Exhibit 99.2
AGREEMENT FOR SALE AND PURCHASE
OF PARTNERSHIP INTERESTS
dated as of August 3, 1997
by and among
WESTERN FARM & CATTLE COMPANY,
CALIFORNIA LAND & CATTLE COMPANY
N.N. INVESTORS, L.P.,
ST RANCH GENPAR, INC.,
FW RANCH PARTNERS, L.P.,
and
UNITED STATES FILTER CORPORATION
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . 3
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2 THE ACQUISITION . . . . . . . . . . . . . . . . . . . . 11
2.1 The Acquisition; the Closing . . . . . . . . . . . . . . . . 11
2.2 Stock Consideration . . . . . . . . . . . . . . . . . . . . .12
2.3 Fractional Shares . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . .13
3.1 Organization and Power . . . . . . . . . . . . . . . . . . . 13
3.2 Authorization . . . . . . . . . . . . . . . . . . . . . . . .17
3.3 Consents, Approvals, Etc. . . . . . . . . . . . . . . . . . .21
3.4 Non-Contravention . . . . . . . . . . . . . . . . . . . . . .22
3.5 Capitalization . . . . . . . . . . . . . . . . . . . . . . . 24
3.6 All Assets Necessary . . . . . . . . . . . . . . . . . . . . 26
3.7 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 26
3.8 Financial Statements; Books and Records . . . . . . . . . . .26
3.9 Absence of Certain Changes . . . . . . . . . . . . . . . . . 28
3.10 Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 28
3.11 Material Contracts . . . . . . . . . . . . . . . . . . . . .29
3.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . .32
3.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . .33
3.14 Properties . . . . . . . . . . . . . . . . . . . . . . . . .34
3.15 Water Rights . . . . . . . . . . . . . . . . . . . . . . . .38
3.16 Licenses and Permits; Regulatory Matters . . . . . . . . . .45
3.18 Environmental Matters . . . . . . . . . . . . . . . . . . . 46
3.19 Labor and Employee Benefit Matters . . . . . . . . . . . . .47
3.20 Information Supplied . . . . . . . . . . . . . . . . . . . .47
3.21 No Broker . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.22 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.23 Not Misleading . . . . . . . . . . . . . . . . . . . . . . .48
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . .48
4.1 Corporate Existence and Power . . . . . . . . . . . . . . . .48
4.2 Corporate Authorization . . . . . . . . . . . . . . . . . . .49
4.3 Consents, Approvals, Etc. . . . . . . . . . . . . . . . . . .49
4.4 Non-Contravention . . . . . . . . . . . . . . . . . . . . . .50
4.5 Capitalization . . . . . . . . . . . . . . . . . . . . . . . 50
4.6 SEC Filings; Financial Statements; Books and Records . . . . 51
4.7 No Broker . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 5 COVENANTS SELLERS . . . . . . . . . . . .. . . . . . . 52
5.1 Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . .52
5.2 Access to Information . . . . . . . . . . . . . . . . . . . .57
5.3 Notices of Certain Events . . . . . . . . . . . . . . . . . .58
5.4 No Solicitation or Negotiation . . . . . . . . . . . . . . . 58
5.5 Confidentiality Agreements . . . . . . . . . . . . . . . . . 60
5.6 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.7 Covenants Relating to the Properties . . . . . . . . . . . . 61
5.8 Title Updates . . . . . . . . . . . . . . . . . . . . . . . .61
ARTICLE 6 COVENANTS OF BUYER . . . . . . . . . . . .. . . . . . . 62
6.1 Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . .62
6.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . . .62
6.3 Indemnification and Insurance . . . . . . . . . . . . . . . .63
6.4 Representation on Buyer's Board of Directors . . . . . . . . 63
6.5 Copies of SEC Filings . . . . . . . . . . . . . . . . . . . .63
6.6 Access to Information . . . . . . . . . . . . . . . . . . . .63
ARTICLE 7 COVENANTS OF BUYER AND SELLERS . . . . . . . . . . . ..64
7.1 Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . 64
7.2 Public Announcements . . . . . . . . . . . . . . . . . . . . 66
7.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE 8 TAX MATTERS; CERTAIN COVENANTS . . . . . . . . . . . . .67
8.1 Representations, Warranties and Covenants . . . . . . . . . .67
8.2 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . .71
ARTICLE 9 INDEMNIFICATION . . . . . . . . . . . . . .. . . . . . .75
9.1 Indemnification . . . . . . . . . . . . . . . . . . . . . . 75
9.2 Limitations to Indemnification Obligations . . . . . . . . . 76
9.3 Notice of Claim . . . . . . . . . . . . . . . . . . . . . . .76
9.4 Third Party Claims . . . . . . . . . . . . . . . . . . . . . 77
9.5 Payments of Indemnity . . . . . . . . . . . . . . . . . . . .78
ARTICLE 10 CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . 79
10.1 Conditions to Obligations of Buyer Parties and Sellers . . .79
10.2 Further Conditions to Obligation of Buyer . . . . . . . . . 81
10.3 Further Conditions to Obligation of Sellers . . . . . . . . 83
ARTICLE 11 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . 85
11.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . .85
ARTICLE 12 TERMINATION . . . . . . . . . . . . . . . . . . . . . .85
12.1 Grounds for Termination . . . . . . . . . . . . . . . . . . 85
12.2 Effect of Termination . . . . . . . . . . . . . . . . . . . 86
ARTICLE 13 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . .87
13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 87
13.2 Amendments and Waivers . . . . . . . . . . . . . . . . . . .90
13.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . .90
13.4 Successors and Assigns . . . . . . . . . . . . . . . . . . .90
13.5 Governing Law; Submission to Jurisdiction . . . . . . . . . 90
13.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . .92
13.8 No Third Party Beneficiaries . . . . . . . . . . . . . . . .92
13.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . .92
13.10 Invalid Provisions . . . . . . . . . . . . . . . . . . . . 92
13.11 Construction . . . . . . . . . . . . . . . . . . . . . . . 93
13.12 Specific Performance . . . . . . . . . . . . . . . . . . . 93
AGREEMENT FOR SALE AND PURCHASE
OF PARTNERSHIP INTERESTS
THIS AGREEMENT FOR SALE AND PURCHASE OF PARTNERSHIP INTERESTS is made
and entered into as of August 3, 1997, by and among Western Farm & Cattle
Company, a California corporation ( Western Farm & Cattle ), California
Land & Cattle Company, a Delaware corporation ( CLCC ), N.N. Investors,
L.P., a Delaware limited partnership ( N.N. Investors ), ST Ranch GenPar,
Inc., a Texas corporation ( GenPar ), FW Ranch Partners, L.P., a Texas
limited partnership ( FW Ranch ), and United States Filter Corporation, a
Delaware corporation ( Buyer ).
RECITALS
WHEREAS, Western Farm & Cattle is the sole general partner of, and the
holder of a 1% general partner interest (the WFLP GP Interest ) in,
Western Farms, L.P., a California limited partnership ( WFLP ), and
California Farms, L.P., a Delaware limited partnership ( California
Farms ), is the sole limited partner of, and the holder of a 99% limited
partner interest (the WFLP LP Interest ) in, WFLP;
WHEREAS, CLCC is the sole general partner of, and the holder of a 1%
general partner interest (the California Farms GP Interest ) in,
California Farms, and N.N. Investors is the sole limited partner of, and
the holder of a 99% limited partner interest (the California Farms LP
Interest ) in, California Farms;
WHEREAS, GenPar is the sole general partner of, and the holder of a 1%
general partner interest (the FWRLP GP Interest ) in, FW Ranchlands, L.P.,
a Texas limited partnership ( FWRLP ), and FW Ranch is the sole limited
partner of, and the holder of a 99% limited partner interest (the FWRLP
LP Interest ) in, FWRLP;
WHEREAS, Western Farm & Cattle desires to sell the WFLP GP Interest to
Buyer, and Buyer desires to purchase the WFLP GP Interest from Western Farm
& Cattle, and CLCC desires to sell the California Farms GP Interest to
Buyer, and Buyer desires to purchase the California Farms GP Interest from
CLCC, and N.N. Investors desires to sell the California Farms LP Interest
to Buyer and Buyer desires to purchase the California Farms LP Interest
from N.N. Investors; and GenPar desires to sell the FWRLP GP Interest to
Buyer, and Buyer desires to purchase the FWRLP GP Interest from GenPar, and
FW Ranch desires to sell the FWRLP LP Interest to Buyer, and Buyer desires
to purchase the FWRLP LP Interest from FW Ranch, all on the terms and
subject to the conditions set forth herein (such purchases and sales
collectively, the Acquisition );
WHEREAS, the boards of directors of Western Farm & Cattle, CLCC and
GenPar, the general partners of WFLP, California Farms and FWRLP,
respectively, and a majority in interest of the limited partners of FW
Ranch and the board of directors of Buyer has approved the Acquisition;
WHEREAS, in connection with and concurrently with the Acquisition, (i)
Buyer, Western Farm & Cattle, CLCC, N.N. Investors, GenPar and FW Ranch
will enter into a Transfer, Registration Rights and Governance Agreement
(the Governance Agreement ) substantially in the form attached hereto as
Exhibit A, (ii) WFLP and N.N. Investors will enter into a Farm Lease
Agreement with respect to certain real property to be owned by WFLP upon
consummation of the Acquisition (the California Farm Lease ) substantially
in the form attached hereto as Exhibit B; and (iii) FWRLP and FW Ranch will
enter into a Farm Lease Agreement with respect to certain real property to
be owned by FWRLP upon consummation of the Acquisition (the Texas Farm
Lease ) substantially in the form attached hereto as Exhibit C;
WHEREAS, Western Farm & Cattle, CLCC, N.N. Investors, GenPar, FW
Ranch, and Buyer desire to make certain representations, warranties,
covenants and agreements in connection with the Acquisition;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements of the parties set
forth herein, the parties hereto do hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the
following meanings:
"Acquisition" shall have the meaning set forth in the Recitals.
"Acquisition Proposal" shall have the meaning specified in Section
5.4.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with such Person.
"Agreement" means this Agreement for Sale and Purchase of Partnership
Interests, including the schedules and exhibits hereto.
"Ancillary Agreements" means the Governance Agreement, the California
Farm Lease, the Texas Farm Lease, the Keepwell Agreements and the Warrant
Agreement.
"Average Trading Price" means the average (rounded to the nearest one-
thousandth (.001)) of the daily closing sales prices of a share of Buyer
Stock as reported on the New York Stock Exchange Composite Tape (as
reported by The Wall Street Journal or, if not reported thereby, as
reported by another source as mutually agreed by Buyer Parties and
Sellers), for the twenty consecutive full trading days ending on the
trading date that is five business days prior to the Closing Date.
"Benefit Arrangement" means any employment, consulting,
indemnification, severance or similar contract, arrangement or policy, or
any plan or arrangement (whether or not written) providing for severance
benefits, insurance coverage (including any self-insured arrangements),
workers compensation, disability benefits, supplemental unemployment
benefits, vacation benefits, retirement benefits, deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights or other
forms of incentive compensation or post-retirement insurance, compensation
or benefits that (i) is not an Employee Plan, (ii) is entered into or
maintained, as the case may be, by WFLP or FWRLP and (iii) covers any
employee or former employee of WFLP or FWRLP.
"Benefit Plan" means any Employee Plan or Benefit Arrangement.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which commercial banks in New York, New York are required or
permitted to be closed.
"Buyer" shall have the meaning specified in the paragraph preceding
the Recitals.
"Buyer Stock" means the common stock, $.01 par value, of the Buyer.
"California Farm Lease" shall have the meaning specified in the
Recitals.
"California Farms" shall have the meaning specified in the paragraph
preceding the Recitals.
"California Farms GP Interest" shall have the meaning specified in the
Recitals.
"California Farms Limited Partnership Agreement" means the limited
partnership agreement, as amended, of California Farms.
"California Farms LP Interest" shall have the meaning specified in the
Recitals.
"California Properties" shall have the meaning specified in
Section 3.15(a).
"CLCC" shall have the meaning specified in the Recitals.
"Closing" shall have the meaning specified in Section 2.1.
"Closing Date" shall have the meaning specified in Section 2.1.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Confidentiality Agreement" means that certain Confidentiality
Agreement dated July 2, 1997, between WFLP and Buyer.
"Delaware Superior Court" shall have the meaning specified in Section
13.5.
"Employee Plan" means any employee benefit plan, as defined in
Section 3(3) of ERISA, that (i) is subject to any provision of ERISA, (ii)
is maintained, administered or contributed to by WFLP or FWRLP and (iii)
covers any employee or former employee of WFLP or FWRLP.
"Encumbrance" shall have the meaning specified in Section 3.14.
"Environmental Laws" means any local, state or federal statute, rule,
regulation, binding judicial or administrative order, code or ordinance
and any binding judicial or administrative interpretation thereof or
requirement thereunder pertaining to: (A) the regulation or protection of
public health, safety and the indoor or outdoor environment; (B) the
conservation, management, development, control and/or use of land
(including zoning laws and ordinances), natural resources and wildlife; (C)
the protection or use of surface water and ground water; (D) the
management, manufacture, possession, presence, use, generation,
transportation, treatment, storage, disposal, release, threatened release,
abatement, removal, remediation, or handling of, or exposure to, any
Hazardous Material; or (E) pollution (including any release to air, land,
surface water and ground water).
"ERISA" means the United States Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" of any entity means any other entity which, together
with such entity, would be treated as a single employer under Section 414
of the Code.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Federal Tax" means any Tax imposed under the Code.
"FW Ranch" shall have the meaning specified in the Recitals.
"FW Ranch Partners Approval" shall have the meaning specified in
Section 5.6.
"FW Ranch Partners Meeting" shall have the meaning specified in
Section 5.6.
"FWRLP" shall have the meaning specified in the Recitals.
"FWRLP GP Interest" shall have the meaning specified in the Recitals.
"FWRLP Interest" means the FWRLP GP Interest and the FWRLP Interest.
"FWRLP Interest" shall have the meaning specified in the Recitals.
"FWRLP Limited Partnership Agreement" means the limited partnership
agreement, as amended, of FWRLP.
"GAAP" means United States generally accepted accounting principles.
"GenPar" shall have the meaning specified in the Recitals.
"Governance Agreement" shall have the meaning specified in the
Recitals.
"Governmental Approval" means any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, authorization,
decision or action or approval of any federal, state or local Governmental
Body with jurisdiction over any Environmental Law.
"Governmental Body" means any federal, state, municipal, political
subdivision or other governmental legislature, court, tribunal, arbitrator,
authority, official, department, commission, board, bureau, agency or
instrumentality, whether U.S. or non-U.S..
"Hazardous Material" means any substance, chemical, compound, product,
solid, gas, liquid, waste, by-product, pollutant, contaminant, or material
which is hazardous or toxic, and includes without limitation, asbestos or
any substance containing asbestos, polychlorinated biphenyls, petroleum
(including crude oil or any fraction thereof), and any hazardous or toxic
waste, material, or substance regulated under any federal, state or local
statute, regulation, rule, order, code or ordinance.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"IID" shall have the meaning specified in Section 3.15.
"IID Water" shall have the meaning specified in Section 3.15.
"Keepwell Agreements" means the separate Keepwell Agreements and
related inducement letters in substantially the form agreed to by the
parties.
"Knowledge of Sellers" means the actual knowledge after due inquiry of
the individuals named on Schedule 1.1.
"Law" means any statute, law, rule, regulation or ordinance of any
Governmental Body and any international treaty or interstate compact.
"Lease" shall have the meaning specified in Section 3.14.
"Lien" means, with respect to any property or asset, any mortgage,
deed of trust, lien, pledge, charge, security interest, encumbrance or
other adverse claim of any kind in respect of such property or asset. For
the purposes of this Agreement, a Person shall be deemed to own subject to
a Lien any property or asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such property
or asset.
"Material Adverse Effect" means, with respect to any Person or
Persons, a material adverse effect on the financial condition, results of
operations, business, assets or liabilities of such Person or Persons and
its or their Subsidiaries, taken as whole, or a material adverse effect on
the consummation of the transactions contemplated hereby.
"N. N. Investors" shall have the meaning specified in the Recitals.
"Order" means any judgment, injunction, decree, order, writ, permit or
license of any Governmental Body.
"Permits" shall have the meaning specified in Section 3.16.
"Person" means an individual, corporation, partnership, association,
trust, limited liability company or other entity or organization, including
a government or political subdivision or an agency or instrumentality
thereof.
"Preferred Stock" means the Preferred Stock, $.10 par value, of Buyer.
"Proceeding" shall have the meaning specified in Section 13.5.
"Properties" means, with respect to any Person, all real property,
including all improvements and appurtenances thereon, that are owned,
leased, held, used and/or on which operations are based by such Person
and/or its Subsidiaries on or before the Closing Date, but does not include
Water Rights.
"Representative" shall have the meaning specified in Section 5.4.
"SEC" means the United States Securities and Exchange Commission.
"SEC Reports" shall have the meaning specified in Section 4.6.
"Sellers" means Western Farm & Cattle, CLCC, N.N. Investors, GenPar
and FW Ranch.
"Significant Agreements" shall have the meaning specified in Section
3.1.
"Stock Consideration" shall have the meaning specified in Section 2.2.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to
elect 50% or more of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such
Person.
"Summary Proceeding" shall have the meaning specified in Section 13.5.
"Summary Proceeding Rules" shall have the meaning specified in Section
13.5.
"Taxes" means all taxes, charges, fees, levies or other assessments,
including but not limited to any net income tax or franchise tax based on
net income, any alternative or add-on minimum taxes, any gross income,
gross receipts, premium, sales, use, ad valorem, value added, transfer,
profits, license, social security, Medicare, payroll, employment, excise,
severance, stamp, occupation, property, environmental or windfall profit
tax, custom, duty or other tax, governmental fee or other like assessment,
together with any interest, penalty, addition to tax or additional amount
imposed by any Taxing Authority.
"Tax Claims" shall mean any claims, actions, causes of action,
liabilities, losses, damages, deficiencies, judgments, settlements, costs
and expenses whatsoever (including reasonable out-of-pocket expenses and
reasonable attorneys' fees), whether or not resulting from third party
claims, relating to Taxes.
"Tax Return" shall mean any return, report, statement, information or
other document including any amendment thereto filed or to be filed or
required to be filed or supplied to any federal, state, or local Taxing
Authority or any other government entity with respect to Taxes, including,
where permitted or required, combined or consolidated returns for any group
of entities.
"Taxing Authority" means any Governmental Body (U.S. or non-U.S.)
responsible for the imposition of any Taxes.
"Texas Farm Lease" shall have the meaning specified in the Recitals.
"Texas Properties" shall have the meaning specified in
Section 3.15(b).
"Warrant Agreement" means the Warrant Agreement to be entered into by
Buyer and Sellers at the Closing substantially in the form set forth as
Exhibit D to this Agreement.
"Warrants" means warrants to acquire 600,000 shares of Buyer Stock at
a price of $50.00 per share and 600,000 shares of Buyer Stock at a price of
$60.00 per share, substantially in the form attached as Exhibit A to the
Warrant Agreement.
"Water Rights" means any and all surface and subterranean water rights
of any nature and from any source whatsoever, whether riparian, overlying,
appropriative, prescriptive, contractual or otherwise, and whether or not
appurtenant to one or more of the Properties, including, without
limitation, (i) all rights associated with the irrigation of, and xxxxx
located on, the Properties and (ii) all rights of the California Properties
to water service from the IID.
"Western Farm & Cattle" shall have the meaning specified in the
paragraph preceding the Recitals.
"WFLP" shall have the meaning specified in the Recitals.
"WFLP GP Interest" shall have the meaning specified in the Recitals.
"WFLP Interests" means the WFLP GP Interest, the California Farms GP
Interest and the California Farms LP Interest.
"WFLP LP Interest" shall have the meaning specified in the Recitals.
"WFLP Limited Partnership Agreement" means the Limited Partnership
Agreement, as amended, of WFLP.
ARTICLE 2
THE ACQUISITION
2.1 The Acquisition; the Closing. (a) The Acquisition shall be
consummated at a closing (the Closing ) to be held at the offices of
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx,
X.X. 00000, or such other place as the parties may agree, on a date set by
Buyer and Sellers (the Closing Date ), which date shall be within five
Business Days following the date upon which all other conditions set forth
in Article 10 hereof have been satisfied or waived.
(a)Subject to the terms and conditions hereof, at the Closing and in
accordance with the provisions of this Agreement and applicable provisions
of Law; (i) GenPar shall transfer and deliver to Buyer, an assignment and
assumption agreement substantially in the form of Exhibit E hereto
conveying to Buyer all of GenPar s right, title and interest in FWRLP; (ii)
FW Ranch shall transfer and deliver to Buyer an assignment and assumption
agreement substantially in the form of Exhibit E hereto conveying to Buyer,
all of FW Ranch's right, title and interest in FWRLP; (iii) Western Farm &
Cattle shall transfer and deliver to Buyer, an assignment and assumption
agreement substantially in the form of Exhibit E hereto conveying to Buyer
all of Western Farm & Cattle s right, title and interest in WFLP; (iv) CLCC
shall transfer and deliver to Buyer an assignment and assumption agreement
substantially in the form of Exhibit E hereto conveying to Buyer all of
CLCC s right, title and interest in California Farms; (v) N.N. Investors
shall transfer and deliver to Buyer an assignment and assumption agreement
substantially in the form of Exhibit E hereto conveying to Buyer all of
N.N. Investors right, title and interest in California Farms; and (vi)
Buyer shall issue and deliver to the respective Sellers in the amounts
specified on Schedule 2.1, (A) certificates registered in the names of the
respective Sellers, representing, in the aggregate, the Stock Consideration
and cash in respect of fractional shares of Buyer Stock, if any, and (B)
certificates registered in the names of the respective Sellers,
representing, in the aggregate, the Warrants. The Buyer Stock and Warrants
will be allocated among Sellers in accordance with Schedule 2.1 hereto.
Buyer may assign the right to purchase the various general partner and
limited partner interests to be purchased in the Acquisition to one or more
wholly-owned Subsidiaries of Buyer.
2.2 Stock Consideration. Subject to Section 2.3, the Stock
Consideration shall be (i) if the Average Trading Price is at least $25.05
and not greater than $37.575, an aggregate of 8,000,000 shares of Buyer
Stock, (ii) if the Average Trading Price is less than $25.05, the number of
shares of Buyer Stock determined by dividing $200,400,000 by the Average
Trading Price and (iii) if the Average Trading Price is greater than
$37.575, the number of shares of Buyer Stock determined by dividing
$300,600,000 by the Average Trading Price.
2.3 Fractional Shares. No fractional shares of Buyer Stock shall be
issued as Stock Consideration. In lieu of the issuance of any fractional
shares of Buyer Stock as Stock Consideration, cash adjustments shall be
paid to the respective Sellers in respect of any fractional share of Buyer
Stock that would otherwise be issuable, and the amount of such cash
adjustment shall be equal to the product of such fractional amount and the
Average Trading Price. No fractional Warrants shall be issued.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers, jointly and severally, represent and warrant to Buyer as of
the date hereof and as of the Closing Date (but as of no other dates unless
expressly so stated) that:
3.1 Organization and Power. (a) WFLP (i) has been duly organized
and is validly existing as a limited partnership in good standing under the
laws of the State of California, (ii) has the authority to own, lease and
operate its properties and to carry on its business as now conducted and
(iii) is duly qualified to do business and is in good standing in each
jurisdiction where such qualification is necessary, except for those
jurisdictions where failure to be so qualified would not, individually or
in the aggregate, have a Material Adverse Effect on WFLP. WFLP has
heretofore delivered or made available to Buyer true and complete copies of
the WFLP Limited Partnership Agreement as in effect on the date hereof.
WFLP is not in violation of any of the provisions of the WFLP Limited
Partnership Agreement.
(b) Western Farm & Cattle (i) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of California, (ii) has the authority to own, lease and operate its
properties and to carry on its business as now conducted and (iii) is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where such qualification is necessary, except for
those jurisdictions where failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect on Western
Farm & Cattle. Western Farm & Cattle has heretofore delivered or made
available to Buyer true and complete copies of its articles of
incorporation and bylaws as in effect on the date hereof. Western Farm &
Cattle is not in violation of any of the provisions of its articles of
incorporation or bylaws.
(c) N.N. Investors (i) has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the
State of Delaware, (ii) has the authority to own, lease and operate its
properties and to carry on its business as now conducted and (iii) is duly
qualified to do business and is in good standing in each jurisdiction where
such qualification is necessary, except for those jurisdictions where
failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect on N.N. Investors. N.N. Investors has
heretofore delivered or made available to Buyer true and complete copies of
its limited partnership agreement as in effect on the date hereof. N.N.
Investors is not in violation of any of the provisions of its limited
partnership agreement.
(d) CLCC (i) has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware; (ii)
has the authority to own, lease and operate its properties and to carry on
its businesses as now conducted; and (iii) is duly qualified to do business
as a foreign corporate and is in good standing in each jurisdiction where
such qualification is necessary, except for those jurisdictions where
failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect on CLCC. CLCC has heretofore delivered or
made available to Buyer true and complete copies of its certificate of
incorporate and bylaws as in effect on the date hereof. CLCC is not in
violation of any of the provisions of its certificate of incorporation or
bylaws.
(e) FWRLP (i) has been duly organized and is validly existing as a
limited partnership in good standing under the laws of the State of Texas,
(ii) has the authority to own, lease and operate its properties and to
carry on its business as now conducted and (iii) is duly qualified to do
business and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to
be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect on FWRLP. FWRLP has heretofore delivered or made
available to Buyer true and complete copies of the FWRLP Limited
Partnership Agreement as in effect on the date hereof. FWRLP is not in
violation of any of the provisions of the FWRLP Limited Partnership
Agreement.
(f) GenPar (i) has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Texas, (ii)
has the authority to own, lease and operate its properties and to carry on
its business as now conducted and (iii) is duly qualified to do business
and is in good standing in each jurisdiction where such qualification is
necessary, except for those jurisdictions where failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect
on GenPar. GenPar has heretofore delivered or made available to Buyer true
and complete copies of its articles of incorporation and bylaws as in
effect on the date hereof. GenPar is not in violation of any of the
provisions of its articles of incorporation or bylaws.
(g) FW Ranch (i) has been duly organized and is validly existing as a
limited partnership in good standing under the laws of the State of Texas,
(ii) has the authority to own, lease and operate its properties and to
carry on its business as now conducted and (iii) is duly qualified to do
business and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to
be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect on FW Ranch. FW Ranch has heretofore delivered or
made available to Buyer true and complete copies of its limited partnership
agreement as in effect on the date hereof. FW Ranch is not in violation of
any of the provisions of its limited partnership agreement.
(h) California Farms (i) has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the
State of Delaware, (ii) has the authority to own, lease and operate its
properties and to carry on its business as now conducted and (iii) is duly
qualified to do business and is in good standing in each jurisdiction where
such qualification is necessary, except for those jurisdictions where
failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect on California Farms. California Farms has
heretofore delivered or made available to Buyer a true and complete copy of
the California Farms Limited Partnership Agreement as in effect on the date
hereof. California Farms is not in violation of any of the provisions of
the California Farms Limited Partnership Agreement.
3.2 Authorization. (a) Western Farm & Cattle has all requisite
power, authority and legal right to enter into this Agreement and the
Ancillary Agreements to which it is a party and consummate the transactions
contemplated hereby and thereby. The execution, delivery and, subject to
the receipt of the approvals referred to in Section 3.3 and the approval of
this Agreement and the Ancillary Agreements to which Western Farm & Cattle
is a party by the shareholders of Western Farm & Cattle, performance by
Western Farm & Cattle of this Agreement and the Ancillary Agreement to
which Western Farm & Cattle is a party have been duly authorized by all
necessary corporate action on the part of Western Farm & Cattle, and this
Agreement has been duly executed and delivered by Western Farm & Cattle.
Other than the approval of this Agreement and the Ancillary Agreements to
which Western Farm & Cattle is a party by the board and shareholders of
Western Farm & Cattle, no proceedings on the part of Western Farm & Cattle
are necessary to authorize the execution, delivery and performance of this
Agreement and the Ancillary Agreements to which Western Farm & Cattle is a
party by Western Farm & Cattle and the consummation by Western Farm &
Cattle of the transactions contemplated hereby and thereby. This Agreement
and the Ancillary Agreements to which Western Farm & Cattle is a party
constitute valid and legally binding agreements of Western Farm & Cattle,
enforceable against Western Farm & Cattle in accordance with their
respective terms, subject to (i) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors rights generally and (ii)
general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
(b) CLCC has all requisite power, authority and legal right to enter
into this Agreement and the Ancillary Agreements to which it is a party and
consummate the transactions contemplated hereby and thereby. The
execution, delivery and, subject to the receipt of the approvals referred
to in Section 3.3 and the approval of this Agreement and the Ancillary
Agreements to which CLCC is a party by the stockholders of CLCC,
performance by CLCC of this Agreement and the Ancillary Agreements to which
CLCC is a party have been duly authorized by all necessary corporate action
on the part of CLCC, and this Agreement has been duly executed and
delivered by CLCC. Other than the approval of this Agreement and the
Ancillary Agreements to which CLCC is a party by the board and shareholders
of CLCC, no proceedings on the part of CLCC are necessary to authorize the
execution, delivery and performance of this Agreement and the Ancillary
Agreements to which CLCC is a party by CLCC and the consummation by CLCC of
the transactions contemplated hereby and thereby. This Agreement and the
Ancillary Agreements to which CLCC is a party constitute valid and legally
binding agreements of CLCC, enforceable against CLCC in accordance with
their respective terms, subject to (i) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now
or hereafter in effect relating to or affecting creditors rights generally
and (ii) general principles of equity (regardless of whether considered in
a proceeding at law or in equity).
(c) N.N. Investors has all requisite power, authority and legal right
to enter into this Agreement and the Ancillary Agreements to which it is a
party and consummate the transactions contemplated hereby and thereby. The
execution, delivery and, subject to the receipt of the approvals referred
to in Section 3.3, performance by N.N. Investors of this Agreement and the
Ancillary Agreements to which N.N. Investors is a party have been duly
authorized by all necessary partnership action on the part of N.N.
Investors, and this Agreement has been duly executed and delivered by N.N.
Investors. No proceedings on the part of N.N. Investors and its general
and limited partners are necessary to authorize the execution, delivery and
performance of this Agreement and the Ancillary Agreements to which N.N.
Investors is a party by N.N. Investors and the consummation by N.N.
Investors of the transactions contemplated hereby and thereby. This
Agreement and the Ancillary Agreement to which N.N. Investors is a party
constitute valid and legally binding agreements of N.N. Investors,
enforceable against N.N. Investors in accordance with their respective
terms, subject to (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors rights generally and (ii) general
principles of equity (regardless of whether considered in a proceeding at
law or in equity).
(d) GenPar has all requisite power, authority and legal right to
enter into this Agreement and the Ancillary Agreements to which it is a
party and consummate the transactions contemplated hereby and thereby. The
execution, delivery and, subject to the receipt of the approvals referred
to in Section 3.3 and approval of this Agreement and the Ancillary
Agreements to which GenPar is a party by the board of directors and sole
shareholder of GenPar, performance by GenPar of this Agreement and the
Ancillary Agreements to which GenPar is a party have been duly authorized
by all necessary corporate action on the part of GenPar, and this Agreement
has been duly executed and delivered by GenPar. Other than the approval of
this Agreement and the Ancillary Agreements to which GenPar is a party by
the board of directors and sole shareholder of GenPar, no proceedings on
the part of GenPar are necessary to authorize the execution, delivery and
performance of this Agreement and the Ancillary Agreements to which GenPar
is a party by GenPar and the consummation by GenPar of the transactions
contemplated hereby and thereby. This Agreement and the Ancillary
Agreements to which GenPar is a party constitute valid and legally binding
agreements of GenPar, enforceable against GenPar in accordance with their
respective terms, subject to (i) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors rights generally and (ii)
general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
(e) FW Ranch has all requisite power, authority and legal right to
enter into this Agreement and the Ancillary Agreements to which it is a
party and consummate the transactions contemplated hereby and thereby. The
execution, delivery and, subject to the receipt of the approvals referred
to in Section 3.3 and the approval of this Agreement and the Ancillary
Agreements to which FW Ranch is a party by the partners of FW Ranch,
performance by FW Ranch of this Agreement and the Ancillary Agreements to
which it is a party have been duly authorized by all necessary partnership
action on the part of FW Ranch, and this Agreement has been duly executed
and delivered by FW Ranch. Other than the approval of this Agreement and
the Ancillary Agreements and the Ancillary Agreements to which FW Ranch is
a party by the partners of FW Ranch, no proceedings on the part of FW Ranch
and its general and limited partners are necessary to authorize the
execution, delivery and performance of this Agreement and the Ancillary
Agreements to which FW Ranch is a party by FW Ranch and the consummation by
FW Ranch of the transactions contemplated hereby and thereby. This
Agreement and the Ancillary Agreements to which FW Ranch is a party
constitute valid and legally binding agreements of FW Ranch, enforceable
against FW Ranch in accordance with their respective terms, subject to (i)
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors rights generally and (ii) general principles of equity
(regardless of whether considered in a proceeding at law or in equity).
3.3 Consents, Approvals, Etc. (a) The execution, delivery and
performance by Western Farm & Cattle, CLCC and N.N. Investors of this
Agreement and the Ancillary Agreements to which such entities are parties
require no consent, approval or action of, filing with or notice to any
Governmental Body or other public or private third party other than (i)
compliance with any applicable requirements of the HSR Act, (ii) filings
and notices not required to be made or given until after the Closing Date,
(iii) filings, at any time, of tax returns, tax reports and tax information
statements, and (iv) any such action or filing as to which the failure to
take or make such action or filing would not, individually or in the
aggregate, have a Material Adverse Effect on WFLP, Western Farm & Cattle,
CLCC or N.N. Investors.
(b) The execution, delivery and performance by GenPar and FW Ranch of
this Agreement and the Ancillary Agreements to which such entities are
parties require no consent, approval or action of, filing with or notice to
any Governmental Body or other public or private third party other than (i)
compliance with any applicable requirements of the HSR Act, (ii) filings
and notices not required to be made or given until after the Closing Date,
(iii) filings, at any time, of tax returns, tax reports and tax information
statements, and (iv) any such action or filing as to which the failure to
take or make such action or filing would not, individually or in the
aggregate, have a Material Adverse Effect on FWRLP, GenPar or FW Ranch.
3.4 Non-Contravention. (a) The execution, delivery and performance
by Western Farm & Cattle, CLCC and N.N. Investors of this Agreement and the
Ancillary Agreements to which such entities are parties do not and will not
(i) violate the WFLP Limited Partnership Agreement, California Farms
Limited Partnership Agreement, the articles of incorporation and bylaws of
Western Farm & Cattle or CLCC or the limited partnership agreement of N.N.
Investors, (ii) assuming compliance with the matters referred to in Section
3.3, violate any applicable Law or Order, (iii) require any consent or
other action by any Person under, violate, conflict with, result in a
breach of, constitute (with or without due notice or lapse of time or both)
a default under, or give rise to any right of termination, cancellation or
acceleration of any right or obligation of WFLP, Western Farm & Cattle or
California Farms or to a loss of any benefit to which WFLP, Western Farm &
Cattle or California Farms is entitled, under any material agreement or
other material instrument binding upon WFLP, Western Farm & Cattle or
California Farms or any of their properties or assets or any material
license, franchise, permit or other similar authorization held by WFLP,
Western Farm & Cattle or California Farms or (iv) result in the creation or
imposition of any material Lien on any asset of WFLP, the WFLP GP Interest
or the WFLP LP Interest.
(b) The execution, delivery and performance by Western Farm & Cattle,
CLCC and N.N. Investors of this Agreement and the Ancillary Agreements to
which such entities are parties do not and will not (i) violate the
articles of incorporation and bylaws of CLCC or the limited partnership
agreement of N.N. Investors; (ii) assuming compliance with the matters
referred to in Section 3.3, violate any applicable Law or Order; (iii)
require any consent or other action by any Person under, violate, conflict
with, result in a breach of, constitute (with or without due notice or
lapse of time or both) a default under, or give rise to any right of
termination, cancellation or acceleration of any right or obligation of
Western Farm & Cattle, California Farms or WFLP or to a loss of any benefit
to which California Farms or WFLP is entitled, under any material agreement
or other material instrument binding upon Western Farm & Cattle, California
Farms or WFLP or any of their properties or assets or any material license,
franchise, permit or other similar authorization held by Western Farm &
Cattle, California Farms or WFLP; or (iv) result in the creation or
imposition of any material Lien on any asset of California Farms, the
California Farms GP Interest or the California Farms LP Interest.
(c) The execution, delivery and performance by GenPar or FW Ranch of
this Agreement and the Ancillary Agreements to which such entities are
parties do not and will not (i) violate the FWRLP Limited Partnership
Agreement, the articles of incorporation and bylaws of GenPar or the
limited partnership agreement of FW Ranch, (ii) assuming compliance with
the matters referred to in Section 3.3, violate any applicable Law or
Order, (iii) require any consent or other action by any Person under,
violate, conflict with, result in a breach of, constitute (with or without
due notice or lapse of time or both) a default under, or give rise to any
right of termination, cancellation or acceleration of any right or
obligation of FWRLP, GenPar or FW Ranch or to a loss of any benefit to
which FWRLP, GenPar or FW Ranch is entitled, under any material agreement
or other material instrument binding upon FWRLP, GenPar or FW Ranch or any
of their properties or assets or any material license, franchise, permit or
other similar authorization held by FWRLP, GenPar or FW Ranch or
(iv) result in the creation or imposition of any material Lien on any asset
of FWRLP, GenPar or FW Ranch, the FWRLP GP Interest or the FWRLP LP
Interest.
3.5 Capitalization. (a) Western Farm & Cattle is the sole general
partner of WFLP and California Farms is the sole limited partner of WFLP.
The equity of WFLP consists of the WFLP GP Interest, which represents a 1%
interest in WFLP, and the WFLP LP Interest, which represents a 99% interest
in WFLP. There are no outstanding interests in WFLP other than the WFLP GP
Interest and the WFLP LP Interest.
(b) All outstanding WFLP Interests have been duly authorized and
validly issued and are fully paid and non-assessable and free of preemptive
rights. Except as set forth in Section 3.5(a), there are no outstanding
(i) interests in WFLP or (ii) options, warrants, calls, rights, preemptive
rights or other contracts, commitments, arrangements or understandings
under which any Person has the right to acquire from WFLP, or WFLP is
obligated to issue, sell or deliver, any WFLP interests. There are no
outstanding obligations of WFLP or any of its Affiliates to repurchase,
redeem or otherwise acquire any interest in WFLP.
(c) Western Farm & Cattle owns the WFLP GP Interest, and California
Farms owns the WFLP LP Interest, in each case free and clear of all Liens.
(d) GenPar is the sole general partner of FWRLP, and FW Ranch is the
sole limited partner of FWRLP. The equity of FWRLP consists of the FWRLP
GP Interest, which represents a 1% interest in FWRLP, and the FWRLP LP
Interest, which represents a 99% interest in FWRLP. There are no
outstanding interests in FWRLP other than the FWRLP GP Interest and the
FWRLP Interest.
(e) All outstanding FWRLP Interests have been duly authorized and
validly issued and are fully paid and non-assessable and free of preemptive
rights. Except as set forth in Section 3.5(d), there are no outstanding
(i) interests in FWRLP or (ii) options, warrants, calls, rights, preemptive
rights or other contracts, commitments, arrangements or understandings
under which any Person has the right to acquire from FWRLP, or FWRLP is
obligated to issue, sell or deliver, any interests in FWRLP. There are no
outstanding obligations of FWRLP or any of its Affiliates to repurchase,
redeem or otherwise acquire any interest in FWRLP.
(f) GenPar owns the FWRLP GP Interest, and FW Ranch owns the FWRLP LP
Interest, in each case free and clear of all Liens.
(g) CLCC is the sole general partner of California Farms, and N.N.
Investors is the sole limited partner of California Farms. The equity of
California Farms consists of the California Farms GP Interest, which
represents a 1% interest in California Farms, and the California Farms LP
Interest, which represents a 99% interest in California Farms. There are
no outstanding interests in California Farms other than the California
Farms GP Interest and the California Farms LP Interest.
(h) All outstanding California Farms Interests have been duly
authorized and validly issued and are fully paid and non-assessable and
free of preemptive rights. Except as set forth in Section 3.5(h), there
are no outstanding (i) interests in California Farms or (ii) options,
warrants, calls, rights, preemptive rights or other contracts, commitments,
arrangements or understandings under which any Person has the right to
acquire from California Farms, or California Farms is obligated to issue,
sell or deliver, any interests in California Farms. There are no
outstanding obligations of California Farms or any of its Affiliates to
repurchase, redeem or otherwise acquire any interest in California Farms.
(i) CLCC owns the California Farms GP Interest, and N.N. Investors
owns the California Farms LP Interest, in each case free and clear of all
Liens.
3.6 All Assets Necessary. (a) WFLP owns, leases or licenses all
material property and assets necessary to carry on its businesses and
operations as presently conducted, and all such assets and properties
(other than as Buyer and Sellers may mutually agree) will be conveyed to
Buyer at the Closing and will as of the Closing permit Buyer to conduct
such businesses and operations in the same manner as such businesses and
operations have been conducted prior to the Closing.
(b) FWRLP owns, leases or licenses all material property and assets
necessary to carry on its businesses and operations as presently conducted,
and all such assets and properties (other than as Buyer and Sellers may
mutually agree) will be conveyed to Buyer at the Closing and will as of the
Closing permit Buyer to conduct such businesses and operations in the same
manner as such businesses and operations have been conducted prior to the
Closing.
(c) California Farms owns, leases or licenses all material property
and assets necessary to carry on its businesses and operations as presently
conducted, and all such assets and properties (other than as Buyer and
Sellers may mutually agree) will be conveyed to Buyer at the Closing and
will as of the Closing permit Buyer to conduct such businesses and
operations in the same manner as such businesses and operations have been
conducted prior to the Closing.
3.7 Subsidiaries. WFLP does not have any Subsidiaries. FWRLP does
not have any Subsidiaries. California Farms does not have any Subsidiaries
other than WFLP.
3.8 Financial Statements; Books and Records. (a) The pro forma
restated combined financial statements of WFLP (as nominee for California
Farms) and FWRLP for the years ended December 31, 1996 and 1995, copies of
which have been furnished to Buyer, have been prepared to reflect the
assets and continuing liabilities of WFLP and its property and leasing
operations after eliminating cattle operations and non-recurring and
certain discretionary expenses not related to the leasing operations. Such
pro forma restated combined financial statements, subject to such pro forma
adjustments and certain assumptions described therein, have been prepared
on a consistent basis during the periods involved and present fairly, in
all material respects, the restated pro forma combined financial position
of the property of WFLP (as nominee for California Farms) and FWRLP as of
December 31, 1996 and 1995 and the results of operations of WFLP (as
nominee for California Farms) and FWRLP for the years ended December 31,
1996 and 1995. The books of account, record books, minutes books and other
partnership records of WFLP are in all material respects complete and
correct and have been maintained in accordance with good business
practices.
(b) The projected pro forma combined financial statements of WFLP (as
nominee for California Farms) and FWRLP for the eight months ended August
31, 1997, copies of which have been furnished to Buyer, have been prepared
to reflect the assets and continuing liabilities of WFLP and FWRLP and
their property and leasing operations after eliminating cattle operations
and non-recurring and certain discretionary expenses not relating to the
leasing operations. Such projected pro forma restated combined financial
statements, subject to such pro forma adjustments and certain assumptions
described therein, present on the basis of the assumptions stated, the
projected pro forma combined financial position of WFLP (as nominee for
California Farms) and FWRLP at August 31, 1997 and the projected pro forma
combined income and expenses of the property and leasing operations of such
entities for the eight months ended August 31, 1997.
3.9 Absence of Certain Changes. (a) Except as disclosed in Schedule
3.9, since January 1, 1997, the businesses of WFLP and California Farms
have been conducted in the ordinary course consistent with past practices,
and neither WFLP nor California Farms has taken or permitted to occur any
action which, if taken after the date hereof, would constitute a breach of
Section 5.1.
(b) Since its formation, the business of FWRLP has been conducted in
the ordinary course, and FWRLP has not taken or permitted to occur any
action which, if taken after the date hereof, would constitute a breach of
Section 5.1.
3.10 Undisclosed Liabilities. (a) There are no liabilities of WFLP,
California Farms or FWRLP of any kind whatsoever, whether accrued,
contingent, absolute, determined or otherwise, other than:
(i) liabilities provided for in the pro forma restated combined
balance sheet of WFLP (as nominee for California Farms) and FWRLP as of
December 31, 1996;
(ii) liabilities disclosed on Schedule 3.10(a);
(iii) liabilities incurred since December 31, 1996 in the
ordinary course of business consistent with past practice and in amounts
and on terms consistent with past practice; and
(iv) other undisclosed liabilities that are not individually or
in the aggregate material to WFLP, California Farms or FWRLP.
(b) Except as disclosed in Schedule 3.10(b), neither WFLP, nor
California Farms nor FWRLP has entered into or invested in any derivative
financial instruments.
3.11 Material Contracts. (a) Except as disclosed in Schedule 3.11 or
Schedule 3.14(a), as of the date hereof, neither WFLP, nor California Farms
nor FWRLP is a party to or bound by:
(i) any lease of real property where WFLP, California Farms or
FWRLP is tenant (A) providing for annual base rentals of $50,000 or more,
(B) expiring after December 31, 2002 or (C) where WFLP, California Farms or
FWRLP or any of their respective Affiliates holds an equity or fee interest
in such real property;
(ii) any agreement for the purchase of materials, supplies,
goods, services, equipment or other assets that provides for either (A)
annual payments by WFLP, California Farms or FWRLP of $50,000 or more or
(B) aggregate required payments by WFLP, California Farms or FWRLP of
$500,000 or more;
(iii) any limited partnership, joint venture or other
unincorporated business organization or similar arrangement or agreement in
which WFLP, California Farms or FWRLP serves as a general partner or
otherwise has unlimited liability or for which WFLP, California Farms or
FWRLP would be subject to further mandatory funding, contribution or loss
sharing obligations;
(iv) any agreement relating to the acquisition or disposition of
any business (whether by merger, sale of stock, sale of assets or
otherwise);
(v) any agreement relating to indebtedness for borrowed money or
any guarantee or similar agreement or arrangement relating thereto;
(vi) any contractual commitment to make any loan, advance or
capital contribution to, or investment in, any other Person in excess of
$50,000;
(vii) any license, franchise or similar agreement material to
WFLP, California Farms or FWRLP;
(viii) any agency, dealer, sales representative, marketing or
other similar agreement material to WFLP, California Farms or FWRLP;
(ix) any agreement that restricts or prohibits WFLP, California
Farms or FWRLP from competing with any Person in any line of business or
from competing in, engaging in or entering into any line of business in any
area and which would so restrict or prohibit WFLP, California Farms or
FWRLP after the Closing Date;
(x) any agreement material to the conduct of the business of
WFLP or FRWLP containing change in control or similar provisions relating
to change in control of WFLP, California Farms or FWRLP;
(xi) any agreements (other than their respective limited
partnership agreements and any indemnification provisions in the Loan
Documents with Metropolitan Life) material to WFLP, California Farms or
FWRLP pursuant to which WFLP, California Farms or FWRLP is obligated to
indemnify any other Person; or
(xii) any agreement with any of WFLP s, California Farms or
FWRLP s Affiliates.
(b) WFLP, California Farms and FWRLP have heretofore furnished or
made available to Buyer complete and correct copies of the contracts,
agreements and instruments listed on Schedule 3.11, each as amended or
modified to the date hereof, including any waivers with respect thereto
(the Significant Agreements ). Except as specifically disclosed on
Schedule 3.11, and except to the extent not material, individually or in
the aggregate, to WFLP, California Farms or FWRLP: (i) each of the
Significant Agreements is in full force and effect and enforceable in
accordance with its terms, subject to (A) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now
or hereafter in effect relating to or affecting creditors rights generally
and (B) general principles of equity (regardless of whether considered in a
proceeding at law or in equity); (ii) neither Sellers, nor WFLP, nor
California Farms, nor FWRLP have received any notice (written or oral) of
cancellation or termination of, or any expression or indication of an
intention or desire to cancel or terminate, any of the Significant
Agreements; (iii) no Significant Agreement is the subject of, or, to the
Knowledge of Sellers, has been threatened to be made the subject of, any
arbitration, suit or other legal proceeding; and (iv) there exists no
material event of default or occurrence, condition or act on the part of
WFLP, California Farms or FWRLP or, to the Knowledge of Sellers, on the
part of any other party to the Significant Agreements that constitutes or
would constitute (with notice or lapse of time or both) a material breach
or violation of or material default in the performance or observance of any
term or provision of any of the Significant Agreements.
(c) Except as set forth on Schedule 3.11 or Schedule 3.14(a), there
are no transactions, commitments or obligations between WFLP, California
Farms or FWRLP and any beneficial owner, directly or indirectly, of any
general partner interest in WFLP, California Farms or FWRLP or any limited
partner interest of five percent or more in WFLP, California Farms or FWRLP
or any of such beneficial owner's Affiliates which will continue after the
Closing. In addition, except as set forth on Schedule 3.11, none of the
matters listed on Schedule 3.11 will provide to WFLP, California Farms or
FWRLP assets, income, financing or business on a basis significantly more
or less favorable than that available from unaffiliated Persons. Schedule
3.11 (i) states the amounts due from WFLP, California Farms or FWRLP to any
beneficial owner, directly or indirectly, of any general partner interest
in WFLP, California Farms or FWRLP or any limited partner interest of five
percent or more in WFLP, California Farms or FWRLP or any of such
beneficial owner's Affiliates, (ii) describes the transactions out of which
such amounts due arose and (iii) describes any interest of any beneficial
owner, directly or indirectly, of any general partner interest in WFLP,
California Farms or FWRLP or any limited partner interest of five percent
or more in WFLP, California Farms or FWRLP or any of such beneficial
owner's affiliates in any supplier or customer of, or any other entity that
will have business dealings with WFLP, California Farms or FWRLP after the
Closing. To the knowledge of WFLP, California Farms or FWRLP neither any
beneficial owner, directly or indirectly, of any general partner interest
in WFLP, California Farms or FWRLP or any limited partner interest of five
percent or more in WFLP, California Farms or FWRLP or any of such
beneficial owner's Affiliates, nor any officer or key employee (each key
employee being listed on Schedule 3.11 to this Agreement) of WFLP,
California Farms or FWRLP possesses, directly or indirectly, any ownership
interest in, or is a director, officer, employee or consultant to, any
corporation or other business which is a client, supplier, customer,
lessor, tenant or competitor of WFLP, California Farms or FWRLP.
3.12 Litigation. Except as disclosed on Schedule 3.12, there is no
action, suit, arbitration, investigation or proceeding pending against, or,
to the Knowledge of Sellers, threatened against, or affecting the
properties, real, personal or other, of WFLP, California Farms or FWRLP
before any Governmental Body and, to the Knowledge of Sellers, there is no
reasonable basis for any such claim in which the damages alleged or sought
exceeds or could reasonably be expected to exceed $50,000 or which seeks or
could reasonably be expected to result in non-monetary relief, other than
non-monetary relief that would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect on WFLP, California
Farms or FWRLP. As of the date hereof and as of no other date, there is no
action, suit, investigation or proceeding pending against, or, to the
Knowledge of Sellers, threatened against, or affecting the properties of,
WFLP, California Farms or FWRLP before any Governmental Body which
challenges or seeks to prevent the transactions contemplated hereby.
Neither WFLP nor California Farms nor FWRLP nor any of their respective
properties is subject to any Order which would prevent or delay the
consummation of the transactions contemplated hereby or which could
reasonably be expected to have a Material Adverse Effect on WFLP,
California Farms, FWRLP or Buyer.
3.13 Compliance with Laws. To the Knowledge of Sellers, except as
disclosed on Schedule 3.13, WFLP and California Farms are and have been at
all times since January 1, 1996 (and FWRLP is and since its formation has
been) in compliance with all applicable material Laws and Orders, except to
the extent that failure to be in compliance would not have a Material
Adverse Effect on WFLP, California Farms or FWRLP. To the Knowledge of
Sellers, no investigation by any Governmental Body of WFLP, California
Farms or FWRLP is pending or threatened, other than, in each case, those
the outcome of which, as far as reasonably can be foreseen, will not have a
Material Adverse Effect on WFLP or FWRLP. All Properties held by WFLP,
California Farms and FWRLP and the Water Rights associated therewith since
January 1, 1996 have been held and operated in compliance with all
applicable Laws and Orders, except to the extent that failure to be in
compliance would not have a Material Adverse Effect.
3.14 Properties. (a) Title and Certain Other Matters. Schedule
3.14(a) (the Property Schedule ) lists all of WFLP s, California Farms
and FWRLP s Properties, except as may be otherwise specifically indicated
on the Property Schedule with respect to each Property.
(i) WFLP, California Farms or FWRLP is the owner of, and has
good and marketable (or, in the case of Properties located in Texas, good
and indefeasible) fee title to, the Property and has full right, power, and
authority to contract to convey and to convey the Property without the
joinder or consent of any other person or entity. Except as may have been
disclosed in the title policies and/or title reports furnished to Buyer, to
the Knowledge of Sellers, there are no material leases, licenses,
encumbrances, or other agreements, liens or rights affecting the Property
that would extend beyond the Closing.
(ii) There are no pending, threatened or contemplated
condemnation or similar proceedings, claims, governmental investigations,
litigations, or other proceedings affecting the Property or any portion
thereof.
(iii) There exist no notices of violations that are uncured
which have been served by any Governmental Body or authority of violations
of Law that would affect the Property or any portion thereof or its
proposed development or use.
(iv) To the Knowledge of Sellers, there exist no material adverse
facts relating to the physical condition of the Property or any portion
thereof, including, without limitation, adverse soil conditions, and
contamination by Hazardous Materials.
(v) To the Knowledge of Sellers, the parcels comprising the
Property located in California are legal parcels in compliance with the
California Subdivision Map Act and all applicable local subdivision
ordinances.
(vi) Subject to pro-ration for taxes and other assessments, there
are no outstanding obligations to any governmental authorities, utility
companies, school districts, or other governmental agencies which would
apply to Buyer or its successors or assigns.
(b) Other Matters. The Property Schedule accurately sets forth for
each Property the date of acquisition by WFLP, California Farms or FWLRP s
predecessor in title and the total price paid for and acreage of the
Property. Except as may be otherwise specifically set forth on the
Property Schedule:
(i) Neither Sellers, nor WFLP, nor California Farms, nor FWRLP
has received any notice alleging, or has any knowledge, that the current
use of any of the Properties does or will constitute a violation of, any of
the easements, covenants, conditions, agreements, restrictions, liens, or
other encumbrances or title matters ("Encumbrances") affecting any of the
Properties, and all consents required therefor under those Encumbrances, if
any, have been obtained and not revoked. To the Knowledge of Sellers,
there are no defaults under any of the Encumbrances by any party thereto
and no condition exists that, with notice or lapse of time or both, would
constitute a default thereunder. The Encumbrances do not as a whole,
prevent the practical use of the Property for agriculture or as currently
used. The benefits and obligations of the Encumbrances shall continue to
enure to WFLP and FWRLP after the Closing.
(ii) Since the date of acquisition of each of the Properties by
WFLP, California Farms (if any) or FWRLP s predecessor in title, there have
been no exploration, drilling, mining, or other investigation or activities
on the Property in respect of any oil, gas, hydrocarbons, minerals,
geothermal energy or resources, or the like.
(iii) Since the date of acquisition of each of the Properties
by WFLP, California Farms (if any) or FWRLP s predecessor in title, there
has been no challenge to the title of WFLP, California Farms or FWRLP to
the Property or any portion of the Property or any easement or other
interest or right appurtenant to the Property, and WFLP, California Farms
or FWRLP has been in exclusive possession of the Property, subject only to
the rights of tenants under the Leases.
(c) Taxes. The Property Schedule accurately sets forth, for each of
the Properties, (i) the tax lot(s) or other tax-map designation(s)
comprising the Property, (ii) the current assessed valuation for each tax
lot comprising the Property, and (iii) the total real estate taxes and
assessments and personal property taxes and assessment of whatever nature,
payable in respect of the Property for the current fiscal year. Except as
set forth on the Property Schedule, there are no tax abatements or
exemptions affecting any of the Properties. Each of the Properties
identified on the Property Schedule constitutes a separate and distinct lot
or parcel, or lots and parcels, for purposes of real estate taxation, and
no part of any of the Properties is part of a tax lot or parcel with any
property not part of the Property. No special assessments have been
levied, or to the Knowledge of Sellers, are contemplated or pending,
against any such Property or any part thereof.
(d) Leases. Attached to this Agreement as Schedule 3.14(d) (the
Rent Roll ) is an accurate schedule of all existing leases, tenancies,
licenses or other occupancy or use agreements or arrangements affecting any
of the Properties shown on the Property Schedule (each, a Lease ),
accurately setting forth, among other things, the name of the tenant
thereunder, the commencement and expiration date of the Lease, whether
there is any right of renewal or extension of the Lease, and, if so,
whether such right has been exercised and the outside date to which the
term maybe extended, the rent payable under the Lease and the date to which
rent has been paid, and any security received in connection with the Lease.
Except as may be otherwise specifically set forth on the Rent Roll, for
each Lease:
(i) the term of each has commenced and the tenant thereunder is
occupying or otherwise has taken possession of the premises leased to it
and has commenced the payment of rent;
(ii) all of the landlord's material covenants and obligations
thereunder accrued to date have been performed;
(iii) no construction, alteration, decoration, or other work
remains to be performed or paid for thereunder by the landlord, and all
allowances or other sums, if any, to be paid to any tenants has been paid;
(iv) there has been no material default, nor any claim of
default, on the part of any party thereto, and to the Knowledge of Sellers,
no event has occurred that, with notice or lapse of time or both, would
constitute a default by any party thereto;
(v) no rent, additional rent, or other charge has been paid for
more than three months in advance;
(vi) no tenant has exercised any option granted to it under its
Lease to cancel or terminate its Lease or shorten the term thereof (unless
such tenant or another tenant has entered into a new lease replacing the
terminated lease), renew or extend the term thereof, or lease additional
property;
(vii) no tenant has any option to purchase, or right of
refusal, right of first offer, or other preemptive right with respect to
the purchase of the Property or any part thereof; and
(viii) there are no leasing, broker's, or finder's commissions
or compensations of any kind that are unpaid although due and payable or
due or to become due after the Closing with respect to any of the Leases,
with respect to the primary terms of any such Leases.
(a)Insurance. Neither Sellers, nor WFLP, nor California Farms nor
FWRLP has received (or has any knowledge of) any notice or request from any
insurance company that has issued insurance in respect of the Property or
any board of fire underwriters (or organization exercising similar
functions) requiring the performance of any work in respect of the Property
or any part thereof, or canceling or threatening to cancel any existing
insurance policies pertaining to the Property.
(b)To the Knowledge of Sellers, the map relating to the California
Properties delivered by Sellers to Buyer generally depicts the location of
the Properties of WFLP and California Farms in all material respects. To
the Knowledge of Sellers, the surveys that were ordered by Sellers or their
Affiliates in connection with the purchase of such Properties (which were
delivered to Buyer by Sellers) were prepared in accordance with the
standards for a Category 1B, Rural, Condition IV survey as specified by the
latest edition of the Manual of Practice for Land Surveying.
3.15 Water Rights. This Section 3.15 addresses Water Rights in
California and Texas.
(a) California Properties. With respect to the real properties
situated in California ( California Properties ):
(i) By virtue of WFLP s fee ownership of approximately 41,868
acres of land in Imperial County, California as set forth on the Property
Schedule, a11 of which land is located within the Imperial Irrigation
District (the IID ) and within the irrigation service area of the IID,
WFLP, as owner of the California Properties, is entitled to use water
diverted by the IID from the Colorado River and distributed to the
California Properties through the facilities of the IID (the IID Water )
for reasonable and beneficial use, subject only to the availability to the
IID of Colorado River water under existing IID title, rights, contracts,
and Laws and Orders.
(i)To the Knowledge of Sellers, each of the California
Properties, during its period of ownership by WFLP, has been used solely
for agricultural purposes, and in connection with those agricultura1
activities, has received IID Water from the IID. Schedule 3.15 (a)(ii)
accurately sets forth the annual consumptive water usage of IID Water for
the respective California Properties for the periods shown on that
schedule. Those usage amounts are based on information provided to WFLP by
the IID, and to the Knowledge of Sellers, reflect, in all material
respects, the records of the IID.
(ii)To the Knowledge of Sellers, the annua1 allocation of
Colorado River water to WFLP s California Properties by the IID depends
upon the amount of Colorado River water made available to IID under its
1932 Contract with the United States Department of the Interior, Bureau of
Reclamation (the Bureau ), as more fully described in Schedule
3.15(a)(iii) attached.
(iv) Were there to be a drought or other condition that would
reduce the amount of Colorado River water available to the IID, such that
landowners within the IID would not be entitled to receive all water
requested by them, the owner(s) of the California Properties (WFLP or any
subsequent owner) would be entitled to receive its pro rata share of water
available to the IID as determined by the IID under applicable Law.
(v) To the Knowledge of Sellers, WFLP has never been denied
delivery to the respective California Properties of the full amount of IID
Water requested by it for the irrigation of crops grown on the California
Properties, or by agents or tenants on behalf of WFLP. To the Knowledge of
Sellers, no Person has contested, challenged, or otherwise called into
question WFLP'S right, as owner of the California Properties, to the
receipt and use of all IID Water requested by it to irrigate the California
Properties,
(i)WFLP has at a11 times during its ownership of the California
Properties complied in all material respects with the rules and regulations
promulgated by the IID, and with any other applicable Law or Order, for the
distribution and use of water from the Colorado River. Without limiting
the generality of the foregoing, to the Knowledge of Sellers, WFLP has at
all times during its ownership of the California Properties duly and
properly filed, and kept in ful1 force and effect, all necessary
applications for the delivery of IID Water to the California Properties,
including, without limitation, for each of the Ca1ifornia Properties, a
"Certificate of Ownership and Authorization of Agent or Tenant," true and
complete copies of which have been furnished to Buyer.
(vii) Subject only to and in accordance with applicable
regulations and procedures that may be established by the IID or the Bureau
and other applicable Laws and Orders, without the consent of any other
Person, WFLP, as owner of the California Properties, has been advised and
believes in good faith that it has the right to transfer, through an IID
program, IID Water to any California Person inside or outside the IID (it
being recognized that thus far no specific allocation of IID water on a
property-by-property basis has been established by the IID, since IID Water
for reasonable and beneficia1 use for agriculture has been readily
available within the IID, as requested by the landowners). WFLP has not
sold, assigned, or otherwise transferred, or agreed or attempted to do so,
that right (nor any title to or interest in the IID Water). WFLP has been
advised and in good faith believes that, under applicable Law, the Bureau
will approve an intrastate transfer of Colorado River water conserved by
IID landowners.
(i)In connection with all transfers of IID Water by WFLP, as
owner of the California Properties, WFLP has been advised and believes in
good faith that it will receive the proceeds from the sale or other
transfer of IID Water, reduced by at present indeterminable
non-discriminatory Taxes, costs, and charges imposed in connection with the
transfer. Neither WFLP nor any of its Affiliates has received any opinion
of counsel retained by WFLP, or by any Affiliate of WFLP or any of the
Sellers, that concludes that there is any substantial likelihood that WFLP
could not sell or otherwise transfer its IID Water through a program
established by the IID, and receive the proceeds, net of Taxes, costs and
charges, from such sales or other transfers.
(ix) Sellers are not aware of any policy of the IID that would
suggest that the IID would not permit the sale or other transfer by the IID
of Colorado River water outside the service area of IID, or would not
permit landowners, including WFLP or its successor-in-interest, to receive
the proceeds, net of Taxes, costs and charges, from the sale or other
transfer of IID Water to Persons outside the IID. WFLP has a good faith
belief, after due inquiry, that WFLP, through the IID, will be able to
market and sell IID Water and receive the proceeds therefrom, net of Taxes,
costs and charges.
(i)To the Knowledge of Sellers, there exist no notices, cured or
not, which have been issued by the IID or any other Person during WFLP's
ownership of the California Properties, which could materially affect the
entitlement to or delivery of IID Water to WFLP's California Properties or
WFLP's entitlement to sell or otherwise transfer IID Water in conjunction
within IID and Bureau policies and procedures and other applicable Laws and
Orders.
(xi) All rights of landowners within the IID to water from the
IID are appurtenant to the land and run with the land, and cannot be
severed from the land. Accordingly, any reservation of water or rights to
water in deeds of the California Properties to WFLP or in any prior deeds
or other conveyances of the California Properties would not affect the
rights of WFLP, as owner of the California Properties, to IID Water.
(b) Texas Properties. With respect to the real properties situated
in Texas ( Texas Properties ):
(i)By virtue of FWRLP s fee ownership of approximately 4,549
acres of land in Texas as set forth on the Property Schedule, all of which
land is located above the body of underground water known as the Xxxxxxx
Aquifer, FWRLP, as owner of the Texas Properties, is and will after the
Closing be entitled to draw water from the Xxxxxxx Aquifer (the EA Water )
annually for beneficial use, subject to applicable Law or Orders.
(i)Since acquisition of the Texas Properties by FWRLP or any of
its Affiliates (or nominees for any of its Affiliates), EA Water has been
drawn for agricultural purposes at the Texas Properties on an interim basis
at historical levels, based upon authorization contained in, and in
accordance with, applicable Law.
(ii)FWRLP, or its predecessors in interest, has applied to
receive Initial Regular Permits issued by the Xxxxxxx Aquifer Authority
(the EA Authority ) and all other licenses, certificates, approvals, or
other Permits required by the Xxxxxxx Aquifer Authority Act, the procedures
of the EA Authority, or any other Governmental Body, so as to establish and
perfect FWRLP s right and entitlement, from and after the Closing, to the
EA Water by virtue of the ownership of the Texas Properties.
(iii)Without limiting the generality of the foregoing, FWRLP or
its predecessors in interest has filed on a timely basis and in proper form
and in compliance with all applicable Law and Orders, on behalf of the
owner(s) of the Texas Properties and in a manner that will accrue to the
benefit of FWRLP, from and after the Closing, all applications and
declarations required by the EA Authority for the issuance of Initial
Regular Permits, as authorized by Section 1.16 of the Xxxxxxx Aquifer
Authority Act, and for the interim withdrawal and beneficial use of
groundwater, pursuant to Section 1.17 of the Xxxxxxx Aquifer Authority Act,
based on the historical use of water from the Xxxxxxx Aquifer. No uncured
notice specific to FWRLP s application has been received, from the EA
Authority or any other Governmental Body, to the effect that any such
application is deficient. The application amounts of water for the
respective Texas Properties, as well as historical usages of EA Water at
the respective Texas Properties (on an acreage basis), are set forth on the
Property Schedule.
(iv)To the Knowledge of Sellers, FWRLP has never been denied
delivery to the respective Texas Properties of the full amount of EA water
requested by it or by agents or tenants on behalf of FWRLP.
(v)Subject to and in accordance with any applicable regulations
and procedures of the EA Authority and Laws or Orders, to the Knowledge of
Sellers, FWRLP will have the right to use and/or transfer the EA Water to
any Person; neither that right, nor any title to or interest in the EA
Water, has been sold, assigned, or otherwise transferred or encumbered by
FWRLP, except pursuant to the farming leases for the Texas Properties for
use by tenants in agricultural operations at the respective Texas
Properties only during the terms of the respective farming leases.
(vi)In connection with all transfers of EA Water, FWRLP, as owner
of the Texas Properties, from and after the Closing will have the right to
receive all proceeds from the sale or other transfer of that EA Water,
subject only to Taxes, costs and charges.
(vii)The owner(s) of the Texas Properties affiliated with Sellers
have at all times during their ownership of the Texas Properties complied
in all material respects with the rules and regulations promulgated by the
EA Authority for the withdrawing, distribution, and use of water from the
Xxxxxxx Aquifer (the EA Water), and complied with any other applicable
provisions of any Law or Order concerning the EA Water.
(ix) To the Knowledge of Sellers, there exist no uncured notices
specific to the Texas Properties which have been issued by the EA Authority
that could materially affect the eligibility of FWRLP to qualify for the
issuance and thereafter the continuing effectiveness of Initial Regular
Permits, as authorized by Section 1.16 of the Xxxxxxx Aquifer Authority
Act, and all other Permits that may be required under any applicable Law or
Order, for the annual withdrawal and beneficial use of groundwater pursuant
to the Xxxxxxx Aquifer Authority Act based on the historical use of water
from the Xxxxxxx Aquifer, or any right to transfer EA Water in conjunction
with any applicable EA Authority policies and procedures or any other
applicable Law or Order.
3.16 Licenses and Permits; Regulatory Matters. (a) WFLP, California
Farms or FWRLP holds or has received all licenses, franchises, exemptions,
orders, approvals, permits or other similar authorizations (the Permits )
necessary for the ownership and conduct of their respective businesses or
the operation of the Properties of WFLP, California Farms or FWRLP in the
manner now conducted or to be conducted immediately prior to the Closing in
each of the jurisdictions in which WFLP, California Farms or FWRLP conducts
or operates their respective businesses, and such Permits are in full force
and effect except where any failure to hold any Permit or any failure of
any Permit to be in full force and effect would not, individually or in the
aggregate, materially impair the ability of WFLP, California Farms or FWRLP
to conduct their respective businesses. No material violations exist in
respect of any Permit of WFLP, California Farms or FWRLP, and no proceeding
or investigation is pending or, to the Knowledge of Sellers, threatened,
that would be reasonably likely to result in the suspension of, revocation
of or material limitation or restriction on any Permit and, to the
Knowledge of Sellers, there is no reasonable basis for the assertion of any
such violation or the institution of any such proceeding. Except to the
extent that failure to file or comply would not reasonably be expected to
have a Material Adverse Effect on WFLP, California Farms or FWRLP, WFLP,
California Farms and FWRLP have filed all reports, statements, documents,
registrations, filings or submissions required to be filed by any of them
with any applicable Governmental Body, and all such reports, statements,
documents, registrations, filings and submissions complied in all material
respects with applicable Law in effect when filed and no material
deficiencies have been asserted by any such Governmental Body with respect
to such reports, statements, documents, registrations, filings or
submissions that have not been satisfied.
3.17 [Reserved]
3.18 Environmental Matters. (a) Except as would not, individually or
in the aggregate, have a Material Adverse Effect on WFLP, California Farms
or FWRLP: (i) WFLP, California Farms and FWRLP and their respective
Properties are each in compliance with all applicable Environmental Laws
and have all Governmental Approvals required for their operations and their
Properties necessary to conduct WFLP s, California Farms or FWRLP s
current operations, and WFLP, California Farms or FWRLP has taken or will
prior to the Closing take all necessary actions to ensure the
transferability of all Governmental Approvals which are required with
respect to its operations and its Properties or use of its Water Rights
under any Environmental Law; (ii) to the Knowledge of Sellers, there are no
pending or threatened claims against WFLP, California Farms or FWRLP or
their respective Properties alleging a violation of any Environmental Laws;
(iii) to the Knowledge of Sellers, there are no persons who have caused any
release, threatened release, or disposal of any Hazardous Material on, onto
or from the Properties that has resulted in or could result in a violation
of any Environmental Law, the creation of liabilities or obligations under
any Environmental Law or material diminution in value of the Properties;
(iv) there are no Properties that are adversely affected by any release,
threatened release, or disposal of a Hazardous Material originating or
emanating from any other property, nor were any Hazardous Materials
manufactured, used, generated, stored, treated, transported, disposed of,
released, or otherwise managed at any of the Properties; (v) there is no
liability for response or corrective action, natural resources damage, or
any other harm pursuant to any Environmental Law at any of the Properties
or at any other property and neither Sellers, nor WFLP, nor California
Farms, nor FWRLP has received any written or oral request for information
under Section 104 of the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Sec. 9604) or comparable state or local laws;
(vi) the Properties are not subject to any restrictions (except for
requirements not to waste water), or imminent restrictions, on the
ownership, occupancy, use or transferability of the Properties in
connection with any (A) Environmental Law, or (B) release, threatened
release, or disposal of any Hazardous Material; and (vii) Sellers have
provided to Buyer any and all reports, records, data, site assessments or
any other documents in their possession with respect to the Properties
concerning Hazardous Materials and compliance with any Environmental Laws.
3.19 Labor and Employee Benefit Matters. Neither WFLP, nor California
Farms, nor FWRLP maintains any Benefit Plan.
3.20 Information Supplied. Neither the information supplied or to be
supplied by or on behalf of Sellers, WFLP, California Farms or FWRLP for
inclusion in any document to be filed by Buyer with the SEC or any self-
regulatory organization in connection with the Acquisition will, on the
date of its filing or effectiveness, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
3.21 No Broker. No broker, finder, agent or similar intermediary has
acted for or on behalf of WFLP, California Farms or FWRLP in connection
with this Agreement or the transactions contemplated hereby, and no other
broker, finder, agent or similar intermediary is entitled to any brokers ,
finders agents or similar fee or other commission in connection therewith
based on any agreement, arrangement or understanding with WFLP, California
Farms or FWRLP or any action taken by WFLP, California Farms or FWRLP.
3.22 Insurance. Each of WFLP, California Farms and FWRLP has, and
will make provision through the Closing Date for, insurance coverage on its
property and assets customary for similar businesses and consistent with
past practice.
3.23 Not Misleading. To the Knowledge of Sellers, none of the
representations and warranties of Sellers in this Agreement or in any
certificate or schedule delivered pursuant hereto or in connection with the
transactions contemplated hereby, contain, or will contain at the time made
or delivered, any untrue statement of a material fact or, omit to state a
material fact necessary in order to make the statements herein and therein,
in light of the circumstances in which they are made, not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as of the date hereof and as
of the Closing Date (but as of no other dates unless expressly so stated)
that:
4.1 Corporate Existence and Power. Buyer (i) has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of Delaware, (ii) has all corporate powers required to own,
lease or operate its properties and to carry on its business as now
conducted and (iii) is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect on Buyer. Buyer has heretofore delivered or
made available to Sellers true and complete copies of the certificate of
incorporation and bylaws of Buyer as in effect on the date hereof. Buyer
is not in violation of any of the provisions of its articles of
incorporation or bylaws.
4.2 Corporate Authorization. Buyer has all requisite power,
authority and legal right to enter into this Agreement and the Ancillary
Agreements and consummate the transactions contemplated hereby. The
execution, delivery and, subject to the receipt of the approvals referred
to in Sections 4.3 and 10.2(d), performance by Buyer of this Agreement and
the Ancillary Agreements to which Buyer is a party has been duly authorized
by all necessary corporate action on the part of Buyer and this Agreement
has been duly executed and delivered by Buyer. This Agreement and the
Ancillary Agreements to which Buyer is a party constitute valid and legally
binding agreements of Buyer, enforceable against Buyer in accordance with
their respective terms, subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors rights
generally and (ii) general principles of equity (regardless of whether
considered in a proceeding at law or in equity).
4.3 Consents, Approvals, Etc. The execution, delivery and
performance by Buyer of this Agreement and the Ancillary Agreements to
which Buyer is a party require no consent, approval or action of, filing
with or notice to any Governmental Body or other public or private third
party other than (i) compliance with any applicable requirements of the HSR
Act, (ii) filings and notices not required to be made or given until after
the Closing Date, (iii) filings, at any time, of tax returns, tax reports
and tax information statements, (iv) any such action or filing as to which
the failure to take such action or filing would not, individually or in the
aggregate, have a Material Adverse Effect on the ability of Buyer to
consummate the Acquisition, and (v) compliance with any applicable
requirements under the listing rules of the New York Stock Exchange.
4.4 Non-Contravention. The execution, delivery and performance by
Buyer of this Agreement and the Ancillary Agreements do not and will not
(i) violate the certificate of incorporation or bylaws of Buyer,
(ii) assuming compliance with the matters referred to in Section 4.3,
violate any applicable Law or Order, (iii) require any consent or other
action by any Person under, violate, conflict with, result in a breach of,
constitute (with or without due notice or lapse of time or both) a default
under, or give rise to any right of termination, cancellation or
acceleration of any right or obligation of Buyer or to a loss of any
benefit to which Buyer is entitled under, any material agreement or other
material instrument binding upon Buyer or any of its properties or assets
or any material license, franchise, permit or other similar authorization
held by Buyer, or (iv) result in the creation or imposition of any material
Lien on any asset of Buyer.
4.5 Capitalization. (a) As of June 23, 1997, the authorized capital
stock of Buyer consisted of 150,000,000 shares of Buyer Stock, of which
80,377,604 shares are issued and outstanding, and 3,000,000 shares of
Preferred Stock, of which no shares are issued and outstanding.
(b) All outstanding shares of Buyer Stock have been duly authorized
and validly issued and are fully paid and non-assessable and free of
preemptive rights, except for those preemptive rights disclosed in
agreements described on Schedule 6.4(d) to the Governance Agreement. At
the Closing, Buyer will have reserved 1,200,000 shares of Buyer Stock for
issuance upon exercise of the Warrants. The shares of Buyer Stock to be
issued in accordance with Article 2 hereof and issuable upon exercise of
Warrants have been duly authorized and will be validly issued, fully paid
and non-assessable. There are no outstanding obligations of Buyer or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any Buyer
Stock.
4.6 SEC Filings; Financial Statements; Books and Records. Buyer has
filed all forms, reports and documents required to be filed with the SEC
and has previously furnished to Sellers true and complete copies of its
Annual Report on Form 10-K for the year ended March 31, 1997 and all
material filings made by Buyer under the Exchange Act since the end of its
most recent fiscal year (collectively, the SEC Reports ). Each filing,
when filed, complied in all material respects with the requirements of the
Exchange Act and the applicable rules and regulations thereunder and none
of such SEC Reports contained, as of their respective dates, any untrue
statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading.
4.7 No Broker. No broker, finder, agent or similar intermediary has
acted for or on behalf of Buyer in connection with this Agreement or the
transactions contemplated hereby, and no other broker, finder, agent or
similar intermediary is entitled to any brokers , finders , agents or
similar fee or other commission in connection therewith based on any
agreement, arrangement or understanding with Buyer or any action taken by
Buyer.
ARTICLE 5
COVENANTS OF SELLERS
5.1 Conduct. (a) Sellers agree that, except as otherwise expressly
provided in this Agreement, during the period from the date hereof to the
Closing, WFLP, California Farms and FWRLP will: (i) conduct their
operations according to their ordinary course of business consistent with
past practice; and (ii) use commercially reasonable efforts to (A) preserve
intact their business organizations; (B) keep available the services of
their officers and employees, if any; and (C) maintain existing
relationships with tenants, agents, licensors, licensees, suppliers,
contractors, customers and others having business relationships with them
to the end that their goodwill and ongoing business and operations shall be
unimpaired at the time of the Closing. Without limiting the generality of
the foregoing, and except as otherwise expressly provided in this Agreement
or as set forth in Schedule 5.1(a), neither WFLP, nor California Farms, nor
FWRLP will without the prior written consent of Buyer:
(1) amend the WFLP Limited Partnership Agreement, the California
Farms Limited Partnership Agreement or the FWRLP Limited Partnership
Agreement;
(2) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or granting
of options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any partnership interest or any other securities or equity
equivalents, or amend any of the terms of any such securities or equity
equivalents outstanding as of the date hereof;
(3) (A) split, combine or reclassify any interests in WFLP,
California Farms or FWRLP, (B) set aside or pay any distribution (whether
in cash, securities or property or any combination thereof) in respect of
any interests in WFLP, California Farms or FWRLP, (C) redeem, repurchase or
otherwise acquire any of their respective securities or any options or
rights to acquire any such securities, or (D) adopt a plan of complete or
partial liquidation or resolutions providing for or authorizing such
liquidation or a dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization;
(4) issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any options, calls, rights, preemptive
rights or other contracts, commitments, arrangements or understandings
under which any Person has the right to acquire from Sellers, WFLP,
California Farms or FWRLP, or Sellers, WFLP, California Farms or FWRLP is
obligated to issue, sell, or deliver, any interests in WFLP, California
Farms or FWRLP;
(5) (A) incur any indebtedness for borrowed money (except for
short-term indebtedness incurred in the ordinary course of business
consistent with past practice pursuant to existing lines of credit) or
issue any debt securities or, except in the ordinary course of business
consistent with past practice, assume, guarantee or endorse the obligations
of any other Person; (B) make any loans, advances or capital contributions
to, or investments in, any other Person, in excess of $50,000 in the
aggregate; (C) pledge or otherwise encumber any interests in WFLP,
California Farms or FWRLP; (D) enter into or invest in any derivative
financial instruments; or (E) except in the ordinary course of business
consistent with past practice, mortgage or pledge any assets of WFLP,
California Farms or FWRLP, tangible or intangible, or create or suffer to
exist any Lien thereupon;
(6) to the extent payable directly or indirectly by WFLP,
California Farms or FWRLP: (A) enter into, adopt or (except as may be
required by Law or the terms of any such arrangement) terminate any bonus,
profit sharing, compensation, severance, termination, stock option, stock
appreciation right, restricted stock, performance unit, stock equivalent,
stock purchase agreement, pension, retirement, deferred compensation,
employment, consulting, indemnification, severance or other employee
benefit agreement, trust, plan, fund or other arrangement for the benefit
or welfare of any officer or employee of WFLP, California Farms or FWRLP;
or (B) amend any such arrangement as it relates to any such officers or
employees or (other than scheduled annual increases in base compensation,
and changes in benefits in accordance with plans or arrangements in effect
as of the date hereof, in each case in the ordinary course of business
consistent with past practice, that do not constitute in the aggregate a
change in the employer's approach to compensation or benefit increases and
that, in the aggregate, do not result in a material increase in
compensation or benefit expense to WFLP, California Farms or FWRLP) change
in any manner the compensation or other benefits payable to any officer or
employee of WFLP, California Farms or FWRLP; provided, that Buyer agrees it
will not unreasonably withhold its consent, if requested by WFLP,
California Farms or FWRLP, to transactions governed by this paragraph (6);
(7) acquire, sell, lease or dispose of any assets outside the
ordinary course of business consistent with past practices or any assets
which in the aggregate are material to WFLP, California Farms or FWRLP;
(8) relinquish any contract or right other than in the ordinary
course of business consistent with past practice;
(9) except to the extent required by applicable law, permit any
material change in (A) any marketing, purchasing, investment, accounting,
financial reporting, inventory, credit, allowance or tax practice, policy,
method or procedure or (B) any method of calculating any bad debt,
contingency or other reserve for accounting, financial reporting or tax
purposes, except as may be required as a result of a change occurring
subsequent to the date hereof in law or GAAP;
(10) make any material tax election or settle or compromise any
material income tax liability with any Governmental Body;
(11) (A) acquire (by merger, consolidation or acquisition of
stock or assets, but excluding foreclosure) any corporation, partnership or
other business organization or division thereof; (B) authorize any new
capital expenditures; or (C) enter into or amend any contract, agreement,
commitment or arrangement with respect to any of the foregoing;
(12) pay, discharge or satisfy any material claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business consistent with past practice or in accordance
with its or their terms of existing indebtedness for borrowed money and
other liabilities reflected or reserved against in the pro forma restated
combined financial statements (or the notes thereto) of WFLP (as nominee
for California Farms) and FWRLP or incurred in the ordinary course of
business consistent with past practice;
(13) terminate, or in any manner material thereto modify,
amend or waive compliance with, any provision of any of the Significant
Agreements;
(14) enter into any agreement providing for acceleration of
payment or performance or other consequence as a result of a change of
control of WFLP, California Farms or FWRLP;
(15) make any capital expenditures or commitments in excess of
$50,000 in the aggregate for additions to plant, property or equipment
constituting capital assets except in the ordinary course of business;
(16) except to the extent permitted by paragraphs (1) through
(15) above, enter into any Significant Agreement of the type described in
Section 3.11(a); or
(17) authorize or agree in writing or otherwise to take, any of
the actions described above in this Section 5.1(a).
(b) Sellers agree to cause each of WFLP, California Farms and FWRLP
to, except as otherwise expressly provided in this Agreement, during the
period from the date hereof to the Closing: (i) conduct its operations
according to its ordinary course of business consistent with past practice;
and (ii) use commercially reasonable efforts to (A) preserve intact its
business organizations; (B) keep available the services of its officers and
employees, if any; and (C) maintain existing relationships with tenants,
agents, licensors, licensees, suppliers, contractors, customers and others
having business relationships with them to the end that its goodwill and
ongoing business and operations shall be unimpaired at the time of the
Closing. Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement or as set forth in Schedule
5.1(b), Sellers will cause each of WFLP, California Farms and FWRLP to not
, without the prior written consent of Buyer:
(1) amend its limited partnership agreement;
(2) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such liquidation or a dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization;
(3) issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any options, calls, rights, preemptive
rights, or other contracts, commitments, arrangements or understandings
under which any Person has the right to acquire, or Sellers, WFLP,
California Farms or FWRLP is obligated to issue, sell, or deliver, any
interests in WFLP, California Farms or FWRLP;
(4) (A) pledge or otherwise encumber any interests in WFLP,
California Farms or FWRLP; or (B) except in the ordinary course of business
consistent with past practice, mortgage or pledge any assets of WFLP,
California Farms or FWRLP, tangible or intangible, or create or suffer to
exist any Lien thereupon;
(5) authorize, or agree in writing or otherwise to take, any of
the actions described above in this Section 5.1(b).
5.2 Access to Information. (a) Sellers agree that, from the date
hereof until the Closing Date, subject to the terms of the Confidentiality
Agreement, WFLP, California Farms and FWRLP will (i) give to Buyer and its
counsel, financial advisors, auditors and other authorized representatives
full access, upon reasonable prior notice and during normal business hours,
to their respective offices, properties, information systems, books,
records, contracts, commitments and personnel, (ii) furnish to Buyer and
its counsel, financial advisors, auditors and other authorized
representatives such business, financial, operating and personnel data and
other information relating to WFLP, California Farms or FWRLP as such
Persons may reasonably request and (iii) instruct their respective
employees, counsel and financial advisors to cooperate with Buyer in its
investigation of WFLP, California Farms and FWRLP; provided that this
Section 5.2 shall not obligate WFLP, California Farms or FWRLP to provide
or make available to Buyer any employee medical records.
(b) Sellers agree that they shall cause WFLP, California Farms and
FWRLP and their Affiliates not to issue any communication to their
employees and agents, other than those in the ordinary course of business
consistent with past practice, including with respect to the transactions
contemplated hereby, without the prior consent of Buyer, such consent not
to be unreasonably withheld.
5.3 Notices of Certain Events. Sellers agree that they shall cause
WFLP, California Farms and FWRLP to notify Buyer promptly of any actions,
suits, claims, investigations or proceedings commenced or, to the Knowledge
of Sellers, threatened against, relating to or involving or otherwise
affecting WFLP, California Farms or FWRLP that, if pending on the date of
this Agreement, would have been required to have been disclosed pursuant to
Section 3.12 or that relate to the consummation of the transactions
contemplated by this Agreement. Sellers shall give Buyer the opportunity
to participate in the defense or settlement of any such action, suit,
claim, investigation or proceeding; provided, however, that no such
settlement shall be agreed without Buyer s consent.
5.4 No Solicitation or Negotiation. (a) Sellers agree that Sellers,
WFLP, California Farms and FWRLP will immediately cease any existing
discussions or negotiations with any third parties conducted prior to the
date hereof with respect to any Acquisition Proposal (as defined below).
Neither Sellers, WFLP, California Farms, FWRLP nor any of their respective
Affiliates shall, directly or indirectly, through any officer, director,
employee, investment banker, attorney or other advisor, representative or
agent (each, a Representative ) of any of them, (i) entertain, pursue,
solicit, initiate or encourage any inquiries or proposals that constitute,
or would lead to, a proposal or offer for a merger, consolidation or
business combination involving WFLP, California Farms or FWRLP or to
acquire or cause to be acquired in any manner, directly or indirectly, any
of the assets or business, or any interest in, WFLP, California Farms or
FWRLP, or any similar transaction, other than the transactions contemplated
by this Agreement (any of the foregoing inquiries or proposals being
referred to in this Agreement as an Acquisition Proposal ), (ii) engage in
negotiations or discussions concerning, or provide any information to any
person or entity relating to, any Acquisition Proposal or (iii) agree to or
approve any Acquisition Proposal.
(b) Sellers and each of the general and limited partners of N.N.
Investors and FW Ranch shall not: (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Buyer, its approval or
recommendation of this Agreement or the Acquisition; (ii) entertain,
pursue, approve or recommend, or propose to entertain, pursue, approve or
recommend, or allow WFLP, California Farms or FWRLP to entertain, pursue,
approve or recommend, any Acquisition Proposal; or (iii) cause WFLP,
California Farms or FWRLP to enter into any agreement with respect to any
Acquisition Proposal. Nothing contained in this Section 5.4(b) shall
prohibit WFLP, California Farms, N.N. Investors, FWRLP or FW Ranch from
making any disclosure to its partners, or Western Farm & Cattle, CLCC or
GenPar from making any disclosure to its stockholders, which, in the good
faith and reasonable judgment of the general partner of WFLP, California
Farms, N.N. Investors, FWRLP or FW Ranch, or the directors of Western Farm
& Cattle, CLCC or GenPar, as the case may be, based on the advice of
outside counsel, is required under applicable law; provided, that except as
permitted in accordance with this Section 5.4(b), neither Sellers, WFLP,
California Farms, FWRLP,, nor any of the general or limited partners of
California Farms withdraws or modifies its position with respect to this
Agreement or the Acquisition or entertains, pursues, approves or recommends
an Acquisition Proposal.
5.5 Confidentiality Agreements. Sellers agree that, without Buyer s
consent, after the date hereof and until the expiration of such agreements,
they will not, and they will not permit WFLP, California Farms or FWRLP to,
terminate, amend, waive or modify any provision of any confidentiality
agreement pursuant to which information was provided to any Person (other
than Buyer) with respect to WFLP, California Farms or FWRLP or their
respective business and operations. If, to the Knowledge of Sellers, any
breach of a confidentiality agreement is threatened or has occurred,
Sellers shall immediately notify Buyer and shall, at Buyer s expense, take
all action reasonably requested by Buyer to enforce the terms of each such
confidentiality agreement.
5.6 Meetings. GenPar and FW Ranch agree that (i) FW Ranch will take
all action necessary in accordance with applicable law and its limited
partnership agreement and bylaws either (A) to convene a meeting of its
partners (the FW Ranch Partners' Meeting ) as promptly as practicable to
consider and vote upon the approval of this Agreement and the Ancillary
Agreements and the Acquisition and the other transactions contemplated
hereby (the FW Ranch Partners' Approval ) or (B) to obtain the written
consent of such partners and (ii) FW Ranch shall take all lawful action to
solicit, and use all reasonable efforts to obtain, such approval.
5.7 Covenants Relating to the Properties. Sellers agree that, until
the Closing:
(i) Sellers shall cause WFLP, California Farms and FWRLP to
perform all their respective obligations under and comply with all
applicable provisions of the Leases, any Permits, and any other document or
agreement by which WFLP, California Farms or FWRLP or any of their
respective Properties is bound or affected and all applicable legal
requirements and insurance requirements pertaining to any of the
Properties.
(ii) Buyer and its agents and representatives may enter any of
the Properties during normal business hours for the purpose of conducting
the studies, inspections and tests described above, and Sellers shall cause
WFLP, California Farms and FWRLP to grant Buyer and its agents a license
for the duration of this Agreement to so enter upon any such Property.
(iii) Sellers shall not, nor permit WFLP, California Farms or
FWRLP to, create or suffer any additional easements, leaseholds, tenancies,
liens, or other encumbrances with respect to any of the Properties
whatsoever without Buyer's prior written approval, which approval may be
withheld in Buyer's sole discretion.
5.8 Title Updates At Sellers sole cost and expense, at Closing
Sellers shall cause title insurance policies relating to the Properties of
WFLP, California Farms and FWRLP to be issued in favor of Buyer by a
mutually acceptable and nationally recognized title insurance company which
policies shall contain as exceptions only those items set forth in the
title policies and reports delivered by Sellers to Buyer and, mortgages and
deeds of trust which will be discharged prior to or at Closing and
easements or rights of way granted to any Governmental Body.
ARTICLE 6
COVENANTS OF BUYER
Buyer agrees that:
6.1 Conduct. Except as otherwise expressly provided in this
Agreement, during the period from the date hereof to the Closing, Buyer
will, and will cause its Subsidiaries to, conduct their respective
operations according to their ordinary course of business consistent with
past practice. Without limiting the generality of the foregoing, and
except as otherwise expressly provided in this Agreement or as set forth in
Schedule 6.1, Buyer will not, and will cause each Subsidiary of Buyer not
to, without the prior written consent of Sellers:
(i) amend its articles of incorporation (other than the
amendment scheduled to be considered at Buyer s annual meeting on August
14, 1997) or bylaws or other comparable organizational documents;
(ii) (A) split, combine or reclassify any shares of Buyer Stock,
(B) set aside or pay any dividend or other distribution (whether in cash,
securities or property or any combination thereof) in respect of the Buyer
Stock, (C) redeem, repurchase or otherwise acquire any of its securities or
any options or rights to acquire any such securities, or (D) adopt a plan
of complete or partial liquidation or resolutions providing for or
authorizing such liquidation or a dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization; or
(iii) authorize or agree in writing or otherwise to take any
of the actions described above in this Section 6.1.
6.2 Confidentiality. All information provided to Buyer or any of the
Persons referred to in Section 5.2 will be treated as if provided under the
Confidentiality Agreement.
6.3 Indemnification and Insurance. Buyer agrees that all rights to
indemnification and exculpation from liability for acts or omissions
occurring prior to the Closing now existing in favor of the current or
former officers or employees of WFLP, California Farms or FWRLP, as
provided in the WFLP Limited Partnership Agreement, the California Farms
Limited Partnership Agreement, or the FWRLP Limited Partnership Agreement
or in indemnification agreements to which any of WFLP, California Farms or
FWRLP is a party listed on Schedule 6.3, shall survive the Closing and
shall continue in full force and effect in accordance with their respective
terms for a period of not less than six (6) years after the Closing Date.
6.4 Representation on Buyer's Board of Directors. At or prior to the
Closing, Buyer shall increase the size of its Board of Directors by one
member to eleven members. At the Closing, Buyer shall use its best efforts
to nominate Xxxxx Xxxxx and cause him to be elected or appointed to Buyer's
Board of Directors in accordance with Section 4.2 of the Governance
Agreement. At Buyer's 2000 Annual Meeting of stockholders, Buyer shall use
its best efforts to nominate the aforesaid individual to Buyer's Board of
Directors as a Class I Director and cause him to be elected to one full
three-year term in accordance with Section 4.2 of the Governance Agreement.
6.5 Copies of SEC Filings. From the date hereof until the Closing
Date, Buyer shall furnish to WFLP on behalf of Sellers a copy of any
material filing made by Buyer under the Exchange Act promptly after such
filing is made with the SEC.
6.6 Access to Information. Buyer agrees that, from the date hereof
until the Closing Date, subject to the terms of the Confidentiality
Agreement, Buyer will (i) give to Sellers and their counsel, financial
advisors, auditors and other authorized representatives agreed upon access
upon reasonable prior notice and during normal business hours, to the
offices, properties, information systems, books, records, contracts,
commitments and personnel of Buyer, (ii) furnish to Sellers and their
counsel, financial advisors, auditors and other authorized representatives
such business, financial and operating data as Buyer and Sellers may agree,
and (iii) instruct the employees, counsel and financial advisors of Buyer
to cooperate with Sellers in their investigation of Buyer.
ARTICLE 7
COVENANTS OF BUYER AND SELLERS
Buyer and Sellers agree that:
7.1 Reasonable Efforts. (a) Subject to the terms and conditions of
this Agreement, each of them will use its reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
reasonably necessary or desirable under applicable laws and regulations or
otherwise to consummate the transactions contemplated by this Agreement as
promptly as practicable. Buyer, on one side, and Sellers, on the other
side, will promptly, and in any event within 20 days of the date hereof,
prepare and file all applications, notices, consents and other documents
necessary or advisable to obtain the consents, approvals or actions make
the filings and give the notices specified in Section 4.3 and Section 3.3,
respectively, promptly file all supplements or amendments thereto and use
reasonable efforts to obtain such consents, approvals or actions, make such
filings and give such notice as promptly as practicable; provided that
nothing in this Section 7.1 or elsewhere in this Agreement shall require
Buyer or Sellers, in order to obtain any such consent, approval, or action,
make such filing or give such notice, to accept or agree to any condition
that would be materially disadvantageous to it other than those customarily
imposed. Buyer, on the one side, and Sellers, on the other side, will
provide each other and their counsel the opportunity to review in advance
and comment on all such filings, notices, applications and similar
documents. Buyer, on the one side, and Sellers, on the other side, will
keep each other informed of the status of matters relating to the consents,
approvals, actions, filings and notices specified in Section 4.3 and
Section 3.3. Buyer, on the one side, and Sellers, on the other side, agree
to use their reasonable efforts to execute and deliver such other
documents, certificates, agreements and other writings and to take such
other actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement.
In addition to and not in limitation of the foregoing, each of the parties
will (i) promptly take all actions necessary to make the filings required
of Buyer and Sellers or their respective Affiliates or Subsidiaries under
the HSR Act, (ii) comply at the earliest practicable date with any request
for additional information received by such party or its Affiliates or
Subsidiaries from the United States Federal Trade Commission (the FTC ) or
the Antitrust Division of the United States Department of Justice (the
Antitrust Division ) pursuant to the HSR Act, (iii) cooperate with the
other party in connection with such party s filings under the HSR Act using
their reasonable efforts to resolve any investigation or other inquiry
concerning the Acquisition or the other matters contemplated by this
Agreement commenced by either the FTC or the Antitrust Division or state
attorneys general and (iv) request early termination of the waiting period
under the HSR Act.
(b) Buyer, on one side, and Sellers, on the other side, will notify
the other of any event, transaction or circumstance, as soon as practical
after it becomes known to such party, that causes or will cause any
covenant or agreement of Buyer, on one side, or Sellers, on the other side,
under this Agreement to be breached or any of the conditions to the
consummation of the transactions contemplated hereby not to be satisfied or
that renders or will render untrue any representation or warranty of Buyer,
on one side, or Sellers, on the other side, contained in this Agreement.
Buyer, on the one side, and Sellers, on the other side, also will notify
the other in writing of any violation or breach, as soon as practical after
it becomes known to such party, of any representation, warranty, covenant
or agreement made by Buyer, on one side, or Sellers, on the other side. In
connection therewith, Buyer and Sellers will promptly supplement or amend
the various schedules to this Agreement to reflect any matter which, if
existing, occurring or known on the date of this Agreement, would have been
required to be set forth or described in such schedules or which is
necessary to correct any information in such schedules which was or has
been rendered inaccurate thereby. No notice given pursuant to this Section
7.1 or supplements or amendments to the schedules to this Agreement shall
have any effect on the representations, warranties, covenants or agreements
contained in this Agreement for purposes of determining satisfaction of any
condition contained herein.
7.2 Public Announcements. The parties to this Agreement agree to
consult with each other before issuing any press release or making any
public statement with respect to this Agreement or the transactions
contemplated hereby or in the Ancillary Agreements and to provide the other
party an opportunity to comment thereon and, except as may be required by
applicable Law, by regulatory authorities or by any listing agreement with
any national securities exchange, will not issue any such press release or
make any such public statement without the consent of the other party, such
consent not to be unreasonably withheld. Without limiting the generality
of the foregoing, Buyer agrees that, without the prior consent of Sellers,
it will not make any public announcement or issue any press release that
names, describes or attributes statements or actions to Sellers, their
direct and indirect partners or their affiliates, except as otherwise
required by applicable law.
7.3 Consents. Between the date hereof and the Closing Date, Sellers
and Buyer shall use their respective best efforts, without payment of any
consideration to the persons from whom or which consents or agreements are
required, to obtain at the earliest practicable date, and prior to the
Closing Date, all consents and agreements of third parties necessary or
advisable for the performance by Sellers and Buyer of their respective
obligations under this Agreement or any agreement referred to herein or
contemplated hereby or to the consummation of the transactions contemplated
hereby or thereby. No consideration, whether such consideration shall
consist of the payment of money or shall take any other form, for any such
consent or agreement necessary to the consummation of the transactions
contemplated hereby or by the Ancillary Agreements shall be given or
promised by either Sellers or Buyer or any of their respective Subsidiaries
without the prior written approval of the other party.
ARTICLE 8
TAX MATTERS; CERTAIN COVENANTS
8.1 Representations, Warranties and Covenants. (a) Except as set
forth on Schedule 8.1, Sellers represent, warrant and covenant to Buyer
that as of the Closing Date:
(i) CLCC is the tax matters partner of California Farms, GenPar
is the tax matters partner of FWRLP and Western Farm & Cattle is the tax
matters partner of WFLP;
(ii) Each of FWRLP, California Farms and WFLP is and has been
since its date of inception properly treated as a partnership, and not as
an association taxable as a corporation, pursuant to Section 7701(a)(2) of
the Code and any corresponding provision of state and local Law and will be
treated as a partnership for Tax purposes at all times from the date hereof
through the Closing Date;
(iii) With respect to periods ending on or before the Closing
Date: (A) FWRLP, California Farms and WFLP have filed when due (including
extensions) all Tax Returns that are required to be filed by FWRLP,
California Farms and WFLP; (B) such returns were prepared in the manner
required by applicable Laws and are true, correct, and complete in all
material respects; and (C) FWRLP, California Farms and WFLP have timely
paid all Taxes imposed on or incurred by FWRLP, California Farms and WFLP
as shown on such Tax Returns as being owed, except for Taxes which are
being contested in good faith by appropriate proceedings;
(iv) True and complete copies of all Tax Returns and all
schedules thereto filed by, or on behalf of, FWRLP, California Farms and
WFLP for all prior taxable years and all written communications to or from
such Taxing Authorities relating to all such returns have been delivered to
Buyer for inspection on or before the Closing Date;
(v) Except for the Nominee Agreement (as defined in clause (ix)
of this Section 8.1), there have been no agreements in connection with
FWRLP, California Farms and WFLP providing for allocations of income,
losses or distributions of cash, other than as set forth in the FWRLP
Limited Partnership Agreement, the California Farms Limited Partnership
Agreement and the WFLP Limited Partnership Agreement;
(vi) There are no Tax liens upon the assets of FWRLP. California
Farms and WFLP except liens for Taxes not yet due;
(i)With respect to periods ending on or before the Closing Date,
FWRLP, California Farms and WFLP have established on their books and
records (A) reserves adequate to pay all Taxes imposed on or incurred by
them not yet due and payable and (B) reserves for deferred Taxes imposed on
or incurred by it, in each case, in accordance with GAAP; FWRLP, California
Farms, and WFLP have not received a Tax Ruling (as defined below) or
entered into a Closing Agreement (as defined below) with any Taxing
Authority that would have a continuing Material Adverse Effect on FWRLP,
California Farms, WFLP or the Buyer after the Closing Date. "Tax Ruling",
as used in this Agreement, shall mean a written ruling of a Taxing
Authority relating to Taxes imposed on or incurred by California Farms or
WFLP; "Closing Agreement", as used in this Agreement, shall mean a written
and legally binding agreement with a Taxing Authority relating to Taxes
imposed on or incurred by FWRLP, California Farms or WFLP;
(viii) None of FWRLP, California Farms, and WFLP is a party to
any allocation or sharing agreement regarding Taxes with any Person except
for the Nominee Agreement dated June 1, 1993 between WFLP and California
Farms (the Nominee Agreement );
(ix) FWRLP, California Farms and WFLP have no liability for Taxes
of any Person other than FWRLP, California Farms or WFLP under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or otherwise;
(x) FWRLP, California Farms, or WFLP have not requested any
extension of time within which to file any Tax Return, which Tax Return has
not since been filed;
(xi) FWRLP, California Farms and WFLP have not requested or
executed any outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any Taxes imposed
on or incurred by FWRLP, California Farms or WFLP or Tax Returns of FWRLP,
California Farms or WFLP;
(xii) The Tax Returns of FWRLP, California Farms and WFLP
have not been examined by the appropriate Taxing Authorities, for any
period. No deficiency for any Taxes has been proposed, asserted or
assessed against California Farms or WFLP that has not been resolved and
paid in full;
(xiii) No audits or other administrative proceedings or court
proceedings are presently pending with regard to any Taxes or Tax Returns
of FWRLP, California Farms or WFLP. There is no threatened action, audit,
or administrative or court proceeding with respect to any such Taxes or Tax
Returns of FWRLP, California Farms or WFLP. No power of attorney with
respect to Taxes imposed on or incurred by California Farms or WFLP
currently in force has been granted by FWRLP, California Farms or WFLP;
(xiv) FWRLP, California Farms and WFLP have not initiated any
voluntary changes in accounting method, and the United States Internal
Revenue Service has not proposed any such adjustment or change in
accounting method;
(xv) Neither FWRLP nor California Farms nor WFLP nor any of their
respective stockholders or partners are nonresident alien individuals or
foreign corporations within the meaning of Section 897 of the Code;
(xvi) Schedule 8.1 (a)(xvii) sets forth all of the states in
which either California Farms or WFLP has been required to file Tax Returns
during the most recent three-year period; and
(xvii) On the Closing Date, FWRLP, California Farms and WFLP
shall be eligible to make an election pursuant to Section 754 of the Code
and their respective limited partnership agreements shall provide for such
election.
8.2 Tax Matters.
(a) Transfer Taxes. Sellers shall pay all sales, use, transfer
(other than real property transfer), recording, gains, stock transfer and
other similar taxes and fees ("Transfer Taxes") if any, and Sellers and
Buyer shall each pay one-half of real property transfer taxes, if any,
arising out of or in connection with the transactions effected pursuant to
this Agreement. Buyer and Sellers shall indemnify, defend, and hold
harmless the other with respect to such Transfer Taxes and its share of any
real property transfer taxes. WFLP, California Farms and FWRLP shall file
all necessary documentation and Tax Returns with respect to such Transfer
Taxes.
(b) Indemnification. (i) After the Closing Date, Sellers shall
jointly and severally indemnify and hold harmless Buyer, FWLP, California
Farms and WFLP from and against any and all Tax Claims, resulting from,
arising out of or relating to: (A) any and all Taxes imposed on or incurred
by a Buyer, FWLP, California Farms or WFLP relating to any taxable period
beginning before the Closing Date (and the portion of any Overlap Period
(as defined below) beginning before the Closing Date) attributable to
operations or activities occurring before the Closing Date; (B) any and all
Taxes imposed on or incurred by FWLP, California Farms or WFLP relating to
any taxable period ending on or prior to the Closing Date ("Pre-Closing
Taxes"); (C) with respect to any taxable period ending on or after the
Closing Date that includes the Closing Date (the "Overlap Period"), any and
all Taxes imposed on or incurred by FWRLP, California Farms or WFLP
attributable to the period ending on or prior to the Closing Date; and (D)
any and all Taxes resulting from, or that would not have been incurred but
for, any breach of any representation or warranty of Sellers contained in
Section 8.1. For purposes of the Overlap Period, Taxes shall be
attributable to the period ending on or prior to the Closing Date: (X) in
the case of any real or personal property Tax imposed on or incurred by
WFLP, California Farms or FWRLP in an amount equal to the real or personal
property Tax for the entire period multiplied by a fraction the numerator
of which is the number of days in the period for which such real or
personal property Tax is paid ending on the Closing Date and the
denominator of which is the number of days in the entire period; and (Y) in
the case of any other Taxes imposed on or incurred by WFLP, California
Farms and FWRLP to the extent of any Taxes imposed on or incurred by WFLP,
California Farms and FWRLP that would be payable if the taxable year ended
on the Closing Date; provided, however, that the Tax liability shall be
reduced, in each case, for (A) any previously made estimated Tax payments
and (B) any amounts provided as a Tax reserve on the taxpayer s books and
records as of the Closing Date; and
(ii) After the Closing Date, Buyer shall indemnify and hold
harmless Seller from and against any and all Tax Claims resulting from,
arising out of or relating to (A) any and all Taxes imposed on or incurred
by WFLP, FWRLP or California Farms relating to any taxable period beginning
after the Closing Date (and the portion of any Overlap Period beginning
after the Closing Date) attributable to Buyer or any Subsidiary of Buyer
owning an interest in WFLP, FWRLP or California Farms after the Closing
Date, and (B) any and all Taxes imposed on or incurred by WFLP, California
Farms or FWRLP relating to any taxable period after the Closing Date (and
the portion of any Overlap Period beginning after the Closing Date). For
purposes of any Overlap Period, Taxes shall be attributable to the period
beginning after the Closing Date: (A) in the case of any real or personal
property Tax imposed on or incurred by WFLP, California Farms or FWRLP, in
an amount equal to the real or personal property Tax for the entire period
multiplied by a fraction the numerator of which is the number of days in
the period for which such real or personal property Tax is paid beginning
after the Closing Date and the denominator of which is the number of days
in the entire period; and (B) in the case of any other Taxes, to the extent
of any Taxes that would be payable if the taxable year began after the
Closing Date; provided, however, the Tax liability shall be reduced, in
each case, for (A) any previously made estimated Tax payments and (B) any
amounts provided as a Tax reserve on the taxpayer's books and records as of
the Closing Date.
(c) Refunds. Any refund or credit of any WFLP, California Farms or
FWRLP Pre-Closing Taxes shall be for the benefit of Sellers and Buyer shall
pay any such refund to Sellers within 30 days after receipt or actual
realization of the benefit of such credit.(d) Contests. The
appropriate tax matters partner of WFLP, California Farms and FWRLP for the
relevant Tax period (the TMP ) shall have the right to control any audit,
examination, proposed adjustment, administrative or judicial proceeding, or
other matter related to any Pre-Closing Taxes. Buyer agrees that, in the
event WFLP, California Farms or FWRLP receives notice in writing of any
examination, audit, claim, settlement, proposed adjustment, administrative
or judicial proceeding, or other matter related to any Pre-Closing Taxes,
Buyer shall notify the TMP in writing as soon as reasonably practical (but
in no event not more than 10 business days) after receipt of notice and the
TMP shall be entitled to control, at its own expense, all such matters.
Sellers will pay any Taxes found to be owing. Buyer shall and shall cause
WFLP, California Farms and FWRLP to cooperate with the TMP by giving the
TMP and its representatives, on prior reasonable notice, access and
cooperation during normal business hours to all information, books and
records pertaining to WFLP s, California Farms or FWRLP s Pre-Closing
Taxes. To the extent any audit, examination, proposed adjustment,
administrative or judicial proceeding, or other matter related to any Pre-
Closing Taxes could result in liability for Buyer, WFLP, California Farms
or FWRLP pursuant to this Agreement, Buyer shall notify the TMP of such
event, and the TMP shall not agree to the resolution of any issue relating
to Taxes arising as a result of or in connection with such event, without
the prior written consent of Buyer, which consent shall not be unreasonably
withheld.
(a)Information. Sellers, on one side, and Buyer, on the other side,
will make available to each other, and Buyer will cause WFLP, California
Farms and FWRLP to make available as reasonably requested, and to any
Taxing Authority, all information, records, or documents relating to the
liability or potential liability for Pre-Closing Taxes and will preserve
such information, records or documents until the expiration of any
applicable statute of limitations or extensions thereof.
(b)Preparation of Tax Returns and Code Section 754 Election. For all
tax years of California Farms, WFLP, and FWRLP that end on or before the
Closing Date, the TMP shall prepare and file, or cause to be prepared and
filed, all Tax returns. The TMP shall (if requested by a Buyer) elect and
cause WFLP, California Farms and FWRLP to elect under Code Section 754 with
respect to the Tax Year which includes the Closing Date to adjust the basis
of assets under Code Section 743 or make any other tax election requested
by Buyer.
(g) Assistance and Cooperation. Except as specifically provided in
this Agreement, no party shall take any actions with respect to WFLP,
California Farms, FWRLP or the interests in WFLP, California Farms or FWRLP
out of the ordinary course of business on or prior to the Closing Date.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification. Except as otherwise limited by this Agreement,
Sellers shall jointly and severally indemnify and hold harmless Buyer and
its successors and permitted assigns (each, an "Indemnified Party") against
and in respect of (i) any and all claims, losses, liabilities, damages, and
reasonable costs and expenses, net of any Tax benefit received by such
Indemnified Party (collectively, Losses ), directly suffered or incurred
or disbursed by any Indemnified Party (whether incurred under tort,
contract, strict or any other form of liability) as a result of, or with
respect to, any breach or inaccuracy of any representation or warranty of
Sellers; and (ii) any and all actions, claims, proceedings, investigations,
audits, fines, judgments, costs and other expenses (including, without
limitation, reasonable legal fees and expenses) incident to any of the
foregoing or to the enforcement of this Section 9.1; provided, however,
that the indemnity set forth in this Section 9.1 shall not include Tax
Claims relating to any Taxes, which claims shall be covered exclusively in
Article 8.
9.2 Limitations to Indemnification Obligations. Notwithstanding
anything contained herein to the contrary, (a) Sellers shall not be
obligated to make any payment pursuant to Section 9.1 or pursuant to
Article 8 (other than with respect to Taxes which are the subject of clause
(x) of the last sentence of Section 8.2(b)(i)) hereof, unless, and only to
the extent that, all such Losses and Tax Claims, in the aggregate, exceed
$1,200,000 (provided that if aggregate Losses and Tax Claims shall exceed
$1,200,000, Sellers shall pay all such Losses and Tax Claims from the first
dollar thereof), and (b) in no event shall the aggregate liability of
Sellers under this Article 9 and Article 8 hereof exceed the sum of
$120,000,000. The obligations of Sellers under this Article 9 and Article
8 shall expire on the date that their representations and warranties expire
under Section 11.1, unless (i) prior to such date of expiration, Buyer
gives written notice to each of Sellers of its claim for indemnification
(setting forth in reasonable detail the specific facts and circumstances
pertaining thereto), and (ii) Sellers do not satisfy (or provide for the
satisfaction of) such claim within 30 days after such notice is given and
Buyer commences a legal action or proceeding within 60 days after the
giving of such notice. It is specifically understood and agreed that the
remedy of any Indemnified Party specified in Section 9.1 or Article 8 for
Losses and Tax Claims covered by the indemnification provided in this
Article 9 and in Article 8 shall be limited to such indemnification, and
Sellers shall not otherwise have any liability under this Agreement (or
otherwise) in connection with or arising out of the transactions
contemplated by this Agreement.
9.3 Notice of Claim. If any Indemnified Party believes that it has
suffered or incurred or disbursed any claims, losses, liabilities, damages,
or reasonable costs or expenses for which it is entitled to such
indemnification provided in this Agreement (hereinafter, collectively, a
"Loss" or "Losses"), such Indemnified Party shall promptly notify each of
Sellers (each, an "Indemnifying Party") and shall promptly provide each
Indemnifying Party with such information as is then available or thereafter
becomes available to enable the Indemnifying Party to evaluate the claim of
such Indemnified Party for indemnity. If any legal action is instituted by
or against a third party with respect to which any Indemnified Party
intends to claim any Losses, such Indemnified Party shall promptly notify
each Indemnifying Party of such action. The failure of an Indemnified
Party to give any notice required by this Section 9.3 shall not affect any
of such Indemnified Party's rights hereunder except to the extent such
failure is actually prejudicial to the rights or obligations of any
Indemnifying Party.
9.4 Third Party Claims. If a claim made pursuant to Section 9.3
arises out of the claim of any third party, or if there is any claim
against a third party available by virtue of the circumstances relating
thereto, the Indemnifying Party shall have thirty (30) days after receipt
of the notice referred to in Section 9.3 to notify the Indemnified Party
that it elects to conduct and control such action. If the Indemnifying
Party does not give the foregoing notice, the Indemnified Party shall have
the right to defend, contest and, subject to the prior written consent of
the Indemnifying Party, which consent shall not be unreasonably withheld,
settle or compromise such action in the exercise of its reasonable
discretion, and the Indemnifying Party shall, upon request from the
Indemnified Party, promptly pay to such Indemnified Party, in accordance
with the other terms hereof, the amount of any Losses for which
indemnification is provided hereunder. If the Indemnifying Party gives the
foregoing notice, the Indemnifying Party shall have the right to undertake,
conduct and control, through counsel of its own choosing and at its sole
expense, the conduct and settlement of such action and the Indemnified
Party shall cooperate with the Indemnifying Party in connection therewith;
provided, however, that (a) the Indemnifying Party shall not, without the
consent of the affected Indemnified Party, enter into any settlement the
effect of which is to create or impose any lien upon any of the properties
or assets of the Indemnified Party; (b) the Indemnifying Party shall not
consent to any settlement that does not include as an unconditional term
thereof the giving of a complete release from liability with respect to
such action to the Indemnified Party; (c) the Indemnifying Party shall not
enter into any settlement the effect of which is to permit any injunction,
declaratory judgment or other nonmonetary relief to be entered against the
Indemnified Party; (d) the Indemnifying Party shall permit the Indemnified
Party to participate in such conduct or settlement through counsel chosen
by the Indemnified Party, with the fees and expenses of such counsel borne
by the Indemnified Party unless under then applicable standards of
professional conduct a conflict would exist, or be reasonably foreseeable
to arise, between the Indemnifying Party and the Indemnified Party in which
event such fees and expenses of such counsel shall be borne by the
Indemnifying Party, but under no circumstance shall the Indemnifying Party
be required to pay the expenses of more than one such separate counsel in
connection with such claim other than separate local counsel; and (e) the
Indemnifying Party shall agree promptly to reimburse the Indemnified Party
for the full amount of any Losses resulting from such action (except for
expenses borne by the Indemnified Party pursuant to clause (d) hereof)
incurred by the Indemnified Party, including reasonable fees and expenses
of counsel for the Indemnified Party.
9.5 Payments of Indemnity. If any Indemnifying Party notifies an
Indemnified Party within 60 days of receipt of the notice provided by the
Indemnified Party under Section 9.3 that such Indemnifying Party does not
dispute the claim specified in such notice, the amount of such claim shall
be conclusively deemed a liability of the Indemnifying Party hereunder, and
the amount of such claim shall be increased as may be necessary so that
after making all required deductions or withholdings (including deductions
or withholdings applicable to additional amounts paid under this Section
9.5 of Taxes based on net income), the Indemnified Party shall receive an
amount equal to the amount it would have received if no deduction or
withholding had been made in the relevant jurisdiction.
ARTICLE 10
CONDITIONS TO CLOSING
10.1 Conditions to Obligations of Buyer Parties and Sellers. The
obligations of Sellers and Buyer to consummate the Acquisition are subject
to the satisfaction of the following conditions:
(a) Any applicable waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired or been terminated.
(b) All other consents, approvals or clearances from any Governmental
Body necessary for the consummation of the Acquisition shall have been
obtained and shall be in full force and effect, and such consents,
approvals and clearances shall be subject to no conditions other than those
customarily imposed, and no provision of any applicable Law shall prohibit
the consummation of the Acquisition.
(c) All consents, approvals or waivers of all non-governmental
Persons necessary for the consummation of the Acquisition shall have been
obtained, other than any such consent, approval or waiver which, if not
obtained, would not individually or in the aggregate have a Material
Adverse Effect on Buyer or Sellers.
(d) There shall not have been any Law or Order promulgated, entered,
enforced, enacted, issued or deemed applicable to the transactions
contemplated by this Agreement by any Governmental Body which, directly or
indirectly, (i) prohibits or imposes any material limitations on Buyer's
ownership or operation (or that of any of its Subsidiaries or Affiliates)
of, or compels Buyer (or its Subsidiaries or Affiliates) to dispose of any
portion of its, WFLP's, California Farms or FWRLP s businesses or assets
which is material to the business of WFLP, California Farms or FWRLP, or
material to their business, or otherwise results in a material diminution
of the benefits of the transactions contemplated by this Agreement to
Buyer, (ii) prohibits, restrains or makes illegal any of the transactions
contemplated by this Agreement, (iii) imposes limitations on the ability of
Buyer effectively to control in any material respect any material portion
of the business or assets of WFLP, California Farms or FWRLP, or any
material portion of their business or assets, or (iv) has the effect of
making illegal or otherwise preventing, prohibiting or materially
restricting consummation of the transactions contemplated by this Agreement
or the Ancillary Agreements.
(e) There shall be no instituted or pending action or proceeding
(whether civil or criminal) before any Governmental Body (or any such
action threatened by or before any Governmental Body) which (i) in the case
of any such action or proceeding brought by any Governmental Body, seeks
any Order having any effect set forth in paragraph (d) above or (ii) in the
case of any such action or proceeding brought by any other Person, could
reasonably be expected to result in any Order having any effect set forth
in paragraph (d) above.
(f) WFLP, California Farms and FWRLP each shall have obtained all
necessary approvals from their respective general and limited partners in
accordance with applicable Law and their respective limited partnership
agreements.
10.2 Further Conditions to Obligation of Buyer. The obligation of
Buyer to consummate the Acquisition is subject to the satisfaction of the
following further conditions:
(a) (i) Sellers shall have performed in all material respects all of
their respective obligations hereunder required to be performed by them on
or prior to the Closing Date, (ii) the representations and warranties of
Sellers contained in this Agreement that contain materiality qualifications
or exceptions shall be true and correct as of the date of this Agreement
and the representations and warranties of Sellers contained in this
Agreement that do not contain materiality qualifications or exceptions
shall be true and correct in all material respects as of the date of this
Agreement, except for those representations and warranties made as of a
specified date, which representations and warranties shall be true and
correct, or true and correct in all material respects, as applicable, as of
such date, (iii) the representations and warranties of Sellers contained in
this Agreement shall be true and correct at and as of the Closing Date, as
if made at and as of such date (without giving effect to any materiality
qualifications or materiality exceptions contained therein), except for
those representations and warranties made as of a specified date which
shall be true and correct as of the date specified (without giving effect
to any materiality qualifications or materiality exceptions contained
therein); provided that this condition (iii) shall be deemed satisfied if
any failures of such representations and warranties to be true and correct
at and as of the Closing Date (without giving effect to any materiality
qualifications or materiality exceptions contained therein) would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect on Sellers, WLFP, California Farms or FWRLP other
than those resulting from any change since the date of this Agreement in
general economic conditions, and (iv) Buyer shall have received a
certificate, dated the Closing Date, from the chief executive officer of
each Seller that is a corporation and of the general partner of each Seller
that is a limited partnership to the effect that the foregoing conditions
have been satisfied.
(b) Buyer shall have received a certificate, dated as of the Closing
Date, from each of the secretaries or assistant secretaries of Western Farm
& Cattle, as general partner of WFLP, CLCC, as general partner of
California Farms, and GenPar, as general partner of FWRLP, certifying as to
the accuracy and completeness of the attached respective limited
partnership agreement; a certificate, dated as of the Closing Date, from
the secretary or assistant secretary of each of GenPar, Western Farm &
Cattle and CLCC certifying as to the accuracy and completeness of the
attached certificate of incorporation and bylaws and a certificate, dated
the Closing Date, from the secretary or assistant secretary of each Seller
that is a corporation and of the general partner of each Seller that is a
limited partnership, as to the accuracy and completeness of the attached
resolutions, consents and authorizations with respect to the execution and
delivery of this Agreement, the Ancillary Agreements to which such Seller
is a party and the transactions contemplated hereby.
(c) Sellers shall have delivered a certificate to Buyer, dated as of
the Closing Date, that satisfies the requirements of Treasury Regulation
Sec. 1.1445-11T(d)(2) (a certificate of non-foreign status).
(d) The Ancillary Agreements shall have been executed and delivered
and shall be in full force and effect.
(e) WFLP, California Farms and FWRLP shall have repaid or provided in
a manner satisfactory to Buyer all of their existing indebtedness for
borrowed money in accordance with its terms, provided Buyer with
certificates, dated as of the Closing Date, from the chief financial
officer of each of WFLP, California Farms and FWRLP to the effect that the
foregoing condition has been satisfied and cause all deeds of trust and
mortgages relating to the Properties of WFLP, California Farms and FWRLP to
be released.
(a) WFLP, California Farms and FWRLP shall have exercised and closed,
or deposited funds sufficient to permit the exercise and close, of all
options to purchase Properties and agreements to purchase Properties listed
on Schedule 10.2.
10.3 Further Conditions to Obligation of SellersThe obligation of
Sellers to consummate the Acquisition is subject to the satisfaction of the
following further conditions:
(b)(i) Buyer shall have performed in all material respects all of its
respective obligations hereunder required to be performed by it at or prior
to the Closing Date, (ii) the representations and warranties of Buyer
contained in this Agreement that contain materiality qualifications or
exceptions shall be true and correct as of the date of this Agreement and
the representations and warranties of Buyer contained in this Agreement
that do not contain materiality qualifications or exceptions shall be true
and correct in all material respects as of the date of this Agreement,
except for those representations and warranties made as of a specified
date, which representations and warranties shall be true and correct, or
true and correct in all material respects, as applicable, as of such date,
(iii) the representations and warranties of Buyer contained in this
Agreement shall be true and correct at and as of the Closing Date, as if
made at and as of such date (without giving effect to any materiality
qualifications or materiality exceptions contained therein), except for
those representations and warranties made as of a specified date, which
shall be true and correct as of the date specified (without giving effect
to any materiality qualifications or materiality exceptions contained
therein); provided that this condition (iii) shall be deemed satisfied if
any failures of any such representations and warranties to be true and
correct at and as of the Closing Date (without giving effect to any
materiality qualifications or materiality exceptions contained therein)
would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect on Buyer other than those
resulting from any change since the date of this Agreement in general
economic conditions, and (iv) Sellers shall have received a certificate
signed by the chief financial officer of Buyer to the effect that the
foregoing conditions have been satisfied.
2 (c) Sellers shall have received a certificate, dated as of the
Closing Date, from the secretary or assistant secretary of Buyer certifying
as to the accuracy and completeness of the attached articles of
incorporation and bylaws, and resolutions, consents and authorizations of
Buyer with respect to the execution and delivery of this Agreement and the
transactions contemplated hereby. The Ancillary Agreements shall have been
executed and delivered and shall be in full force and effect.
ARTICLE 11
SURVIVAL
11.1 Survival. (a) Except as provided in Article 9 and in Sections
11.1(b), the covenants, agreements, representations and warranties of the
parties hereto contained in this Agreement shall not survive the Closing;
provided, that the covenants and agreements that, by their terms, are to
have effect or be performed after the Closing Date shall survive in
accordance with their terms.
(b) Notwithstanding anything to the contrary in Section 11.1(a), and
except as provided in Article 9, the representations and warranties of
Sellers made herein shall survive for a period of one (1) year following
the Closing, except that the representations and warranties of Sellers made
in Sections 3.1, 3.2, 3.3 and 3.4 shall survive indefinitely, the
representations and warranties of Sellers made in Section 3.18 shall
survive for a period of four years following the Closing, and the
representations and warranties made in Section 8.1 shall survive until the
statute of limitations shall have expired as to the tax matters set out
therein.
ARTICLE 12
TERMINATION
12.1 Grounds for Termination. This Agreement may be terminated and
the Acquisition may be abandoned at any time prior to the Closing:
(a) by mutual written agreement of Sellers and Buyer;
(b) by Sellers, on one side, or Buyer, on the other side, upon
written notice to the other parties if the Acquisition shall not have been
consummated on or before November 1, 1997; provided that the right to
terminate this Agreement under this clause (b) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has
been the cause of or has resulted in the failure of the Acquisition to
occur on or before such date; or
(c) by Sellers, on one side, or Buyer, on the other side, if any
court of competent jurisdiction in the United States or any other
Governmental Body in the United States shall have issued an Order or taken
any other action permanently restraining, enjoining or otherwise
prohibiting the Acquisition and such Order or other action shall have
become final and nonappealable.
12.2 Effect of Termination. If this Agreement is terminated as
permitted by Section 12.1, termination shall be without liability of any
party (or any shareholder, director, officer, employee, agent, consultant
or representative of such party) to any other party to this Agreement,
except for payment of costs and expenses in accordance with Section 13.3
and except that no such termination shall relieve Buyer of its obligations
under Section 6.2; and provided that if such termination shall result from
the willful failure of any party to fulfill a condition to the performance
of the obligations of any other party or to perform a covenant of this
Agreement or from a willful breach by any party to this Agreement, such
party shall be fully liable for any and all damage, loss, liability and
expense (including but not limited to reasonable expenses of investigation
and reasonable attorneys fees and expenses in connection with any action,
suit or proceeding) incurred or suffered by the other party as a result of
such failure or breach. The provisions of this Section 12.2, Section 13.3
and Section 13.5 shall survive any termination hereof pursuant to Section
12.1.
ARTICLE 13
MISCELLANEOUS
13.1 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given
when delivered by hand, or when sent by facsimile transmission (with
receipt confirmed by an electronically generated written confirmation),
addressed as follows (or to such other address as a party may designate by
notice to the others):
(a) if to Buyer, to:
United States Filter Corporation
00-000 Xxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx,
Senior Vice President, General Counsel and
Secretary
Fax: 000-000-0000
with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx III, Esq.
Fax: 000-000-0000
(b) if to Western Farm & Cattle, to:
Western Farm & Cattle Company
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: 000-000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxxxx
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: F. Xxxxxxx Xxxxxxxx, Esq.
Fax: 000-000-0000
(c) if to CLCC, to:
California Land & Cattle Co.
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: 000-000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxxxx
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: F. Xxxxxxx Xxxxxxxx, Esq.
Fax: 000-000-0000
(d) if to N.N. Investors, to:
N.N. Investors, L.P.
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: 000-000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxxxx
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: F. Xxxxxxx Xxxxxxxx, Esq.
Fax: 000-000-0000
(e) if to GenPar, to:
ST Ranch GenPar, Inc.
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: 000-000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxxxx
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: F. Xxxxxxx Xxxxxxxx, Esq.
Fax: 000-000-0000
(f) if to FWRLP, to:
FW Ranch Partners, L.P.
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: 000-000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxxxx
0000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: F. Xxxxxxx Xxxxxxxx, Esq.
Fax: 000-000-0000
or at such other address or facsimile number for a party as shall be
specified by like notice.
13.2 Amendments and Waivers. (a) Any provision of this Agreement may
be amended or waived if, but only if, such amendment or waiver is explicit
and in writing and is signed, in the case of an amendment, by each party to
this Agreement or, in the case of a waiver, by the party against whom the
waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. Other than
as provided herein, the rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
13.3 Expenses. Except as otherwise expressly provided herein, the fee
for filing an application pursuant to the HSR Act and all other costs and
expenses incurred in connection with this Agreement and the Ancillary
Agreements, including all brokers , finders , agents investment advisory
or similar fees, shall be paid by the party incurring or responsible for
incurring such cost or expense.
13.4 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that, except as provided in
Section 2.1, no party may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the consent of each
other party hereto.
13.5 Governing Law; Submission to Jurisdiction
(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in
and to be performed in that state.
(b) Any action, suit or proceeding where the amount in controversy as
to at least one party, exclusive of interest and costs, exceeds U.S.
$1,000,000 (a Summary Proceeding ), arising out of or relating to this
Agreement or the breach, termination or validity thereof, shall be
litigated exclusively in the Superior Court of the State of Delaware (the
Delaware Superior Court ) as a summary proceeding pursuant to rules 124-
131 of the Delaware Superior Court, or any successor rules (the Summary
Proceeding Rules ). Each of the parties hereto hereby irrevocably and
unconditionally (i) submits to the jurisdiction of the Delaware Superior
Court for any Summary Proceeding, (ii) agrees not to commence any Summary
Proceeding except in the Delaware Superior Court, (iii) waives, and agrees
not to plead or to make, any objection to the venue of any Summary
Proceeding in the Delaware Superior Court, (iv) waives, and agrees not to
plead or to make, any claim that any Summary Proceeding brought in the
Delaware Superior Court has been brought in an improper or otherwise
inconvenient forum, (v) waives, and agrees not to plead or to make, any
claim that the Delaware Superior Court lacks personal jurisdiction over it,
(vi) waives its right to remove any Summary Proceeding to the federal
courts except where such courts are vested with sole and exclusive
jurisdiction by statute, and (vii) understands and agrees that it shall not
seek a jury trial or punitive damages in any Summary Proceeding based upon
or arising out of or otherwise related to this Agreement and waives any and
all rights to any such jury trial or to seek punitive damages.
(c)In the event any action, suit or proceeding where the amount in
controversy as to at least one party, exclusive of interest and costs, does
not exceed U.S. $1,000,000 (a Proceeding ), arising out of or relating to
this Agreement or the breach, termination or validity thereof is brought,
the parties to such Proceeding agree to make application to the Delaware
Superior Court to proceed under the Summary Proceeding Rules. Until such
time as such application is rejected, such Proceeding shall be treated as a
Summary Proceeding and all of the foregoing provisions of this Section 13.5
relating to Summary Proceeding shall apply to such Proceeding.
13.6 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. Each counterpart may consist of a number
of copies each signed by less than all, but together signed by all, the
parties hereto.
13.7 No Third Party Beneficiaries. No provision of this Agreement is
intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder, except for the indemnification provisions contained
in Articles 8 and 9, which provisions may be enforced by the parties to be
indemnified thereunder.
13.8 Entire Agreement. This Agreement (together with all Exhibits and
Schedules hereto which are incorporated herein by reference), the
Confidentiality Agreement and the Ancillary Agreements constitute the
entire agreement among the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings,
both oral and written, among the parties with respect to such subject
matter. No representation, inducement, promise, understanding, condition
or warranty not set forth herein has been made or relied upon by any party
hereto.
13.9 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future law or
order, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, and (c) the remaining provisions of this Agreement
will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom.
13.10 Construction. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine
or neuter forms, and the singular form of nouns, pronouns and verbs shall
include the plural and vice versa. The name assigned this Agreement and
the section captions used herein are for convenience of reference only and
shall not affect the interpretation and construction hereof. Unless
otherwise specified, (a) the terms hereof, herein and similar terms
refer to this Agreement as a whole and (b) references herein to Articles,
Sections, Schedules or Exhibits refer to articles or sections of or
schedules or exhibits to this Agreement. This Agreement is the result of
arms-length negotiations among the parties hereto and has been prepared
jointly by the parties. In applying and interpreting the provisions of
this Agreement, there shall be no presumption that the Agreement was
prepared by any one party or that this Agreement shall be construed in
favor of or against any one party.
13.11 Specific Performance. The parties acknowledge that money
damages are not an adequate remedy for violations of this Agreement and
that any party may, in its sole discretion, apply to a court of competent
jurisdiction for specific performance or injunctive or such other relief as
such court may deem just and proper in order to enforce this Agreement or
to prevent any violation hereof, this remedy being in addition to any other
remedy to which it is entitled at law or in equity. To the extent
permitted by applicable law, each party waives any objection to the
imposition of such relief.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the date
first above written.
WESTERN FARM & CATTLE COMPANY
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: President
CALIFORNIA LAND & CATTLE COMPANY
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: President
N.N. INVESTORS, L.P.
By: California Land & Cattle Company,
its general partner
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: President
ST RANCH GENPAR, INC.
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: President
FW RANCH PARTNERS, L.P.
By: ST Ranch GenPar, Inc.,
its general partner
By: Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: President
UNITED STATES FILTER CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
