FORBEARANCE AND PEACEFUL POSSESSION AGREEMENT
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THIS FORBEARANCE AND PEACEFUL POSSESSION AGREEMENT (this "Agreement"),
dated as of May 29, 2003, by and among Smithfield Foods, Inc. ("Smithfield"),
and PENNEXX Foods, Inc., f/k/a Pinnacle Foods, Inc. ("PENNEXX"), recites and
provides as follows:
RECITALS
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A. Pursuant to that certain Credit Agreement, dated June 27, 2001, by
and between PENNEXX and Smithfield (as it has been amended from time to time,
the "Credit Agreement"), Smithfield agreed to extend, subject to certain
conditions, a $30,000,000 revolving line of credit to PENNEXX.
B. Pursuant to that certain Guaranty Agreement, dated December 31, 2002
(the "Guaranty"), by and between Smithfield and Commerce Commercial Leasing, LLC
(the "Lessor"), Smithfield guaranteed up to an aggregate amount of $12.1 million
of PENNEXX's obligations under certain equipment leases by and between the
Lessor and PENNEXX (collectively, the "Leases") for certain equipment located at
0000 Xxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx (the "Xxxxx Road Facility").
C. In connection with the Credit Agreement, PENNEXX and Smithfield
entered into related security agreements and an open-ended mortgage
(collectively, the "Security Documents," and together with the Credit Agreement,
the "Loan Documents"), pursuant to which PENNEXX granted to Smithfield a blanket
lien and security interest in all of PENNEXX's property, including without
limitation all real and personal property used in connection with the operation,
use or enjoyment of PENNEXX's business, all land and improvements, accounts,
equipment, vehicles, inventory, books and records, office furniture and supplies
and all proceeds from the foregoing (collectively and as more specifically
defined in the Loan Documents, the "Collateral").
D. Numerous Events of Default (as that phrase is defined in the Credit
Agreement) have occurred under the Loan Documents, and all applicable cure
periods, if any, have expired without such Events of Default being cured.
E. By letter dated May 7, 2003, Smithfield notified PENNEXX of the
continuing Events of Default and accelerated and declared immediately due and
payable all of PENNEXX's obligations to Smithfield under the Loan Documents
(collectively, the "Loan Obligations").
F. On or about May 7, 2003, Smithfield demanded that PENNEXX turn over
the Collateral to Smithfield pursuant to the terms of the Loan Documents.
G. Similarly, on May 14, 2003, Smithfield again demanded in writing
that PENNEXX surrender Smithfield's Collateral to Smithfield.
H. Following PENNEXX's failure to comply with Smithfield's demands, on
May 19,
2003, Smithfield commenced an action for replevin of all of the tangible
property constituting Collateral in the United States District Court for the
Eastern District of Pennsylvania (the "District Court"), styled Smithfield
Foods, Inc. v. Pennexx Foods, Inc., Civil Action No. 03-3155 (the "Replevin
Action").
I. In addition to commencing the Replevin Action, on May 19, 2003,
Smithfield commenced an action in the Court of Common Pleas of Philadelphia
County (the "State Court") styled Smithfield Foods, Inc. v. Pennexx Foods, Inc.,
May Term 2003 Action No. 002218 (the "Foreclosure Action"), to gain possession
of certain real property and fixtures underlying the Xxxxx Road Facility
pursuant to the Open-end Mortgage from PENNEXX to Smithfield (the "Mortgage"),
which Mortgage includes a warrant of attorney and confession of judgment.
Accordingly, pursuant to the terms of the Mortgage, on May 19, 2003, the State
Court entered judgment granting possession to Smithfield, subject only to
PENNEXX's right to file a petition seeking relief from the judgment with the
State Court on or before June 18, 2003 pursuant to Pennsylvania Rules of Civil
Procedure 2970, et seq.
J. On May 22, 2003, following an emergency hearing in the Replevin
Action, the District Court entered an Order (the "Order") directing the Clerk of
the District Court to issue a Writ of Seizure directing the United States
Xxxxxxxx to seize all tangible property located at the Xxxxx Road Facility (the
"Writ"), provided that Smithfield post a bond in the amount of $12,510,396.64
(the "Bond").
K. In addition, the Order required that, following seizure, the
Collateral that is subject to the Writ be placed in the possession of Xxxxxx
Xxxxxxxx, the Chief Financial Officer of PENNEXX, subject to PENNEXX's right to
post a counter-bond as set forth in the Order.
L. On May 23, 2003, Smithfield posted the Bond and effected service of
the Writ.
M. On May 28, 2003 the Court agreed to enter an Order extending the
time for payment or posting of a counter-bond and dealing with certain related
matters. A form of Stipulated Order was submitted to the Court for signature on
May 29, 2003.
N. PENNEXX has requested that Smithfield forbear from exercising its
rights and remedies under the Order and the Loan Documents on account of the
Events of Default.
O. Smithfield has agreed to forbear from exercising its rights and
remedies on the terms and conditions in this Agreement.
AGREEMENT
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NOW, THEREFORE, for and in consideration of the promises, mutual
covenants, releases, and agreements herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Defined Terms. Terms herein with an initial capital not required by
standard capitalization rules are defined terms, and each such term not
parenthetically defined herein shall have the meaning assigned to it in the Loan
Documents.
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2. Forbearance. From and after the execution by PENNEXX and delivery to
Smithfield of this Agreement through 11:59 p.m. Eastern Daylight Time on June
18, 2003 (the "Forbearance Period"), and provided that no Default has occurred
under this Agreement during the Forbearance Period, Smithfield shall and hereby
agrees to forbear from exercising any of its rights or remedies under the Order,
the Loan Documents, the Guaranty or applicable law in respect of the existing
defaults or Events of Default under the Credit Agreement.
3. Payment of Loan Obligations, Trade Obligations and Related Amounts.
On or before 3:00 p.m. Eastern Daylight Time on June 9, 2003, PENNEXX shall pay
to Smithfield the sum of $13,019,651.59 (plus (i) $2,340.80 per diem for each
day after the date hereof during May 2003 and (ii) $2,354.64 per diem for each
day of June 2003) which represents (i) the outstanding balance of the Loan
Obligations, including without limitation all principal, accrued interest, and
costs and expenses associated with enforcing Smithfield's rights under the
Credit Agreement (including legal fees, auditor's fees, public sale advertising
fees, the costs of hiring outside security to protect the Collateral, and all
similar expenses) (collectively, "Costs"), (ii) all outstanding amounts PENNEXX
owes to Smithfield or any of Smithfield's subsidiaries or affiliates on account
of meat or related products or inventory delivered to PENNEXX prior to June 2,
2003 (collectively, the "Trade Obligations"), and (iii) the Guaranty Fee payable
by PENNEXX to Smithfield for providing the Guaranty through the period ending
May 31, 2003.
4. Release of Guaranty. No later than June 18, 2003, PENNEXX shall
provide Smithfield with an absolute and irrevocable release and discharge of the
Guaranty in form and substance reasonably acceptable to Smithfield in its sole
discretion.
5. Repossession of the Collateral; Cooperation. Immediately upon the
occurrence of a Default (i) the Forbearance Period shall end, (ii) Smithfield
shall be entitled immediately to exercise all of its rights as a secured party
under the Credit Agreement and applicable law, and (iii) PENNEXX shall grant to
Smithfield and its agents immediate peaceful possession of all of the Collateral
(including, without limitation, the Collateral that is not subject to the Writ).
Simultaneously with Smithfield's repossession of the Collateral, PENNEXX shall
make available to Smithfield such books of account, financial statements,
account receivable listings, inventory reports, and other business and financial
information, whether written or computerized, as Smithfield may reasonably
request. In addition, PENNEXX hereby agrees to take such other and further
actions as may be reasonably requested by Smithfield for the purpose of
liquidating or otherwise realizing value from the Collateral.
6. Defaults. The occurrence of any of the following shall constitute a
"Default" hereunder:
(a) Failure of PENNEXX to pay any amount to Smithfield under the
terms of this Agreement when due and payable, time being of the
essence, including those amounts due and payable pursuant to
Paragraph 3 above;
(b) Failure of PENNEXX to provide the release of the Guaranty
pursuant to Paragraph 4 above, time being of the essence;
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(c) Material breach of any covenant made by PENNEXX hereunder;
(d) Any representation or warranty made by PENNEXX herein proves to
have been materially false or misleading when made;
(e) The occurrence of an Event of Default under the Leases, other
than an Event of Default existing as of the date hereof; or
(f) PENNEXX's commencement of, causing or inducing creditors to
commence, or voluntarily becoming a debtor under any state or
federal insolvency proceeding.
7. No Cure Periods. Notwithstanding any other provision herein or in
the Loan Documents, PENNEXX shall have no period in which to cure a Default
hereunder.
8. Post-Default Waivers. PENNEXX hereby renounces and waives all
notices otherwise required by the Uniform Commercial Code, as enacted in
Virginia and Pennsylvania (the "UCC") or applicable law, including without
limitation the notice of sale pursuant to Section 9-611 of the UCC. PENNEXX
further hereby renounces and waives any requirement of compulsory disposition
under Section 9-620 of the UCC, irrevocably consents to Smithfield's acceptance
of the Collateral (should it decide to do so in its discretion) in full or
partial satisfaction of the Loan Obligations, and renounces and waives any right
to redeem any or all of the Collateral under Section 9-623 of the UCC. Further,
PENNEXX hereby renounces and waives (a) its rights under Pennsylvania state law
to answer, petition or otherwise move the State Court or any other court of
competent jurisdiction to stay, amend, modify or otherwise set aside the
judgment entered in the Foreclosure Action and (b) its rights, if any, to redeem
the property that is the subject of the Foreclosure Action. In the event PENNEXX
becomes a "debtor" in a voluntary or involuntary case under any Chapter of the
United States Bankruptcy Code, 11 U.S.C. xx.xx. 101-1330 (the "Bankruptcy
Code"), PENNEXX hereby irrevocably and absolutely (x) waives the automatic stay
of ss. 362(a) of the Bankruptcy Code to the extent necessary to permit
Smithfield to enforce its rights and/or remedies hereunder and/or under the Loan
Documents and the Order, (y) consents to, and agrees not to oppose, any and all
motions, adversary proceedings, and/or other proceedings filed or otherwise
commenced by or on behalf of Smithfield for relief from the automatic stay of
ss. 362(a) of the Bankruptcy Code to enforce Smithfield's rights and/or remedies
hereunder and/or under the Loan Documents, and (z) represents and warrants that
"cause" for such relief from the automatic stay under ss. 362(d)(1) of the
Bankruptcy Code exists. Notwithstanding the foregoing, Smithfield acknowledges
and agrees that the foregoing provision is subject to bankruptcy court review
and approval and is not self-executing. Nothing in this Paragraph 8 modifies or
effects Smithfield's obligation to forbear under the terms and conditions of
this Agreement.
9. No Release, Discharge or Termination of Loan Obligations Until
Performance. Notwithstanding any other provision herein, Smithfield has not
released or discharged, and is not hereby releasing or discharging, any or all
of the Loan Obligations or any other obligation of PENNEXX to Smithfield.
Notwithstanding any other provision herein, Smithfield has not released or
terminated, and is not hereby releasing or terminating, in whole or in part, any
or all of the security interests in or liens on the Collateral granted to
Smithfield under
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the Loan Documents. After the payment required by Paragraph 3 hereof has been
made and the release required by Paragraph 4 hereof has been delivered and
accepted by Smithfield, the Loan Obligations shall be deemed released and
discharged, the Replevin Action shall be dismissed with prejudice pursuant to an
order in form and substance reasonably acceptable to both parties, the judgment
entered by confession against PENNEXX in the Foreclosure Action shall be marked
"SATISFIED," Smithfield shall execute UCC-3 termination statements, mortgage
satisfaction piece, and such other documents as may be reasonably necessary to
terminate and release its liens and security interests with respect to the
Collateral, and Smithfield shall execute a release in favor of PENNEXX in the
form of Exhibit "A" attached hereto.
10. General Release of Smithfield. Except for Smithfield's obligations
under this Agreement, PENNEXX, individually and on behalf of its stockholders
and affiliates in their respective capacities as such, hereby irrevocably and
absolutely releases, remises, acquits, and discharges Smithfield and each of its
current and former officers, directors, employees, shareholders, affiliates,
subsidiaries, parent corporations, attorneys, agents, affiliates, predecessors,
successors and assigns, from and of any and all claims, causes of action,
actions, liabilities, damages, losses, expenses, costs and demands, of any kind
or nature whatsoever, absolute or contingent, matured or unmatured, liquidated
or unliquidated, now known or subsequently discovered, arising prior to the date
hereof or in any way relating to actions, omissions or events occurring or
failing to occur prior to the date hereof, specifically including without
limitation (i) all claims and causes of action, if any, arising out of or in any
way relating to the Loan Documents, the Leases, the Guaranty, this Agreement, or
any course of conduct, course of dealing, statements (oral or written) or
actions of Smithfield in interest in connection with the Loan Documents, the
Leases, the Guaranty, or this Agreement, (ii) all claims or causes of actions
that were or could have been asserted in the Replevin Action, and (iii) all
claims and causes of action asserted in the brief filed by PENNEXX in the
Replevin Action on May 27, 2003. PENNEXX further hereby irrevocably and
absolutely releases, remises, acquits and discharges any and all third parties
that are liable (in tort, contract or otherwise) with Smithfield to PENNEXX on
or with respect to any of the claims, causes of action, actions, liabilities,
damages, losses, expenses, costs or demands released in the preceding sentence
of this Paragraph 10.
11. Representations and Warranties by Both Parties. Each of the parties
hereto hereby represents and warrants that each of the following statements is
true, accurate and complete as to such party as of the date hereof:
(a) Such party has carefully read and fully understood all of the
terms and conditions of this Agreement;
(b) Such party has consulted with, or had a full and fair opportunity
to consult with, an attorney regarding the terms and conditions
of this Agreement;
(c) Such party has had a full and fair opportunity to participate in
the drafting of this Agreement;
(d) Such party is freely, voluntarily, knowingly and intelligently
entering into this
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Agreement;
(e) In entering into this Agreement, such party has not relied upon
any representation, warranty, covenant or agreement not expressly
set forth herein;
(f) This Agreement has been duly authorized and validly executed and
delivered by such party and constitutes each such party's legal,
valid and binding obligation, enforceable in accordance with its
terms;
(g) Such party is duly organized, validly existing and in good
standing under the laws of its state of incorporation and has the
full power and legal authority to execute this Agreement,
consummate the transactions contemplated hereby, and perform its
obligations hereunder; and
(h) Such party is not subject to any restriction, agreement or law,
order, writ, injunction, decree, rule or regulation of any court,
administrative agency or other governmental authority that, with
or without the giving of notice, the passage of time or both,
would prohibit, contravene, be violated by, or be inconsistent
with the execution, delivery and performance by such parties of
this Agreement and the consummation of the transaction effected
hereby or contemplated herein.
12. Representations and Warranties by PENNEXX. PENNEXX hereby
represents and warrants that each of the following statements is true, accurate
and complete as of the date hereof:
(a) Each of the recitals to this Agreement is true, accurate and
complete as of the date hereof;
(b) Except for the liens and security interests granted to Smithfield
under the Credit Agreement and any Permitted Encumbrances (as
defined in the Credit Agreement), the Collateral is free and
clear of all liens, charges, claims and other encumbrances;
(c) The outstanding principal balance owed by PENNEXX under the
Credit Agreement is $11,623,303.19;
(d) Accrued and unpaid interest owed by PENNEXX under the Credit
Agreement equals $64,008.88 and continues to accrue in the amount
of $2,340.80 per day;
(e) Accrued and unpaid Trade Obligations owed by PENNEXX equal
$652,980.72;
(f) Costs owed by PENNEXX under the Credit Agreement equal
$580,565.18;
(g) PENNEXX does not currently intend or expect to become a "debtor"
in a voluntary or involuntary case under any Chapter of the
Bankruptcy Code;
(h) The liens and security interests granted to Smithfield under the
Credit Agreement
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are valid, enforceable and not subject to any defense; and
(i) All of PENNEXX's obligations under the Leases are current.
13. Smithfield Voting and Corporate Covenants. Provided that no Default
has occurred hereunder, Smithfield shall and hereby agrees to:
(a) (i) Execute and deliver to the Escrow Agent (as defined below), a
proxy in the form of Exhibit "B" attached hereto not later than
5:00 p.m. Eastern Daylight Time on May 30, 2003 to be held in
escrow, in accordance with this Paragraph 13(a), pending full and
complete performance by PENNEXX of its obligations under this
Agreement, whereupon such proxy shall be immediately provided to
PENNEXX ;
(ii) Xxxxxx Xxxxx, a partner of Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll, LLP, is serving as the escrow agent ("Escrow Agent")
holding the proxy pursuant to this Agreement solely as an
accommodation to and at the request and with the consent of the
parties. Smithfield hereby agrees that it will not object to
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP's continuing to represent
PENNEXX because of its partner's holding such proxy or the
delivery thereof pursuant to the terms of this Agreement. The
parties agree that Escrow Agent may, in his discretion, withdraw
in the role of the agent holding the proxy and be replaced by a
corporate trust department. The parties shall and hereby agree to
indemnify and hold Escrow Agent and Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll, LLP, and each of its other partners and all of its
associates, severally but not jointly, harmless from, against,
and in respect of any claim, debt, demand, suit, liability,
damage, assessment, judgment or sum whatsoever resulting from the
performance of his or its duties hereunder, provided that such
duties were carried out in good faith. The foregoing
indemnification shall include, without limitation, any amounts
incurred in investigating or defending against any claim
including the reasonable attorneys fees incurred in connection
therewith. Escrow Agent shall deliver the proxy to PENNEXX only
upon the receipt by him of a letter of instructions from
Smithfield to do so. Smithfield shall and hereby agrees, promptly
upon the satisfaction of all of PENNEXX's obligations under this
Agreement to provide such a letter of instructions to Escrow
Agent signed by its President and Chief Operating Officer. If
Smithfield fails to do so, PENNEXX shall be entitled to obtain a
decree of specific performance from a court of competent
jurisdiction. The duties of Escrow Agent hereunder shall be
entirely administrative and not discretionary. Escrow Agent shall
be obligated to act only in accordance with written instructions
received by him as provided in this Agreement, except that Escrow
Agent shall comply with any final and unappealable order,
judgment or decree of any court of competent jurisdiction or the
order of any arbitration in any binding arbitration panel between
the parties and shall not be liable as a result of its compliance
with such order, judgment or decree.
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(iii) Escrow Agent may rely absolutely upon the genuineness and
authorization of the signature or purported signature of any
party upon any instruction, notice, release, receipt or other
document delivered to it pursuant to this Agreement. The parties
agree that Escrow Agent shall not be liable for any damages or
other payments pursuant to any suit, claim or cause of action
that may be commenced relating to the subject matter hereof.
(iv) If any dispute or difference arises between Escrow Agent and
any other parties hereto, or if any conflicting demand shall be
made upon Escrow Agent, Escrow Agent shall not be required to
determine the same or take any action thereon. Rather, Escrow
Agent may await settlement of the controversy by appropriate
legal proceedings; or Escrow Agent may, by written notice to the
parties hereto, require the parties to enter binding arbitration
or litigation to determine to whom the proxy held under this
Agreement shall be delivered; or Escrow Agent may file suit in
interpleader with the proper court in Philadelphia County,
Pennsylvania for the purpose of having the respective rights of
the parties adjudicated. Escrow Agent, upon initiation of such
suit, may deposit the proxy with the court and, upon giving
notice thereof to the parties hereto, Escrow Agent shall be fully
released and discharged from all further obligations hereunder
with respect to the proxy held under this Agreement. Any
out-of-pocket costs associated with any action taken by the
Escrow Agent shall be borne evenly by the parties to this
Agreement and the indemnification set forth above shall include
such costs as well.
(b) (i) Be present in person or by proxy at a meeting of the
shareholders of PENNEXX (the "Meeting") (so that all shares of
PENNEXX common stock beneficially owned by Smithfield may be
counted for the purposes of determining the presence of a quorum
at the Meeting) called on or after June 18, 2003 for the purpose
of voting on, and (ii) vote all of its shares of PENNEXX common
stock at the Meeting in favor of, a proposal to merge PENNEXX
with and into a to-be-formed, wholly-owned Delaware subsidiary of
PENNEXX for the purposes of redomestication and to facilitate the
recapitalization of PENNEXX by increasing the number of
authorized shares of capital stock (the "Delaware Merger"), or if
so requested by PENNEXX, to execute a consent in writing to
effect a consent to and adoption and approval of the Delaware
Merger;
(c) Refrain, directly or indirectly, from soliciting proxies with
respect to the common stock of PENNEXX or becoming a
"participant" in a "solicitation" (as such terms are defined in
Regulations 14A promulgated under the Securities Exchange Act of
1934) in opposition to the recommendation of the Board of
Directors of PENNEXX with respect to the proposal for the
Delaware Merger;
(d) Not sell or transfer any shares of its PENNEXX common stock or
exercise any demand registration right under that certain
Registration Rights Agreement between Smithfield and PENNEXX
dated June 27, 2001 for a period of at least one hundred twenty
(120) days;
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(e) Not take any action to prevent or make more difficult the passage
of the proposal for the Delaware Merger.
14. Delaware Merger Is No Default. Notwithstanding anything to the
contrary contained in Section 7.2 of the Credit Agreement or any provision of
any other Loan Document, the Delaware Merger shall not be or be deemed to be a
default or Event of Default under the Loan Documents.
15. Further Assurances. PENNEXX and Smithfield agree to execute and
deliver all such other instruments and take all such other action as either
party may reasonably request from time to time, without payment of further
consideration, in order to effectuate the transactions provided for herein. The
parties shall cooperate fully with each other and with their respective counsel
in connection with any steps required to be taken as part of their respective
obligations under this Agreement.
16. Survival. The parties hereto hereby agree that the provisions of
this Agreement, including without limitation the representations, warranties,
covenants and releases made herein, shall survive the execution of this
Agreement and the performance by the parties of their respective obligations
under this Agreement.
17. Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the Commonwealth of Virginia,
notwithstanding its conflict of laws principles or any other rule, regulation or
principle that would result in the application of any other state's law.
18. Jurisdiction and Venue. Each of the parties hereto hereby agrees
that all actions, suits or other proceedings arising out of or relating in any
way to this Agreement shall be brought only in the District Court or, failing
the District Court's willingness or ability to exercise jurisdiction, the state
or federal courts located in Richmond, Virginia. Each of the parties hereto
hereby knowingly, voluntarily, intelligently, absolutely and irrevocably waives
and agrees not to assert any objection he, she or it, as the case may be, may
now or hereafter have to the laying of venue of all actions, suits or
proceedings arising out of or relating in any way to this Agreement in the
District Court or the federal and state courts in Richmond, Virginia and
irrevocably submits to the jurisdiction of such courts for such purposes. Each
of the parties hereto hereby knowingly, voluntarily, intelligently, absolutely
and irrevocably waives and agrees not to assert in any such action, suit or
proceeding that he, she or it, as the case may be, is not subject to the
personal jurisdiction of such courts or that the action, suit or proceeding
should be transferred to a different venue under forum non conveniens principles
or statutes embodying such principles.
19. Severability. Any part, provision, representation or warranty of
this Agreement that is prohibited or unenforceable, or is held by a court of
competent jurisdiction to be void or unenforceable, in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining parts, provisions,
representations or warranties herein, 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 applicable law, the parties hereto hereby knowingly, voluntarily and
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intelligently waive any provision of law that prohibits or renders void or
unenforceable any part, provision, representation or warranty hereof.
20. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
all prior and contemporaneous agreements and understandings relating to the
subject matter hereof.
21. Modifications. No part or provision of this Agreement may be
changed, modified, waived, discharged or terminated except by an instrument
executed under oath, sealed and delivered by the party against whom enforcement
of such change, modification, waiver, discharge or termination is sought.
22. Successors and Assigns. This Agreement shall inure to the benefit
of and bind the parties hereto and their respective successors and assigns.
23. WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTELLIGENTLY WAIVES ANY RIGHTS HE, SHE OR IT, AS THE
CASE MAY BE, MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (ORAL OR WRITTEN) OR ACTIONS OF
ANY OF THE PARTIES HERETO IN CONNECTION WITH THIS AGREEMENT. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT.
24. Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and all of which when taken together shall
constitute one and the same instrument.
25. Submission to District Court for Approval. The parties hereto agree
to submit a stipulated order in form and substance reasonably agreeable to the
parties for entry by the District Court approving this Agreement between the
parties as a reasonable resolution of the Replevin Action.
[Signatures Appear on Following Pages; Remainder of This Page
Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under their respective seals as of the date first set forth above.
PENNEXX FOODS, INC.
By: /s/ Xxxxxxx X. Xxxxx [SEAL]
-----------------------------------------
Its: President
-----------------------------------------
SMITHFIELD FOODS, INC.
By: /s/ C. Xxxxx Xxxx [SEAL]
-----------------------------------------
Its: President and Chief Operating Officer
--------------------------------------
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EXHIBIT "A"
RELEASE
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For and in consideration of the sum of $13,019,651.59 in hand paid, and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, SMITHFIELD FOODS, INC. ("Smithfield"), for itself and for
its successors and assigns, jointly and severally (hereinafter, collectively
called "Releasors"), releases, acquits, and forever discharges, and hereby does
release, acquit, and forever discharge PENNEXX FOODS, INC. ("PENNEXX"), and its
successors and assigns and each of its current and former officers, directors,
employees, shareholders, affiliates, subsidiaries, attorneys, agents, and
affiliates, jointly and severally (hereinafter, collectively called
"Releasees"), of and from all actions, causes of action, claims, suits, debts,
dues, accounts, bonds, covenants, contracts, agreements, judgments, damages, and
costs whatsoever in law or in equity including, without intending any limitation
on the generality of the foregoing, any claim concerning, related to, arising
out of, or in any way connected with the Loan Documents, the Leases, the
Guaranty, that certain Forbearance and Peaceful Possession Agreement dated May
29, 2003 (the "Agreement") and all claims or causes of actions that were or
could have been asserted is the Replevin Action, which Releasors, its successors
or assigns, or any of them can, shall, or may have from the beginning of the
world to the date of this Release; provided, however, that this Release does not
affect any right Smithfield has as a shareholder of PENNEXX after the date
hereof. (Each capitalized word used in the preceding sentence which is not
defined in this Release shall have the respective meaning given to it in the
Agreement.)
Subject to the provisions of the preceding sentence, Releasors do
acknowledge final and complete settlement and satisfaction of all claims of
whatever kind, character and description which they or any of them may have
against Releasees for any reason.
It is agreed and understood that the payment of the aforesaid
consideration is in full accord and satisfaction of, and in compromise of, a
disputed claim and that the payment thereof is made for the purpose of
terminating the dispute between Releasors and Releasees.
All agreements and understandings between the parties hereto are
embodied and expressed herein, and the terms of this Release are contractual and
are not mere recitals.
IN WITNESS WHEREOF, intending to be legally bound hereby, Smithfield
has executed this Release this ____ day of ____, 2003.
SMITHFIELD FOODS, INC.
By: _______________________
2
EXHIBIT "B"
IRREVOCABLE PROXY
PENNEXX FOODS, INC.
Smithfield Foods, Inc., being the legal and beneficial owner of the
number of shares of the Common Stock of Pennexx Foods, Inc., a Pennsylvania
corporation (the "Company"), set forth below (the "Shares"), hereby appoints
___________________ the proxy and attorney-in-fact of the undersigned, with full
power of substitution, (i) to attend a meeting of the shareholders of the
Company, whether annual or special, and all adjournments or postponements
thereof, and to vote the Shares in favor of a proposal to merge the Company with
and into a to-be-formed, wholly-owned Delaware subsidiary of the Company (the
"Delaware Merger"), or (ii) to consent in writing on behalf of the undersigned
to effect a consent to and adoption and approval of the Delaware Merger. This
Proxy shall expire sixty days from the execution hereof.
This Proxy is coupled with an interest and shall be irrevocable to the
fullest extent permitted by law.
The undersigned hereby revokes all proxies which it may have previously
executed with respect to the Shares.
IN WITNESS WHEREOF, this Proxy has been executed and delivered as of
this ___ day of ______, 2003.
SMITHFIELD FOODS, INC.
By: ______________________________
Name:
Title:
Number of Shares:
12,510,161 Shares
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