MARKETING AGREEMENT
by and among
SEABOARD CORPORATION,
SEABOARD FARMS, INC.,
TRIUMPH FOODS LLC
and, for certain limited purposes only,
THE TF MEMBERS IDENTIFIED HEREIN
Dated as of February 2, 2004
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
Section 1.01 Definitions 1
Section 1.02 Other Definitions 7
Section 1.03 Construction 9
ARTICLE II PURPOSE AND SCOPE OF ALLIANCE 9
Section 2.01 Purpose and Scope 9
Section 2.02 Other Arrangements; Non-Discrimination 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SEABOARD
ENTITIES 10
Section 3.01 Organization, Authority and Qualification 10
Section 3.02 No Conflicts 11
Section 3.03 Governmental Consents and Approvals 11
Section 3.04 Litigation 11
Section 3.05 Insurance 11
Section 3.06 Financial Statements 11
Section 3.07 Books and Records 12
Section 3.08 Assets 12
Section 3.09 Compliance with Laws 12
Section 3.10 SBF Marks; Legacy Systems 12
Section 3.11 Supply Agreements 13
Section 3.12 Real Property 13
Section 3.13 Environmental, Health and Safety Matters 13
Section 3.14 Other Transactions 14
Section 3.15 Finder's Fees 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TF 14
Section 4.01 Organization, Authority and Qualification 15
Section 4.02 Equity Ownership of TF 15
Section 4.03 No Conflicts 15
Section 4.04 Governmental Consents and Approvals 15
Section 4.05 Litigation 15
Section 4.06 Insurance 16
Section 4.07 Books and Records 16
Section 4.08 Assets 16
Section 4.09 Compliance with Laws 16
Section 4.10 Equity Financing 16
Section 4.11 Supply Agreements 17
Section 4.12 Real Property 17
Section 4.13 Environmental, Health and Safety Matters 17
Section 4.14 Other Transactions 18
Section 4.15 Finder's Fees 18
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE TF MEMBERS 19
Section 5.01 Organization, Authority and Qualification 19
Section 5.02 No Conflicts 19
Section 5.03 Governmental Consents and Approvals 19
Section 5.04 Litigation 19
Section 5.05 Compliance with Laws 20
Section 5.06 Other Transactions 20
ARTICLE VI MARKETING AND SALE OF PRODUCT 20
Section 6.01 Marketing and Sale Rights and Obligations 20
Section 6.02 Branding and Labeling 20
Section 6.03 Marketing Plan 21
ARTICLE VII PRODUCTION AND TRANSFER 21
Section 7.01 Production; Transfer of Product 21
Section 7.02 Product Quality Standards 21
ARTICLE VIII FEES AND PAYMENT TERMS 22
Section 8.01 Base Marketing Fee; Start-Up Fee 22
Section 8.02 Payment of Fees 22
Section 8.03 Invoicing; Collections 23
Section 8.04 TF Product Customer Sales Information 23
Section 8.05 General Payment Terms 23
ARTICLE IX TF PLANT CONSTRUCTION; MANAGEMENT AND OPERATION 24
Section 9.01 TF Plant Construction; Operation 24
Section 9.02 Scheduling; Transportation 25
Section 9.03 SBF Services 26
Section 9.04 Quality Assurance 26
Section 9.05 Core Plant Employees 26
Section 9.06 Legacy Systems 26
Section 9.07 Third Party Fees; Other Fees 27
Section 9.08 Use of TF Plant Facilities 27
Section 9.09 Executive Changes 28
ARTICLE X HOG SUPPLY 28
Section 10.01 Country of Origin 28
Section 10.02 Standards and Criteria 28
ARTICLE XI ADDITIONAL AGREEMENTS 29
Section 11.01 Exempted Product 29
Section 11.02 Operation of the TF Plant 29
Section 11.03 Operation of the Guymon Plant 30
Section 11.04 Confidential Information 31
Section 11.05 Public Announcements 32
Section 11.06 Inspection and Access to Information; Audit 32
Section 11.07 HACCP Plan and Food Safety 33
Section 11.08 Financial Information 33
Section 11.09 Insurance; Casualty 34
Section 11.10 Notice of Developments 35
Section 11.11 Force Majeure 35
Section 11.12 Reports and Data Sharing 35
Section 11.13 Financing Commitment 35
Section 11.14 Party/TF Member Additional Agreements 35
ii
Section 11.15 Party Additional Agreements 35
Section 11.16 Further Assurances 35
ARTICLE XII DEFAULT; EVENTS OF DEFAULT 36
Section 12.01 TF Defaults and Events of Default 36
Section 12.02 SBF Defaults and Events of Default 37
Section 12.03 Cumulative Remedies 39
ARTICLE XIII INDEMNIFICATION 39
Section 13.01 Indemnification by the Seaboard Entities 39
Section 13.02 Indemnification by TF 40
Section 13.03 Indemnification Procedures 41
Section 13.04 Punitive Damages 42
ARTICLE XIV TERMINATION, AMENDMENT AND WAIVER 42
Section 14.01 Termination 42
Section 14.02 Effect of Termination 42
Section 14.03 Perpetual Term 43
ARTICLE XV MISCELLANEOUS PROVISIONS 43
Section 15.01 Expenses 43
Section 15.02 Notices 43
Section 15.03 Binding Effect; Assignment 45
Section 15.04 Severability 45
Section 15.05 Entire Agreement; Amendment; Waiver 45
Section 15.06 No Third Party Beneficiaries; No Relationship 46
Section 15.07 Governing Law 46
Section 15.08 Survival of Representations and Warranties 46
Section 15.09 Dispute Resolution 46
Section 15.10 Headings 48
Section 15.11 Specific Performance 48
Section 15.12 Counterparts 48
iii
Exhibit A -- Form of Promissory Note
Schedule 1.01(a) -- Employee Costs
Schedule 1.01(b) -- TF Competitors
Schedule 1.01(c) -- SBF Account
Schedule 1.01(d) -- SBF Competitors
Schedule 3.10(a) -- SBF Marks
Schedule 3.10(b) -- Legacy Systems
Schedule 3.11 -- SBF Supply Agreements
Schedule 4.02 -- TF Members
Schedule 4.04 -- TF Governmental Approvals
Schedule 4.06 -- TF Insurance Standards
Schedule 4.11 -- TF Supply Agreements
Schedule 8.01 -- Start-Up Fees
Schedule 9.01 -- Minimum Capability Requirements
Schedule 9.02(a) -- Start-Up Scheduling
Schedule 9.03 -- SBF Services
Schedule 9.07(b) -- Third Party Fees
Schedule 10.02 -- Hog Quality Standards
Schedule 11.14 -- Additional Agreements of the Parties and TF Members
Schedule 11.15 -- Additional Agreements of the Parties
iv
MARKETING AGREEMENT
THIS MARKETING AGREEMENT (this "Agreement"), dated as of
February 2, 2004, is made and entered into by and among SEABOARD
CORPORATION, a Delaware corporation ("Seaboard"), SEABOARD FARMS,
INC., an Oklahoma corporation ("SBF" and, together with Seaboard,
the "Seaboard Entities"), TRIUMPH FOODS LLC, a Missouri limited
liability company ("TF"), and, for purposes of Article V, Section
11.04 and Section 11.14 only, the TF MEMBERS (as defined herein
and identified on Schedule 4.02). The Seaboard Entities, on the
one hand, and TF, on the other hand, are sometimes individually
referred to herein as a "Party" and together as the "Parties".
WHEREAS, the Seaboard Entities are engaged in the business
of producing and selling pork products;
WHEREAS, TF intends to construct a new pork processing plant
in St. Xxxxxx, Missouri (the "TF Plant");
WHEREAS, the Parties desire to enter into a strategic
alliance (the "Alliance"), under which SBF will market and sell
the pork products produced at the TF Plant;
WHEREAS, the Parties desire to make certain agreements in
connection with the marketing and sale of pork products produced
at the TF Plant;
WHEREAS, the Parties desire to make certain representations,
warranties, covenants and other agreements in connection with the
Alliance; and
WHEREAS, for certain limited purposes only, the TF Members
have agreed to be parties to this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, the Parties (and, for purposes
of Article V, Section 11.04 and Section 11.14 only, the TF
Members on a several basis), intending to be legally bound
hereby, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. The following terms, as used herein,
have the following meanings:
"Affiliate" of any specified Person means any other Person
that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by, or is under common Control with,
such specified Person.
1
"Affiliated Plant" means a processing plant that produces
pork products and is at least 25% owned or controlled by a Party
or an Affiliate thereof.
"Anniversary Date" means an anniversary date of the Start-Up
Date, and references to a specific Anniversary Date (e.g., the
"5th Anniversary Date") shall refer to the corresponding
anniversary of the Start-Up Date.
"Business Day" means any day except Saturday, Sunday or any
day on which banks in Kansas City, Missouri are required or
authorized by Law to be closed.
"Code" means the United States Internal Revenue Code of
1986.
"Commencement Date" means the date on which commercial
processing of pork products commences at the TF Plant. Such date
is expected to be approximately 18 months after the Commencement
of Construction.
"Commencement of Construction" means the date on which the
digging of the foundation for the TF Plant begins.
"Confidentiality Agreement" means the Confidentiality and
Non-Disclosure Agreement, dated May 29, 2003, by and between SBF
and TF.
"Control" (including, with its correlative meanings,
"Controlled by" and "under common Control with") means, when used
with respect to any specified Person, any of the following:
(i) ownership, directly or indirectly through one or more
intermediaries, by such specified Person of equity securities
entitling it to exercise in the aggregate more than 50% of the
voting power of the entity in question, or (ii) the possession by
such specified Person of the power, directly or indirectly
through one or more intermediaries, (A) to elect a majority of
the board of directors (or equivalent governing body) of the
entity in question, or (B) to direct the management and policies
of the entity in question, directly or indirectly, whether
through the ownership of voting securities, by contract or
otherwise.
"Default Rate" means the floating rate of 90 day LIBOR plus
500 basis points, compounded daily.
"Employee Costs" means the direct costs, fees and expenses
incurred by the Seaboard Entities (calculated on an accrual basis
in accordance with U.S. GAAP) as reasonably necessary to perform
the SBF Services and only as set forth on Schedule 1.01(a).
"Environmental Laws" means the Resource Conservation and
Recovery Act of 1987, 42 U.S.C. Section 6901 et. seq.,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. Section 9601 et. seq., The Federal
Water Pollution Control Act, 33 U.S.C. Section 6901 et. seq.,
The Clean Water Act, 33 U.S.C. Section 1321 et. seq., The
Clean Air Act, 42 U.S.C. Section 7401 et. seq., The Toxic
Substances Control Act, 15 U.S.C. Section 2601 et. seq., in
each case, together with the rules and regulations promulgated
thereunder and as amended from
2
time to time, and any so-called "Superfund" or "Superlien" Law,
and any other local, state, foreign and federal Law relating to
the protection of the environment, pollution control or
natural resources, including surface or ground water, drinking
water supply, soil, surface or subsurface strata or medium, or
ambient air, pollution control, product registration and
Hazardous Materials.
"Force Majeure Event" means any event or condition, not
existing or reasonably foreseeable as of the date hereof and not
reasonably within the control of a Party, which prevents in whole
or in any material part the performance by a Party of its
obligations hereunder. A "Force Majeure Event" includes labor
disputes, delay or inability to obtain labor, machinery or
services through such Party's usual sources and after reasonable
attempts have been made, equipment malfunction or breakdown
(assuming regular maintenance procedures are observed), acts of
God, diseases (assuming good husbandry practices are observed),
inability to obtain or any delay in delivery of (in either case
for reasons unrelated to cost) market hogs from third parties
(specifically excluding any failure of a TF Member to deliver
hogs under any TF Supply Agreement to which such TF Member is a
party), governmental restrictions and fire, flood, tornado, power
outage or other casualty. A "Force Majeure Event" shall not
include any event which makes performance under this Agreement
merely difficult, costly, unprofitable or commercially
unreasonable.
"Governmental Entity" means any federal, state or local or
foreign government, any political subdivision thereof or any
court, administrative or regulatory agency, department,
instrumentality, body or commission or other governmental
authority or agency, domestic or foreign.
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered
by or with any Governmental Entity.
"Guymon Plant" means SBF's Plant located in Guymon,
Oklahoma.
"HACCP Plan" means the plan with respect to meeting Hazard
Analysis and Critical Control Point requirements established by
the U.S. Department of Agriculture and any similar regulations.
"Hazardous Materials" means any waste, pollutant,
contaminant, hazardous substance, toxic, ignitable, reactive or
corrosive substance, hazardous waste, special waste, industrial
substance, by-product, process-intermediate product or waste,
petroleum or petroleum-derived substance or waste, chemical
liquids or solids, liquid or gaseous products, or any constituent
of any such substance or waste, the use, handling or disposal of
which is in any way governed by or subject to any applicable Law.
"Indemnified Party" means an SBF Indemnified Party or a TF
Indemnified Party, as applicable.
"Indemnifying Party" means TF pursuant to Section 13.02 and
Seaboard or SBF pursuant to Section 13.01, as applicable.
3
"Interest Rate" means the floating rate of 90 day LIBOR plus
250 basis points, compounded daily.
"Knowledge" means (i) with respect to the Seaboard Entities,
the actual knowledge of Xxxxx Xxxxxx, Xxx X. Xxxxxxxxx, Xxxx
Xxxxx or Xxxxxx Xxxxx; (ii) with respect to TF, the actual
knowledge of Xxxxxx Xxxxxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxx X.
Xxxxxxx or Xxxxxx Xxxxxx; and (iii) with respect to a TF Member,
the actual knowledge of the chief executive officer and the chief
financial officer of such TF Member.
"Laws" means all statutes, rules, codes, regulations,
restrictions, ordinances, orders, decrees, approvals, directives,
judgments, injunctions, writs, awards and decrees of, or issued
by, all Governmental Entities.
"Liabilities" means any and all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent,
matured or unmatured, or determined or determinable, including
those arising under any Law or Governmental Order and those
arising under any contract, agreement, arrangement, commitment or
undertaking.
"LIBOR" means the London Interbank Offered Rate, as quoted
in The Wall Street Journal (or, if no longer published, a
comparable financial publication) from time to time.
"Loss" or "Losses" means any and all Liabilities, losses,
damages, claims, actions, suits, proceedings, costs, expenses
(including attorneys' and consultants' fees and expenses),
interest, awards, judgments and penalties.
"Monthly TF Plant Percentage" means the percentage obtained
by dividing (i) the aggregate Product Revenue for only the TF
Plant for a given calendar month by (ii) the aggregate Product
Revenue for both the TF Plant and the Guymon Plant for such
calendar month.
"Person" means any individual, corporation, partnership,
joint venture, limited liability company, trust, unincorporated
organization or Governmental Entity.
"Plant" means a pork processing plant, including all land,
buildings, machinery, natural resources, furniture, fixtures and
all other equipment employed with respect to such pork processing
plant.
"Potential Investment" shall have the meaning set forth in
Schedule 11.15.
"Product Price" means the aggregate gross revenues from
sales of a Qualifying Product from the TF Plant and the Guymon
Plant, on an FOB Plant basis net of any related sales
commissions, marketing accruals, trade allowances and freight and
similar charges (but including any other payments received from
the customer in lieu of, or in consideration for reductions in,
the prevailing resale price), divided by the total number of
pounds of the Qualifying Product sold from the TF Plant and the
Guymon Plant.
4
"Product Revenue" means the Product Price for a Qualifying
Product multiplied by the total number of pounds of the
Qualifying Product sold from the TF Plant and the Guymon Plant.
"Promissory Note" means the Promissory Note to be delivered
by SBF on the Commencement Date substantially in the form
attached as Exhibit A.
"Qualifying Product" means a specific product (identified by
a specific SKU) that is manufactured by either or both the TF
Plant and/or the Guymon Plant. The total amount of Qualifying
Products shall equal the total pounds of all products, including
Transferred Products and Non-Conforming Products, sold or
transferred from the TF Plant and the Guymon Plant for any given
time period. For purposes of this Agreement, Qualifying Products
shall be identified by type, and Transferred Products and Non-
Conforming Products shall be identified as such. All products
with identical specifications and identical costs shall be
identified by one SKU.
"Reasonable Good Faith Determination" means a good faith
determination made by a Party, taking into account the purposes
of this Agreement and the intentions of the Parties as expressed
and contemplated herein, including but not limited to the
purposes and intentions expressed in Section 2.01.
"Receivable" shall have the meaning set forth in Schedule
11.15.
"SBF Account" means account set forth on Schedule 1.01(c),
or such other account as SBF shall from time to time hereafter
specify in writing to TF.
"SBF Change of Control" means any of the following: (i) the
sale, transfer, assignment or conveyance by SBF of all or a
substantial portion of the assets used by SBF in the operation of
the Guymon Plant to a Person or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934) that is not an Affiliate of SBF (other than in connection
with any financing for SBF or any Affiliate thereof); (ii) any
merger, consolidation, share exchange, recapitalization, sale or
other transaction in which any Person or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934) that is not an Affiliate of SBF acquires
Control of SBF; or (iii) any merger, consolidation, share
exchange, recapitalization, sale or other transaction, as a
result of which any Person that is a TF Competitor acquires
Control of Seaboard; provided, however, that an "SBF Change of
Control" shall not include a public offering of securities by a
Seaboard Entity.
"SBF Competitor" means any Person (including each of the
Persons listed on Schedule 1.01(d)) that sells, on a wholesale
basis, pork products that are competitive with a Qualifying
Product, and the Affiliates of such Person.
5
"SBF Leased Real Property" means the parcels of real
property used in connection with the operation of the Guymon
Plant of which SBF or an Affiliate of SBF is the lessee (together
with all fixtures and improvements thereon).
"SBF Material Adverse Effect" means any change, event,
circumstance, development or effect on the Seaboard Entities that
is or is reasonably likely to be materially adverse to the pork
processing business, liquidity or financial condition of the
Seaboard Entities, taken as a whole, and which is reasonably
likely to materially adversely affect the ability of either of
the Seaboard Entities to carry out its obligations under, and to
consummate the transactions contemplated by, this Agreement.
"SBF Owned Real Property" means the parcels of real property
used in connection with the operation of the Guymon Plant of
which SBF or an Affiliate of SBF is the owner (together with all
fixtures and improvements thereon).
"SBF Real Property" means the SBF Owned Real Property and
the SBF Leased Real Property.
"SBF Supply Agreements" means all contracts and agreements
relating to the supply of market hogs to the Guymon Plant.
"Start-Up Date" means the date that pork producing
operations at the TF Plant begin to xxxxxxxxx at least 1,500 head
per day.
"Supply Agreements" means the TF Supply Agreements or the
SBF Supply Agreements, as applicable.
"TF Change of Control" means any of the following: (i) the
sale, transfer, assignment or conveyance of all or a substantial
portion of the assets of TF used in the operation of the TF Plant
to a Person or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934) that is not an
Affiliate of TF (other than in connection with any financing for
TF), or (ii) any merger, consolidation, share exchange,
recapitalization, sale or other transaction in which any Person
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934) that is not an Affiliate of
TF acquires Control of TF; provided, however, that a "TF Change
of Control" shall not include: (a) a public offering of
securities by TF; (b) transfers of equity interests of TF among
the TF Members; (c) changes in voting power or equity interests
among the TF Members in accordance with the terms of the TF
Operating Agreement as in effect on the date hereof; (d) any sale
or transfer of equity interests or assets of an individual TF
Member, provided that any such sale or transfer with respect to
more than one TF Member shall not indirectly constitute an event
described in (i) or (ii) above; or (e) any issuance or sale of
equity interests in TF to any other pork producer (which is not
an SBF Competitor) so long as no Person which is not a TF Member
as of the date hereof acquires Control of TF.
6
"TF Competitor" means any Person (including each of the
Persons listed on Schedule 1.01(b)) that sells, on a wholesale
basis, pork products that are competitive with a Qualifying
Product, and the Affiliates of such Person.
"TF Leased Real Property" means the parcels of real property
used in connection with the operation of the TF Plant of which TF
or an Affiliate of TF is the lessee (together with all fixtures
and improvements thereon).
"TF Material Adverse Effect" means any change, event,
circumstance, development or effect on TF that is or is
reasonably likely to be materially adverse to the pork processing
business, liquidity or financial condition of TF and which is
reasonably likely to materially adversely affect the ability of
TF to carry out its obligations under, or to consummate the
transactions contemplated by, this Agreement.
"TF Member Material Adverse Effect" means any change, event,
circumstance, development or effect on a TF Member which is
reasonably likely to materially adversely affect the ability of
such TF Member to carry out its obligations under, or to
consummate the transactions contemplated by, this Agreement or
any TF Supply Agreement.
"TF Operating Agreement" means the Operating Agreement of
Triumph Foods LLC effective April 29, 2003.
"TF Owned Real Property" means the parcels of real property
used in connection with the operation of the TF Plant of which TF
or an Affiliate of TF is owner (together with all fixtures and
improvements thereon).
"TF Plant Products" means products (whether finished or
unfinished) produced from the TF Plant.
"TF Real Property" means the TF Owned Real Property and the
TF Leased Real Property.
"TF Supply Agreements" means all contracts and agreements
relating to the supply of market hogs to the TF Plant.
"Third Party Offeror" shall have the meaning set forth in
Schedule 11.14.
"U.S. GAAP" means United States generally accepted
accounting principles and practices in effect from time to time,
applied consistently throughout the periods involved.
"Week" means the period commencing on any given Sunday and
ending on the next successive Saturday.
Section 1.02 Other Definitions. Each of the following terms is
defined in the Section set forth opposite such term:
7
Term Section
Agreement Preamble
Alliance Recitals
Alternative Marketing Arrangement 2.02(a)
Base Marketing Fee 8.01(a)
Confidential Information 11.04(a)
Core Plant Employees 9.05
Credit Policies 8.03(b)
Current Base Marketing Fee 8.01(a)
Disclosing Party 11.04(a)
Dispute Notice 15.09(a)
Equity Commitment Letter 4.10
Financing Commitments 11.13
Force Majeure Period 11.11
Governmental Approvals 3.03
Independent Accounting Firm 15.09(b)
Legacy Systems 3.10(b)
Legacy Systems Fee 9.06(a)
Non-Arbitral Dispute 15.09(d)
Non-Conforming Products 7.02(c)
Party Preamble
TF Preamble
TF Covenant Default 12.01 (a)(iii)
TF Default 12.01 (a)
TF Event of Default 12.01 (b)
TF Indemnified Party 13.01 (a)
TF Members 4.02
TF Operations Default 12.0l (a)(i)
TF Payment Default 12.01 (a)(ii)
TF Plant Recitals
TF Product Claims 8.05(c)(ii)
TF Product Customer Receivables 8.04
TF Representation Default 12.01(a)(iv)
Quality Standards 7.02(a)
Receiving Party 11.04(a)
Representatives 11.04(a)
SBF Preamble
SBF Covenant Default 12.02(a)(iii)
SBF Default 12.02(a)
SBF Event of Default 12.02(c)
SBF Indemnified Party 13.02(a)
SBF Managed Operations 9.03
SBFMarks 3.10(a)
SBF Operations Default 12.02(a)(i)
SBF Payment Default 12.02(a)(ii)
8
SBF Products 8.05(c)(i)
SBF Quality Assurance Employees 9.04
SBF Representation Default 12.02(a)(iv)
SBF Services 9.03
SBF Transportation Employees 9.02(b)
Scheduling Operations 9.02(a)
Seaboard Preamble
Seaboard Entities Preamble
Seaboard Financial Statements 3.06(a)
Start-Up Fee 8.01(b)
STI 9.02(b)
Third Party Claims 13.03
Transferred Product 7.01(b)
Unidentified Product 8.05(c)(iii)
Section 1.03 Construction. Unless the context of this
Agreement otherwise clearly requires, (a) references to the
plural include the singular, and references to the singular
include the plural, (b) references to any gender include the
other genders, (c) the words "include", "includes" and
"including" do not limit the preceding terms or words and shall
be deemed to be followed by the words "without limitation", (d)
the term "or" has the inclusive meaning represented by the phrase
"and/or", (e) the terms "hereof", "herein", "hereunder", "hereto"
and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement, (f)
the terms "day" and "days" mean and refer to calendar day(s) and
(g) the terms "year" and "years" mean and refer to calendar
year(s). Unless otherwise set forth herein, references in this
Agreement to (i) any document, instrument or agreement (including
this Agreement) (A) includes and incorporates all exhibits,
schedules, annexes and other attachments thereto, (B) includes
all documents, instruments or agreements issued or executed in
replacement thereof and (C) means such document, instrument or
agreement, or replacement or predecessor thereto, as amended,
modified or supplemented from time to time in accordance with its
terms and in effect at any given time, and (ii) a particular Law
means such Law as amended, modified, supplemented or succeeded,
from time to time and in effect at any given time. All Article,
Section, Exhibit and Schedule references herein are to Articles,
Sections, Exhibits and Schedules of this Agreement, unless
otherwise specified. This Agreement shall not be construed as if
prepared by one of the Parties, but rather according to its fair
meaning as a whole, as if all Parties had prepared it.
ARTICLE II
PURPOSE AND SCOPE OF ALLIANCE
Section 2.01 Purpose and Scope. The Parties hereby agree that
TF shall produce pork products at the TF Plant and that SBF shall
purchase, market and sell such products pursuant to this
Agreement. In addition, the Parties agree to work in good faith
to achieve, through the Alliance, the following objectives:
(a) to generate cost savings in the construction and operation
of the TF Plant;
9
(b) to facilitate the entry of TF Plant Products into the
marketplace;
(c) to achieve efficiencies through economies of scale in
selling, general and administrative costs;
(d) to achieve benefits in sales and marketing associated with
an increased presence in the marketplace resulting from marketing
the combined production from both Parties' Plants; and
(e) to ensure collaboration between the Parties for their mutual
benefit.
Section 2.02 Other Arrangements; Non-Discrimination.
(a) In the event SBF enters into another marketing arrangement
(an "Alternative Marketing Arrangement") with a Person that is
not an Affiliate of SBF, no product produced at a Plant other
than the Xxxxxx Plant in connection with such Alternative
Marketing Arrangement shall be considered for purposes of making
any calculation or other determination pursuant to this
Agreement.
(b) From and after the Start-Up Date, except as otherwise
provided in this Agreement or as may be commercially appropriate,
SBF shall not discriminate in favor of its own products produced
at the Xxxxxx Plant or an Affiliated Plant of SBF or in favor of
any products produced at a Plant other than the Xxxxxx Plant in
connection with an Alternative Marketing Arrangement or
otherwise, in either case to the financial detriment of TF, with
respect to such matters as scheduling, marketing and sales
efforts, personnel incentives, pricing, order fulfillment,
branding, transportation, information services, cost allocations
or sales commissions, marketing accruals and trade allowances to
customers and third parties.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SEABOARD ENTITIES
The Seaboard Entities hereby represent and warrant to TF, on
a joint and several basis, each of the following as of the date
hereof:
Section 3.01 Organization, Authority and Qualification.
Seaboard is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
necessary power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the
transactions contemplated hereby. SBF is a corporation duly
organized, validly existing and in good standing under the Laws
of the State of Oklahoma and has all necessary power and
authority to enter into this Agreement, to carry out its
obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery by the Seaboard
Entities of this Agreement, the performance by the Seaboard
Entities of their respective obligations hereunder and the
consummation by the Seaboard Entities of the transactions
contemplated hereby have been duly authorized by all requisite
action on the part of the Seaboard Entities. This Agreement has
been duly executed and delivered by the Seaboard Entities and
(assuming due authorization, execution and delivery by TF), this
10
Agreement constitutes the legal, valid and binding obligations of
the Seaboard Entities, enforceable against the Seaboard Entities
in accordance with its terms.
Section 3.02 No Conflicts. The execution, delivery and
performance by the Seaboard Entities of this Agreement do not and
will not (a) violate, conflict with or result in the breach of
any provision of the organizational documents of the Seaboard
Entities; (b) conflict with or violate in any material respect
any Law or Governmental Order applicable to the Seaboard
Entities; or (c) materially conflict with, or result in, any
material breach of, constitute a material default (or event which
with the giving of notice or lapse of time or both would become a
material default) under, require any material consent under, or
give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, any
note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or
arrangement to which a Seaboard Entity is a party, which would
result in an SBF Material Adverse Effect.
Section 3.03 Governmental Consents and Approvals. The
execution and delivery of this Agreement by the Seaboard Entities
do not, and the performance by the Seaboard Entities of this
Agreement shall not, require any consent, approval, authorization
or permit of, or filing with or notification to, any Governmental
Entity ("Governmental Approvals"), except where the failure to
obtain such Governmental Approvals would not result in an SBF
Material Adverse Effect.
Section 3.04 Litigation. Except as publicly disclosed, there
is no suit, action, claim, arbitration, proceeding or
investigation pending or, to the knowledge of SBF, threatened
against, relating to or involving any Seaboard Entity or the
Xxxxxx Plant before any Governmental Entity that, if finally
determined adversely to such Seaboard Entity, is reasonably
likely, individually or in the aggregate, to result in an SBF
Material Adverse Effect. Other than as reflected or reserved
against on the Seaboard Financial Statements, no Seaboard Entity
is subject to any judgment, decree, injunction, rule or order of
any court or arbitration panel that is reasonably likely to
result in an SBF Material Adverse Effect.
Section 3.05 Insurance. All material assets, properties and
risks of the Xxxxxx Plant are covered by valid insurance policies
or binders of insurance (including general liability insurance,
property insurance and workers' compensation insurance) issued in
favor of SBF, in each case with responsible insurance companies,
in such types and amounts and covering such risks with respect to
the Xxxxxx Plant as are at least as comprehensive as those with
respect to the TF Plant set forth on Schedule 4.06.
Section 3.06 Financial Statements.
(a) SBF has delivered to TF true and correct copies of (i) the
audited consolidated balance sheet of Seaboard for the fiscal
year ended December 31, 2002, along with the related audited
consolidated statements of income and cash flows and accompanied
by the reports thereon of Seaboard's independent auditors, as
filed with the Securities and Exchange Commission on Seaboard's
Form 10-K/A for such fiscal year, (ii) the unaudited consolidated
balance sheet of Seaboard for the quarterly period ended June 28,
2003, along with the related unaudited consolidated statements of
income and cash flows, as filed with the Securities and
11
Exchange Commission on Seaboard's Form 10-Q for such quarterly period
((i) and (ii) collectively referred to herein as the "Seaboard
Financial Statements"), and (iii) the internal financial
statements of SBF for the quarterly period ended June 28, 2003,
prepared in the ordinary course of business.
(b) The Seaboard Financial Statements have been prepared in
accordance with U.S. GAAP applied on a basis consistent with the
past practices of Seaboard and present fairly in all material
respects the consolidated financial condition and results of
operations of Seaboard as of the dates thereof or for the periods
covered thereby.
Section 3.07 Books and Records. The books of account and other
financial records of the Xxxxxx Plant (a) reflect all items of
income and expense and all assets and Liabilities required to be
reflected therein in accordance with U.S. GAAP, applied on a
basis consistent with past practice, (b) are in all material
respects complete and correct, and do not contain or reflect any
material inaccuracies or discrepancies, and (iii) have been
maintained in accordance with good business and accounting
practices.
Section 3.08 Assets. SBF owns, leases or has the legal right
to use all the properties and assets used in connection with the
operation of the Xxxxxx Plant and, with respect to contract
rights, enjoys the right to the benefits of all contracts,
agreements and other arrangements used by SBF in connection with
the operation of the Xxxxxx Plant. SBF has caused such
properties and assets to be maintained in accordance with good
business practice, and all such properties and assets are in good
operating condition and repair (subject to normal wear and tear)
and suitable for the purposes for which they are used and
intended.
Section 3.09 Compliance with Laws. Except as publicly
disclosed or as would not be reasonably likely to have an SBF
Material Adverse Effect, (a) each Seaboard Entity is in
compliance in all material respects with all Laws (including the
U.S. Foreign Corrupt Practices Act, applicable foreign Laws and
applicable Laws relating to zoning, environmental matters and the
safety and health of employees), (b) neither Seaboard Entity has
been charged with, nor has either received any written notice
that it is under investigation with respect to, and, to the
knowledge of SBF, neither is otherwise now under investigation
with respect to, a material violation of any such Law, (c)
neither Seaboard Entity is a party to, or bound by, any order,
judgment, decree, injunction, rule or award of any Governmental
Entity, and (d) each Seaboard Entity has filed all reports and
has all licenses and permits required to be filed with any
Governmental Entity on or prior to the date hereof.
Section 3.10 SBF Marks; Legacy Systems.
(a) The Seaboard Entities are the owners of the marks and logos
set forth on Schedule 3.10(a) (the "SBF Marks") and are entitled
to use such SBF Marks in the operation of the Xxxxxx Plant as
currently conducted and as currently contemplated.
(b) The Seaboard Entities are the owners of, and have full right
and authority. to grant licenses with respect to, the management
information systems of SBF described in Schedule 3.10(b) (the
"Legacy Systems"). Upon the completion of installation of the
Legacy
12
Systems at the TF Plant, the Legacy Systems will be
operable and will reasonably perform the functions that they were
designed to perform.
Section 3.11 Supply Agreements. Schedule 3.11 lists each SBF
Supply Agreement in effect as of the date hereof. Each such SBF
Supply Agreement is valid and binding on the parties thereto and
is in full force and effect. SBF is not in material breach of,
or material default under, any such SBF Supply Agreement, and, to
the knowledge of SBF, no other party to any such SBF Supply
Agreement is in material breach thereof or material default
thereunder. SBF has not received any written notice of
termination, cancellation, breach or default under any such SBF
Supply Agreement.
Section 3.12 Real Property.
(a) SBF has (i) good and marketable title to each parcel of the
SBF Owned Real Property, except as would not interfere in any
material respect with the present or intended use or occupancy by
SBF of the SBF Owned Real Property, and (ii) a valid leasehold
interest in the SBF Leased Real Property, and the leases granting
SBF such interests are in full force and effect.
(b) No portion of the SBF Real Property, or any building or
improvement located thereon, violates in any material respect any
Law, including those Laws relating to zoning, building, land use,
environmental, health and safety, fire, air, sanitation and noise
control. Except as would not interfere in any material respect
with the present or intended use or occupancy by SBF of the SBF
Real Property, no SBF Real Property is subject to (i) any
governmental decree or order (or, to the knowledge of SBF,
threatened or proposed order) or (ii) any rights of way, building
use restrictions, exceptions, variances, reservations or
limitations of any nature whatsoever.
(c) The improvements and fixtures on the SBF Real Property are
in good operating condition and in a state of good maintenance
and repair, ordinary wear and tear excepted, and are adequate and
suitable for the purposes for which they are presently being
used. There are no condemnation, expropriation or similar
proceeding pending or, to the knowledge of SBF, threatened,
against any of the SBF Real Property or any improvement thereon.
The SBF Real Property constitutes all of the real property that
is utilized by SBF in the operation of the Xxxxxx Plant.
Section 3.13 Environmental, Health and Safety Matters. Except
as publicly disclosed or as would not be reasonably likely to
have an SBF Material Adverse Effect:
(a) SBF possesses all material permits and approvals required
under, and is in compliance in all material respects with, all
Environmental Laws and is in compliance in all material respects
with all applicable limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and
timetables contained in all Environmental Laws or contained in
any other Law, or any notice or demand letter issued thereunder;
(b) SBF has not received notice of actual or threatened material
liability under any Environmental Law or any similar foreign Law
from any Governmental Entity or any third
13
party, and, to the knowledge of SBF, there is no fact or circumstance
that could form the basis for the assertion of any material claim against
SBF under any Environmental Law, including with respect to any on-
site or off-site location;
(c) SBF (i) has not entered into or agreed to enter into any
consent decree or order, (ii) has not contemplated entering into
any consent decree or order, and (ii) is not subject to any
judgment, decree or judicial or administrative order relating to
compliance with, or the cleanup of Hazardous Materials under, any
applicable Environmental Law;
(d) to the knowledge of SBF, SBF is not alleged to be in
violation in any material respect of, and is not subject to any
administrative or judicial proceeding pursuant to, applicable
Environmental Laws;
(e) SBF is not subject to any material Liability , incurred or
imposed or based upon any provision of any Environmental Law or
arising out of any act or omission of SBF, or SBF's employees,
agents or representatives or arising out of the ownership, use,
control or operation by SBF of the Xxxxxx Plant;
(f) SBF has made available to TF true, correct and complete
copies of all reports and files relating to environmental
matters; and SBF has not paid any material fine, penalty or
assessment with respect to environmental matters;
(g) no SBF Real Property, improvement or equipment contains any
asbestos, polychlorinated biphenyls, underground storage tanks,
open or closed pits, sumps or other containers on or under any
asset; and
(h) SBF has not imported, manufactured, stored, used, operated,
transported, treated or disposed of any Hazardous Material other
than in compliance with all Environmental Laws.
Section 3.14 Other Transactions. As of the date hereof,
neither Seaboard Entity is involved in negotiations or
discussions that would be reasonably likely to result in an SBF
Change of Control or a Potential Investment.
Section 3.15 Finder's Fees. SBF has not engaged any broker,
agent, finder, investment banker or similar Person with respect
to the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TF
TF hereby represents and warrants to the Seaboard Entities
each of the following as of the date hereof and as of the
Commencement Date; provided, however, that representations and
warranties that are explicitly made by TF only as of the
Commencement Date are made only as of such date:
14
Section 4.01 Organization, Authority and Qualification. TF is
a limited liability company duly formed, validly existing and in
good standing under the Laws of the State of Missouri and has all
necessary power and authority to enter into this Agreement, to
carry out its obligations hereunder and to consummate the
transactions contemplated hereby. On or prior to the date
hereof, TF has delivered to SBF true and complete copies of its
governing instruments, including its Certificate of Formation and
Operating Agreement and any amendments thereto. The execution
and delivery by TF of this Agreement, the performance by TF of
its obligations hereunder and the consummation by TF of the
transactions contemplated hereby have been duly authorized by all
requisite action on the part of TF. This Agreement has been duly
executed and delivered by TF and (assuming due authorization,
execution and delivery by the Seaboard Entities), this Agreement
constitutes the legal, valid and binding obligations of TF,
enforceable against TF in accordance with its terms.
Section 4.02 Equity Ownership of TF. Set forth on Schedule
4.02 is a true and complete list of all of the equity owners of
TF (the "TF Members"), listing for each such TF Member its name,
number of equity interests held, aggregate amount of cash
contributions made or committed to TF and percentage of total
outstanding equity interests in TF held by such TF Member.
Except as set forth on Schedule 4.02, there are no options,
warrants, calls, convertible notes, agreements, commitments or
other rights outstanding that obligated or, under any
circumstance would obligate, TF to issue, deliver or sell any
equity interest in TF, or to grant, extend or enter into such
option, warrant, call, convertible note, agreement, commitment or
other right. There are no voting trusts or other agreements or
understandings with respect to the voting of the equity interests
of TF, and TF does not own or control, directly or indirectly
through one or more intermediaries, any equity interest in any
other Person.
Section 4.03 No Conflicts. The execution, delivery and
performance by TF of this Agreement do not and will not (a)
violate, conflict with or result in the breach of any provision
of the governing instruments of TF; (b) conflict with or violate
in any material respect any Law or Governmental Order applicable
to TF; or (c) materially conflict with, or result in, any
material breach of, constitute a material default (or event which
with the giving of notice or lapse of time or both would become a
material default) under, require any material consent under, or
give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, any
note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or
arrangement to which TF is a party, which would result in a TF
Material Adverse Effect.
Section 4.04 Governmental Consents and Approvals. The
execution and delivery of this Agreement by TF do not, and the
performance by TF of this Agreement shall not, require any
Governmental Approvals, except as described in Schedule 4.04 or
where the failure to obtain such Governmental Approvals would not
materially adversely affect or materially delay the ability of TF
to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement.
Section 4.05 Litigation. There is no suit, action, claim,
arbitration, proceeding or investigation pending or, to the
knowledge of TF, threatened against, relating to or involving TF,
the TF Plant or any TF Member before any Governmental Entity
that, if finally determined
15
adversely to TF or such TF Member, is reasonably likely, individually
or in the aggregate, to result in a TF Material Adverse Effect.
TF and the TF Plant are not subject to any judgment, decree,
injunction, rule or order of any court or arbitration panel that is
reasonably likely to result in a TF Material Adverse Effect.
Section 4.06 Insurance. Prior to the commencement of pork
producing operations at the TF Plant, all material assets,
properties and risks of TF will be covered by valid and currently
effective insurance policies or binders of insurance (including
general liability insurance, property insurance and workers'
compensation insurance) issued in favor of TF, in each case with
responsible insurance companies, in such types and amounts and
covering such risks as are at least as comprehensive as those set
forth in Schedule 4.06.
Section 4.07 Books and Records.
(a) The books of account and other financial records of TF (i)
reflect all items of income and expense and all assets and
Liabilities required to be reflected therein in accordance with
U.S. GAAP, where applicable, (ii) are in all material respects
complete and correct, and do not contain or reflect any material
inaccuracies or discrepancies, and (iii) have been maintained in
accordance with good business and accounting practices.
(b) The minute books of TF contain accurate records of all
meetings and accurately reflect all other actions taken by the TF
Members. Complete and accurate copies of all such minute books
and of the record of interest holders of TF have been provided by
TF to SBF.
Section 4.08 Assets. As of the Commencement Date, TF will own,
lease or have the legal right to use all the properties and
assets used or intended to be used in connection with the
operation of the TF Plant or otherwise owned, leased or used by
TF and, with respect to contract rights, will be a party to and
enjoy the right to the benefits of all contracts, agreements and
other arrangements used or intended by be used by TF in
connection with the operation of the TF Plant. As of the
Commencement Date, TF will have caused such properties and assets
to be maintained in accordance with good business practice, and
all such properties and assets will be in good operating
condition and repair and suitable for the purposes for which they
are used and intended.
Section 4.09 Compliance with Laws. Except as would not be
reasonably likely to result in a TF Material Adverse Effect, TF
(a) is in compliance in all material respects with all applicable
Laws (including applicable Laws relating to zoning, environmental
matters and the safety and health of employees), (b) has not been
charged with, and has received no written notice that it is under
investigation with respect to, and, to the knowledge of TF, is
not otherwise now under investigation with respect to, a material
violation of any applicable Law, (c) is not a party to, or bound
by, any order, judgment, decree, injunction, rule or award of any
Governmental Entity, and (d) has filed all reports and has all
licenses and permits required to be filed with any Governmental
Entity on or prior to the date hereof.
Section 4.10 Equity Financing. TF has received and has
furnished to SBF true and complete copies of executed commitment
letters containing commitments from the TF Members
16
to provide TF with equity financing in an aggregate amount of
$63,144,000 (the "Equity Commitment Letter"). The Equity Commitment
Letter is in full force and effect and has not been amended or
rescinded. TF has no reason to believe that the Equity Commitment
Letter will not lead to the financing contemplated therein. To the
knowledge of TF, the financing contemplated by the Equity Commitment Letter
constitutes all of the equity financing required to be provided
to TF in order to carry out its obligations under, and to
consummate the transactions contemplated by, this Agreement.
Section 4.11 Supply Agreements. Schedule 4.11 lists each TF
Supply Agreement in effect as of the date hereof (copies of which
have been made available by TF to SBF). As of the Commencement
Date, Schedule 4.11 shall list each TF Supply Agreement in effect
as of such date (which TF Supply Agreements shall be
substantially in the form of the TF Supply Agreements made
available by TF to SBF). Each TF Supply Agreement is valid and
binding on the parties thereto and is in full force and effect.
TF is not in material breach of, or material default under, any
TF Supply Agreement, and, to the knowledge of TF, no other party
to any TF Supply Agreement is in material breach thereof or
material default thereunder. TF has not received any written
notice of termination, cancellation, breach or default under any
TF Supply Agreement.
Section 4.12 Real Property.
(a) As of the Commencement Date, TF will have (i) good and
marketable title to each parcel of the TF Owned Real Property,
except as would not interfere in any material respect with the
present or intended use or occupancy by TF of the TF Owned Real
Property, and (ii) a valid leasehold interest in the TF Leased
Real Property, and, as of the Commencement Date, the leases
granting TF such interests will be in full force and effect.
(b) As of the Commencement Date, no portion of the TF Real
Property, or any building or improvement located thereon, will
violate in any material respect any Law, including those Laws
relating to zoning, building, land use, environmental, health and
safety, fire, air, sanitation and noise control. As of the
Commencement Date, except as would not interfere in any material
respect with the present or intended use or occupancy by TF of
the TF Real Property, no TF Real Property will be subject to (i)
any governmental decree or order (or, to the knowledge of TF,
threatened or proposed order) or (ii) any rights of way, building
use restrictions, exceptions, variances, reservations or
limitations of any nature whatsoever.
(c) As of the Commencement Date, the improvements and fixtures
on the TF Real Property will be in good operating condition and
in a state of good maintenance and repair, ordinary wear and tear
excepted, and will be adequate and suitable for the purposes for
which they are presently being used. As of the Commencement
Date, there will be no condemnation, expropriation or similar
proceeding pending or, to the knowledge of TF, threatened,
against any of the TF Real Property or any improvement thereon.
The TF Real Property constitutes all of the real property that
will be utilized by TF as of the Commencement Date in the
operation of the TF Plant.
Section 4.13 Environmental, Health and Safety Matters. Except
as would not be reasonably likely to result in a TF Material
Adverse Effect, as of the Commencement Date:
17
(a) TF will possess all material permits and approvals required
under, and is in compliance in all material respects with, all
Environmental Laws and will be in compliance in all material
respects with all applicable limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in all Environmental Laws or
contained in any other Law, or any notice or demand letter issued
thereunder;
(b) TF will not have received notice of actual or threatened
material liability under any Environmental Law or any similar
foreign Law from any Governmental Entity or any third party, and,
to the knowledge of TF, there will be no fact or circumstance
that could form the basis for the assertion of any material claim
against TF under any Environmental Law, including with respect to
any on-site or off-site location;
(c) TF (i) will not have entered into or agreed to enter into
any consent decree or order, (ii) will not have contemplated
entering into any consent decree or order, and (ii) will not be
subject to any judgment, decree or judicial or administrative
order relating to compliance with, or the cleanup of Hazardous
Materials under, any applicable Environmental Law;
(d) to the knowledge of TF, TF will not be alleged to be in
violation in any material respect of, and will not be subject to
any administrative or judicial proceeding pursuant to, applicable
Environmental Laws;
(e) TF will not be subject to any material Liability incurred or
imposed or based upon any provision of any Environmental Law
arising out of any act or omission of TF, or TF's employees,
agents or representatives or arising out of the ownership, use,
control or operation by TF of any plant, facility, site, area or
property (including any plant, facility, site, area or property
currently or previously owned or leased by TF) from which any
Hazardous Material was Released;
(f) TF will have made available to SBF true, correct and
complete copies of all reports and files relating to
environmental matters; and TF will not have paid any material
fine, penalty or assessment with respect to environmental
matters;
(g) no Real Property, improvement or equipment will contain any
asbestos, polychlorinated biphenyls, underground storage tanks,
open or closed pits, sumps or other containers on or under any
asset; and
(h) TF will not have imported, manufactured, stored, used,
operated, transported, treated or disposed of any Hazardous
Material other than in compliance with all Environmental Laws.
Section 4.14 Other Transactions. As of the date hereof, TF is
not involved in negotiations or discussions that would be
reasonably likely to result in a TF Change of Control or a
Potential Investment.
Section 4.15 Finder's Fees. TF has not engaged any broker,
agent, finder, investment banker or similar Person with respect
to the transactions contemplated by this Agreement.
18
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE TF MEMBERS
Each TF Member severally (as to itself and not as to any
other TF Member) hereby represents and warrants to the Seaboard
Entities each of the following as of the date hereof:
Section 5.01 Organization, Authority and Qualification. Such
TF Member is an entity duly formed, validly existing and in good
standing under the Laws of the State of its organization or
formation and has all necessary power and authority to enter into
this Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby. The execution
and delivery by such TF Member of this Agreement, the performance
by such TF Member of its obligations hereunder and the
consummation by such TF Member of the transactions contemplated
hereby have been duly authorized by all requisite action on the
part of such TF Member. This Agreement has been duly executed
and delivered by such TF Member, and (assuming due authorization,
execution and delivery by the Seaboard Entities), Article V and
Sections 11.04 and 11.14 of this Agreement constitute the legal,
valid and binding obligations of such TF Member, enforceable
against such TF Member in accordance with their terms.
Section 5.02 No Conflicts. The execution, delivery and
performance by such TF Member of this Agreement do not and will
not (a) violate, conflict with or result in the breach of any
provision of the governing instruments of such TF Member; (b)
conflict with or violate in any material respect any Law or
Governmental Order applicable to such TF Member; or (c)
materially conflict with, or result in, any material breach of,
constitute a material default (or event which with the giving of
notice or lapse of time or both would become a material default)
under, require any material consent under, or give to others any
rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which such TF
Member is a party, which would result in a TF Material Adverse
Effect or a TF Member Material Adverse Effect.
Section 5.03 Governmental Consents and Approvals. The
execution and delivery of this Agreement by such TF Member do
not, and the performance by such TF Member of this Agreement
shall not, require any Governmental Approvals, except where the
failure to obtain such Governmental Approvals would not result in
a TF Material Adverse Effect or a TF Member Material Adverse
Effect.
Section 5.04 Litigation. There is no suit, action, claim,
arbitration, proceeding or investigation pending or, to the
knowledge of such TF Member, threatened against, relating to or
involving such TF Member before any Governmental Entity that, if
finally determined adversely to such TF Member, is reasonably
likely, individually or in the aggregate, to result in a TF
Material Adverse Effect or a TF Member Material Adverse Effect.
Such TF Member is not subject to any judgment, decree,
injunction, rule or order of any court or arbitration panel that
is reasonably likely to result in a TF Material Adverse Effect or
a TF Member Material Adverse Effect.
19
Section 5.05 Compliance with Laws. Except as would not be
reasonably likely to result in a TF Material Adverse Effect or a
TF Member Material Adverse Effect, such TF Member (a) is in
compliance in all material respects with all applicable Laws
(including applicable Laws relating to zoning, environmental matters
and the safety and health of employees), (b) has not been charged
with, and has received no written notice that it is under
investigation with respect to, and, to the knowledge of such
TF Member, is not otherwise now under investigation with respect
to, a material violation of any applicable Law, (c) is not a party
to, or bound by, any order, judgment, decree, injunction, rule or
award of any Governmental Entity, and (d) has filed all reports and
has all licenses and permits required to be filed with any Governmental
Entity on or prior to the date hereof.
Section 5.06 Other Transactions. As of the date hereof, no TF
Member is involved in negotiations or discussions that would be
reasonably likely to result in a TF Change of Control or a
Potential Investment.
ARTICLE VI
MARKETING AND SALE OF PRODUCT
Section 6.01 Marketing and Sale Rights and Obligations.
(a) Except as otherwise provided in this Agreement, SBF shall
have the exclusive right to, and shall be obligated to, market
and sell on behalf of TF all TF Plant Products. SBF shall use
its commercially reasonable efforts (taking into account customer
needs and requirements) to schedule, market and sell to customers
all of the TF Plant Products that the TF Plant is capable of
producing in accordance with this Agreement so as to generate the
highest combined net margins with respect to products produced at
both the TF Plant and the Xxxxxx Plant.
(b) Except as permitted by Sections 7.01(b), 11.01(a) and
12.02(b), TF hereby agrees that it shall not sell, transfer,
convey or assign, directly or indirectly through one or more
intermediaries (other than to SBF), or conduct any direct or
indirect marketing efforts with respect to, any TF Plant
Products.
Section 6.02 Branding and Labeling.
(a) SBF shall, in its sole discretion, determine and direct the
branding and labeling by TF of all TF Plant Products. TF shall
be responsible for all costs and expenses related to the
application of labels to all TF Plant Products; provided,
however, that SBF shall use its reasonable efforts to cause the
projected costs and expenses for such labeling (on a per package
basis) to be substantially similar to those incurred by SBF in
labeling comparable products produced at the Xxxxxx Plant.
(b) SBF hereby grants to TF a royalty-free, non-exclusive
license to use the SBF Marks solely in connection with the
branding and labeling of TF Plant Products as directed and
approved by SBF. TF acknowledges that SBF owns all right, title
and interest in and to the SBF Marks, and TF shall not take any
action that is inconsistent with the ownership by SBF of the SBF
Marks. TF shall not seek or obtain any registration of any SBF
Xxxx or any confusingly
20
similar xxxx. TF agrees that nothing in this Agreement, and no
use of any SBF Xxxx by TF pursuant to this Agreement, shall vest
in TF or shall be construed to vest in TF any right of ownership
in or to such SBF Xxxx other than the right to use such SBF Xxxx
in accordance with this Agreement. All goodwill and improved
reputation with respect to the SBF Marks generated in connection
with the Alliance shall inure to the benefit of SBF. In no event
shall TF use any SBF Xxxx in connection with any TF Plant Product
that is not transferred to SBF in accordance with this Agreement.
Subject to Section 12.02(d), any and all rights of TF to use the
SBF Marks shall cease and be of no further force or effect upon the
termination of this Agreement pursuant to Section 14.01 or otherwise. TF
shall not by any act or omission use any SBF Xxxx in any manner
that tarnishes, degrades, disparages or reflects adversely on SBF
or its business or reputation.
Section 6.03 Marketing Plan. SBF shall develop and deliver to
TF for TF's review and comment, on an annual basis, a marketing
plan setting forth SBF's plan for the applicable year regarding,
among other things, marketing strategies and initiatives, sales,
promotion and marketing staffing and expenses, incentive
compensation for sales and marketing personnel, target customers,
target markets, product mix and new products, value-added
products, branding, order fulfillment and pricing; provided,
however, that SBF shall make the final determination regarding
the content of each such marketing plan in its sole discretion.
ARTICLE VII
PRODUCTION AND TRANSFER
Section 7.01 Production; Transfer of Product.
(a) From and after the Commencement Date, TF shall use
commercially reasonable efforts to produce at the TF Plant
(within the capacity of the TF Plant) all pork products
reasonably requested by SBF, so long as such products are
standard industry products or SBF is producing such products at
the Xxxxxx Plant.
(b) Upon 30 days prior written notice to and consent of the
other Party (which consent shall not be unreasonably withheld or
delayed), TF shall have the right to transfer, and SBF shall have
the right to cause TF to transfer, product ("Transferred
Product") from the TF Plant to an Affiliated Plant so that such
Transferred Product may be modified into a form that otherwise is
not produced at the TF Plant; provided, however, that the amount
of Transferred Product per Party during any 30-day period shall
not be greater than 50% (by weight) of the total amount of such
product produced at the TF Plant during such 30-day period (it
being understood, however, that if the Transferred Product
required modification prior to transfer, then, for the purposes
of this proviso, the applicable weight of the Transferred Product
shall refer to the applicable weight of the applicable origin
product (prior to such modification) produced at the TF Plant
during such 30-day period).
Section 7.02 Product Quality Standards.
(a) From and after the Commencement Date, each of TF and SBF
hereby agrees to produce, at the TF Plant and the Xxxxxx Plant,
respectively, pork products that
21
conform to the relevant quality standards and specifications made
available by SBF to TF (the "Quality Standards"), which Quality
Standards shall be consistent with the standards and specifications
for the Xxxxxx Plant, as amended from time to time. From and after
the Commencement Date, each of TF and SBF shall have the right to inspect,
during normal business hours, the premises of the other Plant to the extent
reasonably necessary to ensure compliance with the Quality
Standards. SBF shall not make any material modification to the
Quality Standards (other than with respect to standard industry
items or requirements) without the prior written consent of TF,
which consent shall not be unreasonably withheld or delayed.
(b) SBF shall be solely responsible and liable for any Losses
arising out of the production and sale of products produced at
the Xxxxxx Plant that do not meet the Quality Standards. TF
shall be solely responsible and liable for any Losses arising out
of the production and sale of products produced at the TF Plant
that do not meet the Quality Standards.
(c) The determination of whether TF Plant Products comply with
the applicable Quality Standards shall be made by SBF in its
Reasonable Good Faith Determination. TF Plant Products that do
not, in the Reasonable Good Faith Determination of SBF, meet the
applicable Quality Standards ("Non-Conforming Products") shall be
marketed and sold to customers by SBF as it deems appropriate in
its sole discretion.
(d) Notwithstanding anything to the contrary set forth in this
Agreement, the Parties shall in good faith agree upon an
appropriate transfer price with respect to any Non-Conforming
Product that is also a Transferred Product.
ARTICLE VIII
FEES AND PAYMENT TERMS
Section 8.01 Base Marketing Fee; Start-Up Fee.
(a) TF shall pay SBF a base marketing fee (the "Base Marketing
Fee"), consisting of a current portion (the "Current Base
Marketing Fee") and a deferred portion, pursuant to the terms and
conditions set forth in Schedule 11.15.
(b) For the 24-month period after the Start-Up Date, TF shall be
obligated to pay SBF, on a monthly basis (on or before the 5th
Business Day of each applicable month, beginning the first month
following the Start-Up Date), a start-up fee (the "Start-Up Fee")
equal to the respective amounts for such period as determined in
accordance with Schedule 8.01.
Section 8.02 Payment of Fees. SBF shall, on a weekly basis,
deliver to TF an invoice setting forth the Current Base Marketing
Fees payable by TF to SBF for the prior Week. All such invoiced
amounts shall be due and payable by TF, by wire transfer in
immediately available funds to the SBF Account, on the second
successive Business Day after receipt by TF of such invoice.
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Section 8.03 Invoicing; Collections.
(a) SBF shall be responsible, in accordance with standard
industry practices, for all invoicing and collections with
respect to sales of TF Plant Products by SBF to customers.
(b) In connection with the performance of its obligations set
forth in Section 8.03(a), SBF shall adhere to the credit policies
of SBF with respect to the Xxxxxx Plant (the "Credit Policies"),
a copy of which has been made available to TF. SBF may modify
the Credit Policies at any time, in its reasonable discretion,
and shall notify TF as promptly as practicable after making any
such modification; provided, however, that SBF shall not make any
material modification to the Credit Policies as in effect on the
date hereof, or materially deviate from the Credit Policies in
effect from time to time, without the prior written consent of
TF, which consent shall not be unreasonably withheld or delayed.
Section 8.04 TF Product Customer Sales Information. SBF shall
report to TF on a weekly basis (a) all sales of TF Plant Products
to customers; (b) the amounts receivable from customers by SBF
with respect to such sales ("TF Product Customer Receivables");
and (c) the amounts collected by SBF with respect to such TF
Product Customer Receivables.
Section 8.05 General Payment Terms.
(a) For purposes of this Agreement, all prices used for the sale
of Qualifying Products shall be on an FOB TF Plant basis or FOB
Xxxxxx Plant basis, as applicable, established at the time that
product is shipped to a customer, net of any sales commissions,
marketing accruals, trade allowances and freight and similar
charges.
(b) Any outstanding balances under this Agreement or the
Promissory Note due to either TF or SBF from the other Party
shall bear interest at the Default Rate from the second Business
Day after the due date through the date of payment.
(c) Any Loss arising out of or resulting from third party claims
against SBF or TF shall be allocated as follows:
(i) The Seaboard Entities shall be solely responsible for all
Losses arising out of claims related to products produced at SBF
Plants ("SBF Products").
(ii) TF shall be solely responsible for all Losses arising out
of claims related to TF Plant Products that are not recoverable
pursuant to Section 8.05(c)(v) ("TF Product Claims"). SBF shall
deliver to TF an invoice setting forth any Losses suffered or
incurred by SBF arising out of TF Product Claims. All such
invoiced amounts shall be due and payable by TF, by wire transfer
in immediately available funds to the SBF Account, on the fifth
Business Day after receipt by TF of such invoice. No TF Product
Claim may be settled by SBF without the prior written consent of
TF, which consent shall not be unreasonably withheld or delayed;
provided, however, that SBF shall be entitled, without the prior
written consent of TF, to settle any such TF Product Claim (or
any
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series of TF Product Claims related to the same TF Plant
Product) at TF's expense for an amount less than $25,000 in the
aggregate.
(iii) In the event that a third party claim relates to a
product (an "Unidentified Product") that cannot be specifically
identified as either a TF Plant Product or an SBF Product, the
amount payable by TF to SBF pursuant to this Section 8.05(c)
shall be equal to (A) the Losses suffered or incurred by SBF
arising out of such claim, multiplied by (B) the ratio of (1) the
Product Revenues attributable to the TF Plant Products comparable
to the products giving rise to such claim, divided by (2) the
aggregate Product Revenues attributable to such TF Plant Products
and the comparable SBF Products.
(iv) With respect to sales-related claims initiated by a
customer relating to the sale of TF Plant Products (not otherwise covered
by Section 8.05(c)(i), (ii) or (iii)), TF shall pay to SBF an
amount equal to (A) the Losses suffered or incurred by SBF
arising out of such claim, multiplied by (B) the ratio of (1) the
Product Revenues attributable to the TF Plant Products giving
rise to such claim, divided by (2) the aggregate Product Revenues
attributable to such TF Plant Products and the comparable SBF
Products. SBF shall consult with TF (X) with respect to any
individual sales-related claim or series of related claims
involving Losses in excess of $10,000, and (Y) to the extent
aggregate Losses arising out of sales-related claims in any given
calendar year exceed $50,000.
(v) Contribution or reimbursement for Losses arising out of
transportation claims shall be sought against the transportation
company, and any net recoveries with respect to such Losses shall
be distributed to the Party responsible for such Losses in
accordance with this Section 8.05(c).
(d) The difference between the amount of freight charges charged
to customers with respect to the shipment of products from the TF
Plant and the Xxxxxx Plant and the amount of freight charges
actually incurred with respect to the shipment of products from
the TF Plant and the Xxxxxx Plant shall be determined and
shared/paid by the Parties at the end of each month, based upon
the weight of the products sold from the TF Plant and the Xxxxxx
Plant.
(e) Notwithstanding anything to the contrary contained herein,
SBF may settle any customer claims involving a pricing or billing
error for any amount as necessary to correct such pricing or
billing error without the consent of TF.
ARTICLE IX
TF PLANT CONSTRUCTION; MANAGEMENT AND OPERATION
Section 9.01 TF Plant Construction; Operation.
(a) TF shall engineer, design, construct and develop the TF
Plant in order to meet the minimum capability requirements set
forth on Schedule 9.01. TF shall be solely
24
responsible for all costs, fees and expenses relating to the
engineering, design, construction and development of the TF Plant.
TF shall use all reasonable efforts to cause construction on the
TF Plant to commence as soon as practicable after the date hereof.
(b) SBF shall have the right to review at its request all plans,
as amended or modified from time to time, relating to the
engineering, design, construction and development of the TF
Plant. TF will promptly notify SBF of any material changes to
such plans. SBF will consult with TF from time to time and
provide TF with any suggestions that SBF has that could impact
product mix, customer mix, quality, scheduling, efficiencies or
similar issues in order to maximize efficiencies at the TF Plant
and sales prices for the TF Plant Products.
(c) Prior to the Start-Up Date, SBF shall allow TF employees to
receive such training at the Xxxxxx Plant as the Parties
determine to be reasonable and appropriate. TF shall be solely
responsible for all costs, fees and expenses relating to such
training. During the period between the Commencement Date and
the Start-Up Date, SBF shall cause certain of its employees to be
present at the TF Plant to assist with the start-up of pork
producing operations at the TF Plant as the Parties determine to
be reasonable and appropriate. TF shall be solely responsible
for all Employee Costs related to such SBF employees during such
period.
(d) As soon as reasonably possible following the Commencement
Date, TF shall, in a manner consistent with the scheduling
directives of SBF, endeavor to operate the TF Plant at all times
in accordance with the requirements set forth on Schedule 9.01.
From and after the Commencement Date, SBF shall endeavor to
operate the Xxxxxx Plant at all times in accordance with the
requirements set forth on Schedule 9.01.
Section 9.02 Scheduling; Transportation.
(a) SBF shall be directly responsible, acting in a commercially
reasonable manner, for scheduling the pork processing operations
(the "Scheduling Operations") at the TF Plant to meet customer
needs and requirements (taking into account the capabilities of
the TF Plant). From and after the Commencement Date and prior to
the 2nd year anniversary thereof, subject to customer needs and
requirements (and taking into account the capabilities of the TF
Plant), SBF shall, at a minimum, direct scheduling at the TF
Plant in accordance with Schedule 9.02(a), so long as it is
commercially reasonable to do so. From and after the 2nd year
anniversary of the Commencement Date, subject to customer needs
and requirements (and taking into account the capabilities of the
TF Plant), SBF shall, at a minimum, direct scheduling at the TF
Plant such that, over any period of 45 consecutive Business Days
after such 2nd year anniversary, the daily average number of hogs
slaughtered at the TF Plant shall be no less than the lesser of
(i) 15,000 and (ii) the daily average number of hogs slaughtered
at the Xxxxxx Plant for the comparable period of 45 consecutive
Business Days, so long as it is commercially reasonable to
schedule such number of hogs. TF shall use commercially
reasonable efforts to schedule and organize its production
operations as reasonably directed by SBF.
(b) SBF shall be directly responsible for all services,
functions and responsibilities relating to the transportation of
all TF Plant Products from the TF Plant to SBF customers. SBF
shall employ one or more employees (the "SBF Transportation
Employees") at the TF Plant to oversee and perform all such
transportation functions. SBF shall not transport
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more than 20% of TF Plant Products in any given year using Seaboard
Transport Inc. ("STI") without the prior written consent of TF, which
consent shall not be unreasonably withheld or delayed. The rates
charged by STI in connection with hauling all TF Plant Products
shall be comparable to those being charged by third party
carriers.
Section 9.03 SBF Services. SBF shall provide to TF the
additional services set forth on Schedule 9.03 attached hereto
(the "SBF Services" and, together with the Scheduling Operations,
the "SBF Managed Operations").
Section 9.04 Quality Assurance. The Parties shall work in a
cooperative manner to ensure that TF will produce pork products
at the TF Plant that meet or exceed the Quality Standards. TF
shall be responsible for the employment of employees on the pork
production lines at the TF Plant whose primary responsibility is
to monitor the quality of the pork products being produced by the
TF Plant. SBF shall be entitled to employ at least one SBF
employee per shift (the "SBF Quality Assurance Employees") to
monitor the quality of the final product being produced by each
production line at the TF Plant.
Section 9.05 Core Plant Employees. All salaried and clerical
employees at the TF Plant responsible for TF Plant operations
(other than the SBF Transportation Employees and the SBF Quality
Assurance Employees), and all TF Plant hourly production workers
(collectively, the "Core Plant Employees") shall be employed by
TF. TF shall be solely and directly responsible for all costs,
fees and expenses, with respect to the Core Plant Employees,
including the costs, fees and expenses with respect to items set
forth on Schedule 1.01(a).
Section 9.06 Legacy Systems.
(a) TF shall pay SBF a fee (the "Legacy Systems Fee") for the
source code to the Legacy Systems and for reimbursement of costs
and expenses, and payment of fees incurred in connection with the
pre-purchase planning, design, programming, testing, training,
written documentation and installation of software in connection
with the Legacy Systems for use with respect to the TF Plant, in
accordance with the terms and conditions set forth in
Schedule 11.15. SBF shall install the Legacy Systems at the
TF Plant and shall integrate the Legacy Systems with third party
software (which third party software shall be similar to that
used at the Xxxxxx Plant) required by TF to operate the TF Plant.
SBF shall not be obligated to begin such installation and
integration until the date on which TF begins to make Legacy
Systems Fee payments in accordance with Schedule 11.15.
(b) SBF shall use its commercially reasonable efforts to
complete the installation of the Legacy Systems at the TF Plant
within 18 months after the commencement of such installation.
SBF and TF shall conduct mutually agreed testing and verification
procedures with respect to the functionality of the Legacy
Systems at the TF Plant. SBF shall make such modifications as
are reasonably required to cause the Legacy Systems to perform
the functions described in Schedule 3.10(b) as appropriate with
respect to the operations of the TF Plant.
(c) SBF shall provide TF with all source codes for the Legacy
Systems in machine readable format, together with all
documentation for the Legacy Systems. SBF shall
26
assist TF as reasonably required to allow TF to verify such source
codes, and TF shall have the right to modify such source codes for
internal use by TF.
(d) In consideration for and upon full payment of the Legacy
Systems Fee, the Seaboard Entities hereby grant to TF a
perpetual, fully paid-up, non-exclusive license to use and modify
the Legacy Systems in connection with TF's operations. All data
created by TF through the use of the Legacy Systems in connection
with TF's operations shall be the property of TF and, to the
extent in the possession of either Seaboard Entity, shall be
delivered to TF upon request. The license granted pursuant to
this Section 9.06(d) shall survive any termination of this
Agreement.
(e) At any time during the term of this Agreement or after
termination of this Agreement by either Party pursuant to Section
14.01, TF shall have the right to acquire a fully paid-up
perpetual license to the Legacy Systems by paying to SBF any
unpaid portion of the Legacy Systems Fee.
(f) Upon termination of this Agreement by either Party pursuant
to Section 14.01 and payment by TF to SBF of all amounts payable
hereunder and under the Promissory Note in accordance with the
terms hereunder and thereunder, at TF's option, SBF shall provide
all required maintenance and support with respect to the Legacy
Systems for a period of 12 months after the date of such
termination, for a fee equal to all actual costs and expenses
incurred by SBF in providing such maintenance and support.
Section 9.07 Third Party Fees; Other Fees.
(a) All costs, fees and expenses incurred by the Parties in
connection with the installation of third party management
information systems and software at the TF Plant, including one-
time software license payments to vendors, shall be paid by TF.
Any costs, fees and expenses necessary to upgrade SBF's AS/400
systems to run the Legacy Systems shall be shared between the
Parties (based on the relative CPU usage by SBF and TF when their
respective systems are operating at full capacity). Any third
party software license fees incurred in connection with licenses
allowing TF to use non-Legacy Systems shall be paid by TF.
(b) Without duplication of amounts otherwise payable under
Section 9.07(a), TF shall pay an amount equal to the Monthly TF
Plant Percentage multiplied by all direct costs, fees and
expenses incurred by SBF in the applicable month in connection
with third party and other SBF services as set forth on Schedule
9.07(b), to the extent such services relate to SBF Managed
Operations and are performed for both the Xxxxxx Plant and the TF
Plant, and, to the extent such services are performed solely for
the TF Plant, TF shall pay the full amount of such costs, fees
and expenses incurred by SBF.
Section 9.08 Use of TF Plant Facilities.
(a) In order to enable SBF to provide the SBF Managed Operations
to TF, TF shall:
27
(i) provide the use of space in the TF Plant, together with
access to employee cafeterias and parking facilities, office
furnishings, telephone equipment and services and janitorial
services, as may be reasonably required by SBF;
(ii) provide SBF with information reasonably requested by SBF
relating to the SBF Managed Operations;
(iii) obtain any third party consents or approvals necessary
to enable SBF to enter and use the TF Plant as necessary to
perform the SBF Managed Operations; and
(iv) at SBF's request, cooperate with SBF in matters relating to
SBF's performance of the SBF Managed Operations.
(b) The use of the TF Plant by SBF does not constitute a
leasehold interest in favor of SBF.
Section 9.09 Executive Changes. From and after the
Commencement Date, each of TF and SBF shall provide written
notice to the other Party as promptly as practicable after any
change in the employee serving as Plant manager, chief executive
officer or chief financial officer of TF or the TF Plant or of
SBF or the Xxxxxx Plant, as applicable.
ARTICLE X
HOG SUPPLY
Section 10.01 Country of Origin. Each Party shall use its
commercially reasonable efforts to process hogs that are born and
raised in the United States, with any reductions in revenue and
increases in costs, fees and expenses attributable to the
processing of hogs not born and raised in the United States to be
borne solely by the Party processing those hogs.
Section 10.02 Standards and Criteria. In addition to the
obligations set forth in Section 10.01, each of TF and SBF shall
use commercially reasonable efforts to ensure that all hogs
delivered to the TF Plant or the Xxxxxx Plant, as applicable, by
producers shall meet the criteria and parameters set forth on
Schedule 10.02. All reductions in revenue received by either
Party, and increases in costs, fees and expenses incurred by
either Party, in each case related to the failure of any hogs
delivered to the TF Plant by any TF Member or third party
producer to meet such criteria and parameters, shall be borne
solely by TF. All reductions in revenue received by either
Party, and increases in costs, fees and expenses incurred by
either Party, in each case related to the failure of any hogs
delivered to the Xxxxxx Plant by SBF or any third party producer
to meet such criteria and parameters, shall be borne solely by
SBF.
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ARTICLE XI
ADDITIONAL AGREEMENTS
Section 11.01 Exempted Product.
(a) TF shall have the option to exempt from this Agreement
product consisting of casings, heparin and other products as
mutually agreed by the Parties, in an amount up to two pounds per
carcass processed from the TF Plant, for handling and/or
processing by third parties. Any product so exempted hereunder
shall not be considered TF Plant Product for the purposes of this
Agreement.
(b) Unless otherwise agreed by the Parties, this Agreement shall
not apply to product produced at any Plant other than the TF
Plant or the Xxxxxx Plant.
Section 11.02 Operation of the TF Plant.
(a) TF hereby agrees that it shall, except as expressly required
by this Agreement or as otherwise consented to in advance in
writing by SBF (which consent shall not be unreasonably withheld
or delayed) or except as would not be reasonably likely to have a
TF Material Adverse Effect:
(i) conduct the operations of the TF Plant in the ordinary
course on a basis consistent with the purposes of the Alliance as
set forth herein, and not enter into any agreement, transaction
or activity or make any commitment with respect to the operation
of the TF Plant, except those in the ordinary course of business
and not otherwise prohibited under this Section 11.02;
(ii) maintain in good condition and repair (ordinary wear and
tear excepted), consistent with past practices, all buildings,
offices, facilities and other structures at the TF Plant, and all
equipment, fixtures and other tangible personal property at the
TF Plant;
(iii) perform in all material respects all of its
obligations under all, and not default or suffer to exist any event or
condition that with notice or lapse of time or both could
constitute a default under any TF Supply Agreement (except those
being contested in good faith);
(iv) obtain and maintain all Governmental Approvals that are
necessary for the operation of the TF Plant;
(v) maintain its minute books, books of account and other
financial records in accordance with good business and accounting
practices;
(vi) comply with all applicable Laws, including applicable Laws
promulgated by the United States Department of Agriculture and
the United States Food and Drug Administration and applicable
Laws relating to zoning, environmental matters and the safety and
health of employees; and
29
(vii) obtain all permits and approvals required under, and
remain in full compliance with, all Environmental Laws, including
all applicable limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained therein.
(b) TF agrees that, for so long as there remains any outstanding
balance under the Promissory Note, it shall not, unless consented
to in advance in writing by SBF, amend any existing TF Supply
Agreement with a TF Member or enter into any new TF Supply
Agreement in any manner that (i) reduces the aggregate number of
hogs deliverable under all TF Supply Agreements, (ii) decreases
the quality standards from those set forth in the then existing
TF Supply Agreements, or (iii) increases the prices payable for
hogs above those in the then existing TF Supply Agreements, in
each case from the terms in existence on the date of such
existing TF Supply Agreements. TF shall make a Reasonable Good
Faith Determination that the producer party to any new TF Supply
Agreement is able to perform its obligations under such
agreement. TF may substitute any TF Supply Agreement so long as
the aggregate number of hogs delivered under all the TF Supply
Agreements is not reduced and the quality standards and price in
such substitute TF Supply Agreement are consistent with those set
forth in the then existing TF Supply Agreements.
Section 11.03 Operation of the Xxxxxx Plant. SBF hereby agrees
that it shall, except as expressly required by this Agreement or
as otherwise consented to in advance in writing by TF (which
consent shall not be unreasonably withheld or delayed) or except
as would not be reasonably likely to have an SBF Material Adverse
Effect:
(a) conduct the operations of the Xxxxxx Plant in the ordinary
course on a basis consistent with the purposes of the Alliance as
set forth herein, and not enter into any agreement, transaction
or activity or make any commitment, in each case with respect to
the operation of the Xxxxxx Plant, except those in the ordinary
course of business and not otherwise prohibited under this
Section 11.03;
(b) maintain in good condition and repair (ordinary wear and
tear excepted), consistent with past practices, all buildings,
offices, facilities and other structures at the Xxxxxx Plant, and
all equipment, fixtures and other tangible personal property at
the Xxxxxx Plant;
(c) perform in all material respects all of its obligations
under all, and not default or suffer to exist any event or
condition that with notice or lapse of time or both could
constitute a default under any SBF Supply Agreement (except those
being contested in good faith);
(d) obtain and maintain all Governmental Approvals that are
necessary for the operation of the Xxxxxx Plant;
(e) maintain the books of account and other financial records
with respect to the Xxxxxx Plant in accordance with good business
and accounting practices;
(f) comply with all Laws (including Laws promulgated by the
United States Department of Agriculture and the United States
Food and Drug Administration and Laws
30
relating to zoning, environmental matters and the safety and health of
employees) applicable to the Xxxxxx Plant; and
(g) with respect to the Xxxxxx Plant, obtain all permits and
approvals required under, and remain in full compliance with, all
Environmental Laws, including all applicable limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained therein.
Section 11.04 Confidential Information.
(a) SBF, on the one hand, and TF and each TF Member, on the
other hand, hereby acknowledge that one Party may make available
to the other Party certain information concerning its business,
financial condition, operations, employees, assets and
liabilities (such Party when disclosing such information being
the "Disclosing Party", and such Party when receiving such
information being the "Receiving Party") (when the respective
terms "Disclosing Party" and "Receiving Party" are used herein to
refer to TF, such terms shall also be deemed to be referring to
each TF Member). The Receiving Party agrees to, and shall cause
is agents, representatives, advisors, Affiliates, employees,
officers and directors (collectively, "Representatives") to,
treat and hold as confidential (and not disclose or provide
access to any third party to) all confidential trade secrets,
technical and business information, know-how, manufacturing and
production processes and techniques, customer information,
financial and marketing data, pricing and cost information and
all other confidential or proprietary information ("Confidential
Information") with respect to the other Party. "Confidential
Information" shall include, without limitation, information,
modeling and/or spreadsheets relating to genetics, nutrition,
food, safety, pork quality, animal handling and other topics. It
is agreed that a Receiving Party shall not be responsible for any
breach of the provisions of this Section 11.04 by a
Representative if the Receiving Party requires such
Representative to enter into a confidentiality agreement.
(b) In the event that the Receiving Party or its Representatives
become legally compelled to disclose any Confidential Information
of the Disclosing Party, the Receiving Party shall provide the
Disclosing Party with prompt written notice of such requirement
so that the Disclosing Party may seek a protective order or other
remedy or waive compliance with this Section 11.04. In the event
that such protective order or other remedy is not obtained, or
the Disclosing Party waives compliance with this Section 11.04,
the Receiving Party shall furnish only that portion of the
Disclosing Party's Confidential Information that is legally
required to be provided and exercise commercially reasonable
efforts to obtain assurances that confidential treatment will be
accorded such information.
(c) The Receiving Party, upon the request of the Disclosing
Party, shall promptly furnish to the Disclosing Party any and all
copies (in whatever form or medium) of all such Disclosing
Party's Confidential Information then in the possession of the
Receiving Party or any of its Representatives and destroy any and
all additional copies of such Confidential Information then in
the possession of the Receiving Party or any of its
Representatives and of any analyses, compilations, studies or
other documents prepared, in whole or in part, on the basis
thereof.
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(d) The term "Confidential Information" shall not include
information that (i) is or becomes generally available to the
public other than as a result of a disclosure by the Receiving
Party or its Representatives, (ii) was independently developed by
the Receiving Party without access to the Confidential
Information of the Disclosing Party, (iii) was within the
Receiving Party's possession prior to its being furnished to the
Receiving Party or its Representatives by or on behalf of the
Disclosing Party, provided that the source of such information
was not known by the Receiving Party to be bound by a
confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality to the Disclosing Party
or any other party with respect to such information or (iv)
becomes available to the Receiving Party on a non-confidential
basis from a source other than the Disclosing Party or any of its
Representatives, provided that such source is not known by the
Receiving Party to be bound by a confidentiality agreement with
or other contractual, legal or fiduciary obligation of
confidentiality to the Disclosing Party or any other party with
respect to such information.
(e) Notwithstanding any obligations of confidentiality imposed
by this Section 11.04, the Parties agree that this Agreement does
not limit the ability of any Party (or any Representative of such
Party) to disclose the tax treatment or tax structure of the
transactions contemplated by this Agreement to any Person. The
foregoing is not intended to waive the attorney-client privilege
or other privileges, including the tax advisor privilege under
Section 7525 of the Code.
(f) Each Party's confidentiality obligations pursuant to this
Section 11.04 shall survive any termination of this Agreement.
Section 11.05 Public Announcements. Except as otherwise
required by Law or the rules of any applicable securities
exchange or national market system, neither Party shall make, or
cause to be made, any press release or public announcement, or
otherwise communicate with any news media, in each case with
respect to this Agreement or the transactions contemplated hereby
without the prior written consent of the other Party, and the
Parties shall cooperate as to the timing and contents of any such
press release or public announcement.
Section 11.06 Inspection and Access to Information; Audit.
(a) After the date hereof, each of SBF and TF shall (and shall
cause its Representatives to) provide SBF and TF and their
respective lenders and customers, upon reasonable notice,
reasonable access, during reasonable hours and under reasonable
circumstances, to the Xxxxxx Plant and the TF Plant,
respectively.
(b) After the date hereof, each of SBF and TF shall cause its
Representatives to furnish to the other Party and its
Representatives, promptly upon request therefor and as reasonably
necessary to allow such other Party to perform its obligations
under this Agreement, any and all books, records, financial,
manufacturing and marketing data and other information pertaining
to the transfer or sale of products manufactured at, and the
operation of, the TF Plant or the Xxxxxx Plant, as applicable.
(c) With respect to the TF Plant and the Xxxxxx Plant, as
applicable, for so long as there exist any monetary payments or
reporting obligations from one Party to the other
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Party under this Agreement, each of SBF and TF will maintain complete and
accurate accounting records and production records in a
consistent form to substantiate such monetary payments and
reporting obligations. Each Party may, upon reasonable advance
written notice to the other Party, conduct during the other
Party's regular business hours and in accordance with applicable
law and reasonable security requirements, audits of the other
Party with respect to such monetary payment and reporting
obligation accounts and records; provided, however, that (i) the
audited Party may require that the auditing Party's employees
conduct such audits on the premises of the audited Party; and
(ii) the audited Party shall have the right to have one of its
Representatives present at all times during any such audit.
Subject to the restrictions set forth in this Section 11.06(c),
the audited Party shall cooperate fully with the auditing Party
in connection with any such audit. The audited Party shall have
the right to have the results of any such audit reviewed by its
internal auditing staff or by the audited Party's independent
accountants. All reasonable fees and costs incurred (including a
reasonable charge for the services of any employee of the audited
Party directly involved in the audit) by either Party in
connection with any such audit shall be paid by the auditing
Party; provided, however, that if the audit reveals, on an
aggregate basis, an under-reporting or under-payment by the
audited party in an amount more than $250,000, then the
reasonable fees and costs incurred by either Party in connection
with any such audit shall be paid by the audited Party.
Section 11.07 HACCP Plan and Food Safety. SBF and TF shall
mutually agree upon the HACCP Plan and all other food safety
protocols, as may be amended or modified from time to time, with
respect to the TF Plant, which shall be substantially similar in
form and substance to the HACCP Plan and other food safety
protocols currently utilized by SBF at the Xxxxxx Plant.
Section 11.08 Financial Information.
(a) As promptly as practicable (and in any event within 110
days) following the end of each fiscal year, TF shall deliver to
SBF the audited consolidated balance sheet of TF and its
subsidiaries, if any, as of the end of such fiscal year, along
with the related audited consolidated statements of income and
cash flows, accompanied by the reports thereon of TF's
independent auditors.
(b) As promptly as practicable (and in any event within 45 days)
following the end of each fiscal quarter, TF shall deliver to SBF
an unaudited consolidated balance sheet of TF and its
subsidiaries, if any, as of the end of such fiscal quarter, along
with the related unaudited consolidated statements of income and
cash flows.
(c) As promptly as practicable (and in any event within 110
days) following the end of each fiscal year, SBF shall deliver to
TF the audited consolidated balance sheet of Seaboard and its
subsidiaries, if any, as of the end of such fiscal year, along
with the related audited consolidated statements of income and
cash flows, accompanied by the reports thereon of Seaboard's
independent auditors.
(d) As promptly as practicable (and in any event within 45 days)
following the end of each fiscal quarter, SBF shall deliver to TF
(i) an unaudited consolidated balance sheet of Seaboard and its
subsidiaries, if any, as of the end of such fiscal quarter, along
with the related
33
unaudited consolidated statements of income and
cash flows, and (ii) the internal financial statements of SBF
prepared on a quarterly basis in the ordinary course of business.
(e) All financial information with respect to TF and Seaboard
provided pursuant to this Section 11.08 shall be prepared in
accordance with U.S. GAAP applied on a basis consistent with the
past practices of the applicable Party.
Section 11.09 Insurance; Casualty.
(a) TF shall obtain and maintain at all times the insurance
coverage as described in Schedule 4.06 with respect to its
operations at the TF Plant, naming the Seaboard Entities as
additional insureds in the case of general liability insurance,
with companies and in such amounts and deductibles reasonably
satisfactory to SBF. Such insurance policies shall contain a
waiver of subrogation clause with respect to any claims against
SBF or any Affiliates thereof. TF shall cause to be delivered to
SBF a certificate of insurance evidencing the effectiveness of
such insurance. Such certificate shall provide for at least 30
days' prior written notice to SBF in the event of cancellation of
the insurance and permit SBF to cure (at the expense of TF) any
failure to pay the premium for such insurance, and a certificate
evidencing the renewal or replacement of such insurance shall be
delivered to SBF no later than 10 days after the effective date
of such insurance.
(b) SBF shall obtain and maintain at all times the insurance
coverage as described in Schedule 4.06 with respect to its
operations at the Xxxxxx Plant, naming TF as an additional
insured in the case of general liability insurance, with
companies and in such amounts and deductibles reasonably
satisfactory to TF. Such insurance policies shall contain a
waiver of subrogation clause with respect to any claims against
TF or any Affiliates thereof SBF shall cause to be delivered to
TF a certificate of insurance evidencing the effectiveness of
such insurance. Such certificate shall provide for at least 30
days' prior written notice to TF in the event of cancellation of
the insurance and permit TF to cure (at the expense of SBF) any
failure to pay the premium for such insurance, and a certificate
evidencing the renewal or replacement of such insurance shall be
delivered to TF no later than 10 days after the effective date of
such insurance.
(c) Each Party shall be solely responsible for all self
insurance obligations and for all deductible amounts applicable
with respect to any insurance claims made by such Party
(irrespective of which Party is the primary insured party under
the applicable insurance policy).
(d) TF shall maintain the TF Plant in good operating condition
and repair, excepting ordinary wear and tear. In the event of
any damages to the TF Plant, TF shall promptly cause any damaged
property to be promptly repaired or replaced at TF's cost and
expense (after the application of any and all insurance proceeds
received with respect to any such damaged property). SBF shall
maintain the Xxxxxx Plant in good operating condition and repair,
excepting ordinary wear and tear. In the event of any damages to
the Xxxxxx Plant, SBF shall promptly cause any damaged property
to be promptly repaired or replaced at SBF's cost and expense
(after the application of any and all insurance proceeds received
with respect to any such damaged property).
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Section 11.10 Notice of Developments. From and after the
Commencement Date, each of TF and SBF shall notify the other
Party in writing of (a) all events, circumstances, facts and
occurrences arising after the Commencement Date that would be
reasonably likely to result in a TF Default or an SBF Default, as
applicable; and (b) all other material developments affecting the
TF Plant or the Xxxxxx Plant.
Section 11.11 Force Majeure. Notwithstanding anything in this
Agreement to the contrary, neither Party shall be responsible or
liable for any failure or lack of performance hereunder if such
performance is rendered impossible by a Force Majeure Event. As
promptly as practicable after the occurrence of such event, the
affected Party shall provide written notice to the other Party
setting forth the particulars of the Force Majeure Event, and the
obligations of the affected Party under this Agreement shall be
suspended, for a period of up to 24 months from the date of such
notice (the "Force Majeure Period"), to the extent such Party is
unable to perform on account of such Force Majeure Event. During
the Force Majeure Period, the affected Party shall use reasonable
commercial efforts to mitigate and eliminate, as soon as
practicable, the effects of any such Force Majeure Event. Any
suspension of obligations beyond the Force Majeure Period shall
be mutually agreed to by the Parties. In the event such Force
Majeure Event shall continue for longer than 24 months, despite
the reasonable commercial efforts of the affected Party to
mitigate and eliminate such Force Majeure Event, the Party not
suffering such Force Majeure Event shall have the right to
terminate this Agreement upon 10 days' written notice. Any
failure by a Party to perform on account of a Force Majeure Event
shall not be deemed to be a TF Default, TF Event of Default, SBF
Default or SBF Event of Default, as applicable, unless such
default is a TF Payment Default (or a TF Event of Default
attributable thereto) or an SBF Payment Default (or an SBF Event
of Default attributable thereto).
Section 11.12 Reports and Data Sharing. SBF shall, to the
extent otherwise available and to the extent reasonably necessary
to confirm compliance with this Agreement, provide real-time, on-
line access to records, reports, data, analyses and other
information in the possession of SBF relating to the TF Plant or
the Xxxxxx Plant or to the sale of TF Plant Products or SBF
Products.
Section 11.13 Financing Commitment. TF shall use commercially
reasonable efforts to obtain, as soon as practicable after the
date hereof, all debt financing commitments (the "Financing
Commitments") and all governmental permits, in each case on
commercially reasonable terms, required to construct, equip and
operate the TF Plant.
Section 11.14 Party/TF Member Additional Agreements. Each of
the Parties and each TF Member hereby agrees to the additional
terms and conditions set forth in Schedule 11.14.
Section 11.15 Party Additional Agreements. The Parties hereby
agree to the additional terms and conditions set forth in
Schedule 11.15.
Section 11.16 Further Assurances. Each Party shall use
commercially reasonable efforts to take, or cause to be taken,
all appropriate action, to do or cause to be done all things
necessary, proper or advisable under applicable Law, and to
execute and deliver such documents
35
and other papers, as may be required to carry out the provisions
of this Agreement and to consummate and to make effective the
transactions contemplated hereby.
ARTICLE XII
DEFAULT; EVENTS OF DEFAULT
Section 12.01 TF Defaults and Events of Default.
(a) Each of the following conditions or events shall constitute
a default by TF (a "TF Default") for purposes of this Agreement:
(i) the failure of TF, from and after the 2nd Anniversary Date,
to xxxxxxxxx at the TF Plant a daily average number of hogs at
least equal to the lesser of (A) 15,000 and (B) the daily average
number of hogs slaughtered at the Xxxxxx Plant (a "TF Operations
Default") during any period of 45 consecutive Business Days after
the 2nd Anniversary Date, so long as it is commercially
reasonable for TF to xxxxxxxxx such average number of hogs, and
which failure is not the result of TF's compliance with any
request by SBF pursuant to this Agreement;
(ii) (A) the failure or refusal by TF to make any payment under
this Agreement or the Promissory Note on or before its due date
if such default continues for a period of 2 Business Days after
receipt by TF of written notice of such default from SBF, or (B)
the failure or refusal by TF to make any payment under this
Agreement or the Promissory Note on or before its due date in an
amount equal to or exceeding $1,000,000 if such default continues
for a period of 1 Business Day after receipt by TF of written
notice thereof from SBF (either such failure or refusal being a
"TF Payment Default");
(iii) the failure or refusal by TF to fulfill any of its
obligations or covenants under this Agreement or the Promissory
Note (other than obligations or covenants related to payment of
amounts to SBF), where such failure or refusal materially and
adversely affects TF's performance hereunder and such failure or
refusal continues for a period of 15 Business Days after receipt
by TF of written notice thereof from SBF (such failure or refusal
being a "TF Covenant Default"); and
(iv) the failure of any of the representations and warranties of
TF in this Agreement to be true in any material respect, where
such failure materially and adversely affects TF's performance
hereunder and such failure continues for a period of 15 Business
Days after receipt by TF of written notice thereof from SBF (such
failure being a "TF Representation Default").
(b) Each of the following events shall constitute a "TF Event of
Default":
(i) the continuation of a TF Operations Default for a period of
45 consecutive Business Days or the occurrence of two or more TF
Operations Defaults during any twelve-consecutive month period;
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(ii) the continuation of a TF Covenant Default or a TF
Representation Default for a period of 30 Business Days following
the receipt of written notice from SBF;
(iii) the occurrence of (A) three or more TF Payment Defaults
during any twelve-consecutive month period involving,
individually, an amount in excess of $20,000, whether or not
cured within the time period specified herein, or (B) any single
TF Payment Default in an amount equal to or exceeding $1,000,000
that is not cured within 2 Business Days after receipt by TF of
written notice thereof from SBF;
(iv) the general assignment by TF for the benefit of creditors,
or the filing of a petition or suit under any bankruptcy,
reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency, liquidation or similar Law of
any jurisdiction, whether now or hereafter in effect, by or
against TF that is not dismissed within 30 days; or
(v) the entry of a final judgment, order or decree of a court
of competent jurisdiction adjudicating TF to be bankrupt, and the
expiration without appeal of the period, if any, allowed by
applicable Law in which to appeal.
(c) Upon the occurrence of a TF Event of Default, SBF may
terminate this Agreement.
(d) Notwithstanding anything herein to the contrary, SBF shall
be entitled to recover any Losses suffered or incurred by the SBF
Indemnified Parties in accordance with Section 13.02 and to seek
specific performance of this Agreement in accordance with
Section 15.11.
Section 12.02 SBF Defaults and Events of Default.
(a) Each of the following conditions or events shall constitute
a default by SBF (an "SBF Default") for purposes of this
Agreement:
(i) the failure of SBF, from and after the 2nd Anniversary
Date, to direct scheduling with respect to a daily average of at least
15,000 head per day at the TF Plant (an "SBF Operations Default")
during any period of 45 consecutive Business Days after the 2nd
Anniversary Date, so long as it is commercially reasonable for
SBF to schedule such number of hogs, and which failure is not the
result of TF's inability to comply with any such scheduling
request pursuant to this Agreement;
(ii) (A) the failure or refusal by the Seaboard Entities to make
any payment to TF in accordance with Section 6 of Schedule 11.15,
and such failure or refusal continues for a period of 2 Business
Days after receipt by the Seaboard Entities of written notice
thereof from TF, or (B) the failure or refusal by the Seaboard
Entities to make any payment to TF in accordance with Section 6
of Schedule 11.15 in an amount equal to or exceeding $1,000,000,
and such failure or refusal continues for a period of 1
37
Business Day after receipt by the Seaboard Entities of written notice
thereof from TF (either such failure or refusal being an "SBF
Payment Default");
(iii) the failure or refusal by either of the Seaboard
Entities to fulfill any of its obligations or covenants under
this Agreement (other than obligations or covenants related to
payments set forth in Section 6 of Schedule 11.15), where such
failure or refusal materially and adversely affects the Seaboard
Entities' performance hereunder and such failure or refusal
continues for a period of 15 Business Days after receipt by the
Seaboard Entities of written notice thereof from TF (such failure
or refusal being an "SBF Covenant Default"); and
(iv) the failure of any of the representations and warranties of
the Seaboard Entities in this Agreement to be true in any
material respect, where such failure materially and adversely
affects either Seaboard Entity's performance hereunder and such
failure continues for a period of 15 Business Days after receipt
by the Seaboard Entities of written notice thereof from TF (such
failure being an "SBF Representation Default").
(b) Upon the occurrence of an SBF Payment Default and for so
long as such SBF Payment Default shall be continuing, (i) TF
shall have the right to market and sell TF Plant Products
directly to customers or through other agents or representatives,
without payment to SBF of any Base Marketing Fees, Start-Up Fees
or margin payments (as set forth in Schedule 11.15) in connection
with any such sales, (ii) any TF Plant Products in transit and
not yet delivered to the customer shall remain the property of TF
until received by the customer, at which time title may pass to
the customer as permitted by TF, or such TF Plant Products may be
recalled by TF, and (iii) all TF Product Customer Receivables
generated after the occurrence of such SBF Payment Default shall
be the sole property of and may be collected directly by TF.
(c) Each of the following events shall constitute an "SBF Event
of Default":
(i) the continuation of an SBF Operations Default for a period
of 45 consecutive Business Days or the occurrence of two or more
SBF Operations Defaults during any twelve-consecutive month
period;
(ii) the occurrence of (A) three or more SBF Payment Defaults
during any twelve-consecutive month period involving,
individually, an amount in excess of $20,000, whether or not
cured within the time period specified herein, or (B) any single
SBF Payment Default in an amount equal to or exceeding $1,000,000
that is not cured within 2 Business Days after receipt by the
Seaboard Entities of written notice thereof from TF;
(iii) the continuation of an SBF Covenant Default or an SBF
Representation Default for a period of 30 Business Days following
the receipt of written notice from TF;
(iv) the general assignment by either Seaboard Entity for the
benefit of creditors, or the filing of a petition or suit under
any bankruptcy, reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency, liquidation or
38
similar Law of any jurisdiction, whether now or hereafter in
effect, by or against either Seaboard Entity that is not
dismissed within 30 days; or
(v) the entry of a final judgment, order or decree of a court
of competent jurisdiction adjudicating either Seaboard Entity to be
bankrupt, and the expiration without appeal of the period, if
any, allowed by applicable Law in which to appeal.
(d) Upon the occurrence of an SBF Event of Default, TF may
terminate this Agreement, after which termination (i) the license
granted by SBF to TF pursuant to Section 6.02(b) shall be
extended for a period of 12 months; provided, however, that,
pursuant to such extended license, TF shall be entitled to use
the SBF Marks in connection with the branding and labeling of TF
Plant Products in the same manner as such SBF Marks are used
immediately prior to such termination; and (ii) TF shall be
entitled to use SBF customer lists and other sales and marketing
data and reports.
(e) Notwithstanding anything herein to the contrary, TF shall be
entitled to recover any Losses suffered or incurred by the TF
Indemnified Parties in accordance with Section 13.01 and to seek
specific performance of this Agreement in accordance with
Section 15.11.
Section 12.03 Cumulative Remedies. No TF Payment Default or SBF
Payment Default shall exist with respect to, and to the extent
of, amounts as to which there is a bona fide dispute pending in
accordance with Section 15.09. The rights and remedies created
by this Agreement shall be cumulative and non-exclusive of those
to which a Party may be entitled at Law or in equity, and the
right to exercise all such rights and remedies is hereby
reserved. The use and availability of one remedy shall not be
taken to exclude or waive the right to the use of another. In
the event of any breach of this Agreement, the breaching Party
shall be liable to the other Party for actual damages (including
accrued costs, fees and expenses and the present value of lost
future profits, but excluding punitive damages) arising out of
such breach.
ARTICLE XIII
INDEMNIFICATION
Section 13.01 Indemnification by the Seaboard Entities.
(a) Seaboard shall indemnify and hold harmless TF and its
Affiliates, officers, directors, employees, agents, successors
and assigns (each a "TF Indemnified Party" and collectively the
"TF Indemnified Parties") from and against any and all Losses
actually suffered or incurred by the TF Indemnified Parties which
arise out of or result from:
(i) the breach of any representation or warranty made by
Seaboard contained in this Agreement;
(ii) the breach of any covenant, agreement or undertaking by or
obligation of Seaboard contained in this Agreement; and
39
(iii) the failure by Seaboard to repay or satisfy any debt
obligation or other Liability of Seaboard.
(b) Without duplication of any indemnification obligation set
forth in Section 13.01(a), SBF shall indemnify and hold harmless
the TF Indemnified Parties from and against any and all Losses
actually suffered or incurred by the TF Indemnified Parties which
arise out of or result from:
(i) the breach of any representation or warranty made by SBF
contained in this Agreement;
(ii) the breach of any covenant, agreement or undertaking by or
obligation of SBF contained in this Agreement;
(iii) the failure by SBF to repay or satisfy any debt
obligation or other Liability of SBF; and
(iv) the operations of SBF at the Xxxxxx Plant.
(c) To the extent that either Seaboard Entity's undertakings set
forth in this Section 13.01 are determined to be unenforceable,
such Seaboard Entity shall contribute the maximum amount that it
is permitted to contribute under applicable Law to the payment
and satisfaction of all Losses incurred by the TF Indemnified
Parties.
Section 13.02 Indemnification by TF.
(a) TF shall indemnify and hold harmless each Seaboard Entity
and its Affiliates, officers, directors, employees, agents,
successors and assigns (each an "SBF Indemnified Party" and
collectively the "SBF Indemnified Parties") from and against any
and all Losses actually suffered or incurred by the SBF
Indemnified Parties which arise out of or result from:
(i) the breach of any representation or warranty made by TF
contained in this Agreement; and
(ii) the breach of any covenant, agreement or undertaking by or
obligation of TF contained in this Agreement;
(iii) the failure by TF to repay or satisfy any debt
obligation or other Liability of TF; and
(iv) the operations of TF at the TF Plant.
(b) To the extent that TF's undertakings set forth in this
Section 13.02 may be unenforceable, TF shall contribute the
maximum amount that it is permitted to contribute under
applicable Law to the payment and satisfaction of all Losses
incurred by the SBF Indemnified Parties.
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Section 13.03 Indemnification Procedures. An Indemnified Party
shall give the Indemnifying Party notice of any matter which an
Indemnified Party has determined has given or could give rise to
a right of indemnification under this Agreement, within 60 days
of such determination, stating the amount of the Loss, if known,
and method of computation thereof, and containing a reference to
the provisions of this Agreement in respect of which such right
of indemnification is claimed or arises; provided, however, that
the failure to provide such notice shall not release the
Indemnifying Party from any of its obligations under this Article
XIII except to the extent that the Indemnifying Party is
materially prejudiced by such failure and shall not relieve the
Indemnifying Party from any other obligation or Liability that it
may have to any Indemnified Party otherwise than under this
Article XIII. The obligations and Liabilities of the
Indemnifying Party under this Article XIII with respect to Losses
arising from claims of any third party which are subject to the
indemnification provided for in this Article XIII ("Third Party
Claims") shall be governed by and be contingent upon the
following additional terms and conditions: if an Indemnified
Party shall receive notice of any Third Party Claim, the
Indemnified Party shall give the Indemnifying Party notice of
such Third Party Claim within 30 days of the receipt by the
Indemnified Party of such notice; provided, however, that the
failure to provide such notice shall not release the Indemnifying
Party from any of its obligations under this Article XIII except
to the extent that the Indemnifying Party is materially
prejudiced by such failure and shall not relieve the Indemnifying
Party from any other obligation or Liability that it may have to
any Indemnified Party otherwise than under this Article XIII. If
the Indemnifying Party acknowledges in writing its obligation to
indemnify the Indemnified Party hereunder against any Losses that
may result from such Third Party Claim, then the Indemnifying
Party shall be entitled to assume and control the defense of such
Third Party Claim at its expense and through counsel of its
choice if it gives notice of its intention to do so to the
Indemnified Party within 20 days of the receipt of such notice
from the Indemnified Party; provided, however, that if there
exists or is reasonably likely to exist a conflict of interest
that would make it inappropriate for the same counsel to
represent both the Indemnified Party and the Indemnifying Party,
then the Indemnified Party shall be entitled to retain its own
counsel in each jurisdiction for which the Indemnified Party
determines counsel is required, at the expense of the
Indemnifying Party; provided, further, that in no event shall the
Indemnifying Party be liable for the fees and expenses of more
than one law firm for the Indemnified Party. In the event that
the Indemnifying Party exercises the right to undertake any such
defense against any such Third Party Claim as provided above, the
Indemnified Party shall cooperate with the Indemnifying Party in
such defense and make available to the Indemnifying Party, at the
Indemnifying Party's expense, all witnesses, pertinent records,
materials and information in the Indemnified Party's possession
or under the Indemnified Party's control relating thereto as is
reasonably required by the Indemnifying Party. Similarly, in the
event the Indemnified Party is, directly or indirectly,
conducting the defense against any such Third Party Claim, the
Indemnifying Party shall cooperate with the Indemnified Party in
such defense and make available to the Indemnified Party, at the
Indemnifying Party's expense, all such witnesses, records,
material and information in the Indemnifying Party's possession
or under the Indemnifying Party's control relating thereto as is
reasonably required by the Indemnified Party. No such Third
Party Claim may be settled by the Indemnifying Party without the
prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld or delayed (it being
understood that the withholding of a consent with respect to a
settlement that provides a full release to the Indemnified Party
and imposes no material duties on the Indemnified Party shall be
unreasonable). In the event the
41
Indemnified Party withholds consent to a settlement proposed to
the Indemnified Party by the Indemnifying Party, the Indemnified
Party shall be liable for any Losses arising out of the underlying
Third Party Claim to the extent such Losses exceed the amounts
under such proposed settlement.
Section 13.04 Punitive Damages. Under no circumstances shall
either Party be liable to the other Party for punitive damages
arising out of the undertakings in this Article XIII or
otherwise, except to the extent, if any, that such damages have
been awarded to third parties with respect to claims for which a
Party is entitled to be indemnified hereunder.
ARTICLE XIV
TERMINATION, AMENDMENT AND WAIVER
Section 14.01 Termination. This Agreement may be terminated:
(a) in writing by mutual consent of the Parties;
(b) by SBF pursuant to Section 12.01(c);
(c) by TF pursuant to Section 12.02(d);
(d) by either SBF or TF if TF does not obtain the Financing
Commitments on or before June 30, 2004;
(e) by either SBF or TF, if Commencement of Construction has not
occurred on or before September 30, 2004;
(f) by either SBF or TF if the Start-Up Date shall not have
occurred by December 31, 2006; provided, however, that the right
to terminate this Agreement under this Section 14.01(f) shall not
be available to any Party whose failure to fulfill any obligation
under this Agreement shall have been the cause of, or shall have
materially contributed to or resulted in, the failure of the
Start-Up Date to occur on or prior to such date;
(g) by either SBF or TF in accordance with Section 11.11; or
(h) by TF in the event TF is unable to obtain accounts
receivable financing with respect to the Receivables on
commercially reasonable terms (taking into account TF's financial
condition), and SBF does not elect to provide such accounts
receivable financing on commercially reasonable terms (taking
into account TF's financial condition) within 60 Business Days
after SBF receives notice from TF.
Section 14.02 Effect of Termination. In the event of
termination of this Agreement pursuant to Section 14.01:
(a) all outstanding payment obligations of TF under this
Agreement and the Promissory Note accrued as of the date of such
termination shall be immediately due and payable (except that,
(i) if this Agreement is terminated by SBF pursuant to Section
12.01(c), the
42
entire unpaid principal balance plus all accrued interest under
the Promissory Note shall accelerate and be immediately due
and payable; and (ii) as of the date of any termination of this
Agreement pursuant to Section 14.01, (A) all unpaid Legacy Systems
Fees accrued from the time such fees became payable in accordance
with this Agreement shall be paid by TF, (B) no further installments
with respect to the Legacy Systems Fee shall be due thereafter, and
(C) unless TF elects to acquire and pays for a fully paid-up license
to the Legacy Systems pursuant to Section 9.06(d), TF shall have no
further right, title or interest with respect to the Legacy Systems);
(b) all outstanding payment obligations of the Seaboard Entities
under this Agreement accrued as of the date of such termination
shall be immediately due and payable (except that the aggregate
Receivables payable pursuant to Schedule 11.15 for which TF has
not received payment as of the date of such termination shall, to
the extent after such date either Seaboard Entity collects the
applicable Product Price from customers related to such
Receivables, be immediately due and payable); and
(c) this Agreement shall forthwith become void and there shall
be no liability on the part of any Party except for obligations
under Section 11.04 (Confidential Information), Section 11.05
(Public Announcements), Article XIII (Indemnification) and
Article XV (Miscellaneous Provisions), all of which shall survive
the date of such termination. Notwithstanding the foregoing, (i)
any amounts which are or would become otherwise payable under
this Agreement or the Promissory Note by the Seaboard Entities or
TF for TF Plant Products sold or for services rendered by the
Seaboard Entities or TF hereunder prior to the effective date of
the termination of this Agreement shall (except to the extent
otherwise provided in Section 14.02(a) or 14.02(b)) continue to
be payable in accordance with the terms of this Agreement or the
Promissory Note until paid in full; and (ii) nothing contained
herein shall relieve any Party from liability for any breach of
this Agreement.
Section 14.03 Perpetual Term. It is the intent of the Parties
that unless this Agreement is terminated pursuant to Section
14.01, this Agreement shall continue in effect in perpetuity.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.01 Expenses. Except as otherwise expressly provided
herein, all costs and expenses, including fees and disbursements
of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated
hereby shall be paid by the Party incurring such costs and
expenses.
Section 15.02 Notices.
(a) All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given
(and shall be deemed to have been duly given upon receipt) by
delivery in person, by fax, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective
Parties at the following addresses (or at such other address for
a Party as shall be specified in a notice given in accordance
with this Section 15.02(a)):
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if to the Seaboard Entities: Seaboard Farms, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxx 000
X.X. Xxx 00000
Xxxxxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: President
with a copy to: Seaboard Corporation
0000 Xxxx 00xx Xxxxxx
Xxxxx 000
X.X. Xxx 0000
Xxxxxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: General Counsel
if to TF or any TF Member: Triumph Foods LLC
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Chief Executive Officer
with a copy to: Xxx Xxxxxxxxxxx
Xxxxxxxxxxx Family Farms
00000 Xxxxxx Xxxx 00
X.X. Xxx 000
Xxxxxx Xxx, XX 00000
(b) Notwithstanding the foregoing, all notices and other
communications pursuant to Article VI, Article VII, Article IX
and Article X shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in
person or by registered or certified mail (postage prepaid,
return receipt requested) or by fax to the respective Parties at
the following addresses (or at such other address for a Party as
shall be specified in a notice given in accordance with this
Section 15.02(b)):
if to SBF: Seaboard Farms, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxx 000
X.X. Xxx 00000
Xxxxxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Director of Finance and Accounting
44
if to TF: Triumph Foods LLC
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Chief Financial Officer
(c) Notwithstanding the foregoing, all notices and other
communications pursuant to Section 9.02 shall be made via email
at such addresses as each Party shall specify in a notice given
in accordance with Section 15.02(b).
Section 15.03 Binding Effect; Assignment. This Agreement shall
be binding upon and shall inure to the benefit of the Parties and
their respective successors and permitted assigns. No Party may
assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement (by operation of Law or
otherwise) without the consent of the other Party hereto;
provided, however, that either Party may assign this Agreement or
any of its rights and obligations hereunder (a) to one or more
Affiliates and (b) to a Third Party Offeror in accordance with
Schedule 11.14, in either case without the consent of the other
Party, provided that such assignee assumes in writing all of the
assignor's obligations hereunder; and provided, further, that
nothing hereunder shall relieve any assignor of its obligations
hereunder; and provided, further, that (i) SBF may assign this
Agreement or any of its rights and obligations hereunder, without
the consent of TF, to another wholly owned subsidiary of Seaboard
to which the Xxxxxx Plant is transferred (whereupon SBF shall be
relieved of all obligations hereunder and shall cease to be a
party hereof), provided that such assignee (A) is of comparable
financial condition to SBF, (B) is able to perform all of SBF's
obligations hereunder, and (C) assumes in writing all of SBF's
obligations hereunder; and (ii) TF may collaterally assign this
Agreement or any of its rights and obligations hereunder, without
the consent of SBF, to a lender as security for TF debt
financing..
Section 15.04 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced
by any Law or public policy, all other terms and provisions of
this Agreement shall nevertheless remain in full force and effect
for so long as the economic or legal substance of the
transactions contemplated by this Agreement is not affected in
any manner materially adverse to either Party. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible in an
acceptable manner in order that the transactions contemplated by
this Agreement are consummated as originally contemplated to the
greatest extent possible.
Section 15.05 Entire Agreement; Amendment; Waiver.
(a) This Agreement supersedes all negotiations, agreements
(including the Confidentiality Agreement) and understandings
among the Parties with respect to the subject matter hereof and
constitutes the entire agreement among the Parties with respect
hereto. The Parties hereby agree that the Confidentiality
Agreement is terminated as of the date hereof and that, as of and
after the date hereof, neither Party shall have any right or
obligation thereunder.
45
(b) This Agreement may not be amended or modified except (i) by
an instrument in writing signed by or on behalf of each Party
hereto; or (ii) by a waiver in accordance with Section 15.05(c).
Notwithstanding anything to the contrary contained in this
Section 15.05(b), (A) SBF shall have the right to amend Schedule
1.01(c) (SBF Account), Schedule 1.01(d) (SBF Competitors),
Schedule 3.10(a) (SBF Marks) and Schedule 3.11 (SBF Supply
Agreements) in its commercially reasonable discretion, consistent
with the purposes and intent of this Agreement, without the
approval of, but upon reasonable notice to, TF; and (B) TF shall
have the right to amend Schedule 1.01(b) (TF Competitors) and
Schedule 4.11 (TF Supply Agreements) in its commercially
reasonable discretion, consistent with the purposes and intent of
this Agreement, without the approval of, but upon reasonable
notice to, SBF.
(c) Any agreement on the part of a Party to any extension or
waiver of any provision hereof shall be valid only if set forth
in an instrument in writing signed on behalf of such Party. A
waiver by a Party of the performance of any covenant, agreement,
obligation, condition, representation or warranty shall not be
construed as a waiver of any other covenant, agreement,
obligation, condition, representation or warranty. A waiver by
any Party of the performance of any act shall not constitute a
waiver of the performance of any other act or an identical act
required to be performed at a later time.
Section 15.06 No Third Party Beneficiaries; No Relationship.
Neither this Agreement nor any provision hereof is intended to or
shall confer upon any Person other than the Parties any rights or
remedies hereunder. This Agreement does not create a
partnership, joint venture or agency relationship between the
Parties, and neither Party shall be deemed to have an equity
interest in the other Party by virtue of this Agreement.
Section 15.07 Governing Law. This Agreement shall be governed
by and construed and enforced in accordance with the internal
Laws of the State of Kansas without reference to its choice of
law rules.
Section 15.08 Survival of Representations and Warranties. The
representations and warranties of each of SBF and TF contained in
this Agreement shall survive the execution of this Agreement and
the consummation of the transactions contemplated by this
Agreement for a period of one year after the Commencement Date.
Section 15.09 Dispute Resolution.
(a) Either Party may, acting reasonably, dispute any computation
or other amount made or provided for pursuant to this Agreement
or the Promissory Note, but only on the basis that such amounts
were not computed in accordance with this Agreement or the
Promissory Note or were arrived at based on mathematical or
clerical error; provided, however, that the disputing Party shall
have delivered to the other Party a written notice (a "Dispute
Notice"), specifying the estimated amount thereof in dispute and
setting forth, in reasonable detail, the basis for such dispute.
(b) In the event a Party delivers a Dispute Notice in accordance
with Section 15.09(a), the Parties shall attempt to reconcile
such dispute, and any resolution by them as to any disputed
amounts shall be final, binding and conclusive on the Parties.
If the Parties
46
are unable to reach a resolution with such effect within 15 Business
Days after the receipt by the non-disputing Party of the Dispute Notice,
then the Parties shall submit the items remaining in dispute for
resolution to an independent accounting firm of national reputation
mutually acceptable to the Parties (the "Independent Accounting Firm"),
which shall, within 30 Business Days after such submission, determine
and report to the Parties upon such remaining disputed items, and such report
shall be final, binding and conclusive on the Parties. The fees
and disbursements of the Independent Accounting Firm shall be
allocated by the Independent Accounting Firm between the Parties
in a manner deemed appropriate by the Independent Accounting Firm
based upon the relative merits of the respective Parties with
respect to the disputed items so submitted to the Independent
Accounting Firm.
(c) Except as otherwise provided in Sections 15.09(a) and (b),
any dispute arising out of, or in connection with, this Agreement
involving an aggregate amount of $500,000 or less shall be fully
and finally settled by arbitration pursuant to the rules of the
American Arbitration Association. Such arbitration shall be
conducted and finally settled by a sole arbitrator jointly
selected by the Parties. Such arbitrator (i) shall be and remain
at all times wholly impartial and shall provide the Parties with
a statement that he can and shall decide the case impartially,
(ii) shall not have any financial interest (directly or
indirectly) in the dispute or any financial dependence (directly
or indirectly) upon either Party, and (iii) shall be
knowledgeable with respect to the industry in which the Parties
conduct their respective businesses and the Law applicable to
such industry. If the Parties fail to agree on the arbitrator
within 30 days after the initiation of the arbitration, then the
American Arbitration Association shall appoint the arbitrator.
Unless otherwise agreed by the Parties, such arbitration shall be
conducted in the greater Kansas City area, and the Parties shall
be entitled to engage in depositions and discovery as provided
for in the United States Federal Rules of Civil Procedure.
Judgment on the award of the arbitrator may be entered by any
court of competent jurisdiction.
(d) Except as otherwise provided in Sections 15.09(a) and (b),
in the event of a dispute arising out of, or in connection with,
this Agreement involving an aggregate amount in excess of
$500,000 (a "Non-Arbitral Dispute"), the Parties shall
immediately refer such Non-Arbitral Dispute to a person
designated by the chief executive officer of TF and a person
designated by the chief executive officer of SBF. The two
designees shall, acting in good faith, attempt to resolve such
Non-Arbitral Dispute within 20 days after the commencement of
discussions between such designees. If a Non-Arbitral Dispute is
not resolved within such 20-day period, the Parties shall
litigate such dispute in a non-jury trial brought in a court of
competent jurisdiction sitting in the State of Kansas. Each
Party hereby (i) consents to the exclusive jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any
such suit, action or proceeding arising out of a Non-Arbitral
Dispute and (ii) irrevocably waives and agrees not to assert by
way of motion, defense or otherwise in any such suit, action or
proceeding, any claim that it is not subject personally to the
jurisdiction of such courts, that its property is exempt or
immune from attachment or execution, that such suit, action or
proceeding is brought in an inconvenient forum, that the venue of
the suit, action or proceeding is improper or that this Agreement
or the transactions contemplated by this Agreement may not be
enforced in or by any such court.
47
(e) EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT THAT IT MAY HAVE TO A TRIAL
BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH A NON-ARBITRAL
DISPUTE. EACH PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (II)
ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 15.09(e).
Section 15.10 Headings. The titles, captions and table of
contents contained herein are inserted herein only as a matter of
convenience and for reference and in no way define, limit, extend
or describe the scope of this Agreement or the intent of any
provision hereof
Section 15.11 Specific Performance. Each Party hereby
acknowledges that the rights of each Party to consummate the
transactions contemplated hereby are special, unique and of
extraordinary character and that, in the event that any Party
violates or fails or refuses to perform any covenant or agreement
made by it herein, the non-breaching Party may be without an
adequate remedy at law. In the event that any Party violates or
fails or refuses to perform any covenant or agreement made by
such Party herein, the non-breaching Party may, subject to the
terms hereof and in addition to any remedy at law for damages or
other relief, institute and prosecute an action in any court of
competent jurisdiction to enforce specific performance of such
covenant or agreement or seek any other equitable relief
Section 15.12 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this
Agreement or the terms hereof to produce or account for more than
one of such counterparts.
48
IN WITNESS WHEREOF, the Parties have caused this Agreement
to be executed, as of the date first written above, by their
respective officers thereunto duly authorized.
SEABOARD CORPORATION
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President, Chief Financial
Officer and Treasurer
SEABOARD FARMS, INC.
By: /s/Xxx Xxxxxxxxx
Name: Xxx Xxxxxxxxx
Title: President
TRIUMPH FOODS LLC
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
IN WITNESS WHEREOF, for purposes of Article V, Section 11.04
and Section 11.14 only, the TF Members have caused this Agreement
to be executed, as of the date first written above, by their
respective officers thereunto duly authorized.
AGRO XXXXX, LLC
By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: President
ASPEN PORK PRODUCTION, LLC
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Authorized Representative
COTTONWOOD RIVER, LLC
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxxx
Title: President
XXXXXXXXXXXX FARMS, INC.
By: /s/ Xxxx Xxxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxxx
Title: President
IC PORK, L.L.P.
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Managing Partner
KRONSEDER FARMS, INC.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President and Chief
Financial Officer
NFP WEST R.L.L.P.
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Managing Partner
OAK RESEARCH FARMS, INC.
By: /s/ Xxxx XxXxxxx Xx.
Name: Xxxx XxXxxxx Xx.
Title: Secretary
SOUTHERN MINNESOTA FARMS, LLC
By: /s/ XxxxXxx Xxxxxxxxxxx
Name: XxxxXxx Xxxxxxxxxxx
Title: President
THE XXXXX COMPANY, INC.
By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Senior Vice President
TRIOAK FOODS, INC.
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Chief Executive Officer
UPPER MIDWEST SWINE MANAGEMENT, LLC
By: /s/ Xxxx Xxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxx
Title: President
ALLIED PRODUCERS' COOPERATIVE
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Chairman
EXHIBIT AND SCHEDULES TO
MARKETING AGREEMENT
Following is a list of the Exhibit and Schedules to the Marketing
Agreement, which are omitted from the Marketing Agreement which
is filed with the Securities and Exchange Commission ("SEC").
Seaboard Corporation ("Seaboard") undertakes to provide to the
SEC the Exhibit or any of the Schedules, as requested, subject to
Seaboard's right to request confidential treatment under the
Freedom of Information Act.
Exhibit A -- Form of Promissory Note
Schedule 1.01(a) -- Employee Costs
Schedule 1.01(b) -- TF Competitors
Schedule 1.01(c) -- SBF Account
Schedule 1.01(d) -- SBF Competitors
Schedule 3.10(a) -- SBF Marks
Schedule 3.10(b) -- Legacy Systems
Schedule 3.11 -- SBF Supply Agreements
Schedule 4.02 -- TF Members
Schedule 4.04 -- TF Governmental Approvals
Schedule 4.06 -- TF Insurance Standards
Schedule 4.11 -- TF Supply Agreements
Schedule 8.01 -- Start-Up Fees
Schedule 9.01 -- Minimum Capability Requirements
Schedule 9.02(a) -- Start-Up Scheduling
Schedule 9.03 -- SBF Services
Schedule 9.07(b) -- Third Party Fees
Schedule 10.02 -- Hog Quality Standards
Schedule 11.14 -- Additional Agreements of the Parties and TF Members
Schedule 11.15 -- Additional Agreements of the Parties
