Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Registration of Securities Issued in a 170 804K
Business-Combination Transaction
2: EX-1.1 Placement Agreement 26 97K
3: EX-2.1 Articles of Merger 6 33K
4: EX-3.1.A Certificate of Incorporation 17 70K
5: EX-3.1.B Certificate of Amendment 2 17K
14: EX-3.10 Restated By-Laws 20 80K
6: EX-3.2.A Certificate of Incorporation 2 19K
7: EX-3.2.B Certificate of Correction 1 16K
8: EX-3.4 Articles of Incorporation 3 20K
9: EX-3.5 Certificate of Incorporation 3 19K
10: EX-3.6 Amended and Restated By-Laws 22 88K
11: EX-3.7 Amended and Restated By-Laws 20 84K
12: EX-3.8 Restated By-Laws 23 94K
13: EX-3.9 Restated By-Laws 23 94K
15: EX-4.1.A Indenture 106 411K
16: EX-4.1.B Specimen Certificate 12 47K
17: EX-4.2 Registration Rights Agreement 21 82K
18: EX-4.3.A Credit Agreement 73 278K
19: EX-4.3.B First Amendment to Credit Agreement 15 59K
20: EX-4.3.C Second Amendment to Credit Agreement 8 41K
21: EX-4.3.D Third Amendment to Credit Agreement 5 28K
22: EX-4.3.E Fourth Amendment to Credit Agreement 27 102K
23: EX-4.3.F Fifth Amendment to Credit Agreement 13 55K
24: EX-4.3.G Guaranty Agreement 7 39K
25: EX-5.1 Opinion of Blackwell Sanders Peper Martin LLP 2 20K
26: EX-10.1 1999 Equity Incentive Plan 20 77K
36: EX-10.10 Stock Purchase Agreement 47 184K
37: EX-10.11 Market Hog Contract Grower Agreement 9 44K
27: EX-10.2 Long-Term Incentive Plan 9 32K
28: EX-10.3 Executive Level Severance Plan 13 54K
29: EX-10.4 Vice President Level Severance Plan 13 54K
30: EX-10.5 Special Executive Retirement Plan 16 69K
31: EX-10.6.A Premium Standard Farms Deferred Compensation Plan 17 71K
32: EX-10.6.B Amendment No.1 Psf Deferred Compensation Plan 2 17K
33: EX-10.7 Consulting Agreememt 8 36K
34: EX-10.8 Services Agreement 10 47K
35: EX-10.9 Consulting Agreement 4 22K
38: EX-12.1 Statement Re Computation of Ratio of Earnings 1 17K
39: EX-21.1 Subsidiaries 1 14K
40: EX-23.2 Consent of Arthur Andersen LLP 1 14K
41: EX-23.3 Consent of Kpmg LLP 1 14K
42: EX-25.1 Form T-1 29 98K
43: EX-25.2 Statement of Eligibility and Qualification on T-1 30 100K
44: EX-99.1 Form of Letter 2 22K
45: EX-99.2 Form of Letter of Transmittal 9 42K
46: EX-99.3 Form of Notice of Guaranteed Delivery 4 24K
47: EX-99.4 Form of Instructions 2 20K
48: EX-99.5 Form of Letter to Clients 2± 16K
49: EX-99.6 Guidelines 4± 23K
EXHIBIT 10.10
EXECUTION COPY
STOCK PURCHASE AGREEMENT
DATED AS OF
SEPTEMBER 22, 2000
BY AND AMONG
PREMIUM STANDARD FARMS, INC.
PSF GROUP HOLDINGS, INC.
AND
CONTIGROUP COMPANIES, INC.
TABLE OF CONTENTS
[Download Table]
ARTICLE 1 Purchase; Purchase Price; Closing............................1
1.1 Purchase of Stock............................................1
1.2 Purchase Price...............................................1
1.3 Closing......................................................2
1.4 Access to Records............................................2
ARTICLE 2 Representations and Warranties of Buyer......................2
2.1 Organization and Qualification...............................2
2.2 Capitalization...............................................2
2.3 Authority Relative to this Agreement.........................3
2.4 Securities Act Matters.......................................3
2.5 Parent Financial Statements..................................4
2.6 Undisclosed Liabilities......................................4
ARTICLE 3 Representations and Warranties of the Company................4
3.1 Organization, Qualification and Corporate Power..............5
3.2 Authorization of Transaction.................................5
3.3 Capitalization...............................................6
3.4 Financial Statements.........................................6
3.5 Receivables..................................................6
3.6 Absence of Certain Developments..............................7
3.7 Undisclosed Liabilities......................................8
3.8 Books and Records............................................9
3.9 Taxes........................................................9
3.10 Real Property Leases.........................................9
3.11 Real Property Owned or Under Option.........................10
3.12 Compliance, Utilities and Other Matters.....................11
3.13 Assets......................................................13
3.14 Inventory...................................................14
3.15 Contracts and Commitments...................................15
3.16 Litigation..................................................17
3.17 Compliance with Law.........................................17
3.18 Intellectual Property.......................................18
3.19 Environmental and Land Use Matters..........................18
3.20 Seller Products; Product Liability..........................22
3.21 Securities Act Matters......................................23
3.22 Disclosure..................................................23
ARTICLE 4 Additional Agreements.......................................24
4.1 Employees...................................................24
4.2 Severance Period............................................24
4.3 Warn Act....................................................25
4.4 Employee Benefit Plans......................................25
4.5 Vacation....................................................25
[Download Table]
4.6 Worker's Compensation Claims................................25
4.7 Further Assurances..........................................25
ARTICLE 5 Conditions to Closing.......................................25
5.1 Conditions to Obligations of Each Party to Close............25
5.2 Additional Conditions to the Buyer's Obligations............26
5.3 Additional Conditions to the Seller's Obligations...........27
ARTICLE 6 Survival of Representations; Indemnification................28
6.1 Survival of Representations.................................28
6.2 Indemnification by Seller...................................29
6.3 Notice and Defense of Claims................................30
6.4 Calculation of Covered Liabilities; Insurance Proceeds......32
6.5 Limitation on Indemnification..............................33
6.6 Exclusive Remedy following Closing..........................33
ARTICLE 7 General Provisions..........................................34
7.1 Public Statements...........................................34
7.2 Mediation...................................................34
7.3 Notices.....................................................34
7.4 Interpretation..............................................36
7.5 Amendment...................................................36
7.6 Severability................................................36
7.7 Miscellaneous...............................................36
7.8 Counterparts................................................36
7.9 Cumulative Remedies.........................................36
7.10 Attorneys' Fees.............................................36
7.11 Construction................................................36
7.12 Brokers, etc................................................37
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of September 22, 2000 (this
"AGREEMENT"), by and among Premium Standard Farms, Inc., a Delaware corporation
(the "BUYER"), PSF Group Holdings, Inc., a Delaware corporation (the "PARENT"),
and ContiGroup Companies, Inc., a Delaware corporation (the "SELLER").
Capitalized terms used and not elsewhere defined in this Agreement have the
respective meanings assigned to such terms in Appendix I hereto.
RECITALS
WHEREAS, Seller is engaged in the hog production business in the States
of North Carolina and Georgia d/b/a/ "CAROLINA FARMS" and "SOUTHERN MAID"
(collectively, the "CAROLINA FARMS");
WHEREAS, all of the assets used in connection with the Carolina Farms
are now owned by Premium Standard Farms of North Carolina, Inc., a Delaware
corporation (the "COMPANY");
WHEREAS, Seller owns one thousand (1,000) shares of the Company's
common stock, no par value (the "PURCHASED SHARES"), with such shares
constituting all of the issued and outstanding capital stock of the Company;
WHEREAS, Buyer currently provides services to Seller in managing and
operating the Carolina Farms and has provided such services for several years;
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer the Purchased Shares.
NOW THEREFORE, the parties hereby agree as follows:
ARTICLE 1
Purchase; Purchase Price; Closing
1.1 Purchase of Stock. On the Closing Date, Seller shall sell,
convey, transfer and assign, upon the terms and subject to the conditions set
forth in this Agreement, to Buyer, free and clear of all liens, security
interests, charges, restrictions, encumbrances and claims of every kind, and
Buyer shall purchase from Seller, all but not less than all of the Purchased
Shares. In consideration of the sale of the Purchased Shares to Buyer, Buyer
agrees to pay to Seller the Purchase Price.
1.2 Purchase Price. The aggregate purchase price for the
Purchased Shares shall be THIRTY-TWO MILLION THREE HUNDRED THOUSAND AND NO/100
DOLLARS ($32,300,000) (the "PURCHASE PRICE"), and shall be payable at the
Closing one-half in cash and one-half in common stock of Parent as follows:
1
(a) by the wire transfer of immediately available funds in the
amount of SIXTEEN MILLION ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($16,150,000) into an account designated by Seller;
(b) by the delivery of 9,219 shares of the Class B common
stock, par value $.01 per share, of Parent (the "PARENT COMMON
SHARES").
1.3 Closing. The closing of the transactions contemplated by
this Agreement (the "CLOSING") shall be held, subject to the satisfaction or
waiver by the appropriate parties of the conditions set forth herein, at the
offices of Blackwell Sanders Peper Martin LLP, 2300 Main Street, Suite 1000,
Kansas City, Missouri, at 9 a.m. local time on September 22, 2000, or at such
other place and time as the parties may mutually agree (the "CLOSING DATE").
1.4 Access to Records. After the date hereof, Seller and its
Agents shall have reasonable access during regular business hours to all books,
records, files and documents relating to the Company to enable Seller to prepare
and file tax returns, prepare for litigation or obtain or confirm any
information relating to the Company, in each case subject to Seller's agreement
to maintain the confidentiality of any of the same. Buyer shall maintain all
such books and records in the United States and, for a period of seven years
from the date hereof, and shall not destroy or dispose of any such books and
records without first providing to Seller adequate notice of such intended
destruction or disposal and the reasonable opportunity for Seller, at its
expense, to copy or move any such books or records prior to their destruction or
disposal.
ARTICLE 2
Representations and Warranties of Buyer and Parent
Except as otherwise set forth in written disclosure schedules delivered
to Seller prior to or contemporaneously with the execution hereof (copies of
which are attached hereto), the Buyer and Parent hereby represent and warrant to
the Seller each of the following items 2.1 through 2.6. The representation and
warranties set forth below are limited and/or qualified by and may not be relied
upon by Seller to the extent of: (i) the knowledge of Seller acquired in the
course of its ownership of the capital stock of Parent and its participation in
the management of Buyer and/or Parent, and (ii) the knowledge of any of Seller's
current directors, officers, employees, managers and/or agents who are or were
directors, officers, employees, managers and/or agents of Buyer and/or Parent
and who are or were assigned to or engaged in substantial activities related to
or who performed substantial responsibilities, duties or assignments with
respect to, the management or operation of Buyer and/or Parent.
2.1 Organization and Qualification. Each of the Buyer and
Parent has been duly incorporated and is validly existing as a corporation and
in good standing under the laws of the State of Delaware and has the requisite
corporate power to carry on its business as now conducted.
2.2 Capitalization. Parent's entire authorized capital stock
consists of (a) 250,000 shares of Class A common stock, par value $.01 per share
(the "CLASS A STOCK"), of which 100,000 shares are issued and outstanding, (b)
300,000 shares of Class B common stock,
2
par value $.01 per share (the "CLASS B STOCK"), of which 104,081.64 shares are
issued and outstanding, and (c) 10,000 shares of preferred stock, par value $.01
per share (the "PREFERRED STOCK"), none of which are issued and outstanding. All
of the issued and outstanding shares of Class A Stock and Class B Stock have
been duly authorized and are validly issued, fully paid and nonassessable.
Except as disclosed in Schedule 2.2, there are no outstanding or authorized
options, rights, warrants, calls, convertible securities, rights to subscribe,
conversion rights or other agreements or commitments to which Parent is a party
or which are binding upon Parent providing for the issuance or transfer by
Parent of additional shares of capital stock of Parent and Parent has not
reserved any shares of Common Stock for issuance, nor are there any outstanding
stock appreciation rights, phantom equity or similar rights, agreements,
arrangements or commitments based upon the book value, income or other attribute
of Parent.
2.3 Authority Relative to this Agreement. Each of the Buyer
and Parent has the requisite corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and delivery
of this Agreement by the Buyer and Parent, and the consummation by the Buyer and
Parent of the transactions contemplated hereby, have been duly authorized by the
board of directors of the Buyer and Parent, and no other corporate proceedings
on the part of the Buyer or Parent are necessary to authorize this Agreement and
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Buyer and Parent and constitutes a valid and binding obligation
of each such company, enforceable in accordance with its terms. Except as
disclosed in Schedule 2.3, neither the Buyer nor Parent is subject to or
obligated under any provision of (a) its certificate or articles of
incorporation or bylaws, (b) any contract, (c) any license, franchise or permit
or (d) any law, regulation, order, judgment or decree, which would be breached
or violated by the execution, delivery and performance of this Agreement and the
consummation by it of the transactions contemplated hereby. No authorization,
consent or approval of, or filing with, any public body, court or authority is
necessary on the part of the Buyer or Parent for the consummation by the Buyer
and Parent of the transactions contemplated by this Agreement.
2.4 Securities Act Matters.
(a) Each of the Parent Common Shares to be issued as
contemplated by this Agreement has been duly authorized and, when
issued in accordance with this Agreement, will be validly issued, fully
paid and nonassessable and free of preemptive rights.
(b) Neither Buyer nor Parent (nor any Person acting on their
behalf) has, directly or indirectly, offered any Parent Common Shares
to be issued hereunder for sale to, or solicited any offers to buy any
such shares from, or otherwise approved or negotiated with respect
thereto with, anyone other than Seller, and neither Buyer nor Parent
(nor any Person acting on their behalf) has taken or will take any
action that would cause the offer, issuance or sale of any such shares
hereby to violate the provisions of Section 5 of the Securities Act of
1933, as amended, or any applicable state securities laws and
regulations.
3
2.5 Parent Financial Statements. Seller has previously been
provided true and complete copies of the audited financial statements, including
the notes thereto, of Parent for the period ended March 27, 1999, and the year
ended March 31, 2000 (the "PARENT FINANCIAL STATEMENTS"). The Parent Financial
Statements present fairly, in all material respects, the financial position and
results of operations of Parent as of such dates in accordance with generally
accepted accounting principles ("GAAP") consistently applied throughout the
periods covered thereby.
2.6 Undisclosed Liabilities. Except as disclosed in Schedule
2.6, Parent does not have any material liabilities or obligations (known or
unknown, absolute, accrued or contingent) except: (a) liabilities which are
reflected and reserved against on the Parent Financial Statements in accordance
with GAAP, (b) liabilities incurred in the ordinary course of business and
consistent with past practice since the date of the Parent Financial Statements
(none of which relates to any breach of contract, breach of warranty, tort,
infringement or violation of Law), (c) future performance obligations (none of
which relates to any breach of Contract, breach of warranty, tort, infringement
or violation of Law), (d) liabilities and obligations arising out of or related
to Buyer's acquisition of The Lundy Packing Company and its affiliates and (e)
liabilities and obligations arising out of or related to Buyer's execution of
Fourth and Fifth Amendments to its Credit Agreement with U.S. Bancorp Ag Credit.
ARTICLE 3
Representations and Warranties of Seller
Except as otherwise set forth in written disclosure schedules (the
"SCHEDULES") delivered to Buyer prior to or contemporaneously with the execution
hereof (copies of which are attached hereto), the Seller hereby represents and
warrants to the Buyer each of the following items 3.1 through 3.22, which apply
to and relate solely to the Company and Carolina Farms and not to Seller in
general or other divisions, subsidiaries or affiliates of Seller. The Schedules
are numbered to correspond to the various sections of this Article 3 setting
forth certain exceptions to the representations contained in this Article 3 and
other Schedules attached are numbered to correspond to their respective section
of this Agreement. To the extent any of the representations and warranties set
forth in this Article 3 or elsewhere in this Agreement (to include attached
Schedules) are qualified to "Seller's knowledge," or a similar phrase, such
qualification means and the knowledge of Seller is limited to the knowledge of
Jeffrey L. Bradshaw ("SELLER'S OPERATING MANAGER"), Rudolph W. Kellerman and
David Moore as of the date of this Agreement or the date so indicated in the
representation or warranty. The representation and warranties set forth below
are also limited and/or qualified by and may not be relied upon by Buyer to the
extent of: (i) the knowledge of Buyer acquired in the course of providing
services to Seller and otherwise, (ii) the knowledge of any of Buyer's current
directors, officers, employees, managers and/or agents who were formerly
directors, officers, employees, managers and/or agents of Seller and who were
assigned to or engaged in substantial activities related to or performed
substantial responsibilities, duties or assignments with respect to Carolina
Farms, (iii) knowledge considered in the "public domain" and the general and
other knowledge of Buyer related to the industry in which Carolina Farms
operates and the changing governmental and
4
regulatory oversight and environment relative thereto, including, without
limitation, Buyer's knowledge with respect to lagoons, land application fields,
the spraying and/or other disposal of solid and liquid waste therefrom and the
existing and/or potential liability and/or costs and expenses associated with
and arising from each and all of the foregoing, and (iv) information obtained
from Phase I or greater environmental audits conducted with respect to the Owned
Real Property, the Leased Real Property, the Facilities and/or other
improvements by Buyer or on behalf of Buyer, or for Seller and provided to Buyer
as a disclosure item in connection with this transaction.
As used herein with respect to Seller or the Company, the term
"material" or any variation thereof shall be interpreted in this Agreement by
reference to the assets, operations, business and financial condition of the
Company taken as a whole.
As used herein, the term "substantial" or any variation thereof means
and shall be interpreted in this Agreement to mean significant and/or
considerable; and when used in connection with compliance and/or conformity,
shall be interpreted and applied using a reasonable person standard.
As used in this Agreement, the term "Person" or any variation thereof
means and shall be interpreted in this Agreement to include firms, companies,
associations, general partnerships, limited partnerships, limited liability
companies, trusts, business trusts, corporations and legal entities, including
public and quasi-public bodies, as well as individuals.
3.1 Organization, Qualification and Corporate Power. Each of
the Company and the Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company is duly
qualified to do business as a foreign corporation and in good standing in the
jurisdictions specified in Schedule 3.1, which are all the jurisdictions where a
failure to be so qualified or licensed would have a material adverse effect on
the Carolina Farms. The Company has full corporate power and authority and,
except as provided in Schedules attached hereto or otherwise in this Agreement,
all material authorizations, licenses and permits necessary to carry on the
business of the Carolina Farms and to own and use the properties owned and used
by it in connection with the same as such business is now being conducted and as
such properties are now being used.
3.2 Authorization of Transaction. The execution, delivery and
performance of this Agreement and the transactions contemplated by this
Agreement have been duly authorized by the board of directors of the Seller. No
other corporate approval on the part of the Seller or the Company is necessary
to authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby. The Seller has full corporate power and
authority to enter into this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of the
Seller enforceable in accordance with its terms and conditions. Except as
disclosed in Schedule 3.2, other Schedules or elsewhere in this Agreement,
neither the execution and the delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) conflict in a material manner
with, result in a breach of, constitute a default under, result in the
acceleration of, or require the payment of any
5
amounts under, or create in any party the right to accelerate, terminate, modify
or cancel (A) any written restriction, lien, encumbrance, indenture, contract,
lease, sublease, agreement or mortgage for borrowed money, instrument of
indebtedness or other obligation or liability to which Seller or the Company is
a party or by which it is bound or to which any of its assets is subject (or
result in the creation of any lien or encumbrance upon any of the Purchased
Shares or the Company's assets) or (B) any provision of the certificate of
incorporation or bylaws or other organizational documents of Seller or the
Company, or (ii) violate any Law to which Seller or the Company is subject, the
violation of which would adversely affect Buyer, the Company and/or the
transactions contemplated by this Agreement. No notice to, filing with or
authorization, consent or approval of, any public body, court or authority is
necessary by the Seller for the consummation by the Seller of the transactions
contemplated by this Agreement.
3.3 Capitalization. The Company's entire authorized capital
stock consists of 5,000 shares of common stock, no par value, of which 1,000
shares are issued and outstanding. No shares of capital stock of the Company are
held in treasury by the Company. Seller owns beneficially and of record all of
the outstanding shares of capital stock of the Company and such capital stock is
owned free and clear of all liens, security interests, charges, voting trusts,
restrictions, encumbrances and claims of every kind. All of the issued and
outstanding shares of the capital stock of the Company have been duly authorized
and validly issued, are fully paid and nonassessable and were offered, issued,
sold and delivered by the Company in compliance with all applicable state and
federal laws concerning the issuance of securities. There are no outstanding or
authorized options, rights, warrants, calls, convertible securities, rights to
subscribe, conversion rights or other agreements or commitments to which the
Company is a party or which are binding upon the Company providing for the
issuance or transfer by the Company of additional shares of capital stock of the
Company and the Company has not reserved any shares of Common Stock for
issuance, nor are there any outstanding stock appreciation rights, phantom
equity or similar rights, agreements, arrangements or commitments based upon the
book value, income or other attribute of the Company.
3.4 Financial Statements. Schedule 3.4 contains the unaudited
pro forma balance sheet of the Carolina Farms dated as of August 26, 2000 (the
"PRO FORMA BALANCE SHEET") and the related unaudited statement of income for the
five months then ended (the "FINANCIAL STATEMENTS"). The Financial Statements
have been delivered to Buyer and fairly present the financial position and
results of operations of the Carolina Farms as of such date and unless otherwise
indicated thereon or in a separate management letter accompanying the Financial
Statements, the same are substantially in accordance with generally accepted
accounting principles consistently applied for the period covered thereby,
subject to normal year-end adjustments and the absence of footnotes. August 26,
2000 is sometimes referred to herein as the "BALANCE SHEET DATE."
3.5 Receivables. All accounts and notes receivable reflected
on the Pro Forma Balance Sheet, and all of the Company's accounts and notes
receivable existing as of the Closing Date, unless otherwise indicated thereon
or in a separate management letter (a) have arisen in the ordinary course of
business of Carolina Farms and the Company, (b) are subject only to a reserve
for bad debts computed substantially in accordance with generally accepted
accounting principles consistently applied and reasonably estimated to reflect
the probable results of
6
collection and (c) have been collected or, subject to such reserve and to
Seller's knowledge, recognizing Seller can not predict the future collectibility
of any such accounts and/or notes receivables, should be collectible in the
ordinary course of business of the Company in the aggregate recorded amounts
thereof in accordance with their terms. Schedule 3.5 lists any obligor which
together with all of its affiliates owed accounts and notes receivable reflected
on the Pro Forma Balance Sheet in an aggregate amount of $50,000 or more.
3.6 Absence of Certain Developments. Except as disclosed on
Schedule 3.6, on other Schedules or elsewhere in this Agreement, since the
Balance Sheet Date, with respect to the Company and Carolina Farms and not
Seller's business generally or other parts of Seller's business, to the Seller's
knowledge, there has not been, unless indicated below or on Schedules attached
to this Agreement or shown in any update of the Financial Statements delivered
to Buyer by Seller:
(a) any material adverse change in the condition of the
assets, liabilities, financial condition, operations or current
business of the Company and Carolina Farms, except for changes
expressly contemplated by this Agreement;
(b) any sale, assignment or transfer of any of the Assets of
the Company or Carolina Farms with a value of over $50,000 per asset,
other than routine sales of inventory in the ordinary course of
business;
(c) any cancellation or compromise of any material
indebtedness by, or waiver or compromise of any right of material value
to, the Company and Carolina Farms, whether or not in the ordinary
course of business;
(d) any acceleration, termination, amendment, modification or
cancellation or threat thereof by any party to any contract, lease,
license or other agreement or instrument to which Seller or the Company
is a party or by which it is bound so as to materially and adversely
affect the properties, assets, liabilities or business of the Company
and Carolina Farms;
(e) any capital expenditure or the execution of any lease or
any incurring of liability therefor by Seller or the Company, in both
instances requiring payments by the Company or Carolina Farms in excess
of $10,000 per month per incurrence or $50,000 per month in the
aggregate;
(f) any material delay in payment of or failure to pay any
material obligation of the Company or Carolina Farms, other than in the
ordinary course of business consistent with past practice;
(g) any failure to operate the business of the Company or
Carolina Farms in the ordinary course so as to use reasonable efforts
to preserve the material aspects of the business intact and to preserve
for Buyer the goodwill of the Company's and Carolina Farms' material
suppliers, customers and others having business relations with such
entity;
7
(h) any change in material accounting methods or practices by
the Company or Carolina Farms affecting its assets, liabilities or
business except as reflected on the Financial Statements or in a
separate management letter;
(i) any damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting the properties, business
or prospects of the Company or Carolina Farms;
(j) any mortgage, pledge or other encumbrance of any asset of
the Company or Carolina Farms, other than mortgages, pledges or other
encumbrances incurred in connection with credit facilities entered into
in the ordinary course of business, liens for current property taxes
not yet due and payable and mortgages, pledges or other encumbrances
which are to be released as of the Closing Date;
(k) any indebtedness incurred by the Company or Carolina Farms
for borrowed money or any commitment to borrow money entered into by
the Company or Carolina Farms, or any loans or other investments made
or agreed to be made by the Company or Carolina Farms, in both
instances other than in connection with credit facilities (to include,
without limitation, trade payables) entered into in the ordinary course
of business;
(l) any incurrence of liabilities involving in each instance
$100,000 or more except in the ordinary course of business and
consistent with past practice;
(m) any payment, discharge or satisfaction of any material
liability, the effect of which would materially and negatively change
the Financial Statements, other than the payment, discharge or
satisfaction of liabilities in the ordinary course of business and
consistent with past practice; or
(n) any other transaction material to the Company or Carolina
Farms, other than in the ordinary course of business and consistent
with past practice.
3.7 Undisclosed Liabilities. Except as disclosed in Schedule
3.7, to the knowledge of Seller, the Company does not have any material
liabilities or obligations except (a) liabilities which are reflected and
reserved against on the Pro Forma Balance Sheet in accordance with generally
accepted accounting principles, (b) liabilities incurred in the ordinary course
of business and consistent with past practice since the date of the Pro Forma
Balance Sheet (none of which relates to a breach of Contract, breach of
warranty, tort, infringement or violation of Law which, if determined adverse to
the Company, should result in a significant liability to the Company) and (c)
future performance obligations (none of which relates to a breach of Contract,
breach of warranty, tort, infringement or violation of Law which, if determined
adverse to the Company, should result in a significant liability to the Company)
under Contracts described in Schedule 3.15 or which are of the type described in
Schedule 3.15 but which because of the dollar amount or other qualifications are
not required to be listed on Schedule 3.15.
8
3.8 Books and Records. With respect to the Company and
Carolina Farms, the Seller has made and kept books and records and accounts,
which, in reasonable detail, accurately and fairly reflect the material
activities of such entity. With respect to such operations, the Seller has not
engaged in any material transaction, maintained any bank account or used any
corporate funds except for transactions, bank accounts and funds which have been
and are reflected in the normally maintained books and records of such entity.
3.9 Taxes.
(a) As used herein, the term "TAX" means any federal, state,
local or foreign income, gross receipts, profits, franchise,
withholding, payroll, employment, stamp, excise, occupation, sales,
use, transfer, revenue, value added, real or personal property, social
security, retirement, unemployment, license, capital, net worth,
profits or similar tax, charge, fee, levy or other assessment, together
with any interest, penalties or additions in respect therefor whether
computed on a separate, consolidated, unitary, combined or any other
basis.
(b) Except as disclosed in Schedule 3.9, on other Schedules or
otherwise in this Agreement, and excepting ad valorem real and personal
property tax liabilities assumed or required to be paid by Buyer, no
state of facts exists, or upon the Closing, shall exist, that would
constitute grounds for the assessment against Buyer, by reason of
transferee liability or otherwise, of any liability for any Tax of any
sort or any obligation under any tax-sharing, tax allocation or similar
agreement to which Seller or the Company is a party attributable to any
period ending on or before the Closing Date relating to the Carolina
Farms or the transactions contemplated by this Agreement, which Tax
would have been payable by Seller (not Buyer) but for this transaction
and the closing hereof.
3.10 Real Property Leases.
(a) Set forth in Schedule 3.10 is a complete and accurate list
and a brief description of all real property leased or subleased by the
Company (as lessee or sublessee) (the "LEASED REAL PROPERTY"). With
respect to each lease so set forth, and except as otherwise indicated
in Schedule 3.10: (i) the lease has been validly executed and delivered
by Seller or the Company and, to Seller's knowledge, by the other
parties thereto and is in full force and effect; (ii) neither Seller,
the Company nor to Seller's knowledge any other party to the lease, is
in material breach or default, and to Seller's knowledge no event has
occurred which, with notice or lapse of time, would constitute such a
material breach or default and permit termination, modification or
acceleration under the lease; (iii) the consummation of the
transactions under this Agreement, including the assignment of the
lease to the Company, will not cause a termination of the lease; (iv)
to the Seller's knowledge, no party to the lease has repudiated any
material provision thereof; (v) to Seller's knowledge there are no
disputes or oral agreements in effect as to the lease, and there are no
delayed payment programs in effect as to the lease; (vi) all
improvements leased thereunder have been maintained substantially in
accordance with the lease, applicable Laws and normal industry
practice, and such improvements are
9
generally suitable for the purposes for which they are being used and
to Seller's knowledge, neither Seller nor the Company has received any
notice from any governmental authority that any of the buildings and
improvements is in material violation of any applicable Laws; and (vii)
neither Seller nor the Company has assigned, sublet, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest in the
leasehold, except encumbrances, if any, which are to be released on or
before the Closing Date.
(b) To the knowledge of Seller, except as disclosed in
Schedule 3.10, each component of the Leased Real Property is in good
condition, working order and repair, except for maintenance, repairs
and replacements conducted or required in the ordinary course of the
operation of the Leased Real Property, maintenance, repairs and
replacements that do not adversely affect in a material manner the
operation of the Leased Real Property as the same are now operated, and
ordinary wear and tear.
(c) Except as disclosed in Schedule 3.10, to Seller's
knowledge, no Person authorized to act on behalf of Seller or the
Company has entered into any Contract, arrangement or understanding
with respect to the future ownership, development, use, occupancy or
operation of the Leased Real Property which (i) would be binding on the
Company, and (ii) would have a material, adverse effect on the Company,
the leased property and/or its future ownership, development, use or
operation thereof by Buyer, other than options, rights of first refusal
or other similar arrangements in favor of the Seller under the leases
and subleases relating to the Leased Real Property, copies of which
have been previously delivered to the Buyer.
(d) neither Seller nor the Company has received notice of any
pending condemnation or eminent domain proceedings that affect in a
material manner the Leased Real Property or, to the Seller's knowledge,
there are no threatened or contemplated condemnation or eminent domain
proceedings that affect in a material manner the Leased Real Property,
and neither Seller nor the Company has received any notice, oral or
written, of the intention of any governmental entity or other Person to
take or use all or any material part thereof under the power of eminent
domain.
3.11 Real Property Owned or Under Option. Schedule 3.11 lists
and describes in reasonable detail and contains a legal description of all real
property owned by the Company (the "OWNED REAL PROPERTY"). With respect to each
parcel of real property listed in Schedule 3.11, except as otherwise indicated
in Schedule 3.11 and in the special exceptions to title set forth on title
insurance commitments for each of the Owned Real Property, the documents noted
in such title commitments and surveys of each of the Owned Real Property
(collectively, the "PERMITTED OWNED REAL PROPERTY ENCUMBRANCES"), copies of
which are attached and/or have been delivered to Buyer:
(a) the Company has good and marketable fee simple title to
the Owned Real Property, free and clear of all mortgages, pledges,
security interests, encumbrances, covenants charges or other liens,
easements and other restrictions, other than installments
10
of real property taxes and special assessments not yet delinquent or
which are to be assumed by Buyer at Closing;
(b) neither Seller nor the Company has received any notice of
pending condemnation or eminent domain proceedings that affect in a
material manner the Owned Real Property or, to the Seller's knowledge,
there are no threatened or contemplated condemnation or eminent domain
proceedings that affect in a material manner the Owned Real Property,
and neither Seller nor the Company has received any notice, oral or
written, of the intention of any governmental entity or other Person to
take or use all or any material part thereof under the power of eminent
domain;
(c) there are no leases, subleases, licenses, concessions or
other agreements, written or oral, granting to any party or parties the
right of use or occupancy of any portion of the Owned Real Property,
except for possible incidental and temporary use, none of which, if
any, would be binding on the Company following Closing;
(d) there are no outstanding options or rights of first
refusal to purchase any of the Owned Real Property, or any portion
thereof or interest therein;
(e) there are no Persons (other than the Seller) in possession
of any of the Owned Real Property;
(f) each component of the Owned Real Property is in good
operating condition and repair, except for ordinary wear and tear,
maintenance, repairs and replacements conducted or required in the
ordinary course of the operation of the Owned Real Property and
maintenance, repairs and replacements that do not adversely affect in a
material manner the operation of any of the Owned Real Property as the
same are now operated; and
(g) the Leased Real Property described in Schedule 3.11 and
the Owned Real Property comprise all of the real property used by the
Seller and the Company in connection with the Carolina Farms.
3.12 Compliance, Utilities and Other Matters. Except as
disclosed in Schedule 3.12, with respect to the Owned Real Property and the
Leased Real Property (as indicated below), to the Seller's knowledge and except
as shown on or would be revealed by (i) the special exceptions to title set
forth on the title insurance commitments, the documents referenced in such title
commitments and/or the surveys with respect to the Owned Real Property, and (ii)
with respect to the Leased Real Property, if any, the leases themselves:
(a) the buildings and improvements on the Owned Real Property
are located within the boundary lines of the parcels of land as shown
on the surveys and/or described in the deeds with respect to each
(excluding boundary line fences and driveways and utility lines
extending into public rights of way), are not in material violation of
setback requirements known to Seller's Operating Manager and which were
applicable at the time such buildings and improvements were
constructed, to Seller's knowledge are not in violation of zoning laws
and ordinances, the violation of which would or could prohibit
11
the current use of such properties, and do not encroach on any easement
which burdens the land to an extent that they prevent the use of such
easements for their beneficial purposes or could warrant a removal of
the encroachment and the incurrence of a significant expense in
connection therewith;
(b) the Company currently has vehicular access to the Owned
Real Property and the Leased Real Property adequate for their current
uses and to Seller's knowledge, such access will not be terminated upon
consummation of the transactions contemplated by this Agreement;
(c) all buildings and improvements thereon have received all
material approvals of governmental authorities (including licenses and
permits) known to Seller to be reasonably necessary in connection with
the current ownership or operation thereof and to Seller's knowledge,
such buildings and improvements in general have been operated and
maintained in substantial compliance with all material and applicable
laws, rules and regulations; and
(d) all buildings and improvements thereon are supplied with
utilities and other similar services or have available utilities and
other similar services (e.g., on-site wells) reasonably adequate, to
Seller's knowledge, for the present operation of such buildings and
improvements; and
(e) to Seller's knowledge and (i) taking into account the
changing nature of and the vagaries in application and enforcement of
Environmental Laws and Environmental Permits relative to land
application of effluents and lagoons and the numerous variables
affecting land application of effluents and lagoons, all or any of
which variables can change at any time, do frequently change without
advance notice or opportunity to make appropriate adjustments and are
expected to change, and (ii) excepting conditions that may in the
future be caused by "Acts of God," each of the hog production
facilities of Seller and the Company located on Owned Real Property is
situated on farm land or currently has access to farm land (including
land application fields) which should be reasonably sufficient in terms
of size and current soil condition under normal weather conditions
(normal weather conditions does not include hurricanes, tropical storms
or other similar low pressure weather disturbances, tornadoes,
flooding, drought or drought like conditions, earthquakes, variations
in rainfall, temperatures or winds that do not in and of themselves
change the "norm", and any matters deemed "Acts of God") to permit
adequate land application of normal and customary effluents (including
land application spraying) from the hog production operation as now
conducted by Seller and the Company to the extent allowed under all
known, material Environmental Permits and Land Use Approvals (each as
defined below) currently applicable to such operations, as such
Environmental Permits and Land Use Approvals are now applied and
enforced with respect to such operations, and, subject to abnormal
weather conditions as described in the parenthetical above and all of
the assumptions, limitations, qualifications and/or conditions set
forth above, to the Seller's knowledge, there should be reasonably
sufficient lagoon capacity to store all effluents, as such improvements
are currently operated, during periods of normal frequency and duration
12
when land application is not permitted under such Environmental Permits
and Land Use Approvals, as such Environmental Permits and Land Use
Approvals are now applied and enforced with respect to such operations
and assuming no moratorium on land application or other governmental or
regulatory interference or interference by or disruption by some other
Person, whether or not lawful, and assuming such periods have
intervening periods of sufficient length to allow full restoration of
the lagoons to normal levels.
3.13 Assets.
(a) Except as set forth in Schedule 3.13, other Schedules and
elsewhere in this Agreement, the Company has good and marketable title
to the non-inventory tangible personal property assets reflected on the
Pro Forma Balance Sheet (collectively, the "TANGIBLE PERSONAL PROPERTY
ASSETS") and none of the Tangible Personal Property Assets is subject
to any lien, security interest, encumbrance or other adverse claim,
except for liens which in the aggregate are not material in amount, do
not materially detract from the value of the property or assets subject
thereto or interfere with the present use and have not arisen other
than in the ordinary course of business, or which are to be discharged
on or before the Closing Date.
(b) Except as set forth in Schedule 3.13, the Tangible
Personal Property Assets constitute all of the material tangible
personal property assets used or held for use in connection with or
material to the current business operations of Carolina Farms and the
Company. The Tangible Personal Property Assets used in the business of
Carolina Farms and the Company that are owned by any Person other than
the Company are leased or licensed to the Company under current leases
or license arrangements that are valid and with respect to all leases
and licenses of Tangible Personal Property Assets that are material to
the operation of the business of Carolina Farms as now conducted, they
will remain in full force and effect following consummation of the
transactions contemplated hereby, unless otherwise provided in the
lease or license and assuming continued performance thereunder by Buyer
and the Company. To the Seller's knowledge, the Tangible Personal
Property Assets that are material to the operation of the business of
Carolina Farms as now conducted are in all material respects in good
operating condition and repair, taking into account normal wear and
tear and the purposes for which such assets are currently used and
subject to maintenance, repairs and replacements conducted or required
in the ordinary course of the use thereof and maintenance, repairs and
replacements that do not adversely affect in a material manner the use
of such assets.
(c) To Seller's knowledge, and subject to the limitations,
qualifications and conditions set forth elsewhere in this Agreement and
on Schedules attached hereto with respect to such personal property
assets or the real property assets (including, without limitation,
those set forth in Section 3.12(e) above and those at the beginning of
this Article 3), all of which are applicable under this paragraph, and
assuming no abnormal conditions or events, or unusual, unexpected or
unanticipated circumstances, and assuming the enforcement and
application of all Laws, Permits and Approvals, including Environmental
Laws, Permits and Approvals, as the same are now normally and typically
applied to the use and/or operation of such assets, (i) the Tangible
Personal Property
13
Assets that are material to the operation of the business of Carolina
Farms as now conducted are in all material respects reasonably suitable
and adequate for the purposes for which such assets are currently used,
subject, however, to normal wear and tear, maintenance, repairs and
replacements conducted or required in the ordinary course of the use
thereof and maintenance, repairs and replacements that do not adversely
affect in a material manner the use of such assets and (ii) there are
no actual, current and/or presently existing conditions (as opposed to
future conditions, or potential, possible or probable conditions, or
contingent conditions) known to Seller's Operating Manager directly
affecting the Tangible Personal Property Assets and that are material
to the operation of the business of Carolina Farms and the Company as
now conducted, individually or in the aggregate, which should interfere
in any adverse, material respect with the normal use and operation
thereof as currently used or operated, or their adequacy for such use
or operation.
3.14 Inventory.
(a) As used herein, the term "INVENTORY" means all swine
livestock (including hogs, piglets and piglets in gestation), genetic
lines related thereto and any associated biological materials (to the
extent the Company has rights therein), all inventories of swine feed
(including pre-purchased grain and feed ingredients), injectable and
other treatments and similar materials for swine, and any other raw
materials, work-in-process and finished goods, wherever located
(including items in transit) related to swine.
(b) Except as set forth in Schedule 3.14, other Schedules and
elsewhere in this Agreement, the Company has good and marketable title
to the Inventory reflected on the Pro Forma Balance Sheet and none of
such Inventory is subject to any lien, security interest, encumbrance
or other adverse claim, except for liens which in the aggregate are not
material in amount, do not materially detract from the value of the
Inventory subject thereto or interfere with the present use and have
not arisen other than in the ordinary course of business, or which are
to be discharged on or before the Closing Date.
(c) To Seller's knowledge, substantially all of the Inventory,
wherever located (including items in transit), owned by the Company and
used or held for use in connection with the Carolina Farms (i) is
currently usable or saleable in all material respects in the ordinary
course of business as now conducted by Seller and the Company and
taking into account market conditions, useful life of the Inventory and
any other matters customarily affecting the use and sale of Inventory,
(ii) is sufficient but not excessive, in the opinion of Seller's
Operating Manager, in kind or amount for the conduct of the business of
Carolina Farms and the Company as it is presently being conducted,
taking into account market conditions, useful life of the Inventory and
any other matters customarily affecting Inventory levels, (iii) meets,
in all material respects and on average, after taking into account
quality problems that are normal, customary and typical in the
industry, applicable quality control standards of the Seller and the
Company and all published and, to the Seller's knowledge, applicable
governmental quality control standards, if any and (iv) is carried on
the books of the Company at an amount which
14
reflects valuations not in excess of the lower of cost or market
determined substantially in accordance with generally acceptable
accounting principles applied on a consistent basis, unless otherwise
indicated on the books of the Company.
(d) To Seller's knowledge, with respect to livestock
Inventory, unless otherwise indicated on a Schedule 3.14 attached
hereto, (i) breeding females and boars are PIC genetic stock, (ii) the
average sow parity is not greater than 4, (iii) all Seller documented
outbreaks of PRRS, TGE and pseudo-rabies within the past one (1) year
are identified in Schedule 3.14 and (iv) Seller has followed normal and
customary industry standards to ensure that the administration of
medications to the livestock Inventory is in all material respects
substantially in accordance with valid, applicable Federal and state
laws and regulations and no medication has been knowingly and willfully
administered which is not labeled for swine and which use would be in
violation of any valid, applicable Federal or state laws and
regulations.
3.15 Contracts and Commitments.
(a) Except for those contracts set forth in Schedule 3.15,
neither Seller nor the Company is a party to any material written or
oral contract, agreement, commitment, lease, license, instrument,
guaranty, bid or proposal related to the Carolina Farms or the Company
(a "CONTRACT") which is:
(i) a mortgage, indenture, note, installment
obligation or other instrument relating to the borrowing of
money other than trade payables incurred in the ordinary
course of business;
(ii) a guarantee or any other evidence of liability
for any indebtedness of any other Person of any obligation
other than non-material promises or undertakings to or for the
benefit of employees and those incurred in the ordinary course
of the day-to-day operations of the business relating to
non-material matters;
(iii) a letter of credit, bond or other indemnity
(including letters of credit, bonds or other indemnities as to
which the Company is the beneficiary but excluding
endorsements of instruments for collection in the ordinary
course of the operation of such entity);
(iv) a currency or interest rate swap, collar or
hedge agreement;
(v) an offset, countertrade or barter agreement;
(vi) an agreement for the sale or lease by Seller or
the Company to any Person of the Company's assets other than
dispositions of Inventory in the ordinary course of the
operation of its business and dispositions of Tangible
Personal Property Assets no longer useful to its business and
infrequent and
15
incidental disposition of non-material Tangible Personal
Property Assets that occur in the ordinary course of the
operation of its business;
(vii) an agreement requiring the payment by the
Company of more than $50,000 under such agreement in any
12-month period for the purchase or lease of any machinery,
equipment or other capital assets;
(viii) a distributor, representative, broker or
advertising Contract that is not terminable by the Company at
will or by giving notice of 30 days or less, without
liability;
(ix) except as provided in Article IV of this
Agreement, a collective bargaining agreement, employment,
severance or consulting agreement or agreement providing for
severance payments or other additional rights or benefits
(whether or not optional) in the event of the sale or change
in control of Seller or the Company other than non-material
severance payments made by Seller to its employees in the
normal and ordinary course of business upon their termination
of employment;
(x) a joint venture or partnership agreement other
than with Buyer;
(xi) an agreement with any Person to sell, distribute
or otherwise market any products of the Company, including to
government contracts or subcontracts, other than short term
contracts made in the ordinary course of business consistent
with past practice;
(xii) a futures contract, option contract, derivative
contract, or any forward purchase contract in excess of 30
days;
(xiii) an agreement related to the production or use
of breeding stock other than agreements and undertakings made
from time to time by employees of Seller or the Company in the
course of their daily work, which agreements and undertakings
are made for the purpose of dealing with issues and problems
encountered in the ordinary course of business and for which
on-site decisions are typically made;
(xiv) an agreement related to swine management,
grow-out, finishing or feeding of swine or otherwise related
to the production or use of swine livestock other than
agreements and undertakings made from time to time by
employees of Seller in the course of their daily work, which
agreements and undertakings are made for the purpose of
dealing with issues and problems encountered in the ordinary
course of business and for which on-site decisions are
typically made;
(xv) an agreement requiring the payment to the
Company by any other Person of more than $50,000 under such
agreement in any 12-month period for the purchase of goods or
services;
16
(xvi) an agreement requiring the payment by the
Company to any Person of more than $50,000 under such
agreement in any 12-month period for the purchase of goods or
services; or
(xvii) an agreement imposing non-competition or
exclusive dealing obligations on the Company.
(b) The Seller has delivered or made available to the Buyer
correct and complete copies of each written agreement listed in
Schedule 3.15, as amended to date. Each Contract listed in Schedule
3.15 is a valid, binding and enforceable obligation of the Company and,
to Seller's knowledge, the other party or parties thereto, and is in
full force and effect. Except as set forth in Schedule 3.15, (i) to
Seller's knowledge, neither Seller, the Company nor any other party
thereto, is in material breach of any term of any Contract listed in
Schedule 3.15 or has repudiated any term of any such Contract, (ii) to
Seller's knowledge, no event, occurrence or condition exists that, with
the lapse of time, the giving of notice, or both, would become a
material default under any such Contract by Seller, the Company or any
other party thereto, (iii) neither Seller nor the Company has waived or
released any of its material rights under any such Contract, the waiver
or release of which adversely affects, in a significant manner, the
rights and benefits of the Company under such Contract.
3.16 Litigation. Except as set forth in Schedule 3.16, there
is no action (of which Seller has knowledge), order, writ, injunction (of which
Seller has knowledge), judgment or decree outstanding that has a material
adverse effect on the Company or the Carolina Farms or any material claim, suit,
litigation, proceeding, labor dispute, arbitral action, governmental audit or
investigation of which Seller has received notice that could have such an effect
(collectively, "ACTIONS") pending or, to Seller's knowledge, threatened or
anticipated (a) against, related to or affecting the Company or the Carolina
Farms, (b) seeking to delay, limit or enjoin the transactions contemplated by
this Agreement, (c) that involve the risk of criminal liability to Seller, the
Company or their respective officers or directors arising out of the Carolina
Farms, or (d) in which Seller, or the Company is a plaintiff with respect to
matters arising out of the Carolina Farms. Except as set forth in Schedule 3.16,
with respect to the Carolina Farms, neither Seller nor the Company is in default
with respect to or subject to any judgment, order, writ, injunction or decree of
any court or governmental agency of which Seller or the Company has notice, and
there are no unsatisfied judgments against Seller or the Company except as shown
on the Financial Statements or other Schedules attached to this Agreement.
3.17 Compliance with Law. Except as set forth in Schedule
3.17, to Seller's knowledge, with respect to the Carolina Farms:
(a) neither the Seller nor the Company has violated in any
material respect and is in material compliance with all applicable
Laws, and any final, non-appealable judgment, decision, decree or order
of any court or governmental agency, department or authority relating
to the business or operations of Carolina Farms, including, without
limitation, all applicable energy, public utility, zoning, building and
health Laws and all
17
applicable Laws promulgated by the United States Department of
Agriculture and the United States Food and Drug Administration, except
for such violations of Laws as would not reasonably be expected to
materially and adversely affect the material assets, liabilities,
operations, business or financial condition of the Company and Carolina
Farms;
(b) the Company holds all material governmental licenses and
permits (the "PERMITS") reasonably necessary for the operation of
Carolina Farms as currently conducted;
(c) neither Seller nor the Company has received any written
notice to the effect and Seller's Operating Manager has not been
advised that Seller or the Company is not in substantial compliance
with any such Laws, and Seller's Operating Manager has no reason to
anticipate that any of its existing practices or policies are likely to
result in material or substantial violations of any such Laws as now
applied and enforced against Carolina Farms, except for such violations
of Laws as would not reasonably be expected to materially and adversely
affect the assets, liabilities, operations, business or financial
condition of the Company and Carolina Farms; and
(d) the Seller has filed in a timely manner all material
reports, documents and other materials it was required to file (and the
information contained therein was, to Seller's knowledge, substantially
correct and complete in all material respects) under all Laws
(including rules and regulations thereunder) other than filings which
have not had and should not have a material adverse effect on the
assets, liabilities, business, operations or financial condition of the
Company and Carolina Farms.
3.18 Intellectual Property. The Seller makes no representation
and warranties with respect to intellectual property, if any, being transferred
to Buyer under this agreement. The corporate and/or trade names used by Seller
in connection with Carolina Farms have not been protected by Seller.
3.19 Environmental and Land Use Matters.
(a) As used herein, the term "ENVIRONMENTAL LAW" means any
past or present applicable Law and well established principles of
common law affirmed and consistently applied in the State of North
Carolina by the North Carolina Supreme Court (as to the Facilities
located in North Carolina) and affirmed and consistently applied in the
State of Georgia by a similar state court in the State of Georgia (as
to the Facility located in Georgia) with respect to the regulation and
protection of the environment, human health, safety, and natural
resources, including any Law relating to Hazardous Materials, drinking
water, surface water, groundwater, wetlands, landfills, open dumps,
storage tanks, underground storage tanks, solid waste, waste water,
storm water run-off, odors, air emissions, waste emissions, lagoons,
land application areas or wells. Without limiting the generality of the
foregoing, the term shall encompass each of the following statutes and
the regulations duly promulgated thereunder, and any similar applicable
state or local Laws, each as amended, (i) the Comprehensive
Environmental Response, Compensation,
18
and Liability Act of 1980 ("CERCLA"), (ii) the Solid Waste Disposal Act
("SWDA"), (iii) the Hazardous Materials Transportation Act ("HMTA"),
(iv) the Toxic Substances Control Act, (v) the Clean Water Act, (vi)
the Clean Air Act, (vii) the Safe Drinking Water Act, (viii) the
National Environmental Policy Act of 1969, (ix) the Federal
Insecticide, Fungicide and Rodenticide Act, the Resource Conservation
and Recovery Act ("RCRA") and (xi) the provisions of the Occupational
Safety and Health Act of 1970 and their State or local counterparts or
equivalents, all as amended from time to time.
(b) As used herein, the term "FACILITIES" means the Owned Real
Property listed on Schedule 3.19(b), and no other.
(c) As used herein, the term "ENVIRONMENTAL PERMIT" means any
registration, application, filing, certification, notice, final,
non-appealable order, license, permit, approval, consent,
qualification, authorization and/or waiver of any governmental
authority issued under or with respect to an Environmental Law.
(d) As used herein, the term "HAZARDOUS MATERIALS" means each
and every element, compound, chemical mixture, contaminant, pollutant,
materials, waste or other substance that is defined, determined or
identified as hazardous or toxic under any Environmental Law or the
Release of which is regulated or prohibited under any Environmental
Law. Without limiting the generality of the foregoing, the term shall
include (i) "hazardous substances" as defined in the CERCLA, and
regulations promulgated thereunder, (ii) "hazardous waste" as defined
in the SWDA and regulations promulgated thereunder, (iii) "hazardous
materials" as defined in HMTA and regulations duly promulgated
thereunder, (iv) "hazardous substances" and "pollutants" as defined in
the Clean Water Act, and regulations promulgated thereunder, (v) any
pollutant regulated under the Clean Air Act, and regulations
promulgated thereunder, (vi) petroleum and petroleum products and
byproducts, (vi) asbestos and (vii) polychlorinated biphenyls.
(e) As used herein, the term "RELEASE" means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
storing, escaping, leaching, dumping, discarding, burying, abandoning
or disposing into the environment, and shall include both acute and
chronic releases, but shall exclude the escape and/or emission of
nitrogen, ammonia and other gases, nutrients and substances into the
air from or in connection with lagoons, land application fields and/or
any spraying associated with either. For purposes of this Section 3.19,
continued migration shall constitute a Release.
(f) Except as set forth in Schedule 3.19(f), the Seller and
the Company have complied in all material respects with all
Environmental Laws in connection with its ownership, use, maintenance
and operation of the Facilities, except for violations of Environmental
Laws which would not reasonably be expected to materially adversely
affect the business, operations or financial condition of the Carolina
Farms or the Company.
19
(g) Except as set forth in Schedule 3.19(g) and excepting the
disposal of solid and/or liquid waste from its hog operations conducted
at the Facilities to the extent such disposal is substantially in
accordance with the normal and customary business practices of Seller
and the Company for such activities, which practices are known by Buyer
and are recognized by Buyer as being in accordance with current
industry practice, to Seller's knowledge, neither the Seller nor the
Company has any material liability under any Environmental Law with
respect to the Facilities, including any such liability arising with
respect to the Release or proposed Release of any Hazardous Materials,
whether on property owned or controlled by the Seller, the Company or
elsewhere, except for violations of Environmental Laws which would not
reasonably be expected to adversely affect in a material manner the
business, operations or financial condition of the Company and Carolina
Farms;
(h) Except as set forth in Schedule 3.19(h), to Seller's
knowledge, the Company is not required to obtain any material
Environmental Permits to conduct the business of the Carolina Farms as
it is presently being conducted, including those relating to (i) the
Release or threatened Release of Hazardous Materials or (ii) the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, whether by the
Seller, the Company or any third party on its behalf. Schedule 3.19(h)
contains a complete and correct list of all material Environmental
Permits, all of which are in full force and effect and, to the extent
any of such Environmental Permits are not personal to Seller as opposed
to running with the Facilities, all such Environmental Permits will
remain in full force and effect following consummation of the
transactions contemplated hereby. To Seller's knowledge, the Facilities
are in substantial compliance with all Environmental Permits and
Environmental Laws, and neither Seller nor the Company has received any
notice from any governmental authority or any other Person indicating
that the Facilities are not now in compliance or requesting information
that may reasonably result in issuance of notice that the Facilities
are not now in compliance. To Seller's knowledge, Schedule 3.19(h)
further contains a complete and correct list of all periodic or other
reports concerning the Facilities or operations at the Facilities
submitted to any governmental agency by Seller or the Company within
the past one year, including but not limited to NPDES, EPCRA, CERCLA,
hazardous waste, air emissions reports, and any action plans.
(i) To Seller's knowledge, except as set forth in Schedule
3.19(i), no underground storage tanks or underground storage
receptacles for Hazardous Materials are located on the Facilities and
there have been no uncorrected or non-mitigated material releases of
Hazardous Substances in, on, under or from the Facilities. Except as
set forth in Schedule 3.19(i), to Seller's knowledge, and (i) taking
into account the changing nature of and the vagaries in application and
enforcement of Environmental Laws and Environmental Permits relative to
hog operations and the disposal of solid and/or liquid waste from hog
operations, including, without limitation, those relative to land
application of effluents and lagoons, and the numerous variables
affecting hog operations and the disposal of solid and/or liquid waste
from hog operations, all or any of which variables can change at any
time, do frequently change without advance notice or opportunity to
make appropriate adjustments and are expected to change, and (ii)
20
excepting conditions that may in the future be caused by abnormal
weather conditions (e.g., hurricanes, tropical storms or other similar
low pressure weather disturbances, tornadoes, flooding, drought or
drought like conditions, earthquakes and variations in rainfall,
temperatures or winds that do not in and of themselves change the
"norm") and/or "Acts of God," no conditions exist which (i) interfere
with, prevent, or, with the passage of time, could interfere with or
prevent continued compliance in all material respects with any of the
Environmental Permits or any Environmental Law, (ii) may give rise to
any substantial liability of the Company (whether based in contract,
tort, implied or express warranty, criminal or civil statute or
otherwise) under any Environmental Law or (iii) obligate the Company
or, with the passage of time, could cause the Company to be obligated,
to incur substantial cost in connection with the clean up, remediation,
abatement or other restoration to a former condition, by themselves or
jointly with others, of any contaminated surface water, ground water,
soil or any natural resources associated therewith either on the
Facilities or at any property owned by a third party, or any building,
structural or insulation materials located on or in the Facilities that
contain greater than 1% asbestos, and except as provided above, on
Schedules attached hereto and elsewhere in this Agreement, neither
Seller nor the Company has received any notice of, and Seller's
Operating Manager is not otherwise aware of any material conditions
which interfere with or prevent continued material compliance or give
rise to any such material liability or obligation.
(j) Intentionally Deleted.
(k) Neither Seller nor the Company has (i) knowingly released
any person from any claim under any Environmental Law or waived any
rights concerning any violation of Environmental Law or (ii)
contractually indemnified any person for any violation of Environmental
Law related to the Facilities, except as listed on Schedule 3.19(k).
(l) Except as set forth in Schedule 3.19(l), there are no
consent decrees, consent orders, settlement agreements, judgments,
judicial or administrative orders or agreements (other than licenses
and permits) with or liens by any governmental authority,
quasi-governmental entity or other Person relating to any Environmental
Law which regulate, obligate or bind the Company with respect to the
Facilities and which are not generally applicable to all Persons owning
and/or operating properties similar to the Facilities.
(m) To Seller's knowledge, true and correct copies of all
Phase I or greater written environmental reports, audits or assessments
conducted for Seller by independent, unrelated third Persons and
related to the Facilities have been made available to Buyer for copying
and/or inspection.
(n) To Seller's knowledge, except as set forth on Schedule
3.19(n), there are no (i) accumulations of mining spoil, spent
batteries, used tires, used appliances, out-of-service equipment, spent
or outdated fertilizers or chemicals (or containers or packages
therefor) or other accumulations of solid waste discarded at the
Facilities (excluding animal waste in lagoons or sprayed on lands and
fertilizers applied to lands in the
21
ordinary course of business) or (ii) currently operated or formerly
used landfills at the Facilities.
(o) To Seller's knowledge, (i) the Facilities are either
grandfathered or have all applicable material special exceptions,
special use permits, conditional use permits, variances, zoning
permits, certificates of occupancy, consents and approvals ("LAND USE
APPROVALS") as reasonably necessary to own and operate the Facilities
as they are currently being operated, all such Land Use Approvals are
in full force and effect and, to the extent the same are not personal
to Seller and run with the Facilities, Seller does not know of any
reason why such Land Use Approvals should not remain in full force and
effect following consummation of the transactions contemplated hereby,
assuming the continuation of current uses and Buyer's performance
thereunder; (ii) the Facilities are either grandfathered or in
compliance in all material respects with all Land Use Approvals and
zoning and land use laws, rules, regulations, ordinances and judicial
and administrative consents and orders ("LAND USE REQUIREMENTS")
currently applicable to the Facilities as they are currently being
operated and as such Land Use Requirements are now being applied and
enforced in the locales where the Facilities are located; (iii) the
Facilities are being operated substantially in compliance with all
current nutrient management and waste management plans; (iv) with
respect to the Facilities, neither Seller nor the Company has received
any written notice from any Governmental Authority of any (a) material
violation of any Land Use Requirements which has not been remedied, (b)
pending or threatened proceedings or governmental action or (c) process
that seeks to modify the zoning classifications of any of the
Facilities; and (v) subject to the limitations, qualifications and
conditions set forth elsewhere in this Agreement and on Schedules
attached hereto with respect to the Purchased Assets (including,
without limitation, those set forth in Section 3.12(e), 3.13(c),
3.19(i) and those at the beginning of this Article 3), all of which are
applicable under this paragraph, and assuming no abnormal conditions or
events, or unusual, unexpected or unanticipated circumstances, and
assuming the enforcement and application of all Land Use Approvals and
Land Use Requirements as the same are now normally and typically
applied to the use and/or operation of such assets, no current
conditions exist which interfere with, prevent, or, with the passage of
time, will interfere with or prevent continued compliance of the
Facilities with the Land Use Requirements as they now exist or the
operation of the Facilities as currently being operated, including,
without limitation, any non-conforming use designations, other than as
disclosed in Schedule 3.19(o) and any changes in Land Use Approvals
and/or Land Use Requirements.
3.20 Seller Products; Product Liability. Except as set forth
on Schedule 3.20, to Seller's knowledge, there are no binding and final,
non-appealable statements, citations or decisions by any governmental authority
having jurisdiction over Seller's activities with respect to Carolina Farms
stating that any product produced, processed, manufactured, marketed or
distributed at any time by the Seller or the Company in connection with the
Carolina Farms ("SELLER PRODUCTS") is defective or unsafe or fails to meet in
any material respect any final rules and regulations of such governmental
authority.
22
3.21 Securities Act Matters. Seller is an "accredited investor" as
defined under the Securities Act of 1933, as amended (the "SECURITIES ACT").
Seller is acquiring the Parent Common Shares hereunder solely for investment
purposes for its own account as principal and not with a view to resale or
distribution except pursuant to an effective registration statement filed under
the Securities Act or an applicable exemption from such registration. Seller
acknowledges that Parent's offering and sale of Parent Common Shares hereunder
will not be registered under the Securities Act or any other securities laws,
and that accordingly restrictions will apply to the Seller's ability to transfer
or sell such securities, and that an appropriate legend to such effect will be
placed on each stock certificate representing any such shares. Seller
acknowledges that none of the securities may be resold unless their offer and
sale are registered under the Securities Act and applicable state securities
laws, or unless appropriate exemptions from registration are available. Seller
agrees that it will not directly or indirectly offer, transfer, sell, pledge,
hypothecate or otherwise dispose of any Parent Common Shares (or solicit any
offer to buy, purchase or otherwise acquired, or to take a pledge of, any such
shares) except in compliance with the Securities Act and applicable state
securities laws and regulations. Seller acknowledges that it and its
representatives have had an opportunity to examine the financial and business
affairs of Buyer and Parent and an opportunity to ask questions of and receive
answers from management, and that it and its representatives have such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in Buyer and Parent in making
an informed investment decision with respect thereto.
3.22 Disclosure. The representations and warranties and statements of
fact made by the Seller in this Agreement, in the Disclosure Schedule and in
certificates and other written statements or agreements specifically identified
in this Agreement and listed as a certificate or other written statement or
agreement which has been delivered or to be delivered pursuant to this Agreement
or in connection with the transactions contemplated herein are, to Seller's
knowledge, substantially accurate, correct and complete in all material respects
on the date of this Agreement and Seller has no reason to believe that the same
will not be substantially accurate, correct and complete in all material
respects at Closing, except to the extent that the Seller has advised Buyer
otherwise in writing prior to Closing, and will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements and information contained herein or therein not misleading in a
material manner. Notwithstanding anything to the contrary in Article 3, the
representations and warranties and statements of fact relate solely to Carolina
Farms and the Company and with respect to Section 3.19, the Facilities, and
unless otherwise specifically stated (i) exclude activities and matters relating
to or caused by previous owners of or other Persons with respect to any of the
Owned Real Property and/or Leased Real Property, unless known by Seller, (ii)
apply solely to the current operations of Carolina Farms and the Company and the
current use of the Facilities and other improvements and do not apply to and/or
relate to proposed or future events, conditions or circumstances, (iii) exclude
any representations, warranties or statements of fact with respect to proposed
or future governmental laws, rules, regulations, ordinances, permits and/or
licenses and/or a change in the application and enforcement of existing
governmental laws, rules, regulations, ordinances, permits and/or licenses and
(iv) excludes future matters relating to Carolina Farms, the Company, the
Facilities and/or other improvements arising from or resulting from conditions
caused by abnormal weather conditions (e.g., hurricanes, tropical storms or
other
23
similar low pressure weather disturbances, tornadoes, flooding, drought or
drought like conditions, earthquakes and variations in rainfall, temperatures or
winds that do not in and of themselves change the "norm") and/or "Acts of God";
it being understood and agreed that with respect to governmental laws, rules,
regulations, ordinances, permits and/or licenses, the nature of the industry in
which Carolina Farms and the Company operate is constantly changing and under
review and is expected to experience significant changes in the near future, and
that with respect to the other matters referenced and similar matters, the
Facilities and other improvements are located in areas prone to such occurrences
and/or such occurrences occur in the normal course of events.
ARTICLE 4
Additional Agreements
4.1 Employees. Except as set forth in Schedule 4.1, on or before the
Closing Date, the employment by Seller of all employees of Seller at Carolina
Farms shall terminate and except as specifically provided in the Employee
Services Agreement referred to below, such employees shall cease to participate
in any employee benefit plans maintained by or for the benefit of Seller
(provided, that upon such termination of employment, Seller shall fully vest all
such employees with respect to savings plans and pension benefits). On or before
the Closing Date, the Company shall offer comparable employment to all persons
whose employment was so terminated (all such persons who accept the Company's
offer of employment being referred to as the "CAROLINA FARMS EMPLOYEES"). For
purposes of this Section 4.1, "comparable" shall be defined as employment on
substantially the same terms and conditions (including location of employment),
with substantially the same duties and responsibilities, at substantially the
same rate of pay, and with substantially the same fringe benefits as in effect
on the Closing Date while such individuals were employed by Seller. Those
Carolina Farms Employees who accept employment with the Company shall become
employees of the Company effective as of the Closing Date. As soon as
practicable after the Closing Date, Seller and the Company shall execute an
Employee Services Agreement substantially in the form of the agreement attached
as Schedule 4.1(A) whereby Seller will administer the payroll and benefits for
the Carolina Farms Employees through December 31, 2000, subject to reimbursement
by the Company for payments made thereunder and costs and expenses incurred in
connection therewith.
4.2 Severance Period. As soon as practicable after the Closing Date,
but effective as of the Closing and for at least one year thereafter (the
"SEVERANCE PERIOD"), Buyer shall cause the Company to adopt and maintain a
severance plan which provides identical benefits to each Carolina Farms Employee
as the Salaried Severance Plan and Hourly Employee Severance Practices (as
defined on Schedule 4.2); provided, however, that neither Buyer nor the Company
shall be obligated to pay severance benefits to those Carolina Farms Employees
who (i) voluntary terminate employment with the Company during the Severance
Period and (ii) thereafter immediately accept employment with Seller or any of
its Affiliates. From and after the Severance Period, Buyer shall cause the
Company to provide severance benefits to the Carolina Farms Employees consistent
with Buyer's own severance plans and policies. For purposes of computing
severance benefits for the Carolina Farms Employees from and after the Closing
Date, the employment of Carolina Farms Employees with Seller and/or the Company
prior to the
24
Closing Date together with employment with the Company after the Closing Date
shall be aggregated and treated as if it were employment with the Company.
Seller shall reimburse Buyer and the Company for severance benefits paid in
accordance with this Section 4.2 to the extent specified in Schedule 4.2(A).
4.3 Warn Act. Buyer acknowledges that it has not informed Seller of any
planned or contemplated decisions or actions by Buyer that would require the
service of notice under the Warn Act. Buyer agrees that it shall not take any
action which causes the notice provisions of the Warn Act to be applicable to
the transactions contemplated by this Agreement.
4.4 Employee Benefit Plans. Buyer shall cause the Company's employee
benefit plans which are welfare plans (as defined in Section 3(1) of ERISA) to
(i) provide that employment by Seller and/or the Company prior to the Closing
Date shall be treated as employment by the Company after the Closing Date for
purposes of determining eligibility for participation (including waiver of any
pre-existing conditions), and (ii) provide that any expenses incurred by
Carolina Farms Employees during 2000 on or before the Closing Date shall be
taken into account during the plan year of such welfare plans in which the
Closing Date occurs for purposes of satisfying deductible or coinsurance
requirements or satisfying maximum out-of-pocket thresholds to the same extent
as if such expenses had been incurred by such employees after the Closing Date.
4.5 Vacation. Buyer shall cause the Company to honor the Seller's
existing policy and vacation entitlement of each Carolina Farms Employee through
March 31, 2001. Records maintained by the Seller with respect to earned, used
and available vacation for each Carolina Farms Employee shall be provided to
Buyer at Closing. In consideration of Buyer and the Company honoring the
existing vacation policy, Seller shall neither pay Carolina Farms Employees for
earned and unused vacation nor debit employees for used and unearned vacation.
Buyer and the Company assume the obligation for settlement of vacation by
employee in the event of separation from employment from and after Closing.
4.6 Worker's Compensation Claims. Buyer and the Company shall be
responsible and liable for any claim arising under any state worker's
compensation or similar law which is based upon any occurrence on or after the
Closing Date.
4.7 Further Assurances. Each of the parties shall execute such
documents and take such further action as may be reasonably requested to carry
out the provisions of this Agreement and the transactions contemplated herein.
Each party shall use reasonable efforts to fulfill or obtain the fulfillment of
the conditions to Closing set forth in Article 5 hereof.
ARTICLE 5
Conditions to Closing
5.1 Conditions to Obligations of Each Party to Close. The respective
obligations of each party to enter into and complete the Closing shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
25
(a) there shall have been no law, statute, rule or regulation,
domestic or foreign, enacted or promulgated which would make
consummation of the transactions contemplated by this Agreement
illegal; and
(b) No injunction or other order entered by a United States
(state or federal) court of competent jurisdiction shall have been
issued and remain in effect which would prohibit the Buyer or the
Seller from consummating the transactions contemplated hereby.
5.2 Additional Conditions to the Buyer's Obligations. The obligations
of the Buyer to enter into and complete the Closing are subject to the
satisfaction of the following conditions on or before the Closing Date:
(a) The representations and warranties of the Seller contained
in this Agreement , as qualified herein, will be true and correct in
all material respects (provided that any representation and warranty
that is subject to materiality, material adverse effect or similar
qualification shall not be so qualified for determining the existence
of any breach thereof under this provision) as of the date hereof and
at and as of the Closing Date, as though then made and as though the
Closing Date were substituted for the date of this Agreement throughout
such representations and warranties;
(b) The Seller shall have performed each obligation and
agreement and complied with each covenant to be performed and complied
with by it under this Agreement prior to the Closing Date;
(c) All consents by third parties including, without
limitation, any required consents of the landlords under any leases, or
any consents by governmental or regulatory agencies that are reasonably
required for the consummation of the transactions contemplated hereby,
or that are reasonably required in order for the Buyer to own, operate
or control the Carolina Farms will have been obtained and will be, in
all material respects, in full force and effect;
(d) The Seller shall have obtained, at Buyer's cost and
expense, from one or more nationally recognized title insurance
companies reasonably satisfactory to Buyer a fee owner's title
insurance policy, in each case in form and substance reasonably
satisfactory to Buyer, together with endorsements reasonably requested
by Buyer, including, without limitation, "extended coverage," access,
zoning, non-imputation, comprehensive and contiguity endorsements, in
an amount determined by Buyer, insuring Buyer, showing that the Company
has good and marketable fee simple title to the Owned Real Property,
free and clear of all Encumbrances other than Permitted Real Property
Encumbrances. In connection therewith, Seller shall facilitate Buyer's
dealing directly with the title insurance company and shall provide to
the title insurance company such affidavits and indemnifications in
customary form and substance as shall be required by the title
insurance company.
(e) The Buyer shall have received a written opinion of its
financial advisor dated not more than seven days before the Closing
Date, in form and substance satisfactory to
26
Buyer, to the effect that, based upon the information and procedures
specified therein, the Purchase Price for the Carolina Farms is fair to
the Buyer from a financial point of view.
(f) Each director and officer of the Company shall have
submitted his or her resignation effective as of Closing.
(g) The Seller will have delivered to the Buyer the following:
(i) a certificate representing all of the Purchased
Shares, endorsed by the Seller in blank, or with stock
transfer powers executed by the Seller in blank attached;
(ii) a certificate executed on behalf of the Seller
by any of its executive vice presidents, stating that the
conditions set forth in Sections 5.2(a) through 5.2(c) hereof
have been satisfied;
(iii) certified copies of the resolutions duly
adopted by the Seller's board of directors approving the
execution, delivery, and performance of this Agreement;
(iv) a copy of the Company's certificate of
incorporation certified by the Secretary of State of the State
of Delaware;
(v) good standing certificates for the Company from
the jurisdiction of its organization and from every
jurisdiction in which it is required to qualify to do business
as a foreign corporation, dated not earlier than 10 days prior
to the Closing Date;
(vi) copies of all third party and governmental
consents (or other evidence satisfactory to the Buyer) that
Seller or the Company is required to obtain in order to effect
the transactions contemplated by this Agreement; and
(vii) such other documents as the Buyer may
reasonably request in connection with the transactions
contemplated hereby.
5.3 Additional Conditions to the Seller's Obligations. The obligations
of the Seller to enter into and complete the Closing are subject to the
satisfaction of the following conditions on or before the Closing Date;
(a) The representations and warranties of Buyer set forth in
this Agreement, as qualified herein, will be true and correct in all
material respects (provided that any representation and warranty that
is subject to materiality, material adverse effect or similar
qualification shall not be so qualified for determining the existence
of any breach thereof under this provision) as of the date hereof and
at and as of the Closing Date, as though then made and as though the
Closing Date were substituted for the date of this Agreement throughout
such representations and warranties;
27
(b) The Buyer shall have performed each obligation and
agreement and complied with each covenant required to be performed and
complied with by them under this Agreement prior to the Closing Date;
(c) At Closing, the Buyer will have delivered to the Seller
the following:
(i) a duly executed stock certificate representing
the Parent Common Shares and that portion of the purchase
price to be paid in cash;
(ii) a certificate executed on behalf of the Buyer by
its president or any vice president, stating that the
conditions set forth in Sections 5.3(a) and 5.3(b) hereof have
been satisfied;
(iii) certified copies of the resolutions duly
adopted by the Buyer's board of directors approving the
execution, delivery, and performance of this Agreement;
(iv) copies of all third party and governmental or
regulatory consents (or other evidence satisfactory to the
Seller) that the Buyer is required to obtain in order to
effect the transactions contemplated by this Agreement;
(v) such other documents as the Seller may reasonably
request in connection with the transactions contemplated
hereby.
ARTICLE 6
Survival of Representations; Indemnification
6.1 Survival of Representations. Except for the representations and
warranties set forth in (i) Section 3.3 (the "COMPANY CAPITALIZATION
REPRESENTATIONS") and Section 3.19 (the "ENVIRONMENTAL REPRESENTATIONS") with
respect to Seller and (ii) Section 2.2 and 2.5 (the "BUYER CAPITALIZATION
REPRESENTATIONS") with respect to Buyer, the representations and warranties
contained in this Agreement (including the Schedules hereto) and any certificate
or document delivered pursuant hereto shall terminate at Closing or upon
termination of this Agreement pursuant to Article V. All Environmental
Representations and Buyer Capitalization Representations shall survive the
Closing hereunder for a period of only 270 calendar days (the "CLAIMS PERIOD"),
the first day following Closing being the first day of said 270 day period. At
the end of the Claims Period, the Environmental Representations (to include,
without limitation, the Specified Conditions and/or any Asserted Liability or
Environmental Law Violation thereunder or in connection therewith) and the Buyer
Capitalization Representations shall terminate. Upon termination of the
representations and warranties contained in this Agreement (including the
Schedules hereto) and any certificate or document delivered pursuant hereto,
whether such termination occurs at Closing (as provided in the first sentence of
this Section) or at the end of the Claims Period with respect to Environmental
Representations and Buyer Capitalization Representations (as provided in the
third sentence of this Section), no demand, claim, cause of action,
counter-claim, third-party claim, Action, proceeding, writ, summons and/or
process, whether civil or criminal or at law, in equity or otherwise, can or
shall be
28
brought, made, advanced, prosecuted, instituted and/or issued with respect to
any of the representations and warranties contained in this Agreement (including
the Schedules hereto) and/or any certificate or document delivered pursuant
hereto, by or on behalf of any of the parties to this Agreement, or any
combination of them, and/or any other person or combination of persons,
including, without limitation, any successors or assigns of the parties hereto
and/or any of their respective subsidiaries, affiliates, partners, shareholders,
directors, officers, employees, agents, managers, contractors and/or creditors
or other debt holders, against any of the parties to this Agreement, or any
combination of them, including, without limitation, any successors or assigns of
the parties hereto and/or any of their respective subsidiaries, affiliates,
partners, shareholders, directors, officers, employees, agents, managers and/or
contractors; and no person or combination of persons shall be a third-party
beneficiary or other beneficiary, whether direct or indirect, of any of the
representations and warranties contained in this Agreement (including the
Schedules hereto) and/or any certificate or document delivered pursuant hereto.
Notwithstanding the foregoing, if prior to the close of business on the last day
of the Claims Period, an Indemnified 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 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.
6.2 Indemnifications by Seller and by Buyer and Parent.
(a) Subject to the limitations contained in this Article 6,
including, without limitation, the Applicable Capitalization Cap,
Seller will indemnify and hold harmless Buyer, its subsidiaries,
affiliates, partners, directors, officers, employees and agents, and
each of the heirs, executors, successors and assigns of the foregoing
(collectively, the "BUYER INDEMNIFIED PARTIES") from and against, and
pay, advance or reimburse the Buyer Indemnified Parties for, any and
all Covered Liabilities based upon, arising out of or otherwise in
respect of any inaccuracy contained in, omission from or breach of any
of the Company Capitalization Representations.
(b) Subject to the limitations contained in this Article 6,
including, without limitation, the Claims Period and the Applicable
Environmental Cap, Seller will indemnify and hold harmless the Buyer
Indemnified Parties from and against, and pay, advance or reimburse the
Buyer Indemnified Parties for, any and all Covered Liabilities based
upon, arising out of or otherwise in respect of:
(i) any inaccuracy contained in, omission from or
breach of any of the Environmental Representations; or
(ii) any matter or condition identified or described
on Schedule 6.2 attached hereto (the "SPECIFIED CONDITIONS")
(A) concerning which, any governmental entity or other Person
(other than Buyer or its controlled affiliates) has commenced
or threatened to commence a claim, written demand, notice or
order (an "ASSERTED LIABILITY") alleging that the Facilities
are in violation of an Environmental Law (a "ENVIRONMENTAL LAW
VIOLATION") or (B) that is
29
reasonably likely to give rise to an Asserted Liability or
Environmental Law Violation.
(c) Subject to the limitations contained in this Article 6,
including, without limitation the Claims Period and the Applicable
Buyer Cap, Buyer and Parent, jointly and severally, will indemnify and
hold harmless Seller, its subsidiaries, affiliates, partners,
directors, officers, employees and agents, and each of the heirs,
executors, successors and assigns of any of the foregoing
(collectively, the "SELLER INDEMNIFIED PARTIES") from and against, and
pay, advance or reimburse the Seller Indemnified Parties for, any and
all Covered Liabilities based upon, arising out of or otherwise in
respect of any inaccuracy contained in, omission from or breach of any
of the Buyer Capitalization Representations.
(d) The term "COVERED LIABILITIES" used in this Article 6
shall mean losses, liabilities, claims, fines, damages, Actions,
obligations, payments (including those arising out of any demand,
assessment, settlement, judgment or compromise relating to any Action),
costs (including costs of mitigation) and expenses (including interest
and penalties due and payable with respect thereto and reasonable
attorneys' and accountants' fees and any other out-of-pocket expenses
incurred in investigating, preparing, defending, avoiding or settling
any Action or in investigating, preserving or enforcing another party's
obligations hereunder).
(e) The claims for indemnity by Buyer Indemnified Parties
pursuant to this Section 6.2 are referred to as "BUYER CLAIMS" and the
claims for indemnity by Seller Indemnified Parties pursuant to this
Section 6.2 are referred to as "SELLER CLAIMS." The indemnities
provided for in this Section 6.2 are not limited to matters asserted by
third parties against any Indemnified Party, but includes Covered
Liabilities actually incurred or sustained by any Indemnified Party in
the absence of third party claims.
6.3 Notice and Defense of Claims.
(a) Whenever a claim shall arise for indemnification hereunder
(a "CLAIM"), the party seeking indemnification (an "INDEMNIFIED PARTY")
shall give reasonably prompt notice to the party from whom
indemnification is sought (an "INDEMNIFYING PARTY") of such Claim and
the facts, in reasonable detail, constituting the basis for such claim
(a "CLAIM NOTICE"); provided that failure of an Indemnified Party to
give prompt written notice of any Claim shall not release, waive or
otherwise affect an Indemnifying Party's obligations with respect
thereto except to the extent that the Indemnifying Party is adversely
affected in its ability to defend against such Claim or is otherwise
prejudiced thereby.
(b) In the case of a Claim involving the assertion of a claim
by a third party (whether pursuant to an Action or otherwise, a
"THIRD-PARTY CLAIM"), if the Indemnifying Party shall acknowledge in
writing to the Indemnified Party that the Indemnifying Party shall be
obligated to indemnify the Indemnified Party under the terms of its
indemnity hereunder in connection with such Third-Party Claim, then (i)
the Indemnifying Party shall be entitled and, if it so elects, shall be
obligated at its own cost,
30
risk and expense, (A) to take control of the defense and investigation
of such Third-Party Claim and (B) to pursue the defense thereof in good
faith by appropriate actions or proceedings promptly taken or
instituted and diligently pursued, including to employ and engage
attorneys of its own choice reasonably acceptable to the Indemnified
Party to handle and defend the same, and (ii) the Indemnifying Party
shall be entitled (but not obligated), if it so elects, to compromise
or settle such Third-Party Claim, which compromise or settlement shall
be made only with the written consent of the Indemnified Party, such
consent not to be unreasonably withheld. In the event the Indemnifying
Party elects to assume control of the defense and investigation of such
lawsuit or other legal action in accordance with this Section 6.3(b),
the Indemnified Party may, at its own cost and expense, participate in
the investigation, trial and defense of such Third-Party Claim;
provided that, if the named persons to an Action include both the
Indemnifying Party and the Indemnified Party and the Indemnified Party
has been advised in writing by counsel that there may be one or more
legal defenses available to such Indemnified Party that are different
from or additional to those available to the Indemnifying Party, the
Indemnified Party shall be entitled, at the Indemnifying Party's cost,
risk and expense, to separate counsel of its own choosing. If the
Indemnifying Party fails to assume the defense of such Third-Party
Claim or fails to acknowledge to the Indemnified Party that it is
obligated to indemnify the Indemnified Party in accordance with this
Section 6.3(b) within 10 calendar days after receipt of the notice of
such Third Party Claim, the Indemnified Party against which such
Third-Party Claim has been asserted shall (upon delivering notice to
such effect to the indemnifying party) have the right to undertake, at
the Indemnifying Party's cost, risk and expense, the defense,
compromise and settlement of such Third-Party Claim on behalf of and
for the account of the Indemnifying Party if the Indemnifying Party is
held liable therefor; provided that such Third-Party Claim shall not be
compromised or settled without the written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld. In the event
the Indemnifying Party assumes the defense of the Third Party Claim,
the Indemnifying Party shall keep the Indemnified Party reasonably
informed of the progress of any such defense, compromise or settlement,
and in the event the Indemnified Party assumes the defense of the Third
Party Claim, the Indemnified Party shall keep the Indemnifying Party
reasonably informed of the progress of any such defense, compromise or
settlement. If the Indemnifying Party is held liable for the
Third-Party Claim, the Indemnifying Party shall be liable for any
settlement of any Third-Party Claim effected pursuant to and in
accordance with this Section 6.3(b) and for any final judgment (subject
to any right of appeal), and the Indemnifying Party agrees to indemnify
and hold harmless each Indemnified Party from and against any and all
Covered Liabilities by reason of such settlement or judgment.
(c) Any Covered Liabilities for which an Indemnifying Party is
responsible shall, subject to the provisions of Section 6.5 hereof, be
paid directly by the Indemnifying Party. Upon Final Determination (as
defined below) of the amount of a claim for indemnification, the
Indemnifying Party shall pay the amount of such claim within 20 days
after the date of such Final Determination together with interest at
the prime rate of The Chase Manhattan Bank from time to time, from (and
including) the later of (i) the date of delivery of the Claim Notice or
(ii) the date such Covered Liability was paid or
31
incurred, to (and including) the date immediately preceding the date of
payment; provided that no such interest shall be paid if such Claim is
paid to a Third Party.
(d) If the Claim involves a matter other than a Third Party
Claim, the Indemnifying Party shall have thirty (30) days from the date
of receipt of notice of the Claim to object to such Claim by delivery
of a written notice of such objection to such Indemnified Party
specifying in reasonable detail the basis for such objection. Failure
to timely so object shall constitute a final and binding acceptance of
the Claim by the Indemnifying Party, and the Claim shall be paid in
accordance with the further provisions hereof. If an objection is
timely interposed by the Indemnifying Party, then the Indemnified Party
and the Indemnifying Party shall negotiate in good faith for a period
of thirty (30) business days from the date the Indemnified Party
receives such objection prior to commencing any arbitration, formal
legal action, suit or proceeding with respect to such Claim for
indemnification. Upon Final Determination (as defined below) of the
amount of a Claim for indemnification, the Indemnifying Party shall pay
the amount of such Claim within thirty (30) days of the date of such
Final Determination.
(e) A "FINAL DETERMINATION" of a Claim shall be (i) a judgment
of any court determining the validity of a disputed Claim, if no appeal
is pending from such judgment or if the time to appeal therefrom has
elapsed (it being understood that the Indemnified Party shall have no
obligation to appeal); or (ii) an award of any arbitrator or
arbitration panel determining the validity of such disputed Claim, if
the arbitration is binding and there is not pending any motion to set
aside such award or if the time within which to move to set aside such
award has elapsed; or (iii) a written termination of the dispute with
respect to such Claim signed by all of the parties thereto or their
attorneys; or (iv) a written acknowledgment of the Indemnifying Party
that it no longer disputes the validity of such Claim; (v) settlement
of the Claim reached and reduced to writing pursuant to negotiation of
the parties or (vi) such other evidence of final determination of a
disputed Claim as shall be reasonably acceptable to the parties.
6.4 Calculation of Covered Liabilities; Insurance Proceeds. To
the extent that any Buyer Claim or Seller Claim is covered by insurance
held by such Buyer Indemnified Party or Seller Indemnified Party, such
Indemnified Party shall be entitled to indemnification pursuant to
Section 6.2 only with respect to the amount of the Covered Liabilities
that are in excess of the cash proceeds received by such Indemnified
Party pursuant to such insurance. If such Indemnified Party receives
such cash insurance proceeds prior to the time such Claim is paid, then
the amount payable by the Indemnifying Party pursuant to such Claim
shall be reduced by the amount of such proceeds. If such Indemnified
Party receives such cash insurance proceeds after such Claim has been
paid, then upon the receipt by the Indemnified Party of any cash
proceeds pursuant to such insurance up to the amount of Covered
Liabilities incurred by such Indemnified Party with respect to such
Claim, such Indemnified Party shall promptly repay any portion of such
amount which was previously paid by the Indemnifying Party to such
Indemnified Party in satisfaction of such Claim. Buyer and Seller shall
each secure from their respective insurance carriers waiver of
subrogation agreements under which such insurance carriers waive the
right of subrogation against the respective parties hereto.
32
6.5 Limitation on Indemnification.
(a) Notwithstanding anything to the contrary contained in this
Agreement in any of the Schedules attached hereto and/or in any of the
certificates or documents delivered in connection herewith, and except
as provided in Section 6.5(b) and (d), Seller's total obligation and
liability under this Agreement, including, without limitation, its
indemnification obligation and liability under this Article 6, to
either and/or both of the other parties to this Agreement and/or any
successors or assigns of the other parties hereto and/or any of their
respective subsidiaries, affiliates, partners, shareholders, directors,
officers, employees or agents on account of or as a result of any of
the Environmental Representations, including, without limitation, any
Specified Conditions and/or any Asserted Liability or Environmental Law
Violation thereunder or in connection therewith, shall not exceed under
any circumstances, individually or in the aggregate, the sum of ONE
MILLION AND NO/100 DOLLARS ($1,000,000) (the "APPLICABLE ENVIRONMENTAL
CAP").
(b) Notwithstanding anything to the contrary contained in this
Agreement, in any of the Schedules attached hereto and/or in any of the
certificates or documents delivered in connection herewith, and except
as provided in Section 6.5(a) and (d), Seller's total obligation and
liability under this Agreement, including, without limitation, its
indemnification obligation and liability under this Article 6, to
either and/or both of the other parties to this Agreement and/or any
successors or assigns of the other parties hereto and/or any of their
respective subsidiaries, affiliates, partners, shareholders, directors,
officers, employees or agents on account of or as a result of any of
the Company Capitalization Representations shall not exceed under any
circumstances, individually or in the aggregate, the sum of SIXTEEN
MILLION ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($16,150,000)
(the "APPLICABLE CAPITALIZATION CAP").
(c) Notwithstanding anything to the contrary contained in this
Agreement, in any of the Schedules attached hereto and/or in any of the
certificates or documents delivered in connection herewith, Buyer's and
Parent's total obligation and liability under this Agreement,
including, without limitation, its indemnification obligation and
liability under this Article 6, to Seller and/or any successors or
assigns of Seller and/or any of its subsidiaries, affiliates, partners,
shareholders, directors, officers, employees or agents on account of or
as a result of any of the Buyer Capitalization Representations, shall
not exceed under any circumstances, individually or in the aggregate,
the sum of ONE MILLION AND NO/100 DOLLARS ($1,000,000) (the "APPLICABLE
BUYER CAP").
(d) Notwithstanding anything to the contrary contained in this
Agreement, the obligation of Seller to indemnify Buyer pursuant to
Sections 6.2(a), and its liability with respect thereto, shall not be
limited in any way by the Claims Period.
6.6 Exclusive Remedy following Closing. Except for any covenants to be
performed after the Closing ("POST-CLOSING COVENANTS") and actions grounded in
fraud, the parties hereto acknowledge and agree that in the event the Closing
occurs, the indemnification
33
provisions in this Article 6 shall be the exclusive remedy of Buyer and Seller
with respect to the transactions contemplated by this Agreement. With respect to
Post-Closing Covenants and actions grounded in fraud, (i) the right of a party
to be indemnified and held harmless pursuant to the indemnification provisions
in this Agreement, if any, shall be in addition to and cumulative of any other
remedy of such party at law or in equity and (ii) no such party shall, by
exercising any remedy available to it under this Article 6, if any, be deemed to
have elected such remedy exclusively or to have waived any other remedy, whether
at law or in equity, available to it.
ARTICLE 7
General Provisions
7.1 Public Statements. Except as required by applicable law, neither
the Buyer, on the one hand, nor the Seller, on the other hand, shall make any
public announcement or statement with respect to this Agreement without the
approval of the Seller or the Buyer, respectively. Moreover, the parties hereto
agree to consult with each other prior to issuing each public announcement or
statement with respect to this Agreement.
7.2 Mediation. The parties agree to submit any claim, controversy or
dispute arising out of or relating to this Agreement or the transactions
contemplated hereby to non-binding mediation prior to bringing such claim,
controversy or dispute to arbitration or to a court. The mediation shall be
conducted either through an individual mediator or a mediator appointed by a
mediation services organization or body, experienced in the mediation of
disputes of similar type, agreed upon by the parties and, failing such agreement
within a reasonable period of time after either party has notified the other of
its desire to seek mediation of any claim, controversy or dispute (not to exceed
fifteen (15) days) through the American Arbitration Association in accordance
with its rules governing mediation, at a location in Chicago, Illinois chosen by
the party seeking mediation. The costs and expenses of mediation, including
compensation of the mediator, shall be borne by the parties equally. If the
parties are unable to resolve the claim, controversy or dispute within ninety
(90) days after conferring with the mediator, then either party may submit such
claim, controversy or dispute to a court in accordance with the terms of this
Agreement.
7.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
sent by telex, telecopy, facsimile or overnight courier, or mailed by registered
or certified mail (postage prepaid and return receipt requested), to the party
to whom the same is so delivered, sent or mailed at the following addresses (or
at such other address for a party as shall be specified by like notice):
34
(a) if to the Buyer or Parent:
Premium Standard Farms, Inc.
423 West 8th Street
Suite 200
Kansas City, Missouri 64105
Attention: John Meyer
Telecopy: (816) 472-5837
with a copy to:
Jeffrey T. Haughey
Blackwell Sanders Peper Martin LLP
2300 Main Street
Suite 1000
Kansas City, Missouri 64108
Telecopy: (816) 983-8080
(b) if to the Seller:
ContiGroup Companies, Inc.
277 Park Avenue
New York, New York 10172
Attention: Vart Adjemian
Telecopy: (212) 207-5043
with copies to:
William S. Cherry, Jr.
Poyner & Spruill LLP
3600 Glenwood Avenue
Raleigh, North Carolina 27612
Telecopy: (919) 783-1075
and
ContiBeef LLC
5408 Idylwild Trail
Boulder, Colorado 80301
Attention: Suzanne Griffin
Telecopy: (303) 516-5928
Notices delivered personally or by telex, telecopy or facsimile shall be deemed
delivered as of actual receipt, mailed notices shall be deemed delivered three
days after mailing and overnight courier notices shall be deemed delivered one
day after the date of sending.
35
7.4 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.
7.5 Amendment. This Agreement may not be amended except by an
instrument signed by each of the parties hereto.
7.6 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify the Agreement to preserve such party's anticipated
benefits under the Agreement.
7.7 Miscellaneous. This Agreement (together with all other agreements,
documents and instruments referred to herein): (a) constitute the entire
agreement and supersede all other prior agreements and undertakings, both
written and oral, among the parties with respect to the subject matter hereof;
(b) are not intended to confer upon any other Person any rights or remedies
hereunder; (c) shall not be assigned by operation of law or otherwise, except
that the Buyer may assign all or any portion of its rights under this Agreement
(i) to any wholly-owned subsidiary, but no such assignment shall relieve the
Buyer of its obligations hereunder and (ii) by operation of law or otherwise to
any of their respective successors; and (d) shall be governed in all respects,
including validity, interpretation and effect, by the internal laws of the State
of Delaware, without giving effect to the principles of conflict of laws
thereof.
7.8 Counterparts. This Agreement may be executed via facsimile or
otherwise in one or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.
7.9 Cumulative Remedies. All rights and remedies of either Party hereto
are cumulative of each other and of every other right or remedy such Party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
7.10 Attorneys' Fees. If any Party to this Agreement brings an action
to enforce its rights under this Agreement, the prevailing Party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action, which shall be set by the judge and not a jury.
7.11 Construction. The language used in this Agreement shall be deemed
to be the language chosen by the parties to express their mutual intent and no
rule of strict construction shall be applied against any Party. The use of the
word "including" in this Agreement means "including without limitation" and is
intended by the parties to be by way of example rather than limitation.
36
7.12 Brokers, etc. Seller and Buyer each covenant with the other that
no brokers have been involved in this transaction and that no brokerage fee,
finder's fee or other similar fee is due and owing to any person on account of
this transaction. Buyer and Seller each agree to indemnify the other for any
claims made with respect to broker's, finder's or other similar fees owing on
account of this transaction.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
37
IN WITNESS WHEREOF, the Buyer and the Seller have caused this Agreement
to be executed on the date first written above by their respective officers
thereunder duly authorized.
PREMIUM STANDARD FARMS, INC.
By: /s/ Stephen Lightstone
Name: Stephen A. Lightstone
Title: Executive Vice President
PSF GROUP HOLDINGS, INC.
By: /s/ Stephen Lightstone
Name: Stephen A. Lightstone
Title: Executive Vice President
CONTIGROUP COMPANIES, INC.
By: /s/ Mark Baker
Name: Mark R. Baker
Title: Executive Vice President
38
APPENDIX
"Actions" has the meaning assigned to such term in Section 3.16.
"Agreement" has the meaning assigned to such term in the preamble to
this Agreement.
"Asserted Liability" has the meaning assigned to such term in Section
6.2(a)(ii).
"Applicable Buyer Cap" has the meaning assigned to such term in Section
6.5.
"Applicable Capitalization Cap" has the meaning assigned to such term
in Section 6.5.
"Applicable Environmental Cap" has the meaning assigned to such term in
Section 6.5.
"Balance Sheet Date" has the meaning assigned to such term in Section
3.4.
"Benefit Plan" means any employee benefit plan, arrangement, policy or
commitment (whether or not an employee benefit plan within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended), including any employment, consulting or deferred compensation
agreement, executive compensation, bonus, incentive, pension, profit-sharing,
savings, retirement, stock option, stock purchase or severance pay plan, any
life, health, disability or accident insurance plan or any holiday or vacation
practice as to which Seller or any commonly controlled entity has or in the
future could have any direct or indirect, actual or contingent liability.
"Buyer" has the meaning assigned to such term in the preamble to this
Agreement.
"Buyer Capitalization Representations" has the meaning assigned to such
term in Section 6.1.
"Buyer Claims" has the meaning assigned to such term in Section 6.2(e)
"Buyer Indemnified Parties" has the meaning assigned to such term in
Section 6.2(a).
"Carolina Farms" has the meaning assigned to such term in the Recitals.
"Carolina Farms Employees" has the meaning assigned to such term in
Section 4.1.
"CERCLA" has the meaning assigned to such term in Section 3.19(a).
"Claim" has the meaning assigned to such term in Section 6.3.
"Claim Notice" has the meaning assigned to such term in Section 6.3(a).
"Claims Period" has the meaning assigned to such term in Section 6.1.
"Class A Stock" has the meaning assigned to such term in Section 2.2.
i
"Class B Stock" has the meaning assigned to such term in Section 2.2.
"Closing" has the meaning assigned to such term in Section 1.3.
"Closing Date" shall mean the date on which the Closing takes place.
"Commonly Controlled Entity" means any entity which is under common
control with the Seller within the meaning of Code section 414(b), (c), (m), (o)
or (t).
"Company" has the meaning assigned to such term in the preamble to this
Agreement.
"Company Capitalization Representations" has the meaning assigned to
such term in Section 6.1.
"Contract" has the meaning assigned to such term in Section 3.15(a).
"Covered Liabilities" has the meaning assigned to such term in Section
6.2(c).
"Environmental Law" has the meaning assigned to such term in Section
3.19(a).
"Environmental Permit" has the meaning assigned to such term in Section
3.19(c).
"Environmental Representations" has the meaning assigned to such term
in Section 6.1.
"Environmental Law Violation" has the meaning assigned to such term in
Section 6.2(a)(ii).
"Facilities" has the meaning assigned to such term in Section 3.19(b).
"Final Determination" has the meaning assigned to such term in Section
6.3(e).
"Financial Statements" has the meaning assigned to such term in Section
3.4.
"GAAP" has the meaning assigned to such term in Section 2.5.
"Hazardous Materials" has the meaning assigned to such term in Section
3.19(d).
"HMTA" has the meaning assigned to such term in Section 3.19(a).
"Indemnified Party" has the meaning assigned such term in Section
6.3(a).
"Indemnifying Party" has the meaning assigned such term in Section
6.3(a).
"Inventory" has the meaning assigned to such term in Section 3.14(a).
"Land Use Approvals" has the meaning assigned to such term in Section
3.19(o).
"Land Use Requirements" has the meaning assigned to such term in
Section 3.19(o).
ii
"Laws" means all applicable statutes, laws, rules, regulations,
permits, decrees, injunctions, judgments, orders, rulings, determinations,
writs, decrees and awards.
"Leased Real Property" has the meaning assigned to such term in Section
3.10(a).
"Owned Real Property" has the meaning assigned to such term in Section
3.11.
"Parent" has the meaning assigned to such term in the preamble to this
Agreement.
"Parent Common Shares" has the meaning assigned to such term in Section
1.5(b).
"Parent Financial Statements" has the meaning assigned to such term in
Section 2.5.
"Permits" has the meaning assigned to such term in Section 3.18(b).
"Permitted Owned Real Property Encumbrances" has the meaning assigned
to such term in Section 3.11.
"Person" has the meaning assigned to such term in the preamble to
Article 3.
"Post-Closing Covenants" has the meaning assigned to such term in
Section 6.6.
"Preferred Stock" has the meaning assigned to such term in Section 2.2.
"Pro Forma Balance Sheet" has the meaning assigned to such term in
Section 3.4.
"Purchase Price" has the meaning assigned to such term in Section 1.2.
"Purchased Shares" has the meaning assigned to such term in the
preamble to this Agreement.
"RCRA" has the meaning assigned to such term in Section 3.19(a).
"Release" has the meaning assigned to such term in Section 3.19(e).
"Schedules" has the meaning assigned to such term in the preamble to
Article 3.
"Securities Act" has the meaning assigned to such term in Section 3.21.
"Seller" has the meaning assigned to such term in the preamble to this
Agreement.
"Seller Claims" has the meaning assigned to such term in Section
6.2(e).
"Seller Indemnified Parties" has the meaning assigned to such term in
Section 6.2(b).
"Seller Products" has the meaning assigned to such term in Section
3.20.
iii
"Seller's Operating Manager" has the meaning assigned to such term in
the preamble to Article 3.
"Severance Period" has the meaning assigned to such term in Section
4.2.
"Specified Conditions" has the meaning assigned to such term in Section
6.2(a)(ii).
"SWDA" has the meaning assigned to such term in Section 3.19(a).
"Tangible Personal Property Assets" has the meaning assigned to such
term in Section 3.13(a).
"Tax" has the meaning assigned to such term in Section 3.9(a).
"Third-Party Claim" has the meaning assigned to such term in Section
6.3(b).
iv
LIST OF SCHEDULES
Schedule 2.2 - Parent Capitalization
Schedule 2.3 - Buyer and Parent Authority
Schedule 3.1 - Seller Jurisdictions Authorized to do Business re Carolina Farms
Schedule 3.2 - Agreements Breached by this Transaction
Schedule 3.4 - Pro Forma Balance Sheet
Schedule 3.5 - Accounts Receivables greater than or equal to $50,000
Schedule 3.6 - New Developments since Balance Sheet Date
Schedule 3.7 - Undisclosed Liabilities
Schedule 3.9 - Transferee Tax Liability
Schedule 3.10 - Leased Real Property and Exceptions
Schedule 3.11 - Owned Real Property
Schedule 3.12 - Compliance: Owned and Leased Real Property
Schedule 3.13 - Encumbrances on Personal Property
Schedule 3.14 - Livestock Inventory
Schedule 3.15 - Contracts and Commitments
Schedule 3.16 - Litigation
Schedule 3.17 - Compliance with Laws
Schedule 3.19(b) - Facilities
Schedule 3.19(f) - Environmental Compliance
Schedule 3.19(g) - Environmental Liability
Schedule 3.19(h) - Environmental Permits
Schedule 3.19(i) - Underground Storage Tanks and Unmitigated Releases
Schedule 3.19(j) - Waste Disposal Sites
i
Schedule 3.19(k) - Environmental Indemnifications
Schedule 3.19(l) - Environmental Orders
Schedule 3.19(n) - Landfills and Debris Located at Facilities
Schedule 3.19(o) - Change in Land Use Approvals or Requirements
Schedule 3.20 - Product Liability
Schedule 4.1 - Employees
Schedule 4.1(A) - Employee Services Agreement
Schedule 4.2 - Severance Plans
Schedule 4.2(A) - Seller Reimbursement
Schedule 6.2 - Specified Conditions
ii
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-4’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 6/29/01 | | | | | | | None on these Dates |
| | 3/31/01 | | 28 |
| | 12/31/00 | | 27 |
| | 9/22/00 | | 1 | | 5 |
| | 8/26/00 | | 9 |
| | 3/31/00 | | 7 |
| | 3/27/99 | | 7 |
| List all Filings |
↑Top
Filing Submission 0000950123-01-504009 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Tue., Apr. 16, 6:41:13.1pm ET 