EXHIBIT 2.1.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
CENTENNIAL SPECIALTY FOODS CORPORATION,
XXXXXX XXXXX FOODS, INC.
AND
XXXXX X. XXXXX AND XXXXX X. XXXXX
JUNE 20, 2003
TABLE OF CONTENTS
PAGE
RECITALS.......................................................................................................... 1
ARTICLE I CERTAIN DEFINITIONS............................................................................. 1
ARTICLE II STOCK PURCHASE......................................................................................... 8
2.1 Sales and Transfer of Stock............................................................ 8
2.2 Consideration.......................................................................... 8
ARTICLE III CLOSING............................................................................................... 9
3.1 Closing................................................................................ 9
3.2 Mutual Deliveries at Closing........................................................... 9
3.3 Deliveries of Xxxxx at Closing......................................................... 9
3.4 Xxxxx Foods' Deliveries at Closing..................................................... 9
3.5 Centennial's Deliveries at Closing..................................................... 10
3.6 Conditions of Centennial............................................................... 11
3.7 Conditions of Xxxxx Foods and Xxxxx................................................... 12
3.8 Escrow................................................................................ 13
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF XXXXX FOODS AND JEL................................................. 14
4.1 Organization and Standing, Articles and Bylaws........................................ 14
4.2 Authorization......................................................................... 14
4.3 Subsidiaries.......................................................................... 14
4.4 Capitalization........................................................................ 14
4.5 Financial Statements.................................................................. 15
4.6 Material Contracts.................................................................... 15
4.7 Assets Other Than Real Property....................................................... 16
4.8 Real Property......................................................................... 16
4.9 No Conflicts.......................................................................... 16
4.10 Litigation............................................................................ 17
4.11 Taxes................................................................................. 17
4.12 Employees............................................................................. 17
4.13 Consents.............................................................................. 18
4.14 Operating Rights...................................................................... 18
4.15 Compliance with Applicable Laws....................................................... 18
4.16 Insurance............................................................................. 18
4.17 Absence of Changes.................................................................... 19
4.18 Employee Plans........................................................................ 19
i
4.19 Intellectual Property Rights.......................................................... 20
4.20 Environment, Health and Safety........................................................ 20
4.21 Certain Transactions.................................................................. 21
4.22 Bank Accounts; Powers of Attorney..................................................... 21
4.23 Absence of Claims Against Xxxxxx Xxxxx and Xxxxxx..................................... 21
4.24 Employee Loans........................................................................ 21
4.25 Brokers' Fees......................................................................... 21
4.26 Burdensome Obligations................................................................ 21
4.27 Full Disclosure....................................................................... 22
ARTICLE V REPRESENTATIONS AND WARRANTIES OF CENTENNIAL........................................................... 22
5.1 Organization and Standing Articles and Bylaws......................................... 22
5.2 Authorization......................................................................... 22
5.3 No Conflicts.......................................................................... 23
5.4 Consents.............................................................................. 23
5.5 Brokers' Fees......................................................................... 23
5.6 Full Disclosure....................................................................... 23
ARTICLE VI CONDUCT OF BUSINESS PENDING CLOSING................................................................... 23
6.1 Qualification......................................................................... 23
6.2 Ordinary Course....................................................................... 24
6.3 Corporate Changes..................................................................... 24
6.4 Indebtedness.......................................................................... 24
6.5 Accounting............................................................................ 24
6.6 Compliance with Legal Requirements.................................................... 24
6.7 Disposition of Assets................................................................. 24
6.8 Compensation.......................................................................... 25
6.9 Modification or Breach of Agreements; New Agreements.................................. 25
6.10 Capital Expenditures.................................................................. 25
6.11 Consents.............................................................................. 25
6.12 Maintenance of Insurance.............................................................. 25
6.13 Discharge............................................................................. 25
6.14 Claims................................................................................ 26
6.15 Taxes and Tax Assessments............................................................. 26
ARTICLE VII ADDITIONAL COVENANTS................................................................................. 26
7.1 Covenants of Xxxxx Foods and Xxxxx.................................................... 26
7.2 Covenants of Centennial............................................................... 27
7.3 Tax Advice............................................................................ 27
7.4 Access and Information................................................................ 27
7.5 Expenses.............................................................................. 28
7.6 Certain Notifications................................................................. 28
ii
7.7 Publicity............................................................................. 28
7.8 Further Assurances.................................................................... 29
7.9 Pre and Post Closing Distributions to Xxxxx........................................... 29
7.10 Income Tax Return for Xxxxxx Xxxxx and Xxxxxx ........................................ 29
7.11 Indemnification Post Closing.......................................................... 29
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER................................................................... 29
8.1 Termination........................................................................... 30
8.2 Effect of Termination................................................................. 30
8.3 Amendment............................................................................. 30
8.4 Waiver................................................................................ 30
ARTICLE IX INDEMNIFICATION....................................................................................... 30
9.1 Survival of Representations and Warranties............................................ 31
9.2 Indemnification by Xxxxx Foods and Xxxxx.............................................. 31
9.3 Indemnification by Centennial......................................................... 31
9.4 Third-Party Claims.................................................................... 31
9.5 Indemnification Exclusive............................................................. 32
9.6 Access and Information................................................................ 32
9.7 Mitigation............................................................................ 32
9.8 Right of Set-Off...................................................................... 32
9.9 Limitations........................................................................... 33
ARTICLE X GENERAL PROVISIONS..................................................................................... 33
10.1 Governing Law......................................................................... 33
10.2 Successors and Assigns................................................................ 33
10.3 Entire Agreement...................................................................... 33
10.4 Severability.......................................................................... 34
10.5 Notice................................................................................ 34
10.6 Construction.......................................................................... 34
10.7 Arbitration........................................................................... 34
10.8 Headings.............................................................................. 35
10.8 Counterparts.......................................................................... 35
10.9 Schedules, and Exhibits............................................................... 35
iii
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), effective as of this
20th day of June, 2003, by and among CENTENNIAL SPECIALTY FOODS CORPORATION, a
Delaware corporation ("Centennial"), XXXXXX XXXXX FOODS, INC., formerly known as
XXXXX FOODS, INC., a Delaware corporation ("Xxxxxx Xxxxx"), XXXXX X. XXXXX
("JEL"), and XXXXX X. XXXXX ("JML"). JEL and JML are collectively referred to
herein as "Xxxxx." Xxxxxx Xxxxx, Xxxxx and Centennial are sometimes referred to
collectively herein as the "Parties" or singularly as a "Party."
RECITALS
WHEREAS, JEL and JML are the record and beneficial owners of all of the
issued and outstanding shares of capital stock of Xxxxxx Xxxxx, with JEL and JML
each owning 5 shares (the "Xxxxxx Xxxxx Shares");
WHEREAS, the board of directors of Centennial deem it advisable and in
the best interests of its shareholders that Centennial purchase all of the
Xxxxxx Xxxxx Shares pursuant to this Agreement;
WHEREAS, Xxxxx desires to sell all of the Xxxxxx Xxxxx Shares to
Centennial pursuant to this Agreement, in exchange for the consideration set
forth herein;
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
Unless the context otherwise requires, the terms defined in this
Article I shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and the plural forms of such terms.
Any capitalized term used in this Agreement and not ascribed a meaning in this
Article I shall have the meaning ascribed to such term elsewhere in this
Agreement.
"Affiliate" means, with respect to a Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person, and shall include (a)
any officer or director or of a Person, (b) any Person of which Centennial or
Xxxxxx Xxxxx (or such specified Person) or any Affiliate (as defined in clause
(a) above) of Centennial or Xxxxxx Xxxxx (or such specified Person) shall,
directly or indirectly, beneficially own either (i) at least 10% of the
outstanding equity securities having the general
1
power to vote, or (ii) at least 10% of the interests, or (c) any Person directly
or indirectly controlling Centennial or Xxxxxx Xxxxx (or such specified Person)
through a management agreement, voting agreement or other contract.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or would reasonably form the
basis for any specified consequence.
"Benefit Arrangement" mean any form of current or deferred
compensation, bonus, stock option, stock appreciation right, severance pay,
salary continuation, pension, profit-sharing, retirement or incentive plan,
practice or arrangement, any group or individual disability, medical, dental,
health, hospitalization, life insurance or other insurance plans or related
benefits, or any other welfare or similar plan or arrangement for the benefit of
any director, officer or employee, whether active or retired, or for any class
or classes of such directors, officers or employees.
"Breach" has the meaning set forth in Section 8.1.2.
"Breaching Party" has the meaning set forth in Section 8.1.2.
"Centennial" has the meaning set forth in the first paragraph hereof.
"Centennial Indemnified Party" has the meaning set forth in Section
9.2.
"Claim" means any actual or threatened claim, action, suit,
arbitration, hearing, inquiry, proceeding (including administrative and informal
proceedings), complaint, charge, investigation or audit by or before any
Governmental Entity or arbitrator and any appeal from any of the foregoing.
"Closing" has the meaning set forth in Section 3.1 below.
"Closing Date" has the meaning set forth in Section 3.1 below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of any of the Parties that is not already generally
available to the public. Confidential Information includes all information or
material disclosed or provided by Xxxxx or Xxxxxx Xxxxx to Centennial (or vice
versa), either orally or in writing, or obtained by Centennial from a third
party or any other source, concerning any aspect of the business or affairs of
Xxxxxx Xxxxx or Xxxxxx or their Affiliates (or vice versa), including without
limitation, any information or material pertaining to products, formulae,
specifications, designs, processes, plans, policies, procedures, employees, work
conditions, legal and regulatory affairs, assets, inventory, discoveries,
trademarks, patents, manufacturing, packaging, distribution, sales, marketing,
2
expenses, financial statements and data, customer and supplier lists, raw
materials, costs of goods and relationships with third parties. Confidential
Information also includes any notes, analyses, compilations, studies or other
material or documents prepared by the Parties which contain, reflect or are
based, in whole or in part, on the Confidential Information. Notwithstanding the
foregoing, Confidential Information shall not include information or material
that (i) is publicly available or becomes publicly available through no action
or fault of other Party, (ii) was already in a Party's possession or known to a
Party prior to being disclosed or provided to that Party by or on behalf of the
other Party provided, that, the source of such information or material was not
bound by a contractual, legal or fiduciary obligation of confidentiality, known
to Party, to the other Party or any other party with respect thereto, or (iii)
was or is obtained by a Party from a third party, provided, that, such third
party was not bound by a contractual, legal or fiduciary obligation of
confidentiality to the other Party or any other party with respect to such
information or material that is known to the Party which obtained the
information from the third party.
"Debentures" means the Senior Debentures to be issued by Centennial to
Xxxxx at the Closing pursuant to Section 2.2.1 hereof as consideration for the
sale of the Xxxxxx Xxxxx Shares hereunder, together with any renewals,
extensions or modifications thereof.
"Disclosure Schedule" means the Schedules to this Agreement required to
be prepared by Xxxxxx Xxxxx and delivered to Centennial.
"Employee Plan" means any "employee benefit plan," as defined in
Section 3(3) of ERISA, which is subject to any provisions of ERISA, and covers
any employee, whether active or retired, of Xxxxxx Xxxxx or Xxxxxx.
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all Legal Requirements concerning
pollution or protection of the environment, public health and safety, or
employee health and safety, including Legal Requirements relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, toxic materials
or other Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Financial Statements" shall have the meaning as set forth in Section
4.5.
"GAAP" means United States generally accepted accounting principles, as
amended from time to time.
3
"Governmental Entity" means any court, federal, state, local or foreign
government or any administrative agency or commission or any other governmental
authority or instrumentality whatsoever.
"Hazardous Substances" means any hazardous, toxic or infectious
substance, material, gas or waste which is regulated by any Governmental Entity.
"Hoopeston" means Hoopeston Foods Denver Corp, which, pursuant to a
Co-Pack and Warehousing Agreement with Xxxxxx Canning Company, a wholly-owned
subsidiary of Xxxxxx Xxxxx, dated January 26, 2001, and various other
agreements, provides for Hoopeston to operate the canning and food production
plant owned by Xxxxxx located at 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000.
"Indebtedness" means, when used with reference to any Person, without
duplication, (i) any Liability of such Person created or assumed by such Person,
or any Subsidiary thereof, (A) for borrowed money, (B) evidenced by a bond,
note, debenture, or similar instrument (including a purchase money obligation,
deed of trust or mortgage) given in connection with the acquisition of, or
exchange for, any property or assets (other than inventory or similar property
acquired and consumed in the Ordinary Course of Business), including securities
and other indebtedness, (C) in respect of letters of credit issued for such
Person's account and "swaps" of interest and currency, exchange rates (and other
interest and currency exchange rate hedging agreements) to which such Person is
a party or (D) for the payment of money as lessee under leases that should be,
in accordance with GAAP recorded as capital leases for financial reporting
purposes; (ii) any Liability of others described in the preceding clause (i)
guaranteed as to payment of principal or interest by such Person or in effect
guaranteed by such Person through an agreement, contingent or otherwise, to
purchase, repurchase, or pay the related Indebtedness or to acquire the security
therefor; (iii) all Liabilities or obligations secured by a Lien upon property
owned by such Person and upon which Liabilities or obligations such Person
customarily pays interest or principal, whether or not such Person has assumed
or become liable for the payment of such liabilities or obligations; and (iv)
any amendment, renewal, extension, revision or refunding of any such Liability
or obligation.
"Indemnified Party" has the meaning set forth in Section 9.4.
"Indemnifying Party" has the meaning set forth in Section 9.4.
"Intellectual Property" means (i) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part revisions, extensions, and
reexaminations thereof; (ii) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all-goodwill associated
therewith, and all applications registrations, and renewals in connection
therewith; (iii) all copyrightable works,
4
together with all copyrights and all applications, registrations, and renewals
in connection therewith; (iv) all trade secrets and confidential business
information (including recipes, ideas, research and development, know-how,
formulas, formulations, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals); (v) all computer software (including data and related
documentation); (vi) all other proprietary rights; and (vii) all copies and
tangible embodiments thereof (in whatever form or medium).
"IPO" means, with respect to Centennial, (i) the completed initial
offering and sale of a minimum of 1,550,000 shares of Centennial's common stock
to the public at a minimum price of $5.00 per share in an offering registered
under the provisions of the Securities Act and described in Centennial's
registration statement on Form SB-2 to be filed with the SEC, and (ii)
Centennial common stock being quoted on the NASDAQ SmallCap Market.
"JEL" has the meaning set forth in the first paragraph hereof.
"JML" has the meaning set forth in the first paragraph hereof.
"Knowledge" means that a Party is actually aware of the fact or matter
in question.
"Legal Requirement" means any statute, law, ordinance, rule,
regulation, permit, order, writ, judgment, injunction, decree or award issued,
enacted or promulgated by any Governmental Entity or any arbitrator with binding
authority on a Party or Parties, as the case may be.
"Xxxxx" has the meaning set forth in the first paragraph hereof.
"Xxxxx Indemnified Party" has the meaning set forth in Section 9.3.
"Liability" means any liability (whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due), including, but not limited
to, any liability for Taxes.
"Licenses" has the meaning set forth in Section 4.14 below.
"Lien" means all liens (including judgment and mechanics' liens,
regardless of whether liquidated), mortgages, assessments, security interests,
easements, pledges, trusts (constructive or otherwise), deeds of trust, options
or other charges, encumbrances or restrictions.
"Loan Agreement" means the Senior Subordinated Loan Agreement between
Centennial as borrower, and Xxxxx, as lender, together with any modifications
thereof, to be dated as of the Closing.
5
"Losses" means any and all losses, damages, demands, assessments,
adjustments, judgments, settlement payments, deficiencies, penalties, fines,
interest (including interests from the date of such damages), and costs and
expenses (including without limitation reasonable attorneys' fees and
disbursements of every kind, nature and description).
"Material Adverse Effect" means any event, effect, development,
occurrence or circumstance, individually or when taken together with all other
such events, effects, developments, occurrences or circumstances, causing,
resulting in or having a material adverse effect on (i) the business, assets,
results of operations, properties or condition (financial or otherwise) of
Xxxxxx Xxxxx, Xxxxxx or Centennial, as applicable; or (ii) the legal right or
authorization of Xxxxxx Xxxxx, Xxxxxx or Centennial, as applicable, to continue
to operate its business as a going concern.
"Material Contracts" means with respect to Xxxxxx Xxxxx and Xxxxxx (i)
any union contract or any employment or consulting contract or arrangement
providing for future compensation, written or oral, with any officer, director
or employee which is not terminable on thirty (30) days notice or less without
penalty or obligation to make payments related to such termination; (ii) any
plan contract or arrangement, whether written or oral, providing for bonuses,
pensions, deferred compensation, severance pay or benefits, retirement payments,
profit sharing or the like; (iii) any existing broker agreement, lease sale or
purchase agreement, distribution agreement, volume purchase agreement, or
similar agreement in which the annual amount involved in fiscal 2002 exceeded or
is expected to exceed $20,000 in aggregate amount; (iv) except for trade
indebtedness incurred in the Ordinary Course of Business, any Indebtedness
incurred in the acquisition of companies or other entities or Indebtedness for
borrowed money by way of direct loan, sale of debt securities, recourse
obligations on lease sales, purchase money obligation, conditional sale,
guarantee, leasehold obligations or otherwise; (v) any contract containing
covenants purporting to limit in any way the freedom of Xxxxxx Xxxxx or Xxxxxx
to compete in any line of business or in any geographic area; (vi) any agreement
of indemnification; (vii) any agreement, contract or commitment relating to
capital expenditures and which involve future payments in excess of $25,000 in
the aggregate by Xxxxxx Xxxxx or Xxxxxx; (viii) any agreements, contracts or
commitments relating to the disposition of assets, including any intangible
assets or Intellectual Property rights (other than inventory), which involve
payments in excess of $25,000 in the aggregate by Xxxxxx Xxxxx or Xxxxxx; (ix)
any contracts with a Governmental Entity subject to price redetermination or
renegotiation; or (x) all insurance policies of Xxxxxx Xxxxx and Xxxxxx; (xi)
all equipment leases of Xxxxxx Xxxxx and Xxxxxx in which Xxxxxx Xxxxx or Xxxxxx
is lessee and which involve payments in excess of $20,000 in the aggregate; or
(xii) any other agreement, contract or commitment which is material to Xxxxxx
Xxxxx or Xxxxxx. "Material Contracts" with respect to Centennial means any
agreement, contract or commitment which Centennial files or is required to file
with its SEC reports.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency and, where appropriate, in accordance with formulas).
6
"Party" has the meaning set forth in the preamble to this Agreement.
"Permitted Liens" means (i) liens for Taxes not yet due and payable or
for Taxes that the taxpayer is contesting in good faith through appropriate
proceedings; (ii) purchase money Liens and Liens securing rental payments under
capital lease arrangements; (iii) statutory Liens, such as mechanic's,
materialman's, warehouseman's, carrier's or other like Liens, incurred in good
faith in the Ordinary Course of Business, provided that the underlying
obligations relating to such Liens are paid in the Ordinary Course of Business,
or are being contested diligently and in good faith by appropriate proceedings
and as to which the applicable obligor has set aside reserves on its books
reasonably satisfactory to Centennial, or the payment of which obligations are
otherwise secured in a manner reasonably satisfactory to Centennial; and (iv)
zoning ordinances, easements, licenses, reservations, provisions, covenants,
conditions, waivers or restrictions on the use of Property and other title
exceptions, in each case, that are reasonably acceptable to Centennial.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, business enterprise, or a governmental
entity (or any department, agency, or political subdivision thereof), or any
other legal entity, whether acting in an individual, fiduciary or other
capacity.
"Real Property" has the meaning as set forth in Section 4.8.
"Requisite Regulatory Approvals" has the meaning as set forth in
Section 3.6.9.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Xxxxxx" means Xxxxxx Canning Company, a wholly owned Subsidiary of
Xxxxxx Xxxxx.
"Xxxxxx Deed of Trust" means the deed of trust in the form attached
hereto as Exhibit 1-A to be executed by Xxxxxx at the Closing to grant a deed of
trust/mortgage on the real property owned by Xxxxxx as security for the Xxxxxx
Guaranty.
"Xxxxxx Xxxxx" has the meaning set forth in the first paragraph hereof.
"Xxxxxx Xxxxx Guaranty Agreement" means the guaranty agreement in the
form attached hereto as Exhibit 1-B to be executed by Xxxxxx Xxxxx at the
Closing to fully and unconditionally guarantee all obligations of Centennial
under the Debentures and Loan Agreement.
"Xxxxxx Xxxxx Security Agreement" means the pledge and security
agreement in the form attached hereto as Exhibit 1-C to be executed by Xxxxxx
Xxxxx at the Closing to pledge and grant a security interest in all assets of
Xxxxxx Xxxxx as security for the Xxxxxx Xxxxx Guaranty.
7
"Xxxxxx Xxxxx Shares" has the meaning set forth in the Recitals.
"Xxxxxx Xxxxx Stock" means shares of Common Stock, $.01 par value, of
Xxxxxx Xxxxx.
"Xxxxxx Guaranty Agreement" means the guaranty agreement in the form
attached hereto as Exhibit 1-D to be executed by Xxxxxx at the Closing to fully
and unconditionally guarantee all obligations of Centennial under the Debentures
and Loan Agreement.
"Xxxxxx Security Agreement" means the pledge and security agreement in
the form attached hereto as Exhibit 1-E to be executed by Xxxxxx at the Closing
to pledge and grant a security interest in all assets of Xxxxxx as security for
the Xxxxxx Guaranty.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs, duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax or contribution of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Threshold Amount" has the meaning set forth in Section 9.9.2.
ARTICLE II
STOCK PURCHASE
2.1 Sales and Transfer of Stock. On the basis of the
representations, warranties, covenants and agreements and subject to the
satisfaction (or waiver by the Party whose obligations hereunder are subject to
such satisfaction) of the conditions set forth in this Agreement, on the Closing
Date, Xxxxx shall sell, convey, assign, transfer and deliver to Centennial, and
Centennial shall purchase and acquire from Xxxxx, all of the Xxxxxx Xxxxx Shares
owned by Xxxxx, which constitutes 100% of the issued and outstanding capital
stock of Xxxxxx Xxxxx. Xxxxx shall transfer to Centennial good and marketable
title to such Xxxxxx Xxxxx Shares, free and clear of all liens, security
interests and encumbrances.
2.2 Consideration. The following is the consideration to be paid
to Xxxxx for the sale of the Xxxxxx Xxxxx Shares:
8
2.2.1 Centennial shall issue to Xxxxx Debentures in an
aggregate principal amount equal to $10,000,000.00, payable in United States
dollars in accordance with the terms thereof, which Debentures shall be
substantially in the form to be attached hereto as Exhibit 2.2.1. The Debentures
are subject to the terms of the Loan Agreement and other loan instruments
referenced therein. The number, principal amount and payee of the Debentures to
be issued are set forth on Schedule 2.2.1 hereof.
ARTICLE III
CLOSING
3.1 Closing. The consummation of the purchase of the Xxxxxx Xxxxx
Shares by Centennial and the other transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Centennial, located at 000
Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, on such date that all
of the conditions to Closing are satisfied including, without limitation, the
satisfaction of the condition set forth in Section 3.7.6 that Centennial shall
have consummated the IPO (the "Closing Date"), or such other date and place as
the Parties may mutually agree. The Closing shall be carried out and completed
in accordance with the escrow provisions set forth in Section 3.8 below.
3.2 Mutual Deliveries at Closing. Provided that all of the
conditions to the Closing set forth in Sections 3.6 and 3.7 below have been
satisfied or waived by the Party benefitting therefrom, the appropriate Parties
or Persons shall execute and deliver or cause to be delivered to the appropriate
Parties at Closing the following:
3.2.1 The Loan Agreement;
3.2.2 All other required loan instruments as specified in
the Loan Agreement.
3.3 Deliveries of Xxxxx at Closing. Provided that all of the
conditions to the Closing set forth in Sections 3.6 and 3.7 below have been
satisfied or waived by the Party benefitting therefrom, Xxxxx shall execute and
deliver or cause to be delivered to Centennial at the Closing the following
documents:
3.3.1 The original stock certificates for all of the Xxxxxx
Xxxxx Shares along with a duly executed stock power in favor of Centennial for
such certificates; and
3.3.2 Such other documents and instruments as may be
specified in this Agreement or otherwise reasonably requested by Centennial in
order to consummate the transactions contemplated hereby.
3.4 Xxxxxx Xxxxx' Deliveries at Closing. Provided that all of the
conditions to the closing set forth in Sections 3.6 and 3.7 below have been
satisfied or waived from the Party
9
benefitting therefrom, Xxxxxx Xxxxx shall execute and deliver or cause to be
delivered to Centennial at the Closing the following:
3.4.1 An Officer's Certificate of Xxxxxx Xxxxx dated the
Closing Date substantially in the form of Exhibit 3.4 hereto;
3.4.2 Xxxxxx Xxxxx' and Xxxxxx original minute books, such
minute books to contain (i) original Articles of Incorporation and all
amendments thereto, or copies thereof if the originals are unavailable; (ii)
bylaws presently in effect; (iii) stock transfer records together with all
available canceled stock certificates; and (iv) all minutes of meetings or
consents in lieu of such meetings of board of directors and shareholders;
3.4.3 A good standing certificate of Xxxxxx Xxxxx and
Xxxxxx, dated within forty five (45) business days of the Closing Date, for each
jurisdiction in which Xxxxxx Xxxxx or Xxxxxx is required to be qualified and
authorized to do business;
3.4.4 Minutes of the board of directors and shareholders of
Xxxxxx Xxxxx authorizing and approving this Agreement and the transactions
contemplated herein;
3.4.5 The resignations of all of the officers and directors
of Xxxxxx Xxxxx and Xxxxxx effective as of the Closing Date;
3.4.6 The Disclosure Schedule required to be submitted to
Centennial by Xxxxxx Xxxxx and JEL; and
3.4.7 Such other documents and instruments as may be
specified in this Agreement or otherwise reasonably requested in writing by
Centennial in order to consummate the transactions contemplated hereby.
3.5 Centennial's Deliveries at Closing. Provided that all of the
conditions to the Closing set forth in Sections 3.6 and 3.7, below, have been
satisfied or waived by the Party benefitting therefrom, Centennial shall execute
and deliver or cause to be delivered to Xxxxx at the Closing the following:
3.5.1 The Debentures in accordance with Section 2.2.1
above;
3.5.2 The Xxxxxx Guaranty Agreement, the Xxxxxx Security
Agreement and the Xxxxxx Deed of Trust;
3.5.3 The Xxxxxx Xxxxx Guaranty Agreement and Xxxxxx Xxxxx
Security Agreement;
10
3.5.4 All documents necessary to perfect Xxxxx' security
interest in collateral to be pledged by Centennial, Xxxxxx Xxxxx and Xxxxxx, as
described and granted in the Loan Agreement, the Xxxxxx Security Agreement, the
Xxxxxx Deed of Trust and the Xxxxxx Xxxxx Security Agreement;
3.5.5 A good standing certificate of Centennial, dated
within forty five (45) business days of the Closing Date, for each jurisdiction
in which Centennial is required to be qualified and authorized to do business;
3.5.6 Minutes of the board of directors and shareholders of
Centennial authorizing and approving this Agreement and the transactions
contemplated herein;
3.5.7 The Indemnification Agreement in the form attached
hereto as Exhibit 3.5.7; and
3.5.8 Such other documents and instruments as may be
specified in this Agreement or otherwise reasonably requested in writing by
Xxxxx in order to consummate the transactions contemplated hereby.
3.6 Conditions of Centennial. Centennial's obligations hereunder
to consummate the transactions hereunder are subject to the satisfaction, at or
prior to the Closing, of all of the following conditions:
3.6.1 Representations and Warranties True; Performance of
Obligations. The representations and warranties made by Xxxxxx Xxxxx and JEL in
this Agreement shall be true, correct and complete in all material respects on
and as of the Closing Date with the same force and effect as if they had been
made on and as of said date; and Xxxxxx Xxxxx and Xxxxx shall have in all
material respects performed all of the obligations and complied with each and
all of the covenants required to be performed or complied with by them on or
prior to the Closing Date.
3.6.2 Material Adverse Effect. No act, event or condition
shall have occurred which Centennial determines in its reasonable discretion has
had or could have a Material Adverse Effect on Xxxxxx Xxxxx or Xxxxxx.
3.6.3 Authorizations and Approvals. All authorizations,
approvals or consents, if any, from third parties, including from any
Governmental Entity or other Person, required to be obtained by Xxxxx and Xxxxxx
Xxxxx shall have been obtained.
3.6.4 Investigation of Xxxxxx Xxxxx. Centennial shall have
concluded (through its representatives, accountants, counsel and other experts)
a due diligence investigation of the business, condition (financial, legal and
other), properties, assets, prospects, operations and affairs of Xxxxxx Xxxxx
and Xxxxxx.
11
3.6.5 Deliveries. Centennial shall have received from the
appropriate Party or Person, the delivery obligations set forth in Sections 3.2
through 3.4 above.
3.6.6 Disclosure Schedule. Centennial shall be satisfied
with the Disclosure Schedule delivered by Xxxxxx Xxxxx and JEL in accordance
with Section 3.4.6 above.
3.6.7 No Claims. There shall not be instituted and pending
or threatened any Claims before any Governmental Entity (i) challenging or
otherwise seeking to restrain or prohibit the consummation of the transactions
contemplated hereby, or (ii) seeking to prohibit the direct or indirect
ownership or operation by Centennial of all or a material portion of the
business or assets of Xxxxxx Xxxxx, or to compel Centennial or Xxxxxx Xxxxx to
dispose of or hold separate all or a material portion of the business or assets
of Xxxxxx Xxxxx or Centennial.
3.6.8 Corporate Action. All corporate and other proceedings
and actions taken in connection with the transactions contemplated hereby and
all certificates, opinions, agreements, instruments, releases and documents
referenced herein or incident to the transactions contemplated hereby shall be
in form and substance satisfactory to Centennial and its counsel.
3.6.9 Requisite Regulatory Approvals. All notices or
filings required to be made, all authorizations, permits, certificates,
registrations, consents, approvals or orders required to be obtained, and all
waiting periods required to expire, prior to the consummation of the
transactions contemplated by this Agreement under applicable federal law of the
United States or applicable laws of any state having jurisdiction over the
transactions contemplated by this Agreement or the businesses conducted by the
Parties or any Affiliate or Subsidiary of any Party (collectively, the
"Requisite Regulatory Approvals") shall have been obtained or expired, as the
case may be, without the imposition of any condition which is materially
burdensome upon Centennial or any Party or Person to be affected by such
condition.
3.6.10 IPO Completed. The IPO of Centennial shall have been
closed.
3.7 Conditions of Xxxxxx Xxxxx and Xxxxx. Xxxxxx Xxxxx' and Xxxxx'
obligations hereunder to consummate the transactions hereunder are subject to
the satisfaction, at or prior to the Closing, of the following conditions:
3.7.1 Representations and Warranties True; Performance of
Obligations. The representations and warranties made by Centennial in this
Agreement shall be true, correct and complete in all material respects on and as
of the Closing Date with the same force and effect as if they had been made on
and as of said date; and Centennial shall have in all material respects
performed all of the obligations and complied with each and all of the covenants
required to be performed or complied by it on or prior to the Closing Date.
12
3.7.2 Authorizations and Approvals. All authorizations,
approvals or consents, if any, from third parties, including from any
Governmental Entity or other Person, required to be obtained by Centennial shall
have been obtained.
3.7.3 Deliveries. Xxxxxx Xxxxx or Xxxxx, as applicable,
shall have received from Centennial the delivery obligations set forth in
Sections 3.2 and 3.5 above.
3.7.4 No Claims. There shall not be instituted and pending
or threatened any Claims before any Governmental Entity (i) challenging or
otherwise seeking to restrain or prohibit the consummation of the transactions
contemplated hereby, or (ii) seeking to prohibit the direct or indirect
ownership or operation by Centennial of all or a material portion of the
business or assets of Xxxxxx Xxxxx, or to compel Centennial or Xxxxxx Xxxxx to
dispose of or hold separate all or a material portion of the business or assets
of Xxxxxx Xxxxx or Centennial.
3.7.5 Requisite Regulatory Approvals. The Requisite
Regulatory Approvals shall have been obtained or expired, as the case may be,
without the imposition of any condition which is materially burdensome upon
Xxxxxx Xxxxx or any Party or Person to be affected by such condition.
3.7.6 IPO Completed. The IPO of Centennial shall have been
closed.
3.8 Escrow. On or prior to the date that the registration
statement filed with the SEC for the IPO becomes effective, the Parties hereto
shall execute all of the documents to be delivered at Closing as set forth in
Sections 3.2 through 3.5 above and deliver such originally executed documents to
an escrow agent appointed in the manner set forth below. The documents will be
held by the escrow agent in escrow, subject to instructions to deliver the
documents as follows:
Upon closing of the IPO, to the recipients entitled to receive such
documents at the Closing as provided under Sections 3.2 through 3.5
above; or
If this Agreement is terminated prior to closing the IPO pursuant to
Section 8.1 hereof, to the Parties who executed and delivered such
documents to the escrow agent.
The escrow agent shall be selected and appointed by mutual agreement of JEL and
Centennial. The above instructions and the other terms and conditions of the
escrow arrangement shall be set forth in a written escrow agreement mutually
acceptable to JEL, Centennial and the escrow agent. The fees of the escrow agent
and other costs and expenses of such escrow shall be paid by Centennial under
Section 7.5 hereof.
13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF XXXXXX XXXXX AND JEL
Xxxxxx Xxxxx and JEL, jointly and severally, represent and warrant to
Centennial that (except for changes contemplated by this Agreement and except as
set forth in the Disclosure Schedule attached hereto), each of the following
statements is true, correct and complete as of the date of this Agreement and
the Closing Date:
4.1 Organization and Standing, Articles and Bylaws. Xxxxxx Xxxxx
and Xxxxxx are corporations duly organized, validly existing and in good
standing under the laws of the State of Delaware and Colorado, respectively,
have full power and authority to own their assets and properties and to carry on
their business as presently conducted. Xxxxxx Xxxxx and Xxxxxx are duly
qualified and authorized to do business, and are in good standing as a foreign
corporation, in each jurisdiction where the nature of their activities or of
their properties (both owned and leased) make such qualification necessary,
except where the failure to so qualify would not have a Material Adverse Effect.
Xxxxxx Xxxxx has furnished Centennial with copies of the Articles of
Incorporation and Bylaws, as amended to the date hereof, of both Xxxxxx Xxxxx
and Xxxxxx. Said copies are true, correct and complete and contain all
amendments through the Closing Date.
4.2 Authorization. All actions on the part of Xxxxx and all
corporate action on the part of Xxxxxx Xxxxx, its officers, directors and
shareholders necessary for the authorization, execution and delivery of this
Agreement and the documents contemplated hereby, the performance of all of
Xxxxxx Xxxxx' and Xxxxx' obligations hereunder and thereunder have been taken
prior to the Closing. This Agreement and the documents contemplated hereby, when
executed and delivered, shall constitute valid and legally binding obligations
of Xxxxxx Xxxxx and Xxxxx enforceable in accordance with their respective terms.
4.3 Subsidiaries. Other than Xxxxxx and Produce Finance, LLC, a
Colorado limited liability company, both of which are wholly-owned by Xxxxxx
Xxxxx, Xxxxxx Xxxxx has no Subsidiaries and does not presently own, of record or
beneficially, or control, directly or indirectly, any capital stock, securities
convertible into capital stock or any other equity interest in any corporation,
association or business entity, nor is Xxxxxx Xxxxx, directly or indirectly, a
participant in any joint venture, partnership or other entity. Produce Finance,
LLC is an inactive Subsidiary.
4.4 Capitalization. The authorized capital stock of Xxxxxx Xxxxx
consists of 3,000 shares of voting Common Stock, $.01 par value, and 10 shares
are issued and outstanding as of the date of this Agreement. Xxxxx is the record
and beneficial holder of all of the issued and outstanding shares of Xxxxxx
Xxxxx Common Stock, with JEL owing 5 shares and JML owning 5 shares. All of the
Xxxxxx Xxxxx Shares have been duly authorized and validly issued and are fully
paid and non-assessable.
14
Other than the foregoing, there are no outstanding shares of Xxxxxx
Xxxxx Stock, preferred stock or any other equity securities of Xxxxxx Xxxxx, and
there are no options, warrants, calls, conversion rights, preemptive rights,
commitments or agreements of any character to which Xxxxxx Xxxxx or Xxxxx may be
bound that do or may obligate Xxxxxx Xxxxx or Xxxxx to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of Xxxxxx Xxxxx
Stock, preferred stock or other equity securities or that do or may obligate
Xxxxxx Xxxxx or Xxxxx to xxxxx, extend or enter into any such option, warrant,
call, conversion right, commitment or agreement. There are no outstanding
arrangements, agreements, commitments or understandings of any kind affecting or
relating to the voting, issuance, purchase, redemption, repurchase or transfer
of any capital stock of Xxxxxx Xxxxx or any other securities of Xxxxxx Xxxxx.
Xxxxxx Xxxxx and Xxxxx have not, or prior to the Closing will have not, become a
party to or subject to any contract or obligation wherein any Person has a right
or option to purchase or acquire any rights in any capital stock or securities
of Xxxxxx Xxxxx. Xxxxx owns of record and beneficially, and has title to all of
the Xxxxxx Xxxxx Shares, free and clear of all Claims and Liens.
4.5 Financial Statements. True, complete and correct copies of
Xxxxxx Xxxxx' financial statements [containing (1) audited balance sheet as of
December 31, 2002, and 2001, and statements of income, cash flows and
stockholders' equity for the years ended December 31, 2001, and 2002, and (2)
unaudited balance sheet as of March 31, 2003, and 2002, and statements of
income, cash flows and stockholders' equity for the fiscal quarters then ended
(collectively, the "Financial Statements")], have been delivered to Centennial.
The Financial Statements have been prepared in accordance with GAAP consistently
applied and fairly present the financial position of Xxxxxx Xxxxx as of the
dates thereof and the results of its operations and cash flows for the periods
then ended. There are no Xxxxxx Xxxxx Liabilities, direct or indirect, fixed or
contingent, which are not reflected in the balance sheet as of March 31, 2003,
except for Liabilities incurred in the Ordinary Course of Business subsequent to
March 31, 2003, which, either individually or in the aggregate, would not be
material. To the Knowledge of JEL, there is no Basis for any assertion against
Xxxxxx Xxxxx of any material Liability or material obligation of any nature
whatsoever that is not fully reflected in the Financial Statements which, either
individually or in the aggregate, would be material. Since the date of the
Financial Statements, there have been no material changes in Xxxxxx Xxxxx'
accounting policies.
4.6 Material Contracts. Schedule 4.6 to the Disclosure Schedule
hereto contains a complete and accurate list of all Material Contracts to which
Xxxxxx Xxxxx or Xxxxxx is a party or bound. True, correct and complete copies of
all Material Contracts listed on Schedule 4.6 to the Disclosure Schedule have
been furnished by Xxxxxx Xxxxx to Centennial. Each Material Contract so listed
is a valid and binding obligation of Xxxxxx Xxxxx or Xxxxxx and is enforceable
against Xxxxxx Xxxxx or Xxxxxx and the other Person or Persons thereto, in
accordance with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and subject to the availability
of equitable remedies. To the Knowledge of JEL and subject to obtaining any
necessary waivers at or prior to Closing, Xxxxxx Xxxxx and Xxxxxx have performed
all material obligations required to be performed by them to date and are not in
material default under or in breach of any material term or provision of any
Material Contract to which Xxxxxx
15
Xxxxx or Xxxxxx is a party, is subject or is otherwise bound, and no event has
occurred that, with the giving of notice or the passage of time or both, would
constitute such a default or breach under any Material Contract. To the
Knowledge of JEL, no party with whom Xxxxxx Xxxxx or Xxxxxx has a Material
Contract is in default of its obligations thereunder. Except as otherwise set
forth on Schedule 4.6, no consent or approval of any party to any of the
Material Contracts is necessary in order to permit Xxxxxx Xxxxx to consummate
the transactions contemplated hereby.
4.7 Assets Other Than Real Property. Xxxxxx Xxxxx and Xxxxxx have
title to all properties and assets (other than real property which is subject to
Section 4.8, below) owned or leased by Xxxxxx Xxxxx or Xxxxxx, free and clear of
all Liens except for: (i) Liens for current Taxes not yet due and payable which
have been fully reserved for; (ii) Liens, if any, that are not substantial in
character, amount or extent and do not detract materially from the value, or
interfere with present use or the sale or other disposition, of the property
subject thereto or affected thereby, and (iii) Liens set forth on Schedule 4.7 .
The assets and properties of Xxxxxx Xxxxx and Xxxxxx constitute all the assets,
properties, rights, privileges and interests necessary for the operation of
Xxxxxx Xxxxx' and Xxxxxx' businesses; provided, however, that no representation
or warranty is made as to the physical condition or current state of repair of
such properties or assets.
4.8 Real Property. Schedule 4.8 to the Disclosure Schedule hereto
contains an accurate list and general description of all real property fee
interests owned by Xxxxxx Xxxxx or Xxxxxx (the "Real Property"). Schedule 4.8 to
the Disclosure Schedule further contains a complete and accurate list of Xxxxxx
Xxxxx' or Xxxxxx' other real property interests pursuant to leases, subleases,
licenses or other agreements. Xxxxxx Xxxxx or Xxxxxx has good and marketable
title in and to the Real Property, free and clear of all Liens and Claims,
except for (i) Liens and Claims and other matters recorded in the real property
records, and (ii) other matters as described in the Disclosure Schedule. To the
extent it has had operations thereon, the activities of Xxxxxx Xxxxx or Xxxxxx
with respect to the Real Property are in all material respects permitted and
authorized by applicable zoning laws, ordinances and regulations and all laws
and regulations of any Governmental Entity. The buildings and other improvements
on the Real Property are in the aggregate sufficient to conduct such current
business activities as are conducted at such facilities; provided, however, that
no representation or warranty is made as to the physical condition or current
state of repair of such Real Property, including the improvements thereon.
4.9 No Conflicts. Neither the execution and delivery nor the
performance of this Agreement by Xxxxxx Xxxxx and Xxxxx will result in any of
the following: (i) a default or an event that, with notice or lapse of time or
both, could be a default, breach or violation of (A) the Articles of
Incorporation or Bylaws of Xxxxxx Xxxxx or Xxxxxx, (B) any Material Contract;
(ii) the termination of any Material Contract or the acceleration of the
maturity of any Indebtedness or other material obligation of Xxxxxx Xxxxx,
Xxxxxx or Xxxxx; (iii) the creation or imposition of any Lien (except for
Permitted Liens) on any of the assets or properties of Xxxxxx Xxxxx, Xxxxxx or
Xxxxx; (iv) the creation or imposition of any Lien on any shares of the Xxxxxx
Xxxxx Stock; or (v) a
16
violation or breach of any known writ, injunction or decree of any Governmental
Entity or arbitrator to which Xxxxxx Xxxxx or Xxxxxx is a party or by which any
of its properties are bound.
4.10 Litigation. There are no Claims before any court or
administrative agency pending or, to the Knowledge of JEL, currently threatened
against or with respect to Xxxxxx Xxxxx or Xxxxxx, which question the validity
of this Agreement or any action taken or to be taken in connection herewith, or
which, individually or in the aggregate, might result in a Material Adverse
Effect, or in any material impairment of the right or ability to carry on their
businesses as now conducted or as proposed to be conducted, or in any material
Liability or Loss on the part of Xxxxxx Xxxxx or Xxxxxx. Xxxxxx Xxxxx and Xxxxx
are not a party or subject to, and none of their assets are bound by, the
provisions of any order, writ, injunction, judgment, or decree of any
Governmental Entity or arbitrator known to Xxxxxx Xxxxx.
4.11 Taxes. Xxxxxx Xxxxx has no Liability for any federal, state or
local Taxes, except for Taxes which have accrued and are not yet payable. Xxxxxx
Xxxxx has filed or caused to be filed all Tax Returns required under applicable
law to be filed on or before the Closing Date, Xxxxxx Xxxxx has paid or made
provision for all Taxes and other charges which have or may become due for the
periods covered by such Tax Returns, and all such Tax Returns are true, correct
and complete in all material respects. None of the Tax Returns of Xxxxxx Xxxxx
are currently under investigation or audit, nor is an investigation or audit
pending to the Knowledge of JEL. There are no outstanding agreements or waivers
extending the statutory period of limitations applicable to any Xxxxxx Xxxxx Tax
Return for any period. The accounting treatment of all items of income, gain,
loss, deduction and credit as reported on all Tax Returns and estimates filed by
or on behalf of Xxxxxx Xxxxx are true, correct and complete in all material
respects, and all deferred Taxes and all Taxes due for the period ending on the
Closing Date have been accrued on the Balance Sheet as of March 31, 2003. No
Claim has ever been made by any Governmental Entity in a jurisdiction where
Xxxxxx Xxxxx does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction. All Taxes owed by Xxxxxx Xxxxx or which Xxxxxx Xxxxx is
obligated to withhold from amounts owed or owing to any employee, independent
contractor, stockholder, creditor or third party have been paid. There are no
unresolved Claims concerning Xxxxxx Xxxxx' Tax Liability, and to the Knowledge
of JEL, no Basis for any such Claims exist.
4.12 Employees. Schedule 4.12 to the Disclosure Schedule hereto
sets forth a complete list of all current employees of Xxxxxx Xxxxx and Xxxxxx,
together with each employee's tenure, title or job classification, and the
current annual rate of compensation payable to each such employee. With respect
to Xxxxxx Xxxxx and Xxxxxx, and to the Knowledge of JEL, with respect to
Hoopeston, there are no unfair labor practice complaints, strikes, slowdowns,
stoppages or other controversies pending or threatened, attempts to unionize or
controversies threatened relating to, any of their respective employees. None of
Xxxxxx Xxxxx, Xxxxxx and, to the Knowledge of JEL, Hoopeston, is a party to any
collective bargaining agreement with respect to any of its employees or to a
written employment contract with any of its employees. There are no
understandings with respect to the employment of any officer or employee of
Xxxxxx Xxxxx or Xxxxxx which are not terminable by Xxxxxx Xxxxx or Xxxxxx
without Liability on not more than
17
thirty (30) days' notice. No officer, director, or employee is entitled to
receive any payment of any amount under any existing agreement, Benefit
Arrangement, Employment Plan or other benefit, or to the accrual or vesting of
any other benefit or payment as a result of the consummation of any transactions
contemplated by this Agreement. Xxxxxx Xxxxx and Xxxxxx have complied with all
applicable Legal Requirements which govern workers' compensation, equal
employment opportunity and equal pay. Xxxxxx Xxxxx' and Xxxxxx' employment of
each of its employees is in compliance with all immigration and naturalization
laws of the United States.
4.13 Consents. Except as set forth on the Disclosure Schedule, no
consents, approvals' orders, or authorizations of, or registrations,
qualifications, designations, declarations or filings with, any Governmental
Entity or under any Material Contract, is or will be required on the part of
Xxxxxx Xxxxx or Xxxxxx in connection with the valid execution and delivery of
this Agreement and the sale of the Xxxxxx Xxxxx Shares, or the consummation of
any other transaction contemplated hereby.
4.14 Operating Rights. Xxxxxx Xxxxx and Xxxxxx have all operating
authority, licenses, franchises, permits, certificates, consents, rights and
privileges (collectively, "Licenses") as are necessary or appropriate to the
operation of its business as now conducted. Such Licenses are in full force and
effect, no violations have been or are expected to have been recorded in respect
of any such Licenses, and no proceeding is pending or to the Knowledge of JEL
threatened, or to the Knowledge of JEL is any proceeding pending against
Hoopeston, that could result in the revocation or limitation of any such
Licenses held by Hoopeston. Xxxxxx Xxxxx and Xxxxxx have conducted their
businesses so as to comply in all material respects with all such Licenses and,
to the best of Xxxxx' Knowledge, Hoopeston has done likewise.
4.15 Compliance with Applicable Laws. The properties, assets,
business and operations of Xxxxxx Xxxxx and Xxxxxx have been and are being
maintained and conducted in compliance with all Legal Requirements to which
Xxxxxx Xxxxx or Xxxxxx is subject. No investigation or review by any
Governmental Entity with respect to Xxxxxx Xxxxx or Xxxxxx is pending, or to the
Knowledge of JEL, has any Governmental Entity indicated in writing to Xxxxxx
Xxxxx or Xxxxxx any intention to conduct the same.
4.16 Insurance. Schedule 4.16 to the Disclosure Schedule hereto
sets forth an accurate list, as of the date of this Agreement, of all insurance
policies carried by Xxxxxx Xxxxx and Xxxxxx and all insurance loss runs or
workmen's compensation claims received for the past two (2) policy years, if
any. Attached to Schedule 4.16 to the Disclosure Schedule are true, complete and
correct copies of the summaries or declaration pages from the insurance
companies of all applicable policies, all of which are in full force and effect.
All premiums payable under all such policies have been paid and Xxxxxx Xxxxx and
Xxxxxx are, to Xxxxx' Knowledge, otherwise in full compliance with the terms of
such policies (or other policies providing substantially similar coverage).
There is no threatened termination or rescission of, or material premium
increase with respect to, any such policies.
18
4.17 Absence of Changes. Except as set forth on Schedule 4.17 to
the Disclosure Schedule, since March 31, 2003, (i) there has not been any change
or amendment in the Articles of Incorporation, Bylaws or other governing
instruments of Xxxxxx Xxxxx or Xxxxxx; (ii) any sale or issuance of, or grant of
options or rights to acquire, any shares of stock or other securities of Xxxxxx
Xxxxx or Xxxxxx or any declaration, setting aside, or payment of dividends or
redemptions in respect of any shares of stock of Xxxxxx Xxxxx, or any direct or
indirect redemption, purchase or other acquisition of such stock of Xxxxxx
Xxxxx, or any agreement, understandings or commitments to do the same; (iii) any
transfer or other disposition or pledge of, or the grant of options or rights to
acquire, any of the outstanding shares of Xxxxxx Xxxxx or Xxxxxx; (iv) any
amendment, termination or revocation of any Material Contract; (v) any sale,
transfer, mortgage, pledge, or incurring of any Lien (other than Permitted Liens
and sales in the ordinary course of business) of, on or affecting any of the
assets of Xxxxxx Xxxxx or Xxxxxx valued at or above $10,000 individually or in
the aggregate; (vi) any increase in the compensation paid or payable or in the
fringe benefits provided to any employee of Xxxxxx Xxxxx or Xxxxxx, or the
adoption of any Benefit Arrangements or Employee Plans not in existence in the
fiscal year ended December 31, 2002; (vii) any damage, destruction or loss,
whether or not covered by insurance, of any of the assets of Xxxxxx Xxxxx or
Xxxxxx; (viii) any purchase or lease, or commitment for the purchase or lease,
of equipment or other capital assets not disclosed in Xxxxxx Xxxxx' Financial
Statements which is in excess of the normal, ordinary and usual requirements of
the business of Xxxxxx Xxxxx or Xxxxxx; (ix) any change that by itself or
together with other changes, has had a Material Adverse Effect on Xxxxxx Xxxxx
or Xxxxxx; (x) any agreement or arrangement made by Xxxxxx Xxxxx, Xxxxxx or any
shareholder of Xxxxxx Xxxxx to take any action which, if taken prior to the date
of this Agreement, would have made any representation or warranty set forth in
this Agreement untrue or incorrect in any material respect as of the date when
made; (xi) the commencement or written notice or written threat of commencement
of any Claim against Xxxxxx Xxxxx, Xxxxxx or any of their Affiliates; or (xii)
any dividends or other distributions of cash, property or other assets to the
shareholders of Xxxxxx Xxxxx (except as otherwise permitted under Section 7.9
hereof).
4.18 Employee Plans. Schedule 4.18 to the Disclosure Schedule
hereto sets forth a complete list of all Employee Plans and Benefit Arrangements
maintained, administered or contributed to, or otherwise participated in, by
Xxxxxx Xxxxx or Xxxxxx. True and complete copies of each such Employee Plan or
Benefit Arrangement, including amendments thereto, have been provided to
Centennial, together with true and complete copies of (i) annual reports for the
most recent three (3) years, (ii) all plan documents and the most recent summary
plan description of each such Employee Plan, together with any modifications
thereto, and (iii) the most recent favorable determination letter (if
applicable) from the Internal Revenue Service for each such Employee Plan. None
of the Employee Plans is a "multiemployer plan" as defined in Section 3(37) of
ERISA or a "multiple employer plan" as covered in Section 412(c) of the Code,
and Xxxxxx Xxxxx and Xxxxxx have not been obligated to make a contribution to
any such multiemployer or multiple employer plan. All contributions (including
all employer contributions and employee salary reduction contributions) which
are due have been paid to each such Employee Plan or
19
Benefit Arrangement and all contributions for any period ending on or before the
Closing Date which are not yet due have been paid to each such Employee Plan or
Benefit Arrangement or accrued in accordance with past custom and practice of
Xxxxxx Xxxxx and Xxxxxx. Each Employee Plan which is intended to be qualified
under Section 401 (a) of the Code is so qualified and each trust maintained
pursuant thereto is exempt from income tax under Section 501(a) of the Code.
None of Xxxxxx Ellis, Stokes, any Employee Plan, any trusts created thereunder,
and any trustee, administrator nor any other fiduciary thereof has engaged in a
"prohibited transaction," as defined in Section 406 of ERISA and Section 4975 of
the Code, or any breach of fiduciary duty as defined in Part 4 of Subtitle B of
Title I of ERISA.
4.19 Intellectual Property Rights.
4.19.1 Subject to all prior agreements entered into between
Xxxxxx and Hoopeston, copies of which have been furnished by Xxxxxx Xxxxx to
Centennial, Xxxxxx Xxxxx and Xxxxxx own, or have the right to use, sell or
license all Intellectual Property necessary or required for the conduct of their
businesses as presently conducted and such rights to use, sell or license are
reasonably sufficient for such conduct of Xxxxxx Xxxxx' and Xxxxxx' businesses.
Xxxxxx Xxxxx and Xxxxxx have taken reasonable actions designed to safeguard and
maintain the secrecy and confidentiality of, and its proprietary right in, all
of its Intellectual Property.
4.19.2 Neither the license, sublicense or intended use of
any Intellectual Property licensed or used by Xxxxxx Xxxxx or Xxxxxx or
currently under development by Xxxxxx Xxxxx or Xxxxxx violates any license or
agreement between Xxxxxx Xxxxx or Xxxxxx and any third party or, to the
Knowledge of JEL, infringes any Intellectual Property of any other party; and
there is not pending or to the Knowledge of JEL threatened any Claim contesting
the validity, ownership or right to use, license or dispose of any Intellectual
Property or that the proposed use, license or disposition thereof conflicts or
will conflict with the rights of any other party.
4.20 Environment, Health and Safety.
4.20.1 To the Knowledge of JEL, each of Xxxxxx Xxxxx, Xxxxxx
and Hoopeston, has complied with all Environmental, Health and Safety Laws,
except where failure to comply would not have a Material Adverse Effect, and no
Claim or notice has been filed or commenced against either of them alleging any
failure to so comply. Without limiting the generality of the preceding sentence,
Xxxxxx Xxxxx and Xxxxxx have obtained and been in compliance with all of the
terms and conditions of all Licenses and other authorizations which are required
under, and has complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
which are contained in, all Environmental, Health, and Safety Laws, except where
failure to comply would not have a Material Adverse Effect.
4.20.2 To the Knowledge of JEL, Xxxxxx Xxxxx and Xxxxxx have
not handled or disposed of any substance, arranged for the disposal of any
substance, exposed any employee or other individual to any substance or
condition, or owned or operated any property or facility in any manner that
could form a Basis known to Xxxxx for any present or future Claim against
20
Xxxxxx Xxxxx or Xxxxxx giving rise to any Liability, except where having done so
would not have a Material Adverse Effect. To the Knowledge of JEL, Xxxxxx Xxxxx
and Xxxxxx have no known Liability for damage to any site, location, or body of
water (surface or subsurface), for any illness of or personal injury to any
employee or other individual, or for any reason under any Environmental, Health,
and Safety Law which could have a Material Adverse Effect.
4.20.3 To the Knowledge of JEL, all properties used in
Xxxxxx Xxxxx' and Xxxxxx' businesses, including the Real Property, are free of
Hazardous Substances, except where the existence thereof would not have a
Material Adverse Effect.
4.21 Certain Transactions. Except as set forth on Schedule 4.21 of
the Disclosure Schedule, there are no existing or pending transactions, nor are
there any agreements or understandings, between Xxxxxx Xxxxx and Xxxxxx, on the
one hand, and any shareholder, officer or director of Xxxxxx Xxxxx or Xxxxxx, or
any Affiliates of any of them, on the other hand, including, without limitation,
any transactions, arrangements or understandings relating to the purchase or
sale of goods or services or the sale, lease or use of any of the assets of or
by Xxxxxx Xxxxx or Xxxxxx, with or without adequate compensation, or to any
indebtedness owed to or by Xxxxxx Xxxxx or Xxxxxx, in any amount whatsoever.
4.22 Bank Accounts; Powers of Attorney. Schedule 4.22 of the
Disclosure Schedule sets forth an accurate list, as of the date of this
Agreement, of the following: (i) the name of each financial institution in which
Xxxxxx Xxxxx or Xxxxxx has any account or safe deposit box; (ii) the names in
which the accounts or boxes are held; (iii) the type of account; and (iv) the
name of each person authorized to draw thereon or have access thereto. The
Disclosure Schedule hereto also sets forth the name of each Person holding a
general or special power of attorney from Xxxxxx Xxxxx or Xxxxxx and description
of the terms of such power.
4.23 Absence of Claims Against Xxxxxx Xxxxx and Xxxxxx. Except as
set forth herein or in the Financial Statements, Xxxxx has no Claims against
Xxxxxx Xxxxx or Xxxxxx.
4.24 Employee Loans. There are no outstanding loans and/or other
advances made by Xxxxxx Xxxxx or Xxxxxx to any of its officers, directors,
shareholders, employees, agents or consultants.
4.25 Brokers' Fees. Xxxxxx Xxxxx and Xxxxx are not a party to or
obligated under any agreement with any broker, agent, or finder relating to the
transactions contemplated hereby, and neither the execution of this Agreement
nor the consummation of the transactions provided for herein will result in any
liability to any broker, agent or finder.
4.26 Burdensome Obligations. After giving effect to the
transactions contemplated by this Agreement, the Loan Agreement and all related
agreements and documents, (i) no Lender (A) will be a party to or be bound by
any franchise, agreement, deed, lease or other instrument, or be subject to any
restriction, which is so unusual or burdensome so as to cause a Material
21
Adverse Effect on Lender, and (B) intends to incur, or believes that it will
incur, debts beyond its ability to pay such debts as they become due, and (ii)
each Lender owns and will own Property, the fair salable value of which is (I)
greater than the total amount of his or her liabilities (including contingent
liabilities), and (II) greater than the amount that will be required to pay its
then existing debts as they become absolute and matured. No Lender presently
anticipates that future expenditures needed to meet the provisions of federal or
state statutes, orders, rules or regulations will be so burdensome so as to have
a Material Adverse Effect on Lender.
4.27 Full Disclosure. Neither this Agreement, the representations
and warranties by Xxxxxx Xxxxx and Xxxxx contained herein, the Exhibits or
Schedules hereto, nor any other written statement or certificate delivered or to
be furnished to Centennial in connection herewith, when read together, contain
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
materially misleading, in light of the circumstances under which they were made.
To the Knowledge of JEL, there is no fact which has not been disclosed to
Centennial that would have a Material Adverse Effect or would affect the ability
of Xxxxxx Xxxxx and Xxxxx to perform their obligations under this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CENTENNIAL
Centennial represents and warrants to Xxxxxx Xxxxx and Xxxxx that each
of the following statements is true, correct and complete in all material
respects as of the date of this Agreement and the Closing Date:
5.1 Organization and Standing Articles and Bylaws. Centennial is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full power and authority to own its assets and
properties and to carry on its business as presently conducted. Centennial is
duly qualified and authorized to do business, and is in good standing as a
foreign corporation, in each jurisdiction where the nature of its activities or
of its properties (both owned and leased) make such qualification necessary,
except where the failure to so qualify would not have a Material Adverse Effect.
Centennial has furnished JEL with copies of its Articles of Incorporation and
Bylaws, as amended to the date hereof. Said copies are true, correct and
complete and contain all amendments through the Closing Date.
5.2 Authorization. All corporate action on the part of Centennial,
its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement and the documents contemplated hereby,
the performance of all of Centennial's obligations hereunder and thereunder have
been taken prior to the Closing. This Agreement and the documents contemplated
hereby, when executed and delivered, shall constitute valid and legally binding
obligations of Centennial enforceable in accordance with their respective terms
22
5.3 No Conflicts. Neither the execution and delivery nor the
performance of this Agreement by Centennial will result in any of the following:
(i) a default or an event that, with notice or lapse of time or both, could be a
default, breach or violation of (A) the Articles of Incorporation or Bylaws of
Centennial, (B) any Material Contract; (ii) the termination of any Material
Contract or the acceleration of the maturity of any Indebtedness or other
material obligation of Centennial; (iii) the creation or imposition of any Lien
(except for Permitted Liens) on any of the assets or properties of Centennial;
(iv) the creation or imposition of any Lien on any shares of stock of
Centennial; or (v) a violation or breach of any known writ, injunction or decree
of any Governmental Entity or arbitrator to which Centennial is a party or by
which any of its properties are bound
5.4 Consents. No consents, approvals' orders, or authorizations
of, or registrations, qualifications, designations, declarations or filings
with, any Governmental Entity or under any Material Contract, is or will be
required on the part of Centennial in connection with the valid execution and
delivery of this Agreement and the purchase of the Xxxxxx Xxxxx Shares, or the
consummation of any other transaction contemplated hereby.
5.5 Brokers' Fees. Centennial is not a party to or obligated under
any agreement with any broker, agent, or finder relating to the transactions
contemplated hereby, and neither the execution of this Agreement nor the
consummation of the transactions provided for herein will result in any
liability to any broker, agent or finder.
5.6 Full Disclosure. Neither this Agreement, the representations
and warranties by Centennial contained herein, the Exhibits or Schedules hereto,
nor any other written statement or certificate delivered or to be furnished to
Xxxxxx Xxxxx or Xxxxx in connection herewith, when read together, contain any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein not materially
misleading, in light of the circumstances under which they were made. To the
Knowledge of Centennial, there is no fact which has not been disclosed to Xxxxxx
Xxxxx and Xxxxx that would have a Material Adverse Effect or would affect the
ability of Centennial to perform its obligations under this Agreement.
ARTICLE VI
CONDUCT OF BUSINESS PENDING CLOSING
During the period commencing on the date hereof and through the Closing
Date, Xxxxx and Xxxxxx shall comply with the following:
6.1 Qualification. Xxxxxx Xxxxx and Xxxxxx shall maintain all
qualifications to transact business and remain in good standing in their
jurisdiction of incorporation and in the foreign jurisdictions in which Xxxxxx
Xxxxx or Xxxxxx owns or leases any property or conducts any business.
23
6.2 Ordinary Course. Xxxxxx Xxxxx and Xxxxxx shall conduct their
business in, and only in, the Ordinary Course of Business and, to the extent
consistent with such business, shall not make or institute any unusual or novel
methods of management, accounting, or operation that vary materially from those
methods used by Xxxxxx Xxxxx and Xxxxxx as of March 31, 2003. Xxxxxx Xxxxx and
Xxxxxx will use commercially reasonable efforts to preserve their business
organization intact, to keep available to Xxxxxx Xxxxx and Xxxxxx their present
officers and employees, and to preserve their present relationships with
suppliers, customers, and others having business relationships with Xxxxxx Xxxxx
and Xxxxxx. Xxxxxx Xxxxx and Xxxxxx shall maintain its properties and assets in
such condition and repair as such properties and assets are in as of the date
hereof.
6.3 Corporate Changes. Xxxxxx Xxxxx and Xxxxxx shall not (i) amend
its Articles of Incorporation or Bylaws (or equivalent documents); (ii) acquire
by merging or consolidating with, or agreeing to merge or consolidate with, or
purchase substantially all of the stock or assets of, or otherwise acquire, any
business or any corporation, partnership, association or other business
organization or division thereof; (iii) enter into any partnership or joint
venture; (iv) except as provided in Section 7.9, declare, set aside, make or pay
any dividend or other distribution in respect of its capital stock or purchase
or redeem, directly or indirectly, any shares of its capital stock; (v) issue or
sell any shares of its capital stock of any class or any options, warrants,
conversion or other rights to purchase any such shares or any securities
convertible into or exchangeable for such shares; or (vi) liquidate or dissolve
or obligate itself to do so.
6.4 Indebtedness. Xxxxxx Xxxxx and Xxxxxx shall not incur any
Indebtedness, sell any debt securities or lend money to or guarantee the
Indebtedness of any Person. Xxxxxx Xxxxx and Xxxxxx shall not restructure or
refinance their existing Indebtedness.
6.5 Accounting. Xxxxxx Xxxxx and Xxxxxx shall not make any change
in the accounting principles, methods or practices followed by them or
depreciation or amortization policies or rates heretofore adopted by them.
Xxxxxx Xxxxx and Xxxxxx shall maintain their books, records, and accounts in
accordance with GAAP applied on a basis consistent with that of prior periods.
6.6 Compliance with Legal Requirements. Xxxxxx Xxxxx and Xxxxxx
shall comply promptly and in all material respects with all Legal Requirements
imposed upon them, their operations and with respect to the transactions
contemplated by this Agreement, and shall cooperate promptly with, and furnish
information to, Centennial in connection with any such requirements imposed upon
Centennial, or upon any of its Affiliates, in connection therewith or herewith.
6.7 Disposition of Assets. Except in the Ordinary Course of
Business, Xxxxxx Xxxxx and Xxxxxx shall not sell, transfer, license, lease or
otherwise dispose of, or suffer or cause the encumbrance by any Lien other than
Permitted Liens upon any of their properties or assets, tangible or intangible,
or upon any interest therein.
24
6.8 Compensation. Except in the Ordinary Course of Business,
Xxxxxx Xxxxx and Xxxxxx shall not (i) adopt or amend in any material respect any
collective bargaining, bonus, profit-sharing, compensation, stock option,
pension, retirement, deferred compensation, Employee Plan, Benefit Arrangement,
or any other agreement, trust, fund or arrangement for the benefit of employees
other than to comply with any Legal Requirement; or (ii) pay, or make any
accrual or arrangement for payment of, any increase in compensation, bonuses or
special compensation of any kind, or any severance or termination pay to, or,
except as contemplated by Section 7.9 hereof and other provisions of this
Agreement, enter into any employment or loan or loan guarantee agreement with,
any shareholder or any current or former officer, director, employee or
consultant of Xxxxxx Xxxxx.
6.9 Modification or Breach of Agreements; New Agreements. Except
in the Ordinary Course of Business, Xxxxxx Xxxxx and Xxxxxx shall not terminate
or modify, or commit or cause or, suffer to be committed any act that will
result in breach or violation of any term of or (with or without notice or
passage of time, or both) constitute a default under or otherwise give any
Person a basis for nonperformance under, any Material Contract, written or oral.
Xxxxxx Xxxxx and Xxxxxx shall refrain from becoming a party to any contract or
commitment other than in the Ordinary Course of Business. Xxxxxx Xxxxx and
Xxxxxx shall meet all of its contractual obligations in accordance with their
respective terms.
6.10 Capital Expenditures. Except in the Ordinary Course of
Business, except for capital expenditures or commitments necessary to maintain
their properties and assets in good condition and repair (the amount of which
shall not exceed $20,000 individually or in the aggregate), Xxxxxx Xxxxx and
Xxxxxx shall not purchase or enter into any contract to purchase any capital
assets without informing Centennial of the same in writing.
6.11 Consents. Xxxxxx Xxxxx and Xxxxxx shall use commercially
reasonable efforts to obtain any consent, authorization or approval of, or
exemption by, any Governmental Entity or Person required to be obtained or made
by any Party hereto in connection with the transactions contemplated hereby or
the taking of any action in connection with the consummation thereof.
6.12 Maintenance of Insurance. Xxxxxx Xxxxx and Xxxxxx shall
maintain their policies of insurance in full force and effect on substantially
the same terms and conditions as in effect on March 31, 2003, and shall not do,
permit or willingly allow to be done any act by which any of said policies of
insurance may be suspended, materially impaired or canceled.
6.13 Discharge. Except in the Ordinary Course of Business, Xxxxxx
Xxxxx and Xxxxxx shall not cancel, compromise, release or discharge any Claim of
Xxxxxx Xxxxx or Xxxxxx upon or against any Person or waive any right of Xxxxxx
Xxxxx or Xxxxxx of material value, and not discharge any Lien upon any asset of
Xxxxxx Xxxxx or Xxxxxx or compromise any debt or other obligation of Xxxxxx
Xxxxx or Xxxxxx to any Person other than Liens, debts or obligations with
respect to current Liabilities of Xxxxxx Xxxxx and Xxxxxx.
25
6.14 Claims. Xxxxxx Xxxxx and Xxxxxx shall not institute, settle or
agree to settle any Claim before any Governmental Entity.
6.15 Taxes and Tax Assessments. Xxxxxx Xxxxx and Xxxxxx shall pay,
when due, and prior to the imposition or assessment of any interest, penalties
or Liens by reason of the nonpayment of, all Taxes assessed against Xxxxxx Xxxxx
or Xxxxxx, their assets, properties or operations. Xxxxxx Xxxxx and Xxxxxx shall
furnish promptly to Centennial a copy of all notices of proposed assessment or
similar notices or reports that are received from any taxing authority and which
relate to Xxxxxx Xxxxx' or Xxxxxx' operations for periods ending on or prior to
the Closing Date.
ARTICLE VII
ADDITIONAL COVENANTS
7.1 Covenants of Xxxxxx Xxxxx. During the period from the date
hereof through the Closing Date, Xxxxxx Xxxxx agrees to:
7.1.1 Comply promptly with all applicable Legal
Requirements imposed upon it with respect to the transactions contemplated by
this Agreement, and shall cooperate promptly with, and furnish information to,
Centennial in connection with any such requirements imposed upon Centennial or
upon any of Centennial's Affiliates in connection therewith or herewith;
7.1.2 Use its reasonable best efforts to obtain (and to
cooperate with Centennial in obtaining) any consent, authorization or approval
of, or exemption by, any Person required to be obtained or made by Xxxxxx Xxxxx
and/or Xxxxx in connection with the transactions contemplated by this Agreement;
7.1.3 Use its reasonable best efforts to bring about the
satisfaction of the conditions precedent to Closing set forth in Section 3.6,
above;
7.1.4 Promptly advise Centennial orally and, within three
(3) business days thereafter, in writing of any change in Xxxxxx Xxxxx' business
or condition that has had or would reasonably be expected to have a Material
Adverse Effect on Xxxxxx Xxxxx;
7.1.5 Deliver to Centennial prior to the Closing a written
statement disclosing any untrue statement in this Agreement or any Exhibit or
Schedule hereto (or supplement thereto) or document furnished pursuant hereto,
or any omission to state any material fact required to make the statements
herein or therein contained complete and not misleading, immediately upon the
discovery of such untrue statement or omission, accompanied by a written
supplement to any Exhibit or Schedule to this Agreement that may be affected
thereby; provided, however, that the disclosure of such untrue statement or
omission shall not prevent Centennial from terminating this Agreement pursuant
to Section 8.1.2 below, at any time at or prior to the Closing in respect of any
original untrue or misleading statement; and
26
7.1.6 Prior to the Closing, deliver to Centennial the
Disclosure Schedule.
7.2 Covenants of Centennial. During the period from the date
hereof to the Closing Date, Centennial shall:
7.2.1 Comply promptly with all applicable Legal
Requirements imposed upon it with respect to the transactions contemplated by
this Agreement, and shall cooperate promptly with, and furnish information to,
Xxxxx and Xxxxxx Xxxxx in connection with any such requirements imposed upon
Xxxxx or Xxxxxx Xxxxx or upon any of Xxxxxx Xxxxx' Affiliates in connection
therewith, or herewith;
7.2.2 Use its reasonable best efforts to obtain any
consent, authorization or approval of, or exemption by, any Person required to
be obtained or made by Centennial in connection with the transactions
contemplated by this Agreement;
7.2.3 Use its reasonable best efforts to bring about the
satisfaction of the conditions precedent to Closing set forth in Section 3.7 of
this Agreement; and
7.2.4 Promptly advise Xxxxxx Xxxxx and Xxxxx orally and,
within three (3) business days thereafter, in writing of any change in
Centennial's business or condition that has had or would reasonably be expected
to have a Material Adverse Effect on Centennial.
7.3 Tax Advice. Xxxxx shall assume and be fully responsible for
any and all Liability, including without limitation any and all Tax Liability,
incurred by them, which is caused by, arises from, or relates to the sale of the
Xxxxxx Xxxxx Shares to Centennial and the other transactions set forth herein.
Xxxxxx Xxxxx and Xxxxx acknowledge that they have received their own independent
tax advice with respect to this Agreement and the transactions contemplated
thereby, and are not in any way relying on any statements or advice of
Centennial or any of their officers, directors, employees, agents or
representatives with respect to such matters.
7.4 Access and Information.
7.4.1 During the period commencing on the date hereof and
continuing through the Closing Date, Xxxxx shall cause Xxxxxx Xxxxx and Xxxxxx
to afford to Centennial and to its accountants, counsel, and other
representatives, reasonable access during regular business hours and without
undue interruption to its business to all of its properties, books, contracts,
commitments, records and personnel and, during such period, to cause Xxxxxx
Xxxxx to furnish promptly to Centennial all information concerning its business,
properties and personnel as Centennial may reasonably request.
7.4.2 Except to the extent permitted by the provisions of
Section 7.7, below, Centennial shall hold in confidence, and shall use
reasonable efforts to ensure that its employees
27
and representatives hold in confidence, all such information supplied to it by
Xxxxx or Xxxxxx Xxxxx concerning Xxxxxx Xxxxx or Xxxxxx and shall not disclose
such information to any third party except as may be required by any Legal
Requirement and except for information that (i) is or becomes generally
available to the public other than as result of disclosure by Centennial or its
representatives; (ii) becomes available to Centennial or its representatives
from a third party other than Xxxxx or Xxxxxx Xxxxx and Centennial or its
representatives have no reason to believe that such third party is not entitled
to disclose such information; (iii) is known to Centennial or its
representatives on a nonconfidential basis prior to its disclosure by Xxxxx or
Xxxxxx Xxxxx; (iv) is made available by Xxxxx or Xxxxxx Xxxxx to any other
Person on a non-restricted basis. Centennial's obligations under the foregoing
sentence shall expire upon completion of the Closing; or (v) is required to be
disclosed in connection with the IPO or the registration statement filed with
the SEC.
7.4.3 Centennial shall hold in confidence, and shall use
reasonable efforts to ensure, that its employees and representatives hold in
confidence, all information supplied to it by Xxxxxx Xxxxx or Xxxxx that is
personal information of Xxxxx. Centennial's obligations under the foregoing
sentence shall survive the Closing indefinitely.
7.5 Expenses. All costs and expenses of Xxxxx (including, without
limitation, all legal fees and expenses and costs) incurred in connection with
this Agreement, the transactions contemplated hereby, the IPO and all related
transactions shall be paid by Xxxxxx Xxxxx. All costs and expenses of the other
parties hereto (including, without limitation, all legal fees and expenses and
costs) incurred in connection with this Agreement, the transactions contemplated
hereby, the IPO and all related transactions shall be paid by the party
incurring such costs or expenses.
7.6 Certain Notifications. At all times from the date hereof to
the Closing Date, each Party shall promptly notify the others in writing of the
occurrence of any event that will or reasonably would be expected to result in
the failure to satisfy any of the conditions specified in Sections 3.6 and 3.7
above.
7.7 Publicity. At all times prior to the Closing Date, each Party
shall obtain the consent of all other Parties hereto prior to issuing, or
permitting any of its directors, officers, employees or agents to issue, any
press release or other information to the press, employees of Xxxxxx Xxxxx or
any third party with respect to this Agreement or the transactions contemplated
hereby; provided, however, that no party shall be prohibited from supplying any
information to any of its representatives, agents, attorneys, advisors, and
others to the extent necessary to complete the transactions contemplated hereby
so long as such representatives, agents, attorneys, advisors, and others are
made aware of the terms of this Section 7.7. Nothing contained in this Agreement
shall prevent any party to this Agreement at any time from furnishing any
required information to any Governmental Entity or others in connection with the
IPO or pursuant to a Legal Requirement or from complying with its legal or
contractual obligations; provided that the Party furnishing such information
shall have used its reasonable best efforts to comply with this provision first,
and in any event does so only with the advice of counsel.
28
7.8 Further Assurances.
7.8.1 Subject to the terms and conditions of this
Agreement, each of the Parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable Legal Requirements, to
consummate and make effective the transactions contemplated by this Agreement.
7.8.2 If at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, Xxxxx and
the proper officers or directors of Centennial and Xxxxxx Xxxxx, as the case may
be, shall take or cause to be taken all such necessary or convenient action and
execute, and deliver and file, or cause to be executed, delivered and filed, all
necessary or appropriate documentation.
7.9 Pre-Closing Distribution to Xxxxx. Immediately prior to
Closing, Xxxxxx Xxxxx shall make a distribution to Xxxxx of the total net profit
for Xxxxxx Xxxxx, on a consolidated tax basis, for the period from January 1,
2003, through Closing. The final amount of such net profit will not be known as
of Closing and the parties agree to make a good faith estimate of such amount
prior to Closing, with Xxxxxx Xxxxx distributing the amount of the agreed upon
estimate to Xxxxx immediately prior to Closing. The amount of the net profit
indicated on the tax return for the Short Period Year prepared and filed with
the IRS under Section 7.10 shall be the final amount of net profit to be
distributed to Xxxxx under this Section 7.9. Within 10 days following the filing
of such return with the IRS, a final settlement and payment shall be made, with
the party owning making a payment to the party owed of the difference between
the estimate and the final amount.
7.10 Income Tax Return For Xxxxxx Xxxxx and Xxxxxx. Upon Closing,
the "S" tax status of Xxxxxx Xxxxx and Xxxxxx will terminate and the tax year
beginning on January 1, 2003, will end as of the Closing (the "Short Year
Period"). JEL agrees to prepare and file, on or prior to its due date (as
extended), the Federal and State income tax returns for both Xxxxxx Xxxxx and
Xxxxxx for the Short Year Period. Centennial shall provide JEL with access to
and copies of all books and records of Xxxxxx Xxxxx or Xxxxxx as may be
necessary to prepare such tax returns and shall reimburse JEL for the costs and
expenses incurred in preparing such returns.
7.11 Indemnification Post Closing. As further consideration for the
transactions set forth herein, Centennial shall indemnify Xxxxx after the
Closing pursuant to the terms and conditions of the Indemnification Agreement in
the form attached hereto as Exhibit 3.5.7, the original of which will be
executed and delivered to Xxxxx at Closing pursuant to Section 3.5.7 hereof.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
29
8.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
8.1.1 By written consent of Centennial and Xxxxx;
8.1.2 By Xxxxxx Xxxxx and Xxxxx as a group, on the one
hand, or by Centennial, on the other hand, if there has been a breach, failure
to fulfill or default (collectively, a "Breach") on the part of the other Party
(the "Breaching Party") of any of the representations and warranties contained
herein or in the due and timely performance and satisfaction of any of the
covenants, agreements or conditions contained herein;
8.1.3 By Xxxxxx Xxxxx and Xxxxx as a group, on the one
hand, or by Centennial, on the other hand, if there shall be a final
non-appealable order of a Governmental Entity or arbitrator in effect preventing
consummation of the transactions hereunder; or there shall be any action taken,
or any statute, rule, regulation or order enacted, promulgated or issued or
deemed applicable to the transactions hereunder by any Governmental Entity or
arbitrator which would make the consummation of the transactions illegal; or
8.1.4 By Xxxxxx Xxxxx and Xxxxx as a group, on the one
hand, or by Centennial, on the other hand, if the IPO shall not have been
completed on or before October 31, 2003.
8.2 Effect of Termination. In the case of any termination of this
Agreement pursuant to Section 8.1, above, this Agreement shall forthwith become
void, and there shall be no Liability or obligation on the part of any Party or
its officers, directors or shareholders. Notwithstanding the foregoing sentence,
(i) the provisions of Section 7.4.2 and 7.5 shall remain in full force and
effect and survive any termination of this Agreement; and (ii) each Party shall
remain liable for any breach of this Agreement or other wrongful conduct prior
to its termination.
8.3 Amendment. This Agreement may be amended at any time by a
written instrument executed by the Parties. Any amendment effected pursuant to
this Section 8.3 shall be binding upon all Parties.
8.4 Waiver. Any term or provision of this Agreement may be waived
in writing at any time by the Party or Parties entitled to the benefits thereof.
Any waiver effected pursuant to this Section 8.4 shall be binding upon all
Parties hereto. No failure to exercise and no delay in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege preclude the exercise of any
other right, power or privilege. No waiver of any breach of any covenant or
agreement hereunder shall be deemed a waiver of a preceding or subsequent breach
of the same or any other covenant or agreement. The rights and remedies of each
Party under this Agreement are in addition to all other rights and remedies,
whether at law, in equity or otherwise, that such Party may have against the
other Parties.
ARTICLE IX
INDEMNIFICATION
30
9.1 Survival of Representations and Warranties. The
representations and warranties contained in Articles IV and V of this Agreement
or in any writing delivered pursuant hereto or at the Closing, along with the
obligations to indemnify under this Article IX, shall survive the Closing and
the consummation of the transactions contemplated hereby until the first
anniversary of the Closing Date, at which time they shall terminate and be of no
further force and effect.
9.2 Indemnification by JEL. Effective as of the Closing, JEL, in
consideration for the purchase of the Xxxxxx Xxxxx Shares by Centennial,
covenants and agrees with Centennial and its officers, directors, employees,
shareholders, assigns, successors and Affiliates (a "Centennial Indemnified
Party") to indemnify and hold harmless a Centennial Indemnified Party from,
against and in respect of any and all Losses suffered, sustained, incurred or
paid by any Centennial Indemnified Party in connection with resulting from or
arising out of, directly or indirectly:
9.2.1 any breach of any representation or warranty of Xxxxx
or Xxxxxx Xxxxx set forth in this Agreement or any certificate, document or
instrument delivered by or on behalf of Xxxxx or Xxxxxx Xxxxx in connection
herewith; or
9.2.2 any material non-fulfillment of any covenant or
agreement on the part of Xxxxx or Xxxxxx Xxxxx in this Agreement.
Payment shall not be a condition precedent to recovery under the above
indemnities.
9.3 Indemnification by Centennial. Effective as of the Closing,
Centennial covenants and agrees with Xxxxx and his or her heirs, successors and
assigns (a "Xxxxx Indemnified Party") to indemnify and hold harmless a Xxxxx
Indemnified Party from, against and in respect of any and all Losses suffered,
sustained, incurred or paid by any Xxxxx Indemnified Party in connection with
resulting from or arising out of, directly or indirectly:
9.3.1 any breach of any representation or warranty of
Centennial set forth in this Agreement or any certificate, document or
instrument delivered by or on behalf of Centennial in connection herewith; or
9.3.2 any non-fulfillment of any covenant or agreement on
the part of Centennial in this Agreement.
Payment shall not be a condition precedent to recovery under the above
indemnities.
9.4 Third-Party Claims. In the event any third party asserts any
Claim with respect to any matter as to which the indemnities in this Agreement
relate, the Party or Person against whom the Claim is asserted (the "Indemnified
Party") shall give prompt notice to the other Party or Person (the "Indemnifying
Party"), and the Indemnifying Party shall have the right at its election to take
over the defense or settlement of the third-party Claim at its own expense by
giving prompt notice to the Indemnified Party. If the Indemnifying Party does
not give such
31
notice and does not proceed diligently so to defend the third-party Claim within
thirty (30) days after receipt of the notice of the third-party Claim, the
Indemnifying Party shall be bound by any defense or settlement that the
Indemnified Party may make as to those claims and shall reimburse the
Indemnified Party for its Losses related to the defense or settlement of the
third-party Claim. The Parties shall cooperate in defending against any asserted
third-party Claims. For purposes of this Article IX, the reference to this
Agreement includes any certificate, Disclosure Schedule, Exhibit, list, summary
or other information provided or delivered to a party by the Indemnifying Party
or its agents and affiliates in connection with this Agreement.
9.5 Indemnification Exclusive. The indemnification provisions of
this Article IX are the sole and exclusive remedy any Party may have for breach
of representation, warranty, covenant or agreement set forth in this Agreement;
provided, however, that the foregoing does not supercede, restrict, limit or
otherwise affect Xxxxx' rights, remedies and benefits under (i) any director and
officer liability insurance policy held by Centennial, as to which Xxxxx is an
endorsed party, and (ii) the Indemnification Agreement to be executed by
Centennial and delivered to Xxxxx at Closing under Section 3.5.7.
9.6 Access and Information. With respect to any Claim for
indemnification hereunder, the Indemnified Party will give to the Indemnifying
Party and its counsel, accountants and other representatives full and free
access during normal business hours and upon the giving of reasonable prior
notice to their books and records relating to such Claims, and to their
employees, accountants, counsel and other representatives, all without charge to
the Indemnifying Party, except for reimbursement of reasonable out-of-pocket
expenses. The Indemnified Party agrees to maintain any of its books and records
which may relate to a Claim for indemnification hereunder for such period of
time as may be necessary to enable the Indemnifying Party to resolve such Claim;
provided that the failure to do so shall not relieve the Indemnifying Party of
any obligation hereunder unless the Indemnifying Party demonstrates that the
failure to do so substantially prejudiced the Indemnifying Party in the defense
of any third-party proceeding, and then only to the extent so prejudiced.
9.7 Mitigation. The Indemnified Parties agree to mitigate their
Losses and use their reasonable efforts to collect any indemnifiable damages
from any available insurer or third-party indemnitors before collecting from the
Indemnifying Party; provided, however, nothing in the foregoing sentence shall
preclude any Indemnified Party from filing a Claim against the Indemnifying
Party from the outset. If any amounts are recovered from an insurer or third
party after payment to an Indemnified Party, the recovering party (or parties)
shall promptly pay over to such Indemnifying Party (or Parties) any such
recovered amounts, but only to the extent of any Losses with respect to such
matter, after giving effect to any tax implications with respect to such
recovered amounts. Centennial shall cause Xxxxxx Xxxxx to continue to maintain
the same or comparable insurance coverage, as in effect at the Closing, to the
extent such coverage protects Xxxxxx Xxxxx and Xxxxx with respect to their
representations and warranties hereunder.
9.8 Right of Set-Off. Any Party to this Agreement shall be
entitled to set-off against any amounts due to another Party under the terms of
this Agreement or under any additional agreement executed in connection
herewith, any amounts due from such other Party under the
32
terms of this Agreement, except that Centennial shall not be entitled to
exercise any right of set-off as to the Debentures without first giving Xxxxx 30
days' prior written notice of its intent to do so. Upon receiving such notice,
Xxxxx shall have 30 days to satisfy any amounts owing to Centennial that give
rise to Centennial's right of set-off as to the Debentures.
9.9 Limitations. Notwithstanding any other provisions contained in
this Agreement, the obligations of the parties to indemnify the other parties
under this Article IX are subject to the following limitations:
9.9.1 JEL shall not be obligated to indemnify Centennial
for any Losses arising under Section 9.2.1 above if Centennial or any of its
officers and directors had Knowledge of the breach as of the Closing;
9.9.2 Centennial shall not be obligated to indemnify Xxxxx
for any Losses arising under Section 9.3.1 above if Xxxxx had Knowledge of the
breach as of the Closing;
9.9.3 JEL's obligations shall be limited to an amount equal
to $1,000,000 in the aggregate and, notwithstanding anything to the contrary
contained in this Agreement, such amount may only be recovered by Centennial by
set off against the principal amount owed under the Debentures held by JEL;
9.9.4 Neither party shall not assert a claim for
indemnification until the total of all claims exceed an aggregate amount of
$50,000 (the "Threshold Amount"). Once the claims exceed the Threshold Amount,
such party can assert and recover all amounts owed hereunder, excluding the
initial $50,000 representing the Threshold Amount;
9.9.5 JML shall have no obligation to indemnify Centennial
under this Article IX; and
9.9.6 No party shall be liable for any consequential
damages, including lost profits.
ARTICLE X
GENERAL PROVISIONS
10.1 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Colorado as applied to agreements among
Colorado residents, made and to be performed entirely within the State of
Colorado.
10.2 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
Parties hereto.
10.3 Entire Agreement. This Agreement, the Exhibits and Schedules
hereto, and the other documents delivered pursuant hereto constitute the full
and entire understanding and
33
agreement among the Parties with regard to the subject matter hereof and no
Party shall be liable or bound to any other Party in any manner by any
representations, warranties, covenants, or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any Person, other than the Parties hereto and their
respective successors and assigns, any rights, remedies, obligations, or
Liabilities under or by reason of this Agreement, except as expressly provided
herein.
10.4 Severability. In the event any provision of this Agreement
shall be invalid, illegal, or unenforceable, it shall, to the extent
practicable, be modified so as to make it valid, legal and enforceable and to
retain as nearly as practicable the intent of the Parties, and the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
10.5 Notice. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
(i) if delivered personally (including by overnight express or messenger), upon
delivery; (ii) if delivered by registered or certified mail, return receipt
requested, upon the earlier of actual delivery or three (3) days after being
mailed; or (iii) if given by facsimile, upon confirmation of transmission by
facsimile, in each case to the Parties at the following addresses:
(a) If to Centennial, addressed to:
Centennial Specialty Foods Corporation
000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: J. Xxxxxxx Xxxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
(b) If to Xxxxx or Xxxxxx Xxxxx, addressed to:
Xxxxx X. Xxxxx
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
10.6 Construction. Parties to this Agreement have participated
jointly in the negotiation and drafting of this Agreement and have had competent
counsel of their own choosing. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
10.7 Arbitration. Any controversy or claim as to the provisions of
this Agreement between or among any of the Parties shall be submitted for
binding arbitration. The arbitration
34
shall be conducted by a single arbitrator of the American Arbitration
Association ("AAA") in accordance with the applicable Commercial Arbitration
Rules of the AAA then in effect. Any arbitration under this Section 10.7 shall
take place in Denver, Colorado.
10.8 Headings. The headings of the Articles and Sections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
10.9 Counterparts. This Agreement may be executed by facsimile and
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one instrument.
10.10 Schedules, and Exhibits. The Schedules and Exhibits to this
Agreement are incorporated herein and, by this reference, made a part hereof as
if fully set forth at length herein.
IN WITNESS WHEREOF, the foregoing Agreement and is hereby executed as
of the date first above written.
CENTENNIAL SPECIALTY FOODS CORPORATION,
a Delaware corporation
By: /s/ J. Xxxxxxx Xxxxxx
-----------------------------------
Its: CEO
-----------------------------------
XXXXXX XXXXX FOODS, INC., a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Its: Chairman
-----------------------------------
XXXXX X. XXXXX
/s/ XXXXX X. XXXXX
---------------------------------------
Xxxxx X. Xxxxx
XXXXX X. XXXXX
/s/ XXXXX X. XXXXX
---------------------------------------
Xxxxx X. Xxxxx
35
Exhibit List
Exhibit 1- A: Xxxxxx Deed of Trust
Exhibit 1-B Xxxxxx Xxxxx Guaranty Agreement
Exhibit 1-C Xxxxxx Xxxxx Security Agreement
Exhibit 1-X Xxxxxx Guaranty Agreement
Exhibit 1-E Xxxxxx Security Agreement
Exhibit 2.2.1 Form of Debentures
Exhibit 3.4 Xxxxxx Xxxxx Officer's Certificate
Exhibit 3.5.7 Form of Indemnification Agreement
36
Schedule List
Schedule 2.2.1 Number, principal amount and payee of the Debentures to be
issued
Schedule 4.6 Material Contracts
Schedule 4.7 Liens on Personal Property
Schedule 4.8 Real Property
Schedule 4.12 Employees
Schedule 4.16 Insurance
Schedule 4.17 Material Changes
Schedule 4.18 Employee Plans
Schedule 4.21 Certain Transactions
Schedule 4.22 Bank Accounts/Powers of Attorney
37
Schedule 2.2.1
Number, Principal Amount and Payee of Debentures
Xxxxx X. Xxxxx shall receive five Debentures in the following principal amounts:
$2,000,000
1,250,000
1,000,000
500,000
250,000
Xxxxx X. Xxxxx shall receive five Debentures in the following principal amounts:
$2,000,000
1,250,000
1,000,000
500,000
250,000
Total principal amount of all Debentures equals $10,000,000
38