Exhibit 2
▇▇▇▇▇▇▇ FOODS, INC.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), dated as of
________, 1998, is made by and among ▇▇▇▇▇▇▇ FOODS, INC., a Virginia
corporation ("Company"), and CASE FOODS, INC., a Delaware corporation
("Case Foods") and CASE FARMS, L.L.C., a Delaware limited liability
company ("Case Farms") (Case Foods and Case Farms together referred to
as the "Buyer").
RECITALS
A. The Company is a fully integrated provider of turkey and
chicken products. As part of its business, the Company owns and
operates a poultry processing plant, a feed mill, and a hatchery, all
located, in ▇▇▇▇▇ County, North Carolina, and grain storage facilities
located in ▇▇▇▇▇ County, North Carolina (the "Business").
B. The Company desires to sell, and Buyer desires to purchase,
substantially all of the assets of the Business as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth in this Agreement, the parties
covenant and agree with each other as follows:
1. PURCHASE AND SALE OF CERTAIN ASSETS.
1.1. Purchase and Sale of Assets. Upon and subject to the
terms and conditions of this Agreement, and on the Closing Date as
defined herein, the Company shall sell, transfer, convey and deliver
to the Buyer, and the Buyer shall purchase, all right, title and
interest in and to all of the following assets owned or used by the
Company in the Business (the "Assets"):
(a) All those certain tracts and parcels of real
estate, with improvements thereon, comprising the Company's poultry
processing facility located in ▇▇▇▇▇ County, North Carolina, as more
particularly described on Schedule 1.1(a) attached to this Agreement,
(the "Processing Facility");
(b) All those certain tracts and parcels of real
estate, with improvements thereon, comprising the Company's hatchery
facility located in ▇▇▇▇▇ County, North Carolina, as more particularly
described on Schedule 1.1(b) attached to this Agreement, (the
"Hatchery");
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(c) All those certain tracts and parcels of real
estate, with improvements thereon, comprising the Company's feed mill
located in ▇▇▇▇▇ County, North Carolina, as more particularly
described on Schedule 1.1(c) attached to this Agreement, (the "Feed
Mill");
(d) All those certain tracts or parcels of real
estate, with improvements thereon, comprising the Company's grain
storage facility located in ▇▇▇▇▇ County, North Carolina, as more
particularly described on Schedule 1.1(d) attached to this Agreement,
(the "Grain Storage Facility").
The real estate and improvements described in Sections 1.1(a) -
(d) of this Agreement, together with any leaseholds, subleaseholds,
easements, rights of way and other appurtenances thereto or therein,
are referred to herein collectively as the "Real Estate".
(e) All equipment and machinery including all poultry
processing equipment, fixtures, furniture, tools, fittings, spare
parts and supplies located on the Real Estate, together with certain
vehicles, automobiles, trucks, tractors and trailers, whether or not
located on the Real Estate, all as more particularly described on the
schedules attached hereto as Schedule 1.1(e) (the "Machinery and
Equipment");
(f) All inventories which are usable and saleable in
their ordinary course located at the Business, including live poultry,
hatching eggs, poultry products, feed, grain, medication, work in
progress, supplies, packing materials (excluding materials containing
the Company's trademarks), and raw materials as well as live poultry
owned by the Company and located on the growout and breeder farms
listed on Schedule 1.1(f) and excluding (i) all Machinery and
Equipment, and (ii) finished product including boxed, frozen or
otherwise stored (the "Inventory");
(g) The pre-paid expenses, claims, including insurance
claims or insurance proceeds from the date hereof, deposits, pre-
payments, refunds, causes of action, rights of recovery, rights of
set-off, and rights of recoupment relating to the Assets as listed on
Schedule 1.1(g) (the "Pre-paid Assets");
(h) All supply lists, personnel files, those sections
of the Company's books and ledgers relating to the Business, files,
documents, plats, architectural plans, drawings, specifications,
materials, reports, technical data, and any other materials, whether
written, printed, or contained in other media relating to the Assets,
including, but not limited to, those listed on the attached Schedule
1.1(h) (the "Intangible Assets"), but specifically excluding all
records pertaining to or identifying in any way customers, provided,
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however, all documents at the Business on the Closing Date shall be
Intangible Assets acquired by Case;
(i) All leases, sub-leases, franchises, approvals,
authorizations, permits, licenses, orders, registrations, certificates
of occupancy, and other certificates, variances, rights obtained from
governmental agencies or regulatory authorities, contracts,
agreements, indentures, mortgages, instruments, security agreements,
guarantees, and other similar arrangements and rights thereunder as
listed on Schedule 1.1(i).
1.2. Liabilities Assumed by Buyer. Notwithstanding any
implication from Section 1.3, upon and subject to the terms and
conditions of this Agreement, and on the Closing Date, Buyer agrees to
assume and become responsible for the liabilities expressly set forth
on Schedule 1.2 (the "Assumed Liabilities"), and shall not be
responsible for any other liabilities of the Company not expressly set
forth on Schedule 1.2.
1.3. Liabilities Retained by the Company. Except as
otherwise specifically provided in Section 1.2 above, the Buyer shall
not by the execution and performance of this Agreement, or otherwise,
assume, hold the Company harmless from or otherwise be responsible for
any liability or obligation of any nature of the Company, or claims
made with respect to any such liability or obligation, whether matured
or unmatured, liquidated or unliquidated, fixed or contingent, or
known or unknown, or arising out of occurrences prior to the Closing
Date, including, without limitation, any of the following:
(a) Current and Long-Term Liabilities. Current and
long-term liabilities of the Company incurred in or as a result of the
conduct of the Business prior to the Closing Date.
(b) Breaches or Defaults. Any liability or obligation
arising out of any occurrence or circumstance (whether known or
unknown) which occurs or exists prior to the Closing Date and which
constitutes, or which by lapse of time or delivery of notice (or both)
would constitute, a breach or default under any lease, contract or
other instrument or agreement of the Company (whether written or
oral).
(c) Adjustments to Contractual Allowances. Any
liability or obligation arising out of any claims for credits,
refunds, rebates, or other adjustments to contractual allowances for
periods prior to the Closing Date.
(d) Injury or Death. Any liability or obligation
arising out of any injury to or death of any person or damage to or
destruction of any property, whether based on negligence, breach of
warranty, products liability, strict liability or any other theory
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arising out of occurrences prior to the Closing Date.
(e) Governmental Requirements. Any liability or
obligation arising out of any violation occurring prior to the Closing
Date of the requirements of any governmental authority including,
without limitation, requirements (i) relating to the reporting or
payment of federal, state, local or foreign income, property or other
taxes, and (ii) relating to federal contract compliance particularly
including a current review by the Office of Federal Contract
Compliance for the 1996 calendar year, or any ancillary state law
claims.
(f) Employees, Employee Benefit Plans or Fringe
Benefit Programs. Any liability or obligation arising out of any
employment relationship between the Company and any employee or former
employee, employee benefit plan or any other fringe benefit program
maintained by the Company or to which the Company contributes, or any
contributions, benefits or liabilities therefor or any liability for
the Company's withdrawal or partial withdrawal from, or termination
of, any such plan or program; provided, that Buyer shall be liable for
due and timely payment to the former employees of the Company of all
amounts paid by the Company to Buyer pursuant to the provisions of
Section 6.2(g) of this Agreement as accrued vacation pay.
1.4. Purchase Price.
(a) The preliminary purchase price for the Assets,
shall be
(i) For the Assets other than the Inventory,
Thirty-One Million Dollars ($31,000,000); as adjusted for grain
contracts as set forth on Schedule 1.4(a)(i).
(ii) For the Inventory, the amount determined by
the Company and reported to the Buyer at least two (2) business days
prior to the closing based on its books and records maintained in
accordance with past practices, estimated to be the value of the
Inventory on the Closing Date as categorized on Schedule 1.4
("Estimated Inventory"). Such amount shall not exceed Eight Million
Dollars ($8,000,000).
(iii) If the Closing Date is delayed for any
reason other than (1) a second request from a governmental authority
relating to the HSR Act filing, (2) on account of any action or
inaction of the Company, or any affiliate or shareholder of any
affiliate, including any shareholder of WLR Foods, Inc., (3) any
action by any other bidder or potential bidder for the Assets, or (4)
remediation or additional testing as may be required as a result of an
updated Phase One site assessment, that is not reasonably handled
through an escrow arrangement because of the potential magnitude of
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the possible remediation costs, beyond August 17, 1998, the purchase
price shall be increased by Fifteen Thousand Dollars ($15,000) per day
for any day that elapses until the Closing occurs, up to a maximum of
Six Hundred Seventy-Five Thousand Dollars ($675,000).
(iv) If the Closing Date is delayed (1) on account
of any action or inaction of the Company or any affiliate or
shareholder of any affiliate, including any shareholder of WLR Foods,
Inc. or (2) any action by any other bidder or potential bidder for the
Assets, beyond August 17, 1998, the purchase price shall be decreased
by Fifteen Thousand Dollars ($15,000) per day for any day that elapses
until the Closing occurs, up to a maximum of Six Hundred Seventy-Five
Thousand Dollars ($675,000).
(b) The final purchase price shall be determined as
follows: Within 30 days following the Closing Date, KPMG Peat Marwick
("KPMG") shall prepare and deliver to the Company and Buyer an audited
schedule of the Inventory as of the commencement of business on the
Closing Date ("Closing Date Inventory") according to generally
accepted accounting principles, in accordance with past practices,
consistently applied.
(c) The preliminary purchase price set forth in
Section 1.4(a)(ii) above shall be adjusted according to the following
post-closing determinations (Post-Closing Adjustments):
(i) The preliminary purchase price shall be
increased by the excess of Closing Date Inventory over Estimated
Inventory or decreased by the excess of Estimated Inventory over the
Closing Date Inventory.
(ii) The preliminary purchase price shall be
decreased by the accrued vacation pay as of the Closing Date.
(d) During the ten (10) days following the Company's
and Buyer's receipt of the Closing Date Inventory as required by
Section 1.4(b) and (c) hereof, the Buyer's auditors shall be permitted
to review the Closing Date Inventory and working papers of KPMG
related thereto. If any matter is in dispute and cannot be resolved
in such ten (10) day period, both accounting firms shall, within an
additional five (5) day period following expiration of Buyer's
auditors' review period, submit the question or questions in dispute
to a mutually agreed on neutral auditor (the "Neutral Auditor"), which
shall resolve the dispute within ten (10) days after the question(s)
are referred to them and whose decision shall be final and binding on
all parties hereto.
One business day after the earlier of the Company and Buyer
agreeing on the Post Closing Adjustments or the final decision of the
Neutral Auditor the payments described in Section 1.5 below shall
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occur (the Second Closing Date). The costs of the Neutral Auditor, if
any, shall be paid equally by Buyer and Company.
1.5. Payment.
(a) On the Closing Date, Buyer shall pay to or for the
benefit of the Company, by wire transfer of immediately available
funds, a sum equal to the preliminary purchase price as determined in
Section 1.4(a); and
(b) On the Second Closing Date, if the preliminary
purchase price, after making the Post-Closing Adjustments, (i) is
increased, Buyer shall pay to or for the benefit of the Company, by
wire transfer of immediately available funds, a sum equal to such
excess or (ii) is decreased, the Company shall remit to Buyer, by wire
transfer of immediately available funds, a sum equal to such
deficiency.
1.6. Allocation. The Company and Buyer agree to allocate
the Purchase Price described in Section 1.5 in accordance with
Internal Revenue Code Section 1060 on the Forms 8594 filed by both
parties with the Internal Revenue Service as required by law. The
allocation to those assets will be agreed upon before or after the
Closing. The Buyer and the Company acknowledge and agree that the
allocation to be made pursuant to this Section 1.6, and the following
undertaking with respect to tax reporting will, have been specifically
negotiated by the parties at arms' length and are a part of the basis
of this Agreement. The Buyer and the Company covenant and agree that
each shall prepare its federal, state and local income tax returns
employing the allocation made pursuant to this Section 1.6 and shall
not take a position in any tax proceeding, tax examination or
otherwise inconsistent with such allocation. The Buyer and the
Company shall give prompt notice to each other of the commencement of
any tax examination or the assertion of any proposed deficiency or
adjustment by any taxing authority or agency which challenges such
allocation.
2. CLOSING.
2.1. Closing Date. The closing of the transaction
contemplated by the Agreement (the "Closing") shall take place at the
offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, in Harrisonburg, Virginia at
2:00 p.m. on the later of (a) August 17, 1998, or (b) the date that is
two (2) business days following the termination of the applicable
waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended ("HSR Act") or that date that the Closing occurs
on pursuant to the next sentence (the "Closing Date").
Notwithstanding anything to the contrary in this Agreement, if the
Closing does not occur by August 17, 1998, the parties shall continue
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to use their best reasonable efforts to close the transaction as soon
as the party unable to close indicates to the other that it is ready
to close, but in no event later than October 1, 1998. If a closing
occurs on or before October 1, 1998, then there shall be no damages or
claims, and the rights of the parties shall be governed by the
provisions in Section 1.4(a)(iii) and (iv). Subject to provisions
herein to the contrary, failure to consummate the purchase and sale
contemplated herein on the date and time and at the place determined
pursuant to this Section 2.1 will not result in the termination of the
Agreement and will not relieve any party of any of its obligations
herein; provided, however, that either party may terminate this
Agreement as provided in Section 8. Upon satisfactory conclusion of
the actions to be taken at the Closing, all actions to be so taken and
all references in this Agreement to actions to have been taken at,
prior to or as of the Closing shall be deemed to have occurred
effective, in each case, at 5:00 p.m. EDT on the Closing Date.
2.2. Closing Transactions. Subject to the conditions set
forth herein, on the Closing Date, the parties hereto agree as
follows:
(a) The Company shall deliver to Buyer the various
certificates, instruments and documents referred to in Section 6, and
the Company will execute, acknowledge and deliver to Buyer:
(i) Deeds to the Real Estate in form and
substance acceptable to Buyer conveying marketable title to the Real
Estate with special warranty, and otherwise in the form of warranty
deed customarily used for conveyance of North Carolina real property,
but subject to easements, covenants, restrictions of record, and title
exceptions which do not materially adversely affect the value,
usability or marketability of title. The Company has previously
delivered to Buyer copies of abstracts of title, previous title
insurance policies or commitments, title opinions, certificates of
title, deeds, surveys, or other such items in its possession
evidencing the Company's ownership of the Real Estate (hereafter, the
"Company's Title Material") and Buyer shall thereafter obtain, at
Buyer's sole cost and expense, the commitment of a title insurance
company selected by Buyer and licensed to conduct business in the
State of North Carolina to issue title insurance with respect to the
Real Estate;
(ii) A ▇▇▇▇ or Bills Of Sale in form acceptable to
Buyer conveying title to the Machinery and Equipment and Inventory in
"as is" and "where is" condition;
(iii) Motor vehicle certificates of title to each
vehicle or item of rolling stock listed on Schedule 1.1(e) duly
executed and endorsed in blank to Buyer;
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(iv) As to contracts approved by Buyers, an
Assignment or Assignments conveying all of Company's right, title and
interest in and to Pre-Paid Assets and Intangible Assets, contracts
(including grain-to-arrive and grower contracts related to the
Business) and other rights or Assets described in Sections 1.1(g) -
(i).
(b) Buyer shall deliver to the Company the preliminary
purchase price in cash, by wire transfer and an Assumption Agreement
or Agreements providing for Buyer's assumption of the Assumed
Liabilities and any other obligations pertaining to the Assets which
Buyer agrees in writing to assume after the Closing Date.
(c) Buyer shall take possession of the Assets on the
Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Buyer as follows regarding the Assets and
the Business.
3.1. Organization, Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Virginia with all corporate
power and authority, including possession of all material licenses,
permits and authorizations, necessary to own and operate the Assets.
The Company is qualified to transact business in the State of North
Carolina.
3.2. Authorization of Transaction. The execution, delivery
and performance by the Company of this Agreement and each instrument
contemplated by this Agreement, and the performance by it of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action of the Company. This Agreement is a valid
and binding obligation of the Company, and each instrument
contemplated by this Agreement, when executed and delivered by the
Company in accordance with the provisions hereof, will be a valid and
binding obligation of the Company, in each case enforceable against
the Company in accordance with its terms (except as such
enforceability may be limited by applicable principles of equity or
creditors' rights laws.) Neither the execution and delivery of this
Agreement and each instrument contemplated by this Agreement, nor the
consummation of the transactions contemplated hereby will (a) conflict
with or result in any violation of any provision of the certificate of
incorporation or bylaws of the Company, (b) cause a default (or an
event which, with notice or lapse of time or both, would constitute a
default) in the terms, conditions or provisions of any material
obligation (or obligations which in the aggregate would be material)
to which the Company is a party or by which the Assets are bound, (c)
except as expressly waived in writing by Buyer, violate any judgment,
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order or award of any court, administrative agency or governmental
body against or binding upon the Company or the Assets, or (d) except
as expressly waived in writing by Buyer, constitute a violation by the
Company of any law or regulation of any jurisdiction as it relates to
the Company, the Business, or the Assets.
3.3. Compliance with Laws. To the best of its and their
knowledge, the Company and its officers and directors have complied
with all applicable laws, regulations, and ordinances, whether
federal, state or local, which affect the Assets or the operation of
the Business and to which the Company or any of its directors and
officers may be subject, with which the failure to comply would
effect, adversely, the Company, the Assets or the Business, and no
claims have been filed against the Company alleging a violation of any
such laws, regulations, or ordinances. Except as set forth in
Schedule 3.3, there is no order issued nor, to the best knowledge of
the Company, is any investigation or proceeding pending or notice
served nor are any threatened, with respect to any violation of any
law, ordinance, order, writ, decree, rule or regulation issued by any
federal, state or local court or governmental agency or
instrumentality to which the Company is or the Assets are subject.
3.4. Environmental.
(a) Compliance with Laws. Except as set forth in
Schedule 3.4(a), to the best knowledge of the Company, there are no
past or present events, conditions, circumstances, activities,
practices, incidents, actions or plans relating to the Business which
are reasonably likely to fail to comply with, or might interfere or
prevent compliance with, environmental laws, including applicable
rules and regulations, or might give rise to any common law or legal
liability, including, without limitation, liability under the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, or similar state or local laws, or otherwise form
the basis of any legal action or proceeding based on or related to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, or the emission, discharge, release
or threatened release into the environment of any pollutant,
contaminant, chemical, or industrial, toxic or hazardous substance or
waste. The Company has all necessary governmental permits for the
Business, including, without limitation, those necessary for the
disposal of waste and waste water.
(b) Underground Storage Tanks. Except as set forth in
Schedule 3.4(b), the Company has not installed any underground storage
tanks on the Real Estate and to the best knowledge of the Company
there are no underground storage tanks located on the Real Estate.
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3.5. Undisclosed Liabilities. As to material liabilities,
the Company is not liable for or subject to any liabilities associated
with the Assets, except (a) liabilities specifically disclosed on
Schedule 3.5, or (b) liabilities under any contract, commitment, or
agreement specifically disclosed on any schedule to this Agreement.
For purposes of this provision, materiality shall be Twenty-Five
Thousand Dollars ($25,000).
3.6. Governmental Authorities and Consents. Except as
provided in Schedule 3.6, the Company is not required to submit any
notice, report or other filing with any governmental authority in
connection with the execution or delivery by it of this Agreement and
the other agreements contemplated hereby to which the Company is a
party or in connection with the consummation of the transactions
contemplated hereby or thereby. Other than as listed on Schedule 3.6,
no consent, approval or authorization of any governmental or
regulatory authority is required to be obtained by the Company in
connection with its execution, delivery and performance of this
Agreement and the other agreements contemplated hereby to which the
Company is a party or in connection with the transactions contemplated
hereby or thereby.
3.7. Inventory. All inventory currently located at the
Business and at the growout and breeder farms listed on Schedule
1.1(f) is of a quality and quantity usable or salable in the ordinary
course of business of the Company consistent with past practice at
prices at least equal to the lower of cost or market value thereof as
reflected on the financial statements of the Company. Proper
recognition has been given to appropriate ▇▇▇▇-▇▇▇▇▇ for unusable or
unsalable inventory. As of the Closing Date, the Inventory and all
supplies used in connection with the Business will consist in all
material respects of items of quality and quantity normally maintained
on hand in connection with the Business, subject, however, to changes
due to seasonality and changes in business demand.
3.8. Ownership of Assets. Except as set forth on Schedule
3.5, the Company is the owner of the Assets (except leased assets),
and has good and marketable title to all of the Assets, free and clear
of any lien, charge or other encumbrance, except for: (a) statutory
liens for current taxes or assessments not yet due or delinquent, and
(b) inchoate mechanics', carriers', workers', repairers', warehousers'
and other similar liens arising or incurred in the ordinary course of
business relating to obligations as to which there is no default on
the part of the Company, none of which are of character, amount or
extent which materially detract from the value, or interfere with
respect to the properties subject thereto. By virtue of the
deliveries to be made at the Closing, Buyer will obtain good and
marketable title to the Assets, free and clear of all liens,
mortgages, pledges, encumbrances, security interests, charges and
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equities of any nature whatsoever except, with respect to the Real
Estate, such defects as an accurate survey would show and except for
those (if any) shown in the examination of title which do not effect
the value, usability or marketability of title.
3.9. Absence of Certain Events. Except as set forth in
Schedule 3.9 or specifically disclosed on any other schedule to this
Agreement, since June 1, 1998, the Company has not:
(a) Sold, assigned or transferred any of the Assets or
properties except in the ordinary course of business consistent with
past practice;
(b) Suffered any damage, destruction or loss, whether
or not covered by insurance, materially and adversely affecting the
Assets.
3.10. Legal Proceedings. Except as set forth on
Schedule 3.10, there are no disputes, claims, actions, suits or
proceedings, arbitrations or investigations, either administrative or
judicial, pending or, to the knowledge of the Company, threatened or
contemplated, by or against or affecting the Company, at law or in
equity or otherwise, before or by any court or governmental agency or
body, domestic or foreign, or before an arbitrator of any kind that
will have an adverse effect on the Assets. Except as disclosed on
Schedule 3.10, the Company has no knowledge of any state of facts or
occurrence of any event that might reasonably form the basis of any
claim against the Company which might have an adverse effect on the
Assets.
3.11. Schedules of Material Contracts. Set forth on
Schedule 3.11 are complete and accurate lists of the following as of
the date hereof:
(a) All franchises, licenses, permits, easements,
rights and other authorizations which are owned, possessed or used by
the Company for the purpose of using or operating the Assets;
(b) All contracts, commitments or agreements,
including without limitation, lease agreements, to which the Company
is a party which might materially affect the Assets. Except as may be
disclosed on any such schedule, the Company has no knowledge of any
breach or default, or claimed or alleged breach or default, by the
Company or any other party under any term or provision of any material
contract, commitment, agreement, plan, authorization, instrument or
other document listed on any such schedule, and to the knowledge of
the Company, no event has occurred which with the passage of time or
the giving of notice or both would constitute a breach or default by
the Company or any other party thereunder.
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3.12. Highly Paid Contractors. Exclusive of all
growers, Schedule 3.12 sets forth a complete list of the names and
annual payment to all independent contractors of the Company who
contract with the Business and whose payment is in excess of Seventy-
Five Thousand Dollars ($75,000) per annum.
3.13. Brokerage. There are no claims for brokerage
commission, finders fees or similar compensation in connection with
the transaction contemplated by this Agreement based on any
arrangements or agreements made by or on behalf of the Company, except
for the obligation of the Company to pay the fees of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Securities, Inc.
3.14. Employees. Except as set forth on Schedule 3.14,
to the best of the Company's knowledge, no key employee and no group
of employees or independent contractors of the Company employed at the
Business has any plans to terminate his or her employment or
relationship as an independent contractor with the Company. Except as
set forth on Schedule 3.14, to the best of the Company's knowledge,
the Company has complied with all applicable laws relating to the
employment of personnel and labor, including provisions thereof
relating to wages, hours, equal opportunity, collective bargaining and
the payment of social security and other taxes, and the Immigration
Reform and Control Act of 1986. The Company is not a party to nor
bound by any collective bargaining agreement, nor has it experienced
any strikes, grievances, unfair labor practices claims or other
material employee or labor disputes. To the best of the Company's
knowledge, none of its employees located at the Business is actively
seeking or soliciting petitions for a vote concerning representation
by a labor union.
3.15. Taxes. Except as provided in Schedule 3.15, all
taxes, fines, and expenses levied or assessed against the Business for
all taxable years of the Company, up to and including the Closing Date
(regardless of when same are due and payable), have been paid or will
be paid when due by the Company.
3.16. All Assets. Except for those Assets specifically
excluded from this sale, which Assets are listed on Schedule 3.16, the
Assets constitute all of the assets and properties of every kind and
nature owned by the Company or in which the Company has any interest
which are located at or used in connection with the Business.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to the Company as follows:
4.1. Organization and Corporate Power. Case Foods is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full corporate power and
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authority to enter into this Agreement and the other agreements
contemplated hereby to which it is a party and to perform its
obligations hereunder and thereunder. Case Farms is a L.L.C. duly
organized, validly existing and in good standing under the laws of the
State of Delaware, with full power and authority to enter into this
Agreement and the other agreements contemplated hereby to which it is
a party and to perform its obligations hereunder and thereunder. At
Closing, the purchasers of the Assets will be qualified to transact
business in the State of North Carolina.
4.2. Authorization of Transaction. The execution, delivery
and performance by the Buyer of this Agreement and the performance by
it of the transactions contemplated hereby have been duly authorized
by all necessary corporate action of the Buyer. This Agreement is a
valid and binding obligation of the Buyer, and each instrument
contemplated by this Agreement, when executed and delivered by the
Buyer in accordance with the provisions hereof, will be a valid and
binding obligation of the Buyer, in each case enforceable against the
Buyer in accordance with its terms (except as such enforceability may
be limited by applicable principles of equity and creditors' rights
laws.) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (a) conflict
with or result in any violation of any provision of the certificate of
incorporation or bylaws of the Buyer, (b) except as expressly set
forth on Schedule 4.2, constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) in the
terms, conditions or provisions of any material obligation (or
obligations which in the aggregate would be material) to which the
Buyer is a party or by which Buyer is bound, (c) violate any judgment,
order or award of any court, administrative agency or governmental
body against or binding upon the Buyer, or (d) constitute a violation
by the Buyer of any law or regulation of any jurisdiction as relates
to it or its assets.
4.3. No Violation. Except as provided on Schedule 4.3,
Buyer is not subject to or obligated under its certificate of
incorporation, its by-laws, any applicable law, or rule or regulation
of any governmental authority, or any agreement or instrument, or any
license, franchise or permit, or subject to any order, writ,
injunction or decree, which would be breached or violated by its
execution, delivery or performance of this Agreement and the other
agreements contemplated hereby to which Buyer is a party.
4.4. Governmental Authorities and Consents. Buyer is not
required to submit any notice, report or other filing with any
governmental authority in connection with the execution or delivery by
it of this Agreement and the other agreements contemplated hereby to
which Buyer is a party or in connection with the consummation of the
13
transactions contemplated hereby or thereby, except as provided on
Schedule 4.4. Except as provided on Schedule 4.4, no consent,
approval or authorization of any governmental or regulatory authority
is required to be obtained by Buyer in connection with its execution,
delivery and performance of this Agreement and the other agreements
contemplated hereby to which Buyer is a party or in connection with
the transactions contemplated hereby or thereby.
4.5. Litigation. There are no actions, suits, proceedings,
orders or investigations pending or, to Buyer's knowledge, threatened
against or affecting Buyer at law or in equity, or before or by any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, which would adversely affect Buyer's performance under this
Agreement and the other agreements contemplated hereby to which Buyer
is a party or the consummation of the transactions contemplated hereby
or thereby.
4.6. Brokerage. There are no claims for brokerage
commissions, finders' fees or similar compensation in connection with
the transactions contemplated by this Agreement based on any
arrangements or agreements made by or on behalf of the Buyer.
4.7. Financing. Buyer has either simultaneously or
previously executed financing commitments which, with its available
cash, when such financings are closed, would provide sufficient funds
to close this transaction as early as August 10, 1998.
4.8. Due Diligence. Buyer has conducted business, legal and
environmental due diligence of the Company and is satisfied with the
results obtained therefrom to date. Other than the fact that Buyer is
completing its financing arrangements, Buyer is unaware of any facts
or circumstances (either now existing or anticipated in the future)
which could prohibit it from consummating the transactions
contemplated by this Agreement or would cause Buyer to seek to
terminate or modify in any way the terms of this Agreement.
5. CONDUCT AND TRANSACTIONS PRIOR TO THE CLOSING DATE.
5.1. Operation of the Business of Company. The Company
agrees that from the date hereof until Closing, except as otherwise
provided below, it will operate the Business substantially as
presently operated and only in the ordinary course, and, consistent
with such operation, it will (i) maintain the Assets in good repair,
order and condition, reasonable wear and tear excepted; (ii) maintain
in full force and effect all licenses, permits, easements and rights
and other authorizations currently in effect; (iii) use its best
14
efforts to maintain in full force and effect the insurance policies
and binders currently in effect; (iv) use its best efforts to keep
available the services of its present employees at the Business and to
maintain its relations and goodwill with its contract growers and
suppliers; (v) promptly advise Buyer in writing of the threat or
commencement of any dispute, claim, action, suit or proceeding,
arbitration or investigation when the amount claimed is $250,000 or
more in the aggregate or the occurrence of any development of a nature
that is or may be materially adverse to the Assets, (vi) not propose
or take any action which would make any representation or warranty in
Section 3 hereof untrue; and (vii) maintain salaries, bonuses and
other compensation levels of employees located at the Business as of
the date hereof except to the extent such salaries, bonuses and other
compensation levels may increase in the ordinary course of the
Company s business.
5.2. Required Approvals. As promptly as practicable after
the date of this Agreement, the Company will make all filings required
to be made by it in order to consummate the contemplated transaction
(including all filings under the HSR Act). Between the date of this
Agreement and the Closing Date, the Company will (a) cooperate with
Buyer with respect to all filings that Buyer is required to make in
connection with the contemplated transaction, and (b) cooperate with
Buyer in obtaining all consents necessary, including taking all
actions requested by Buyer to cause early termination of any
applicable waiting period under the HSR Act.
5.3. Bulk Sales. Buyer hereby waives compliance by the
Company with the provisions of any so-called bulk transfer laws in
connection with the sale of the Assets. The Company shall furnish to
Buyer at Closing an affidavit confirming that it has paid or made
arrangements for the payment of its creditors.
5.4. Risk of Loss. The risk of loss, damage, or destruction
of or to any of the Assets shall from and after the execution of this
Agreement until the Closing Date remain with the Company, which shall,
at its own cost and expense, maintain in force all insurance coverage
on the Assets in effect on the date of this Agreement until the
Closing Date. If any material loss, damage, or destruction occurs,
the Company shall promptly notify Buyer, including all particulars
thereof and assign or substitute insurance proceeds for any damaged
Assets, with the Company bearing any out-of-pocket cost or deductible
to restore the Assets to their pre-loss condition. If the Assets are
damaged by fire or other casualty to such an extent that the operation
of the Business is substantially interrupted, Buyer may, at its
option, terminate this Agreement by written notice to the Company.
5.5. Employees and Growers; Access. The Buyer's interest in
acquiring the Assets is based in part on the availability to Buyer of
15
an assembled work force and growers. The Company shall cooperate in
good faith with and assist Buyer, from and after the signing of this
Agreement, as Buyer may reasonably request, in transferring to Buyer's
employment such of the personnel located at the Business as Buyer may
elect to retain, and in contracting with the growers identified on
Schedule 1.1(i). Prior to or at the time of Closing, Buyer and the
Company shall send a joint written notice, after such notice has been
approved by both parties, to each of the employees located at the
Business informing each such employee of the transactions contemplated
by this Agreement. The Company shall cooperate in good faith in
providing Buyer's representatives, from and after the signing of this
Agreement, as Buyer may reasonably request, access to the Company's
personnel and Assets.
5.6. Payment of Obligations. The Company shall have paid in
full, or made arrangements for payment in full, all amounts due under
all contracts, commitments or agreements, including without
limitation, lease agreements for services rendered or goods supplied
or for the use of property, prior to the Closing Date and shall have
satisfied in full all of its obligations and liabilities due
thereunder as of the Closing Date. The Company shall use its best
efforts, to the extent possible, to obtain any necessary consents to
the assignment of such contracts, commitments, and agreements so that,
if Buyer elects, they may be duly and property assigned to Buyer at
the Closing, without cost to Buyer.
6. CONDITIONS PRECEDENT.
6.1. Conditions Precedent to Buyer's Obligations. All
obligations of Buyer to consummate this Agreement are subject to the
fulfillment, prior to or as of the Closing, of each of the following
conditions and the receipt of the following documents in addition to
those set forth in Section 2.2 and the affidavit referred to in
Section 5.3 (subject to the right of Buyer to waive such requirement):
(a) Certificate as to Representations, Warranties and
Covenants. All of the representations and warranties of the Company
contained in this Agreement or in any certification, schedule, list,
certificate or document delivered pursuant to the provisions hereof
shall be true at Closing Date as though such representations and
warranties were made on such date, (except to the extent stated
therein to be true as of some other date and except to reflect changes
permitted or contemplated by this Agreement) and the Company shall
have executed, performed and complied with all agreements and
conditions required by this Agreement to be executed, performed or
complied with by it, and the Company shall deliver to Buyer a
certificate signed by its secretary to such effect.
16
(b) Certificate as to Corporate Authority. A copy of
the appropriate board and shareholder's resolutions of the Company
authorizing the execution and performance of this Agreement and all
necessary documents to consummate this Agreement as certified by its
secretary shall be delivered at Closing.
(c) Opinion of Counsel. The Company shall have
delivered to Buyer an opinion of counsel, dated as of the Closing Date
and in substantially the same form as set forth in Schedule 6.1(c).
(d) Government Filings. All governmental filings,
authorizations and approvals which would effect, materially and
adversely, the Assets or the Business, that are required for the
consummation of the transactions contemplated hereby and the continued
operation of the Business thereafter, shall have been duly made and
obtained including, without limitation, all filings under the HSR Act,
and pursuant to any rules or regulations promulgated by the U.S. Food
and Drug Administration and the U.S. Department of Agriculture, and
copies of each of the foregoing shall have been delivered to Buyer.
(e) Legal Action. There shall be no pending or
threatened legal action or inquiry by any party other than Buyer or
the Company which challenges the validity or legality of or seeks or
could reasonably be expected to prevent, delay or impose material and
adverse conditions on the consummation of the transaction contemplated
by this Agreement.
(f) Lien Terminations. Buyer shall have received
terminations of all security interests in, and releases of all liens
on, the Assets, including, but not limited to, UCC Termination
Statements.
(g) Affidavits. Buyer shall have received from the
Company a FIRPTA affidavit of the Company as to the Company's status
as a domestic corporation, and an affidavit of the Company sufficient
for a title insurance company to rely on to eliminate any exception to
an owner's policy of title insurance for the Real Estate for
mechanics', laborers', materialmen's, workers', repairers' or other
similar liens.
(h) Output Contract. The Company shall have entered
into the contract referred to in Section 6.2(f) hereof.
(i) Hatching Egg Contract. The Company shall have
entered into the contract referred to in Section 6.2(g) hereof.
(j) Other. Buyer shall have received each other
document required to be delivered to Buyer hereunder.
17
6.2. Conditions Precedent to Company's Obligations. All
obligations of the Company to consummate this Agreement are subject to
the fulfillment, prior to or at the Closing, of each of the following
conditions and the receipt of the following documents, in addition to
those set forth in Section 2.2 (subject to the right of the Company to
waive such requirement):
(a) Certificate as to Representations and Warranties.
All of the Buyer's representations and warranties contained in this
Agreement or in any certificate or document delivered pursuant to the
provisions hereof shall be true as of the Closing Date as though such
representations and warranties were made on such date (except to the
extent that it is stated herein to be true as of some other date and
except to reflect changes permitted or contemplated by this
Agreement), and Buyer shall have executed, performed and complied with
all agreements and conditions required by this Agreement to be
executed, performed or complied with by it and the Buyer shall deliver
to the Company a certificate signed by its secretary to that effect.
(b) Certificate as to Corporate Authority. A copy of
the appropriate resolutions or other documents of Buyer ratifying or
authorizing the execution and performance of this Agreement and all
necessary documents to consummate this Agreement as certified by its
secretary or manager shall be delivered at Closing.
(c) Opinion of Counsel. Buyer shall have delivered to
the Company an opinion of counsel for Buyer, dated as of the Closing
Date, in substantially the same form as set forth on Schedule 6.2(c).
(d) Government Filings. All governmental filings,
authorizations and approvals that are required for the consummation of
the transactions contemplated hereby and the continued operation of
the Business thereafter, shall have been duly made and obtained on
terms satisfactory to the Company, including, without limitation, all
filings under the HSR Act, and pursuant to any rules or regulations
promulgated by the U.S. Food and Drug Administration and the U.S.
Department of Agriculture, and copies of each of the foregoing shall
have been delivered to the Company.
(e) Covenants and Agreements. Buyer shall have
executed, performed and complied in all material respects with all of
the covenants and agreements required to be executed and performed by
it under this Agreement on or prior to the Closing.
(f) Output Contract. The Buyer shall have entered
into a contract agreeing to sell a portion of the product output from
the Business to the Company, all as set forth in the attached
agreement identified as Schedule 6.2(f).
18
(g) Hatching Egg Contract. The Buyer shall have
entered into a contract agreeing to sell hatching eggs to the Company,
all as set forth in the attached agreement identified as Schedule
6.2(g).
(h) Employee Arrangements. As of the Closing Date all
of the employees of the Business shall be terminated, and no less than
ninety-five percent (95%) of such terminated employees shall be
rehired by the Buyer in the same positions and at the same level of
wages and/or salary and without having incurred a termination of
employment or separation from service; provided, however, except as
may be specifically required by applicable Law or any Contract,
neither Buyer nor the Company shall be obligated to continue any
employment relationship with any employee for any specific period of
time or on any specific terms.
7. INDEMNIFICATION BY THE COMPANY
7.1. Indemnification by the Company.
(a) The Company agrees to indemnify, defend and hold
Buyer, its officers, directors, stockholders, agents and assigns
harmless from and against any and all claims, losses, liabilities,
damages or expenses (including, but not limited to, reasonable
attorney fees) which Buyer incurs by reason of, (i) the breach or
nonfulfillment of, or the misrepresentation of any fact set forth in,
any representation or warranty made by the Company herein or the
omission in any such representation or warranty of any statement of
fact necessary to make such representation or warranty not misleading,
but giving effect to any supplemental disclosure, as certified in
writing by the Company and delivered to Buyer one business day prior
to Closing, expressly identifying a condition, warranty or
representation not to be satisfied; (ii) any failure by the Company
prior to Closing, to perform any obligation or duty required to be
performed by it under any provision of this Agreement; (clauses (i)
and (ii), hereof being collectively referred to herein as the "Buyer
Losses"); (iii) the failure by the Company to fulfill any and all of
its liabilities not expressly assumed by Buyer under Section 1.2 of
this Agreement; and (iv) any damages arising out of the conduct of the
Business by the Company prior to the Closing Date; provided, that
damages arising out of the condition of the Assets are not within the
meaning of the phrase "damages arising out of the conduct of the
Business" and that such damages arising out of the condition of the
Assets are indemnifiable, if at all, pursuant to the provisions of the
preceding clause (i). For purposes of this section only, Buyer Losses
shall include losses described in this Section 7.1(i) which would not
be deemed material as that term is used in many of the
representations, covenants and warranties contained herein. Except
19
for liabilities under Section 7.1(a)(iii), the Company shall not have
liability under this Agreement unless and until the aggregate of all
Buyer Losses exceeds Two Million Dollars ($2,000,000.00) (the "Minimum
Amount") in which event the Company shall be liable for Buyer Losses
in excess of fifty percent (50%) of the Minimum Amount or One Million
Dollars ($1,000,000); and, provided further, that the total aggregate
liability of the Company for indemnification under this Section shall
not exceed the total purchase price paid to the Company under this
Agreement.
(b) Notwithstanding anything contained herein to the
contrary, the Company's indemnification obligations hereunder shall
terminate upon the one (1) year anniversary of the Closing Date
(except (i) in respect of matters for which Buyer has given Company
notice prior to such date, (ii) the representations made in Section
3.15 regarding taxes, and (iii) the indemnification obligation under
Section 7.1(a)(1)(iii) and (iv)) provided that such indemnification
obligation shall expire and not be applicable with respect to any
liability arising out of any cause of action the statute of
limitations (giving effect to any extension thereof) of which has
expired prior to such anniversary.
7.2. Indemnification by Buyer.
(a) Buyer represents and hereby agrees to indemnify,
defend and hold the Company and its respective officers, directors,
stockholders, agents and assigns (collectively the "Company
Indemnities") harmless from and against any and all claims, losses,
damages or expenses (including, but not limited to, reasonable
attorney fees) which the Company Indemnities incur by reason of, (i)
the breach or nonfulfillment of, or the misrepresentation of any fact
set forth in, any representation or warranty made by Buyer herein or
the omission of any representation or warranty of any statement of
fact necessary to make such representation or warranty not misleading;
(ii) any failure by Buyer prior to Closing to perform any obligation
or duty required to be performed by it under any provision of this
Agreement (clauses (i) and (ii) hereof being collectively referred to
as the "Seller Losses"); and (iii) the failure by the Buyer to fulfill
any and all of its liabilities assumed by Buyer under Section 1.2 of
this Agreement, and (iv) any liabilities or obligations of the Buyer
arising out of the conduct of the Business subsequent to the Closing
Date. Except for liabilities under Section 7.2(a)(iii) and (iv),
Buyer shall not have liability under this Agreement unless and until
the aggregate of all Seller Losses exceeds the Minimum Amount set
forth in the preceding Section 7.1(a), in which event Buyer shall be
liable for Seller Losses in excess of fifty percent (50%) of the
Minimum Amount or One Million Dollars ($1,000,000).
20
(b) Notwithstanding anything contained herein to the
contrary, Buyer's indemnification obligations hereunder shall
terminate upon the one (1) year anniversary of the Closing Date,
(except (i) in respect of matters for which the Company Indemnities
have given Buyer written notice prior to such date, and (ii) the
indemnification obligation under Section 7.2(a)(iii) and (iv));
provided, however, that such indemnification obligation shall expire
and not be applicable with respect to any liability arising out of a
cause of action the statute of limitations (giving effect to any
extensions thereof) of which has expired prior to such anniversary.
7.3. Third Party Claims. If any legal proceedings shall be
instituted or any claim is asserted by any third party in respect of
which the Company on the one hand, or Buyer on the other hand, may be
entitled to indemnity hereunder (including claims related to
liabilities not assumed by Buyer hereunder), the party asserting such
right to indemnity shall give the party from whom indemnity is sought
prompt written notice (within 15 days) thereof. A delay in giving
notice shall only relieve the recipient of liability to the extent the
recipient suffers actual prejudice because of the delay. The party
from whom indemnity is sought shall have the right, at its option and
expense, to participate in the defense of such a proceeding or claim,
but not to control the defense, negotiation or settlement thereof,
which control shall at all times rest with the party asserting such
right to indemnity, unless the proceeding or claim involves only money
damages, not an injunction or other equitable relief, and unless the
party from whom indemnity is sought (a) irrevocably acknowledges in
writing complete responsibility for and agrees to indemnify the party
asserting such right to indemnity, and (b) furnishes satisfactory
evidence of the financial ability to indemnify the party asserting
such right to indemnity, in which case the party from whom indemnity
is sought may assume such control through counsel of its choice and at
its expense, but the party asserting such right to indemnity shall
continue to have the right to be represented, at its own expense, by
counsel of its choice in connection with the defense of such a
proceeding or claim. If the party from whom indemnity is sought does
not assume control of the defense of such a proceeding or claim, the
entire defense of the proceeding or claim by the party asserting such
right to indemnity, any settlement made by the party asserting such
right to indemnity, and any judgment entered in the proceeding or
claim shall be deemed to have been consented to by, and shall be
binding on, the party from whom indemnity is sought as fully as though
it alone had assumed the defense thereof and a judgment had been
entered in the proceeding or claim in the amount of such settlement or
judgment, except that the right of the party from whom indemnity is
sought to contest the right of the other to indemnification under this
Agreement with respect to the proceeding or claim shall not be
extinguished. If the party from whom indemnity is sought does assume
21
control of the defense of such a proceeding or claim, it will not,
without the prior written consent of the party asserting such right to
indemnity, settle the proceeding or claim or consent to entry of any
judgment relating thereto which does not include as an unconditional
term thereof the giving by the claimant to the party asserting such
right to indemnity a release from all liability in respect of the
proceeding or claim. The parties hereto agree to cooperate fully with
each other in connection with the defense, negotiation or settlement
of any such proceeding or claim.
7.4. Reimbursement. The indemnifying party shall pay the
indemnified party in immediately available funds promptly after the
indemnified party provides the indemnifying party (i) with written
evidence of entry of a final order by a court of competent
jurisdiction which is not appealable or is a final settlement of a
claim; or (ii) if sooner, with written notice of a claim hereunder in
which the parties reasonably agree that there is a reasonable basis
for such claim.
8. TERMINATION.
8.1. Termination. Notwithstanding anything contained herein
to the contrary, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(a) By mutual consent of the Company and Buyer;
(b) By the Company if any of the conditions set forth
in Section 6.2, shall have become incapable of fulfillment and shall
not have been waived by the Company;
(c) By Buyer in accordance with the provisions of
Section 5.4, or if any of the conditions set forth in Section 6.1,
shall have become incapable of fulfillment and shall not have been
waived by Buyer.
(d) By either Buyer or the Company if the Closing has
not occurred (other than through the failure of any party seeking to
terminate this Agreement to comply fully with its obligations under
this Agreement) on or before September 22, 1998, or such later date as
the parties may agree upon. Such termination shall not in any way
limit, restrict or relieve any party of liability for any breach of
this Agreement.
Neither the Company nor Buyer shall be entitled to terminate this
Agreement if such party's willful breach of this Agreement has
prevented the satisfaction of the conditions contained herein.
22
If this Agreement is terminated pursuant to paragraph (a) of this
Section, all provisions of this Agreement except Section 10.9 shall
become void without any liability on the part of any party. If this
Agreement is terminated pursuant to paragraphs (b), (c) or (d) of this
Section, all rights and remedies available to each party hereunder,
and at common law, and all other provisions hereof related thereto
shall survive termination to the extent required so that any party
responsible for any breach or nonperformance of its obligations
hereunder prior to termination shall remain liable for the damages
resulting therefrom, including reasonable attorney's fees and costs
incurred by the non-breaching party as a result of such breach or
nonperformance.
9. POST CLOSING ACTIONS. The following events shall occur
after the Closing Date:
9.1. Continuing Assistance. The parties hereto shall
cooperate in executing such documents, exchanging any instruments or
information, and taking such additional actions including any lawful
and reasonable arrangement to provide that Buyer shall receive the
benefits under any item listed on Schedule 1.1(i) not assigned at the
Closing by reason of the failure to obtain a required consent or
because it was not assignable, as may be necessary after the Closing
to complete transactions contemplated in this Agreement and any
transactions related thereto.
9.2 Tax Matters. Except for the specific allocations
contained in Section 10.9, all duly incurred and assessable taxes and
fees, of whatever nature or amount, including penalties and interest,
incurred by the Buyer or the Company in connection with the
transactions contemplated in this Agreement shall be paid by the
responsible party and the Buyer and the Company, as the case may be,
agree, it shall, at its own expense, file all necessary tax returns of
whatsoever nature with respect to the transactions contemplated by
this Agreement.
9.3 Employees. The Company agrees not to hire, solicit or
make an offer of employment to any former Company employees hired by
Buyer during a period beginning on the Closing Date and extending one
hundred eighty (180) days later.
Except for the specific benefits set forth below for severance
pay and vacation pay, for the period beginning on the Closing Date and
ending six (6) months thereafter (the Final Date), Buyer shall provide
to the employees of the Company employee benefits (including without
limitation, welfare plan and pension plan benefits) which are
substantially similar to either (i) those benefits provided to
similarly-situated employees of Buyer and its affiliates from time to
time or (ii) those benefits which are provided to the employees of the
Company immediately prior to the Closing Date. To the extent any
23
employee benefit plan, program or policy of Buyer or its affiliates
that is substantially similar to the benefits provided by the Company
is made available to any person who is an employee of the Buyer as of
the Closing Date: (i) continuous service with the Company as
reflected on its books and records by any employee prior to the
Closing Date shall be credited for eligibility and vesting purposes
and additional benefits tied to periods of service under such plan,
program or policy; and (ii) with respect to any welfare benefit plans
under which such employees may become eligible, Buyer shall cause such
plans to provide credit for any co-payments or deductibles by such
employees during the current plan year of the Company and waive all
waiting periods, other than waiting periods that have not been
satisfied under any welfare plans maintained by the Company for its
employees prior to the Closing Date.
(a) Severance Pay. Any employee of the Company
immediately prior to the Closing Date whose employment with the Buyer
is terminated without cause during the period beginning on the Closing
Date and ending on the Final Date, shall receive severance pay in
accordance with the Company's income assistance plans for salaried
employees and clerical employees determined as if employees were still
with the Company through the Final Date.
(b) Vacation Pay. Schedule 9.3(b) sets forth the
accrued vacation pay for all employees being rehired by the Buyer.
Buyer agrees to abide by the Company's vacation policy, at a minimum,
until the commitments identified in Schedule 9.3(b) are satisfied.
10. MISCELLANEOUS.
10.1. Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be
mailed by certified mail, return receipt requested, postage prepaid,
telecopied (with copy to follow) or delivered against receipt to the
party to whom it is to be given at the following address or telecopy
number (or such other address or telecopy number as the party shall
have furnished in writing in accordance with the provisions of this
Section.
(a) If to the Company, at:
▇▇▇▇▇▇▇ Foods, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
24
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.L.C.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Buyer at:
Case Farms, L.L.C.
Case Foods, Inc.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or other communication given by certified mail shall
be deemed given at the time of certification thereof, except for a
notice changing a party's address which shall be deemed given at the
time of receipt thereof.
10.2. Entire Agreement. This Agreement (including the
schedules annexed hereto or referred to herein) and the collateral
agreements executed in connection with the consummation of the
transactions contemplated hereby contain the entire agreement between
the parties with respect to such transactions and supersede all prior
agreements, written or oral, with respect thereto.
10.3. Waivers and Amendment. This Agreement may be
amended and the terms hereof may be waived only by a written
instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of either party in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of either party of
any such right, power or privilege, or any single or partial exercise
of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
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10.4. Specific Performance. The Company acknowledges
that the Assets are unique and recognizes and reaffirms that in the
event of a breach of the Agreement by the Company, money damages may
be inadequate and Buyer may have no remedy at law. Accordingly, the
Company agrees that Buyer shall have the right, in addition to other
rights and remedies existing in its favor, to enforce its rights and
the Company's obligations hereunder not only by an action for damages,
but also by an action for specific performance, injunctive relief
and/or other equitable relief.
10.5. Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the Commonwealth of
Virginia applicable to agreements made and to be performed entirely
within Virginia.
10.6. Binding Effect; No Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties and
their respective successors and legal representatives. This Agreement
is not assignable without the prior written consent of the
non-assigning party, except that Buyer shall have the right, upon
notice to the Company prior to the Closing but without obtaining its
consent, to assign Buyer's rights (but not its obligations), and/or
allocate the assets to be purchased, under this Agreement to any
entity (or entities) which is in control of, controlled by, or under
common control with, Buyer.
(a) In addition,
(i) Buyer may assign its rights (but not its
obligations) under this Agreement for collateral security purposes to
any lenders providing financing to Buyer or any of its affiliates or
subsidiaries, and any such lender may exercise all of the rights and
remedies of the Buyer hereunder; and
(ii) Buyer may assign its rights under this
Agreement, in whole or in part, to any subsequent purchaser of the
Buyer, or any of its subsidiaries, or any of their divisions or any
material portion of their assets (whether such sale is structured as a
sale of stock, a sale of assets, a merger or otherwise).
10.7. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof each signed by
less than all, but together signed by all, of the parties hereto.
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10.8. Severability of Provisions. If any provision or
any portion of any provision of this Agreement or the application of
any such provision or any portion thereof to any person or
circumstance, shall be held invalid or unenforceable, the remaining
portion of such provision and the remaining provisions or portion of
such provisions as is held invalid or unenforceable to persons or
circumstances, other than those as to which it is held invalid or
unenforceable, shall not be affected thereby.
10.9 Expenses. Except as otherwise provided below, the
Company and Buyer shall pay all of their own fees, costs and expenses
(including, without limitation, fees, costs and expenses of legal
counsel, investment bankers, accountants, brokers or other
representatives and consultants and appraisal fees, costs and
expenses) incurred in connection with the negotiation of the letter of
intent between the parties, this Agreement, the performance of its
obligations hereunder, and the consummation of the transactions
contemplated hereby. The Company will pay Twenty-Two Thousand Five
Hundred Dollars ($22,500) of the HSR Act filing fee and Buyer will pay
the balance. Any documentary stamps, recording costs, or realty
transfer taxes shall be shared and paid equally by Buyer and the
Company. Any sales and use taxes levied on this transaction shall be
paid by Buyer. All wages, bonuses, sales commissions and any and all
other obligations owing from the Company to any of its employees,
except for accrued vacation pay owing from the Company to any of its
employees who enter Buyer's employ, will be paid by the Company to its
employees at or before Closing. All rents, telephone, heat, power and
water bills, taxes and assessments and other such like items and
operating expenses for the Assets shall be allocated or prorated, as
appropriate, as of midnight the date of Closing on the basis of the
number of days of the tax year, calendar year or service period which
has elapsed as of such time. All utility deposits shall be refundable
to the Company by the utility. The provisions, allocations and
adjustments contemplated by this Section 10.9 shall be made insofar as
possible at the Closing with a final accounting and cash payment, if
required, made within ninety (90) days following the Closing and
settled at such time or as soon as practical thereafter. The
determination of when any party, or which party, has incurred any such
expense shall be made in a manner consistent with past billing and
employment practices.
10.10. Captions. All section titles or captions
contained in this Agreement or in any schedule annexed hereto or
referred to herein are for convenience only, shall not be deemed a
part of this Agreement and shall not affect the meaning or
interpretation of this Agreement. All references herein to sections
shall be deemed references to such parts of this Agreement, unless the
context shall otherwise require.
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10.11. Waiver Of Jury Trial. As a specifically bargained
inducement for each of the parties to enter into this Agreement (each
party having had opportunity to consult counsel), each party expressly
waives the right to trial by jury in any lawsuit or proceeding
relating to or arising in any way from this Agreement or the
transactions contemplated herein.
10.12. Consent To Jurisdiction. The parties agree that
any action brought by any party pursuant to this Agreement shall be
brought solely in any federal or state court located in Rockingham
County, Virginia. By execution and delivery of this Agreement, each
party irrevocably submits to the jurisdiction of such courts for
itself and in respect of its property with respect to such action.
The parties irrevocably agree that venue would be proper in such
court, and hereby waive any objection that such court is an improper
or inconvenient forum for the resolution of such action. The parties
further agree that the mailing by certified or registered mail, return
receipt requested, of any process required by any such court shall
constitute valid and lawful service of process against them, without
necessity for service by any other means provided by statute or rule
of court.
10.13. No Strict Construction. The parties hereto have
participated jointly in the negotiation of this Agreement. In the
event an ambiguity or question of intent or interpretation arises,
this Agreement will be construed as negotiated jointly by the parties
hereto and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any provision of
this Agreement.
10.14. Insolvency or Bankruptcy of Buyer.
Notwithstanding anything to the contrary contained herein, in the
event that prior to the Closing Date (i) Buyer shall make an
assignment for the benefit of creditors, shall file a voluntary
petition in bankruptcy, or shall be adjudicated bankrupt or insolvent,
or shall file any petition or pleading seeking or consenting to any
reorganization or similar relief under any present or future
Bankruptcy Act or similar law and (ii) the Buyer shall be in material
breach of any of its obligations to the Company under this Agreement,
then in addition to, and not in lieu of, any other rights or remedies
available to the Company at law or in equity under this Agreement,
the Company may terminate this Agreement without further obligation by
it to Buyer.
10.15. Public Announcements. Any public announcements or
similar publicity with respect to this Agreement or the contemplated
transactions will be issued, if at all, at such time and in such
manner as Buyer and the Company jointly determine or as required by
law. Unless consented to by the other party in advance or required by
law, prior to the Closing the Buyer and the Company shall keep this
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Agreement strictly confidential and may not make any disclosure of
this Agreement to anyone. The Company and Buyer will consult with
each other concerning the means by which the Company's employees,
contract growers, customers and suppliers and others having dealings
with the Company will be informed of the contemplated transaction.
10.16. Confidentiality. Between the date of this
Agreement and the Closing Date, Buyer and the Company will maintain in
confidence, and will cause the directors, officers, employees, agents,
and advisors of Buyer and the Company to maintain in confidence any
written, oral or other information obtained in confidence from another
party or the Company in connection with this Agreement, unless (a)
such information is already known to such party or to others not bound
by a duty of confidentiality or such information becomes publicly
available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or
obtaining any consent or approval required by the consummation of the
transaction herein, or (c) the furnishing or use of such information
is required by legal proceedings.
If the contemplated transactions are not consummated, each party
will return or destroy as much of such written information as the
other party may reasonably request.
10.17. Time Is Of The Essence. With regard to all dates
and time periods set forth or referred to in this Agreement, time is
of the essence.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers hereunto duly authorized as of
the day and year first above written.
COMPANY
▇▇▇▇▇▇▇ FOODS, INC.
By:________________
Its:_______________
BUYER
CASE FOODS, INC.
By:________________
Its:_______________
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CASE FARMS, L.L.C.
By:________________
Its:_______________
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