ASSET PURCHASE AGREEMENT
AGREEMENT, dated this 6th day of December, 1999, by and
between SEABOARD CORPORATION, a Delaware corporation
("Seaboard"), and CONAGRA, INC., a Delaware corporation
("ConAgra").
RECITALS:
This Agreement is made with reference to the following facts
and circumstances:
(a) Seaboard owns all of the issued and outstanding shares
of capital stock of Seaboard Farms of Kentucky, Inc., a
Kentucky corporation ("Seaboard Kentucky"). Seaboard
also owns all of the issued and outstanding shares of
the capital stock of Seaboard Farms of Chattanooga,
Inc., Seaboard Farms of Elberton, Inc., and Seaboard
Farms of Athens, Inc. (the "Seaboard Subsidiaries").
(b) Seaboard Kentucky and the Seaboard Subsidiaries
produce, process and sell poultry (such business, as
conducted by Seaboard Kentucky and the Seaboard
Subsidiaries, being hereinafter collectively referred
to as the "Business"). The Business is conducted at
the locations described in Exhibit "A" hereto (the
"Business Locations"). Seaboard owns certain assets
which are used exclusively in connection with the
Business.
(c) Seaboard desires to sell certain assets owned by
Seaboard which are used exclusively in connection with
the Business, and Seaboard desires to cause the
Seaboard Subsidiaries to sell, substantially all of
their respective assets related to the Business to
ConAgra and ConAgra desires to purchase such assets
from Seaboard and the Seaboard Subsidiaries, all on the
terms and conditions contained herein.
(d) Seaboard also desires to sell all of the issued and
outstanding shares of the capital stock of Seaboard
Kentucky to ConAgra and ConAgra desires to purchase
such shares of Seaboard Kentucky capital stock, all on
the terms and conditions contained herein.
AGREEMENT:
In consideration of the foregoing recitals which are
incorporated with and are made a part of this Agreement, and in
further consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree, subject to the
terms and conditions hereinafter set forth, as follows:
1. Sale of Capital Stock and Assets. Subject to Section
2, at the Closing, as defined in Section 6, (a) Seaboard shall
sell, convey, assign, transfer and deliver to ConAgra (or one or
more subsidiaries or affiliates of ConAgra designated by ConAgra)
all of the issued and outstanding shares of the capital stock of
Seaboard Kentucky (the "Seaboard Kentucky Stock"), free and clear
of all liens, claims and encumbrances, (b) Seaboard shall sell,
convey, assign, transfer and deliver to ConAgra (or one or more
subsidiaries or affiliates of ConAgra), free and clear of all
liens, claims and encumbrances (other than "Permitted Liens", as
defined in Section 8.8), all of the assets and rights described
in Exhibit 1(a) hereto (all of such assets and rights being
hereinafter collectively referred to as the "Seaboard Assets"),
and (c) Seaboard shall cause the Seaboard Subsidiaries to sell,
convey, assign, transfer and deliver, to ConAgra (or one or more
subsidiaries or affiliates of ConAgra), free and clear of all
liens, claims and encumbrances (other than Permitted Liens), all
of the assets, properties and rights of the Seaboard Subsidiaries
relating to the Business as conducted by the Seaboard
Subsidiaries as of the Closing Date, as defined in Section 6, of
every type and description, real, personal and mixed, tangible
and intangible, known or unknown, fixed or unfixed, xxxxxx or
inchoate, accrued, absolute, contingent or otherwise, wherever
located and whether or not reflected on the books and records of
the Seaboard Subsidiaries (all of such assets, properties and
rights hereinafter collectively referred to as the "Subsidiaries
Assets") (the Seaboard Assets and the Subsidiaries Assets being
hereinafter collectively referred to as the "Assets"), including
but not limited to all assets located at the Business Locations
which are owned by the Seaboard Subsidiaries and including the
following assets, to the extent owned by the Seaboard
Subsidiaries or to the extent the Seaboard Subsidiaries otherwise
have transferable rights with respect thereto (it being
understood that if any asset is owned by a Seaboard subsidiary
other than the Seaboard Subsidiaries, then Seaboard shall cause
that Seaboard subsidiary to transfer and convey such Asset to
ConAgra):
1.1 Real Estate. Fee simple marketable title in and to the
real property legally described on Exhibit 1.1,
together with all improvements, facilities, fixtures,
hereditaments and appurtenances thereto (the "Real
Estate").
1.2 Sales, General and Administrative Property. All
customer and supplier lists, files, catalogues,
brochures, pricing and other marketing information,
books and records, telephone numbers, computer
programs, software and systems and other sales, general
and administrative property owned or used by the
Seaboard Subsidiaries which relate to the Business.
1.3 Receivables. All of the Seaboard Subsidiaries' trade
accounts receivable existing on the Closing Date and
arising from sales of products by the Business (the
"Subsidiary Receivables").
1.4 Inventories. All of the Seaboard Subsidiaries'
merchantable raw materials, work-in-process and current
finished goods inventory, including packaging material,
existing as of the Closing Date (the "Subsidiary
Inventory").
1.5 Fixed Assets. All machinery, equipment, furniture,
research and development assets, vehicles, rolling
stock and other fixed assets owned or used by the
Seaboard Subsidiaries in connection with the Business.
1.6 Intellectual Property. All trademarks (other than the
Excluded Trademarks (as defined below)), trade names,
service marks, service names, patents, copyrights,
inventions, technology, trade secrets, formulas,
laboratory notebooks, recipes, brand names, brand
marks, labels or registrations or licenses thereof or
applications therefor which the Seaboard Subsidiaries
presently own or utilize in connection with the
Business, together with all knowledge, data,
information, formulations, designs, plans, drawings,
manufacturing documentation, proprietary know-how and
use and application know-how, processes, product
development records, technical data and information,
specifications and other intellectual property, and in
and to all know-how or other proprietary or trade
rights of the Seaboard Subsidiaries associated with or
used in connection with such items. As used herein,
the term "Excluded Trademarks" means any registered or
unregistered trademarks, trade names, service marks,
logos or other artwork (a) containing the word
"Seaboard", or (b) set forth in the list of Excluded
Trademarks in Exhibit 1.6.
1.7 Leases and Contracts.
(a) All of Seaboard Subsidiaries' right, title and
interest in and to (i) the Material Agreements (as
defined in Section 8.15) and (ii) any other
leases, contracts, purchase and sales contracts
and other agreements relating to the Business and
entered into in the ordinary course of business on
or prior to the Closing Date, none of which are
material. Such contracts and agreements, together
with the Material Agreements that Seaboard
Kentucky is a party to and other leases,
contracts, purchase and sales contracts and other
agreements related to the Business and entered
into in the ordinary course of business on or
prior to the Closing Date, none of which are
material, are herein collectively referred to as
the "Assumed Agreements; provided, however, the
"Assumed Agreements" shall not include any
contracts or other items listed in Exhibit 1.7(a)
and shall include, without limitation, all
contracts or other items listed on Exhibit
1.7(a)(1).
(b) To the extent that assignment hereunder by the
Seaboard Subsidiaries to ConAgra of any Assumed
Agreement is not permitted or is not permitted
without the consent of a third party, this
Agreement shall not be deemed to constitute an
undertaking to assign the same if such consent is
not given or if such an undertaking otherwise
would constitute a breach of or cause a loss of
benefits thereunder. Seaboard and the Seaboard
Subsidiaries (together with Seaboard Kentucky,
collectively, the "Seaboard Entities") shall use
all reasonable efforts (other than the payment of
money or the deposit of funds by Seaboard or the
Seaboard Subsidiaries on behalf of ConAgra) to
obtain any and all such third-party consents. In
addition, to the extent any of the Assets (the
"Sublease Assets") are governed by a master lease
which also covers assets to be retained by
Seaboard or the Seaboard Subsidiaries, Seaboard or
the Seaboard Subsidiaries shall undertake to have
the Sublease Assets separately leased to ConAgra
by the lessor thereof, or Seaboard or the Seaboard
Subsidiaries shall sublease the Sublease Assets to
ConAgra on terms and conditions consistent with
the applicable master lease.
(c) If and to the extent that Seaboard or the Seaboard
Subsidiaries are unable to obtain any required
third party consent contemplated by Section
1.7(b), Seaboard or the Seaboard Subsidiaries
shall continue to be bound by any such Assumed
Agreement (the "Non-Assigned Contract"). In such
event, to the maximum extent permitted by law or
the terms of the Non-Assigned Contract, (i)
Seaboard and the Seaboard Subsidiaries shall make
the benefit of such Non-Assigned Contract
available to ConAgra, and (ii) the assignment
provisions of this Agreement shall operate to the
extent permitted by law or the applicable Non-
Assigned Contract to create a subcontract,
sublease or sublicense with ConAgra to perform
each relevant Non-Assigned Contract at a price
equal to the monies, rights and other
consideration receivable or payable by Seaboard or
the Seaboard Subsidiaries with respect to the
performance by or enjoyment of ConAgra under such
subcontract, sublease or sublicense. To the
extent such benefit is made available, and/or such
subcontract, sublease or sublicense is created,
(1) ConAgra shall pay, perform and discharge fully
all obligations of Seaboard or the Seaboard
Subsidiaries under any such Non-Assigned Contract
accruing from and after the Closing Date, (2)
Seaboard and the Seaboard Subsidiaries shall,
without further consideration therefor, pay and
remit to ConAgra promptly any monies, rights and
other consideration received in respect of such
Non-Assigned Contract performance, and (3)
Seaboard and the Seaboard Subsidiaries shall
exercise or exploit their rights and options under
all such Non-Assigned Contracts only as directed
by ConAgra and at ConAgra's expense.
(d) If and when any third party consent contemplated
by Section 1.7(b) shall be obtained or any such
Non-Assigned Contract shall otherwise be
assignable, Seaboard and the Seaboard Subsidiaries
shall promptly assign all of their rights and
obligations thereunder or in connection therewith
to ConAgra without payment of further
consideration therefor, and ConAgra shall assume
such rights and obligations.
1.8 Licenses, Permits and Orders. All approvals,
authorizations, consents, licenses, orders and
establishment numbers and other permits and similar
items of all governmental agencies whether federal,
state or local, owned, held or utilized by the Seaboard
Subsidiaries in connection with the Business as are
transferable by their respective terms, or otherwise,
to ConAgra, excluding those certain enterprise software
license agreements listed on Exhibit 1.8 (the
"Enterprise Software").
1.9 Prepaids. The prepaid expenses of the Seaboard
Subsidiaries set forth on Exhibit 1.9 (the "Subsidiary
Prepaids").
1.10 Supplies and Similar Items. All operating supplies,
fuel, packaging supplies, maintenance, warehouse and
office supplies, spare parts, tools, maintenance
equipment and all similar property owned or used by the
Seaboard Subsidiaries in connection with the Business.
1.11 WebPage Text. All of the text, graphics, software and
other materials currently found on the web site at
xxx.xxxxxxxxxxxxxxx.xxx, including but not limited to,
all electronic files possessed by Seaboard and the
Seaboard Subsidiaries that embody any content visible
on such web site and all copyrights to such electronic
files, other than any Excluded Trademarks and the
domain name xxx.xxxxxxxxxxxxxxx.xxx.
1.12 IRB's. All taxable industrial development revenue
bonds set forth on Exhibit 1.12 (the "IRB's").
1.13 Lockboxes. All lockboxes owned by or utilized by
Seaboard and the Seaboard Subsidiaries in connection
with the Business.
2. Excluded Assets. ConAgra shall not purchase those
assets described on Exhibit 2 (the "Excluded Assets") and neither
ConAgra nor Seaboard Kentucky shall purchase, assume or otherwise
be responsible or liable for any contract or agreement other than
the Assumed Agreements. Except as set forth above, and except as
otherwise specifically provided herein, it is the intent of the
parties hereto that ConAgra acquire all other assets of the
Seaboard Subsidiaries used by the Business, including items which
have been heretofore expensed or fully depreciated.
3. Consideration Payable to Seaboard by ConAgra. Subject
to the terms and conditions of this Agreement, and in reliance
upon the representations and warranties of Seaboard herein
contained, and in consideration of the sale, conveyance,
assignment, transfer and delivery by Seaboard of the Seaboard
Kentucky Stock and by Seaboard and the Seaboard Subsidiaries of
the Assets pursuant to Section 1 hereof, ConAgra agrees as
follows:
3.1 Assumption of Liabilities. From and after the Closing
Date, ConAgra (or one or more subsidiaries or
affiliates of ConAgra designated by ConAgra) shall
assume and agree to pay, perform and discharge
(i) those liabilities described on Exhibit 3.1 (such
liabilities, together with the liabilities of Seaboard
Kentucky as of the Closing Date as reflected on the
Settlement Statement (as defined in Section 4.7 below)
(the "Payables"), (ii) the obligations of Seaboard and
the Seaboard Subsidiaries which accrue from and after
the Closing Date with respect to the Assumed Agreements
to which Seaboard and/or the Seaboard Subsidiaries are
a party, (iii) each other liability or obligation of
Seaboard and the Seaboard Subsidiaries which ConAgra
has expressly assumed pursuant to the terms of this
Agreement, and (iv) the amounts due under the IRB's, as
defined in Section 1.12 above. ConAgra does not assume
and shall not be deemed to have assumed, and Seaboard
and the Seaboard Subsidiaries shall remain solely
responsible for, any liability or obligation of
Seaboard and the Seaboard Subsidiaries not described
above, including without limitation any retiree medical
benefits of any employee of the Business who terminates
employment with the Business or Seaboard on or prior to
the Closing Date. In addition, Seaboard Kentucky shall
not be liable for, and Seaboard shall remain solely
responsible for, any liability or obligation of
Seaboard Kentucky not described above, including
without limitation any retiree medical benefits of any
employee of the Business who terminates employment with
the Business or Seaboard on or prior to the Closing
Date. Notwithstanding anything herein to the contrary,
Seaboard shall be responsible for, and shall indemnify
and hold ConAgra and Seaboard Kentucky harmless against
and in respect of, any liability, damage, cost or
obligation resulting from products sold by the Business
on or prior to the Closing Date (including, without
limitation, product recalls and product liability
actions).
3.1.1 ConAgra agrees to assume all of Seaboard
Subsidiaries' rebate programs,
customer/distributor programs and similar items
relating to the Business in effect as of the
Closing Date and Seaboard Kentucky shall be liable
for its rebate programs, customer/distributor
programs and similar items relating to the
Business in effect as of the Closing Date, but
only , to the extent of the applicable accruals
set forth on the Settlement Statement and Seaboard
shall be liable and responsible for any other such
liabilities and obligations.
3.2 Purchase Price for the Assets; Seaboard Kentucky Stock.
The purchase price for the Assets and the Seaboard
Kentucky Stock (the "Purchase Price") shall be an
amount equal to Three Hundred Seventy Five Million
Dollars ($375,000,000) plus or minus the amount by
which "Net Working Capital" (as defined in Section 4.7)
is greater or less than Seventy Six Million Seven
Hundred Thousand Dollars ($76,700,000).
3.3 Payment of Purchase Price. Three Hundred Sixty Million
Dollars ($360,000,000) of the Purchase Price (the
"Preliminary Payment") shall be paid by ConAgra to
Seaboard by wire transfer in immediately available
funds on the Closing Date in accordance with wire
transfer instructions to be provided by Seaboard. The
balance of the Purchase Price, if any, shall be paid on
the Settlement Date, as defined in Section 4.7.
3.4 Allocation of Asset Purchase Price. The parties hereto
agree that the sum of the Purchase Price and the
Payables shall be allocated to the Assets and the
Seaboard Kentucky Assets in accordance with Exhibit 3.4
hereto. The parties hereto acknowledge that such
allocation represents the fair market value of the
Assets and shall be binding upon the parties hereto for
federal and state tax purposes. Each party covenants
to report gain or loss or cost basis, as the case may
be, in a manner consistent with Exhibit 3.4 for federal
and state tax purposes. Promptly after the Settlement
Date, the parties shall exchange mutually acceptable
and completed IRS Forms 8594 which they shall use to
report the transaction contemplated under this
Agreement to the Internal Revenue Service in accordance
with such allocation.
4. Settlement Date and Repurchase of Receivables.
4.1 Inventory Count. Immediately prior to the Closing,
ConAgra and Seaboard shall mutually conduct a physical
count of the Subsidiary Inventory and all of Seaboard
Kentucky's merchantable raw materials, work-in-process
and current finished goods inventory, including
packaging materials ("Seaboard Kentucky Inventory" and
together with the Subsidiary Inventory, the
"Inventory") existing as of the close of business on
the Closing Date and shall prepare a schedule setting
forth a description of each category of Inventory
together with the quantity of each such category (the
"Inventory Count Schedule"). Such physical count shall
be conducted pursuant to, and the Inventory Count
Schedule will be prepared pursuant to, the procedures
and principles set forth in Exhibit 4 hereto. Upon
completion of the Inventory Count Schedule, the parties
shall issue a revised schedule to reflect the final
inventory count as of the close of business on the
Closing Date (the "Final Inventory Count Schedule").
Upon completion, the Final Inventory Count Schedule
shall be final for purposes of this Section 4.
4.2 Preliminary Settlement Statement. No later than sixty
(60) days following the Closing Date, ConAgra shall
prepare and deliver to Seaboard a draft settlement
statement (the "Preliminary Settlement Statement")
setting forth the following:
(i) The amount of cash and cash equivalents owned by
Seaboard Kentucky on the Closing Date (the
"Kentucky Cash").
(ii) The value of Inventory existing as of the close of
business on the Closing Date, based on the
physical count reflected in the Final Inventory
Count Schedule, and valuing such Inventory
pursuant to the valuations principles set forth in
Exhibit 4.
(iii) The value of the Subsidiary Receivables, the
trade accounts receivable of Seaboard Kentucky
existing as of the Closing Date and arising from
sales of products by Seaboard Kentucky (the
"Seaboard Kentucky Receivables", and, together
with the Subsidiary Receivables, the
"Receivables"), the Subsidiary Prepaids and the
prepaid expenses of Seaboard Kentucky (the
"Seaboard Kentucky Prepaids", and together with
the Subsidiary Prepaids, the "Prepaids"), all as
of the close of business on the Closing Date, as
determined pursuant to Exhibit 4; and
(iv) The outstanding amount of Payables as of the close
of business on the Closing Date as determined
pursuant to Exhibit 4.
4.3 Seaboard Review. Seaboard shall have thirty (30) days
following receipt of the Preliminary Settlement
Statement (the "Review Period") to notify ConAgra in
writing of any objections to the Preliminary Settlement
Statement (a "Notice of Objection"). Any such Notice
of Objection shall specify in reasonable detail the
nature of each objection so asserted and the basis
therefor. If Seaboard does not deliver any Notice of
Objection during the Review Period, the Preliminary
Settlement Statement shall become final and binding.
4.4 Settlement Resolution. Within twenty (20) days
following the Review Period, the parties shall use
reasonable efforts to resolve the matters reflected in
any Notice of Objection, and the Preliminary Settlement
Statement shall be revised to reflect any such
resolution. Such resolutions shall be final and
binding. If all such disagreements are so resolved,
the revised Preliminary Settlement Statement shall
become final and binding.
4.5 Mediation and Arbitration. In the event the parties
shall be unable to resolve any matter set forth in a
Notice of Objection pursuant to Section 4.4, such
disagreement or disagreements shall be first referred
for resolution to the Vice President and Chief
Financial Officer of Seaboard and the Senior Financial
Officer of ConAgra Poultry Company and the Preliminary
Settlement Statement shall be revised to reflect any
such resolutions. Such resolutions shall be final and
binding. In the event that such officers shall be
unable to resolve any disagreement within ten (10) days
after such referral, such disagreement or disagreements
shall be referred for resolution to the President of
Seaboard and the President of ConAgra Poultry Company
and the Preliminary Settlement Statement shall be
revised to reflect such resolutions and such
resolutions shall be final and binding. If such
officers shall be unable to resolve any disagreement
within ten (10) days after such referral, such
disagreement or disagreements shall be referred to
PriceWaterhouseCoopers in Chicago, Illinois (the
"Arbitrator"). The Arbitrator shall be requested to
furnish written notice to Seaboard and ConAgra of its
resolution of any such disagreements referred as soon
as practicable and such resolution shall be
incorporated into the Preliminary Settlement Statement
and such revised settlement statement shall be final
and binding upon the parties. All fees, costs and
expenses of the Arbitrator shall be split equally
between ConAgra and Seaboard.
4.6 Cooperation. During and with respect to the
preparation of the Preliminary Settlement Statement and
revisions thereto, and the reviews and resolution
provisions set forth herein, Seaboard and ConAgra shall
(i) fully cooperate with all reasonable requests of
Seaboard and ConAgra, as the case may be; and (ii) upon
receiving a reasonable request, make available to each
other all work papers, supporting schedules, documents,
systems and other information (including access to all
appropriate knowledgeable personnel).
4.7 Settlement Date. For purposes of this Agreement, the
"Settlement Statement" shall mean the Preliminary
Settlement Statement revised to reflect all resolutions
determined pursuant to Sections 4.3, 4.4 and 4.5, "Net
Working Capital" shall mean the sum of the value of the
Kentucky Cash, the Inventory, the Receivables and the
Prepaids, less the amount of the Payables (all as
reflected in the Settlement Statement). Within five
(5) days following completion of the Settlement
Statement (the "Settlement Date"), ConAgra shall remit
to Seaboard, in immediately available funds, the
amount, if any, by which the Purchase Price exceeds the
Preliminary Payment (plus interest thereon from the
Closing Date at the Prevailing Rate), or, in the event
the Preliminary Payment exceeds the Purchase Price,
Seaboard shall remit to ConAgra, in immediately
available funds, the amount of such overpayment (plus
interest thereon from the Closing Date at the
Prevailing Rate).
4.8 Prevailing Rate. For purposes of this Agreement, the
"Prevailing Rate" shall mean eight percent (8%) per
annum.
4.9 Repurchase of Receivables. During the period
commencing on the Closing Date and ending 120 days
after the Closing Date (the "Collection Period"),
ConAgra shall use commercially reasonable efforts to
collect in full the Receivables (however, ConAgra shall
not be obligated to retain a collection agency or
counsel in connection with such collection efforts or
institute litigation or take any actions that are
beyond ConAgra's or the Seaboard Entities' normal
collection activities). To the extent that ConAgra
receives any payment for accounts receivable for the
Seaboard Entities during the Collection Period relating
to the Business which is not otherwise specifically
identified to a particular invoice, such payment shall
be applied to the oldest outstanding invoice of the
applicable account. Any payment received during the
Collection Period which is specifically identified to a
particular invoice shall be applied to that invoice.
Any Receivables that remain uncollected one hundred
twenty (120) days from the Closing Date shall be
immediately repurchased by Seaboard at the face amount
thereof, plus interest thereon at the Prevailing Rate.
Upon payment by Seaboard for such uncollected
Receivables, ConAgra shall transfer, or shall cause
Seaboard Kentucky to transfer, such Receivables (and
all documentation relating thereto) to Seaboard (which
shall thereafter be entitled to endeavor to collect
such Receivables for its own account), and, to the
extent ConAgra thereafter receives any payment with
respect to such Receivables from third parties, ConAgra
shall promptly forward such payment to Seaboard.
5. Ancillary Agreements.
5.1 Trademark Agreement. At Closing, ConAgra and Seaboard
shall execute a trademark agreement in the form
attached hereto as Exhibit 5.1 (the "Trademark
Agreement").
5.2 Transition Services Agreement. At Closing, ConAgra and
Seaboard shall execute a transition services agreement,
initially in the form attached hereto as Exhibit 5.2
(the "Transition Services Agreement"). Between the
date hereof and Closing, the parties shall negotiate
the Transition Services Agreement in good faith,
provided, however, (i) the term of the Transition
Services Agreement shall be six (6) months, and (ii)
the fees to be charged by Seaboard for services
provided under the Transition Services Agreement shall
not exceed Seaboard's reasonably determined costs in
providing such services.
5.3 Software License Agreement. At Closing, ConAgra and
Seaboard shall execute a software license agreement in
the form attached hereto as Exhibit 5.3 (the "Developed
Software License") with respect to the Developed
Software (as such term is defined in Exhibit 2).
6. Closing. Subject to the terms and conditions contained
herein, the transfer of the Assets and Seaboard Kentucky Stock by
Seaboard to ConAgra (the "Closing") will take place on January 3,
2000 (the "Closing Date") at the offices of XxXxxxx, North,
Xxxxxx & Xxxxx, P.C., Xxx Xxxxxxx Xxxx Xxxxx, Xxxxx 0000, Xxxxx,
Xxxxxxxx, or at such other time and place as may be mutually
acceptable to the parties hereto. The Closing shall be effective
as of the close of business on the Closing Date.
6.1 ConAgra's Obligation at Closing. At Closing, ConAgra
shall:
6.1.1 Payment. Pay to Seaboard, in immediately
available funds, the Preliminary Payment.
6.1.2 Assignment and Assumption Agreement. Execute and
deliver an assignment and assumption agreement in
a mutually acceptable form (the "Assignment and
Assumption Agreement"). ConAgra further agrees
that it will at any time and from time to time
after the Closing Date, upon the reasonable
request of Seaboard and without additional
consideration, do, execute, acknowledge and
deliver all such further acts and documents as may
be required in conformity with this Agreement for
the better assumption of those liabilities and
obligations of Seaboard and the Seaboard
Subsidiaries which ConAgra is required to assume
pursuant to this Agreement.
6.1.3 Legal Opinion. Deliver the legal opinion of
XxXxxxx, North, Xxxxxx & Xxxxx, P.C., counsel for
the ConAgra, in a mutually acceptable form.
6.1.4 Trademark Agreement. Execute and deliver the
Trademark Agreement.
6.1.5 Transition Services Agreement. Execute and
deliver the Transition Services Agreement.
6.1.6 Officer's Certificate. Execute and deliver the
Officer's Certificate required by Section 12.3
hereof.
6.1.7 Resolutions. Deliver a copy of the resolutions
of the Board of Directors of ConAgra authorizing
the transactions contemplated by this Agreement,
certified by the Secretary or any Assistant
Secretary of ConAgra.
6.1.8 Developed Software License. Execute and deliver
the Developed Software License.
6.1.9 Lease Assignment. Execute and deliver
an assignment and assumption of leases covering
the real estate leased by the Seaboard
Subsidiaries in a mutually acceptable form (the
"Lease Assignment").
6.2 Seaboard's Obligations at Closing. At Closing, Seaboard
shall, with respect to the Seaboard Assets and the
Seaboard Kentucky Stock, and Seaboard shall cause the
Seaboard Subsidiaries to, with respect to the
Subsidiaries Assets:
6.2.1 Deeds. Execute and deliver to ConAgra deeds to
the Real Estate owned by Seaboard and the
Seaboard Subsidiaries in the same form of deed it
received when it acquired each such parcel of
Real Estate (the "Deeds").
6.2.2 Xxxx of Sale. Execute and deliver to ConAgra a
general assignment and xxxx of sale in a mutually
acceptable form (the "Xxxx of Sale").
Simultaneously with such delivery, Seaboard shall
take all such steps as may be reasonably
necessary to put ConAgra in actual possession and
control of the Assets.
6.2.3 Assignment and Assumption Agreement. Execute and
deliver to ConAgra the Assignment and Assumption
Agreement.
6.2.4 Trademark Assignments. Execute and deliver to
ConAgra trademark assignments in mutually
acceptable forms (the "Trademark Assignments").
6.2.5 Other Instruments of Conveyance. Execute and
deliver such other assignments, bills of sale,
endorsements, notices, consents, assurances and
such other instruments of conveyance and transfer
as counsel for ConAgra shall reasonably request
and as shall be effective to vest in ConAgra good
and marketable (in case of the Real Estate) title
to all of the Assets. Seaboard further agrees
that it will at any time, and from time to time
after the Closing Date, upon the reasonable
request of ConAgra and without additional
consideration, do, execute, acknowledge and
deliver, or will cause to be done, executed,
acknowledged and delivered, all such further
acts, bills of sale, deeds, assignments,
transfers, conveyances, powers of attorney and
assurances as may be required in conformity with
this Agreement for the better assigning,
transferring, granting, conveying, assuring and
confirming to ConAgra or to its successors and
assigns, or for aiding and assisting in
collecting and reducing to possession, any or all
of the Assets or other properties sold, conveyed,
assigned, transferred and delivered at the
Closing to ConAgra as provided herein.
6.2.6 Resolutions. Deliver a copy of the resolutions
of the Board of Directors of Seaboard and the
Seaboard Subsidiaries authorizing the
transactions contemplated by this Agreement,
certified by the Secretary or any Assistant
Secretary of each.
6.2.7 Legal Opinion. Deliver the legal opinion of King
& Spalding, counsel for Seaboard, in a mutually
acceptable form.
6.2.8 Officer's Certificate. Execute and deliver the
Officer's Certificate required by Section 11.4
hereof.
6.2.9 Title Policies. Deliver title commitments in the
form attached hereto as Exhibit 6.2.9, marked-
down as of the Closing Date.
6.2.10 Trademark Agreement. Execute and deliver
the Trademark Agreement.
6.2.11 Transition Services Agreement. Execute and
deliver the Transition Services Agreement.
6.2.12 Developed Software License. Execute and
deliver the Developed Software License.
6.2.13 Lease Assignment. Execute and deliver
the Lease Assignment.
6.2.14 Stock Certificates. Deliver to ConAgra
certificates representing all of the Seaboard
Kentucky Stock duly endorsed and assigned to
ConAgra, with all necessary transfer tax and
other revenue stamps acquired at Seaboard's
expense.
6.2.15 Resignations. Deliver to ConAgra
resignations of all officers and directors of
Seaboard Kentucky.
6.3 Ancillary Documents. For purposes of this Agreement,
the term "Ancillary Documents" shall mean the Trademark
Agreement, Assignment and Assumption Agreement, the
Xxxx of Sale, the Deeds, the Lease Assignment, the
Trademark Assignments, the Developed Software License,
and the Transition Services Agreement.
7. Employee Matters.
7.1 ConAgra Offers. At Closing, ConAgra shall offer to employ
all employees of Seaboard and the Seaboard Subsidiaries employed
in connection with the Business, and shall retain all employees
of Seaboard Kentucky, who, on the Closing Date, are employees at
the Business Locations (collectively, the "Business Employees").
Such offers of employment will be on existing terms and
conditions, except as set forth on Exhibit 7.1. Business
Employees accepting such offers of employment, and all Seaboard
Kentucky employees remaining employed by Seaboard Kentucky as of
the Closing Date are herein called "Hired Employees" and all
other employees of Seaboard and/or the Seaboard Subsidiaries,
whether offered employment or not, shall be called "Retained
Employees." Notwithstanding the foregoing, ConAgra's and
Seaboard Kentucky's aggregate monetary obligation (including any
payments made by ConAgra under its self-insured insurance
programs) with respect to the Business Employees who are not
active employees of the Business as of the Closing Date (whether
as a result of being on long-term or short-term disability,
medical leave (not constituting long-term or short-term
disability) or for any other reason ("Non-Active Employees"),
while such employees are Non-Active Employees, whether for wages,
sick leave pay, health, medical or disability benefits and all
other benefits (and taxes and withholding with respect thereto)
payable with respect to such employees while Non-Active Employees
(net of any contributions with respect thereto from the Non-
Active Employees and insurance policies, excluding self-
insurance, retainage, retrospective additional premiums, and the
like), shall be capped at $500,000 and Seaboard shall have the
obligation to make all such required payments to Non-Active
Employees which are in excess of $500,000.
7.2 ConAgra Plans. ConAgra shall cause prior periods of
service with Seaboard and the Seaboard Subsidiaries (as
well as with Central Soya, for employees previously
employed by Central Soya) to count for purposes of
eligibility and vesting (but not benefit accrual) under
any benefit plans provided to Hired Employees after
Closing, provided, however, ConAgra shall only vest
union employees in union sponsored retirement and
pension plans to the extent required by the terms of
such union contract or by law. ConAgra shall waive
preexisting condition requirements, evidence of
insurability provisions, waiting period requirements or
any similar provisions under any health or welfare plan
provided to any Hired Employee after the Closing Date
to the extent covered under existing plans. After
Closing, ConAgra shall apply toward any deductible
requirements and out-of-pocket maximum limits under its
employee welfare benefit plans any amounts paid (or
accrued) by each Hired Employee prior to Closing under
welfare benefit plans during the then-current plan
year.
7.3 Union Contracts. ConAgra agrees to recognize the
unions party to the collective bargaining agreements
described in Section 8.15(vii) of the Disclosure
Schedule (as defined in Section 8.3) as the collective
bargaining agents for the Hired Employees represented
by such unions immediately prior to the Closing Date.
ConAgra further agrees to accept and be bound by the
terms and conditions of such collective bargaining
agreements applicable to such employees, except that
any employee benefit required to be provided under such
agreements through a benefit plan maintained by the
Seaboard Entities may instead be provided by ConAgra
through a benefit plan maintained by ConAgra.
7.4 Retirement and Pension Plans. The Seaboard Entities
shall fully vest all Hired Employees under, and remain
responsible for, all retirement and pension plans
maintained by the Business for any of its employees;
provided, however, the Seaboard Entities shall only
vest union employees in union sponsored retirement and
pension plans to the extent required by the terms of
such union contract or by law . Notwithstanding the
foregoing, ConAgra shall assume and be responsible for
the Retirement Income Plan for Production Employees of
Seaboard Farms of Chattanooga, Inc. ("Chattanooga
Plan"), as described in Section 8.15.2 of the
Disclosure Schedule. Seaboard and ConAgra agree to
cooperate to transfer the sponsorship of the
Chattanooga Plan from Seaboard to ConAgra as soon as is
practicable after and effective as of the Closing. In
connection therewith, Seaboard shall use its best
efforts to cause to be assigned to ConAgra or the
Chattanooga Plan such polices of insurance or other
contracts as ConAgra designates in writing and as
pertains to the funding of benefits under the
Chattanooga Plan, or in any case where such assignment
is commercially impracticable, Seaboard shall cooperate
in arranging for the issuance of new or modified
policies or contracts.
7.5 Medical Insurance. ConAgra shall not be responsible
(Seaboard and the Seaboard Subsidiaries shall be
responsible) for any health and accident claims and
expenses with respect to services provided to a Hired
Employee prior to the Closing Date (including any
services provided to any such Hired Employee employed
by Seaboard Kentucky). Seaboard shall not be
responsible (and ConAgra and/or Seaboard Kentucky shall
be responsible) for any health and accident claims and
expenses with respect to services provided to Hired
Employees from and after the Closing Date.
7.6 Workers' Compensation Claims. ConAgra and/or Seaboard
Kentucky shall be responsible for all workers'
compensation claims for any Hired Employee for any
claims and expenses with respect to occurrences prior
to the time that a Hired Employee commences active
employment with ConAgra. Exhibit 7.6 describes all such
pending worker's compensation claims which were
scheduled by Seaboard Entities as of November 27, 1999
(it being understood that, in the ordinary course of
business, workers' compensation claims are not
generally scheduled until several days after the
Seaboard Entities first receive notice of such
potential claims).
7.7 COBRA. Seaboard and the Seaboard Subsidiaries will be
responsible for satisfying obligations under Section
601 et seq. of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4980B of
the Internal Revenue Code of 1986, as amended (the
"Code"), to provide continuation coverage to, or with
respect to, any Hired Employee in accordance with law
with respect to any "qualifying event" occurring on or
before the Closing Date or resulting from the
transactions contemplated herein.
7.8 Severance. Seaboard and the Seaboard Subsidiaries
shall be responsible for any severance or similar
obligations payable to any Hired Employee or Retained
Employee, including, without limitation, obligations
under the Workers' Adjustment and Retraining
Notification Act of 1988, as amended (the "WARN Act"),
resulting from events occurring on or prior to the
Closing Date, or resulting from the transactions
contemplated herein. ConAgra and/or Seaboard Kentucky,
as the case may be, shall be responsible for any
severance or similar obligations payable to Hired
Employees under applicable law (including, without
limitation, under the WARN Act), resulting from events
occurring after the Closing Date.
7.9 Retained Employees. ConAgra shall have no obligation
or liability with respect to any Retained Employee and
Seaboard and the Seaboard Subsidiaries shall be
responsible for any and all liabilities and obligations
with respect to Retained Employees.
7.10 Vacation. The parties acknowledge and agree that the
Settlement Statement will include an accrual for earned
vacation and holiday pay and executive bonuses for the
Hired Employees. ConAgra and/or Seaboard Kentucky, as
the case may be, shall assume such accrued vacation and
holiday pay liability and executive bonuses (to the
extent of such accrual) and shall provide such vacation
and holiday pay benefits and executive bonuses to such
employees.
8. Representations, Warranties and Covenants of Seaboard.
Seaboard hereby represents, warrants, and covenants to and with
ConAgra as follows:
8.1 Organization, Good Standing and Corporate Power. The
Seaboard Entities are corporations duly organized,
validly existing and in good standing under the
respective laws of their states of incorporation, and
each has the corporate power to own, operate and lease
its properties and carry on its business as now being
conducted and to enter into this Agreement and the
Ancillary Documents to which it is a party. The
Seaboard Entities are qualified to do business in all
jurisdictions in which such qualification or
authorization is required, except for those
jurisdictions in which failure to be so qualified or
authorized would not have a "Material Adverse Effect"
(as defined in Section 8.3).
8.2 Corporate Authorization; Binding Effect. The
execution, delivery and performance of this Agreement
and the Ancillary Documents by Seaboard and the
consummation of the transactions contemplated hereby
and thereby have been duly and validly authorized and
approved by all necessary corporate action on the part
of Seaboard (no action by the shareholders of Seaboard
being necessary). This Agreement and the Ancillary
Documents constitute the legal, valid and binding
obligations of Seaboard, each enforceable in accordance
with its respective terms.
8.3 No Conflict with Other Instruments or Agreements.
Except as set forth in Section 8.3 of the Disclosure
Schedule dated of even date herewith and delivered as a
separate document, the contents of which are
incorporated herein (the "Disclosure Schedule"), the
execution, delivery and performance of this Agreement
and the Ancillary Documents by Seaboard will not result
in the breach of, or conflict with, any term, covenant,
condition or provision of, result in the modification
or termination of, constitute a default under, or
result in the creation or imposition of any lien,
security interest, charge or encumbrance upon any of
the Assets, Seaboard Kentucky Stock or Seaboard
Kentucky Assets (as defined below) pursuant to, any
corporate charter, by-law, commitment, contract or
other agreement or instrument to which Seaboard is a
party or by which Seaboard or any of its assets or
property is or may be bound, except where such default
(individually or in the aggregate) would not have a
material adverse effect on the condition (financial or
otherwise), results of operations, business, assets or
liabilities of the Business or on the ability of
Seaboard to consummate the transactions contemplated
herein or to perform its obligations hereunder (herein
a "Material Adverse Effect").
8.4 No Government Authorization Required. Other than
compliance with the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act of 1976, as amended ("HSR Act"), and
except as set forth in Section 8.5 of the Disclosure
Schedule, no consent, approval, authorization or order
of, or qualification with, any court, regulatory
authority or other governmental body is required for
the consummation by the Seaboard Entities of the
transactions contemplated by this Agreement or the
Ancillary Documents.
8.5 Effect of Agreement. Except as set forth in Section
8.5 of the Disclosure Schedule, the execution, delivery
and performance of this Agreement and the Ancillary
Documents by Seaboard and the consummation of the
transactions contemplated hereby and thereby will not,
with or without the giving of notice or the lapse of
time or both, (a) violate any provision of law,
statute, rule or regulation to which the Seaboard
Entities are subject; (b) violate any judgment, order,
writ or decree of any court applicable to the Seaboard
Entities; or (c) have any adverse effect on any of the
permits, licenses, orders or approvals held or utilized
by the Seaboard Entities with respect to the Business
which are transferable, in any case, where such
violations or adverse effect will have a Material
Adverse Effect.
8.6 Financial Statements. Seaboard has heretofore
delivered to ConAgra copies of the Business' balance
sheets for its fiscal years ended December 31, 1998 and
1997 and 1996, and the related statements of income for
the years then ended, together with the interim balance
sheets and statements of income for the interim periods
ended October 30, 1999 (such annual financial
statements are collectively referred to as the "Year
End Financial Statements" and the financial statements
for the periods ended October 30, 1999 are herein
called the "Interim Financial Statements"). Except as
set forth in Section 8.6 of the Disclosure Schedule,
the Year End Financial Statements and the Interim
Financial Statements (collectively, the "Financial
Statements") present fairly in all material respects
the financial position and results of operation of the
Business as of the periods then ended, in conformity
with generally accepted accounting principles applied
on a basis consistent with prior years ("GAAP"). The
Financial Statements do not contain any material
(individually or in the aggregate) items of special or
nonrecurring income or any other material (individually
or in the aggregate) income not earned in the ordinary
course of business. The Seaboard Entities have not used
any improper accounting practice for the purpose of not
reflecting or incorrectly reflecting in the Financial
Statements or books and records of the Seaboard
Entities any properties, assets, liabilities, revenues
or expenses relating to the Business, and all books and
records of the Seaboard Entities relating to the
Business have been maintained and prepared in
conformity with GAAP. All assets reflected in the
Interim Financial Statements are either included in the
definition of Assets or are Seaboard Kentucky Assets,
except for such assets sold in the ordinary course of
business consistent with past practice.
8.7 Undisclosed Liabilities. Except as set forth in
Section 8.7 of the Disclosure Schedule, none of the
Seaboard Entities have any material (individually or in
the aggregate) liability (whether secured or unsecured
and whether accrued, absolute, direct, indirect,
contingent or otherwise) with respect to the Business,
except for (i) liabilities set forth on the face of the
Interim Financial Statements, (ii) liabilities under
contracts and agreements not required by generally
accepted accounting principles to be accrued for on the
Financial Statements, and (iii) contingent and other
liabilities not required by generally accepted
accounting principles to be accrued for on the
Financial Statements and liabilities which have arisen
after the date of the Interim Financial Statements in
the ordinary course of business consistent with past
practice and in amounts consistent with the liabilities
reflected in the Financial Statements, none of which
will have a Material Adverse Effect.
8.8 Title to Assets, Absence of Liens, Condition of Assets.
The Seaboard Entities have good and (in the case of the
real estate owned by it) marketable title to all of the
Assets and the Seaboard Kentucky Assets which are
reflected as owned on the Interim Financial Statements
(the "Owned Assets"), free and clear of all pledges,
liens, defects, leases, licenses, conditional sales
contracts, charges, claims, encumbrances, security
interests, easements, restrictions, chattel mortgages,
mortgages or deeds of trust and material encroachments
on or from the Real Estate (collectively, the "Liens"),
and Seaboard or its wholly-owned subsidiaries owns all
of the IRB's free and clear of all Liens, other than
those set forth in Section 8.8 of the Disclosure
Schedule (the "Permitted Liens"), and the instruments
of conveyance, and other endorsements and instruments
of transfer and assignment contemplated by this
Agreement are sufficient to transfer good and
marketable fee simple (in the case of real estate)
title to the Owned Assets to ConAgra, free and clear of
all Liens, except for Permitted Liens. To the
knowledge of Seaboard, the Assets and the Seaboard
Kentucky Assets are, in all material respects, in good
and usable repair and condition, ordinary wear and tear
excepted, are suitable for the purposes used, and have
been maintained in all material respects consistent
with past practices. Except for the representations
and warranties contained in this Agreement, the Assets
are being transferred to ConAgra on an "AS IS, WHERE
IS" basis.
8.9 Assets. Except as otherwise noted in Section 8.9 of
the Disclosure Schedule, the Assets, the Seaboard
Kentucky Assets and the Excluded Assets constitute in
all material respects all of the assets, properties,
licenses (to the extent transferable) and other
agreements which are presently being used or are
related to the Business as presently conducted, and
after the transfer of the Assets and the Seaboard
Kentucky Stock to ConAgra, ConAgra will have in all
material respects all assets, properties, licenses (to
the extent transferable) and other agreements necessary
to conduct the Business in the same manner as such
business and operations have been conducted prior to
the Closing Date. The Seaboard Assets constitute the
only assets owned, leased or licensed by Seaboard, or
any other Seaboard subsidiary which is not a Seaboard
Subsidiary, which are used exclusively in the Business.
The only assets or property Seaboard used in the
Business on a non-exclusive basis are Seaboard's
company-wide main frame computer system, the Excluded
Trademarks, Enterprise Software and Developed Software.
The Seaboard Entities have not sold, assigned, moved or
disposed of any assets used in the Business in
contemplation of the transactions contemplated herein,
other than the sale of inventory in the ordinary course
of business.
8.10 Inventory, Packaging and Supplies. Except to the
extent reflected in the Settlement Statement, the items
of Inventory consist of items suitable and merchantable
for filling orders in the ordinary course of business.
Such Inventory has been manufactured, mixed, packaged
and labeled in accordance with all applicable
governmental laws and regulations, whether federal,
state or local, including all environmental laws and
regulations. The Inventory includes a sufficient
quantity of each type of such Inventory in order to
meet the normal requirements of the Business
(considering the Business' normal inventory cycle),
but, except to the extent reserved in the final
Settlement Statement, does not include obsolete or out
of date items, damaged items, or quantities not in
conformance with written specifications required by the
customer for whom the Inventory is being produced or in
excess of quantities that can be sold for a normal
margin within a reasonable inventory cycle due solely
to the existence of excess quantities of Inventory. No
Inventory is stored or located outside the United
States. The items of packaging supplies, office,
warehouse, processing, operating and storage supplies,
spare parts, fuel, tools, maintenance equipment and
similar property sold to ConAgra hereunder or owned by
Seaboard Kentucky are suitable in all material respects
for use in the ordinary course of business.
8.11 Licenses, Permits and Orders. Section 8.11 of the
Disclosure Schedule contains a complete and correct
list of all material qualifications, registrations,
filings, approvals, authorizations, consents, licenses,
orders and other permits of all governmental agencies,
whether federal state, or local, owned, held or
utilized by the Seaboard Entities in connection with
the Business including, without limitation, all waste
water permits. The Seaboard Entities hold all material
qualifications, registrations, filings, approvals,
authorizations, consents, licenses, orders and other
permits necessary to own, operate and lease their
properties and carry on the Business as now being
conducted. The Seaboard Entities are in material
compliance with all waste water permits used in
connection with the Business and no basis exists for
the termination or expiration of such permits other
than in accordance with their terms.
8.12 Real Property.
8.12.1 Section 8.12.1 of the Disclosure Schedule lists
and describes briefly all real property owned by
the Seaboard Subsidiaries and Seaboard Kentucky
and used in the Business. With respect to each
such parcel of owned real property:
(i) there are no pending or, to the
knowledge of Seaboard, threatened
condemnation proceedings, lawsuits, or
administrative actions relating to such
property, or the current use, occupancy, or
value thereof;
(ii) the legal description for the parcel
contained in the title commitments attached
hereto in Exhibit 6.2.9 (the "Title
Commitments") describes such parcel fully and
adequately;
(iii) except as disclosed in the Title
Commitments, there are no leases, subleases,
licenses, concessions, or other agreements,
written or oral, granting to any party or
parties the right of use or occupancy of any
portion of such property;
(iv) except as disclosed in the Title
Commitments, there are no outstanding options
or rights of first refusal to purchase the
parcel of such property, or any portion
thereof or interest therein.
8.12.2 Section 8.12.2 of the Disclosure Schedule lists
and describes briefly all real property leased
or subleased to the Seaboard Subsidiaries and
Seaboard Kentucky in connection with the
Business. Seaboard has delivered to the ConAgra
correct and complete copies of the leases and
subleases (as amended) listed in Section 8.12.2
of the Disclosure Schedule. With respect to
each lease and sublease, except as otherwise
noted in Section 8.12.2 of the Disclosure
Schedule:
(i) to the knowledge of Seaboard, the lease
or sublease is legal, valid, binding,
enforceable and in full force and effect;
(ii) to the knowledge of Seaboard, subject to
the receipt of the consents listed in Section
8.12.2(ii) of the Disclosure Schedule, the
lease or sublease will continue to be legal,
valid, binding, enforceable, and in full
force and effect on identical terms following
the consummation of the transactions
contemplated hereby;
(iii) to the knowledge of Seaboard, no
party to the lease or sublease is in material
breach or material default, and no event has
occurred which, with notice or lapse of time,
would constitute a material breach or
material default or permit termination,
modification, or acceleration thereunder;
(iv) to the knowledge of Seaboard, no party
to the lease or sublease has repudiated in
writing any material provision thereof; and
(v) to the knowledge of Seaboard, there are
no material disputes, oral agreements, or
forbearance programs in effect as to the
lease or sublease.
8.13 Corporate Services. Section 8.13 of the Disclosure
Schedule describes all corporate and intercompany
services provided by Seaboard, or any division or
subsidiary of Seaboard, to the Business and all
material intercompany transactions between the Business
and Seaboard, or any division or subsidiary of
Seaboard.
8.14 Insurance. Seaboard has provided to ConAgra a list and
description of all policies of liability, theft,
fidelity, life, fire and other forms of insurance
presently held or within the past three (3) years held
by or for the benefit of the Seaboard Entities with
respect to the Business, specifying the insurer, amount
of coverage, type of insurance and policy number.
Section 8.14 of the Disclosure Schedule sets forth a
description of all material (individually or in the
aggregate) pending claims thereunder relating to the
Business of which the Seaboard Entities have notice and
a summary of material claims made under such policies
of insurance during the past three (3) years. Except
as reflected in Section 8.14 of the Disclosure
Schedule, the Seaboard Entities have not, with respect
to the Business, during the past three (3) years, been
denied or had revoked or rescinded by a carrier any
policy of insurance. Except as otherwise noted in
Section 8.14 of the Disclosure Schedule, there are no
outstanding requirements or recommendations by any
insurance company that wrote any such policy or by any
Board of Fire Underwriters or similar body exercising
similar functions or by any governmental authority
which requires or recommends changes in the conduct of
the business, or repairs or other work to be done or
with respect to any of the properties, assets or
operations of the Business or requiring any equipment
or facilities to be installed on or in connection with
any of the properties or assets of the Business, that,
if not performed, would, individually or in the
aggregate, result in a Material Adverse Effect.
8.15 Contracts and Other Data. Section 8.15 of the
Disclosure Schedule sets forth, as of the date of this
Agreement, a listing of the following, true and correct
copies of which have been furnished to ConAgra:
8.15.1 All of the following material contracts and
commitments, whether written or oral, to which
any of the Seaboard Entities is a party with
respect to the Business, or to which any of the
Assets or Seaboard Kentucky Assets are subject
or bound (collectively, the "Material
Agreements"):
(i) any agreement (or group of related
agreements) for the lease of personal
property to or from any person providing
for lease payments in excess of $100,000
per annum or with a term in excess of one
(1) year;
(ii) any agreement (or group of related
agreements) for the purchase, sale or
consignment of raw materials, commodities,
supplies, products, or other personal
property, or for the furnishing or receipt
of services, the performance of which will
extend over a period of more than one year,
or involve consideration in excess of
$250,000;
(iii) any toll processing, co-packing or
similar agreement;
(iv) any agreement concerning a partnership,
joint venture or other profit sharing
arrangement;
(v) any agreement pursuant to which a Lien is
created with respect to any Asset or
Seaboard Kentucky Assets;
(vi) any agreement concerning confidentiality or
noncompetition;
(vii) any collective bargaining agreement;
(viii) any agreement under which it has
advanced or loaned funds or other property
to any employees of the Business;
(ix) any requirements, "take or pay" or similar
agreement relating to the Business;
(x) any agreement or arrangement establishing,
creating or relating to any rebate,
promotion, advertising coupon or other
allowance;
(xi) any brokerage or distributor agreements
relating to the Business;
(xii) any power of attorney or agency
agreement;
(xiii) any employment or consultant
agreement;
(xiv) any grower agreement, including a list
of all growers with whom the Business has
agreements or relationships;
(xv) any agreement for the purchase of parent
breeding stock;
(xvi) any feed ingredient contracts or
commodity futures contracts, option
contracts or similar agreements;
(xvii) all contracts relating to the Capital
Improvement Projects (as defined in Section
8.29), including any series of contracts or
agreements with an individual contractor to
the extent the aggregate value of such
series of contracts of agreements are in
excess of $250,000 together with other
construction contracts requiring payments
in excess of $250,000 individually; or
(xviii) any agreement under which the
consequences of a default or termination
could have a Material Adverse Effect.
8.15.2 All executive compensation plans, bonus plans,
deferred compensation agreements, employee
pension plans, employee stock ownership plans,
retirement plans, golden parachutes, thrift
plans, severance plans, employee profit sharing
plans, savings plans, group life insurance,
hospitalization insurance, or other plans or
arrangements, whether written or oral, providing
for benefits for employees of the Seaboard
Subsidiaries and Seaboard Kentucky
(collectively, the "Seaboard Employees");
8.15.3 A true, correct and complete list of the names
and current annual compensation (including
wages, salaries, bonuses and benefits under
pension, profit sharing, deferred compensation
and similar plans or programs) of all Seaboard
Employees, as well as information concerning
years of service and seniority.
8.16 Compliance With Agreements. Neither Seaboard nor, to
Seaboard's knowledge, any other person, firm,
corporation or entity is in material breach of, or in
material default under, any Assumed Agreement. To the
knowledge of Seaboard, no state of facts exists or
event has occurred, is pending or is threatened, which,
after the giving of notice, the lapse of time or
otherwise, is reasonably likely to constitute or result
in a material breach or a material default by any of
the Seaboard Entities or any other person, firm,
corporation or entity, of any Assumed Agreement. To
the knowledge of Seaboard, each Assumed Agreement is,
and after consummation of the transactions contemplated
herein will be a, legal, valid and binding obligation
of the respective parties thereto. Seaboard Kentucky
is not a party to any agreement other than those
included in the Assumed Agreements.
8.17 Litigation. Section 8.17 of the Disclosure Schedule
contains a true, complete and correct list and caption
of each pending lawsuit, claim, administrative
proceeding, arbitration, labor dispute or governmental
investigation or inspection to which (a) Seaboard
Kentucky is a party or which involve or affect the
operations or assets of Seaboard Kentucky which (i)
involves any governmental claim, investigation or
inspection, (ii) involves any litigation, claim or
dispute with any grower with exposure or potential
exposure in excess of $25,000, (iii) involves exposure
or potential exposure in excess of $25,000, and (iv)
seeks injunctive or other equitable relief, and (b)
Seaboard and/or any of the Seaboard Subsidiaries is a
party in connection with the Business or which involve
or affect the operations or assets of the Business
which (i) involves any government claim, investigation
or inspection, (ii) involves any litigation, claim or
dispute with any grower with exposure or potential
exposure in excess of $25,000, (iii) involves exposure
or potential exposure in excess of $200,000, and (iv)
seeks injunctive or other equitable relief. Except for
the matters disclosed in Section 8.17 of the Disclosure
Schedule, to the knowledge of Seaboard, there are no
material (individually or in the aggregate) claims,
legal actions or investigations threatened or
contemplated against Seaboard Kentucky or against the
Seaboard Entities in connection with the Business or
otherwise relating to the Business. Section 8.17 of
the Disclosure Schedule further describes all material
(individually or in the aggregate) product liability
claims received by the Seaboard Entities during the
past three (3) years in connection with the Business.
There are no orders, decrees, judgments or agreements
with any court or governmental authority to which any
of the Seaboard Entities is a party and that relates to
the Business or by which the Assets and/or Seaboard
Kentucky Assets are bound.
8.18 Labor Matters. Except as set forth in Section 8.15 of
the Disclosure Schedule, the Seaboard Entities are not
a party to any collective bargaining agreements with
respect to the Business. There are no material
controversies pending or, to the knowledge of Seaboard,
threatened between the Seaboard Entities and any of the
Seaboard Employees. Except as disclosed in
Section 8.17 or Section 8.22 of the Disclosure
Schedule, the Seaboard Entities have not, with respect
to the Business, and Seaboard Kentucky has not,
committed, or engaged in, any material (individually or
in the aggregate) unfair labor practices. Except as
disclosed in Section 8.17 or Section 8.22 of the
Disclosure Schedule, the Seaboard Entities have
complied in all material respects with all federal,
state and local laws relating to employment, wages,
hours, working conditions, collective bargaining and
the payment of social security, unemployment and
similar taxes, and are not liable for any arrears of
wages or any taxes or penalties for failure to comply
with any of the foregoing; and, except as disclosed in
Section 8.17 or Section 8.22 of the Disclosure
Schedule, to the knowledge of Seaboard, there are no
proceedings, investigations or citations pending before
any court, governmental agency or instrumentality or
arbitrator relating to any failure so to comply
thereto.
8.19 Transactions with Management. Except as disclosed in
Section 8.19 of the Disclosure Schedule, to the
knowledge of Seaboard, no director, officer or employee
of the Seaboard Entities directly or indirectly, (i)
owns any shares of stock or other securities of, or has
any other direct or indirect interest in, any firm,
corporation, partnership or other entity or business
(exclusive of companies whose shares are publicly-
traded) which has a business relationship (as creditor,
lessor, lessee, supplier, customer or otherwise) with
the Business; (ii) owns, or has any other direct or
indirect interest in any process, invention, know-how,
formula, trade secret, trade marks, trade names,
service marks, service names, brand marks, brand names,
labels or registrations or licenses thereof or
applications therefor or other right, property or asset
which is used in or which is required in the ownership
or operation of the Business; or (iii) has any other
material contractual relationship with the Business.
8.20 Relationship With Suppliers and Customers. To the
knowledge of Seaboard, the relationship of the Seaboard
Entities with the material (individually or in the
aggregate) suppliers, customers and growers of the
Business is satisfactory and the Seaboard Entities have
not received notice of any intention to terminate or
materially modify any of such relationships. To the
knowledge of Seaboard, the transactions contemplated
herein will not materially and adversely affect the
ongoing relationship of the Business with any material
(individually or in the aggregate) customer, supplier
or grower.
8.21 Intellectual Property.
8.21.1 Section 8.21.1 of the Disclosure Schedule
contains a complete and correct list of: (i)
all patent and all pending applications for
patents which the Seaboard Subsidiaries and/or
Seaboard Kentucky own or are using in connection
with the Business or the use of which is
necessary for the conduct of the Business as
currently being conducted ("Patents"), (ii) all
registered trademarks, registered service marks,
and registered trade names, and all
registrations and pending applications relating
thereto, which the Seaboard Subsidiaries and/or
Seaboard Kentucky own or are using in connection
with the Business ("Trademarks"), and (iii) all
copyrights and all copyright pending
registrations and applications relating thereto
which the Seaboard Subsidiaries and/or Seaboard
Kentucky own or are using in connection with the
Business ("Copyrights").
8.21.2 Except as disclosed in Section 8.21.2 of the
Disclosure Schedule, (i) the Seaboard
Subsidiaries and/or Seaboard Kentucky own all
right, title and interest in and to the
Trademarks, Patents and Copyrights; (ii) all of
the Trademarks, Patents and Copyrights are valid
and subsisting and in full force and effect in
accordance with their terms; (iii) to the
knowledge of Seaboard, no impediment exists to
the Seaboard Subsidiaries' and/or Seaboard
Kentucky's exclusive ownership, use and validity
of any of the Trademarks, Patents and
Copyrights; (iv) to the knowledge of Seaboard,
no other person, corporation, partnership, joint
venture, organization, association or entity
owns any interest in or uses in any way any of
the Trademarks, Patents and Copyrights; (v) to
the knowledge of Seaboard, none of the
Trademarks, Patents or Copyrights are involved
in, nor are the subject of, any pending or
threatened infringement, interference,
opposition, or similar action, suit or
proceeding or has otherwise been challenged in
any way; and (vi) to the knowledge of Seaboard,
neither the ownership or operation of the
Business, the Assets by the Seaboard
Subsidiaries or the Seaboard Kentucky Assets by
Seaboard Kentucky, nor the production,
manufacture, marketing, sale or distribution by
the Seaboard Subsidiaries or Seaboard Kentucky
of the Business' products, nor the marketing,
sale or performance by the Seaboard Entities of
the Business' services, nor the use of any
product of the Business for the purposes for
which sold, infringes upon or conflicts with any
patent, registered trademark, registered trade
name, registered service xxxx, or registered
copyright, of any other person, firm,
corporation or entity.
8.21.3 Section 8.15 or Section 8.21.3 of the Disclosure
Schedule contains a list of all material
agreements and contracts to which any of the
Seaboard Subsidiaries or Seaboard Kentucky is a
party (including, without limitation, licenses
and other such agreements), whether written or
oral, which affect any of the Trademarks,
Patents or Copyrights. Except as disclosed in
Section 8.15 or Section 8.21.3 of the Disclosure
Schedule, to the knowledge of Seaboard, such
material agreements and contracts are valid,
binding and enforceable in accordance with their
respective terms for the periods stated therein,
and there is no existing material default or
material event of default thereunder or any
event which with notice and/or lapse of time
would constitute a default.
8.21.4 Except as set forth in Section 8.21.4 of the
Disclosure Schedule, neither the Seaboard
Subsidiaries and/or Seaboard Kentucky use any
material licensed software in the Business,
except for software that is available from
commercial vendors at prices and on terms and
conditions that are generally available to the
public and except for the Enterprise Software
and the Developed Software.
8.21.5 Section 8.21.5 of the Disclosure Schedule lists
all software owned by the Seaboard Subsidiaries
and Seaboard Kentucky used in the Business.
8.22 Compliance with Laws. The Seaboard Subsidiaries and
Seaboard Kentucky own and operate the Assets, Seaboard
Kentucky Assets and the Business, and have
manufactured, stored, processed and sold the Business'
inventory and products, and otherwise carried on and
conducted the Business in material compliance with all
applicable federal, foreign, state and local laws,
ordinances, rules and regulations. Section 8.22 of the
Disclosure Schedule sets forth for the past five (5)
years all material investigations, inspections or
citations under any health, environmental, safety,
labor, employment or other applicable laws and
regulations and under any other federal, state or local
laws or regulations and the results thereof together
with a brief description of all corrective or other
action taken with respect thereto. There are no
material individually or in the aggregate pending
governmental investigations, inspections or citations
which relate to the Business. The Assets, Seaboard
Kentucky Assets and all assets subject to leases
described in Section 1.7, and all assets subject to any
agreement to which Seaboard Kentucky is a party, are
being used and occupied, and are located, constructed
and operated in material compliance with, and conform
in all material respects to, all applicable federal,
state and local laws, rules, regulations and
ordinances.
8.23 Environmental Matters. Except as set forth in Section
8.23 of the Disclosure Schedule: (a) all owned and
leased real property used in the Business and all real
property previously owned or leased by Seaboard
Kentucky (the "Property") is free from any and all
Hazardous Materials (as defined below) of any material
quantity that requires remediation or clean-up under
Environmental Laws (as defined below) by any Seaboard
Entity; (b) except as expressly authorized by an
effective permit or by applicable law, the Seaboard
Entities have not released, discharged or emitted, nor,
to Seaboard's knowledge, has any third party released,
discharged or emitted, any Hazardous Material or any
other harmful substance, into, onto, under or from the
Property in violation of Environmental Laws; and (c)
the Seaboard Entities have not disposed of, nor, to
Seaboard's knowledge, has any third party disposed of ,
any wastes of any kind on, at or under the Property in
violation of Environmental Laws. Except as set forth
in Section 8.23 of the Disclosure Schedule, with
respect to the Business, the Seaboard Entities are in
material compliance with all Environmental Laws,
including (a) all laws, rules and regulations relating
to (i) releases, discharges, emissions or disposal to
air, water, land or ground water; (ii) the use,
manufacture, importing, generation, treatment, handling
or disposal of Hazardous Material; and (iii) the
exposure of persons to toxic, hazardous, harmful or
other controlled, prohibited or regulated substances;
and (b) all judicial and administrative orders,
injunctions, judgments, declarations, directives,
notices or demands with respect to the foregoing
matters.
There is no pending or, to the knowledge of Seaboard,
threatened lawsuit, claim, action, or proceeding by any
governmental entity or third party arising under
Environmental Laws in respect to the Property, the
Assets or the Seaboard Kentucky Assets, nor to
Seaboard's knowledge does any valid basis for such a
lawsuit, claim, action, or proceeding exist.
For purposes of this Agreement, "Environmental Law"
shall mean any law, regulation, ordinance, order,
permit, license, common law, or other requirement (as
in effect as of the Closing Date) pertaining to
protection of the environment, health or safety of
persons, waste management, or Hazardous Material
Activity (as defined below), and includes, without
limitation, CERCLA, as amended (42 U.S.C. 9601 et
seq.); Solid Waste Disposal Act, as amended (42 U.S.C.
1251 et seq.); Federal Water Pollution Control Act,
as amended (33 U.S.C. 7401 et seq.); Toxic Substances
Control Act of 1976 (15 U.S.C. 2601 et seq.); OSHA as
amended (29 U.S.C. 651 et seq.); Emergency Planning
and Community Right-to-Know Act of 1986 (42 U.S.C.
1101 et seq.); and any similar or implementing law,
and all amendments, rules, regulations, guidance
documents and publications promulgated thereunder.
The term "Hazardous Material" shall mean any substance,
material or waste (whether solid, liquid or otherwise),
including, without limitation, asbestos, petroleum
(including crude oil or any fraction thereof) and urea
formaldehyde, which is defined, prohibited, controlled
or regulated by any Environmental Law. "Hazardous
Material Activity" shall mean any and all activity,
event or occurrence involving a Hazardous Material,
including, without limitation, the use, generation,
storage or disposal (as those terms are defined in any
Environmental Law) of any Hazardous Material.
8.24 Conduct of Business Since December 31, 1998. Except as
otherwise disclosed in Section 8.24 of the Disclosure
Schedule, since December 31, 1998:
(i) The business and affairs of the Business have been
conducted and carried on in all material respects
only in the ordinary course consistent with its
past practices.
(ii) Except for personal property purchased, sold or
leased in the ordinary course of business
consistent with its past practices, the Seaboard
Entities have not purchased, sold, leased,
mortgaged, pledged or otherwise acquired or
disposed of any material properties or assets used
in the Business.
(iii) There has been no increase or other change made
in the rate or nature of the compensation,
including wages, salaries, bonuses and benefits
under employee benefit plans which has been paid,
or will be paid or payable, by the Seaboard
Entities to any employee used in the Business,
other than in the ordinary course consistent with
past practice.
(iv) The Seaboard Entities have not sustained or
incurred any loss or damage (whether or not
insured against) on account of fire, flood,
earthquake, accident or other calamity which has
materially interfered or affected, or may
materially interfere with or affect, the Assets,
the Seaboard Kentucky Assets or the Business.
(v) There has been no material adverse change in or
with respect to the financial condition,
operations, management, rights, properties,
assets, liabilities or results of operations of
the Business, or its relationship with its
employees, creditors, suppliers or others having
business relationships with the Business.
(vi) The Seaboard Entities have not, in connection with
the Business, entered into any transaction,
contract or commitment which, by reason of its
size, nature or otherwise is not in the ordinary
course of business.
(vii) The Seaboard Entities have not, in connection
with the Business, incurred any obligations or
liabilities (whether absolute, accrued, contingent
or otherwise and whether due or to become due),
except in the ordinary course of business
consistent with past practices.
(viii) The Seaboard Entities have not changed any
method of accounting for, or valuing, inventory,
prepaids, receivables or payables.
8.25 Receivables. All Receivables (i) are reflected
properly on the books and records of the Seaboard
Entities, (ii) have arisen only from bona fide
transactions in the ordinary course of the Business'
business, (iii) are, to the knowledge of Seaboard,
current and collectible, and (iv) to the knowledge of
Seaboard, will be collected in accordance with their
terms at their recorded amounts, in accordance with the
Business' prior practices, as reflected in the
Financial Statements. Any Receivables arising from
foreign sales are secured by current and enforceable
letters of credit.
8.26 Tax Matters. Except for any Tax Returns where the
amount of Tax (including interest and penalties) which
would have been owing is not material, the Seaboard
Entities have duly filed all federal, foreign, state,
county and local Tax Returns required to be filed, and
have paid in full all Taxes, interest, penalties,
assessments or deficiencies shown to be due on such
returns and reports. No claims for additional taxes
are pending or, to the knowledge of Seaboard,
threatened with respect thereto for any prior year
which would affect the Business, the Assets, the
Seaboard Kentucky Stock, or the transfer of the
Business, the Assets, or the Seaboard Kentucky Stock to
ConAgra, or the Seaboard Kentucky Assets.
8.26.1 Affiliated Group. Seaboard Kentucky has been a
member of Seaboard's affiliated group since
August 29, 1988 (the date of its incorporation)
and has filed consolidated federal Income Tax
and state consolidated (or combined) Income Tax
Returns with Seaboard and its other subsidiaries
since such time. All state tax periods with
respect to operations of Seaboard Kentucky prior
to 1994 have closed and Seaboard Kentucky has no
further liability for Taxes with respect to such
periods. The federal audits of Seaboard's
consolidated federal Income Tax Returns (which
include Seaboard Kentucky) have been completed
through 1993 and, to the extent such years are
not closed, there are no issues peculiar to
Seaboard Kentucky or which could result in
liability to Seaboard in an amount which
Seaboard does not have adequate resources to
satisfy.
8.26.2 Tax Return. Except for any Tax Returns where
the amount of Tax (including interest and
penalties) which would have been owing is not
material, Seaboard has duly and accurately
prepared and timely filed with all applicable
Tax authorities all Tax Returns required by law
to be filed on or before the Closing Date and
paid or made adequate provision for the payment
of, all Taxes due, or which have become due,
whether by law or pursuant to any judgment,
settlement, assessment, deficiency, notice, 30-
day letter or similar notice received by any of
them.
8.26.3 Withholding. All monies required to be withheld
by Seaboard Kentucky from its employees have
been collected or withheld, and either paid to
the respective Tax authorities or set aside by
Seaboard for such purpose.
8.26.4 Consent. Seaboard Kentucky has not filed or
executed a consent to the application of Section
341(f) of the Code.
8.26.5 Taxes Incurred in the Ordinary Course of
Business. With respect to any period of time
through the Closing Date for which Tax Returns
have not yet been filed, or for which Taxes are
not yet due or owing, Seaboard Kentucky has not
incurred Tax liabilities material to the
business or the operations of Seaboard Kentucky,
other than normally recurring liabilities for
Taxes in the ordinary and regular course of its
business and other than Taxes which will be
incurred pursuant to the Section 338(h)(10)
Joint Election..
8.26.6 Waivers of Periods of Limitations and Pending
Audits. No presently effective agreement
extending the period for assessment or
collection of any Taxes has been executed or
filed by Seaboard Kentucky with any applicable
state Tax authority, or with any federal Tax
authority whereby there exists issues peculiar
to Seaboard Kentucky or which could result in
liability to Seaboard in an amount which
Seaboard does not have adequate resources to
satisfy.
8.26.7 Pending or Threatened Tax Proceedings. Seaboard
Kentucky is not a party to any pending claim,
action, proceeding or examination, nor, to the
knowledge of Seaboard, no claim, action,
proceeding, examination, review, audit or
investigation is being threatened or asserted by
any governmental authority for assessment or
collection of Taxes, except for examinations
currently being conducted with respect to the
consolidated federal Income Tax Returns of
Seaboard and subsidiaries for the years ending
December 31, 1990 through December 31, 1996,
none of which are peculiar to Seaboard Kentucky
or which could result in liability to Seaboard
in an amount which Seaboard does not have
adequate resources to satisfy.
8.26.8 Georgia and Kentucky Tax Incentives and Tax
Abatements. Section 8.26.8 of the Disclosure
Schedule accurately describes the projects that
qualified for Seaboard Kentucky's anticipated
Kentucky tax incentives together with Georgia
incentives and abatements that ConAgra is
entitled to by virtue of its assumption of the
bonds, together with tax abatements, the nature
and projected amounts of such anticipated
benefits and the projected duration of such
benefits. Except for final approval by the
Kentucky Economic Development Finance Authority
with respect to the current plant expansion at
Seaboard Kentucky, no consent, approval,
authorization or order of, or qualification
with, any state, local or regulatory authority,
court or other governmental body or agency is
required to preserve Seaboard Kentucky's
qualification or eligibility for such benefits
in connection with the consummation by the
Seaboard Entities of the transactions
contemplated herein. ConAgra acknowledges that
full realization of such benefits is dependent
on satisfying after Closing the criteria set
forth in the agreements related to the benefits,
copies of which have been provided to ConAgra.
Seaboard represents that it is unaware of any
reason why Seaboard Kentucky's completed
projects or projects-in-progress do not qualify
for the benefits described on Section 8.26.8 of
the Disclosure Schedule.
8.26.9 None of the Seaboard Entities has been a United
States real property holding corporation within
the meaning of Code Section 897(c)(2) during the
applicable period specified in Code
Section 897(c)(1)(A)(ii).
8.26.10 None of the Assets or the Seaboard Kentucky
Assets is subject to a tax benefit transfer
lease executed in accordance with
Section 168(f)(8) of the Internal Revenue Code
of 1954, as amended by the Economic Recovery Tax
Act of 1981.
8.26.11 None of the Assets or the Seaboard Kentucky
Assets is "tax-exempt use property" within the
meaning of Section 168(h) of the Code.
8.26.12 Seaboard Kentucky has not made any
payments; it is not obligated to make any
payments and it is not a party to any agreement
that under certain circumstances could obligate
it to make any payments that will not be
deductible under Code Sections 162(m) or 280G
(or cause Seaboard Kentucky to incur an
obligation to reimburse a person for a tax
imposed under Code Section 4999).
8.26.13 Definitions. For purposes of this
Agreement, (i) the term "Tax" or "Taxes" shall
include, without limitation, all taxes, charges,
duties, fees, levies or other assessments,
including, without limitation, income, gross
receipts, excise, property, sales, use, license,
payroll, withholding, franchise, duties,
business occupation, transfer and recording
taxes, estimates or installments in respect of
any such taxes, fees and charges, imposed by the
United States, or any state, local or foreign
authority, government or subdivision or agency
thereof whether computed on a consolidated,
unitary, combined, separate or any other basis;
and such term shall include any and all
interest, penalties and additions to tax, as
well as any statutory, contractual, primary or
secondary liability for taxes (including,
without limitation, any liability under Treas.
Reg. 1.1502-6 or any state, local or foreign
analog thereof); (ii) the term "Tax Return"
shall mean any report, return or other document
or information required by law to be supplied to
a taxing authority in connection with Taxes;
(iii) the term "Income Taxes" shall mean all
federal, state, local, foreign and other
governmental Taxes imposed on or with respect to
gross or net income or changes in stockholders'
equity; and (iv) the term "Code" means the
Internal Revenue Code of 1986, as amended.
8.27 Year 2000 Compliance.
(a) For the purposes hereof, the term "Year 2000
Compliant" shall mean that the applicable systems,
processes, software (including, without
limitation, the Developed Software), hardware
and/or equipment are able to perform all of the
following functions without human intervention:
handle date information before, during and after January 1,
2000, including but not limited to accepting date input,
providing date output, and performing calculations on dates
or portions of dates;
function accurately and without interruption before, during
and after January 1, 2000, without any change in operations
associated with the advent of the new century;
respond to two-digit year-date input in a way that resolves
the ambiguity as to century in a disclosed, defined and
predetermined manner; and
store and provide output of date information in ways that
are unambiguous as to century.
(b) All systems, processes, production equipment,
software, hardware and equipment used in the
Business and which are transferred to ConAgra
pursuant to this Agreement are Year 2000 Compliant
except as listed in Section 8.27 of the Disclosure
Schedule and except where such nonperformance will
not materially adversely effect operations at any
Seaboard Subsidiaries' or Seaboard Kentucky's
plant or facility or otherwise have a Material
Adverse Effect.
(c) The Seaboard Entities have made due inquiry to
determine whether the systems, processes,
production equipment, software, hardware and
equipment used by the growers of the Business are
Year 2000 Compliant and, based on such inquiry,
Seaboard is not aware of any issues with respect
to Year 2000 Compliance that is reasonably likely
to have a Material Adverse Effect.
8.28 Brokers and Finders. Except as otherwise disclosed in
Section 8.28 of the Disclosure Schedule, the Seaboard
Entities have not employed any investment banker,
broker or finder, or incurred any liability for any
brokerage fees, commissions or finders fees in
connection with the transactions contemplated by this
Agreement.
8.29 Capital Improvement Projects. Section 8.29 of the
Disclosure Schedule describes the Business' current and
planned capital improvement projects (the "Capital
Improvement Projects"), the status thereof, including
the work to be done and the remaining cost therefor,
and the completion schedule (the "Completion Schedule")
therefor. Section 8.29 of the Disclosure Schedule sets
forth a listing of all contracts and agreements
(including warranties) related to the Capital
Improvement Projects, true and correct copies of which
have been furnished to ConAgra. Seaboard has
heretofore delivered to ConAgra true and correct copies
of all plans and specifications related to the Capital
Improvement Projects.
8.30 Disclosure and Reliance. To Seaboard's knowledge, none
of the information furnished or to be furnished by
Seaboard or any of its representatives to ConAgra or
any of its representatives in connection with this
Agreement are false or misleading in any material
respect or contain any material misstatement of fact or
omit to state any material facts required to be stated
to make the statements therein not misleading. The
representations and warranties made herein are made by
Seaboard with the knowledge and expectation that
ConAgra is placing reliance thereon. For purposes of
this Section 8, the terms "to Seaboard's knowledge",
"to the knowledge of Seaboard" and all similar terms
shall mean the knowledge of those Seaboard individuals
set forth on Section 8.30 of the Disclosure Schedule.
8.31 Chattanooga Plan. The following representations and
warranties apply with respect to the Chattanooga Plan:
8.31.1 Seaboard has not incurred, nor has any event
occurred which reasonably can be anticipated to
result in Seaboard incurring any loss in
connection with the Chattanooga Plan with
respect to any time period prior to the Closing
that could become, on or after the Closing
Date, an obligation or liability of ConAgra or
any of its affiliates.
8.31.2 The Chattanooga Plan has been determined by the
Internal Revenue Service to be qualified under
Section 401(a) of the Internal Revenue Code of
1986 ("Code") and each trust related thereto
has been determined to be exempt from tax
pursuant to Section 501(a) of the Code. No
event has occurred that will or could subject
the Chattanooga Plan to tax under Section 511
of the Code. No event has occurred since the
date of such determinations, including
effective changes in laws or modifications to
the Chattanooga Plan, that would adversely
affect such qualification or tax exempt status,
other than the failure to make any required
amendments, the time for adoption of which has
not yet expired. Seaboard has delivered to
ConAgra a true and complete copy of the most
recent Internal Revenue Service determination
letter with respect to the Chattanooga Plan.
8.31.3 No " reportable event" as described in Section
4043 or 4063(a) of the Employee Retirement
Income Security Act of 1974 as amended
("ERISA"), as to which the thirty (30) day
notice requirement has not been waived, has
occurred.
8.31.4 The Chattanooga Plan has at all times in all
material respects been in compliance with and
administered in accordance with the terms of
the Chattanooga Plan, applicable provisions of
ERISA, the Code, and all other applicable laws
and agreements.
8.31.5 All contributions required of Seaboard have
been completely and timely made in compliance
with all applicable laws or agreements, all
contributions have been and are deductible for
income tax purposes, and no such contributions
or deductions have been challenged or
disallowed by any government agency.
8.31.6 All reporting and disclosure requirements of
ERISA and of the Code have been fully and
completely satisfied in all material respects,
and all material communications to employees or
former employees made by or on behalf of
Seaboard or any plan fiduciary or plan
administrator have been consistent with the
documents and actual operation of the
Chattanooga Plan and no such communications
have resulted in a material violation of the
law.
8.31.7 There are no pending or threatened material
legal, governmental or other actions and no
facts exist which could give rise to any such
action against the Chattanooga Plan.
8.31.8 The documents governing the
Chattanooga Plan, including any collective
bargaining agreements, as provided to ConAgra,
fully and accurately describe all benefits and
terms and conditions of eligibility for
benefits under the Chattanooga Plan and no
amendments or other modifications have been
made or are required by applicable law or
agreement to be made, in the terms and
conditions of the Chattanooga Plan, other than
any required amendments, the time for adoption
of which has not expired.
8.31.9 Neither Seaboard nor any other entity has filed
a notice of intent to terminate the Chattanooga
Plan, or adopted any amendment to treat any
plan as terminated; the PBGC has not instituted
proceedings to terminate the Chattanooga Plan;
no event or condition has occurred which might
constitute grounds under Section 4042 of ERISA
for termination of, or the appointment of, a
trustee to administer the Chattanooga Plan; no
accumulated funding deficiency, whether or not
waived, exists with respect to the Chattanooga
Plan; no condition has occurred or exists which
by passage of time would be expected to result
in an accumulated funding deficiency as of the
last day of the current plan year of the
Chattanooga Plan; all required premium payments
to the PBGC have been made when due with
respect to the Chattanooga Plan; no excise
taxes are payable under the Code or ERISA and
no amendment to which security is required
under Section 307 of ERISA has been made or is
reasonably expected to be made with respect to
the Chattanooga Plan.
8.31.10 All costs of the Chattanooga Plan subject to
Title IV of ERISA have been provided for on a
basis of consistent methods in accordance with
sound actuarial assumptions and practices. As
of the Closing Date the market value of the
assets of the Chattanooga Plan exceed the
present value of benefit liabilities thereunder
when computed in accordance with the actuarial
assumptions set forth in the most recent
actuarial valuation of the Chattanooga Plan.
Since the last valuation date of the
Chattanooga Plan, there has been no amendment
or change to the Chattanooga Plan that would
increase the amounts of benefits thereunder.
8.31.11 Seaboard has delivered to ConAgra for
the Chattanooga Plan, copies of the Form PBGC-1
filed in the most recent Plan Year and the
actuarial report as of the last valuation date.
Such actuarial report fairly presents the
financial condition and results of operation of
the Chattanooga Plan as of such date, in
accordance with generally accepted accounting
principles.
8.32 Articles and By-Laws. Seaboard has previously
furnished to ConAgra, complete and correct copies of
(a) the Articles of Incorporation of Seaboard Kentucky,
as amended to the date furnished, and (b) the By-Laws
of Seaboard Kentucky as in effect on the date
furnished, certified by the Secretary of Seaboard
Kentucky. Such Articles of Incorporation and By-Laws
have not been further amended and are in full force and
effect. Seaboard has also furnished to ConAgra a true
and complete copy of Seaboard Kentucky's corporate
minute book.
8.33 Authorized Capital. Authorized capital stock of
Seaboard Kentucky consists of 2,000 shares of common
stock having no par value, of which 1,000 shares are
issued and outstanding. Such shares are owned and held
by Seaboard. All of such shares are duly authorized,
validly issued, fully paid and nonassessable.
8.34 No Options, Warrants, Rights. Seaboard Kentucky
does not have any outstanding or authorized options,
warrants, calls, rights, commitments or any other
agreements of any character obligating it to issue any
shares of its capital stock or any securities
convertible into or evidencing the right to purchase
any shares of its capital stock. There are no
agreements, arrangements or understandings with respect
to the voting of the capital stock of Seaboard Kentucky
on any matter or the transfer or assignment of the
capital stock of Seaboard Kentucky.
8.35 Title to Shares. Seaboard is the lawful and
record owner of all of the Seaboard Kentucky Stock,
free and clear of all Liens. Good title, free and
clear of all Liens to all of Seaboard Kentucky Stock
will pass to ConAgra at the Closing.
8.36 No Subsidiaries; Officers and Directors. Seaboard
Kentucky does not directly or indirectly control, nor
has it ever directly or indirectly controlled, any
corporation, partnership, joint venture or other
business association. Section 8.36 of the Disclosure
Schedule sets forth a list of all of Seaboard
Kentucky's officers and directors.
8.37 Title to Properties. Seaboard Kentucky has good and
marketable title to all of its assets and properties
reflected in its books and records as being owned,
including the assets and properties reflected as being
owned in the Financial Statements, free and clear of
all Liens, other than the Permitted Liens (the
"Seaboard Kentucky Assets").
8.38 Employee Plans. For purposes of this Section 8.38, the
term "Employee Plan" means any "employee benefit plan"
as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (a)
to which Seaboard Kentucky is a party or by which it is
bound; or (b) in the case of "pension plans" as defined
in Section 3(2) of ERISA, with respect to which
Seaboard Kentucky has made any payments or
contributions during the five (5) years prior to
Closing, and in the case of "welfare plans" as defined
in Section 3(1) of ERISA, with respect to which
Seaboard Kentucky makes any payments or contributions.
All Employee Plans are set forth in Section 8.38 of the
Disclosure Schedule. Except as otherwise disclosed in
Section 8.38 of the Disclosure Schedule, no Employee
Plan is a "pension plan" as defined in Section 3(2) of
ERISA.
Each Employee Plan with respect to Seaboard Kentucky
has at all times complied, in all material respect,
with all applicable requirements of ERISA, and of any
other applicable law (including regulations and rulings
thereunder) governing each Employee Plan. No lawsuits
or material complaints to, or by, any person or
government entity have been filed, are pending, or to
Seaboard's knowledge, have been threatened with respect
to any Employee Plan.
Except as otherwise disclosed in Section 8.38 of the
Disclosure Schedule, no Employee Plan is a pension plan
qualified under Section 401(a) of the Internal Revenue
Code ("Code").
Seaboard Kentucky is not now, and never has been during
the past five (5) year period, a participating employer
in a multi-employer plan (as defined in Section 3(37)
of ERISA).
Except as listed in Section 8.38 of the Disclosure
Schedule, Seaboard Kentucky is not a party to, nor is
it obligated to make severance payments to any officer,
director or employee of Seaboard Kentucky under any
change of control agreement, golden parachutes,
severance pay plans, or other similar agreements,
whether written or oral.
9. Representations and Warranties of ConAgra. ConAgra
represents and warrants to and with Seaboard as follows:
9.1 Organization and Corporate Power. ConAgra is a
corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware,
and has the corporate power to own, operate and lease
its properties and carry on its business as now being
conducted and to enter into this Agreement and the
Ancillary Documents to which it is a party.
9.2 Corporate Authorization; Binding Effect. The
execution, delivery and performance of this Agreement
and the Ancillary Documents by ConAgra, and the
consummation by it of the transactions contemplated
hereby and thereby, have been duly and validly
authorized and approved by all necessary corporate
action on the part of ConAgra and constitute the legal,
valid and binding obligations of ConAgra, each
enforceable in accordance with its respective terms.
9.3 No Government Authorization Required. Other than
compliance with the HSR Act, no consent, approval,
authorization or order of, or qualification with, any
court, regulatory authority or other governmental body
is required for the consummation by ConAgra of the
transactions contemplated by this Agreement or the
Ancillary Documents.
9.4 Brokers and Finders. ConAgra has not employed any
investment banker, broker or finder, or incurred any
liability for any brokerage fees, commissions, or
finder fees in connection with the transactions
contemplated by this Agreement.
10. Covenants of Seaboard.
10.1 Conduct of Business. During the period from the date
hereof to the Closing Date, Seaboard covenants that the
Business will be operated in the ordinary course
consistent with past practice and that, in connection
with the Business, it shall not without the prior
written consent of ConAgra, which consent shall not be
unreasonably withheld, delayed or conditioned:
10.1.1 Enter into any agreement or incur any
obligation other than in the normal course of
business, or modify, amend or terminate any
agreement except in the ordinary course of
business, or enter into any agreement the terms
of which would be violated by the consummation
of the transactions contemplated by this
Agreement.
10.1.2 Enter into any feed ingredient contracts except
in the ordinary course of business or into any
commodity futures contracts, option contracts
or similar agreements or otherwise take any
future positions.
10.1.3 Agree to become subject to any liability or
obligation (absolute or contingent) except
liabilities incurred or obligations under
contracts entered into in the ordinary course
of business.
10.1.4 Enter into or terminate any lease of real or
personal property.
10.1.5 Sell, abandon or otherwise dispose of, or
pledge, mortgage or otherwise encumber any of
the Assets or Seaboard Kentucky Assets, other
than the sale of Inventory or Seaboard Kentucky
Inventory in the ordinary course of business,
or make any commitment relating to any of the
Assets or Seaboard Kentucky Assets other than
in the ordinary course of business, or cancel
or waive any claim or right of substantial
value.
10.1.6 Grant any severance or termination pay to, or
enter into any employment or severance
agreement with, any of the Seaboard Employees,
except in connection with the termination
(voluntary or involuntary) or resignation of
such person on terms that are consistent with
past practice.
10.1.7 Commit a breach of, or default under, any
contract, agreement, license or instrument to
which it is a party or to which any of the
Assets or Seaboard Kentucky Assets may be
subject, or violate any applicable law,
regulation, ordinance, order, injunction or
decree or any other requirement of any
governmental body or court, relating to the
Assets or Seaboard Kentucky Assets or the
Business if such breach, default or violation
is reasonably likely to result in a Material
Adverse Effect.
10.1.8 Increase or change the rate or nature of the
compensation, including wages, salaries,
bonuses and benefits under employee benefit
plans which has been paid, or will be paid or
payable, to any Seaboard Employee, other than
in the ordinary course consistent with past
practice.
10.1.9 Fail to construct the Capital Improvement
Projects in accordance with the Completion
Schedule.
10.1.10 Take any action that would or is reasonably
likely to result in any of its representations
and warranties set forth in this Agreement
being untrue in any material respect, or in any
of the conditions set forth in Section 11 not
being satisfied.
10.2 Advise ConAgra of Changes. Seaboard agrees that from
the date hereof until the Closing Date it will report
generally to ConAgra regarding the operations of the
Business and will give prompt notice to ConAgra in
writing with respect to (i) any material changes or
supplements required in the Disclosure Schedule in
order to make the statements contained herein true and
correct at the Closing Date; (ii) any notice of, or
other communication relating to, a default or an event
of default or an event which with lapse of time could
become a default under any instrument or agreement to
which any of the Seaboard Entities is a party in
connection with any of the Business; (iii) any notice
or other communication from any third party alleging
that the consent of such third party is or may be
required in connection with the transactions
contemplated by this Agreement; and (iv) any matter or
event which, if it had occurred as of the date hereof,
would constitute a material breach of the
representations and warranties of Seaboard contained in
this Agreement.
10.3 Maintenance of Assets. Seaboard agrees that at all
times after the date hereof and until the Closing Date
it will:
(i) Consistent with past practices, maintain the
Assets and Seaboard Kentucky Assets in customary
repair, order and condition, reasonable wear and
use excepted.
(ii) Operate the Business only in the usual, regular
and ordinary course and use its best efforts to,
and cause its officers, directors and employees
to, and use its best efforts to cause the Seaboard
Subsidiaries and Seaboard Kentucky and their
officers, directors and employees to (i) preserve
intact the Business, (ii) keep available the
services of the Seaboard Employees, (iii) preserve
the Business' business relationships and preserve
the Business' relationships with customers,
suppliers, distributors, growers and others having
business dealing with the Business, all to the end
that the Business' goodwill and ongoing business
shall be unimpaired at the Closing Date.
10.4 Access. From the date hereof until the Closing,
Seaboard shall grant to ConAgra and its
representatives, employees, counsel and accountants
reasonable access, during normal business hours and
upon reasonable notice, to the personnel, properties,
books and records of the Business; provided, however,
that such access does not unreasonably interfere with
the normal operations of the Business; and provided
further, that all requests for access shall be directed
to such person as Seaboard may designate from time to
time.
10.5 No Solicitation. Unless and until this Agreement is
terminated pursuant to Section 13, Seaboard agrees (a)
that neither it nor any of its subsidiaries shall, and
each of them shall cause its respective officers,
directors, employees, agents, affiliates and
representatives (including, without limitation, any
investment banker, attorney or accountant retained by
it or any of its subsidiaries) not to, initiate,
solicit or encourage, directly or indirectly, any
inquiries or the making or implementation of any
proposal or offer with respect to any merger,
consolidation or other business combination involving
the Business or the acquisition of all or any
substantial part of the Assets and/or Seaboard Kentucky
Assets or capital stock of the Seaboard Subsidiaries
and/or Seaboard Kentucky Stock (an "Acquisition
Transaction") or engage in any negotiations concerning,
or provide any confidential information or data to, or
have any discussions with, any person relating to an
Acquisition Transaction, or otherwise facilitate any
effort or attempt to make or implement an Acquisition
Transaction; (b) that it will immediately cease and
cause to be terminated any existing activities,
discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing and
will take the necessary steps to inform the individuals
or entities referred to above of the obligations
undertaken in this Section 10.5; and (c) that it will
notify ConAgra immediately if any such inquiries or
proposals are received by, any such information is
requested from, or any such negotiations or discussions
are sought to be initiated or continued with it and, to
the extent legally permitted to do so, promptly
communicate to ConAgra the substance of any of the
foregoing.
10.6 Seaboard Farms Name. From and after the Closing,
neither Seaboard nor the Seaboard Subsidiaries shall
use, and neither Seaboard nor the Seaboard Subsidiaries
shall allow any third party to use, (i) the name
"Seaboard Farms" on any poultry product or in the
production, processing and/or sale of poultry provided
that Seaboard may use the "Seaboard Farms" name for
Permitted Activities (as defined in Section 16(b),
whether during, or after, the Non-compete Period, or
(ii) the name "Seaboard", or any derivations thereof,
in the sale or marketing of poultry (other than the
identification of Seaboard Corporation as the parent
entity of the business conducting such sales or
marketing) or as a trademark or brand name on poultry,
provided that Seaboard may use the "Seaboard" name for
such Permitted Activities whether during, or after, the
Non-Compete Period.
10.7 Credit Supports. Seaboard agrees to maintain in place
after Closing those letters of credit, guarantees,
performance bonds and other credit support facilities
described on Exhibit 10.7, except to the extent prior
to Closing ConAgra notifies Seaboard otherwise (such
continuing letters of credit, guarantees, performance
bonds and other credit support facilities collectively
referred to as the "Credit Facilities"), provided,
however, Seaboard shall only be obligated to maintain
the Credit Facilities in place for sixty (60) days
after the Closing. ConAgra shall reimburse Seaboard
and the Seaboard Subsidiaries for all out-of-pocket
costs and expenses required to be made by Seaboard and
the Seaboard Subsidiaries in maintaining the Credit
Facilities. ConAgra shall indemnify and hold Seaboard
and the Seaboard Subsidiaries harmless with respect to
claims made under the Credit Facilities after Closing
for events occurring after Closing.
10.8 Capital Improvement Projects. The Seaboard Entities
will continue to construct the Capital Improvement
Projects diligently in the ordinary course until the
Closing Date in accordance with and pursuant to the
plans, specifications and construction contracts
Seaboard has provided to ConAgra. From and after the
Closing Date, Seaboard will complete the Capital
Improvement Projects (to the extent not otherwise
completed as of that date) diligently in the ordinary
course in accordance with and pursuant to the plans,
specifications and construction contracts Seaboard has
provided to ConAgra. Seaboard shall be solely
responsible for the payment of all costs and expenses
incurred by Seaboard hereunder to complete the Capital
Improvement Projects (to the extent not otherwise paid
as of the Closing Date or accrued on the Settlement
Statement), as well as all costs and expenses necessary
for the Capital Improvement Projects to be operated in
accordance with and pursuant to the plans,
specifications and construction contracts Seaboard has
provided to ConAgra.
10.9 Intercompany Accounts. All intercompany accounts
existing between Seaboard and any of its subsidiaries
and Seaboard Kentucky shall be settled prior to
Closing.
10.10 Undertakings. After the date hereof, Seaboard
will address, investigate and undertake to remedy, the
matters set forth on Exhibit 10.10.
11. Conditions Precedent to Obligations of ConAgra. The
obligation of ConAgra to consummate the transactions contemplated
herein is subject to the satisfaction, at or prior to the Closing
Date, of all of the following conditions:
11.1 Accuracy of Representations and Warranties. The
representations and warranties of Seaboard contained in
this Agreement shall have been true in all respects
when made and, in addition, subject to representations
and warranties made as of a specific date, which need
only be true in all material respects as of such
specific date, shall be true in all material respects
on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date.
11.2 Performance of Agreements. Seaboard shall have
performed in all material respects all obligations and
agreements and complied in all material respects with
all covenants and conditions contained in this
Agreement to be performed and complied with by it on or
prior to the Closing Date.
11.3 Absence of Material Adverse Change. There shall have
been no material adverse change in the results of
operations or financial condition of the Business
during the period from the date hereof to and including
the Closing Date.
11.4 Certificate. At the Closing, Seaboard shall have
delivered to ConAgra a certificate, dated the Closing
Date and signed by Seaboard, stating that it has
fulfilled the obligations set forth in Sections 11.1,
11.2 and 11.3.
11.5 Absence of Injunction. There shall be pending no
temporary or permanent injunction or order from any
court or government body or authority prohibiting,
restraining or making unlawful the consummation of the
transactions contemplated by this Agreement or
materially limiting the ability of ConAgra to operate
the Business.
11.6 HSR. All waiting periods under the HSR Act shall have
expired or been terminated.
11.7 Consents. Seaboard shall have received written
consents to the assignment of those Assumed Agreements
listed on Exhibit 11.7.
12. Conditions Precedent to Obligations of Seaboard. The
obligation of Seaboard to consummate the transactions
contemplated herein is subject to the satisfaction, at or prior
to the Closing Date, of all of the following conditions:
12.1 Accuracy of Representations and Warranties. The
representations and warranties of ConAgra contained in
this Agreement shall have been true in all material
respects when made, and, in addition, shall be true in
all material respects on and as of the Closing Date
with the same force and effect as though made on and as
of the Closing Date.
12.2 Performance of Agreements. ConAgra shall have
performed in all material respects all obligations and
agreements, and shall have complied in all material
respects with all covenants contained in this Agreement
to be performed and complied with by it at or prior to
the Closing Date.
12.3 Certificate. At the Closing, ConAgra shall have
delivered to Seaboard a certificate, dated the Closing
Date and signed by ConAgra, stating that ConAgra has
fulfilled the obligations set forth in Sections 12.1
and 12.2.
12.4 Absence of Injunction. There shall be pending no temporary
or permanent injunction or order from any court or government
body or authority prohibiting, restraining or making unlawful the
transactions contemplated by this Agreement on the Closing Date.
12.5 HSR. All waiting periods under the HSR Act shall have
expired or been terminated.
13. Termination. The transactions contemplated by this
Agreement may be terminated on or before the Closing Date as
follows:
13.1 Mutual Agreement. By mutual written agreement of each
of the parties hereto.
13.2 Court Order. By ConAgra or Seaboard if any court of
competent jurisdiction shall have issued a permanent
order restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated by
this Agreement, and such order shall have become final
and nonappealable.
13.3 Conditions to Close. By ConAgra or Seaboard if any
condition precedent to its obligation to close has not
occurred, unless the party seeking to terminate has
failed to observe any covenant, agreement or condition
precedent to be observed or performed by such party or
before the Closing Date.
13.4 Failure to Close. After January 31, 2000, by either
the Seaboard or ConAgra if the Closing has not occurred
for any reason other than a breach of this Agreement by
the terminating party.
13.5 Effect of Termination. In the event this Agreement is
terminated pursuant to the provisions of Section 13
hereof, except as set forth below, this Agreement shall
forthwith become wholly void and of no force and effect
and there shall be no liability on the part of the
parties hereto. If for any reason on the Closing Date
there has been non-fulfillment of any undertaking by or
condition precedent for any party not waived in writing
by the party in whose favor such undertaking or
condition runs, the party in whose favor such
undertaking or condition runs may refuse to consummate
the transactions contemplated by this Agreement without
any liability or obligation on its part whatsoever. In
the event of any non-fulfillment of an undertaking by
ConAgra or by Seaboard, the non-defaulting party shall
be entitled to specifically enforce this Agreement, and
the refusal by ConAgra or by Seaboard to consummate the
transactions hereby contemplated because of non-
fulfillment by the other party shall not constitute an
election of remedies by ConAgra or by Seaboard and
ConAgra or Seaboard may pursue whatever legal rights
and remedies they may have at law or in equity
(including, without limitation, specific performance)
by reason of such non-fulfillment or failure by ConAgra
or Seaboard. Notwithstanding anything in this
Agreement to the contrary, in the event this Agreement
is terminated pursuant to the provisions of Section 13
hereof, the Confidentiality Agreement (the
"Confidentiality Agreement"), dated as of September 8,
1999, between Seaboard and ConAgra shall continue in
full force and effect in accordance with its terms.
14. Indemnity.
14.1 Indemnification of ConAgra and Seaboard Kentucky by
Seaboard. Seaboard shall, and hereby agrees to,
indemnify and hold ConAgra and Seaboard Kentucky
harmless against and in respect of:
14.1.1 All debts, liabilities and obligations of the
Business, including Seaboard Kentucky, of any
nature, whether accrued, absolute, contingent, or
known or unknown on the Closing Date, existing or
arising on or resulting from events which occurred
or failed to occur on or before the Closing Date
(including, without limitation, all litigation
matters involving or affecting the Business (other
than workers' compensation), whether or not
disclosed in the Disclosure Schedule), to the
extent not specifically assumed by ConAgra
hereunder, and except for Seaboard Kentucky's
liabilities under the Assumed Agreements which
accrue from and after the Closing Date, the
Payables and the liabilities under Section 7 above
with respect to employee matters;
14.1.2 Any claim, action, loss, damage or cost
relating to or arising by reason of (i) the
presence, or any governmental or third party
requirements relating to the disposal or arranging
for disposal (on-site or off-site), or the release
or threatened release on or prior to the Closing
Date, of any Hazardous Material in, on, to, under,
upon or from any of the Assets or Seaboard
Kentucky Assets in violation of any applicable
Environmental Laws or which require remediation
under applicable Environmental Laws, or in, on,
to, under, upon or from the Property or any
portion thereof upon which the Assets or Seaboard
Kentucky Assets are, or have been, located in
violation of any applicable Environmental Laws or
which require remediation under applicable
Environmental Laws, or (ii) any violation or
operation of any applicable Environmental Law
which occurs on or prior to the Closing Date in,
on, under, upon or from any of the Assets or
Seaboard Kentucky Assets, or in, on, to, under,
upon or from the Property or any part thereof upon
which the Assets or Seaboard Kentucky Assets are
or have been located or which otherwise apply to
the activities at the Assets or Seaboard Kentucky
Assets;
14.1.3 Any liability, loss, claim, damage or
deficiency resulting from any misrepresentation or
breach of warranty on the part of Seaboard under
this Agreement or under any certificate furnished
to ConAgra pursuant to Section 11.4 hereof;
14.1.4 Any liability, loss, claim, damage or
deficiency resulting from any breach of any
agreement on the part of Seaboard under this
Agreement;
14.1.5 All other actions, suits, proceedings,
demands, assessments, adjustments, costs and
expenses incident to the foregoing, including,
without limitation, attorneys' fees and other out-
of-pocket expenses.
The claims, liabilities, obligations, losses, costs,
expenses and damages of ConAgra described in this
Section 14.1 as to which ConAgra is entitled to
indemnification hereunder are hereinafter collectively
referred to as "ConAgra Losses."
14.2 Indemnification of Seaboard by ConAgra. ConAgra shall
indemnify and hold each of Seaboard and the Seaboard
Subsidiaries harmless against and in respect of:
14.2.1 All liabilities and obligations of the
Seaboard Entities which are assumed by ConAgra
pursuant to the terms of this Agreement;
14.2.2 Any liability, loss, claim, damage or
deficiency resulting from any misrepresentation or
warranty on the part of ConAgra under this
Agreement or any certificate furnished Seaboard
pursuant to Section 12.3 hereof;
14.2.3 Any liability, loss, claim damage or
deficiency resulting from any breach of any
agreement on the part of ConAgra under this
Agreement;
14.2.4 All other actions, suits, proceedings,
demands, assessments, adjustments, costs and
expenses incident to the foregoing, including,
without limitation, attorneys' fees and other out-
of-pocket expenses.
The claims, liabilities, obligations, losses, costs,
expenses and damages of the Seaboard Subsidiaries
described in this Section 14.2 as to which Seaboard and
the Seaboard Subsidiaries are entitled to
indemnification hereunder are hereinafter collectively
referred to as "Seaboard Losses."
14.3 Notice of Claims. The party seeking indemnification
(the "Indemnified Party") agrees to give the
indemnifying party (the "Indemnifying Party") notice of
any and all claims for which indemnification is or may
be sought under this Section 14. Such notice shall be
given within a reasonable time after the Indemnified
Party obtains knowledge of such claim. Failure to give
such notice shall not abrogate or diminish the
Indemnifying Party's obligation under this Section 14
if the Indemnifying Party has or receives knowledge of
the existence of any such claim by any other means or
if such failure does not prejudice the Indemnifying
Party's ability to defend such claim.
14.4 Defense of Claim. In any third party litigation,
administrative proceeding, negotiation or arbitration
for which indemnification is sought under this
Section 14, the Indemnifying Party shall have the right
to select legal counsel to represent the Indemnified
Party (provided that such counsel is reasonably
satisfactory to the Indemnified Party) and to otherwise
control such litigation, proceedings, negotiations and
arbitration. If the Indemnifying Party elects to
control such litigation, proceeding, negotiation or
arbitration, the Indemnified Party shall at all times
have the right to fully participate in the defense at
its own expense. If the Indemnifying Party shall,
within a reasonable time after notice, fail to defend,
the Indemnified Party shall have the right, but not the
obligation, to undertake the defense of and to
compromise or settle the claim or other matter on
behalf, for the account, and at the risk of the
Indemnifying Party. If the claim is one that cannot by
its nature be defended solely by the Indemnifying Party
(including, without limitation, any federal or state
tax proceeding) then the Indemnified Party shall make
available all information and assistance as the
Indemnifying Party may reasonably request, at the
Indemnifying Party's expense.
14.5 Claims Period. Except as set forth below, all
representations, warranties, covenants and agreements
contained herein shall survive the Closing. For
purposes of this Agreement, a "Claims Period" shall be
the period during which a claim for indemnification may
be asserted under this Agreement by an Indemnified
Party, which period shall (i) begin on the earlier of
the Closing Date or the date of any termination of this
Agreement pursuant to Section 13 (the "Commencement
Date"), and (iii) terminate as follows:
(a) with respect to ConAgra Losses (i) arising
under Section 14.1.3 as a result of a breach or
inaccuracy of any representation or warranty
contained in the last sentence of Section 8.2, the
first sentence of Section 8.8, the last sentence
of Section 8.16, Section 8.26, Section 8.35 or
Section 8.37, or arising under Section 23,
Section 14.1.1, Section 14.1.4 or, to the extent
based upon a matter covered by the foregoing
Sections, Section 14.1.5, the Claims Period shall
survive the Closing Date without limitation, and
(ii) arising under Section 14.1.3 as a result of a
breach or inaccuracy of any representation or
warranty contained in Section 8.3, Section 8.5,
Section 8.22 or Section 8.23 hereof, or arising
under Section 14.1.2 or, to the extent based upon
a matter covered by the foregoing Sections,
Section 14.1.5, the Claims Period shall continue
until the fifth anniversary of the Commencement
Date (all such matters referred to in (i) and (ii)
above are collectively, the "Seaboard Surviving
Matters");
(b) with respect to all other ConAgra Losses
arising under 14.1.3, the Claims Period shall
terminate on the second anniversary of the
Commencement Date;
(c) with respect to Seaboard Losses (i) arising
under Section 14.2.3, or to the extent based upon
a matter covered by the foregoing Section,
Section 14.2.4, the Claims Period shall survive
the Closing Date without limitation, and (ii)
arising under Sections 14.2.2 as a result of a
breach or inaccuracy of any representation or
warranty contained in Section 9.2 hereof, Section
14.2.1, or to the extent based upon a matter
covered by the foregoing Sections, Section 14.2.4,
the Claims Period shall terminate on the fifth
anniversary of the Commencement Date; and
(d) with respect to all other Seaboard Losses
arising under 14.2.2, the Claims Period shall
terminate on the second anniversary of the
Commencement Date.
Notwithstanding the foregoing, if prior to the close of
business on the last day of the applicable Claims
Period, an Indemnifying Party shall have been properly
notified of a claim for indemnity hereunder and such
claim shall not have been finally resolved or disposed
of at such date, such claim shall continue to survive
and shall remain a basis for indemnity hereunder until
such claim is finally resolved or disposed of in
accordance with the terms hereof.
14.6 Limits on Indemnification. Notwithstanding anything to
the contrary contained in this Agreement,
(a) Seaboard shall only be liable for ConAgra
Losses arising hereunder to the extent that any
such ConAgra Losses exceed in the aggregate, Four
Million Dollars ($4,000,000) (the "Basket Amount")
and such liability shall be only for amounts,
which, in the aggregate, are in excess of the
Basket Amount; provided, however, that ConAgra
Losses arising under or pursuant to any Seaboard
Surviving Matters or any matter constituting
fraud, intentional misrepresentation or criminal
activity under applicable law by Seaboard Entities
shall not be subject to the Basket Amount and
there shall be no "threshold amount" on the
indemnification obligations of Seaboard with
respect to such ConAgra Losses; and
(b) Seaboard aggregate liability for all ConAgra
Losses, and ConAgra aggregate liability for all
Seaboard Losses, shall not exceed an amount equal
to one-half (1/2) of the Purchase Price (the
"Maximum Amount"); provided however, that ConAgra
Losses arising under or pursuant to the last
sentence of Section 8.16, Section 8.26, Section 23
and matters constituting fraud, intentional
misrepresentation or criminal activity under
applicable law by Seaboard or the Seaboard
Subsidiaries, shall not be subject to the Maximum
Amount.
(c) With respect to any claim hereunder by
ConAgra involving a defect in Seaboard's or the
Seaboard Subsidiaries' title to any parcel of real
estate included in the Assets or Seaboard
Kentucky's title to any parcel of real estate
owned by it on the Closing Date, ConAgra agrees to
first file and pursue a claim against Lawyers
Title Insurance Company under the applicable title
insurance policy obtained by ConAgra hereunder and
to file and pursue a claim against Seaboard only
to the extent such claim is not covered under such
title insurance policy. In addition,
notwithstanding anything in this Agreement to the
contrary, any claim hereunder by ConAgra involving
a defect in the Seaboard Entities' title to any
parcel of real estate shall be based upon, and
limited to, the title representation and covenants
made to ConAgra in the Deeds delivered by Seaboard
and the Seaboard Subsidiaries pursuant to Section
6.2.1 hereof, if transferred by Deeds, or under
the Agreement if not transferred by Deeds.
14.7 No Representations. ConAgra acknowledges and agrees
that, except as expressly provided in Section 8 hereof,
Seaboard makes no representation or warranty whatsoever
to ConAgra. Seaboard acknowledges and agrees that,
except as expressly provided in Section 9 hereof,
ConAgra makes no representation or warranty whatsoever
to Seaboard.
14.8 Exclusive Remedy. Except as set forth below, the sole
and exclusive remedy of ConAgra with respect to ConAgra
Losses shall be to seek indemnification or equitable
relief under this Agreement in accordance with the
terms hereof. Except as set forth below, the sole and
exclusive remedy of Seaboard and the Seaboard
Subsidiaries with respect to Seaboard Losses shall be
to seek indemnification or equitable relief under this
Agreement in accordance with the terms hereof.
Notwithstanding the foregoing, neither ConAgra,
Seaboard nor the Seaboard Subsidiaries waive their
respective rights or remedies under CERCLA or other
similar state, federal or local laws.
14.9 Inventory Value. In the event the parties decrease the
value of any item or items of Inventory on the
Settlement Statement, due to merchantability,
salability or any other reason, ConAgra shall not have
the right to also submit a claim under this Section 14
with respect to the value of the Inventory to the
extent of such decrease reflected on the Settlement
Statement.
15. Non-Interference Agreement. Seaboard covenants and
agrees that for a period of three (3) years following the
Closing, neither Seaboard nor any Affiliate (as defined herein)
of Seaboard will, directly or indirectly, for whatever reason,
whether for its own account or for the account of any other
person, firm, corporation or other organization: (i) knowingly
interfere with any of the Business' existing or future contracts
or relationships with any officer, director or any independent
contractor whether the person is employed by or associated with
the Business on the Closing Date or at any time thereafter; (ii)
knowingly interfere with the continuance of supplies or raw
materials to the Business (or the terms relating to such
supplies), from any suppliers or growers who have been supplying
goods, materials or services to the Business; (iii) knowingly
interfere with any of the Business' existing or future contracts
or relationships with any independent contractor, customer,
grower, client or consultant of the Business, or any person who
is a bona fide or prospective independent contractor, customer,
client or consultant thereof; or (iv) knowingly interfere with
any existing or proposed contract between the Business and any
other party whatsoever. In addition, for a period of two (2)
years following the Closing, neither Seaboard nor any Affiliate
of Seaboard will hire, or solicit for employment, any Seaboard
Employee (other than through public solicitation). Seaboard
agrees that it will not disparage the Business, the products and
services offered by the Business, or ConAgra's ownership and
operation of the Business.
For purposes of this Agreement, "Affiliate" shall mean any
corporation, partnership, joint venture, limited liability
company, association, joint-stock company, trust, unincorporated
organization or other entity, more than fifty percent (50%) of
the equity interests of which are owned, directly or indirectly
by Seaboard.
16. Non-Competition Agreement.
16.1 Restrictions. In order to further induce ConAgra to
enter into this Agreement and consummate the
transactions contemplated hereunder, Seaboard agrees
that from and after the Closing Date and for a period
of five (5) years thereafter (the "Noncompete Period"),
neither it nor any of its Affiliates shall, within the
Trade Area (as defined below) associate in any capacity
whatsoever, whether as a promoter, owner, officer,
director, employee, partner, lessee, lessor, lender,
agent, consultant, broker, commission salesman or
otherwise, in any business engaged in the processing,
manufacturing, sale or distribution of poultry products
(the "Business Activity"). If Seaboard fails to keep
and perform every covenant of Sections 15 or 16,
ConAgra shall be entitled to specifically enforce the
same by injunction in equity in addition to any other
remedies, which ConAgra may have. If any portion of
Sections 15 or 16 shall be invalid or unenforceable,
such invalidity or unenforceability shall in no way be
deemed or construed to affect in any way the
enforceability of any other portion of Sections 15 or
16. If any court in which ConAgra seeks to have the
provisions of Sections 15 or 16 specifically enforced
determines that the activities, time or geographic area
hereinabove specified are too broad, such court may
determine a reasonable activity, time or geographic
area and shall specifically enforce this Section 15 or
16, as the case may be, for such activity, time and
geographic area. The covenants on the part of Seaboard
under Sections 15 and 16 shall be construed as an
agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of
action by Seaboard against ConAgra or any corporation
affiliated with ConAgra, whether predicated on this
Agreement or otherwise, shall not constitute a defense
to the enforcement by ConAgra of said covenants. For
purposes of this Section 16, "Trade Area" shall mean
United States, Canada, Mexico, Russia, Japan, Hong
Kong/China and Eastern Europe.
16.2 Permitted Activities. Notwithstanding the foregoing,
(i) Seaboard shall be allowed to undertake operations
in the Business Activity so long as annual revenues of
Seaboard from the Business Activity do not exceed Ten
Million Dollars ($10,000,000) per year and (ii)
Business Activity shall specifically exclude the
production, sale or distribution of hot dogs, sausages
and lunch meats, notwithstanding the fact that such
items contain poultry. The activities permitted in
this Section 16.2 are herein called the "Permitted
Activities". Seaboard agrees during the Noncompete
Period to provide ConAgra full access to all relevant
books and records of Seaboard relating to its conduct
of the Business Activity in order for ConAgra to verify
Seaboard's ongoing compliance with the provisions of
this Section 16.
17. Covenant Not to Disclose. Seaboard agrees that as the
owner of the Business, the Seaboard Entities possess certain data
and knowledge of operations of the Business which are proprietary
in nature and confidential, including, without limitation,
certain trade secrets. Seaboard covenants and agrees that
neither it nor any of its Affiliates will, at any time after the
Closing, reveal, divulge or make known to any person (other than
ConAgra) or use for its own account or for the account of any
person, firm, corporation or other organization, any confidential
or proprietary manufacturing method, record, data, trade secret,
pricing policy, bid amount, bid strategy, rate structure,
personnel policy, method or practice of soliciting or obtaining
or doing business by the Business, or any other confidential or
proprietary information whatsoever relating to the Business or
ConAgra or its affiliates, whether or not obtained with the
knowledge and permission of ConAgra or its affiliates. Seaboard
further covenants and agrees that neither it nor any of its
Affiliates shall divulge any such confidential or proprietary
information which it may acquire during any transition period in
which it assists or consults with ConAgra or its affiliates to
facilitate the transfer and the continued success of the
Business. Notwithstanding the foregoing, it is understood that
the foregoing provisions shall apply only to confidential or
proprietary information which relates exclusively to the Business
and not to information which is otherwise used in connection with
Seaboard's other operations. In addition, notwithstanding the
foregoing, it shall not be a violation of the covenant set forth
in this Section 17 for Seaboard to disclose information if
required to do so by court order or if any information disclosed
by Seaboard is in the public domain other than as a result of
conduct by Seaboard which constitutes the breach of a
confidentiality obligation to ConAgra.
18. Reasonable Best Efforts.
18.1 Subject to the terms and conditions herein provided and
applicable legal requirement, each of the parties
hereto agrees to use its reasonable best efforts to
take, or cause to be taken, all actions and to do, or
cause to be done, and to assist and cooperate with the
other parties hereto in doing, as promptly as
practicable, all things necessary, proper or advisable
under applicable laws and regulations to ensure that
the conditions set forth in Sections 11 and 12 are
satisfied and to consummate and make effective the
transactions contemplated by this Agreement; provided,
however, that Seaboard shall not, without ConAgra's
prior written consent, and ConAgra shall not be
required to, divest or hold separate or otherwise take
or commit to take any other similar action with respect
to any assets, businesses or product lines of the
Business or otherwise take action that could reasonably
be expected to have a Material Adverse Effect.
18.2 Subject to Section 18.1 hereof, each of the parties
shall use its reasonable best efforts to obtain as
promptly as practicable all consents, waivers,
approvals, authorizations or permits of, or
registration or filing with or notification to (any of
the foregoing being a "Consent") of any governmental
entity or any other person required in connection with,
and waivers of any violations, defaults or breaches
that may be caused by, the consummation of the
transactions contemplated by this Agreement. Neither
Seaboard nor ConAgra shall be required to make any
payments to any party to obtain any such consents,
waivers, approvals and authorizations (other than the
filing fee to be paid by ConAgra under the HSR Act and
other than fees and expenses incurred to comply with
the HSR Act).
18.3 Each party hereto shall promptly inform the other of
any material communication from the United States
Federal Trade Commission, the United States Department
of Justice, or any other governmental entity regarding
any of the transactions contemplated by this Agreement.
If any party hereto or any affiliate thereof receives a
request for additional information or documentary
material from any such governmental entity with respect
to the transactions contemplated by this Agreement,
then such party shall use commercially reasonable
efforts to cause to be made, as soon as reasonably
practicable and after consultation with the other
party, an appropriate response in compliance with such
request.
18.4 Without limiting the generality of the foregoing and
subject to Section 18.1 hereof, ConAgra and Seaboard
will use their respective reasonable best efforts to
obtain all authorizations or waivers required under the
HSR Act to consummate the transactions contemplated
hereby, including, without limitation, making all
filings with the Antitrust Division of the Department
of Justice ("DOJ") and the Federal Trade Commission
("FTC") required in connection therewith and responding
as promptly as practicable to all inquiries received
from the DOJ or the FTC for additional information or
documentation. ConAgra and Seaboard shall furnish to
each other such necessary information and reasonable
assistance as the other may request in connection with
its preparation of any filing or submission which is
necessary under the HSR Act. ConAgra and Seaboard
shall keep each other apprised of the status of any
communications with, and any inquiries or requests for
additional information from, the FTC and the DOJ.
19. Waiver of Bulk Sales Compliance. The parties hereto
waive compliance with the provisions of any applicable bulk sales
laws in connection with the transactions contemplated by this
Agreement. Notwithstanding the foregoing, nothing herein shall
estop or prevent either ConAgra or Seaboard from asserting, as a
bar or defense to any action or proceeding brought under any
applicable bulk sales law, that such law is not applicable to the
transactions contemplated by this Agreement.
20. Prorations. The parties hereto understand and agree
that all utility accounts will be read, determined and/or
prorated as of the Closing Date based on average daily usage
during the service month immediately preceding the Closing Date.
In addition, all rent and other charges due under the leases and
contracts described in Section 1.7 hereof shall be prorated to
the Closing Date. All real estate and personal property taxes
which are assessed for the calendar year 2000 shall be prorated
to the Closing Date, and all prior taxes shall be paid by
Seaboard. Notwithstanding the foregoing, to the extent any
liability is accrued on the Settlement Statement, such liability
shall be paid by ConAgra.
21. Public Announcements. ConAgra and Seaboard shall
consult with each other before issuing any press releases with
respect to the transactions contemplated by this Agreement and
shall not issue any such press release prior to such consultation
and without the approval of the other (which approval shall not
be unreasonably withheld), except as may be required by
applicable law or obligations pursuant to any listing agreement
with any national securities exchange. The parties shall
cooperate to the extent practicable with respect to other public
statements (including employee, customer and grower
announcements) made in connection with the transactions
contemplated herein, including the timing and contents thereof.
22. Expenses. Each party hereto shall pay its own costs
and expenses incurred in connection with the negotiation and
preparation of this Agreement and the consummation of the
transactions contemplated herein; provided, however, that (i)
Seaboard and ConAgra shall each pay one-half of any sales, use
and gross receipts taxes incurred in connection with the transfer
of the Assets ("Sales Taxes"), one-half of the commitment fees
and premiums for the title insurance policies for the Real Estate
(the "Title Insurance Fees"), one-half of the fees and expenses
of Xxxxx-XxXxxx Associates, Inc. (the "Environmental Fees")
incurred in connection with performing environmental studies with
respect to the Property, and one-half of all real estate transfer
fees or stamp taxes payable in connection with the conveyance of
the Real Estate to ConAgra ("Real Estate Transfer Taxes"); and
(ii) ConAgra shall pay the HSR filing fee and the fees and
expenses of any surveys obtained with respect to the Property.
23. Tax Covenants.
23.1 Transfer Taxes. All non-Income Tax ("Transfer Taxes")
imposed on or in connection with the sale of the
Assets, the Seaboard Kentucky Stock, or the deemed or
actual sale of the Seaboard Kentucky Assets shall be
paid as provided in Section 22 and Section 6.2.14
above.
23.2 Tax Sharing Agreements. Any tax sharing or other
allocation agreement with respect to Taxes to which
Seaboard Kentucky is a party is hereby terminated as of
the Closing Date and shall have no further effect for
any taxable period. This Section 23 and Section 8.26
above shall control all of the parties' respective
obligations for Taxes affecting the Business, the
Assets, and Seaboard Kentucky and supersedes any and
all prior agreements, contracts or understandings
regarding Seaboard Kentucky's Taxes.
23.3 Section 338(h)(10) Joint Election and Tax Returns.
23.3.1 Section 338(h)(10) Joint Election. ConAgra and
Seaboard each agree that they will make
elections or join in making elections under
Section 338(g) and Section 338(h)(10) of the
Code, to treat the sale of the Seaboard
Kentucky Stock as a sale of all of the assets
of Seaboard Kentucky and all of the assets of
each of its subsidiaries, if any,
(collectively, a "Section 338(h)(10) Joint
Election") for federal Income Tax purposes and
an election under the statutes of such states
as permit an equivalent election to treat the
sale of the Seaboard Kentucky Stock as a sale
of all of its assets (and as the sale of the
assets of its subsidiaries, if any) as provided
by such states' applicable laws for the state
Income Tax purposes. The parties agree that
the Purchase Price and the Payables (plus other
relevant items) shall be allocated to the
Assets and the Seaboard Kentucky Assets in
accordance with Exhibit 3.4 hereto. Each party
covenants to report gain or loss or cost basis,
as the case may be, in a manner consistent with
Exhibit 3.4 for federal and state Income Tax
purposes. If required, the parties shall
exchange mutually acceptable IRS Forms 8594 (or
equivalent federal and state forms) reflecting
such allocations which shall be filed with the
IRS and any applicable state or local tax
authority. Seaboard shall pay all Income Taxes
incurred in connection with the
Section 338(h)(10) Joint Election (or its state
equivalent) described in this Section 23.3.1
and will indemnify ConAgra, Seaboard Kentucky
and their subsidiaries against any failure by
Seaboard or the Seaboard Subsidiaries to pay
such Taxes. The parties agree to take all
reasonable actions necessary to effect any
Section 338(h)(10) Joint Election, including,
without limitation, the timely filing of IRS
Form 8023-A or state equivalent.
23.3.2 Income Tax Returns. ConAgra shall cause
Seaboard Kentucky to consent to join, for all
Tax periods of Seaboard Kentucky ending on or
before the Closing Date (the "Pre-Closing
Period") for which Seaboard Kentucky is
eligible to do so, with Seaboard and the
Seaboard Subsidiaries in any consolidated or
combined federal, state or local Income Tax
Returns. Seaboard shall cause to be prepared
and timely filed any and all consolidated or
combined federal, state or local Income Tax
Returns as well as any separate federal, state,
local or federal Income Tax Returns for
Seaboard Kentucky and the Seaboard Subsidiaries
for all Tax periods of Seaboard and the
Seaboard Subsidiaries for the Pre-Closing
Period. ConAgra shall cause to be prepared and
timely filed any and all Income Tax Returns for
Tax periods of Seaboard Kentucky ending after
the Closing Date. The parties agree to
cooperate with each other and each other's
affiliates in the preparation of the portions
of such returns pertaining to Seaboard Kentucky
and/or its subsidiaries, if any. For state
Income Tax purposes, the parties acknowledge
and agree that all state Income Tax Returns
shall be filed on the basis that the applicable
state equivalent of the Section 338(h)(10)
Joint Election terminated the Tax period of
Seaboard Kentucky and its subsidiaries, if any,
as of the Closing Date. The parties agree to
cooperate with each other and each other's
affiliates in the preparation of the portions
of the returns pertaining to Seaboard Kentucky
and/or its subsidiaries. The parties shall be
entitled to utilize the services of the
personnel who would have been responsible for
preparing such returns as they relate to
Seaboard Kentucky and/or its subsidiaries, to
the extent reasonably necessary in preparing
said returns on a timely basis. The parties
shall also provide each other with full access
to applicable records to enable the preparation
of said returns. Seaboard shall pay on a
timely basis all Income Taxes in respect to the
Pre-Closing Period shown as due on such
returns. The parties shall make available to
each other copies of the portions of such
returns relating to Seaboard Kentucky and/or
its subsidiaries, if any, for taxable years
ending before or including the Closing Date.
23.3.3 Non-Income Tax Returns. Seaboard shall cause
to be prepared and timely filed all non-Income
Tax Returns of Seaboard Kentucky and its
subsidiaries, if any, for all Tax periods
ending on or before the Pre-Closing Period.
ConAgra shall cause Seaboard Kentucky and its
subsidiaries, if any, to prepare and timely
file all non-Income Tax Returns for all Tax
periods ending after the Closing Date. The
parties agree to cooperate with each other and
their affiliates in the preparation of such non-
Income Tax Returns. The parties shall be
entitled to utilize the services of the
personnel who would have been responsible for
preparing such returns to the extent reasonably
necessary in preparing said returns on a timely
basis. The parties shall also provide each
other with full access to applicable records to
enable the preparation of such returns.
Seaboard shall pay on a timely basis all non-
Income Taxes for all time periods through the
Pre-Closing Period as shown as due on such
returns. ConAgra shall cause Seaboard Kentucky
and its subsidiaries, if any, to pay all non-
Income Taxes to which such non-Income Tax
Returns relate for all time periods after the
Closing Date (the "Post-Closing Periods"). The
parties shall make available to each other
copies of non-Income Tax Returns of Seaboard
Kentucky and its subsidiaries, if any, covering
Tax periods ending before or including the
Closing Date.
23.3.4 Allocations. Seaboard shall include the income
and deductions of Seaboard Kentucky and its
subsidiaries, if any (including any deferred
income triggered into income by Treas. Reg.
1.1502-13 and Treas. Reg. 1.1502-19, or
equivalent provisions of state or local law) on
Seaboard's consolidated or combined federal,
state or local Income Tax Returns for the Pre-
Closing Period and shall pay any Taxes
attributable thereto. In any case where any
Tax Return covers a Tax period beginning before
and ending after the Closing Date, then, for
all purposes of this Section 23 (including,
without limitation, Sections 23.3, 23.4, 23.5
and 23.6) the amount of Taxes allocable between
Seaboard on one hand, and ConAgra, Seaboard
Kentucky and its subsidiaries, if any, on the
other hand, shall be determined by closing the
books of Seaboard Kentucky and its subsidiaries
as of and including the Closing Date. If the
allocation of an item of income, deduction or
credit cannot be specifically allocated based
on such closing of the books, such item shall
be allocated ratably on a daily basis. In case
of the Taxes attributable to the Pre-Closing
Period, Seaboard and the Seaboard Subsidiaries
shall be liable for such Taxes. In the case of
Taxes attributable to Post-Closing Periods,
ConAgra and Seaboard Kentucky shall be liable
for such Taxes.
23.4 Allocation of Income Tax Benefits.
23.4.1 If any adjustments shall be made to any
federal, state, local, or foreign Income Tax
returns relating to Seaboard Kentucky, its
subsidiaries, if any, Seaboard or the Seaboard
Subsidiaries for the Pre-Closing Period which
result in any Income Tax detriment to Seaboard
or any affiliate of Seaboard with respect to
such period and any Income Tax benefit to
ConAgra, Seaboard Kentucky and its
subsidiaries, if any, for any Tax period ending
after the Closing Date, Seaboard shall be
entitled to the benefit of such Income Tax
benefit to the extent of the related Income Tax
detriment, and ConAgra shall or shall cause
Seaboard Kentucky and its subsidiaries to pay
to Seaboard such amount.
23.4.2 If any adjustment shall be made to any federal,
state, local, or foreign Income Tax returns
relating to Seaboard Kentucky or any of its
subsidiaries for any Tax Period ending after
the Pre-Closing Period which result in any
Income Tax detriment to ConAgra, Seaboard
Kentucky, or any of their subsidiaries with
respect to such period and any Income Tax
benefit to Seaboard or any affiliate of
Seaboard for any Pre-Closing Period, ConAgra
shall be entitled to the benefit of such Income
Tax Benefits to the extent of the related
Income Tax detriment. Seaboard shall pay to
ConAgra such amount.
23.5 Tax Indemnity. From and after the Closing Date,
Seaboard shall be liable for, and agrees to indemnify,
defend and hold harmless each of ConAgra, Seaboard
Kentucky and their subsidiaries from and against all
Taxes imposed on the Business, the Assets, Seaboard
Kentucky, its assets or its subsidiaries, if any, in
respect to the Pre-Closing Period.
23.6 Refunds. Any refunds of Taxes, which are received by
Seaboard Kentucky or any of its subsidiaries relating
to Seaboard Kentucky or its subsidiaries and that are
attributable to the Pre-Closing Period, shall be for
the benefit of Seaboard. ConAgra shall or shall cause
Seaboard Kentucky to pay to Seaboard or its order any
such refunds. Any refunds of Taxes, which are received
by Seaboard or any of its affiliates relating to
Seaboard Kentucky or any of its subsidiaries and that
are attributable to (i) any Post-Closing Period or (ii)
a carryback of Tax attributes or benefits from a Post-
Closing Period to a Pre-Closing Period, in each case,
shall be for the benefit of ConAgra. Seaboard shall or
shall cause its affiliates to pay to ConAgra or its
order any such refunds.
23.7 Cooperation. After the Closing Date, Seaboard and
ConAgra shall make available to the other, free of
charge, costs or expense and as reasonably requested,
all information, records or documents reasonably
relevant to Tax liabilities or potential Tax
liabilities of Seaboard Kentucky or its subsidiaries,
if any, for all periods prior to or including the
Closing Date (or any matter, transaction or event
occurring on or before the Closing Date that may affect
such a Tax liability, the Business, the Assets or
Seaboard Kentucky) and each such person shall preserve
all such available information, records and documents
until the expiration of any applicable statute of
limitations or extensions thereof. Each such person
shall provide, free of charge, cost or expense, the
other(s) and the pertinent Tax Authority with all
available information and documents reasonably
necessary to comply with all Tax audit information
requests or inquiries made of any such periods relevant
to such Tax liabilities or potential Tax liabilities
(or any matter, transaction or event occurring on or
before the Closing Date that reasonably may affect such
a Tax liability, the Business, the Assets or Seaboard
Kentucky). Any information obtained pursuant to this
Section 23.7 shall be held in strict confidence and
shall be used solely in connection with the reasons for
which it was requested.
23.8 Tax Audits. ConAgra shall promptly notify Seaboard in
writing upon receipt by ConAgra, any affiliate of
ConAgra, Seaboard Kentucky, or any subsidiary of
Seaboard Kentucky, and Seaboard shall promptly notify
ConAgra in writing upon receipt by Seaboard or any
affiliate of Seaboard, of notice of any pending or
threatened federal, state, local or foreign Tax audits,
examinations or assessments of Seaboard Kentucky or its
subsidiaries, so long as Pre-Closing Period Taxable
years or periods remain open. Seaboard shall have the
sole right to represent Seaboard Kentucky, its
subsidiaries, if any, and their predecessors in any Tax
audit or administrative or court proceeding relating to
the Pre-Closing Period, and to employ counsel of its
choice at its expense.
23.9 Survival. The representations, warranties and
obligations of the parties under Section 8.26 and
Section 23, shall survive the Closing until the
expiration of the applicable or underlying tax statute
of limitations (including any extensions).
23.10 Payments. Any payment by a party under this
Section 23 shall be due within thirty (30) days after
the realization of the applicable Tax decrease. Any
such payment shall bear interest computed at the rate
and in the manner provided by Section 6621 of the Code
for a period commencing on the later of (i) the
thirtieth (30) day after the realization of the
applicable Tax decrease or (ii) the fifth day after the
reimbursing party's receipt of notice of payment of the
applicable Tax increase, and shall bear such interest
until paid by the reimbursing party.
24. Miscellaneous. The following miscellaneous provisions
shall apply to this Agreement:
24.1 Notices. All notices which are required or may be
given pursuant to the terms of this Agreement shall be
in writing and shall be sufficient in all respects if
given in writing and delivered personally or by
facsimile and confirmed by mail, or mailed by
Registered, Certified or Express mail, postage prepaid,
or overnight courier as follows:
If to Seaboard: Seaboard Corporation
0000 Xxxx 00xx Xxxxxx
P.O. Box 2972
Shawnee Mission, KS 66201
ATTN: Chief Financial Officer
Fax: (000) 000-0000
With a copy to: Seaboard Corporation
0000 Xxxx 0xx Xxxxxx
P.O. Box 2972
Shawnee Mission, KS 66201
ATTN: General Counsel
Fax: (000) 000-0000
If to ConAgra: ConAgra Poultry Company
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx X, X.X. Xxx 0000
Xxxxxx, XX 00000
ATTN: Controller
Fax: (000) 000-0000
With a copy to: ConAgra, Inc.
Xxx XxxXxxx Xxxxx
Xxxxx, XX 00000
ATTN: Vice President/Controller
Fax: (000) 000-0000
or at such other address as any party hereto
shall have designated by notice in writing to the other
parties hereto.
24.2 Waivers. Each of ConAgra and Seaboard may, by written
notice to the other, (i) extend the time for
performance of any of the obligations or other actions
of the other under this Agreement, (ii) waive any
inaccuracies in the representations and warranties of
the other contained in this Agreement or in any
documents delivered pursuant to this Agreement, (iii)
waive compliance with any of the conditions or
covenants of the other contained in this Agreement, or
(iv) waive or modify performance of any of the
obligations of the other under this Agreement. Except
as provided in the preceding sentence, no action taken
pursuant to this Agreement, including, without
limitation, any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any
representations, warranties, covenants or agreements
contained in this Agreement. The waiver by any party
hereto of a breach of any portion of this Agreement
shall not operate or be construed as a waiver of any
subsequent breach.
24.3 Entire Agreement. This Agreement, together with the
Confidentiality Agreement and the Ancillary Documents,
constitute the entire agreement among the parties
hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral
and written, among the parties hereto with respect to
the subject matter hereof or thereof.
24.4 Applicable Law. This Agreement and the legal relations
among the parties hereto shall be governed by and
construed in accordance with the laws of the State of
Georgia applicable to contracts made and performed in
Georgia. The parties agree to the exclusive
jurisdiction and venue of any federal district court in
the State of Georgia in the event of any dispute
arising out of this Agreement or the transactions
contemplated hereby.
24.5 Binding Effect, Benefits. This Agreement shall inure
to the benefit of and be binding upon the parties
hereto and their respective successors and assigns;
nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties
hereto or their respective successors and assigns, any
rights, remedies, obligations or liabilities under or
by reason of this Agreement.
24.6 Assignability. Neither this Agreement nor any of the
parties' rights hereunder shall be assignable by any
party hereto without the prior written consent of the
other parties hereto.
24.7 Effect of Headings. The headings of the various
sections and subsections herein are inserted merely as
a matter of convenience and for reference and shall not
be construed as in any manner defining, limiting or
describing the scope or intent of the particular
sections to which they refer, or as affecting the
meaning or construction of the language in the body of
such sections.
24.8 Exhibits, Disclosure Schedule. All exhibits and
schedules referred to in this Agreement are attached
hereto and are incorporated herein by reference as if
fully set forth herein. Disclosure of a specific state
of facts in one section of the Disclosure Schedule
shall be deemed to be disclosed with respect to other
relevant sections of the Disclosure Schedule so long as
such disclosure is made in such detail and with such
specificity that it is clear that the information
disclosed relates to the subject matter of the other
Sections.
24.9 Construction. The language in all parts of this
Agreement shall in all cases be construed as a whole
according to its fair meaning, strictly neither for nor
against any party hereto, and without implying a
presumption that the terms thereof shall be more
strictly construed against one party by reason of the
rule of construction that a document is to be construed
more strictly against the person who himself or through
his agent prepared the same, it being agreed that
representatives of both parties have participated in
the preparation hereof.
24.10 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be
regarded as an original and all of which shall
constitute one and the same instrument.
24.11 Litigation Cooperation. Each of the parties
hereto agrees to use its commercially reasonable
efforts to take, cause to be taken, all action and to
do, cause to be done, all things necessary, proper or
advisable under the laws and regulations to consummate
and make effective the transactions contemplated by
this Agreement. In particular, ConAgra agrees to use
its commercially reasonable efforts to cooperate with
Seaboard as reasonably necessary to assist Seaboard in
its ongoing obligation to handle all of Seaboard's
litigation matters; provided, however, Seaboard shall
keep ConAgra fully informed with respect to, and shall
otherwise permit ConAgra to discuss ConAgra's view
points and suggested course of action with Seaboard
with respect to, the investigation and defense of the
United States Department of Labor, Office of Federal
Contract Compliant Programs, discrimination matter
against Seaboard Farms of Chattanooga, Inc. (the
"OFCCP Matter"). Notwithstanding the foregoing, with
respect to the OFCCP Matter, Seaboard shall not agree
to, consent to or enter into any conciliation
agreement, settlement, consent or any other
arrangement or understanding which in any way affects,
concerns or impacts the Business, the Assets and/or
employees of the Business, or which involves any
ongoing compliance, monitoring, rehiring and/or
reporting obligation from and after the Closing Date,
without ConAgra's prior written consent, which consent
shall not be unreasonably withheld or delayed.
24.12 Access to Records. After the Closing, for
purposes of preparing and filing Seaboard's tax
returns and making such other reports and taking such
other actions as may be required by law or contract
and for purposes of defending or pursuing third party
claims, ConAgra shall make available to Seaboard and
its accountants, counsel and other authorized
representatives access, during reasonable business
hours and under reasonable circumstances, to the
books, records, contracts and other information of the
Seaboard Entities transferred to ConAgra under this
Agreement and to the Hired Employees (for the purpose
of providing information, testifying in depositions
and arbitration, governmental and litigation
proceedings, and otherwise assisting Seaboard in
connection with third party claims). ConAgra shall
maintain such books, records, contracts and other
information for at least a period of six (6) years
following the Closing.
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IN WITNESS WHEREOF, the parties have each executed this
Agreement on the date first above written.
SEABOARD CORPORATION, CONAGRA, INC.,
a Delaware corporation a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
Its: Vice President and Its: Senior Vice President
Chief Financial Officer Mergers and Acquisitions
The following exhibits and schedules have been excluded from
this filing, registrant agrees to furnish supplementally a copy of any
omitted schedule to the SEC upon request:
Exhibit A - Locations Where Business is Conducted
Exhibit 1(a) - Seaboard Assets
Exhibit 1.1 - Real Estate
Exhibit 1.6 - Excluded Trademarks
Exhibit 1.7(a) - Contracts or Other Items Not Being Assumed
Exhibit 1.7(a)(1) - All Contracts or Other Items to be Assumed
Exhibit 1.8 - Enterprise Software
Exhibit 1.9 - Subsidiary Prepaids
Exhibit 1.12 - Taxable Industrial Development Revenue Bonds
Exhibit 2 - Excluded Assets
Exhibit 3.1 - Assumed Liabilities/Payables
Exhibit 3.4 - Allocation of Asset Purchase Price
Exhibit 4 - Poultry Inventory Processes, Procedures and
Valuation Principles, including
Exhibit 4.2(i) - Existing Inventory Valuation Principles, and
Exhibit 4.2(ii) - Valuation of Payables
Exhibit 5.1 - Trademark Agreement
Exhibit 5.2 - Transition Services Agreement
Exhibit 5.3 - Software License Agreement
Exhibit 6.2.9 - Title Commitments
Exhibit 7.1 - Terms and Conditions for Offers of Employment
Exhibit 7.6 - Pending Worker's Compensation Claims
Exhibit 7.8 - Severance Policies and Arrangements
Exhibit 10.7 - Credit Supports
Exhibit 10.10 - Seaboard Undertakings
Exhibit 11.7 - Consents
