts. The Venture books will be closed as of the Termination
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Date. All debts of the Venture, including all tax liabilities payable by the
Venture, will be paid or accrued pursuant to Section 3 hereof.
6. Name. Xxxxx Xxxx and Flint River agree that neither party has acquired
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any rights to use the other party's name in connection with that party's
business activities because of the Venture relationship.
7. Claims. If either of the parties hereto shall hereafter be held
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individually liable for a Venture debt or obligation of the Venture not paid or
provided for under this Agreement including, but not limited to, any
environmental claims, such party shall have a claim over, against the other
party for one-half of all amounts paid by that party including any reasonable
attorney fees. Each party shall promptly give the other party notice of said
claim. Both parties agree to cooperate on resolution of such claims.
8. Indemnification. Effective as of the Termination Date. Xxxxx Xxxx shall
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indemnify and hold Flint River harmless against and from any and all claims,
demands, fines, suits, actions, proceedings, orders, decrees and judgments of
any kind or nature by anyone whomsoever and against and from any and all costs,
damages and expenses, including attorney's fees, in connection with or resulting
from loss of life, bodily or personal injury, property damage or environmental
damage of any nature, clean-up costs or fines arising directly or indirectly
from Xxxxx Xxxx'x actions or its agents', successors', or assigns' actions that
occur on or after the Termination Date.
Furthermore, effective as of the Termination Date, Flint River shall
indemnify and hold Xxxxx Xxxx harmless against and from any and all claims,
demands, fines, suits, actions, proceedings, orders, decrees and judgments of
any kind or nature by anyone
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whomsoever and against and from any and all costs, damages and expenses,
including attorney's fees, in connection with or resulting from loss of life,
bodily or personal injury, property damage or environmental damage of any
nature, clean-up costs or fines arising directly or indirectly from Flint
River's actions or its agents', successors', or assigns' actions that occur on
or after the Termination Date.
9. Books. Each party shall retain those Venture books which they were
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responsible for maintaining for a period of six years. Each party shall have
reasonable access to these books during normal business hours during such 6-year
period.
10. Tax Returns. The final federal income tax return for the Venture
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required by applicable law shall be prepared and filed by Xxxxx Xxxx after being
reviewed and accepted by Flint River. The final State of Georgia and City of
Cartersville income tax return for the Venture required by applicable law shall
be prepared and filed by Xxxxx Xxxx. Xxxxx Xxxx will be responsible for filing
before the applicable due date, including any extensions thereof, as determined
by the Termination Date. Each party shall bear one-half of the cost of preparing
such returns.
11. Purchase of Products Following Termination. Until March 31, 2003,
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Flint River Xxxxx and Xxxxx Xxxx will use its best efforts to sell feed products
using Xxxxx Xxxx'x Country Prime label to the grocery trade. Xxxxx Xxxx will
invoice customers at prices set by Flint River Xxxxx on a monthly basis. Xxxxx
Xxxx will reimburse Flint River Xxxxx the invoice price less costs absorbed by
Xxxxx Xxxx (brokerage, swill, cash discounts and freight) less agreed upon
margins. Should either Flint River Xxxxx or Xxxxx Xxxx no longer wish to
continue the sale of feed products to the grocery trade, any unused Country
Prime packaging inventory costs will be shared equally by Flint River Xxxxx and
Xxxxx Xxxx.
12. Notice of Dissolution. The parties shall execute, file and publish all
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certificates and notices as may be required by law.
13. Arbitration. Any unresolved disputes or controversies relating to this
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Agreement or the Joint Venture Agreement shall be determined and settled by
arbitration as provided in Section 22 of the Joint Venture Agreement.
14. Further Assurances. In addition to the actions, documents and
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instruments specifically required to be taken or delivered by this Agreement,
and without further consideration, each party hereto shall take such other
actions, and execute and deliver such other documents and instruments, as the
other parties hereto or their counsel may reasonably request in order to
effectuate and perfect the transactions contemplated by this Agreement.
15. Benefit. This Agreement shall benefit and be binding upon the
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respective successors and assigns of the parties hereto.
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16. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
FRM/XXXXXXX PET FOOD
VENTURE
By: FLINT RIVER XXXXX, INC.,
a general partner
By /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Vice President
and
By: Xxxxx Xxxx Pet Food Company, Inc.,
a general partner
By /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: President
XXXXX XXXX PET FOOD COMPANY,
INC.
By /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: President
FLINT RIVER XXXXX, INC.
By /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Vice President
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