PURCHASE AGREEMENT
by and among
SEABOARD CORPORATION,
XXXXXXX FARMS, LLC,
GOLDSBORO MILLING COMPANY
and
GM ACQUISITION, LLC
As of September 9, 2010
TABLE OF CONTENTS
Page
ARTICLE I. CONSTRUCTION; DEFINITIONS 1
Section 1.1 Definitions 1
Section 1.2 Other Definitions 14
Section 1.3 Construction 16
Section 1.4 Accounting Terms 16
ARTICLE II. PURCHASE AND SALE 16
Section 2.1 Xxxxxxx Closing 16
Section 2.2 Seaboard Closing 18
Section 2.3 Further Assurances 18
ARTICLE III. CLOSING DATE STATEMENTS; ADJUSTMENTS 18
Section 3.1 Closing Date Statements 18
Section 3.2 Adjustment of Xxxxxxx Purchase Price 19
Section 3.3 Goldsboro Parties Release 21
ARTICLE IV. REPRESENTATIONS AND WARRANTIES RELATED TO THE
COMPANY 21
Section 4.1 Organization 21
Section 4.2 Authorization 21
Section 4.3 Capital Structure 22
Section 4.4 Subsidiaries 23
Section 4.5 Absence of Restrictions and Conflicts 23
Section 4.6 Real Property 23
Section 4.7 Title to Assets; Related Matters 24
Section 4.8 Inventory 24
Section 4.9 Financial Statements 25
Section 4.10 No Undisclosed Liabilities 25
Section 4.11 Absence of Certain Changes 25
Section 4.12 Legal Proceedings 25
Section 4.13 Compliance with Law 26
Section 4.14 Company Contracts 26
Section 4.15 Tax Returns; Taxes 26
Section 4.16 Officers and Employees 28
Section 4.17 Company Benefit Plans 28
Section 4.18 Labor Relations 29
Section 4.19 Insurance Policies 30
Section 4.20 Environmental, Health and Safety Matters 30
Section 4.21 Intellectual Property 31
Section 4.22 Software 33
Section 4.23 Transactions with Affiliates 33
Section 4.24 Undisclosed Payments 33
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Section 4.25 Customer and Supplier Relations 33
Section 4.26 Notes; Accounts Receivable 34
Section 4.27 Licenses 34
Section 4.28 Ethical Practices 34
Section 4.29 Product and Service Warranties and Guaranties 35
Section 4.30 Brokers, Finders and Investment Bankers 35
Section 4.31 Guarantees 35
Section 4.32 Financial Capability 35
Section 4.33 Disclosure 36
ARTICLE V. REPRESENTATIONS AND WARRANTIES RELATED TO THE
XXXXXXX GROWING INTEREST 36
Section 5.1 Real Property 36
Section 5.2 Title to Assets; Related Matters 37
Section 5.3 Inventory 37
Section 5.4 No Other Assumed Liabilities 37
Section 5.5 Legal Proceedings 37
Section 5.6 Compliance with Law 38
Section 5.7 Xxxxxxx Growing Interest Contracts 38
Section 5.8 Officers and Employees 39
Section 5.9 MGI Benefit Plans 39
Section 5.10 Labor Relations 40
Section 5.11 Insurance Policies 40
Section 5.12 Environmental, Health and Safety Matters 41
Section 5.13 Intellectual Property 42
Section 5.14 Software 42
Section 5.15 Transactions with Affiliates 43
Section 5.16 Undisclosed Payments 43
Section 5.17 Supplier Relations 43
Section 5.18 Licenses 43
ARTICLE VI. REPRESENTATIONS AND WARRANTIES RELATED TO THE
GOLDSBORO PARTIES 44
Section 6.1 Authorization 44
Section 6.2 Absence of Restrictions and Conflicts 44
Section 6.3 Ownership of Equity 44
Section 6.4 Legal Proceedings 45
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER 45
Section 7.1 Organization 45
Section 7.2 Authorization 45
Section 7.3 Absence of Restrictions and Conflicts 45
Section 7.4 Financial Capability 46
ARTICLE VIII. CERTAIN COVENANTS AND AGREEMENTS 46
Section 8.1 Conduct of Business by the Company 46
ii
Section 8.2 Inspection and Access to Information 46
Section 8.3 Notices of Certain Events 47
Section 8.4 Interim Financials 47
Section 8.5 No Solicitation of Transactions 47
Section 8.6 Reasonable Efforts; Further Assurances; Cooperation 48
Section 8.7 Public Announcements 50
Section 8.8 Supplements to Schedules 50
Section 8.9 Confidentiality 50
Section 8.10 Tax Matters 50
Section 8.11 Growing Interest Assets 50
Section 8.12 Seaboard Commitment Letters 51
Section 8.13 Commitment Fees 51
ARTICLE IX. CONDITIONS TO CLOSING 51
Section 9.1 Conditions to Obligations of Each Party 51
Section 9.2 Conditions to Obligations of the Purchaser 52
Section 9.3 Conditions to Obligations of the Goldsboro Parties 54
ARTICLE X. CLOSING 54
Section 10.1 Closing 54
Section 10.2 Goldsboro Parties' Closing Deliveries 54
Section 10.3 Purchaser Closing Deliveries 55
ARTICLE XI. TERMINATION 56
Section 11.1 Termination 56
Section 11.2 Specific Performance and Other Remedies 56
Section 11.3 Effect of Termination 57
ARTICLE XII. INDEMNIFICATION 57
Section 12.1 Indemnification Obligations of the Goldsboro
Parties to the Company 57
Section 12.2 Indemnification Obligations of the Goldsboro
Parties to the Purchaser 58
Section 12.3 Indemnification Obligations of the Purchaser 58
Section 12.4 Indemnification Procedure 59
Section 12.5 Claims Period 61
Section 12.6 Liability Limits. 62
Section 12.7 Exclusive Remedy 62
ARTICLE XIII. MISCELLANEOUS PROVISIONS 62
Section 13.1 Notices 62
Section 13.2 Assignment; Successors in Interest 63
Section 13.3 Captions 63
Section 13.4 Controlling Law; Amendment 63
Section 13.5 Consent to Jurisdiction, Etc 63
Section 13.6 Severability 64
Section 13.7 Counterparts 64
Section 13.8 Enforcement of Certain Rights 64
Section 13.9 Waiver 64
iii
Section 13.10 Integration 64
Section 13.11 Cooperation Following the Closing 64
Section 13.12 Transaction Costs 64
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement"), dated as of
September 9, 2010, is made and entered into by and among SEABOARD
CORPORATION, a Delaware corporation (the "Purchaser"), XXXXXXX
FARMS, LLC, a North Carolina limited liability company
("Xxxxxxx"), GOLDSBORO MILLING COMPANY, a North Carolina
corporation ("Goldsboro" and, collectively with Xxxxxxx, the
"Xxxxxxx Group") and GM ACQUISITION, LLC, a North Carolina
limited liability company ("Newco" and, collectively with Xxxxxxx
and Goldsboro, the "Goldsboro Parties" and each, individually, a
"Goldsboro Party"). The Purchaser, Xxxxxxx, Goldsboro and Newco
are sometimes individually referred to herein as a "Party" and
collectively as the "Parties."
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Operating Agreement
(the "Operating Agreement") of Butterball, LLC, a North Carolina
limited liability company (the "Company") among the Company,
Xxxxxxx and Xxxxxx-Xxxxx LLC, a Delaware limited liability
company ("Xxxxxx-Xxxxx"), dated September 27, 2006, Xxxxxxx
currently holds 51% of the outstanding Membership Interests (as
hereinafter defined) of the Company and Xxxxxx-Xxxxx currently
holds 49% of the outstanding Membership Interests (the "Xxxxxx-
Xxxxx Membership Interest") of the Company;
WHEREAS, pursuant to the terms of the Operating Agreement,
Xxxxxx-Xxxxx has delivered a Buy/Sell Notice (the "Buy/Sell
Notice"), dated March 15, 2010, pursuant to which Xxxxxx-Xxxxx
has offered to sell the Xxxxxx-Xxxxx Membership Interest, the MB
Member Note and the Xxxxxx-Xxxxx Growing Interest (as hereinafter
defined) (the Xxxxxx-Xxxxx Membership Interest, the MB Member
Note and the Xxxxxx-Xxxxx Growing Interest collectively referred
to as the "Xxxxxx-Xxxxx Butterball Interest") to Xxxxxxx in
accordance with the terms of the Operating Agreement and the
Buy/Sell Notice; and
WHEREAS, the Parties desire to enter into a series of
transactions as more specifically described in this Agreement
pursuant to which the Purchaser and Xxxxxxx will, upon
consummation of such transactions, each own 50% of the
outstanding Membership Interests of the Company, and the Company
will own the Xxxxxx-Xxxxx Growing Interest and the Xxxxxxx
Growing Interest (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, and intending to be legally
bound hereby, each Party hereby agrees:
ARTICLE I.
CONSTRUCTION; DEFINITIONS
Section 1.1 Definitions. The following terms, as used herein,
have the following meanings:
"Additional Xxxxxxx Growing Interest Assets" means an
approximately 40 acre parcel of real property and related
improvements in Xxxxxxx County, North Carolina which Goldsboro
has an option to purchase from Coharie Hog Farm, Inc. and
portions of the so called Xxxxxxxxx Farm, Xxxxxxx Farm and
Steven's Farm as more specifically described on Schedule 1.1(a).
"Adjacent Owners" means the owners of the real property
located adjacent to the real property included in the Xxxxxxx
Growing Interest or the Xxxxxx-Xxxxx Growing Interest.
"Affiliate" of any specified Person means any other Person
directly or indirectly Controlling or Controlled by or under
direct or indirect common Control with such specified Person.
"Appraisal" means that certain joint appraisal and report,
dated as of June 11, 2010, prepared by and among Farmers National
Company, CB Xxxxxxx Xxxxx and Xxxx and Xxxxxx, LLC, pursuant to
the terms of Article 10 of the Operating Agreement and the
instructions of Xxxxxxx and Xxxxxx-Xxxxx.
"Balance Sheet" means the audited consolidated balance sheet
of the Company and its Subsidiaries as of January 3, 2010
included in the Financial Statements.
"Business" means the operations of the Company and its
Subsidiaries, including the production of branded turkey
products.
"Business Day" means any day except Saturday, Sunday or any
day on which banks are generally not open for business in the
City of New York, New York.
"Butterball Closing Date Indebtedness" means all
Indebtedness of the Company and its Subsidiaries under the Term
Debt and the Revolver to the extent such Indebtedness is
outstanding as of the Closing Date prior to the payment of such
Indebtedness pursuant to Section 2.1(d) out of the New Butterball
Credit Facility Loan Proceeds.
"CERCLA" means the United States Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9607 et seq.
and the rules and regulations promulgated thereunder.
"Claims Period" means the period during which a claim for
indemnification may be asserted hereunder by an Indemnified
Party.
"Closing" means the consummation of the Xxxxxxx Closing and
the Seaboard Closing as set forth in Section 10.1 of this
Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the United States Internal Revenue Code of
1986, as amended.
"Commercial Software" means commercial "off the shelf"
software understood as third party software that is generally
made available pursuant to a "shrink wrap" license or that is
otherwise commercially available to all licensees pursuant to a
standard end-user license.
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"Commitment Fees" means the "commitment fees" payable by
Xxxxxxx, the Purchaser or the Company related to the Butterball
Refinancing, whether payable to a third party or the Purchaser.
For purposes of this definition, "commitment fees" refers to
fees, which are commonly referred to either as "commitment" fees
or "underwriter" fees, that are paid to ensure that the New
Butterball Credit Facility Loan Proceeds will be available as of
Closing (including the Seaboard Commitment Fee), and "commitment
fees" will not include "arrangement fees" or other on-going fees
related to bank lines, which may also be payable by the Company
in connection with the Butterball Refinancing.
"Company Ancillary Documents" means any certificate,
agreement, document or other instrument to be executed and
delivered by the Company or any of its Subsidiaries in connection
with the transactions contemplated hereby.
"Company Benefit Plan" means each Employee Benefit Plan
currently sponsored or maintained or required to be sponsored or
maintained by the Company or any of its Subsidiaries or to which
the Company or any of its Subsidiaries makes, or has any
obligation to make, directly or indirectly, any contributions or
with respect to which the Company or any of its Subsidiaries has,
or might have, any other liabilities.
"Company Contracts" means all existing written contracts and
agreements to which the Company or any of its Subsidiaries is a
party, by which the Company, any of its Subsidiaries or any
property of any of them is subject or by which the Company or any
of its Subsidiaries is otherwise bound (other than the leases
relating to the Leased Real Property set forth on Schedule
4.6(c), the Employment Agreements set forth on Schedule 4.16, the
Company Benefit Plans set forth on Schedule 4.17, the labor
agreements set forth on Schedule 4.18, and the insurance policies
set forth on Schedule 4.19) (a) involving an annual commitment or
annual payment to or from the Company or any of its Subsidiaries
of more than $1,000,000 individually or (b) the termination or
cancellation of which would be reasonably likely to result in a
Material Adverse Effect on the Business.
"Company Indemnified Parties" means the Company and its
Subsidiaries and each of the successors and assigns of any of the
foregoing.
"Company Intellectual Property" means any Intellectual
Property that is owned by or licensed to the Company or any of
its Subsidiaries, including the Company Registered Intellectual
Property.
"Company Licensed Software" means all Software (other than
Company Proprietary Software and Commercial Software) used by the
Company or any of its Subsidiaries.
"Company Proprietary Software" means all Software owned by
the Company or any of its Subsidiaries.
"Company Real Property" means the Leased Real Property and
the Owned Real Property.
"Company Registered Intellectual Property" means all of the
Registered Intellectual Property owned by or licensed to the
Company or any of its Subsidiaries.
3
"Company Software" means the Company Licensed Software and
the Company Proprietary Software.
"Confidential Information" means any trade secrets or
similar data or information of the Company or any of its
Subsidiaries that provides the Company or any of its Subsidiaries
with a competitive advantage by virtue of not being generally
known to the public or competitors.
"Control" means, when used with respect to any specified
Person, the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise.
"Customer" means each customer that paid the Company or any
of its Subsidiaries in the aggregate more than $25,000,000 during
the 12-month period ended on August 1, 2010.
"Deeds" means the deeds to be delivered to the Company
pursuant to the M-G Purchase Agreement.
"Disclosure Schedule" means the disclosure schedule to this
Agreement, in the form agreed to by the Parties.
"Dollar", "Dollars" and the symbol "$" shall mean lawful
money of the United States of America.
"Employee Benefit Plan" means, with respect to any Person,
(a) each plan, fund, program, agreement, arrangement or scheme,
including each plan, fund, program, agreement, arrangement or
scheme maintained or required to be maintained under the Laws of
a jurisdiction outside the United States of America, in each
case, that is or was at any time sponsored or maintained or
required to be sponsored or maintained by such Person or to which
such Person makes or has made, or has or has had an obligation to
make, contributions providing for employee benefits or for the
remuneration, direct or indirect, of the employees, former
employees, directors, managers, officers, consultants,
independent contractors, contingent workers or leased employees
of such Person or the dependents of any of them (whether written
or oral), including each deferred compensation, bonus, incentive
compensation, pension, retirement, stock purchase, stock option
and other equity compensation plan, or "welfare" plan (within the
meaning of Section 3(1) of ERISA, determined without regard to
whether such plan is subject to ERISA), (b) each "pension" plan
(within the meaning of Section 3(2) of ERISA, determined without
regard to whether such plan is subject to ERISA), (c) each
severance, retention or change in control plan or agreement, each
plan or agreement providing health, vacation, summer hours,
supplemental unemployment benefit, hospitalization insurance,
medical, dental or legal benefit and (d) each other employee
benefit plan, fund, program, agreement, arrangement or scheme.
"Employment Agreement" means any employment contract,
consulting agreement, termination or severance agreement, salary
continuation agreement, change of control agreement, non-compete
agreement, retention agreement, or any other agreement respecting
the terms and conditions of employment or payment of
compensation, or of a consulting or independent contractor
relationship with an individual, in respect to any current
officer, employee, consultant or independent contractor, and
further includes any agreement with any
4
former officer of employee pursuant to which such officer or
employee is entitled to any compensation to be made after the
Closing Date.
"Environmental Laws" means all federal, state, or local or
foreign Laws relating to human health and safety, protection of
the environment, including surface or ground water, drinking
water supply, soil, surface or subsurface strata or medium, or
ambient air, pollution control, product registration or the
regulation of Hazardous Materials.
"ERISA" means the United States Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
"ERISA Affiliate" means any Person (whether incorporated or
unincorporated) that together with the Company or any of its
Subsidiaries would be deemed a "single employer" within the
meaning of Section 414 of the Code.
"Estimated Working Capital Deficit" means the amount, if
any, by which the Estimated Net Working Capital is less than the
Target Working Capital, as reflected on the Estimated Working
Capital Schedule.
"Estimated Working Capital Surplus" means the amount, if
any, by which the Estimated Net Working Capital exceeds the
Target Working Capital, as reflected on the Estimated Working
Capital Schedule.
"Excluded Xxxxxxx Growing Interest Assets" means the real
property commonly known as Neuse Farm, portions of the Xxxxxxx 2
DO Farm, and portions of the so called Lake Breeder Farm, Spring
Creek Farm and Xxxxxx Darkout and Fields Farm and personal
property consisting of twelve (12) feed and four (4) rendering
trucks, all more specifically described on Schedule 1.1(b).
"Expiration Date" means the date set forth on Schedule
1.1(c).
"Feed Supply Agreement" means that feed supply agreement to
be entered into by Sleepy Creek Turkeys, Inc., an Affiliate of
the entities that comprise the Xxxxxxx Group, and the Company on
the Closing Date, in the form agreed to by the Parties.
"Final Working Capital Schedule" means the "Final Working
Capital Schedule" as finally determined pursuant to Section 3.2
hereof.
"Financial Statements" means (a) the audited consolidated
balance sheets of the Company and its Subsidiaries as of January
3, 2010, December 28, 2008, and December 30, 2007 and the audited
consolidated statements of income, stockholders' equity and cash
flows of the Company and its Subsidiaries for the 12-month
periods then ended and (b) the unaudited consolidated balance
sheet of the Company and its Subsidiaries as of August 1, 2010
and the unaudited consolidated statements of income,
stockholders' equity and cash flows of the Company and its
Subsidiaries for the seven-month period then ended.
5
"Financing Fees" means all fees (including "arrangement"
fees) and expenses incurred by the Company and its Subsidiaries
with respect to the Butterball Refinancing other than the
Commitment Fees.
"FLSA" means the United States Fair Labor Standards Act and
the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles in the
United States as applied consistently with the past practices of
the Company and its Subsidiaries in the preparation of the year-
end audited Financial Statements.
"Goldsboro Ancillary Documents" means any certificate,
agreement, document or other instrument, other than this
Agreement, to be executed and delivered by any Goldsboro Party or
any Affiliate of any Goldsboro Party (other than the Company or
any of its Subsidiaries) in connection with the transactions
contemplated hereby.
"Goldsboro Indemnified Parties" means the Goldsboro Parties
and their Affiliates, each of their respective officers and
directors and each of the heirs, executors, successors and
assigns of any of the foregoing.
"Governmental Entity" means any federal, state, local or
foreign government, any political subdivision thereof, or any
court, administrative or regulatory agency, department,
instrumentality, body or commission or other governmental
authority or agency.
"Hazardous Materials" means any waste, pollutant,
contaminant, hazardous substance, toxic, ignitable, reactive or
corrosive substance, hazardous waste, special waste, industrial
substance, by-product, process-intermediate product or waste,
asbestos or asbestos-containing materials, lead-based paint,
petroleum or petroleum-derived substance or waste, chemical
liquids or solids, liquid or gaseous products, or any constituent
of any such substance or waste, the management, use, handling or
disposal of which is in any way governed by or subject to any
applicable Environmental Law.
"HSR Act" means the United States Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 and the rules and regulations
promulgated thereunder.
"Indebtedness" means all indebtedness with respect to
borrowed money, including loans, deferred consideration, debts,
any liabilities under acceptances, credit cards, monies due under
capitalized leases or financial leases (but excluding operating
leases), or for the deferred purchase price of property or
services for which the applicable Person is liable, contingently
or otherwise as obligor, guarantor, or otherwise, or in respect
of which the applicable Person otherwise assures against loss,
including but not limited to bank debt, bank fees, shareholder
debt and vendor debt, including, in each case above, any interest
accrued thereon and prepayment or similar penalties and expenses
which would be payable if such liability were paid in full as of
the Closing Date.
"Indemnified Party" means a Company Indemnified Party, a
Purchaser Indemnified Party or a Goldsboro Indemnified Party.
6
"Intellectual Property" means any or all of the following
and all rights, arising out of or associated therewith: (a) all
United States and foreign patents and applications therefor and
all reissues, reexaminations, divisions, renewals, extensions,
provisionals, continuations and continuations-in-part thereof;
(b) all inventions (whether patentable or not), invention
disclosures, improvements, trade secrets, proprietary
information, know-how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing
throughout the world; (c) all works of authorship (whether
copyrightable or not), including Software, all copyrights,
copyright registrations and applications therefor, all registered
mask works and applications for mask work registration; and all
other rights corresponding thereto throughout the world; (d) all
industrial designs and any registrations and applications
therefor throughout the world; (e) all internet uniform resource
locators, domain names, trade names, logos, slogans, brands,
designs, trade dress, common law trademarks and service marks,
trademark and service xxxx and trade dress registrations and
applications therefor throughout the world and all goodwill and
other rights related thereto; (f) all databases and data
collections and all rights therein throughout the world; (g) all
moral and economic rights of authors and inventors, however
denominated, throughout the world; and (h) any similar or
equivalent rights to any of the foregoing anywhere in the world.
"Knowledge" with respect to the Goldsboro Parties means all
facts known by Xxxxxx Xxxxxxxxx or Xxx Xxxxxx on the date hereof
after due inquiry with respect to the matters at hand (including,
in the case of matters related to the Company and its
Subsidiaries, discussions with Xxxxx Xxxxxxxxx, Xx Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxxxx and Xxxx Xxxxxxxx), and all
facts that any of the foregoing Persons should have known on the
date hereof with respect to the matters at hand if such Person
had made due inquiry and exercised reasonable diligence in the
context which, with respect to the Company, takes into
consideration that the Goldsboro Parties are a 51% owner of the
Company and are not an operator of the Company.
"Laws" means all statutes, rules, codes, regulations,
restrictions, ordinances, orders, decrees, approvals, directives,
judgments, injunctions, writs, awards and decrees of, or issued
by, any Governmental Entity.
"Leased Real Property" means the parcels of real property of
which the Company or any of its Subsidiaries is the lessee
(together with all fixtures and improvements thereon).
"Legal Dispute" means any action, suit, arbitration or
proceeding between or among the Parties and their respective
Affiliates arising in connection with any disagreement, dispute,
controversy or claim arising out of or relating to this Agreement
or any related document.
"Legal Proceeding" means any suit, action, claim,
arbitration, proceeding or investigation pending, as of the
Closing Date, against the Company, any of its Subsidiaries,
Xxxxxxx or any MGI Subsidiary, or their respective real or
personal property, before any Governmental Entity or any
arbitrator.
"Licenses" means all notifications, licenses, permits
(including environmental, construction and operation permits),
qualifications, franchises, certificates, approvals, exemptions,
classifications, registrations and other similar documents and
authorizations issued by any Governmental Entity, and
applications therefor.
7
"Liens" mean all mortgages, liens, pledges, security
interests, charges, claims, restrictions and encumbrances of any
nature whatsoever.
"Losses" means liabilities, damages, losses, costs,
expenses, penalties and fines.
"Material Adverse Effect" means any state of facts, change,
event, effect or occurrence (when taken together with all other
states of fact, changes, events, effects or occurrences) that is
or may be reasonably likely to be materially adverse to the
financial condition, results of operations, properties, assets or
liabilities (including contingent liabilities) of the Company and
its Subsidiaries, taken as a whole. A Material Adverse Effect
shall also include any state of facts, change, event or
occurrence that shall have occurred or been threatened that (when
taken together with all other states of facts, changes, events,
effects or occurrences that have occurred or been threatened) is
or would be reasonably likely to prevent or materially delay the
performance by the Goldsboro Parties of their obligations
hereunder or the consummation of the transactions contemplated
hereby.
"Xxxxxxx Closing" means the consummation of the transactions
contemplated by Section 2.1 hereof.
"Xxxxxxx Expenses" means the legal, accounting, financial
advisory and other advisory or consulting fees and expenses
incurred by the Goldsboro Parties in connection with the
transactions contemplated by this Agreement, including amounts
payable to (a) Xxxxxxxxxx Xxxxxxxx LLP, (b) XxXxxx Partners, (c)
CB Xxxxxxx Xxxxx or (d) Duff and Xxxxxx, LLC, but excluding any
Commitment Fees paid by the Goldsboro Parties.
"Xxxxxxx Family" means each of the following individuals and
their respective spouses and descendants thereof: Xxxx Xxx
Xxxxxxx, Xxxxxxxxx X. Xxxxxx, Xxxxxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxxx, III, Xxxxxxxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxxxxx.
"Xxxxxxx Group Member Note" means (a) that certain
Promissory Note between the Company's predecessor-in-interest,
Carolina Turkeys, and Sleepy Creek Turkeys, Inc., dated January
1, 2006, in the original principal amount of $3,060,000.00 and
amended by letter agreement between Company and Sleepy Creek
Turkeys, Inc.; (b) that certain Promissory Note between the
Company's predecessor-in-interest, Carolina Turkeys, and Xxxxxxx
Foods, Inc. dated January 1, 2006, in the original principal
amount of $4,590,000.00 and amended by letter agreement between
Company and Xxxxxxx Foods, Inc.; and (c) that certain Promissory
Note between the Company's predecessor-in-interest, Carolina
Turkeys, and Goldsboro Milling Company dated January 1, 2006, in
the original principal amount of $4,947,000.00 and amended by
letter agreement between Company and Goldsboro Milling Company.
"Xxxxxxx Growing Interest" means the turkey growing
interests of Xxxxxxx, the MGI Subsidiaries and their Affiliates
as described on Schedule 1.1(d). For purposes of clarity, the
Xxxxxxx Growing Interest shall not include the Excluded Xxxxxxx
Growing Interest Assets and shall include the Additional Xxxxxxx
Growing Interest Assets.
"Xxxxxxx Indiana" means Xxxxxxx Farms of Indiana, Inc., an
Indiana corporation.
8
"Xxxxxxx Membership Interest" means the Membership Interests
of the Company owned by Xxxxxxx.
"Xxxxxxx Purchase Price" means an amount equal to (a) Two
Hundred Fifty-One Million Nine Hundred Thousand Dollars
($251,900,000) minus (b) the aggregate amount of the Butterball
Closing Date Indebtedness minus (c) the aggregate amount of the
Xxxxxx-Xxxxx Member Note Purchase Price minus (d) the aggregate
amount of the Xxxxxxx Group Member Note Purchase Price minus (e)
the amount of any Estimated Working Capital Deficit, if any, plus
(f) the amount of any Estimated Working Capital Surplus, if any.
"Xxxxxxx Redemption Agreement" means the redemption
agreement to be entered into by Xxxxxxx and the Company on the
Closing Date, in the form agreed to by the Parties.
"Xxxxxxx Target Price" means an amount equal to (a) One
Hundred Ninety-Eight Million Five Hundred Thousand Dollars
($198,500,000), plus (b) the amount, if any, by which the total
amount of current assets included in the Xxxxxxx Growing Interest
sold to Smithfield and its Affiliates exceeds Twenty-Seven
Million Five Hundred Thousand Dollars ($27,500,000), minus (c)
the amount, if any, by which the total amount of current assets
included in the Xxxxxxx Growing Interest sold to Smithfield and
its Affiliates is less than Twenty-Seven Million Five Hundred
Thousand Dollars ($27,500,000).
"MB Member Note" means (a) that certain Promissory Note
between the Company's predecessor-in-interest, Carolina Turkeys,
and Xxxxxx-Xxxxx, LLC dated January 1, 2006, in the original
principal amount of $7,350,000.00 and amended by letter agreement
between Company and Xxxxxx-Xxxxx, LLC and (b) that certain
Promissory Note between the Company's predecessor-in-interest,
Carolina Turkeys, and Xxxxxx-Xxxxx, LLC dated January 1, 2006, in
the original principal amount of $4,753,000.00 and amended by
letter agreement between Company and Xxxxxx-Xxxxx, LLC.
"Membership Interests" means "Membership Interests" in the
Company (as defined in the Operating Agreement).
"M-G Purchase Agreement" means the purchase agreement to be
entered into by the Company, on the one hand, and the Xxxxxxx
Group, certain MGI Subsidiaries and their Affiliates, on the
other hand, on the Closing Date, in the form agreed to by the
Parties.
"MGI Benefit Plan" means each Employee Benefit Plan
currently sponsored or maintained or required to be sponsored or
maintained by Xxxxxxx or any MGI Subsidiary or to which Xxxxxxx
or any MGI Subsidiary makes, or has any obligation to make,
directly or indirectly, any contributions or with respect to
which Xxxxxxx or any MGI Subsidiary has, or might have, any other
liabilities, in each case, in connection with the MGI Business.
"MGI Business" means the live turkey operations of Xxxxxxx
or the MGI Subsidiaries or their Affiliates that will be sold to
the Company as part of the MG Purchase.
"MGI Licensed Software" means all Software (other than MGI
Proprietary Software) used by Xxxxxxx or any MGI Subsidiary in
the MGI Business.
9
"MGI Proprietary Software" means all Software owned by
Xxxxxxx or any MGI Subsidiary and used in the MGI Business.
"MGI Real Property" means the parcels of real property
related to the Xxxxxxx Growing Interest and included in the
Appraisal, of which Xxxxxxx or one of the MGI Subsidiaries or
Affiliates is fee title owner (together with all fixtures and
improvements thereon), which may be adjusted from the property
included in the Appraisal based on final surveys or geographical,
access or existing physical features, which adjustments shall in
no event impair in any material respect the operation of the MGI
Business conducted from such property.
"MGI Software" means the MGI Licensed Software and the MGI
Proprietary Software.
"MGI Subsidiary" or "MGI Subsidiaries" means any or all
Persons engaged in the MGI Business of which Xxxxxxx shall own
directly, or indirectly through another Person, a nominee
arrangement or otherwise at least a majority of the outstanding
capital stock (or other shares of beneficial interest) entitled
to vote generally or otherwise have the power to elect a majority
of the board of directors or similar governing body or the legal
power to direct the business or policies of such Person.
"Xxxxxx-Xxxxx Butterball Interest Contribution Agreement"
means the contribution agreement to be entered into by Newco and
the Company on the Closing Date, in the form agreed to by the
Parties.
"Xxxxxx-Xxxxx Contracts" means the Assumed Turkey Contracts
as defined in the Xxxxxx-Xxxxx Purchase Agreement.
"Xxxxxx-Xxxxx Growing Interest" means the turkey growing
interests of Xxxxxx-Xxxxx and its Affiliates as described on
Schedule 1.1(e).
"Xxxxxx-Xxxxx Purchase Agreement" means the purchase
agreement to be entered into by Newco and Xxxxxx-Xxxxx on or
prior to the Closing Date, in the form agreed to by the Parties.
"Net Working Capital" means (a) the current assets of the
Company and its Subsidiaries on a consolidated basis less (b) the
liabilities of the Company and its Subsidiaries on a consolidated
basis, as of the Closing Date, determined in accordance with the
Working Capital Guidelines.
"Newco Promissory Note" means the unconditional promissory
note to be issued by Newco to the Purchaser on the Closing Date,
in the form agreed to by the Parties.
"Ordinary Course" means the ordinary course of Business of
the Company and its Subsidiaries consistent with past practice or
the ordinary course of MGI Business of Xxxxxxx and the MGI
Subsidiaries consistent with past practice, as applicable.
"Owned Real Property" means the parcels of real property of
which the Company or a Subsidiary is fee title owner (together
with all fixtures and improvements thereon).
10
"Pathology Lab Services Agreement and Lease" means,
collectively, that pathology lab services agreement to be entered
into by Xxxxxxx Foods, LLC and Xxxxxxx Farms of Indiana, Inc.,
each an Affiliate of the entities that comprise the Xxxxxxx
Group, and the Company on the Closing Date and that lease to be
entered into by Goldsboro and the Company on the Closing Date,
each in the form agreed to by the Parties.
"Permitted Liens" means (a) Liens for Taxes not yet due and
payable, (b) statutory Liens of landlords, (c) Liens of carriers,
warehousemen, mechanics, materialmen and repairmen incurred in
the Ordinary Course and not yet delinquent, (d) mortgage Liens
existing as of the date hereof, but which will be paid-off and
released at Closing, and (e) in the case of Company Real Property
and MGI Real Property, zoning, building, or other restrictions,
variances, covenants, rights of way, encumbrances, easements and
other irregularities in title or survey, as well as matters
reflected in existing title policies or title commitments
covering the Company Real Property and the MGI Real Property,
none of which, individually or in the aggregate, (i) interfere in
any material respect with the present use of or occupancy of the
affected parcel, (ii) have more than an immaterial effect on the
value thereof or its use or (iii) would impair the ability of
such parcel to be sold, leased or subleased for its present use.
"Person" means any individual, corporation, partnership,
joint venture, limited liability company, trust, unincorporated
organization or Governmental Entity.
"Preliminary Working Capital Schedule" means a draft
schedule of the Net Working Capital, which shall include a
calculation of each of the Net Working Capital, the Working
Capital Surplus, if any, and the Working Capital Deficit, if any.
"Purchaser Ancillary Documents" means any certificate,
agreement, document or other instrument, other than this
Agreement, to be executed and delivered by the Purchaser in
connection with the transactions contemplated hereby.
"Purchaser Indemnified Parties" means the Purchaser and its
Affiliates, each of their respective officers and directors and
each of the heirs, executors, successors and assigns of any of
the foregoing.
"Registered Intellectual Property" means (a) all United
States and foreign: (i) patents and patent applications
(including provisional applications); (ii) registered trademarks
and service marks, applications to register trademarks and
service marks, and trade dress; intent-to-use applications, or
other registrations or applications related to trademarks and
service marks and trade dress; (iii) registered copyrights and
applications for copyright registration; (iv) domain name
registrations; and (v) registered mask works and applications for
mask work registration; and (b) any other Intellectual Property
that is the subject of an application, certificate, filing,
registration or other document issued, filed with, or recorded
with any federal, state, local or foreign Governmental Entity or
other public body.
"Release" means, with respect to any Hazardous Material, any
spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing
into any surface or ground water, drinking water supply, soil,
surface or subsurface strata or medium, or the ambient air.
11
"Revolver" means (a) that certain Credit Agreement, dated as
of October 2, 2006, by and among the Company, as Borrower, CT of
Kinston, LLC, as Guarantor, certain Lenders from time to time
party thereto, and Bank of Montreal (Chicago Branch), as
Administrative Agent, as amended by a first amendment thereto and
by that certain Second Amendment to Credit Agreement dated as of
August 28, 2008, (b) that certain Revolver Note by the Company,
as Borrower, in favor of Bank of Montreal (Chicago Branch), as
Lender, in the original principal amount of up to $162,500,000.00
dated October 2, 2006, (c) that certain Revolver Note by the
Company, as Borrower, in favor of Bank of Montreal (Chicago
Branch), as Lender, in the original principal amount of up to
$37,500,000.00 dated October 2, 2006, and (d) that certain Swing
Note by the Company, as Borrower, in favor of Bank of Montreal
(Chicago Branch), as Lender, in the original principal amount of
up to $20,000,000.00 dated October 2, 2006.
"Schedule" means a schedule included in the Disclosure
Schedule, as such schedule is more specifically identified
herein.
"Seaboard Closing" means the consummation of the
transactions contemplated by Section 2.2 hereof.
"Seaboard Commitment Fee" means the Commitment Fee in the
amount of $8,000,000 which will be payable by the Company to the
Purchaser in connection with the Closing pursuant to the Seaboard
Commitment Letters.
"Seaboard Commitment Letters" means, collectively, (a) the
commitment letter, dated the date hereof, from Seaboard to, and
accepted and agreed to by, Xxxxxxx (together with all exhibits
attached thereto), and (b) the related fee letter, dated the date
hereof, from Seaboard to, and accepted and agreed to by, Xxxxxxx.
"Seaboard Expenses" means the legal, accounting, financial
advisory and other advisory or consulting fees and expenses
incurred by the Purchaser in connection with the transactions
contemplated by this Agreement, including amounts payable to King
& Spalding.
"Seaboard Purchase Agreement" means the purchase agreement
to be entered into by the Purchaser and Newco on the Closing
Date, in the form agreed to by the Parties.
"Sleepy Creek" means Sleepy Creek Turkeys, Inc., a North
Carolina corporation.
"Seaboard Purchase Price" means an amount equal to the
lesser of (a) One Hundred Seventy-Six Million One Hundred
Thousand Dollars ($176,100,000) and (b) the Total Xxxxxx-Xxxxx
Purchase Price.
"Software" means all computer software programs, together
with any error corrections, updates, modifications, or
enhancements thereto, in both machine readable form and human
readable form, including all comments and any procedural code.
"Subsidiary" or "Subsidiaries" means any or all Persons of
which the Company (or other specified Person) shall own directly,
or indirectly through another Person, a nominee arrangement or
otherwise at least a majority of the outstanding capital stock
(or other shares of beneficial interest) entitled to vote
generally or otherwise have the power to elect a majority of
12
the board of directors or similar governing body or the legal
power to direct the business or policies of such Person.
"Supplemental Earnings" means an amount equal to (a) the net
income (determined in accordance with GAAP) of the Company and
its Subsidiaries for the period commencing as of November 29,
2010 and ending as of the Closing Date (such net income being
referred to herein as the "Interim Income") less (b) an amount
equal to the amounts necessary to satisfy the federal and state
income Tax liabilities of the Goldsboro Parties and Xxxxxx-Xxxxx
that are attributable to the Interim Income (with such income Tax
liabilities being calculated with reference to the items of the
Company's income, gain, deduction, loss and credit (determined
without regard to the specific Tax circumstances of a member of
the Company) and the highest marginal rate of federal and state
income Tax applicable to income allocated to a member of the
Company in the states in which the Company has income Tax nexus).
"Supplier" means any supplier that the Company and its
Subsidiaries have paid in the aggregate more than $25,000,000
during the 12-month period ended on August 1, 2010.
"Surveys" shall mean, as to each parcel of MGI Real Property
that, as of the date of this Agreement, is not a legally
subdivided parcel with legal and direct access to a public right
of way, a current boundary survey prepared and certified by a
duly licensed North Carolina land surveyor and registered
professional engineer, showing each such parcel of MGI Real
Property as a separate, legally subdivided parcel together with
access (either direct or via an Access Easement Agreement) to a
public right of way, including a metes and bounds or lot and
block legal description of each such parcel to be used in the
Deeds, and otherwise prepared in accordance with Section 8.11
below and reasonably acceptable to the Purchaser.
"Target Working Capital" means an amount equal to (a) One
Hundred Ninety-Six Million Dollars ($196,000,000) plus (b) an
amount equal to the Supplemental Earnings, if any, if the Closing
does not occur on or before December 13, 2010.
"Taxes" means all taxes, assessments, charges, duties, fees,
levies and other governmental charges (including interest,
penalties or additions associated therewith), including income,
franchise, capital stock, real property, personal property,
tangible, withholding, employment, payroll, social security,
social contribution, unemployment compensation, disability,
transfer, sales, use, excise, license, occupation, registration,
stamp, premium, environmental, customs duties, alternative or add-
on minimum, estimated, gross receipts, value-added and all other
taxes of any kind for which the Company or any of its
Subsidiaries may have any liability whatsoever that may be
imposed by any Governmental Entity, whether disputed or not, and
any charges, interest, additions or penalties imposed by any
Governmental Entity.
"Tax Return" means any report, return, claim for refund,
declaration or other information return or statement required to
be supplied to a Governmental Entity relating to Taxes, including
any schedule or attachment thereto and any estimated returns and
any amendment thereof.
"Term Debt" means (a) that certain Term Note by the Company,
as Borrower, in favor of Bank of Montreal (Chicago Branch), as
Lender, in the original principal amount of $162,500,000.00 dated
October 2, 2006, and (b) that certain Term Note by the Company,
as
13
Borrower, in favor of Bank of Montreal (Chicago Branch), as
Lender, in the original principal amount of $37,500,000.00 dated
October 2, 2006.
"Total Xxxxxx-Xxxxx Purchase Price" means an amount equal to
(a) the Xxxxxx-Xxxxx Membership Interest Purchase Price, plus (b)
the Initial M-B G-I Purchase Price, plus (c) the Xxxxxx-Xxxxx
Member Note Purchase Price.
"Transaction Expenses" means the legal, accounting,
financial advisory and other third party advisory or consulting
fees and expenses incurred by the Company or any of its
Subsidiaries in connection with the transactions contemplated by
this Agreement, excluding Commitment Fees, Financing Fees and
Xxxxxxx Expenses (which shall not include expenses under the
retention agreements with certain employees of the Company listed
on Schedule 4.16).
"Treasury Regulations" means the Income Tax Regulations,
promulgated under the Code.
"WARN" means the United States Worker Adjustment and
Retraining Notification Act and the rules and regulations
promulgated thereunder.
"Warranty" means any warranty or guaranty made by the
Company or any of its Subsidiaries as to goods sold, or services
provided, by the Company or any of its Subsidiaries, including
the Company's standard form of warranty as attached to Schedule
4.29.
"Working Capital Deficit" means the amount, if any, by which
the Net Working Capital, as reflected on the Final Working
Capital Schedule, is less than the Estimated Net Working Capital.
"Working Capital Guidelines" means the guidelines for
determining Net Working Capital, in the form agreed to by the
Parties.
"Working Capital Surplus" means the amount, if any, by which
the Net Working Capital, as reflected on the Final Working
Capital Schedule, exceeds the Estimated Net Working Capital.
Section 1.2 Other Definitions. Each of the following terms is
defined in the Section set forth opposite such term:
Term Section
Access Easement Agreements 9.2(k)
Alternative Offer 8.5
Arbitrator 3.2(f)
Affiliate Loans 4.26(a)
Agreement Preamble
Butterball Refinancing 2.1(d)
Buy/Sell Notice Recitals
Closing Date Indebtedness Statement 3.1(a)
Closing Date Purchase Price Statement 3.1(b)
Company Recitals
Company Legal Proceeding 4.12
Confidentiality Agreement 8.9
14
DOJ 8.6(a)
Estimated Net Working Capital 3.2(a)
Estimated Working Capital Schedule 3.2(a)
FTC 8.6(a)
Goldsboro Preamble
Goldsboro Losses 12.3
Goldsboro Opinion 9.2(c)
Goldsboro Parties Preamble
Goldsboro Party Preamble
Grower Contract Assignments 9.2(j)
Indemnifiable Losses 12.2
Indemnifying Party 12.4(a)
Indemnity Basket 12.6
Indemnity Cap 12.6
Initial M-B G-I Purchase Price 2.1(b)
Initial M-G G-I Purchase Price 2.1(e)
Insurance Contracts 4.19
Interim Income Definition of "Supplemental Earnings"
M-G Purchase 2.1(e)
Management Services Agreement 9.2(h)
Xxxxxxx Preamble
Xxxxxxx Butterball Interest 8.5
Xxxxxxx Closing Payment 2.1(f)
Xxxxxxx Group Preamble
Xxxxxxx Group Member Note Purchase Price 2.1(e)
Xxxxxxx Growing Interest Assets Transfers 8.11
Xxxxxxx Redemption 2.1(f)
Xxxxxxx Transition Services Agreement 9.2(i)
MGI Contracts 5.7
MGI Employment Agreements 5.8
MGI Insurance Contracts 5.11
MGI Legal Proceeding 5.5
Xxxxxx-Xxxxx Recitals
Xxxxxx-Xxxxx Butterball Interest Recitals
Xxxxxx-Xxxxx Butterball Interest Contribution 2.1(c)
Xxxxxx-Xxxxx Butterball Interest Purchase 2.1(b)
Xxxxxx-Xxxxx Member Note Purchase Price 2.1(b)
Xxxxxx-Xxxxx Membership Interest Recitals
Xxxxxx-Xxxxx Membership Interest Purchase Price 2.1(b)
New Butterball Credit Facility Loan Amount 2.1(d)
New Butterball Credit Facility Loan Proceeds 2.1(d)
Newco Preamble
Newco Loan 2.1(a)
Newco Loan Amount 2.1(a)
Newco Membership Interest 2.2(a)
Operating Agreement Recitals
15
Parties Preamble
Party Preamble
Payoff Letters 9.2(e)
Purchaser Preamble
Purchaser Opinion 9.3(c)
Seaboard Contribution 2.2(a)
Seaboard Purchase 2.2(a)
Smithfield 8.5
Section 1.3 Construction. Unless the context of this
Agreement otherwise clearly requires, (a) references to the
plural include the singular, and references to the singular
include the plural, (b) references to one gender include the
other gender, (c) the words "include," "includes" and "including"
do not limit the preceding terms or words and shall be deemed to
be followed by the words "without limitation", (d) the terms
"hereof", "herein", "hereunder", "hereto" and similar terms in
this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement, (e) the terms "day" and
"days" mean and refer to calendar day(s), (f) the terms "year"
and "years" mean and refer to calendar year(s) and (g) unless set
forth specifically otherwise, the settlement of all payments
hereunder shall be made in Dollars. Unless otherwise set forth
herein, references in this Agreement to (i) any document,
instrument or agreement (including this Agreement) (A) includes
and incorporates all Exhibits, Schedules and other attachments
thereto, (B) includes all documents, instruments or agreements
issued or executed in replacement thereof and (C) means such
document, instrument or agreement, or replacement or predecessor
thereto, as amended, modified or supplemented from time to time
in accordance with its terms and in effect at any given time, and
(ii) a particular Law means such Law as amended, modified,
supplemented or succeeded, from time to time and in effect at any
given time on or prior to the Closing Date. All Article and
Section references herein are to Articles and Sections of this
Agreement, unless otherwise specified. This Agreement shall not
be construed as if prepared by one of the Parties, but rather
according to its fair meaning as a whole, as if all Parties had
prepared it.
Section 1.4 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
GAAP.
ARTICLE II.
PURCHASE AND SALE
Section 2.1 Xxxxxxx Closing. At the Xxxxxxx Closing, the
Parties, as applicable, will cause the following transactions to
be consummated:
(a) As evidenced by the Newco Promissory Note, the
Purchaser will loan (the "Newco Loan") to Newco an amount
(the "Newco Loan Amount") equal to the Total Xxxxxx-Xxxxx
Purchase Price.
(b) Immediately following the funding of the Newco
Loan, Newco shall purchase (i) the Xxxxxx-Xxxxx Membership
Interest, free and clear of all Liens other than liens
permitted under the Xxxxxx-Xxxxx Purchase Agreement, from
Xxxxxx-Xxxxx pursuant to the terms of the Operating
Agreement, the Buy/Sell Notice and the Xxxxxx-
16
Xxxxx Purchase Agreement for One Hundred Twenty Million
Dollars ($120,000,000) (the "Xxxxxx-Xxxxx Membership
Interest Purchase Price"), (ii) the Xxxxxx-Xxxxx Growing
Interest, free and clear of all Liens other than liens
permitted under the Xxxxxx-Xxxxx Purchase Agreement, from
Xxxxxx-Xxxxx pursuant to the terms of the Operating
Agreement, the Buy/Sell Notice and the Xxxxxx-Xxxxx Purchase
Agreement for the purchase price (the "Initial M-B G-I
Purchase Price") set forth in the Buy/Sell Notice, which
Initial M-B G-I Purchase Price is subject to adjustment in
accordance with the Xxxxxx-Xxxxx Purchase Agreement, and
(iii) the MB Member Note, free and clear of all Liens, from
Xxxxxx-Xxxxx for the purchase price (the "Xxxxxx-Xxxxx
Member Note Purchase Price") set forth in the Xxxxxx-Xxxxx
Purchase Agreement (the transactions described in this
clause (b), collectively the "Xxxxxx-Xxxxx Butterball
Interest Purchase").
(c) Immediately following the consummation of the
Xxxxxx-Xxxxx Butterball Interest Purchase, pursuant to the
Xxxxxx-Xxxxx Butterball Interest Contribution Agreement,
Newco shall contribute to the Company (i) the Xxxxxx-Xxxxx
Growing Interest and (ii) $14,000,000 of the outstanding
principal and secured interest under the Xxxxxx-Xxxxx Member
Note. The transactions described in this clause (c) are
collectively referred to herein as the "Xxxxxx-Xxxxx
Butterball Interest Contribution".
(d) Immediately following the consummation of the
Xxxxxx-Xxxxx Butterball Interest Contribution, the Goldsboro
Parties and the Purchaser shall (i) cause the Company to
consummate the loan transaction contemplated by the Seaboard
Commitment Letters pursuant to which the Company will
receive loan proceeds (the "New Butterball Credit Facility
Loan Proceeds") of approximately $301,400,000 (or such
greater or lesser amount as shall be needed for the Company
to satisfy its obligations in connection with the Closing)
(the "New Butterball Credit Facility Loan Amount"), of which
approximately $200,000,000 will consist of a senior credit
facility and approximately $100,000,000 will consist of
subordinated debt, and (ii) cause the Company to use the New
Butterball Credit Facility Loan Proceeds to pay off the
Butterball Closing Date Indebtedness and, to the extent not
paid prior to the Closing, the Financing Fees and the
Transaction Expenses (the transactions described in this
clause (d), collectively the "Butterball Refinancing"). In
this regard, it is understood that (x) the Xxxxxxx Group
will be reimbursed for any Commitment Fees paid by the
Xxxxxxx Group (rather than by the Company or its
Subsidiaries) prior to the Closing and (y) the Purchaser
will be reimbursed for any Commitment Fees paid by the
Purchaser (rather than by the Company or its Subsidiaries)
prior to the Closing.
(e) Immediately following the consummation of the
Butterball Refinancing, the Goldsboro Parties shall cause
the Company to purchase (i) the Xxxxxxx Growing Interest,
free and clear of all Liens other than Permitted Liens, from
the Xxxxxxx Group and certain MGI Subsidiaries and their
Affiliates pursuant to the M-G Purchase Agreement for the
purchase price set forth in the M-G Purchase Agreement (the
"Initial M-G G-I Purchase Price"), which Initial M-G G-I
Purchase Price is subject to adjustment in accordance with
the M-G Purchase Agreement and (ii) the Xxxxxxx Group Member
Note, free and clear of all Liens other than Permitted Liens,
from Xxxxxxx for the purchase price (the "Xxxxxxx Group
Member Note Purchase Price") set forth in the M-G
17
Purchase Agreement (the transactions described in this
clause (e), collectively the "M-G Purchase").
(f) Immediately following the consummation of the M-G
Purchase, pursuant to the Xxxxxxx Redemption Agreement, the
Goldsboro Parties will cause the Company to purchase from
Xxxxxxx, and Xxxxxxx to sell to the Company, a Membership
Interest in the Company held by Xxxxxxx representing a 1.1%
interest in the profits of the Company and an interest in
the capital of the Company equal to the Xxxxxxx Purchase
Price, free and clear of all Liens, and in consideration
therefor, the Goldsboro Parties will cause the Company to
pay at Closing a cash amount (the "Xxxxxxx Closing Payment")
equal to the Xxxxxxx Purchase Price (the transactions
described in this clause (f), collectively the "Xxxxxxx
Redemption"). Immediately following the Xxxxxxx Closing,
Xxxxxxx will own a Membership Interest in the Company
representing more than 50% of the total interest in the
capital and profits of the Company.
Section 2.2 Seaboard Closing. Following the consummation
of the Xxxxxxx Closing, the Parties, as applicable, will cause
the following transactions to be consummated at the Seaboard
Closing:
(a) (i) Pursuant to the Seaboard Purchase Agreement,
Newco will (A) sell, transfer, and deliver to the Purchaser,
free and clear of all Liens, the 49.0% Membership Interest
in the Company held by Newco (the "Newco Membership
Interest"), which will represent less than 50% of the total
interest in the capital and profits of the Company, and (B)
pay to the Purchaser in cash the amount, if any, by which
the Newco Loan Amount (plus accrued interest, if any,
thereon) exceeds the Seaboard Purchase Price, and in
consideration therefor, the Purchaser shall discharge the
Newco Promissory Note and shall return the Newco Promissory
Note marked "paid in full" to Newco, and (ii) the Purchaser
shall contribute in cash to the Company an amount, if any,
by which $177,500,000 exceeds the Seaboard Purchase Price
(the "Seaboard Contribution") (the transactions described in
this clause (a), collectively the "Seaboard Purchase").
(b) Immediately following the Seaboard Contribution,
each of Xxxxxxx and the Purchaser will own 50% of the
outstanding Membership Interests in the Company,
representing 50% of the total interest in the capital and
profits of the Company.
Section 2.3 Further Assurances. Each Party shall on the
Closing Date and from time to time thereafter, at any other
Party's reasonable request and without further consideration,
execute and deliver to such other Party such instruments of
transfer, conveyance, and assignment as shall be reasonably
requested to effect the transactions contemplated by this
Agreement.
ARTICLE III.
CLOSING DATE STATEMENTS; ADJUSTMENTS
Section 3.1 Closing Date Statements.
(a) Not less than two (2) Business Days prior to the
Closing Date, Xxxxxxx shall deliver to the Purchaser a
statement (the "Closing Date Indebtedness Statement"),
signed by the Chief Financial Officer of Xxxxxxx, which
sets forth, by lender, the
18
aggregate amount of the Butterball Closing Date Indebtedness.
Attached to the Closing Date Indebtedness Statement will be
copies of the Payoff Letters, or forms thereof, to be
delivered in accordance with Section 9.2(e) hereof.
(b) Not less than two (2) Business Days prior to the
Closing Date, Xxxxxxx shall deliver to the Purchaser a
statement (the "Closing Date Purchase Price Statement"),
signed by the Chief Financial Officer of Xxxxxxx, which sets
forth the Xxxxxx-Xxxxx Membership Interest Purchase Price,
the Initial M-B G-I Purchase Price, the Xxxxxx-Xxxxx Member
Note Purchase Price, the Total Xxxxxx-Xxxxx Purchase Price,
the Xxxxxxx Purchase Price, the Xxxxxx-Xxxxx Member Note
Purchase Price, the Xxxxxxx Group Member Note Purchase Price,
the Transaction Expenses, the Financing Fees, the Commitment
Fees (including the Seaboard Commitment Fee), the Initial
M-G G-I Purchase Price, the Xxxxxxx Group Member Note
Purchase Price, the Xxxxxxx Closing Payment, the Seaboard
Purchase Price and the Seaboard Contribution.
Section 3.2 Adjustment of Xxxxxxx Purchase Price.
(a) Not less than three (3) Business Days prior to the
Closing Date, Xxxxxxx shall deliver to the Purchaser a
statement (the "Estimated Working Capital Schedule")
containing Xxxxxxx'x estimate of Net Working Capital
("Estimated Net Working Capital").
(b) No later than 120 days following the Closing Date,
the Parties shall cause the Company to prepare and deliver
to Xxxxxxx and the Purchaser the Preliminary Working Capital
Schedule.
(c) Xxxxxxx shall have thirty (30) days following
receipt of the Preliminary Working Capital Schedule during
which to notify the Purchaser of any dispute of any item
contained in the Preliminary Working Capital Schedule, which
notice shall set forth in reasonable detail the basis for
such dispute. The Purchaser shall have thirty (30) days
following receipt of the Preliminary Working Capital
Schedule during which to notify Xxxxxxx of any dispute of
any item contained in the Preliminary Working Capital
Schedule, which notice shall set forth in reasonable detail
the basis for such dispute.
(d) If Xxxxxxx does not notify the Purchaser of any
such dispute and the Purchaser does not notify Xxxxxxx of
any such dispute within such thirty (30) day period, then
the Preliminary Working Capital Schedule shall be deemed to
be the Final Working Capital Schedule.
(e) If Xxxxxxx notifies the Purchaser of any such
dispute or the Purchaser notifies Xxxxxxx of any such
dispute within such thirty (30) day period, then Xxxxxxx and
the Purchaser shall cooperate in good faith to resolve any
such dispute as promptly as possible, and upon such
resolution, the Final Working Capital Schedule shall be
prepared in accordance with the agreement of Xxxxxxx and the
Purchaser.
(f) If Xxxxxxx and the Purchaser are unable to resolve
any dispute regarding the Preliminary Working Capital
Schedule within thirty (30) days (or such longer period as
Xxxxxxx and the Purchaser shall mutually agree in writing),
following notice of such
19
dispute, such dispute shall be submitted to, and all issues
having a bearing on such dispute shall be resolved by, (x)
the Raleigh, North Carolina office of Deloitte Touche, or
(y) in the event such accounting firm is unable or unwilling
to take such assignment, a "Big Four" or other nationally
recognized accounting firm mutually agreed upon by Xxxxxxx
and the Purchaser (such identified accounting firm or, if
applicable, the firm so selected, the "Arbitrator").
Xxxxxxx and the Purchaser shall instruct the Arbitrator that,
in resolving any such dispute and in determining Net Working
Capital and the Working Capital Deficit or Working Capital
Surplus, if any, the Arbitrator shall not assign to any item
in dispute a value that is (A) greater than the greatest
value for such item assigned by Xxxxxxx, on the one hand, or
the Purchaser, on the other hand, or (B) less than the
smallest value for such item assigned by Xxxxxxx, on the one
hand, or the Purchaser, on the other hand. Such resolution
shall be final and binding on the Parties. The Arbitrator
shall use commercially reasonable efforts to complete its
work within thirty (30) days following its engagement. The
fees, costs and expenses of the Arbitrator (i) shall be
borne by the Company in the proportion that the aggregate
dollar amount of all unsuccessfully disputed items by the
Purchaser (as finally determined by the Arbitrator) bears to
the aggregate dollar amount of all such items so submitted
by both Purchaser and the Goldsboro Parties, and (ii) shall
be borne by the Goldsboro Parties on a joint and several
basis in the proportion that the aggregate dollar amount of
all successfully disputed items by the Purchaser (as finally
determined by the Arbitrator) bears to the aggregate dollar
amount of all such items so submitted by both Purchaser and
the Goldsboro Parties. If any disputes are submitted to the
Arbitrator pursuant to this Section 3.2(f), the Final
Working Capital Schedule shall be prepared in accordance
with the decision of the Arbitrator and, to the extent
applicable, the agreement of Xxxxxxx and the Purchaser.
(g) Within five (5) Business Days following the
determination of the Final Working Capital Schedule in
accordance with this Section 3.2:
(i) To the extent that there is a Working Capital
Deficit, the Goldsboro Parties shall be obligated on a
joint and several basis to pay to the Company in cash
an aggregate amount equal to the Working Capital
Deficit by wire transfer of immediately available funds.
(ii) To the extent there is a Working Capital
Surplus on the Final Working Capital Schedule, the
Purchaser and Xxxxxxx shall cause the Company to pay to
Xxxxxxx in cash an aggregate amount equal to the
Working Capital Surplus by wire transfer of immediately
available funds to an account designated by Xxxxxxx.
Upon such payment, the Company shall be fully released
and discharged of any obligation with respect to the
Working Capital Surplus.
(iii) Any payment made pursuant to this Section
3.2(g) shall include an additional amount of simple
interest equal to the amount of interest that such
payment would have earned had it earned interest at the
rate per annum of 4% from the Closing Date through the
date of such payment.
20
Section 3.3 Goldsboro Parties Release. In consideration
for the agreement and covenants of the Purchaser set forth in
this Agreement, each of the Goldsboro Parties and each of their
respective Affiliates hereby, effective as of the Closing,
knowingly, voluntarily and unconditionally releases, forever
discharges, and covenants not to xxx the Company or any of its
Subsidiaries and their respective predecessors and successors,
and any of their respective current and former officers,
directors, employees, agents, or representatives from and for any
and all claims, causes of action, demands, suits, debts,
obligations, liabilities, damages, losses, costs, and expenses
(including attorneys' fees) of every kind or nature whatsoever,
known or unknown, actual or potential, suspected or unsuspected,
fixed or contingent, that such Goldsboro Party has or may have,
now or in the future, arising out of, relating to, or resulting
from any act of commission or omission, errors, negligence,
strict liability, breach of contract, tort, violations of law,
matter or cause whatsoever from the beginning of time to the
Closing Date; provided, however, that such release shall not
cover any claims against the Company or its Subsidiaries (a)
under the Xxxxxxx Group Member Note, unless and until the Xxxxxxx
Group Member Note is purchased by the Company pursuant to Section
2.1(e), (b) with respect to amounts otherwise payable to any
Goldsboro Party or their Affiliates for goods sold or services
rendered by the Goldsboro Parties or their Affiliates to the
Company and its Subsidiaries in the Ordinary Course on or prior
to the Closing Date (which amounts, to the extent not paid prior
to the Closing Date, shall be accrued as liabilities of the
Company and its Subsidiaries as of the Closing Date for purposes
of determining the Net Working Capital); or (c) any obligation
arising under or contemplated by this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES RELATED TO THE COMPANY
The Goldsboro Parties hereby, jointly and severally,
represent and warrant to the Purchaser as follows as of the date
hereof and the Closing Date:
Section 4.1 Organization. The Company and each of its
Subsidiaries is a corporation or limited liability company, as
applicable, duly formed and validly existing under the laws of
the jurisdiction of incorporation or organization, as applicable,
set forth on Schedule 4.1 and each has all requisite power and
authority to own, lease and operate its properties and to carry
on its business as now being conducted. The Company and each of
its Subsidiaries is duly qualified or registered as a foreign
corporation or limited liability company, as applicable, to
transact business under the Laws of each jurisdiction where the
character of its activities or the location of the properties
owned or leased by it requires such qualification or
registration. The Goldsboro Parties have heretofore made
available to the Purchaser correct and complete copies of the
organizational documents of the Company and each of its
Subsidiaries as currently in effect and the corporate or limited
liability company, as applicable, record books with respect to
actions taken by its shareholders, board of directors, members
and managers, as applicable. Schedule 4.1 contains a correct and
complete list of the jurisdictions in which the Company and each
of its Subsidiaries is qualified or registered to do business as
a foreign corporation or limited liability company, as
applicable.
Section 4.2 Authorization. The Company and each of its
Subsidiaries has the right, power, authority and capacity to
execute and deliver the Company Ancillary Documents and to
perform its obligations thereunder and to consummate the
transactions contemplated thereunder.
21
As of the Closing, the consummation of the transactions
contemplated thereby will be duly authorized by all required
action on the part of the Company and each of its Subsidiaries.
Section 4.3 Capital Structure.
(a) Schedule 4.3(a) accurately and completely sets
forth the capital structure of the Company and each of its
Subsidiaries including the number of membership interests or
other equity interests which are authorized and which are
issued and outstanding. All of the issued and outstanding
membership interests or other equity interests of the
Company and each of its Subsidiaries (x) are duly authorized,
validly issued, fully paid and nonassessable, (y) are held
of record by the Persons and in the amounts set forth on
Schedule 4.3(a), and (z) were not issued or acquired by the
holders thereof in violation of any Law, agreement or the
preemptive rights of any Person. Except as set forth on
Schedule 4.3(a), no membership interests or other equity
interests of the Company or any of its Subsidiaries are
reserved for issuance or are held as treasury shares, and (i)
there are no outstanding options, warrants, rights, calls,
commitments, conversion rights, rights of exchange,
subscriptions, claims of any character, agreements,
obligations, convertible or exchangeable securities or other
plans or commitments, contingent or otherwise, relating to
the equity of the Company or any of its Subsidiaries; (ii)
there are no outstanding contracts or other agreements of
the Company, any of its Subsidiaries, the Goldsboro Parties
or, to the Knowledge of the Goldsboro Parties, any other
Person to purchase, redeem or otherwise acquire any
outstanding membership interests or other equity interests
of the Company or any of its Subsidiaries, or securities or
obligations of any kind convertible into any membership
interests or other equity interests of the Company or any of
its Subsidiaries; (iii) there are no dividends or
distribution rights which have accrued or been declared but
are unpaid on the membership interests or other equity
interests of the Company or any of its Subsidiaries; (iv)
there are no outstanding or authorized equity appreciation,
phantom stock, equity plans or similar rights with respect
to the Company or any of its Subsidiaries; and (v) there are
no voting agreements or other membership agreements relating
to the management or equity of the Company or any of its
Subsidiaries. Except as set forth on Schedule 4.3(a),
neither the Company nor any of its Subsidiaries has ever
purchased, redeemed or otherwise acquired any membership
interests, units or other equity interests of the Company or
any of its Subsidiaries. Other than Xxxxxxx and Xxxxxx-
Xxxxx, no other Person is the record holder of any
membership interests, units or other equity interests in the
Company. Schedule 4.3(a) also lists all non-cash dividends
or distributions made by the Company to its members since
January 3, 2010. To the Knowledge of any Goldsboro Party,
no prior offer, issue, redemption, call, purchase, sale,
transfer, negotiation or other transaction of any nature or
kind with respect to any membership interests or other
equity interests (including options, warrants or debt
convertible into shares, options or warrants) of the Company,
any of its Subsidiaries or any entity that has been merged
into the Company or any such Subsidiary has given rise to
any claim or action by any Person that is enforceable
against the Company, any of its Subsidiaries, the Goldsboro
Parties or the Purchaser, and no fact or circumstance exists
that could give rise to any such right, claim or action. All
redemptions or transfers of membership interests or other
equity interests of the Company or any of its Subsidiaries
since January 3, 2010 are set forth on Schedule 4.3(a).
22
(b) Except for the Term Debt, the Revolver, the
Xxxxxxx Group Member Note, the MB Member Note, capital lease
obligations, trade payables and other liabilities reflected
in the Balance Sheet and except as set forth on Schedule
4.3(b), there is no outstanding Indebtedness of the Company
or any of its Subsidiaries.
Section 4.4 Subsidiaries. Except as set forth on Schedule
4.4, neither the Company nor any of its Subsidiaries has ever
owned, nor does it currently own, directly or indirectly, any
capital stock or other equities, securities or interests in any
other corporation or in any limited liability company,
partnership, joint venture or other entity.
Section 4.5 Absence of Restrictions and Conflicts. The
execution, delivery and performance of this Agreement, the
Company Ancillary Documents, the consummation of the transactions
contemplated hereby and thereby, and the fulfillment of and
compliance with the terms and conditions hereof and thereof, do
not or will not (as the case may be), with the passing of time or
the giving of notice or both, violate or conflict with,
constitute a breach of or default under, result in the loss of
any benefit under, permit the acceleration of any obligation
under or create in any party the right to terminate, modify or
cancel, (a) any term or provision of the organizational documents
of the Company or any of its Subsidiaries, (b) except as
indicated on Schedule 4.14 and except for contracts with respect
to the Revolver, the Term Debt, the Xxxxxxx Group Member Note,
the MB Member Note and any other Indebtedness to be paid in
connection with the consummation of the transactions contemplated
by this Agreement, any Company Contract or any other contract,
agreement, permit, franchise, license or other instrument
applicable to the Company or any of its Subsidiaries that would
reasonably be expected to result in a Material Adverse Effect on
the Business, (c) any judgment, decree or order of any court or
Governmental Entity or agency to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective properties are bound, or
(d) any Law or arbitration award applicable to the Company or any
of its Subsidiaries. Except for filings pursuant to the HSR Act,
no consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required
with respect to the Company or any of its Subsidiaries in
connection with the execution, delivery or performance of this
Agreement, the Company Ancillary Documents, or the consummation
of the transactions contemplated hereby or thereby.
Section 4.6 Real Property.
(a) Schedule 4.6(a) sets forth a correct and complete
description of the Owned Real Property.
(b) The Company or one of its Subsidiaries, as listed
on Schedule 4.6(a), has good and marketable title to the
Owned Real Property, subject to Permitted Liens.
(c) Schedule 4.6(c) sets forth a correct and complete
description of the Leased Real Property.
(d) The Company or one of its Subsidiaries, as listed
on Schedule 4.6(c), has a valid leasehold interest in the
Leased Real Property, and the leases granting such interests
are in full force and effect.
23
(e) Except as set forth on Schedule 4.6(e), no
portion of the Company Real Property, or any building or
improvement located thereon, to the Knowledge of the
Goldsboro Parties, violates in any material respect any Law,
including those Laws relating to zoning, building, land use,
environmental, health and safety, fire, air, sanitation and
noise control, except to the extent that any such violation
or noncompliance would not interfere with the Business as
currently conducted by the Company and its Subsidiaries.
Except for the Permitted Liens or as set forth on Schedule
4.6(e), no Company Real Property is subject to any decree or
order of any Governmental Entity (or, to the Knowledge of
any Goldsboro Party, threatened or proposed order).
(f) The improvements and fixtures on the Company Real
Property are, in all material respects, considered as a
whole, in good operating condition and in a state of good
maintenance and repair, ordinary wear and tear excepted, and
are adequate and suitable for the purposes for which they
are presently being used. There is no condemnation or
similar proceeding pending or, to the Knowledge of any
Goldsboro Party, threatened against any of the Company Real
Property or any improvement thereon. The Company Real
Property constitutes all of the real property utilized by
the Company and its Subsidiaries in the operation of the
Business.
Section 4.7 Title to Assets; Related Matters.
(a) Except as set forth on Schedule 4.7 the Company
and its Subsidiaries have good and marketable title to all
of their respective property and assets, free and clear of
all Liens except Permitted Liens.
(b) All equipment and other items of tangible
personal property and assets of the Company and its
Subsidiaries (i) are, in all material respects, considered
as a whole, in good operating condition and in a state of
good maintenance and repair, ordinary wear and tear excepted,
(ii) were acquired and are usable in the regular and
Ordinary Course and (iii) conform, in all material respects,
to all applicable Laws. No Person other than the Company or
its Subsidiaries owns any equipment or other tangible
personal property or assets situated on the premises of the
Company or any of its Subsidiaries, except for leased items
that are subject to personal property leases. Except as set
forth on Schedule 4.7, since January 3, 2010, neither the
Company nor any of its Subsidiaries has sold, transferred or
disposed of any assets, other than sales of inventory in the
Ordinary Course and other sales of assets which, in the
aggregate, do not exceed $100,000 in sales price.
Section 4.8 Inventory. The Company's and its Subsidiaries'
inventory (both as of the date hereof and on the Closing Date as
will be reflected on the Final Working Capital Schedule), to the
Knowledge of the Goldsboro Parties, (a) is sufficient for the
operation of the Company's and its Subsidiaries' business in the
Ordinary Course, (b) consists of items that are good and
merchantable within normal trade tolerances, (c) is of a quality
and quantity presently usable or saleable in the Ordinary Course
(subject to applicable reserves), (d) is valued on the books and
records of the Company or a Subsidiary, as applicable, at the
lower of cost or market consistent with past practice, and (e) is
subject to reserves determined in accordance with GAAP,
specifically including reserves for obsolescence and excess
inventory. To the Knowledge of the
24
Goldsboro Parties, no previously sold inventory is subject to
returns in excess of those historically experienced by the
Company or its Subsidiaries.
Section 4.9 Financial Statements. The Financial
Statements are attached as Schedule 4.9 hereto. Except as
expressly noted on Schedule 4.9, the Audited Financial Statements
have been prepared in accordance with GAAP from the books and
records of the Company and its Subsidiaries, and such books and
records have been maintained on a basis consistent with GAAP.
Each balance sheet included in the Financial Statements
(including the related notes and schedules) fairly presents, in
all material respects, the financial position of the Company and
its Subsidiaries, as applicable, as of the date of such balance
sheet, and each statement of income and cash flows included in
the Financial Statements (including the related notes and
schedules) fairly presents, in all material respects, the results
of operations and changes in cash flows of the Company and its
Subsidiaries for the periods set forth therein, in each case in
accordance with GAAP (except with respect to the Interim
Financial Statements, which are not prepared in accordance with
GAAP, and as otherwise as expressly noted therein or as disclosed
on Schedule 4.9). Since the date of the Balance Sheet, there has
been no change in any accounting (or tax accounting) policy,
practice or procedure of the Company or any of its Subsidiaries.
The Company and its Subsidiaries maintain accurate books and
records reflecting each of their assets and liabilities and
maintain proper and adequate internal accounting controls
sufficient to provide reasonable assurances regarding the
reliability of financial reporting and the preparation of annual
financial statements for external purposes in accordance with
GAAP.
Section 4.10 No Undisclosed Liabilities. Except as
disclosed on Schedule 4.10 or any of the other Schedules, to the
Knowledge of the Goldsboro Parties, neither the Company nor any
of its Subsidiaries has any liability (whether absolute, accrued,
contingent or otherwise) that is not adequately reflected or
provided for in the Balance Sheet, except liabilities that have
been incurred since the date of the Balance Sheet in the Ordinary
Course.
Section 4.11 Absence of Certain Changes. Since the date
of the Balance Sheet and through the date of this Agreement, and
except as set forth on Schedule 4.11, there has not been (i) any
Material Adverse Effect, (ii) any damage, destruction, loss or
casualty to property or assets of the Company or any of its
Subsidiaries with a value in excess of $1,000,000, whether or not
covered by insurance, (iii) any action taken to declare any
dividend, pay or set aside for payment any dividend or other
distribution, or make any payment to any related parties (other
than the payment of salaries in the Ordinary Course) or (iv) any
action taken of the type described in Section 8.1 hereof, that,
had such action occurred following the date hereof without the
Purchaser's prior approval, would be in violation of Section 8.1
hereof.
Section 4.12 Legal Proceedings. Except as set forth on
Schedule 4.12, there is no suit, action, claim, arbitration,
proceeding or investigation pending or, to the Knowledge of any
Goldsboro Party, threatened against, relating to or involving the
Company, any of its Subsidiaries or their respective real or
personal property before any Governmental Entity or any
arbitrator (a "Company Legal Proceeding"). Notwithstanding the
foregoing, it is understood that Schedule 4.12 need not list any
matters which have only been threatened (as opposed to matters
which are pending) unless such threatened matters are reasonably
likely to result in Losses to the Company or any of its
Subsidiaries, which exceed $50,000 with respect to any such
matter individually or which exceed $100,000 in the aggregate
with respect to all such matters.
25
Section 4.13 Compliance with Law. The Company and each of
its Subsidiaries is (and has been at all times during the past
four (4) years) in compliance in all material respects with all
applicable Laws, except to the extent such instances of non-
compliance would not require payment by, or result in Losses to,
the Company or any of its Subsidiaries, in excess of $50,000 with
respect to any such instance individually or in excess of
$100,000 in the aggregate with respect to all such instances.
Except as set forth on Schedule 4.13, neither the Company nor any
of its Subsidiaries has received any written notice that it is
under investigation with respect to, and, to the Knowledge of any
Goldsboro Party, neither the Company nor any of its Subsidiaries
is otherwise now under investigation with respect to, any
violation of any applicable Law or other requirement of a
Governmental Entity. Neither the Company nor any of its
Subsidiaries is (a) subject to any judgment, decree, injunction,
rule or order of any court or arbitration panel or (b) debarred
or suspended from doing business with any Governmental Entity.
Section 4.14 Company Contracts. Correct and complete
copies of all Company Contracts have been made available to
Purchaser. To the Knowledge of the Goldsboro Parties, the
Company Contracts are legal, valid, binding and enforceable, in
all material respects, in accordance with their respective terms
with respect to the Company or any of its Subsidiaries, as
applicable, and each other party to such Company Contracts.
There is no existing material default or material breach by the
Company or any of its Subsidiaries, as applicable, under any
Company Contract (or event or condition that, with notice or
lapse of time or both could constitute a default or breach), and,
to the Knowledge of any Goldsboro Party, there is no such default
(or event or condition that, with notice or lapse of time or both,
could constitute a default or breach) with respect to any third
party to any Company Contract. To the Knowledge of the Goldsboro
Parties, neither the Company nor any of its Subsidiaries is
participating in any discussions or negotiations regarding
modification of or amendment to any Company Contract or entry
into any new material contract applicable to the Company, any of
its Subsidiaries or the real or personal property of the Company
or any of its Subsidiaries. Except as set forth on Schedule 4.14,
no Company Contract requires the consent of or notice to the
other party thereto to avoid any material breach, default or
violation of such contract, agreement or other instrument in
connection with the transactions contemplated hereby.
Section 4.15 Tax Returns; Taxes.
(a) Except as otherwise disclosed on Schedule 4.15(a):
(i) all Tax Returns of the Company and each of its
Subsidiaries due to have been filed through the date hereof
in accordance with any applicable Law have been timely filed
and are correct and complete in all material respects; (ii)
all Taxes, deposits of Taxes or other payments relating to
Taxes due and owing by the Company and each of its
Subsidiaries (whether or not shown on any Tax Return), have
been paid in full; (iii) there are not now any extensions of
time in effect with respect to the dates on which any Tax
Returns of the Company or any of its Subsidiaries were or are
due to be filed; (iv) all deficiencies asserted as a result
of any examination of any Tax Returns of the Company or any
of its Subsidiaries have been paid in full, accrued on the
books of the Company or its Subsidiaries, as applicable, or
finally settled, and no issue has been raised in any such
examination which, by application of the same or similar
principles, reasonably could be expected to result in a
proposed deficiency for any other period not so examined; (v)
no claims have been asserted and no proposals or deficiencies
for any Taxes of the Company
26
or any of its Subsidiaries are being asserted, proposed or,
to the Knowledge of the Company, threatened, and no audit or
investigation of any return or report of Taxes of the Company
or any of its Subsidiaries is currently underway, pending or,
to the Knowledge of the Company, threatened; (vi) no claim
has ever been made by a taxing authority in a jurisdiction in
which the Company or any of its Subsidiaries does not file
Tax Returns that it is or may be subject to taxation by that
jurisdiction; (vii) the Company and each of its Subsidiaries
have withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to
any employee, independent contractor, creditor, member,
partner, stockholder or other third party; (viii) there are
no outstanding waivers or agreements by or on behalf of the
Company or any of its Subsidiaries for the extension of time
for the assessment of any Taxes or deficiency thereof, nor
are there any requests for rulings, outstanding subpoenas or
requests for information, notice of proposed reassessment of
any property owned or leased by the Company or any of its
Subsidiaries or any other matter pending between the Company
or any of its Subsidiaries and any taxing authority; (ix)
there are no Liens for Taxes (other than Liens for Taxes
which are not yet due and payable), nor are there any Liens
for Taxes which are pending or, to the Knowledge of the
Company, threatened; (x) none of the Goldsboro Parties is a
"foreign person" within the meaning of Section 1445 of the
Code; (xi) neither the Company nor any of its Subsidiaries is
a party to any Tax allocation or sharing agreement under
which the Company or any of its Subsidiaries will have any
liability after the Closing; (xii) neither the Company nor
any of its Subsidiaries has been a member of an affiliated
group filing a consolidated U.S. federal income Tax Return
(other than a group the common parent of which the Company is
the parent); (xiii) neither the Company nor any of its
Subsidiaries has any liability for the Taxes of any Person
(other than the Company or its Subsidiaries) under Treasury
Regulation section 1.1502-6 (or any similar provision of
state, local, or foreign Law), as a transferee or successor,
by contract, or otherwise; (xiv) neither the Company nor any
of its Subsidiaries has made any payments, is obligated to
make any payments, or is a party to any agreement that under
certain circumstances could obligate it to make any payments
that will not be deductible under Section 280G of the Code;
(xv) the Company is a partnership for federal income Tax
purposes and has not made an election under Treasury
Regulation Section 301.7701-3 to be taxed as a corporation;
(xvi) no Subsidiary has made an election under Treasury
Regulation Section 301.7701-3 relating to its classification
for federal income tax purposes; and (xvii) the Company and
its Subsidiaries have at all times used proper accounting
methods and periods in computing their Tax liability.
(b) Except as set forth on Schedule 4.15(b), the
Goldsboro Parties have delivered to the Purchaser correct and
complete copies of all federal, state, local and foreign
income Tax Returns (together with any agent's reports and any
accountants' work papers) relating to the operations of the
Company and each of its Subsidiaries for taxable years ended
on or after December 31, 2005.
(c) The unpaid Taxes of the Company and its
Subsidiaries did not, as of the date of the applicable
Financial Statements, exceed the reserve for Tax liability
(rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) set
forth on the face of the applicable balance sheet included in
the Financial Statements (rather than any notes thereto).
Since January 3, 2010, neither the
27
Company nor any of its Subsidiaries has incurred any
liability for Taxes arising from extraordinary gains or
losses, as that term is used in GAAP, outside the Ordinary
Course.
(d) None of the Company's Subsidiaries has distributed
stock of another Person, or has had its stock distributed by
another Person, in a transaction that was purported or
intended to be governed in whole or in part by Section 355 or
Section 361 of the Code.
Section 4.16 Officers and Employees. Except as set forth on
Schedule 4.16, neither the Company nor any of its Subsidiaries is
a party to or bound by any Employment Agreement. The Goldsboro
Parties have provided to the Purchaser correct and complete
copies of each Employment Agreement to which the Company or any
of its Subsidiaries is a party, or by which any of them is
otherwise bound. To the Knowledge of the Goldsboro Parties,
there is no existing default or breach of the Company or any of
its Subsidiaries, as applicable, under any Employment Agreement
(or event or condition that, with notice or lapse of time or both
could constitute a default or breach), and there is no such
default (or event or condition that, with notice or lapse of time
or both, could constitute a default or breach) with respect to
any third party to any Employment Agreement. Except as set forth
on Schedule 4.12, neither the Company nor any of its Subsidiaries
nor any Goldsboro Party has received a claim from any
Governmental Entity to the effect that the Company or any of its
Subsidiaries has improperly classified any person (a) as an
independent contractor or (b) as "exempt" or "non-exempt" under
the FLSA. Except as set forth on Schedule 4.16, no Goldsboro
Party has made any verbal commitments to any officer, employee,
former employee, consultant or independent contractor of the
Company or any of its Subsidiaries with respect to compensation,
promotion, retention, termination, severance or similar matters
in connection with the transactions contemplated hereby or
otherwise. The retention and severance agreements entered into
by Xxxxxxx with certain employees of the Company as described on
Schedule 4.16 shall be assumed and paid by the Company in
accordance with the terms of those agreements.
Section 4.17 Company Benefit Plans. To the Knowledge of
the Goldsboro Parties, each Company Benefit Plan is identified in
Schedule 4.17, and the Goldsboro Parties have provided a correct
and complete copy of each such plan to the Purchaser together
with the most recent report filed with respect to such plan with
any Governmental Entity. Except as set forth in Schedule 4.17,
no Company Benefit Plan is subject to Title IV of ERISA, and no
Company Benefit Plan is described in Section 413(c) of the Code
or Section 3(40) of ERISA. Except as set forth in Schedule 4.17,
the terms of each Company Benefit Plan as currently in effect
that purports to be qualified under Section 401(a) of the Code
and any trust which is a part of any such Company Benefit Plan
are subject to a favorable determination letter or opinion letter
from the U.S. Internal Revenue Service, and each such plan has
been operated and administered in accordance with all Laws
(including ERISA and the Code). The terms of each other Company
Benefit Plan satisfy the requirements of Laws (including ERISA
and the Code), and each such plan has been operated and
administered in accordance with all Laws (including ERISA and the
Code) except as would not reasonably be expected to result in a
Material Adverse Effect on the Business. Except as set forth in
Schedule 4.17, the Company and each of its Subsidiaries have
timely satisfied all reporting and disclosure obligations under
Laws (including ERISA and the Code) with respect to the Company
Benefit Plans except as would not reasonably be expected to
result in a Material Adverse Effect on the Business. To the
Knowledge of the Goldsboro Parties,
28
neither the Company nor an ERISA Affiliate has any liability
(directly or indirectly, contingent or otherwise) under any
Employee Benefit Plan other than a Company Benefit Plan. To the
Knowledge of the Goldsboro Parties, there have been no prohibited
transactions (as described in Section 406 of ERISA or Section
4975 of the Code) with respect to any Company Benefit Plan which
have not been corrected in full with respect to which any Tax or
penalty is due or which are not otherwise exempt under Section
4975(d) of the Code or Section 408 of ERISA. Except as set forth
in Schedule 4.17, if the benefits under a Company Benefit Plan
are funded through a trust, the fair market value of the assets
of such trust equal or exceed the liabilities of such plan. If
the benefits under a Company Benefit Plan are funded through
insurance contracts, such contracts are in full force and effect
and all premiums have been paid when due. If benefits under a
Company Benefit Plan are funded from the general assets of the
Company or any of its Subsidiaries, the liability for funding
such benefits is shown on the books and records of the Company or
the applicable Subsidiary of the Company in accordance with GAAP
and any applicable standards of the Financial Accounting
Standards Board. Except as set forth in Schedule 4.17, to the
Knowledge of the Goldsboro Parties, the Company and each of its
Subsidiaries have made full and timely payment of all amounts
which are required to be paid as contributions to each Company
Benefit Plan. No Company Benefit Plan provides for benefits
described in Section 3(1) of ERISA following a termination of
employment except as required under Part 6 of Title I of ERISA,
and the Company and each of its Subsidiaries have complied in all
respects with the healthcare continuation coverage requirements
of Part 6 of Title I of ERISA. Except as set forth in Schedule
4.17, to the Knowledge of the Goldsboro Parties, there is no
contract, agreement, plan or arrangement with any Person which
provides for any payment to any employee by the Company or any of
its Subsidiaries, which payment would fail to be deductible by
reason of Section 280G of the Code or which would exceed the
deduction limits under Section 404 of the Code. Except as set
forth in Schedule 4.17, to the Knowledge of the Goldsboro Parties,
neither the Company nor any of its Subsidiaries has any
contractual obligation to maintain any Company Benefit Plan for
any period of time or to make contributions from its general
assets at a fixed rate to such plan (other than premium payments
for an insurance contract which are set on a year-to-year basis
and matching contributions as provided in the Company's 401(k)
plan), and the Company can terminate any Company Benefit Plan at
any time, including a Company Benefit Plan which is described in
Section 401(k) of the Code, without any early termination fee or
penalty becoming due under the terms of any group annuity or
other insurance contract.
Section 4.18 Labor Relations. Except as set forth in
Schedule 4.18, (a) neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement,
contract or legally binding commitment to any trade union or
employee organization or group in respect of or affecting
employees; (b) neither the Company nor any of its Subsidiaries is
currently engaged in any negotiation with any trade union or
employee organization; (c) neither the Company nor any of its
Subsidiaries has engaged in any unfair labor practice within the
meaning of the National Labor Relations Act, and there is no
pending or, to the Knowledge of any Goldsboro Party, threatened
complaint regarding any alleged unfair labor practices as so
defined; (d) there is no strike, labor dispute, work slow down or
stoppage pending or, to the Knowledge of any Goldsboro Party,
threatened against the Company or any of its Subsidiaries; (e)
there is no arbitration proceeding arising out of any grievance
or under any collective bargaining agreement which is pending or,
to the Knowledge of any Goldsboro Party, threatened against the
Company or any of its Subsidiaries; (f) neither the Company nor
any of its Subsidiaries has experienced
29
any material work stoppage; (g) neither the Company nor any of
its Subsidiaries is the subject of any union organization effort;
(h) there are no claims pending or, to the Knowledge of any
Goldsboro Party, threatened against the Company or any of its
Subsidiaries related to the status of any individual as an
independent contractor or employee; and (i) the Company and each
of its Subsidiaries have complied in all respects with WARN.
Section 4.19 Insurance Policies. Schedule 4.19 sets forth
a list of all policies of insurance currently maintained, owned
or held by the Company and its Subsidiaries (excluding any
insurance contract which is part of a Company Benefit Plan
identified on Schedule 4.17) (collectively, the "Insurance
Contracts"), including the policy limits or amounts of coverage,
deductibles or self-insured retentions, and annual premiums with
respect thereto. To the Knowledge of the Goldsboro Parties, such
Insurance Contracts are valid and binding in accordance with
their terms, are in full force and effect, and the Insurance
Contracts will continue in effect after the Closing Date.
Similar coverage to the coverage set forth in the Insurance
Contracts has been maintained on a continuous basis for the last
four (4) years. To the Knowledge of the Goldsboro Parties,
neither the Company nor any of its Subsidiaries has received
written notice that (a) it has breached or defaulted under any of
such Insurance Contracts, or (b) that any event has occurred that
would permit termination, modification, acceleration or
repudiation of such Insurance Contracts. Except as set forth in
Schedule 4.19 and except as would not reasonably be expected to
result in a Material Adverse Effect on the Business, neither the
Company nor any of its Subsidiaries is in default (including a
failure to pay an insurance premium when due) with respect to any
Insurance Contract, nor has the Company nor any of its
Subsidiaries failed to give any notice of any claim under such
Insurance Contract in due and timely fashion nor has the Company
nor any of its Subsidiaries ever been denied or turned down for
insurance coverage.
Section 4.20 Environmental, Health and Safety Matters.
Except as set forth on Schedule 4.20:
(a) The Company and each of its Subsidiaries possess
all permits and approvals required under, and each is in
compliance in all material respects with, all Environmental
Laws, and the Company and each of its Subsidiaries is in
compliance in all material respects with all applicable
limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and
timetables contained in all Environmental Laws, or any
notice or demand letter issued thereunder,
(b) to the Knowledge of the Goldsboro Parties, neither
the Company nor any of its Subsidiaries has received notice
of actual or threatened liability under CERCLA or any
similar foreign, state or local Law from any Governmental
Entity or any third party and there is no fact or
circumstance that could form the basis for the assertion of
any claim against the Company or any of its Subsidiaries
under any Environmental Law, including CERCLA or any similar
local, state or foreign Law with respect to any on-site or
off-site location;
(c) neither the Company nor any of its Subsidiaries
has entered into or agreed to enter into, any consent decree
or order, and neither the Company nor any of its
Subsidiaries is subject to any judgment, decree or judicial
or administrative order relating
30
to compliance with, or the cleanup of Hazardous Materials
under, any applicable Environmental Law;
(d) neither the Company nor any of its Subsidiaries
has been alleged to be in violation of, and has not been
subject to any administrative or judicial proceeding
pursuant to, applicable Environmental Laws either now or any
time during the past four (4) years;
(e) to the Knowledge of the Goldsboro Parties, the
Company and the Goldsboro Parties have made available to the
Purchaser copies of all reports, notices and assessments
relating to material environmental matters of the Company
and its Subsidiaries; and neither the Company nor any of its
Subsidiaries has paid any fine, penalty or assessment within
the prior four (4) years with respect to environmental
matters; and
(f) neither the Company nor any of its Subsidiaries is
subject to any claim, obligation, liability, loss, damage
or expense of any kind or nature whatsoever, contingent or
otherwise, incurred or imposed or based upon any provision
of any Environmental Law or arising out of any act or
omission of the Company or any of its Subsidiaries, or the
Company's or any of its Subsidiaries' employees, agents or
representatives or arising out of the ownership, use,
control or operation by the Company or any of its
Subsidiaries of any plant, facility, site, area or property
(including any plant, facility, site, area or property
currently or previously owned or leased by the Company or
any of its Subsidiaries) from which any Hazardous Materials
were Released into the environment (the term "environment"
meaning any surface or ground water, drinking water supply,
soil, surface or subsurface strata or medium, or the
ambient air); neither the Company nor any of its
Subsidiaries has imported, manufactured, stored, managed,
used, operated, transported, treated or disposed of any
Hazardous Material other than in compliance in all
material respects with all Environmental Laws.
Section 4.21 Intellectual Property.
(a) Schedule 4.21(a) contains a list of all Company
Registered Intellectual Property, and specifying as to each
scheduled item, as applicable, the assigned identifier or
number, title or xxxx, filing date, registration or grant
date and jurisdiction, and identifies that which is owned
and that which is licensed by the Company and any of its
Subsidiaries.
(b) Except as set forth in Schedule 4.21(b), no
Company Intellectual Property owned by the Company or any of
its Subsidiaries, or product or service as currently used by
the Company or any of its Subsidiaries and which
incorporates and relates to such Company Intellectual
Property, is subject to any proceeding or outstanding decree,
order, judgment, settlement agreement or stipulation
(excluding licenses and business arrangements entered into
by the Company or any of its Subsidiaries in the Ordinary
Course) (i) restricting in any manner the use, transfer or
licensing thereof by the Company or any of its Subsidiaries
or (ii) that may affect the validity, use or enforceability
of the Company Intellectual Property or any such product or
service.
31
Each item of Company Registered Intellectual Property
owned by the Company or any of its Subsidiaries is valid
and subsisting. Except as set forth on Schedule 4.21(b),
all necessary registration, maintenance and renewal fees
currently due in connection with Company Registered
Intellectual Property owned by the Company or any of its
Subsidiaries have been made for the purposes of maintaining
and recording ownership of such Company Registered
Intellectual Property in any jurisdiction material to the
operations of the Company as currently conducted and as
proposed to be conducted.
(c) Except as set forth on Schedule 4.21(c), the
Company owns and has good and exclusive title to, or has
licenses for, each item of Company Intellectual Property
necessary for the conduct of the Company's and its
Subsidiaries' business as currently conducted and as
proposed to be conducted, free and clear of any Lien
(excluding licenses and related restrictions); and the
Company is the exclusive owner or exclusive licensee of all
trademarks and service marks, brands, trade names and domain
names of the Company Registered Intellectual Property.
Except as set forth on Schedule 4.21(c), neither the Company
nor any of its Subsidiaries has granted any rights or
interest in the Company Intellectual Property to a third
party.
(d) The Company owns exclusively and has good title to
all copyrighted works created by or on behalf of the Company
or any of its Subsidiaries for, or otherwise has the right
to use the copyrighted works on or in connection with, the
products currently offered by or proposed to be offered by
the Company or any of its Subsidiaries.
(e) To the extent that the Company Intellectual
Property has been developed or created by a third party for
the Company or any of its Subsidiaries, the Company or such
Subsidiary, as applicable, has either (i) obtained a written
agreement with such third party confirming the Company's
ownership of such Company Intellectual Property, or (ii) has
an irrevocable license sufficient for the operations of the
Company and each of its Subsidiaries as currently conducted
and as proposed to be conducted to all of such third party's
Intellectual Property in such work, material or invention by
operation of law or by valid agreement.
(f) The operations of the Company and its Subsidiaries
as currently conducted and as proposed to be conducted,
including the Company's and any of its Subsidiaries' design,
development, marketing and sale of the products or services
of the Company and any such Subsidiary, has not since
October 2, 2006, and does not, infringe or misappropriate in
any manner the Intellectual Property of any third party or,
to the Knowledge of any Goldsboro Party, constitute unfair
competition or trade practices under the Laws of any
jurisdiction.
(g) The Goldsboro Parties have no Knowledge, and have
not received written notice of or any other overt threat
from any third party, that the operation of the Company and
its Subsidiaries as it is currently conducted and as
proposed to be conducted, or any act, product, service,
brand or xxxx of the Company or any of its Subsidiaries
currently offered or used by the Company, infringes or
misappropriates the Intellectual Property of any third party
or constitutes unfair competition or trade practices under
the Laws of any jurisdiction.
32
(h) To the Knowledge of the Goldsboro Parties, no
Person is currently infringing or misappropriating any
Company Intellectual Property.
(i) The Company and its Subsidiaries have taken
reasonable steps to protect the rights of the Company and
its Subsidiaries in the Confidential Information and any
trade secret or confidential information of third parties
used by the Company or any Subsidiary, and, except under
confidentiality obligations, there has not been to the
Knowledge of the Goldsboro Parties any unauthorized public
disclosure by the Company or any of its Subsidiaries of any
Confidential Information or any such trade secret or
confidential information of third parties.
Section 4.22 Software. Neither the Company nor any of its
Subsidiaries owns any Company Proprietary Software or licenses or
uses any Company Licensed Software that is material to the
operation of the Company or its Subsidiaries as currently
conducted and as proposed to be conducted.
Section 4.23 Transactions with Affiliates. Except as set
forth on Schedule 4.23, to the Knowledge of the Goldsboro Parties,
no executive officer of the Company, any of its Subsidiaries, any
Goldsboro Party, Xxxxxx-Xxxxx or any Affiliate of any of them, no
Person with whom any such officer, manager or director has any
direct or indirect relation by blood, marriage or adoption, no
entity in which any such officer, manager or director or Person
owns any beneficial interest (other than a publicly held
corporation whose stock is traded on a national securities
exchange or in the over-the-counter market and less than five
percent of the stock of which is beneficially owned by all such
officers, directors and Persons in the aggregate), no Affiliate
of any of the foregoing and no current or former Affiliate of the
Company or any of its Subsidiaries, including any Goldsboro Party
or Xxxxxx-Xxxxx, has any interest in: (a) any contract,
arrangement or understanding with, or relating to, the Company or
any of its Subsidiaries or the properties or assets of the
Company or any of its Subsidiaries; (b) any loan, arrangement,
understanding, agreement or contract for or relating to the
Company or any of its Subsidiaries or the properties or assets of
the Company or any of its Subsidiaries; or (c) any property
(real, personal or mixed), tangible or intangible, used or
currently intended to be used by the Company or any of its
Subsidiaries.
Section 4.24 Undisclosed Payments. To the Knowledge of
the Goldsboro Parties, neither the Company, any of its
Subsidiaries nor any of their respective officers, managers or
directors, nor anyone acting on behalf of any of them, has made
or received any payment not correctly categorized and fully
disclosed in the Company's or Subsidiaries' books and records in
connection with or in any way relating to or affecting the
Company or any of its Subsidiaries.
Section 4.25 Customer and Supplier Relations. The Company
and its Subsidiaries maintain good relations with each of its
Customers and Suppliers and, to the Knowledge of the Goldsboro
Parties, no event has occurred that could materially and
adversely affect the Company's or its Subsidiaries' relations
with any Customer or Supplier. Except as set forth on Schedule
4.25, no Customer or Supplier has during the last twelve (12)
months cancelled, terminated or, to the Knowledge of any
Goldsboro Party, made any threat to cancel or otherwise terminate
any of its contracts with the Company or any of its Subsidiaries
or to decrease its usage or supply of the Company's or any of its
Subsidiaries' services or products, where such
33
cancellation, termination, decrease would be reasonably expected
to result in a Material Adverse Effect on the Business. Except
as set forth on Schedule 4.25, no Goldsboro Party has any
Knowledge to the effect that any current Customer or Supplier may
terminate or materially alter its business relations with the
Company or any of its Subsidiaries, either as a result of the
transactions contemplated hereby or otherwise and where such
termination or alteration would be reasonably expected to result
in a Material Adverse Effect on the Business
Section 4.26 Notes; Accounts Receivable.
(a) Notes. All notes receivable and notes payable of
the Company and its Subsidiaries owing by or to any
Affiliate of the Company or any of its Subsidiaries or by or
to any Goldsboro Party or Xxxxxx-Xxxxx (the "Affiliate
Loans") have been paid in full, settled by way of capital
contribution in kind, cancelled or otherwise discharged
prior to the date hereof or shall have been paid in full,
settled by way of capital contribution in kind, cancelled or
otherwise discharged prior to the Closing Date. Schedule
4.26(a) sets forth a correct and complete list of all
Affiliate Loans and the outstanding balance and applicable
interest payments under each Affiliate Loan as of the date
hereof.
(b) Accounts Receivable. Except as set forth on
Schedule 4.26(b), all receivables reflected on the Final
Working Capital Schedule (net of any reserves shown thereon)
(i) will be valid, existing and collectible in a manner
consistent with the Company's past practice without resort
to legal proceedings or collection agencies, (ii) represent
monies due for goods sold and delivered or services rendered
in the Ordinary Course and (iii) will not be subject to any
refund or adjustment or any defense, right of set-off,
assignment, restriction, security interest or other Lien.
Neither the Company nor any of its Subsidiaries has factored
any of its receivables.
(c) Accounts Payable. The accounts payable of the
Company and its Subsidiaries reflected on the Balance Sheet
(and that will be reflected on the Final Working Capital
Schedule) arose or will arise from bona fide transactions in
the Ordinary Course.
Section 4.27 Licenses. The Company and its Subsidiaries
own or possess all Licenses that are necessary to enable them to
carry on their operations as presently conducted. To the
Knowledge of the Goldsboro Parties, all such Licenses are valid,
binding and in full force and effect. The execution, delivery and
performance hereof and the consummation of the transactions
contemplated hereby shall not adversely affect any such License,
or require consent from, or notice to, any Governmental Entity.
No loss or expiration of any License is pending or, to the
Knowledge of any Goldsboro Party, threatened (other than
expiration upon the end of any term).
Section 4.28 Ethical Practices. To the Knowledge of the
Goldsboro Parties, neither the Company, any of its Subsidiaries
nor any representative thereof has offered or given anything of
value to: (i) any official of a Governmental Entity, any
political party or official thereof or any candidate for
political office; (ii) any customer or member of any Governmental
Entity; or (iii) any other Person, in any such case while knowing
or having reason to know that all or a portion
34
of such money or thing of value may be offered, given or promised,
directly or indirectly, to any customer or member of any
Governmental Entity or any candidate for political office for the
purpose of the following: (x) influencing any action or decision
of such Person, in such Person's official capacity, including a
decision to fail to perform such Person's official function; (y)
inducing such Person to use such Person's influence with any
Governmental Entity to affect or influence any act or decision of
such Governmental Entity to assist the Company or any of its
Subsidiaries in obtaining or retaining business for, with, or
directing business to, any Person; or (z) where such payment
would constitute a bribe, kickback or illegal or improper payment
to assist the Company or any of its Subsidiaries in obtaining or
retaining business for, with, or directing business to, any
Person.
Section 4.29 Product and Service Warranties and Guaranties.
(a) There is no pending or, to the Knowledge of any
Goldsboro Party, threatened claim alleging any breach of any
Warranty. Except as set forth on Schedule 4.29, neither the
Company nor any of its Subsidiaries has exposure to, or
liability under, any Warranty (a) beyond that which is
typically assumed in the ordinary course of business by
Persons engaged in businesses comparable in size and scope
of the Company and its Subsidiaries, or (b) that would have
a Material Adverse Effect. Attached to Schedule 4.29 is the
standard form of Warranty provided by the Company and its
Subsidiaries.
(b) Except as set forth on Schedule 4.29, adequate
reserves for any expense to be incurred by any Company or
any of its Subsidiaries as a result of any Warranty granted
prior to the Closing will be reflected on the Final Working
Capital Schedule.
Section 4.30 Brokers, Finders and Investment Bankers.
Except as set forth on Schedule 4.30, neither the Company, any of
its Subsidiaries, nor any Goldsboro Party, nor any officer,
member, manager, director or employee of the Company or any of
its Subsidiaries nor any Affiliate of the Company or any of its
Subsidiaries, has employed any broker, finder or investment
banker or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees or finders' fees in
connection with the transactions contemplated hereby. The
Goldsboro Parties are solely responsible for the fees and
expenses of the brokers set forth on Schedule 4.30.
Section 4.31 Guarantees. Except as otherwise disclosed on
Schedule 4.31, neither any Goldsboro Party nor, to the Knowledge
of the Goldsboro Parties, Xxxxxx-Xxxxx nor any of their
respective Affiliates has guaranteed any obligations of the
Company or any of its Subsidiaries under any guarantee, letter of
credit, bid bond or performance bond.
Section 4.32 Financial Capability. To the Knowledge of
the Goldsboro Parties, the Seaboard Commitment Letters are in
full force and effect and have not been amended or modified.
None of the Goldsboro Parties has any reasonable expectation that
any of the conditions set forth in the Seaboard Commitment
Letters will not be satisfied. None of the Goldsboro Parties
knows of any circumstances or conditions that could be reasonably
expected to prevent the availability at the Closing of the
Seaboard Commitment Letters.
35
Section 4.33 Disclosure. No representation, warranty or
covenant made by any Goldsboro Party in this Agreement, the
Schedules or the Exhibits or any Goldsboro Ancillary Document
contains an untrue statement of a material fact or omits to state
a material fact required to be stated herein or therein or is
necessary to make the statements contained herein or therein not
misleading. Purchaser hereby acknowledges that it is not relying
and has not relied whatsoever on any other representations and
warranties or any other information or materials, including, but
not limited to, those materials containing projections of the
financial performance of the Company, regarding the subject
matter of this Agreement, except for the representations and
warranties set forth in this Agreement.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES RELATED TO THE XXXXXXX GROWING
INTEREST
The Goldsboro Parties hereby, jointly and severally,
represent and warrant to the Purchaser as follows as of the date
hereof and as of the Closing Date:
Section 5.1 Real Property.
(a) Schedule 5.1(a) sets forth a correct and complete
description of the MGI Real Property. Purchaser acknowledges
that final legal descriptions of the MGI Real Property do
not exist as of this date, but will be prepared by the
Goldsboro Parties prior to Closing.
(b) Xxxxxxx or Goldsboro or one of the MGI
Subsidiaries or an Affiliate of Xxxxxxx or Goldsboro, as
listed on Schedule 5.1(a), has good and marketable title to
the MGI Real Property, subject to Permitted Liens.
(c) All of the MGI Real Property is owned (and will be
conveyed) in fee simple and none is leased.
(d) No portion of the MGI Real Property, or any
building or improvement located thereon, violates in any
material respect any Law, including those Laws relating to
zoning, building, land use, environmental, health and safety,
fire, air, sanitation and noise control, except to the
extent that any such violation or noncompliance would not
interfere with the MGI Business as currently conducted.
Except for the Permitted Liens or as set forth on Schedule
5.1(d), no MGI Real Property is subject to any decree or
order of any Governmental Entity (or, to the Knowledge of
any Goldsboro Party, threatened or proposed order).
(e) The improvements and fixtures on the MGI Real
Property are, in all material respects, considered as a
whole with respect to each separate parcel of MGI Real
Property, in good operating condition and in a state of good
maintenance and repair, ordinary wear and tear excepted, and
are adequate and suitable for the purposes for which they
are presently being used. There is no condemnation or
similar proceeding pending or, to the Knowledge of any
Goldsboro Party, threatened against any of the MGI Real
Property or any improvement thereon. The MGI Real Property
constitutes all of the real
36
property utilized by Xxxxxxx and the MGI Subsidiaries in the
operation of the MGI Business.
Section 5.2 Title to Assets; Related Matters.
(a) Except as set forth on Schedule 5.2, Xxxxxxx and
the MGI Subsidiaries have good and marketable title to all
of their respective property and assets used in the MGI
Business, free and clear of all Liens except Permitted Liens.
(b) All equipment and other items of tangible personal
property and assets of Xxxxxxx and the MGI Subsidiaries used
in the MGI Business (i) are, in all material respects,
considered as a whole, in good operating condition and in a
state of good maintenance and repair, ordinary wear and tear
excepted, (ii) were acquired and are usable in the regular
and Ordinary Course and (iii) conform, in all material
respects, to all applicable Laws. No Person other than
Xxxxxxx, Goldsboro or one of the MGI Subsidiaries or any of
their respective Affiliates owns any equipment or other
tangible personal property or assets situated on the MGI
Real Property, except for leased items that are subject to
personal property leases. Except for Excluded Xxxxxxx
Growing Interest Assets and except as set forth on Schedule
5.2, since January 1, 2010, neither Xxxxxxx nor any of the
MGI Subsidiaries has sold, transferred or disposed of any
assets, other than sales of inventory in the Ordinary Course
and other sales of assets which, in the aggregate, do not
exceed $100,000 in sales price.
Section 5.3 Inventory. Xxxxxxx'x and the MGI Subsidiaries'
inventory related to the MGI Business (both as of the date hereof
and on the Closing Date (as will be reflected on the "Final
Working Capital Schedule" pursuant to the M-G Purchase
Agreement)) (a) is sufficient for the operation of the MGI
Business in the Ordinary Course, (b) consists of items that are
good and merchantable within normal trade tolerances, (c) is of a
quality and quantity presently usable or saleable in the Ordinary
Course (subject to applicable reserves), (d) is valued on the
books and records of Xxxxxxx or the MGI Subsidiaries at the lower
of cost or market with the cost determined under the first-in-
first-out inventory valuation method consistent with past
practice, and (e) is subject to reserves determined in accordance
with GAAP, specifically including reserves for obsolescence and
excess inventory. To the Knowledge of the Goldsboro Parties, no
previously sold inventory of the MGI Business is subject to
returns in excess of those historically experienced by Xxxxxxx or
the MGI Subsidiaries.
Section 5.4 No Other Assumed Liabilities. The Company
will not assume any liabilities or obligations related to the
Xxxxxxx Growing Interest in connection with the M-G Purchase,
other than obligations under the MGI Contracts, the insurance
policies set forth on Schedule 5.11, and the contracts listed on
Schedule 5.4, and then only to the extent such obligations are
not required to be performed on or prior to the Closing Date, but
rather will accrue and relate to operations subsequent to the
Closing Date.
Section 5.5 Legal Proceedings. Except as and to the
extent unrelated to the MGI Business or as set forth on Schedule
5.5, there is no suit, action, claim, arbitration, proceeding or
investigation pending or, to the Knowledge of any Goldsboro
Party, threatened against, relating to or involving Xxxxxxx, any
MGI Subsidiary or their respective real or personal property used
37
in the MGI Business before any Governmental Entity or any
arbitrator (an "MGI Legal Proceeding").
Section 5.6 Compliance with Law. Except as and to the
extent unrelated to the MGI Business, Xxxxxxx and each MGI
Subsidiary is (and has been at all times during the four (4)
years) in compliance in all material respects with all applicable
Laws, except to the extent such instances of non-compliance would
not require payment by, or result in Losses to, Xxxxxxx or any
MGI Subsidiary or the Company or any of its Subsidiaries, in
excess of $50,000 with respect to any such instance individually
or in excess of $100,000 in the aggregate with respect to all
such instances. Except as and to the extent unrelated to the MGI
Business or as set forth on Schedule 5.6, (a) neither Xxxxxxx nor
any MGI Subsidiary has been charged with, nor received any
written notice that it is under investigation with respect to,
and, to the Knowledge of any Goldsboro Party, neither Xxxxxxx nor
any MGI Subsidiary is otherwise now under investigation with
respect to, any violation of any applicable Law or other
requirement of a Governmental Entity, (b) neither Xxxxxxx nor any
MGI Subsidiary is a party to, or bound by, any order, judgment,
decree, injunction, rule or award of any Governmental Entity or
arbitrator and (c) Xxxxxxx and each MGI Subsidiary has filed all
reports and has all Licenses required to be filed with any
Governmental Entity on or prior to the date hereof. Sleepy Creek
has revised its standard grower contract form to comply with all
applicable federal Laws (and, to the Knowledge of the Goldsboro
Parties, such revised contract does now so comply), and Sleepy
Creek has now entered into new contracts with each of its active
growers based upon such revised standard contract form. Except
as and to the extent unrelated to the MGI Business or as set
forth on Schedule 5.6, neither Xxxxxxx nor any MGI Subsidiary
sells, or has ever sold, any product or provided any services to
any Governmental Entity, and neither Xxxxxxx nor any MGI
Subsidiary is currently under any contract or agreement with any
Governmental Entity. Neither Xxxxxxx nor any MGI Subsidiary is
(x) subject to any judgment, decree, injunction, rule or order of
any court or arbitration panel with respect to the MGI Business
or (y) debarred or suspended from doing business with any
Governmental Entity.
Section 5.7 Xxxxxxx Growing Interest Contracts. Schedule
5.7 sets forth a correct and complete list of all grower
contracts and other contracts related to the MGI Business to
which Xxxxxxx or any MGI Subsidiary is a party, by which Xxxxxxx,
any MGI Subsidiary or any property of any of them is subject or
by which Xxxxxxx or any MGI Subsidiary is otherwise bound,
whether oral or written, which will be assigned to the Company as
part of the M-G Purchase (the "MGI Contracts") (other than the
Employment Agreements set forth on Schedule 5.8, the MGI Benefit
Plans set forth on Schedule 5.9 and the insurance policies set
forth on Schedule 5.11). Copies of all MGI Contracts have been
made available to the Purchaser. To the Knowledge of the
Goldsboro Parties, the MGI Contracts are legal, valid, binding
and enforceable, in all material respects, in accordance with
their respective terms with respect to Xxxxxxx or any MGI
Subsidiary, as applicable, and each other party to such MGI
Contracts. There is no existing default or breach of Xxxxxxx or
any MGI Subsidiary, as applicable, under any MGI Contract (or
event or condition that, with notice or lapse of time or both
could constitute a default or breach) and, to the Knowledge of
any Goldsboro Party, there is no such default (or event or
condition that, with notice or lapse of time or both, could
constitute a default or breach) with respect to any third party
to any MGI Contract (although approximately 10% of growers are on
process improvement plans).
38
Section 5.8 Officers and Employees. Except as and to the
extent unrelated to the MGI Business or as set forth on Schedule
5.8, neither Xxxxxxx nor any MGI Subsidiary is a party to or
bound by any Employment Agreement (the Employment Agreements set
forth on Schedule 5.8 being referred to herein as the "MGI
Employment Agreements"). The Goldsboro Parties have provided to
the Purchaser correct and complete copies of each MGI Employment
Agreement. To the Knowledge of the Goldsboro Parties, there is
no existing default or breach of Xxxxxxx or any MGI Subsidiary,
as applicable, under any MGI Employment Agreement (or event or
condition that, with notice or lapse of time or both could
constitute a default or breach), and there is no such default
(or event or condition that, with notice or lapse of time or
both, could constitute a default or breach) with respect to any
third party to any MGI Employment Agreement. Neither any
Goldsboro Party nor any MGI Subsidiary has received a claim from
any Governmental Entity to the effect that MGI or any MGI
Subsidiary has improperly classified any person (a) as an
independent contractor or (b) as "exempt" or "non-exempt" under
the FLSA. Except as and to the extent unrelated to the MGI
Business or as set forth on Schedule 5.8, neither any Goldsboro
Party nor any MGI Subsidiary has made any verbal commitments to
any officer, employee, former employee, consultant or
independent contractor of Xxxxxxx or any MGI Subsidiary with
respect to compensation, promotion, retention, termination,
severance or similar matters in connection with the transactions
contemplated hereby or otherwise.
Section 5.9 MGI Benefit Plans. Each MGI Benefit Plan is
identified in Schedule 5.9, and the Goldsboro Parties have
provided a correct and complete copy of each such plan to the
Purchaser together with the most recent report filed with
respect to such plan with any Governmental Entity. No MGI
Benefit Plan is subject to Title IV of ERISA, and no MGI Benefit
Plan is described in Section 413(c) of the Code or Section 3(40)
of ERISA. The terms of each MGI Benefit Plan as currently in
effect that purports to be qualified under Section 401(a) of the
Code and any trust which is a part of any such MGI Benefit Plan
are subject to a favorable determination letter or opinion
letter from the U.S. Internal Revenue Service, and each such
plan has been operated and administered in accordance with all
Laws (including ERISA and the Code). The terms of each other
MGI Benefit Plan satisfy the requirements of Laws (including
ERISA and the Code), and each such plan has been operated and
administered in accordance with all Laws (including ERISA and
the Code). Xxxxxxx and each of the MGI Subsidiaries have timely
satisfied all reporting and disclosure obligations under Laws
(including ERISA and the Code) with respect to the MGI Benefit
Plans. Neither Xxxxxxx nor an ERISA Affiliate has any liability
(directly or indirectly, contingent or otherwise) under any
Employee Benefit Plan other than a MGI Benefit Plan. There have
been no prohibited transactions (as described in Section 406 of
ERISA or Section 4975 of the Code) with respect to any MGI
Benefit Plan which have not been corrected in full with respect
to which any Tax or penalty is due or which are not otherwise
exempt under Section 4975(d) of the Code or Section 408 of ERISA.
If the benefits under an MGI Benefit Plan are funded through a
trust, the fair market value of the assets of such trust equal
or exceed the liabilities of such plan. If the benefits under
an MGI Benefit Plan are funded through insurance contracts, such
contracts are in full force and effect and all premiums have
been paid when due. If benefits under an MGI Benefit Plan are
funded from the general assets of Xxxxxxx or any of the MGI
Subsidiaries, the liability for funding such benefits is shown
on Schedule 5.9 (with such liability being shown in accordance
with GAAP and any applicable standards of the Financial
Accounting Standards Board). Xxxxxxx and each of the MGI
Subsidiaries have made full and timely payment of all amounts
which are required to be paid as contributions to each MGI
Benefit Plan. No MGI Benefit Plan provides for benefits
39
described in Section 3(1) of ERISA following a termination of
employment except as required under Part 6 of Title I of ERISA,
and Xxxxxxx and each of the MGI Subsidiaries have complied in
all respects with the healthcare continuation coverage
requirements of Part 6 of Title I of ERISA. Except as set forth
in Schedule 5.9, there is no contract, agreement, plan or
arrangement with any Person which provides for any payment to
any employee by Xxxxxxx or any of the MGI Subsidiaries, which
payment would fail to be deductible by reason of Section 280G of
the Code or which would exceed the deduction limits under
Section 404 of the Code. Except as set forth in Schedule 5.9,
neither Xxxxxxx nor any of the MGI Subsidiaries has any
contractual obligation to maintain any MGI Benefit Plan for any
period of time or to make contributions from its general assets
at a fixed rate to such plan (other than premium payments for an
insurance contract which are set on a year-to-year basis and
matching contributions as provided in Xxxxxxx'x 401(k) plan),
and Xxxxxxx can terminate any MGI Benefit Plan at any time,
including an MGI Benefit Plan which is described in Section
401(k) of the Code, without any early termination fee or penalty
becoming due under the terms of any group annuity or other
insurance contract.
Section 5.10 Labor Relations. Except as and to the
extent unrelated to the MGI Business or as set forth in Schedule
5.10, (a) neither Xxxxxxx nor any of the MGI Subsidiaries is a
party to any collective bargaining agreement, contract or
legally binding commitment to any trade union or employee
organization or group in respect of or affecting employees; (b)
neither Xxxxxxx nor any of the MGI Subsidiaries is currently
engaged in any negotiation with any trade union or employee
organization; (c) neither Xxxxxxx nor any of the MGI
Subsidiaries has engaged in any unfair labor practice within the
meaning of the National Labor Relations Act, and there is no
pending or, to the Knowledge of any Goldsboro Party, threatened
complaint regarding any alleged unfair labor practices as so
defined; (d) there is no strike, labor dispute, work slow down
or stoppage pending or, to the Knowledge of any Goldsboro Party,
threatened against Xxxxxxx or any of the MGI Subsidiaries; (e)
there is no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement which is pending or,
to the Knowledge of any Goldsboro Party, threatened against
Xxxxxxx or any of the MGI Subsidiaries; (f) neither Xxxxxxx nor
any of the MGI Subsidiaries has experienced any material work
stoppage; (g) neither Xxxxxxx nor any of the MGI Subsidiaries is
the subject of any union organization effort; (h) there are no
claims pending or, to the Knowledge of any Goldsboro Party,
threatened against Xxxxxxx or any of the MGI Subsidiaries
related to the status of any individual as an independent
contractor or employee; and (i) Xxxxxxx and each of the MGI
Subsidiaries have complied in all respects with WARN.
Section 5.11 Insurance Policies. Schedule 5.11 sets
forth a list of all policies of insurance currently maintained,
owned or held by Xxxxxxx and the MGI Subsidiaries related to the
MGI Business (collectively, the "MGI Insurance Contracts"),
including the policy limits or amounts of coverage, deductibles
or self-insured retentions, and annual premiums with respect
thereto. To the Knowledge of the Goldsboro Parties, such MGI
Insurance Contracts are valid and binding in accordance with
their terms, are in full force and effect, and the MGI Insurance
Contracts will continue in effect after the Closing Date.
Similar coverage to the coverage set forth in the MGI Insurance
Contracts has been maintained on a continuous basis for the last
five (5) years. Neither Xxxxxxx nor any of the MGI Subsidiaries
has received written notice that (a) it has breached or
defaulted under any of such MGI Insurance Contracts, or (b) that
any event has occurred that would permit termination,
modification, acceleration or repudiation of such
40
MGI Insurance Contracts. Except as set forth in Schedule 5.11,
neither Xxxxxxx nor any MGI Subsidiary is in default (including
a failure to pay an insurance premium when due) in any material
respect with respect to any MGI Insurance Contract, nor has
Xxxxxxx nor any MGI Subsidiary failed to give any notice of any
material claim under such MGI Insurance Contract in due and
timely fashion nor has Xxxxxxx nor any MGI Subsidiary ever been
denied or turned down for insurance coverage.
Section 5.12 Environmental, Health and Safety Matters.
Except as set forth on Schedule 5.12, with respect to the MGI
Real Property and the MGI Business:
(a) Xxxxxxx and each MGI Subsidiary possess all
permits and approvals required under, and each is in
compliance in all material respects with, all Environmental
Laws, and Xxxxxxx and each MGI Subsidiary is in compliance
in all material respects with all applicable limitations,
restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables
contained in all Environmental Laws or contained in any
other Law, or any notice or demand letter issued thereunder;
(b) to the Knowledge of the Goldsboro Parties,
neither Xxxxxxx nor any MGI Subsidiary has received notice
of actual or threatened liability under CERCLA or any
similar foreign, state or local Law from any Governmental
Entity or any third party and there is no fact or
circumstance that could form the basis for the assertion of
any claim against Xxxxxxx or any MGI Subsidiary under any
Environmental Law, including CERCLA or any similar local,
state or foreign Law with respect to any on-site or off-
site location;
(c) neither Xxxxxxx nor any MGI Subsidiary has
entered into or agreed to enter into any consent decree or
order, and neither Xxxxxxx nor any MGI Subsidiary is
subject to any judgment, decree or judicial or
administrative order relating to compliance with, or the
cleanup of Hazardous Materials under, any applicable
Environmental Law;
(d) neither Xxxxxxx nor any MGI Subsidiary has been
alleged to be in violation of, and has not been subject to
any administrative or judicial proceeding pursuant to,
applicable Environmental Laws either now or any time during
the past four (4) years;
(e) neither Xxxxxxx nor any MGI Subsidiary is subject
to any claim, obligation, liability, loss, damage or
expense of any kind or nature whatsoever, contingent or
otherwise, incurred or imposed or based upon any provision
of any Environmental Law or arising out of any act or
omission of Xxxxxxx or any MGI Subsidiary, or Xxxxxxx'x or
any MGI Subsidiaries' employees, agents or representatives
or arising out of the ownership, use, control or operation
by Xxxxxxx or any MGI Subsidiary of any plant, facility,
site, area or property (including any plant, facility,
site, area or property currently or previously owned or
leased by Xxxxxxx or any MGI Subsidiary) from which any
Hazardous Materials were Released into the environment (the
term "environment" meaning any surface or ground water,
drinking water supply, soil, surface or subsurface strata
or medium, or the ambient air);
41
(f) the Goldsboro Parties have made available to the
Purchaser copies of all reports, correspondence, memoranda,
computer data and files relating to environmental matters
in the MGI Real Property; and neither Xxxxxxx nor any MGI
Subsidiary has paid any fine, penalty or assessment within
the prior four (4) years with respect to environmental
matters on the MGI Real Property;
(g) no MGI Real Property, improvement or equipment of
Xxxxxxx or any MGI Subsidiary contains any polychlorinated
biphenyls, underground storage tanks, open or closed pits,
sumps or other containers in violation in any material
respect of Environmental Laws; and
(h) neither Xxxxxxx nor any MGI Subsidiary has
imported, manufactured, stored, managed, used, operated,
transported, treated or disposed of any Hazardous Material
other than in material compliance with all Environmental
Laws.
Section 5.13 Intellectual Property. Xxxxxxx or an MGI
Subsidiary has transferred all right, title and interest of
Xxxxxxx or such MGI Subsidiary in any Company Intellectual
Property to the Company or will transfer all right, title and
interest of Xxxxxxx or such MGI Subsidiary in any Company
Intellectual Property to the Company in connection with the M-G
Purchase Agreement.
Section 5.14 Software.
(a) Schedule 5.14 sets forth a correct and complete
list of: (i) the MGI Proprietary Software, (ii) the MGI
Licensed Software, and (iii) all technical and restricted
materials relating to the acquisition, design, development,
use or maintenance of computer code program documentation
and materials used by Xxxxxxx or any MGI Subsidiary and
related to the MGI Software.
(b) Except as set forth on Schedule 5.14, Xxxxxxx has
all right, title and interest in and to the MGI Proprietary
Software, free and clear of all Liens. Xxxxxxx has
developed the MGI Proprietary Software through its own
efforts, as described in Section 5.14(d), and for use in
the conduct of the MGI Business. The use of the MGI
Software does not breach any term of any license or other
contract between Xxxxxxx or any MGI Subsidiary, on the one
hand, and any third party, on the other hand. Xxxxxxx and
the MGI Subsidiaries are in compliance with the terms and
conditions of all license agreements in favor of Xxxxxxx or
any MGI Subsidiary relating to the MGI Licensed Software.
(c) The MGI Proprietary Software has not, does not
and shall not infringe any patent, copyright or trade
secret or any other Intellectual Property right of any
third party. The source code for the MGI Proprietary
Software is and has been maintained in confidence.
(d) The MGI Proprietary Software was: (i) developed
by Xxxxxxx'x employees working within the scope of their
employment at the time of such development; or (ii)
developed by agents, consultants, contractors or other
Persons who have executed appropriate instruments of
assignment in favor of Xxxxxxx as assignee that
42
have conveyed to Xxxxxxx ownership of all of its
Intellectual Property rights in the MGI Proprietary
Software; or (iii) acquired by Xxxxxxx in connection with
acquisitions in which Xxxxxxx obtained appropriate
representations, warranties and indemnities from the
transferring party relating to the title to Intellectual
Property rights in the MGI Proprietary Software. Neither
Xxxxxxx nor any MGI Subsidiary has received notice from any
third party claiming any right, title or interest in the
MGI Proprietary Software.
(e) Neither Xxxxxxx nor any MGI Subsidiary has
granted rights in the MGI Software to any third party.
Section 5.15 Transactions with Affiliates. Except as set
forth on Schedule 5.15, to the Knowledge of the Goldsboro Parties,
no officer, manager or director of Xxxxxxx or any MGI Subsidiary,
no Person with whom any such officer, manager or director has any
direct or indirect relation by blood, marriage or adoption, no
entity in which any such officer, manager or director or Person
owns any beneficial interest (other than a publicly held
corporation whose stock is traded on a national securities
exchange or in the over-the-counter market and less than five
percent of the stock of which is beneficially owned by all such
officers, directors and Persons in the aggregate), no Affiliate
of any of the foregoing and no current or former Affiliate of
Xxxxxxx or any MGI Subsidiary has any interest in: (a) any
contract, arrangement or understanding with, or relating to,
Xxxxxxx or any MGI Subsidiary or the properties or assets of
Xxxxxxx or any MGI Subsidiary in connection with the MGI
Business; (b) any loan, arrangement, understanding, agreement or
contract for or relating to Xxxxxxx or any MGI Subsidiary or the
properties or assets of Xxxxxxx or any MGI Subsidiary in
connection with the MGI Business; or (c) any property (real,
personal or mixed), tangible or intangible, used or currently
intended to be used by Xxxxxxx or any MGI Subsidiary in
connection with the MGI Business.
Section 5.16 Undisclosed Payments. To the Knowledge of the
Goldsboro Parties, neither Xxxxxxx, any MGI Subsidiary nor any of
their respective officers, managers or directors, nor anyone
acting on behalf of any of them, has made or received any payment
not correctly categorized and fully disclosed in Xxxxxxx'x or the
MGI Subsidiaries' books and records in connection with or in any
way relating to or affecting the MGI Business.
Section 5.17 Supplier Relations. Schedule 5.17 contains a
correct and complete list of the names of the suppliers to the
MGI Business to which Xxxxxxx or any MGI Subsidiary paid an
amount in excess of $10,000,000 during the twelve (12) month
period ended June 30, 2010.
Section 5.18 Licenses. Schedule 5.18 is a correct and
complete list of all Licenses held by Xxxxxxx and each MGI
Subsidiary related to the MGI Business. Xxxxxxx and the MGI
Subsidiaries own or possess all Licenses that are necessary to
enable them to carry on the MGI Business as presently
conducted. To the Knowledge of the Goldsboro Parties, all such
Licenses are valid, binding and in full force and effect. The
execution, delivery and performance hereof and the consummation
of the transactions contemplated hereby shall not adversely
affect any such License, or require consent from, or notice to,
any Governmental Entity. Xxxxxxx has taken all necessary action
to maintain each such License. No loss or expiration of any
such License is pending or, to the Knowledge of any Goldsboro
Party, threatened (other than expiration upon the end of any
term).
43
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES RELATED TO THE GOLDSBORO PARTIES
The Goldsboro Parties hereby, jointly and severally,
represent and warrant to the Purchaser as follows as of the date
hereof and as of the Closing Date:
Section 6.1 Authorization. Each Goldsboro Party has the
right, power, authority and capacity to execute and deliver this
Agreement and each Goldsboro Ancillary Document and to perform
its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the Goldsboro
Ancillary Documents by the Goldsboro Parties and the consummation
of the transactions contemplated hereby and thereby have been
duly authorized by all required action on the part of the
Goldsboro Parties. This Agreement has been, and the Goldsboro
Ancillary Documents shall be as of the Closing Date, duly
executed and delivered by the Goldsboro Parties, and do or shall,
as the case may be, constitute the valid and binding agreements
of the Goldsboro Parties enforceable against the Goldsboro
Parties in accordance with their respective terms.
Section 6.2 Absence of Restrictions and Conflicts. The
execution, delivery and performance of this Agreement and the
Goldsboro Ancillary Documents, the consummation of the
transactions contemplated hereby and thereby and the fulfillment
of and compliance with the terms and conditions hereof and
thereof do not or shall not, as the case may be, with the passing
of time or the giving of notice or both, violate or conflict
with, constitute a breach of or default under, result in the loss
of any benefit under, permit the acceleration of any obligation
under or create in any party the right to terminate, modify or
cancel (a) except as set forth on Schedule 6.2, any contract,
agreement, permit, franchise, license or other instrument
applicable to such Goldsboro Party, (b) any judgment, decree or
order of any Governmental Entity to which such Goldsboro Party is
a party or by which such Goldsboro Party or any of its properties
are bound, or (c) any Law or arbitration award applicable to such
Goldsboro Party.
Section 6.3 Ownership of Equity.
(a) Xxxxxxx has good and valid title to and beneficial
ownership of the number of Membership Interests set forth
next to Xxxxxxx'x name on Schedule 4.3, and such Membership
Interests are (i) validly issued, fully paid, and
nonassessable, and (ii) free and clear of all Liens. Other
than the Membership Interests listed on Schedule 4.3,
Xxxxxxx owns no Membership Interests, units or other equity
security of the Company or any of its Subsidiaries, or any
option, warrant, right, call, commitment or right of any
kind to have any such equity security issued.
(b) As of the Closing, (i) pursuant to the Xxxxxx-
Xxxxx Butterball Interest Contribution Agreement, Newco will
convey good title to the Xxxxxx-Xxxxx Growing Interest and
the Xxxxxx-Xxxxx Member Note, free and clear of all Liens
other than liens permitted under the Xxxxxx-Xxxxx Purchase
Agreement, to the Company, and (ii) pursuant to the Seaboard
Purchase Agreement, Newco will convey good title to the
Newco Membership Interest, free and clear of all Liens, to
the Purchaser.
44
(c) Immediately upon consummation of the Seaboard
Closing, Xxxxxxx and the Purchaser will each own a 50%
Membership Interest in the Company, free and clear of all
Liens.
(d) Xxxxxxx is a wholly-owned subsidiary of Xxxxxxx
Indiana. The equity interests of Xxxxxxx Indiana are owned
by individuals who are members of the Xxxxxxx Family (or
trusts for the benefit of such individuals or related
persons), and Xxxxxxx Indiana is not a subsidiary of any
other entity.
Section 6.4 Legal Proceedings. There are no suits,
actions, claims, proceedings or investigations pending or, to the
Knowledge of such Goldsboro Party, threatened against, relating
to or involving such Goldsboro Party which could reasonably be
expected to adversely affect such Goldsboro Party's ability to
consummate the transactions contemplated by this Agreement or the
Goldsboro Ancillary Documents.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the
Goldsboro Parties as follows:
Section 7.1 Organization. The Purchaser is a corporation
duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and has all requisite power and
authority to own, lease and operate its properties and to carry
on its business as now being conducted.
Section 7.2 Authorization. The Purchaser has full power
and authority to execute and deliver this Agreement and the
Purchaser Ancillary Documents, to perform its obligations
hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of
this Agreement and the Purchaser Ancillary Documents by the
Purchaser, the performance by the Purchaser of its obligations
hereunder and thereunder, and the consummation of the
transactions provided for herein and therein have been duly and
validly authorized by all necessary action on the part of the
Purchaser. This Agreement has been and, as of the Closing Date,
the Purchaser Ancillary Documents shall be, duly executed and
delivered by the Purchaser and do or shall, as the case may be,
constitute the valid and binding agreements of the Purchaser,
enforceable against the Purchaser in accordance with their
respective terms, subject to applicable bankruptcy insolvency and
other similar Laws affecting the enforceability of creditors'
rights generally, general equitable principles and the discretion
of course in granting equitable remedies.
Section 7.3 Absence of Restrictions and Conflicts. The
execution, delivery and performance of this Agreement and the
Purchaser Ancillary Documents, the consummation of the
transactions contemplated hereby and thereby and the fulfillment
of, and compliance with, the terms and conditions hereof and
thereof do not or shall not (as the case may be), with the
passing of time or the giving of notice or both, violate or
conflict with, constitute a breach of or default under, result in
the loss of any benefit under, or permit the acceleration of any
obligation under, (a) any term or provision of the organizational
documents of the Purchaser, (b) any contract to which the
Purchaser is a party, (c) any judgment, decree or order of any
45
Governmental Entity to which the Purchaser is a party or by which
the Purchaser or any of its properties is bound or (d) any Law
applicable to the Purchaser unless, in each case, such violation,
conflict, breach, default, loss of benefit or accelerated
obligation would not, either individually or in the aggregate,
have a material adverse impact on the ability of the Purchaser to
consummate the transactions contemplated hereby, or by the
Purchaser Ancillary Documents, except for compliance with the
applicable requirements of the HSR Act.
Section 7.4 Financial Capability. To the knowledge of
the Purchaser, the Seaboard Commitment Letters are in full force
and effect and have not been amended or modified. The Purchaser
does not have any reasonable expectation that any of the
conditions set forth in the Seaboard Commitment Letters will not
be satisfied. The Purchaser does not know of any circumstances
or conditions (other than the termination of this Agreement in
accordance with its terms) that could be reasonably expected to
prevent the availability at the Closing of the New Butterball
Credit Facility Loan Proceeds.
ARTICLE VIII.
CERTAIN COVENANTS AND AGREEMENTS
Section 8.1 Conduct of Business by the Company. For the
period commencing on the date hereof and ending on the Closing
Date, the Goldsboro Parties will not vote, approve, agree to or
otherwise authorize any action which requires the unanimous
approval, agreement or authorization of Xxxxxxx and Xxxxxx-Xxxxx
pursuant to the Operating Agreement without the prior written
consent of the Purchaser (which consent shall not be unreasonably
withheld, conditioned or delayed). In connection with the
continued operation of the Company and each Subsidiary during the
period commencing on the date hereof and ending on the Closing
Date, the Goldsboro Parties shall confer, and shall use
commercially reasonable efforts to cause the Company to confer,
in good faith on a regular and frequent basis with the Purchaser
regarding operational matters and the general status of on-going
operations of the Company and its Subsidiaries. Each Goldsboro
Party hereby acknowledges that, except as otherwise consented to
in writing by the Purchaser, the Purchaser does not and shall not
waive any right it may have hereunder as a result of such
consultations. The Goldsboro Parties shall not, and shall use
commercially reasonable efforts to cause the Company and each
Subsidiary not to, take any action that would, or that could
reasonably be expected to, result in any representation or
warranty of any Goldsboro Party set forth herein to become
untrue.
Section 8.2 Inspection and Access to Information. During
the period commencing on the date hereof and ending on the
Closing Date, the Goldsboro Parties will, and will use reasonable
efforts to cause the Company, each Subsidiary and their
respective officers, directors, managers, employees, auditors and
agents to, provide the Purchaser and its accountants, investment
bankers, counsel, environmental consultants and other authorized
representatives full access, during reasonable hours and under
reasonable circumstances, to any and all of their respective
premises, employees (including executive officers), properties,
contracts, commitments, books, records and other information
(including, with respect to the Company and its Subsidiaries, Tax
Returns filed and those in preparation) and shall use reasonable
efforts to cause the Company's officers to furnish to the
Purchaser and its authorized representatives, promptly upon
request therefor, any and all financial, technical and operating
data and other
46
information pertaining to the Company or any of its Subsidiaries
and otherwise fully cooperate with the conduct of due diligence
by the Purchaser and its representatives.
Section 8.3 Notices of Certain Events. The Goldsboro
Parties shall promptly notify the Purchaser of:
(a) any change or event that, individually or in the
aggregate, has had or could reasonably be expected to have a
Material Adverse Effect or otherwise result in any
representation or warranty of any Goldsboro Party hereunder
being inaccurate in any material respect;
(b) any notice or other communication from any Person
alleging that the consent of such Person is or may be
required in connection with the transactions contemplated
hereby;
(c) any notice or other communication from any
Governmental Entity in connection with the transactions
contemplated hereby;
(d) any action, suit, claim, investigation or
proceeding commenced or, to the Knowledge of any Goldsboro
Party, threatened against, relating to or involving or
otherwise affecting the Company or any of its Subsidiaries
that, if pending on the date hereof, would have been
required to have been disclosed pursuant to Section 4.12 or
that relates to the consummation of the transactions
contemplated hereby; and
(e) (i) the damage or destruction by fire or other
casualty of any asset or part thereof of the Company or any
of its Subsidiaries or (ii) any such asset or part thereof
becoming the subject of any proceeding (or, to the Knowledge
of any Goldsboro Party, any threatened proceeding) for the
taking thereof or of any right relating thereto by
condemnation, eminent domain or other similar governmental
action.
Each Goldsboro Party hereby acknowledges that the Purchaser
does not and shall not waive any right it may have hereunder as a
result of such notifications.
Section 8.4 Interim Financials. As promptly as
practicable following each regular accounting period on or after
August 1, 2010 and prior to the Closing Date, the Goldsboro
Parties shall use reasonable efforts to cause the Company to
deliver to the Purchaser periodic financial reports in the
form that it customarily prepares for its internal purposes
concerning the Company and its Subsidiaries and, if available,
unaudited statements of the financial position of the Company
and its Subsidiaries as of the last day of each accounting
period and statements of income and changes in financial position
of such entity for the period then ended.
Section 8.5 No Solicitation of Transactions. During the
period commencing on the date hereof and ending on the Closing
Date, the Goldsboro Parties and their respective Affiliates,
officers, directors, shareholders and advisors will not initiate,
solicit, negotiate, respond to, or pursue with any third party
(including, without limitation, Smithfield Foods, Inc.
("Smithfield") and its Affiliates) any inquiry, proposal or offer
relating to the acquisition and/or financing of the Company and
its Subsidiaries or the Business, or any portion thereof, or of
the Xxxxxx-Xxxxx Butterball Interest, the Xxxxxxx Growing
Interest, or the Xxxxxxx Membership Interest (the
47
Xxxxxxx Membership Interest together with the Xxxxxxx Growing
Interest, the "Xxxxxxx Butterball Interest") whether by purchase
of assets or stock, merger, consolidation, recapitalization,
reorganization or other transaction (an "Alternative Offer"), and
shall not provide any information regarding the Company, its
Subsidiaries, the Xxxxxxx Butterball Interest or the Xxxxxx-Xxxxx
Butterball Interest, to any third party, where the Goldsboro
Parties or their respective Affiliates, officers, directors,
shareholders and advisors have reason to believe such information
may be used in connection with an Alternative Offer. In addition,
the Goldsboro Parties will, from the date hereof until the
Closing Date, cease any discussions with any third parties other
than the Purchaser relating to an Alternative Offer. The
Goldsboro Parties will promptly advise the Purchaser in writing
of the terms of any Alternative Offer and the name of the offeror.
Notwithstanding the foregoing, it is understood that the
Goldsboro Parties shall be permitted to continue discussions and
negotiations with Smithfield and its Affiliates with respect to
the purchase of the Xxxxxx-Xxxxx Butterball Interest pursuant to
the Buy/Sell Notice. Notwithstanding anything to the contrary
contained herein, this Section 8.5 shall be deemed to have
terminated in the event that this Agreement is terminated in
accordance with the provisions of Article XI.
Section 8.6 Reasonable Efforts; Further Assurances;
Cooperation. Subject to the other provisions hereof, each Party
shall each use its commercially reasonable, good faith efforts to
perform its obligations hereunder and to take, or cause to be
taken, and do, or cause to be done, all things necessary, proper
or advisable under applicable Law to obtain all consents required
as described on Schedule 4.14 and all regulatory approvals and to
satisfy all conditions to its obligations hereunder and to cause
the transactions contemplated herein to be effected as soon as
practicable, but in any event on or prior to the Expiration Date,
in accordance with the terms hereof and shall cooperate fully
with each other Party and its officers, directors, managers,
employees, agents, counsel, accountants and other designees in
connection with any step required to be taken as a part of its
obligations hereunder, including the following:
(a) On August 31, 2010, each of the Goldsboro Parties
and the Purchaser filed with the United States Federal Trade
Commission (the "FTC") and the United States Department of
Justice (the "DOJ") the notification and report form and any
supplemental information requested in connection therewith
pursuant to the HSR Act required for the transactions
contemplated by this Agreement. The Goldsboro Parties and
the Purchaser shall keep each other reasonably apprised of
the status of any communications with, and any inquiries or
requests for additional information from, the FTC or the DOJ
and shall comply promptly with any such inquiry or request
and shall promptly provide any supplemental information
requested in connection with the filings made hereunder
pursuant to the HSR Act. Each Party shall use its
reasonable best efforts to obtain any clearance required
under the HSR Act for the consummation of the transactions
contemplated by this Agreement. Each of the Parties shall
cooperate with the other in promptly filing any other
necessary applications, reports or other documents with any
Governmental Entity having jurisdiction with respect to this
Agreement and the transactions contemplated hereby, and in
seeking necessary consultation with and prompt favorable
action by such Governmental Entity. Notwithstanding any
provision of this Agreement to the contrary, the Purchaser
shall not be required under the terms of this Agreement to
dispose of or hold separate all or any portion of the
businesses or assets of the Purchaser or any of its
Affiliates or the Company and its Subsidiaries in order to
48
remedy or otherwise address the concerns (whether or not
formally expressed) of any Governmental Entity under the HSR
Act or any other antitrust statute or regulation. Any
filing fees or other expenses required to be paid under the
HSR Act shall be borne one-half by the Purchaser, on one
hand, and one-half by the Goldsboro Parties, on a joint and
several basis, on the other hand.
(b) In the event any claim, action, suit,
investigation or other proceeding by any Governmental Entity
or other Person is commenced that questions the validity or
legality of any of the transactions contemplated hereby or
seeks damages in connection therewith, the Parties shall (i)
cooperate and use all commercially reasonable efforts to
defend against such claim, action, suit, investigation or
other proceeding, (ii) in the event an injunction or other
order is issued in any such action, suit or other proceeding,
use all commercially reasonable efforts to have such
injunction or other order lifted, and (iii) cooperate
reasonably regarding any other impediment to the
consummation of the transactions contemplated hereby.
(c) The Goldsboro Parties will cause the Company to
give all notices to third parties and use its commercially
reasonable best efforts (in consultation with the Purchaser)
to obtain all third-party consents (i) necessary, proper or
advisable to consummate the transactions contemplated hereby,
(ii) required to be given or obtained, including those
required to be given or obtained as set forth on Schedule
4.14 and the other Schedules, (iii) required to avoid a
breach of or default under any Company Contract in
connection with the consummation of the transactions
contemplated hereby or (iv) required to prevent a Material
Adverse Effect, whether prior to, on or following the
Closing Date.
(d) The Goldsboro Parties, on the one hand, and the
Purchaser, on the other hand, shall give prompt notice to
the other Party or Parties of (i) the occurrence, or failure
to occur, of any event, the occurrence or failure of which
would be likely to cause any representation or warranty of
the Goldsboro Parties or the Purchaser, as the case may be,
contained herein to be untrue or inaccurate at any time from
the date hereof to the Closing Date or that will or may
result in the failure to satisfy any condition specified in
Article IX and (ii) any failure of the Goldsboro Parties or
the Purchaser, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or
satisfied by any of them hereunder. Each Goldsboro Party
hereby acknowledges that the Purchaser does not and shall
not waive any right it may have hereunder as a result of
such notifications, and the Purchaser hereby acknowledges
that none of the Goldsboro Parties waive, nor shall waive
any right any of them may have hereunder as a result of such
notifications; provided that each Party shall provide the
other Party with reasonable time to cure any such occurrence
or failure to occur of an event.
(e) The Goldsboro Parties shall use reasonable efforts
to cause the Company, each Subsidiary and any Affiliate of
any of them thereof to do all things required by the Company
or any of its Subsidiaries pursuant to this Agreement and
otherwise to consummate the transactions contemplated by
this Agreement.
49
Section 8.7 Public Announcements. Subject to their legal
obligations, each Party shall consult with the other regarding
the timing and content of all announcements regarding this
Agreement or the transactions contemplated hereby, whether to the
financial community, Governmental Entities, employees, customers,
suppliers or the general public and shall use reasonable efforts
to agree upon the text of any such announcement prior to its
release.
Section 8.8 Supplements to Schedules. From time to time
up to the Closing, the Goldsboro Parties shall promptly
supplement or amend the Schedules that they have delivered with
respect to any matter first existing or occurring following the
date hereof that (a) if existing or occurring at or prior to the
date hereof, would have been required to be set forth or
described in the Schedules, or (b) is necessary to correct any
information in the Schedules that has been rendered inaccurate
thereby. No supplement or amendment to any Schedule shall have
any effect for the purpose of determining satisfaction of the
conditions set forth in Section 9.2 or the obligations of the
Goldsboro Parties under Sections 12.1 and 12.2.
Section 8.9 Confidentiality. The terms of the
Confidentiality Agreement (the "Confidentiality Agreement"),
dated June 16, 2010, with respect to Butterball and Xxxxxxx are
incorporated by reference herein and shall continue in full force
and effect until the Closing, at which time such Confidentiality
Agreement and the obligations of the Purchaser under this Section
8.9 shall terminate. If this Agreement is, for any reason,
terminated prior to Closing, the Confidentiality Agreement shall
nonetheless continue in full force and effect.
Section 8.10 Tax Matters. The Company will make (or, if
made previously, will maintain) an election under Section 754 of
the Code that will apply with respect to the Company's taxable
year in which the Seaboard Closing occurs. All transfer,
documentary, sales, use, stamp, registration and other such Taxes
and fees (including any penalties and interest) incurred in
connection with this Agreement shall be paid by the Company when
due, and the Goldsboro Parties will cause the Company, at its own
expense, to file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, and, if
required by applicable Law, the Purchaser will, and will cause
its Affiliates to, join in the execution of any such Tax Returns
and other documentation.
Section 8.11 Growing Interest Assets. Prior to the
Closing, the Goldsboro Parties shall take all commercially
reasonable actions to cause the Xxxxxxx Growing Interest to
exclude the Excluded Xxxxxxx Growing Interest Assets and include
the Additional Xxxxxxx Growing Interest Assets (the "Xxxxxxx
Growing Interest Assets Transfers"). Purchaser acknowledges and
agrees that the Goldsboro Parties do not currently own portions
of the Additional Xxxxxxx Growing Interest Assets which portions
are described on Schedule 1.1(a). Prior to the Closing, Xxxxxxx,
at Xxxxxxx'x expense, will deliver to the Company and the
Purchaser the Surveys. Each Survey will: (i) show the location
of all highways, streets, roads and railroads lying adjacent to
each property, (ii) show the approximate location of all major
creeks or ponds, if any, abutting any boundary lines of each
property, (iii) show any and all encroachments over and across
boundary lines, (iv) define the property in acres and square feet
and show a metes and bounds legal description on each Survey and
provide a valid and accurate legal description of the property
(to be used in the Deeds); (v) contain the North directional
arrow at the top of the Survey; (vi) show each point of access to
the property and its direct access to a public
50
right-of-way or such other easement providing a legal and
insurable means of access to such public right-of-way; (vii) be
sufficient to delete the "general" or "standard" survey exception
to a 2006 ALTA title policy in favor of a future insured, and
(viii) include certification of the Survey's accuracy. The
Goldsboro Parties will take all steps (including the granting of
appropriate rights of way easements) to ensure that each parcel
of MGI Real Property has access to a public right of way, as more
particularly described in Section 9.2(k) below. The Parties
shall mutually agree upon any improvements which are to be made
to any Additional Xxxxxxx Growing Interest Assets after the date
hereof and prior to the Closing.
Section 8.12 Seaboard Commitment Letters. The Seaboard
Commitment Letters shall be executed and delivered by Purchaser
and accepted by Xxxxxxx simultaneously with the execution of this
Agreement. While it is understood that Purchaser intends to form
a syndicate of lenders reasonably acceptable to Xxxxxxx in order
to finance the transactions contemplated by the Seaboard
Commitment Letters, the successful formation of such a syndicate
prior to the Closing shall not be a condition to Purchaser's
commitment under the Seaboard Commitment Letters to initially
fund such credit facilities on the Closing Date. Subject to the
terms and conditions set forth in the Seaboard Commitment
Letters, the Goldsboro Parties shall use commercially reasonable
efforts to take all actions to cause the financing transactions
contemplated by the Seaboard Commitment Letters to be consummated
simultaneously with the Closing. Without limitation to the
forgoing, the Goldsboro Parties will, and will cause the Company
to, use commercially reasonable efforts to (a) maintain the
effectiveness of, and comply with all of their respective
obligations under, the Seaboard Commitment Letters in accordance
with their terms (including all obligations of the Goldsboro
Parties to cooperate with and provide agreements in favor of any
"Lead Arranger" engaged by the Purchaser in connection with the
syndication of the financing transactions contemplated by the
Seaboard Commitment Letters), (b) enter into definitive
documentation with respect to the financing transactions
contemplated by the Seaboard Commitment Letters, (c) satisfy all
funding conditions set forth in the definitive documentation with
respect to the financing transactions contemplated by the
Seaboard Commitment Letters and (d) consummate the financing
transactions contemplated by the Seaboard Commitment Letters. No
Goldsboro Party shall, and the Goldsboro Parties shall cause the
Company not to, solicit, initiate, entertain or permit, or enter
into any discussions in respect of, any offering, placement or
arrangement of any financing that is a competing financing to the
financing transactions contemplated by the Seaboard Commitment
Letters.
Section 8.13 Commitment Fees. To the extent that any
Commitment Fees are paid by Xxxxxxx or the Purchaser prior to the
Closing, the Parties shall cause the Company to reimburse Xxxxxxx
or the Purchaser, as applicable, at Closing in an amount equal to
the aggregate Commitment Fees paid by such Party.
ARTICLE IX.
CONDITIONS TO CLOSING
Section 9.1 Conditions to Obligations of Each Party. The
respective obligations of each Party to effect the transactions
contemplated hereby shall be subject the fulfillment at or prior
to the Closing of each of the following additional conditions:
51
(a) Governmental Consents. The waiting period
applicable to the consummation of the transactions
contemplated by this Agreement under the HSR Act shall have
expired or been terminated. All other consents, approvals,
orders or authorizations of, or registrations, declarations
or filings with, all Governmental Entities required in
connection with the execution, delivery or performance
hereof shall have been obtained or made.
(b) Injunction. There shall be no effective
injunction, writ or preliminary restraining order or any
order of any nature issued by a Governmental Entity of
competent jurisdiction to the effect that the transactions
contemplated by this Agreement may not be consummated as
provided herein, no proceeding or lawsuit shall have been
commenced by any Governmental Entity or third party for the
purpose of obtaining any such injunction, writ or
preliminary restraining order and no written notice shall
have been received from any Governmental Entity indicating
an intent to restrain, prevent, materially delay or
restructure the transactions contemplated hereby.
(c) Amended and Restated Operating Agreement. Xxxxxxx
and the Purchaser shall have entered into an Amended and
Restated Operating Agreement of the Company, in the form
agreed to by the Parties.
(d) Xxxxxx-Xxxxx Butterball Interest Purchase. All
closing conditions related to the Xxxxxx-Xxxxx Butterball
Interest Purchase shall have been satisfied or waived.
Section 9.2 Conditions to Obligations of the Purchaser.
The obligations of the Purchaser to consummate the transactions
contemplated hereby shall be subject to the fulfillment at or
prior to the Closing of each of the following additional
conditions:
(a) Representations and Warranties. The
representations and warranties of the Goldsboro Parties set
forth in Article VI shall have been correct and complete in
all material respects as of the date hereof and shall be
correct and complete in all material respects as of the
Closing Date as though made on and as of the Closing Date,
except that those representations and warranties that by
their terms are qualified by materiality shall be correct
and complete in all respects.
(b) Performance of Obligations of the Goldsboro
Parties. The Goldsboro Parties shall have performed in all
material respects all covenants and agreements required to
be performed by each of them hereunder at or prior to the
Closing.
(c) Opinion of Goldsboro Parties' Counsel. The
Purchaser shall have received an opinion of Xxxxxxxxxx
Xxxxxxxx LLP, counsel to the Goldsboro Parties, dated the
Closing Date, substantially in the form agreed to by the
Parties (the "Goldsboro Opinion").
(d) Ancillary Documents. The Goldsboro Parties shall
have delivered, or caused to be delivered, to the Purchaser
the documents listed in Section 10.2.
52
(e) Indebtedness; Release of Liens. The Goldsboro
Parties shall have delivered to the Purchaser payoff letters
("Payoff Letters") from each lender to the Butterball
Closing Date Indebtedness outstanding as of the Closing Date
(including any interest accrued thereon and any prepayment
or similar penalties and expenses associated with the
prepayment of such indebtedness on the Closing Date) and an
agreement that, if such aggregate amount so identified is
paid to such lender on the Closing Date, such indebtedness
shall be repaid in full and that all Liens of such lender
affecting any real or personal property of the Company or
any of its Subsidiaries will be released.
(f) Closing Date Indebtedness Statement and Closing
Date Purchase Price Statement. The Goldsboro Parties shall
have delivered to the Purchaser the Closing Date
Indebtedness Statement and Closing Date Purchase Price
Statement at least two (2) Business Days prior to the
Closing Date.
(g) Xxxxxxx Growing Interest Assets Transfers. The
Xxxxxxx Growing Interest Assets Transfers shall have been
consummated, and the Purchaser shall have received
reasonable evidence thereof.
(h) Management Services Agreement. The Company and
Sleepy Creek Management, LLC, a North Carolina limited
liability company and an Affiliate of the entities
comprising the Xxxxxxx Group, shall have entered into a
Management Services Agreement, substantially in the form
agreed to by the Parties (the "Management Services
Agreement").
(i) Xxxxxxx Transition Services Agreement. The
Company and Sleepy Creek Turkeys, Inc., an Affiliate of the
entities comprising the Xxxxxxx Group, shall have entered
into a Transition Services Agreement, substantially in the
form agreed to by the Parties (the "Xxxxxxx Transition
Services Agreement").
(j) Grower Contracts. Each of the Xxxxxxx Group and
Newco, as applicable, shall have executed a valid assignment
to the Company of the MGI Contracts or the Xxxxxx-Xxxxx
Contracts, as applicable, in the form agreed to by the
Parties (collectively, the "Grower Contract Assignments").
(k) Access Easements. The Company shall have executed
access easement agreements with the Adjacent Owners
sufficient to provide access to and from a public
right-of-way for each parcel of real property included in
the Xxxxxxx Growing Interest that does not have direct
access to (i.e., touch) a public right-of-way, substantially
in the form agreed to by the Parties (collectively, the
"Access Easement Agreements"). All easements shall be
subject to the prior written consent of Purchaser (which
consent shall not be unreasonably withheld, conditioned or
delayed).
(l) Transaction Documents. Each of the Newco
Promissory Note, the Xxxxxx-Xxxxx Purchase Agreement, the
Xxxxxx-Xxxxx Butterball Interest Contribution Agreement, the
M-G Purchase Agreement, the Xxxxxxx Redemption Agreement,
and the Seaboard Purchase Agreement shall have been executed
and delivered by all parties thereto.
53
Section 9.3 Conditions to Obligations of the Goldsboro
Parties. The obligations of the Goldsboro Parties to consummate
the transactions contemplated hereby shall be subject to the
fulfillment at or prior to the Closing of each of the following
additional conditions:
(a) Representations and Warranties. The
representations and warranties of the Purchaser contained in
Article VII shall have been correct and complete in all
material respects as of the date hereof and shall be correct
and complete in all material respects as of the Closing Date
as though made on and as of the Closing Date, except that
those representations and warranties that by their terms are
qualified by materiality shall be correct and complete in
all respects.
(b) Performance of Obligations by the Purchaser. The
Purchaser shall have performed in all material respects all
covenants and agreements required to be performed by it
hereunder on or prior to the Closing Date.
(c) Opinion of the Purchaser's Counsel. The Goldsboro
Parties shall have received an opinion of King & Spalding
LLP, counsel to the Purchaser, dated the Closing Date,
substantially in the form agreed to by the Parties (the
"Purchaser Opinion").
(d) Ancillary Documents. The Purchaser shall have
delivered, or caused to be delivered, to the Goldsboro
Parties the documents listed in Section 10.3.
ARTICLE X.
CLOSING
Section 10.1 Closing. The Xxxxxxx Closing shall occur at
9:00 a.m., Atlanta, Georgia time, on the third (3rd) Business Day
following the satisfaction or waiver of the conditions set forth
in Article IX that are contemplated to be satisfied prior to the
Closing, or on such other date as the Parties may agree. The
Seaboard Closing shall occur immediately following the Xxxxxxx
Closing. The Closing shall take place at the offices of
Xxxxxxxxxx Xxxxxxxx LLP, 0000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx Xxxxxxxx 00000 or at such other place as the
Parties may agree.
Section 10.2 Goldsboro Parties' Closing Deliveries. At
the Closing, the Goldsboro Parties shall deliver, or cause to be
delivered, to the Purchaser the following:
(a) a certificate executed by Xxxxxxx, on behalf of
the Goldsboro Parties, as to compliance with the conditions
set forth in Sections 9.2(a) and (b);
(b) the Payoff Letters;
(c) the Newco Promissory Note, executed by Newco;
(d) the Xxxxxx-Xxxxx Purchase Agreement, executed by
Newco and Xxxxxx-Xxxxx;
(e) the Xxxxxx-Xxxxx Butterball Interest Contribution
Agreement, executed by Newco and the Company;
54
(f) the M-G Purchase Agreement, executed by the
Xxxxxxx Group and certain MGI Subsidiaries and their
Affiliates and the Company;
(g) the Xxxxxxx Redemption Agreement, executed by
Xxxxxxx and the Company;
(h) the Seaboard Purchase Agreement, executed by Newco;
(i) the Management Services Agreement, the Feed Supply
Agreement, and the Pathology Lab Services Agreement and
Lease, each executed by Goldsboro or its Affiliate, as
applicable, and the Company;
(j) the Xxxxxxx Transition Services Agreement,
executed by Sleepy Creek Turkeys, Inc. and the Company;
(k) the Grower Contract Assignments, executed by
Xxxxxxx or Newco, as applicable, and the Company;
(l) the Access Easement Agreements, executed by the
Company and the Adjacent Owners, as applicable;
(m) the Goldsboro Opinion;
(n) a certificate of non-foreign status by each
Goldsboro Party and the Company sworn under penalty of
perjury and in form and substance required under Treasury
Regulation Section 1.1445-2(B)(2)(iv), stating that such
Goldsboro Party or the Company, as applicable, is not a
"foreign person" as defined in Section 1445 of the Code and
setting forth such Goldsboro Party's or the Company's, as
applicable, name, taxpayer identification number and address;
and
(o) all other documents required to be entered into by
the Company, any of its Subsidiaries or any Goldsboro Party
pursuant hereto or reasonably requested by the Purchaser to
otherwise consummate the transactions contemplated hereby.
Section 10.3 Purchaser Closing Deliveries. On the Closing,
the Purchaser shall have delivered, or caused to be delivered, to
the Goldsboro Parties the following:
(a) a certificate of an authorized officer of the
Purchaser as to compliance with the conditions set forth in
Sections 9.3(a) and (b);
(b) the Seaboard Purchase Agreement, executed by the
Purchaser;
(c) the Purchaser Opinion; and
(d) all other documents required to be entered into or
delivered by the Purchaser at or prior to the Closing
pursuant hereto.
55
ARTICLE XI.
TERMINATION
Section 11.1 Termination. This Agreement may be
terminated:
(a) in writing by mutual consent of the Parties;
(b) by written notice from Xxxxxxx to the Purchaser,
in the event the Purchaser (i) fails to perform in any
material respect any of its agreements contained herein
required to be performed by it at or prior to the Closing or
(ii) materially breaches any of its representations and
warranties contained herein, which failure or breach is not
cured within twenty (20) days following Xxxxxxx having
notified the Purchaser of its intent to terminate this
Agreement pursuant to this Section 11.1(b);
(c) by written notice from the Purchaser to Xxxxxxx,
in the event any of the Goldsboro Parties (i) fails to
perform in any material respect any of its agreements
contained herein required to be performed by it at or prior
to the Closing or (ii) materially breaches any of its
representations and warranties contained in Article VI,
which failure or breach is not cured within twenty (20) days
following the Purchaser having notified Xxxxxxx of its
intent to terminate this Agreement pursuant to this Section
11.1(c); or
(d) by written notice by Xxxxxxx to the Purchaser or
the Purchaser to Xxxxxxx, as the case may be, in the event
the Closing has not occurred on or prior to the Expiration
Date for any reason other than delay or nonperformance of
the Party seeking such termination.
Section 11.2 Specific Performance and Other Remedies.
(a) Each Party hereby acknowledges that the rights of
each Party to consummate the transactions contemplated
hereby are special, unique and of extraordinary character
and that, in the event that any Party violates or fails or
refuses to perform any covenant or agreement made by it
herein, the non-breaching Party may be without an adequate
remedy at law. In the event that any Party violates or
fails or refuses to perform any covenant or agreement made
by such Party herein, the non-breaching Party or Parties may,
subject to the terms hereof and in addition to any remedy at
law for damages or other relief, institute and prosecute an
action in any court of competent jurisdiction to enforce
specific performance of such covenant or agreement or seek
any other equitable relief.
(b) Notwithstanding anything in Section 11.2(a) or
Section 11.3 to the contrary, in addition to any other
remedies which may otherwise be available to Purchaser in
accordance with this Agreement, if the Purchaser terminates
this Agreement pursuant to Section 11.1(c) or Xxxxxxx
terminates this Agreement pursuant to Section 11.1(d) and
the Goldsboro Parties elect to sell the Xxxxxxx Butterball
Interest to Smithfield or its Affiliates on or prior to
December 31, 2011, then the Goldsboro Parties shall pay to
the Purchaser within ten (10) days following the
consummation of such sale a cash amount equal to the greater
of (i) One Million Dollars ($1,000,000) or (ii) an amount
equal to 50% of the amount, if any, by which (x) the total
purchase price paid to
56
the Goldsboro Parties in exchange for the Xxxxxxx Butterball
Interest exceeds (y) the Xxxxxxx Target Price.
Section 11.3 Effect of Termination. In the event of
termination of this Agreement pursuant to this Article XI, this
Agreement shall forthwith become void and there shall be no
liability on the part of any Party or its partners, officers,
directors or stockholders, except for obligations under Section
8.7 (Public Announcements), Section 11.2(b) (Specific Performance
and Other Remedies), Section 13.1 (Notices), Section 13.4
(Controlling Law; Amendment), Section 13.5 (Consent to
Jurisdiction, Etc.) and Section 13.12 (Transaction Costs) and
this Section 11.3, all of which shall survive the date of such
termination. Each Party shall redeliver all documents, work
papers and other materials of the other Party relating to the
transactions contemplated hereby, whether obtained before or
after the execution hereof, to the Party furnishing the same or,
upon prior written notice to such Party, shall destroy all such
documents, work papers and other materials and deliver notice to
the Party seeking destruction of such documents that such
destruction has been completed, and all confidential information
received by any Party with respect to the other Parties shall be
treated in accordance with the Confidentiality Agreement.
Notwithstanding the foregoing, nothing contained herein shall
relieve any Party from liability for any breach hereof.
ARTICLE XII.
INDEMNIFICATION
Section 12.1 Indemnification Obligations of the Goldsboro
Parties to the Company. The Goldsboro Parties shall, jointly and
severally, indemnify, defend and hold harmless the Company
Indemnified Parties from, against, and in respect of, any and all
claims, liabilities, obligations, damages, losses, costs,
expenses, penalties, fines and judgments (at equity or at law,
including statutory and common) whenever arising or incurred
(including amounts paid in settlement, costs of investigation and
reasonable attorneys' fees and expenses) arising out of or
relating to:
(a) any breach or inaccuracy of any representation or
warranty made by any Goldsboro Party in Article IV or
Article V (other than Section 4.12 and Section 5.5, as those
matters are otherwise covered by Section 12.1(c)) of this
Agreement or the Goldsboro Ancillary Documents;
(b) any breach of any covenant, agreement or
undertaking made by any Goldsboro Party in this Agreement or
the Goldsboro Ancillary Documents;
(c) any claims, liabilities, obligations, losses,
damages, costs, expenses, penalties, fines and judgments
incurred by the Company and its Subsidiaries after the
Closing Date relating to, resulting from or arising out of
any Legal Proceedings (including the Company Legal
Proceedings and the MGI Legal Proceedings listed on Schedule
4.12 or Schedule 5.5), except to the extent otherwise
reserved for in Final Working Capital Schedule with respect
to such Legal Proceedings;
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(d) any liability or obligation relating to the
Xxxxxxx Growing Interest, other than to the extent not
required to be performed on or prior to the Closing Date and
accruing and relating to operations subsequent to the
Closing Date;
(e) any liability or obligation relating to the
Excluded Xxxxxxx Growing Interest Assets;
(f) any Indebtedness of the Company or its
Subsidiaries as of the Closing Date other than the Term Debt,
the Revolver, the Xxxxxxx Group Member Note, the MB Member
Note and any other Indebtedness disclosed in Schedule 4.3(b);
or
(g) any liability or obligation arising out of or
relating to any claim asserted against the Company or any of
its Subsidiaries by Xxxxxx-Xxxxx.
Section 12.2 Indemnification Obligations of the Goldsboro
Parties to the Purchaser. The Goldsboro Parties shall, jointly
and severally, indemnify, defend and hold harmless the Purchaser
Indemnified Parties from, against, and in respect of, any and all
claims, liabilities, obligations, damages, losses, costs,
expenses, penalties, fines and judgments (at equity or at law,
including statutory and common) whenever arising or incurred
(including amounts paid in settlement, costs of investigation and
reasonable attorneys' fees and expenses) arising out of or
relating to:
(a) any breach or inaccuracy of any representation or
warranty made by the Goldsboro Parties in Article VI of this
Agreement or the Goldsboro Ancillary Documents; or
(b) any breach of any covenant, agreement or
undertaking made by any Goldsboro Party in this Agreement or
the Goldsboro Ancillary Documents.
The claims, liabilities, obligations, losses, damages,
costs, expenses, penalties, fines and judgments of the Purchaser
Indemnified Parties described in this Section 12.2 as to which
the Purchaser Indemnified Parties are entitled to indemnification
and the claims, liabilities, obligations, losses, damages, costs,
expenses, penalties, fines and judgments of the Company
Indemnified Parties described in Section 12.1 as to which the
Company Indemnified Parties are entitled to indemnification are
collectively referred to as "Indemnifiable Losses."
Section 12.3 Indemnification Obligations of the Purchaser.
The Purchaser shall indemnify and hold harmless the Goldsboro
Indemnified Parties from, against and in respect of any and all
claims, liabilities, obligations, losses, damages, costs,
expenses, penalties, fines and judgments (at equity or at law,
including statutory and common) whenever arising or incurred
(including amounts paid in settlement, costs of investigation and
reasonable attorneys' fees and expenses) arising out of or
relating to:
(a) any breach or inaccuracy of any representation or
warranty made by the Purchaser in Article VII of this
Agreement or in any Purchaser Ancillary Document; or
(b) any breach of any covenant, agreement or
undertaking made by the Purchaser in this Agreement or in
any Purchaser Ancillary Document.
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The claims, liabilities, obligations, losses, damages,
costs, expenses, penalties, fines and judgments of the Goldsboro
Indemnified Parties described in this Section 12.3 as to which
the Goldsboro Indemnified Parties are entitled to indemnification
are collectively referred to as "Goldsboro Losses."
Section 12.4 Indemnification Procedure.
(a) Promptly following receipt by an Indemnified Party
of notice by a third party (including any Governmental
Entity) of any complaint or the commencement of any audit,
investigation, action or proceeding with respect to which
such Indemnified Party may be entitled to receive payment
from another Party for any Indemnifiable Loss or any
Goldsboro Loss (as the case may be), such Indemnified Party
shall notify the Purchaser or Xxxxxxx (on behalf of the
Goldsboro Parties), as the case may be (the "Indemnifying
Party"), promptly following the Indemnified Party's receipt
of such complaint or notice of the commencement of such
audit, investigation, action or proceeding; provided,
however, that the failure to so notify the Indemnifying
Party shall relieve the Indemnifying Party from liability
hereunder with respect to such claim only if, and only to
the extent that, such failure to so notify the Indemnifying
Party results in the forfeiture by the Indemnifying Party
of rights and defenses otherwise available to the
Indemnifying Party with respect to such claim. The
Indemnifying Party shall have the right, upon written notice
delivered to the Indemnified Party within twenty (20) days
thereafter assuming full responsibility for any
Indemnifiable Losses or Goldsboro Losses (as the case may be)
resulting from such audit, investigation, action or
proceeding, to assume the defense of such complaint, audit,
investigation, action or proceeding, to the extent such
complaint, audit, investigation, action or proceeding
involves solely monetary damages, including the employment
of counsel reasonably satisfactory to the Indemnified Party
and the payment of the fees and disbursements of such
counsel; provided, however, that an Indemnifying Party will
not be entitled to assume the defense of any complaint,
audit, investigation, action or proceeding if (i) such claim
could result in criminal liability of, or equitable remedies
against, the Indemnified Party; or (ii) the Indemnified
Party reasonably believes that the interests of the
Indemnifying Party and the Indemnified Party with respect to
the such claim are in conflict with one another, and as a
result, the Indemnifying Party could not adequately represent
the interests of the Indemnified Party in such claim. In the
event, however, that the Indemnifying Party declines or fails
to assume, or is not permitted to assume, the defense of the
audit, investigation, action or proceeding on the terms
provided above or to employ counsel reasonably satisfactory
to the Indemnified Party, in either case within such twenty
(20) day period, or if the Indemnifying Party is not entitled
to assume the defense of the audit, investigation, action or
proceeding in accordance with the preceding sentence, then
such Indemnified Party may employ counsel to represent or
defend it in any such audit, investigation, action or
proceeding and the Indemnifying Party shall pay the
reasonable fees and disbursements of such counsel for the
Indemnified Party as incurred; provided, however, that the
Indemnifying Party shall not be required to pay the fees and
disbursements of more than one counsel for all Indemnified
Parties in any jurisdiction in any single audit,
investigation, action or proceeding. In any audit,
investigation, action or proceeding for which indemnification
is being sought hereunder the Indemnified Party or the
Indemnifying Party, whichever is not assuming the defense of
such action, shall have the
59
right to participate in such matter and to retain its own
counsel at such Party's own expense. The Indemnifying Party
or the Indemnified Party (as the case may be) shall at all
times use reasonable efforts to keep the Indemnifying Party
or the Indemnified Party (as the case may be) reasonably
apprised of the status of the defense of any matter the
defense of which it is maintaining and to cooperate in good
faith with each other with respect to the defense of any such
matter.
(b) No Indemnified Party may settle or compromise any
audit, investigation, action or proceeding or consent to the
entry of any judgment with respect to which indemnification
is being sought hereunder without the prior written consent
of the Indemnifying Party, unless (i) the Indemnifying Party
fails to assume, or is not permitted to assume, and maintain
the defense of such claim pursuant to Section 12.4(a) or (ii)
such settlement, compromise or consent includes an
unconditional release of the Indemnifying Party and its
officers, directors, managers, employees and Affiliates from
all liability arising out of such claim. An Indemnifying
Party may not, without the prior written consent of the
Indemnified Party, settle or compromise any claim or consent
to the entry of any judgment with respect to which
indemnification is being sought hereunder unless (x) such
settlement, compromise or consent includes an unconditional
release of the Indemnified Party and its officers, directors,
managers, employees and Affiliates from all liability arising
out of such claim, (y) does not contain any admission or
statement suggesting any wrongdoing or liability on behalf of
the Indemnified Party and (z) does not contain any equitable
order, judgment or term that in any manner affects, restrains
or interferes with the business of the Indemnified Party or
any of the Indemnified Party's Affiliates.
(c) In the event an Indemnified Party claims a right to
payment pursuant hereto, such Indemnified Party shall send
written notice of such claim to the appropriate Indemnifying
Party. Such notice shall specify the basis for such claim.
The failure by any Indemnified Party so to notify the
Indemnifying Party shall not relieve the Indemnifying Party
from any liability that it may have to such Indemnified Party
with respect to any claim made pursuant to this Section
12.4(c), it being understood that notices for claims in
respect of a breach of a representation or warranty must be
delivered prior to the expiration of the survival period for
such representation or warranty under Section 12.5. In the
event the Indemnifying Party does not notify the Indemnified
Party within thirty (30) days following its receipt of such
notice that the Indemnifying Party disputes its liability to
the Indemnified Party under this Article XII or the amount
thereof, the claim specified by the Indemnified Party in such
notice shall be conclusively deemed a liability of the
Indemnifying Party under this Article XII, and the
Indemnifying Party shall pay the amount of such liability to
the Indemnified Party on demand or, in the case of any notice
in which the amount of the claim (or any portion of the
claim) is estimated, on such later date when the amount of
such claim (or such portion of such claim) becomes finally
determined. In the event the Indemnifying Party has timely
disputed its liability with respect to such claim as provided
above, as promptly as possible, such Indemnified Party and
the appropriate Indemnifying Party shall establish the merits
and amount of such claim (by mutual agreement, litigation,
arbitration or otherwise) and, within five (5) Business Days
following the final determination of the merits and amount
60
of such claim, the Indemnifying Party shall pay to the
Indemnified Party in immediately available funds in an amount
equal to such claim as determined hereunder.
(d) The Parties agree that the Purchaser shall have the
right to exercise the rights of the Company Indemnified
Parties under this Article XII, but any amounts paid in
satisfaction of any Indemnifiable Losses on behalf of the
Company Indemnified Parties shall be paid to the Company.
(e) Any indemnification obligation of the Goldsboro
Parties pursuant to this Article XII shall be satisfied by
the Goldsboro Parties on a joint and several basis.
Section 12.5 Claims Period. The Claims Period hereunder
shall begin on the date hereof and terminate as follows:
(a) (i) with respect to Indemnifiable Losses arising
under Section 12.1(a) with respect to any breach or
inaccuracy of any representation or warranty in Section 4.2
(Authorization), Section 4.3 (Capital Structure), or Section
4.30 (Brokers), the Claims Period shall continue indefinitely
(ii) with respect to Indemnifiable Losses arising under
Section 12.1(a) with respect to any breach or inaccuracy of
any representation or warranty in Section 4.1 (Organization),
Section 4.7(a) (Title to Assets) or Section 5.2(a) (Title to
Assets), the Claims Period shall terminate on the date that
is three (3) years following the Closing Date (iii) with
respect to Indemnifiable Losses arising under Section 12.1(a)
with respect to any breach or inaccuracy of any
representation or warranty in Section 4.15 (Tax Returns;
Taxes), the Claims Period shall terminate on the date that is
sixty (60) days following the termination of the applicable
statute of limitations or, if there is no applicable statute
of limitations, the Claims Period shall terminate on the date
that is five (5) years following the Closing Date (iv) with
respect to Indemnifiable Losses arising under Section 12.1(b),
the Claims Period shall terminate on the date that is two (2)
years following the Closing Date (v) with respect to
Indemnifiable Losses arising under Section 12.1(c), the
Claims Period shall terminate on the date that is five (5)
years following the Closing Date (vi) with respect to
Indemnifiable Losses arising under Section 12.1(d) the Claims
Period shall terminate on the date that is two (2) years
following the Closing Date (vii) with respect to
Indemnifiable Losses arising under Section 12.1(e), the
Claims Period shall continue indefinitely, and (viii) with
respect to all other Indemnifiable Losses arising under
Section 12.1, the Claims Period shall terminate on the date
that is twelve (12) months following the Closing Date;
(b) with respect to Indemnifiable Losses arising under
Section 12.2, the Claims Period shall terminate on the date
that is twelve (12) months following the Closing Date; and
(c) with respect to Goldsboro Losses arising under
Section 12.3, the Claims Period shall continue indefinitely.
Notwithstanding the foregoing, if, prior to the close of
business on the last day of the applicable Claims Period, an
Indemnifying Party shall have been properly notified of a claim
for indemnity hereunder and such claim shall not have been
finally resolved or disposed of at such
61
date, such claim shall continue to survive and shall remain a
basis for indemnity hereunder until such claim is finally
resolved or disposed of in accordance with the terms hereof.
Section 12.6 Liability Limits. Notwithstanding anything
to the contrary set forth herein, no claim shall be made against
any Goldsboro Party for indemnification under Sections 12.1(a),
12.1(c) or 12.2(a) for Indemnifiable Losses unless and until the
aggregate amount of such Indemnifiable Losses exceeds One Million
Dollars ($1,000,000) (the "Indemnity Basket"), in which event the
Purchaser (on behalf of the Company Indemnified Parties) may
claim indemnification for all Indemnifiable Losses only to the
extent such Indemnifiable Losses, in the aggregate, exceed One
Million Dollars ($1,000,000). The total aggregate amount of the
liability of the Goldsboro Parties for Indemnifiable Losses
indemnified under Sections 12.1(a), 12.1(c) and 12.2(a) shall be
limited to Ten Million Dollars ($10,000,000) (the "Indemnity
Cap"). The amount of Indemnifiable Losses otherwise payable to
any Indemnified Party pursuant to this Article XII shall be net
of any insurance proceeds actually received by such Indemnified
Party with respect to such Indemnifiable Losses.
Section 12.7 Exclusive Remedy. The Parties agree that,
excluding (a) any claim for injunctive or other equitable relief,
(b) the rights of the Parties under Section 11.2, or (c) any
claim related to fraud, willful misconduct or bad faith by the
Goldsboro Parties or the Purchaser in connection with the
transactions related to this Agreement, the indemnification
provisions of this Article XII are intended to provide the sole
and exclusive remedy as to all claims either the Goldsboro
Parties, on the one hand, or the Purchaser, on the other hand,
may incur arising from or relating to this Agreement.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
Section 13.1 Notices. All notices, communications and
deliveries required or made hereunder must be made in writing
signed by or on behalf of the Party making the same and shall be
delivered personally or by a national overnight courier service
or by registered or certified mail (return receipt requested)
(with postage and other fees prepaid) as follows:
To the Purchaser: Seaboard Corporation
0000 Xxxx 00xx Xxxxxx
Xxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, General Counsel
with a copy to: King & Spalding LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
To the Goldsboro Parties Xxxxxxx Farms, LLC
(Xxxxxxx): 000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
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Attn: Xxx Xxxxxx
with a copy to: Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
or to such other representative or at such other address of a
Party as such Party may furnish to the other Parties in writing.
Any such notice, communication or delivery shall be deemed given
or made (a) on the date of delivery, if delivered in person, (b)
on the first Business Day following timely delivery to a national
overnight courier service or (c) on the fifth Business Day
following it being mailed by registered or certified mail.
Section 13.2 Assignment; Successors in Interest. No
assignment or transfer by any Party of such Party's rights and
obligations hereunder shall be made except with the prior written
consent of the other Parties; provided that the Purchaser shall,
without the obligation to obtain the prior written consent of
any other Party, be entitled to assign this Agreement or all or
any part of its rights or obligations hereunder to one or more
Affiliates of the Purchaser. This Agreement shall be binding
upon and shall inure to the benefit of the Parties and their
respective successors and permitted assigns, and any reference
to a Party shall also be a reference to the successors and
permitted assigns thereof.
Section 13.3 Captions. The titles, captions and table of
contents contained herein are inserted herein only as a matter of
convenience and for reference and in no way define, limit, extend
or describe the scope of this Agreement or the intent of any
provision hereof.
Section 13.4 Controlling Law; Amendment. This Agreement
shall be governed by and construed and enforced in accordance
with the internal Laws of the State of Delaware without reference
to its choice of law rules. This Agreement may not be amended,
modified or supplemented except by written agreement of the
Parties.
Section 13.5 Consent to Jurisdiction, Etc. Each Party
hereby irrevocably consents and agrees that any Legal Dispute
shall be brought only to the exclusive jurisdiction of the courts
of the State of North Carolina or the federal courts located in
the State of Delaware, and each Party hereby consents to the
jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding that is brought in any
such court has been brought in an inconvenient forum. During the
period a Legal Dispute is pending before a court, all actions,
suits or proceedings with respect to such Legal Dispute or any
other Legal Dispute, including any counterclaim, cross-claim or
interpleader, shall be subject to the exclusive jurisdiction of
such court. Each Party hereby waives, and shall not assert as a
defense in any Legal Dispute, that (a) such Party is not subject
thereto, (b) such action, suit or proceeding may not be brought
or is not maintainable in such court, (c) such Party's property
is exempt or immune from execution, (d) such action, suit or
63
proceeding is brought in an inconvenient forum or (e) the venue
of such action, suit or proceeding is improper. A final judgment
in any action, suit or proceeding described in this Section 13.5
following the expiration of any period permitted for appeal and
subject to any stay during appeal shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any
other manner provided by applicable Laws.
Section 13.6 Severability. Any provision hereof that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by
Law, each Party hereby waives any provision of Law that renders
any such provision prohibited or unenforceable in any respect.
Section 13.7 Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this
Agreement or the terms hereof to produce or account for more than
one of such counterparts.
Section 13.8 Enforcement of Certain Rights. Nothing
expressed or implied herein is intended, or shall be construed,
to confer upon or give any Person other than the Parties, and
their successors or permitted assigns, any right, remedy,
obligation or liability under or by reason of this Agreement, or
result in such Person being deemed a third-party beneficiary
hereof.
Section 13.9 Waiver. Any agreement on the part of a
Party to any extension or waiver of any provision hereof shall be
valid only if set forth in an instrument in writing signed on
behalf of such Party. A waiver by a Party of the performance of
any covenant, agreement, obligation, condition, representation or
warranty shall not be construed as a waiver of any other
covenant, agreement, obligation, condition, representation or
warranty. A waiver by any Party of the performance of any act
shall not constitute a waiver of the performance of any other act
or an identical act required to be performed at a later time.
Section 13.10 Integration. This Agreement and the
documents executed pursuant hereto supersede all negotiations,
agreements and understandings among the Parties with respect to
the subject matter hereof (except for the Confidentiality
Agreement, which the Parties agree will terminate as of the
Closing) and constitute the entire agreement among the Parties
with respect thereto.
Section 13.11 Cooperation Following the Closing. Following
the Closing, each Party shall deliver to the other Parties such
further information and documents and shall execute and deliver
to the other Parties such further instruments and agreements as
any other Party shall reasonably request to consummate or confirm
the transactions provided for herein, to accomplish the purpose
hereof or to assure to any other Party the benefits hereof.
Section 13.12 Transaction Costs. Except as provided above
or as otherwise expressly provided herein, each Party shall pay
its own fees, costs and expenses incurred in connection herewith
and the transactions contemplated hereby, including the fees,
costs and expenses of its financial advisors, accountants and
counsel. Without limiting the foregoing, it is understood that
64
the Goldsboro Parties shall pay the Xxxxxxx Expenses and the
Purchaser shall pay the Seaboard Expenses.
* * * * *
65
IN WITNESS WHEREOF, the Parties have caused this Agreement
to be duly executed, as of the date first above written.
PURCHASER:
SEABOARD CORPORATION
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
GOLDSBORO:
GOLDSBORO MILLING COMPANY
By: /s/ J. Xxxxx Xxxxxxx, Xx.
Name: J. Xxxxx Xxxxxxx, Xx.
Title: Authorized Signatory
By: /s/ J. Xxxxxx Xxxxxxxxx, III
Name: J. Xxxxxx Xxxxxxxxx, III
Title: Authorized Signatory
XXXXXXX:
XXXXXXX FARMS, LLC
By: /s/ J. Xxxxx Xxxxxxx, Xx.
Name: J. Xxxxx Xxxxxxx, Xx.
Title: Authorized Signatory
By: /s/ J. Xxxxxx Xxxxxxxxx, III
Name: J. Xxxxxx Xxxxxxxxx, III
Title: Authorized Signatory
NEWCO:
GM ACQUISITION, LLC
By: /s/ J. Xxxxx Xxxxxxx, Xx.
Name: J. Xxxxx Xxxxxxx, Xx.
Title: Authorized Signatory
By: /s/ J. Xxxxxx Xxxxxxxxx, III
Name: J. Xxxxxx Xxxxxxxxx, III
Title: Authorized Signatory
Signature Page to Purchase Agreement
