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Exhibit
10.1
CONTRIBUTION AND EQUITY
INTEREST PURCHASE AGREEMENT
by and among
CONAGRA FOODS,
INC.,
CONAGRA FOODS FOOD
INGREDIENTS COMPANY, INC.,
FREEBIRD I, LLC,
FREEBIRD II, LLC,
FREEBIRD HOLDINGS,
LLC
and
FREEBIRD INTERMEDIATE
HOLDINGS, LLC
Dated as of March 27,
2008
Table of Contents
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Page |
| ARTICLE I. DEFINITIONS AND USAGE |
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2 |
| Section 1.1. |
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Definitions |
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2 |
| Section 1.2. |
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Usage |
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18 |
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| ARTICLE II. CONTRIBUTION; PURCHASE AND SALE OF EQUITY
INTERESTS; CLOSING |
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20 |
| Section 2.1. |
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Reorganization; Contribution of CTG Business Assets |
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20 |
| Section 2.2. |
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Purchase
and Sale of Equity Interests in CTG Business |
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21 |
| Section 2.3. |
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Payment
of Purchase Price by Investor |
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21 |
| Section 2.4. |
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Closing |
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22 |
| Section 2.5. |
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Closing
Obligations |
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22 |
| Section 2.6. |
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Final
Balance Sheet; Payments; Disputes |
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25 |
| Section 2.7. |
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Additional Amounts. |
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26 |
| Section 2.8. |
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Tax
Matters Relating to the PIK Notes and the Warrant |
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31 |
| Section 2.9. |
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Investor
Right to Substitute Cash for PIK Notes |
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31 |
| Section 2.10. |
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Investor
Right to Issue PIK Notes to CAG |
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32 |
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| ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE CAG PARTIES
AND THE LLCs |
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32 |
| Section 3.1. |
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Organization and Good Standing |
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32 |
| Section 3.2. |
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Enforceability; Authority; No Conflict |
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32 |
| Section 3.3. |
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CTG
Company Records |
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33 |
| Section 3.4. |
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Company
Interests; Title; Sufficiency of Assets |
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34 |
| Section 3.5. |
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No
Material Adverse Change |
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35 |
| Section 3.6. |
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Employee
Benefits |
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35 |
| Section 3.7. |
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Compliance with Legal Requirements; Governmental
Authorizations |
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37 |
| Section 3.8. |
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Legal
Proceedings; Orders |
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37 |
| Section 3.9. |
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Contracts; No Defaults |
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38 |
| Section 3.10. |
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Insurance |
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39 |
| Section 3.11. |
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Employees |
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40 |
| Section 3.12. |
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Intellectual Property Assets |
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41 |
| Section 3.13. |
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Taxes |
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41 |
| Section 3.14. |
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Brokers
or Finders |
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42 |
| Section 3.15. |
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Environmental Compliance |
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43 |
| Section 3.16. |
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Financial
Statements; No Undisclosed Liabilities |
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44 |
| Section 3.17. |
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Real
Properties. |
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45 |
| Section 3.18. |
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Affiliate
Agreements |
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46 |
| Section 3.19. |
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Material
Financial Assurances |
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46 |
| Section 3.20. |
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FCPA |
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46 |
| Section 3.21. |
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Recent
Developments |
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46 |
| Section 3.22. |
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Export
Controls |
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47 |
| Section 3.23. |
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Inventory |
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47 |
| Section 3.24. |
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Suppliers
and Customers |
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48 |
(i)
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| Section
3.25. |
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No Other
Representation |
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48 |
| Section 3.26. |
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Joint
Ventures |
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48 |
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| ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER
PARTIES |
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48 |
| Section 4.1. |
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Organization and Good Standing |
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48 |
| Section 4.2. |
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Enforceability; Authority; No Conflict |
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49 |
| Section 4.3. |
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Compliance with Legal Requirements; Governmental
Authorizations |
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49 |
| Section 4.4. |
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Legal
Proceedings |
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50 |
| Section 4.5. |
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Brokers
or Finders |
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50 |
| Section 4.6. |
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Available
Funds |
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50 |
| Section 4.7. |
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No Other
Representation |
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50 |
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| ARTICLE V. CONDITIONS PRECEDENT TO BUYER PARTIES’
OBLIGATION TO CLOSE |
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51 |
| Section 5.1. |
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Accuracy
of Representations |
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51 |
| Section 5.2. |
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Performance |
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51 |
| Section 5.3. |
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Material
Consents and Governmental Approvals |
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51 |
| Section 5.4. |
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Additional Documents |
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51 |
| Section 5.5. |
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Orders |
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51 |
| Section 5.6. |
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Material
Adverse Effect |
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51 |
| Section 5.7. |
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Closing
Certificate |
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51 |
| Section 5.8. |
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Reorganization |
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52 |
| Section 5.9. |
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Debt
Financing |
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52 |
| Section 5.10. |
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Equity
Financing |
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52 |
| Section 5.11. |
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Rating
Agency. |
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52 |
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| ARTICLE VI. CONDITIONS PRECEDENT TO THE CAG PARTIES’
OBLIGATION TO CLOSE |
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52 |
| Section 6.1. |
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Accuracy
of Representations |
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52 |
| Section 6.2. |
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Investor's Performance |
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52 |
| Section 6.3. |
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Material
Consents and Governmental Approvals |
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52 |
| Section 6.4. |
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Additional Documents |
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52 |
| Section 6.5. |
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Orders |
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52 |
| Section 6.6. |
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Material
Adverse Effect |
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53 |
| Section 6.7. |
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Closing
Certificate |
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53 |
| Section 6.8. |
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Release
of Financial Assurances; CAG Letters of Credit |
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53 |
| Section 6.9. |
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CTG
Purchase Price Debt Matters |
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53 |
| Section 6.10. |
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ABL
Financing |
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53 |
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| ARTICLE VII. ADDITIONAL COVENANTS |
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53 |
| Section 7.1. |
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Conduct
of CTG Companies |
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53 |
| Section 7.2. |
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Information and Access |
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55 |
| Section 7.3. |
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Notices
of Certain Events |
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56 |
| Section 7.4. |
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Filings;
Reasonable Best Efforts to Close |
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57 |
| Section 7.5. |
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Financial
Statements |
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57 |
| Section 7.6. |
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Employees
and Employee Benefits |
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58 |
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Section 7.7.
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Retention
of and Access to Records |
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65 |
(ii)
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| Section
7.8. |
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Further
Assurances. |
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66 |
| Section 7.9. |
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No
Shop |
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66 |
| Section 7.10. |
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Transition Plans; Novation |
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66 |
| Section 7.11. |
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Termination of Certain Agreements |
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67 |
| Section 7.12. |
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Insurance |
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68 |
| Section 7.13. |
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Change of
Names |
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68 |
| Section 7.14. |
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Financing |
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69 |
| Section 7.15. |
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Noncompete. |
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70 |
| Section 7.16. |
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Contribution of Foreign Buyer and Freebird to Freebird
II |
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71 |
| Section 7.17. |
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Confidential Information. |
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71 |
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| ARTICLE VIII. TERMINATION |
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72 |
| Section 8.1. |
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Termination |
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72 |
| Section 8.2. |
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Effect of
Termination |
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72 |
| Section 8.3. |
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Termination Fees. |
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73 |
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| ARTICLE IX. INDEMNIFICATION |
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75 |
| Section 9.1. |
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Survival |
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75 |
| Section 9.2. |
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Indemnification and Reimbursement by CAG |
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75 |
| Section 9.3. |
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Indemnification and Reimbursement by Investor and the
LLCs |
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76 |
| Section 9.4. |
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Limitations; Exclusive Remedy |
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76 |
| Section 9.5. |
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Third-Party Claims |
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79 |
| Section 9.6. |
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Other
Claims |
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80 |
| Section 9.7. |
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Tax
Provisions |
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80 |
| Section 9.8. |
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Indemnification Payments |
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81 |
| Section 9.9. |
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Allocation of Certain Taxes |
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82 |
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| ARTICLE X. GENERAL PROVISIONS |
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82 |
| Section 10.1. |
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Expenses |
|
82 |
| Section 10.2. |
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Public
Announcements and Confidentiality |
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82 |
| Section 10.3. |
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Tax
Matters |
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83 |
| Section 10.4. |
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Notices |
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88 |
| Section 10.5. |
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Jurisdiction; Waiver of Jury Trial |
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89 |
| Section 10.6. |
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Waiver;
Remedies Cumulative |
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90 |
| Section 10.7. |
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Entire
Agreement and Modification |
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90 |
| Section 10.8. |
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Assignments, Successors and no Third-Party Rights |
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90 |
| Section 10.9. |
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Severability |
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91 |
| Section 10.10. |
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Headings |
|
91 |
| Section 10.11. |
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Governing
Law |
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91 |
| Section 10.12. |
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Execution
of Agreement |
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91 |
| Section 10.13. |
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Specific
Performance |
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91 |
| Section 10.14. |
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Netting
and Set-Off on the Closing Date |
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92 |
| Section 10.15. |
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Incorporation of Schedules |
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92 |
| Section 10.16. |
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NO
RECOURSE. |
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92 |
(iii)
Exhibits
Exhibit A - Form of PIK Notes
Exhibit B - [Reserved]
Exhibit C - Form of Byproducts Services
Agreement
Exhibit D - Form of Grain Storage and
Handling Agreements
Exhibit E - Form of Building 11
Sublease
Exhibit F - Form of Transition Services
Agreement
Exhibit G - Form of Warrant
Exhibit H - Form of Dried Dairy Products
Agreement
Schedules
Schedule 1 -CTG Companies
Schedule 1.1(a) - Agreed
Adjustments
Schedule 1.1(b) - International
Fertilizer Facilities
Schedule 1.1(c) - CTG Foreign
Sellers
Schedule 1.1(d) - Fiscal
Periods
Schedule 1.1(e) - Reference Balance
Sheet
Schedule 1.2(a)(ix)(1) - CAG Knowledge
Officers
Schedule 1.2(a)(ix)(2) - Investor
Knowledge Officers
Schedule 2.1 - Reorganization
Schedule 2.5(b)(ii) - CAG Required
Material Consents
Schedule 2.5(d)(iii) - Investor Required
Material Consents
Schedule 2.5(e) - Name
Changes
Schedule 2.7(b)(ii) - Pre-Closing
Adjusted Pre-Tax Profits
Schedule 3.1(a) - Good
Standing
Schedule 3.1(c) - Exceptions to CTG
Companies
Schedule 3.2(b) - CAG Required
Consents
Schedule 3.2(c) - CAG Required
Governmental and Other Person Approvals
Schedule 3.4(a) - Equity
Interests
Schedule 3.4(c) - Sufficiency of
Assets
Schedule 3.5(a) - Exceptions to Conduct
of Business in Ordinary Course
Schedule 3.6(a)(i) - CAG
Plans
Schedule 3.6(a)(ii) - Trade Group
Plans
Schedule 3.6(c)(iv) - Liabilities in
Respect of Certain Benefits
Schedule 3.6(f) - CAG Plans and Effect
of This Agreement
Schedule 3.7(a) - Compliance with Legal
Requirements
Schedule 3.7(b) - Governmental
Notices
Schedule 3.8(a) - Legal
Proceedings
Schedule 3.8(b) - Orders
Schedule 3.9(a) - CTG Business
Contracts
Schedule 3.9(b) - Defaults and Validity
of CTG Business Contracts
Schedule 3.10(a) - Insurance
Policies
Schedule 3.10(b) - Disputed Insurance
Claims
(iv)
Schedule 3.11(a) - CTG Business
Employees
Schedule 3.11(b) - Collective Bargaining
Agreements and Compliance, Claims and Controversies
Schedule 3.12(a) - Licenses to CTG
Intellectual Property Assets
Schedule 3.13(a) - Taxes
Schedule 3.13(b) - Ongoing
Audits
Schedule 3.15 - Environmental
Matters
Schedule 3.16(a) - Audited Financial
Statements
Schedule 3.16(b) - Undisclosed
Liabilities
Schedule 3.17(a) - Owned Real
Property
Schedule 3.17(b) - Leased Real
Property
Schedule 3.18 - Affiliate
Agreements
Schedule 3.19 - Material Financial
Assurances
Schedule 3.21 - Recent
Developments
Schedule 3.21(f) - CTG Business Employee
Compensation Changes Since May 27, 2007
Schedule 3.24 - Suppliers and
Customers
Schedule 4.2(b) - Investor Required
Consents
Schedule 4.2(c) - Investor Required
Governmental Approvals
Schedule 4.3(a) - Investor Compliance
with Legal Requirements
Schedule 4.3(b) - Governmental
Notices
Schedule 4.3(c) - Investor Governmental
Authorizations
Schedule 4.5 - Investor Brokers or
Finders
Schedule 6.8 - Release of Financial
Assurances
Schedule 7.1 - Exceptions to Conduct of
CTG Companies Schedule 7.1(j) - VaR Limits
Schedule 7.1(k) - Special Compensation
Adjustments and Retention Awards
Schedule 7.4(a)(ii) - Investor
Governmental Licenses
Schedule 7.6(f) - Severance
Benefits
Schedule 10.3(a)(iii) - Straddle Period
Tax Returns
Schedule 10.3(f) - United States Federal
Income Tax Classification
(v)
CONTRIBUTION AND EQUITY
INTEREST PURCHASE AGREEMENT
This CONTRIBUTION AND EQUITY
INTEREST PURCHASE AGREEMENT, dated as of March 27, 2008, is
entered into by and among ConAgra Foods, Inc., a Delaware
corporation ( “CAG ”), ConAgra Foods Food
Ingredients Company, Inc., a Delaware corporation and a
wholly-owned subsidiary of CAG (“ CFFIC ” and,
together with CAG, the “ CAG Parties ”),
FREEBIRD I, LLC, a Delaware limited liability company
(“Freebird”), FREEBIRD II, LLC a Delaware limited
liability company (“Freebird II” and together with
Freebird, the “ LLCs ”), Freebird Holdings, LLC,
a Delaware limited liability company (“Holdco”) and
FREEBIRD INTERMEDIATE HOLDINGS, LLC, a Delaware limited liability
company (“ Investor ” and, together with Holdco,
the “Buyer Parties‘). The CAG Parties and the Buyer
Parties may be referred to herein individually as a “
Party ” and collectively as the “ Parties
.‘
RECITALS
WHEREAS, the entities listed
on Schedule 1 (the “ CTG Companies ”) are
direct or indirect Subsidiaries of CAG and are engaged in the
international sourcing, merchandising, trading, marketing and
distribution of agricultural and energy commodities;
WHEREAS, the Buyer Parties
were formed for the purpose of entering into the transactions
contemplated herein;
WHEREAS, the CAG Parties have
formed the LLCs for the purposes contemplated by this
Agreement;
WHEREAS, the CAG Parties wish
to contribute certain assets and liabilities related to the CTG
Business to the LLCs, and to retain and be responsible for certain
liabilities related to the CTG Business, all on the terms set forth
in this Agreement;
WHEREAS, Investor wishes to
purchase from the CAG Parties, and the CAG Parties wish to sell to
Investor, all of the issued and outstanding limited liability
company interests of the LLCs;
WHEREAS, Holdco desires to
issue to CAG the Warrant as partial consideration for the purchase
of the limited liability company interests of the LLCs;
WHEREAS, prior to Closing,
Investor intends to form one or more non-U.S. entities
(collectively “Foreign Buyer‘) that will be directly or
indirectly wholly-owned by Investor, for the purpose of assuming
Investor’s rights and performing Investor’s obligations
hereunder with respect to the acquisition of the CTG Foreign
Companies and certain non-U.S. assets and liabilities of the CTG
Business and certain other matters set forth herein, in each case,
pursuant to Section 10.8 , which Foreign Buyer will be
contributed to Freebird II pursuant to Section 7.16 ;
and
WHEREAS, CTG Foreign Sellers
wish to sell to Foreign Buyer, all of the issued and outstanding
Equity Interests in the CTG Foreign Companies.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto, intending to be legally
bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS AND
USAGE
Section 1.1.
Definitions . For purposes of this Agreement, the following
terms and variations thereof have the meanings specified or
referred to in this Section 1.1 :
“ 10.5% Purchase
Price PIK Notes ” means the Investor’s unsecured
10.5% Senior Notes, due on the second anniversary of the Closing
Date, in the original principal amount equal to 18.18% of the
original aggregate principal amount of all Purchase Price PIK Notes
issued to CAG and CFFIC, as applicable, in the form of Exhibit
A attached hereto.
“ 10.75% Earnout
Amount PIK Notes ” means the Investor’s unsecured
10.75% Senior Notes, due on the third anniversary of the Closing
Date, in the original principal amount as determined pursuant to
Section 2.7(d) , issued to CAG and CFFIC, as applicable, in
the form of Exhibit A attached hereto.
“ 10.75% Purchase
Price PIK Notes ” means the Investor’s unsecured
10.75% Senior Notes, due on the third anniversary of the Closing
Date, in the original principal amount equal to 36.37% of the
original aggregate principal amount of all Purchase Price PIK Notes
issued to CAG and CFFIC, as applicable, in the form of Exhibit
A attached hereto.
“ 11% Purchase Price
PIK Notes ” means the Investor’s unsecured 11%
Senior Notes, due on the fourth anniversary of the Closing Date, in
the original principal amount equal to 45.45% of the original
aggregate principal amount of all Purchase Price PIK Notes issued
to CAG and CFFIC, as applicable, in the form of Exhibit A
attached hereto.
“ ABL Financing
” means the financing contemplated by Exhibit A of the
written commitments from the Lenders to make available the Debt
Financing, a complete and correct copy of which has been delivered
to CAG prior to the date hereof.
“ Adjusted Pre-Tax
Profits ” has the meaning set forth in Section
2.7(b)(i) .
“ Adjusted Pre-Tax
Profits Objection Notice ” has the meaning set forth in
Section 2.7(c) .
“ Affiliate
” means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct
or indirect common control with the specified Person. A Person
shall be deemed to control another Person if such Person possesses,
directly or indirectly, the power to direct or cause the direction
of the management and policies of the “controlled”
Person, whether through ownership of voting securities, by contract
or otherwise. “Affiliate” also includes any Person who
is related by blood or marriage to the Person in
question.
-2-
“ Affiliate
Agreements ” has the meaning set forth in Section
3.18 .
“ Agreed
Adjustments ” means the adjustments set forth on
Schedule 1.1(a) .
“ Agreement
” means this Contribution and Equity Interest Purchase
Agreement, as the same may be amended, restated, modified or
supplemented from time to time in accordance with its terms, and
the Exhibits and Schedules hereto and thereto.
“ Allocation Notice
of Objection ” has the meaning set forth in
Section 10.3(d)(ii) .
“ Assignment and
Assumption Agreement ” means that certain Assignment and
Assumption Agreement by and among CAG, the LLCs and any other party
to such agreement in a form reasonably acceptable to the
Parties.
“ Assumed
Liabilities ” has the meaning as set forth in the
Assignment and Assumption Agreement and shall be consistent with
the provisions of this Agreement, including, without limitation,
the definition of Retained Liabilities and the indemnification
provisions.
“ Audited Financial
Statements ” has the meaning set forth in Section
3.16(a) .
“ Building 11
Sublease ” means that certain Lease Agreement by and
among CAG, CTG and any other party to such agreement, substantially
in the form of Exhibit E attached hereto.
“ Business Day
” means a day other than Saturday, Sunday and any day on
which banks located in the State of New York are authorized or
obligated to close.
“ Buyer Parties
” has the meaning set forth in the Recitals.
“ Byproducts
Services Agreement ” means that certain Wheat Byproducts
Supply Agreement by and among CAG, CTG and any other party to such
agreement, substantially in the form of Exhibit C attached
hereto.
“ CAG ”
has the meaning set forth in the preamble.
“ CAG Cash Purchase
Price ” means the portion of the Purchase Price payable
to CAG at the Closing pursuant to Section 2.3
.
“ CAG Foreign
Plan ” has the meaning set forth in Section 3.6(a)
.
“ CAG Non-Union
Retirement Benefits ” has the meaning set forth in
Section 7.6(e)(i) .
-3-
“ CAG Notice of
Objection ” has the meaning set forth in Section
2.6(b) .
“ CAG Parties
” has the meaning set forth in the preamble.
“ CAG Plans
” has the meaning set forth in Section 3.6(a)
.
“ CAG Required
Consents ” has the meaning set forth in Section
3.2(b) .
“ CAG US Plan
” has the meaning set forth in Section 3.6(a)
.
“ Cash ”
means all cash and cash equivalents computed in accordance with
GAAP.
“ CFFIC ”
has the meaning set forth in the preamble.
“ CFFIC Purchase
Price PIK Notes ” means the Purchase Price PIK Notes
issuable to CFFIC pursuant to Section 2.3 .
“ CFFIC Cash
Purchase Price ” means the portion of the Purchase Price
payable at the Closing to CFFIC pursuant to Section 2.3
minus the original aggregate principal amount of the CFFIC Purchase
Price PIK Notes.
“ CIFC ”
means ConAgra International Fertilizer Company, a Delaware
corporation.
“ Closing
” has the meaning set forth in Section 2.4
.
“ Closing Balance
Sheet ” means a combined balance sheet of the LLCs and a
balance sheet for each of the CTG Foreign Companies as of
immediately prior to the Closing (and after giving effect to the
consummation of the Reorganization and the payment of the
Fertilizer Payables) estimated based on the balance sheets of the
CTG Business as of the last day of the most recently completed
Fiscal Period and other available data regarding the then current
Fiscal Period and prepared by CAG in accordance with GAAP and on a
basis consistent with the GAAP conventions used for the preparation
of the Reference Balance Sheet, except that the Agreed Adjustments
shall be made thereon.
“ Closing Date
” has the meaning set forth in Section 2.4
.
“ Closing Net Equity
Book Value ” means the combined stockholders' equity of
the LLCs and the stockholders’ equity of each of the CTG
Foreign Companies on the Closing Date (and after giving effect to
the consummation of the Reorganization and the payment of the
Fertilizer Payables) as shown on the Closing Balance
Sheet.
“ Code ”
means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, in each case as in effect from
time to time. References to sections of the Code shall be construed
also to refer to any successor sections.
-4-
“ Collective
Bargaining Agreement ” means any agreement between any of
the CAG Parties or the CTG Companies and any labor organization (as
defined under the National Labor Relations Act) concerning wages,
hours and other terms and conditions of employment covering CTG
Business Employees.
“ Commodity
” has the meaning assigned to such term in the United States
Commodity Exchange Act as in effect on the date of this
Agreement.
“ Commodity
Transactions ” means (i) spot, forward, futures,
option, deposit, consignment, loan, lease, swap, exchange, sale,
purchase and repurchase (including reverse repurchase and prepaid
forward transactions) transactions, hedge transactions, allocated
transactions, unallocated transactions, forward rate agreements,
cap agreements, floor agreements, collar agreements, or any
combination thereof or option or derivative thereon or similar
transaction, in any case involving any Commodity or indices on, or
comprised of, any Commodity; (ii) dealing, market-making,
clearing, brokering, trading, marketing, buying, selling or
distributing Commodities or transactions of the type described in
clause (i) of this definition; and
(iii) refining, processing, blending, tolling, otherwise
altering, producing, marketing, distributing (at wholesale and
retail), storing, shipping, transporting and generating Commodities
through agreements with third parties.
“ Consent
” means any approval, consent, ratification, waiver or other
authorization.
“ Contamination
” means the presence or existence in surface water,
groundwater, soil or subsurface strata of any Hazardous Substance
as a result of an emission, discharge or release of any Hazardous
Substance to, on, onto or into the Environment.
“ Contemplated
Transactions ” means all of the transactions expected to
be consummated under Article II of this
Agreement.
“ Continuation
Period ” has the meaning set forth in
Section 7.6(c) .
“ Contract
” means any contract, Lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement or other
commitment, undertaking or agreement (whether written or oral) that
is legally binding and related exclusively to the CTG
Business.
“ CTG ”
means ConAgra Trade Group, Inc., a Delaware corporation.
“ CTG Business
” means the domestic and international grain merchandising,
fertilizer distribution, agricultural and energy commodities
trading and services, and grain, animal and oil seed byproducts
merchandising and distribution business, considered as a whole and
as so engaged in by the CAG Parties and the CTG Companies and, for
all purposes hereunder other than Article III , by virtue of
and solely to the extent of the Equity Interests of the JVs held by
CAG and its Subsidiaries, and solely for purposes of
Section 7.9 and 7.15 , the JVs.
-5-
“ CTG Business
Assets ” means the assets of the CTG Business that will
be owned directly or indirectly by the LLCs and the CTG Foreign
Companies immediately following the consummation of the
Reorganization.
“ CTG Business
Employees ” has the meaning set forth in Section
3.6(a) .
“ CTG Business
Material Contract ” has the meaning set forth in
Section 3.9(c) .
“ CTG Companies
” has the meaning set forth in the Recitals; provided
that the term “CTG Companies“ shall refer to all of
the entities listed on Schedule 1 , collectively, and the
term “CTG Company“ shall refer to each of such
entities.
“ CTG Employment
Agreements ” has the meaning set forth in
Section 3.11(a) .
“ CTG Foreign
Business Employees ” has the meaning set forth in
Section 3.6(a) .
“ CTG Foreign
Companies ” means each of the CTG Companies designated on
Schedule 1 as an entity whose equity will not be contributed
to the LLCs but will instead be sold directly to Foreign Buyer
pursuant to Section 2.2 .
“ CTG Foreign
Sellers ” means each Person designated on Schedule
1.1(c) as an entity who will sell Equity Interests in the CTG
Foreign Companies to Foreign Buyers pursuant to
Section 2.2 .
“ CTG Foreign
Sellers Cash Purchase Price ” means the portion of the
Purchase Price payable at the Closing to the CTG Foreign Sellers
pursuant to Section 2.3 .
“ CTG Intellectual
Property Assets ” has the meaning set forth in Section
3.12(a) .
“ CTG Material
Adverse Effect ” means any event, change, circumstance or
occurrence that, individually or together with any other event,
change, circumstance or occurrence, has had a material adverse
effect on (a) the business, assets, operations, or financial
condition of the CTG Companies and their interests in the JVs,
taken as a whole, or (b) the ability of the CAG Parties to
perform their material obligations under this Agreement or any
Related Agreement or to consummate the transactions contemplated
hereby or thereby; provided that any such effect
shall, to the extent resulting from the following, be disregarded
in determining whether a “CTG Material Adverse Effect“
has occurred: (i) any changes in Legal Requirements (or
official interpretations thereof) that are generally applicable to
commodities or energy trading businesses, agricultural
merchandising or distribution businesses, fertilizer distribution
businesses or the commodities or energy markets in general, to the
extent that any such change does not have a disproportionate impact
on the CTG Companies relative to other Persons in similar
businesses; (ii) any adverse change or event to the extent
affecting the economy, commodities or energy trading businesses,
agricultural merchandising or
-6-
distribution businesses,
fertilizer distribution businesses or the commodities or energy
markets in general, to the extent that any such adverse change or
event does not have a disproportionate impact on the CTG Companies
relative to other Persons in similar businesses; (iii) any
failure by the CTG Companies to meet any estimates of revenues or
earnings for any period ending on or after the date of this
Agreement and prior to the Closing; provided that the
exception in this clause shall not prevent or otherwise affect a
determination that any change, effect, circumstance or occurrence
underlying such failure has resulted in, or contributed to, a CTG
Material Adverse Effect; (iv) any adverse change or effect to
the extent resulting from Investor's material breach of its
obligations under Section 7.10 ; or (v) national
or international political or social conditions, including the
engagement by the United States of America in hostilities, whether
or not pursuant to the declaration of a national emergency or war,
or the occurrence of any military or terrorist attack upon the
United States of America, or any of its territories, possessions,
or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States of
America.
“ CTG Purchase Price
Debt ” means the aggregate amount of debt financing
incurred or obtained by Investor and/or LLCs to fund the cash
portion of the Purchase Price.
“ CTG Purchase Price
Debt Threshold ” means the excess of (x) the amount
of CTG Working Capital reflected on the Closing Balance Sheet over
(y) the sum of (i) $1.1 billion and (ii) the amount
paid during the period beginning ten (10) Business Days prior
to Closing and ending three (3) Business Days prior to Closing
to reduce the Fertilizer Payables.
“ CTG US Business
Employees ” has the meaning set forth in
Section 3.6(a) .
“ CTG Working
Capital ” means current assets less non-interest bearing
current liabilities (excluding intercompany receivables and
payables), in each case, as reflected on the Closing Balance
Sheet.
“ Debt Financing
” has the meaning set forth in Section 4.6
.
“ Deductible
” has the meaning set forth in Section 9.4(a)
.
“ Designated
Employee ” has the meaning set forth in Section
7.1(k) .
“ Dried Dairy
Products Agreement ” means the letter agreement between
CFFIC and CTG substantially in the form of Exhibit H
attached hereto.
“ Earn-Out
Amount ” has the meaning set forth in Section
2.7(a) .
“ Earn-Out Cap
” has the meaning set forth in Section 2.7(a)
.
“ Earn-Out
Period ” has the meaning set forth in Section
2.7(a) .
-7-
“ Encumbrance
” means any lien, option, pledge, assessment, adverse claim,
levy, charge, security interest, mortgage, right of way, easement,
encroachment, servitude, conditional sale Contract or similar
restriction or Contract to give any of the foregoing.
“ End Date
” has the meaning set forth in Section 8.1(b)
.
“ Environment
” means navigable waters, waters of the contiguous zone,
ocean waters, surface waters, groundwater, drinking water supply,
land surface, soil, subsurface strata or outdoor or indoor
air.
“ Environmental
Laws ” means, collectively, as enacted and in effect as
of the Closing Date, any and all laws, ordinances, rules,
regulations, directives, Orders, authorizations, decrees, notices,
permits, binding plans, demand letters or other mandates,
proscriptions or prescriptions of any nature, of a Governmental
Authority relating in any way to any Hazardous Substance,
Contamination, protection of the Environment, protection of natural
resources, or work place health and safety, including, without
limitation, those relating to emissions, discharges, releases or
threatened emissions, discharges or releases to, on, onto or into
the Environment of, or exposures or threatened exposures to, any
Hazardous Substance.
“ Environmental
Liability ” shall mean Liabilities arising under any
Environmental Laws for response, remedial or investigation costs,
and any other expenses (including reasonable attorney and
consultant fees, laboratory costs and litigation costs) required
under, arising from, or necessary to attain or maintain compliance
with, applicable Environmental Laws or relating to or arising from
Contamination or Hazardous Substances.
“ Environmental
Matters ” means any matter arising out of or relating to
(a) Contamination; (b) Environmental Laws or compliance
with Environmental Laws; (c) protection of the Environment; or
(d) workplace and occupational health and safety.
“ Environmental
Permits ” means all approvals, consents, permits,
licenses, registrations and authorizations required by applicable
Environmental Laws in order to operate the CTG Business, Owned Real
Property, the Leased Real Property, and CTG Business Assets as
operated by the CTG Companies as of the Closing Date.
“ Equity
Commitment ” means (a) options, warrants,
convertible securities, exchangeable securities, subscription
rights, conversion rights, exchange rights, or other Contracts that
could require a Person to issue any of its Equity Interests or to
sell any Equity Interests it owns in another Person; (b) any
other securities convertible into, exchangeable or exercisable for,
or representing the right to subscribe for any Equity Interest of a
Person or owned by a Person; (c) statutory pre-emptive rights
or pre-emptive rights granted under a Person’s Governing
Documents; and (d) stock appreciation rights, phantom stock,
or other similar rights with respect to a Person.
“ Equity
Financing ” has the meaning set forth in Section
4.6 .
-8-
“ Equity
Interest ” means (a) with respect to a corporation,
any and all shares of capital stock; (b) with respect to a
partnership, limited liability company, trust or similar Person,
any and all units, interests or other partnership/limited liability
company interests; and (c) any other direct or indirect equity
ownership, participation or voting right or interest in a Person
(including any Contract in the nature of a voting trust or similar
agreement or understanding or Indebtedness having general voting
rights).
“ ERISA ”
means the Employee Retirement Income Security Act of 1974, as
amended.
“ ERISA
Affiliate ” means any organization which is a member of a
controlled group of organizations within the meaning of Sections
414(b), (c), (m) or (o) of the Code.
“ Exchange Act
” means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to
time.
“ Expert ”
has the meaning set forth in Section 2.6(c) .
“ FCPA ”
means the Foreign Corrupt Practices Act of 1977, 15 U.S.C. Sections
78a, 78m(b), 78dd-1, 78dd-2 and 78ff, as amended.
“ Fertilizer
Payables ” means short-term notes of the type described
in the Audited Financial Statements that arise out of purchases of
fertilizer and that are supported by the credit agreements set
forth on Schedule 1.1(b) .
“ Final Allocation
Schedule ” has the meaning set forth in
Section 10.3(d)(ii) .
“ Final Balance
Sheet ” has the meaning set forth in Section
2.6(b) .
“ Final Net Equity
Book Value ” has the meaning set forth in Section
2.6(b) .
“ Financial
Assurances ” has the meaning set forth in Section
3.19 .
“ Fiscal Period
” means the applicable period set forth on Schedule
1.1(d) .
“ Foreign Buyer
” has the meaning set forth in the Recitals.
“ Freebird
” has the meaning set forth in the Preamble.
“ Freebird II
” has the meaning set forth in the Preamble.
“ GAAP ”
means U.S. generally accepted accounting principles in effect from
time to time , applied on a consistent basis.
“ Governing
Documents ” means with respect to any particular entity,
(a) if a corporation, the articles or certificate of
incorporation and the bylaws; (b) if a general
-9-
partnership, the partnership
agreement and any statement of partnership; (c) if a limited
partnership, the limited partnership agreement and the certificate
of limited partnership; (d) if a limited liability company,
the certificate of formation and limited liability company
agreement; (e) if another type of Person, any other charter or
similar document adopted or filed in connection with the creation,
formation or organization of the Person; (f) all equity
holders’ agreements, voting agreements, voting trust
agreements or other similar agreements or documents relating to the
organization, management or operation of such entity; and
(g) any amendment or supplement to any of the
foregoing.
“ Governmental
Authorization ” means any Consent, license,
qualification, certificate, franchise, confirmation, registration,
clearance, Order or permit issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
“ Governmental
Body ” means any international, federal, state, local,
municipal, foreign or other governmental or quasi-governmental
authority or self-regulatory organization of any nature (including
any agency, branch, department, board, commission, court, tribunal
or other entity exercising governmental or quasi-governmental
powers) or exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, enforcement,
regulatory or taxing authority or power.
“ Grain Storage and
Handling Agreement ” means that certain Grain Storage and
Handling Agreement, by and among CAG, CTG and any other party to
such agreement, substantially in the form of Exhibit D
attached hereto.
“ Hazardous
Substance ” shall mean any element, substance, compound
or mixture whether solid, liquid or gaseous, that: (a) is or
shall in the future be subject to regulation of any kind by any
Governmental Body with regard to protection of the Environment or
protection of human health and safety from environmental and
occupational hazards; or (b) the presence, existence or
threatened presence or existence of which shall at any time give
rise to any Environmental Liability.
“ Holdco ”
has the meaning set forth in the Preamble.
“ Inactive US
Employees ” has the meaning set forth in
Section 7.6(a)(ii) .
“ Indebtedness
” means with respect to any Person, any obligations of such
Person (a) for borrowed money, (b) evidenced by notes,
bonds, debentures or similar instruments, (c) for the deferred
purchase price of goods or services (other than payables or
accruals incurred in the Ordinary Course of Business, including in
connection with any trades, hedges or other transactions entered
into in connection with the CTG Companies’ trading
activities), (d) under capital leases and (e) in the
nature of guarantees of the obligations described in clauses
(a) through (d) above of any other Person
(but does not include any Cash collateral or any obligation under
any credit support agreement to return any posted collateral
(including Cash collateral) in each case relating to the Trading
Agreements).
-10-
“ Indebtedness for
Borrowed Money ” means with respect to any Person, any
obligations of such Person (a) for borrowed money,
(b) evidenced by notes, bonds, debentures or similar
instruments, and (c) in the nature of guarantees of the
obligations described in clauses (a) and (b)
above of any other Person (but does not include any Cash
collateral or any obligation under any credit support agreement to
return any posted collateral (including Cash collateral) in each
case relating to the Trading Agreements).
“ Indemnified
Persons ” means any of the Section 9.2 Indemnified
Persons and Section 9.3 Indemnified Persons.
“ Indemnifying
Person ” has the meaning set forth in Section
9.5(a) .
“ Interim Fiscal
Period Financials ” has the meaning set forth in
Section 3.16(a) .
“ Inventory
” means all raw materials, supplies, work in process,
finished goods and other inventories of the CTG Business (including
goods in transit or in possession of third parties) included in the
CTG Business Assets.
“ Investment Grade
Rating ” has the meaning given to such terms in the PIK
Notes.
“ Investor
“ has the meaning set forth in the preamble.
“ Investor
Governmental Licenses ” has the meaning set forth in
Section 7.4(a) .
“ Investor Material
Adverse Effect ” means any event, change, circumstance or
occurrence that, individually or together with any other event,
change, circumstance or occurrence, has had a material adverse
effect on the ability of Investor to perform its obligations under
this Agreement or the Related Agreements or to consummate the
transactions contemplated hereby or thereby; provided that
any such effect shall, to the extent resulting from the following,
be disregarded in determining whether an “Investor Material
Adverse Effect” has occurred: (i) any changes in Legal
Requirements (or official interpretations thereof) that are
generally applicable to commodities or energy trading businesses,
agricultural merchandising or distribution businesses, fertilizer
distribution businesses or the commodities or energy markets in
general, to the extent that any such change does not have a
disproportionate impact on Investor relevant to other Persons in
similar businesses; (ii) any adverse change or event to the
extent affecting the economy, commodities or energy trading
businesses, agricultural merchandising or distribution businesses,
fertilizer distribution businesses or the commodities or energy
markets in general, to the extent that any such change does not
have a disproportionate impact on Investor relevant to other
Persons in similar businesses; or (iii) national or
international political or social conditions, including the
engagement by the United States of America in hostilities, whether
or not pursuant to the declaration of a national emergency or war,
or the occurrence of any military or terrorist attack upon the
United States of America, or any of its territories, possessions,
or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States of
America.
-11-
“ Investor Notice of
Objection ” has the meaning set forth in Section
2.6(b) .
“ Investor Required
Consents ” has the meaning set forth in Section
4.2(b) .
“ Junior
Indebtedness ” has the meaning set forth in
Section 2.5(c) .
“ JVs “
means CTG Wilmar Pty Ltd. and Kalama Export Company,
LLC.
“ knowledge
” has the meaning set forth in Section 1.2(a)(ix)
.
“ Lease ”
means any lease or rental agreement pertaining to the occupancy of
any real property or any lease or rental agreement, license,
Contract, right to use or installment and conditional sale
agreement pertaining to the leasing or use of any Tangible Personal
Property.
“ Leased Real
Property ” has the meaning set forth in
Section 3.17(b) .
“ Lease
Agreements ” means all leases, subleases, licenses,
concessions and other agreements including without limitation,
railroad rights of way, rail road yard and similar agreements
pursuant to which the LLCs and/or one of their Subsidiaries hold
any Leased Real Property or the right to use such Leased Real
Property in connection with the CTG Business.
“ Legal
Requirement ” means any laws, statutes, treaties, rules,
regulations, ordinances, judgments, decrees, principles of common
law, codes, orders and other pronouncements having the effect of
law of any Governmental Bodies, including all Governmental
Authorizations.
“ Lenders
” has the meaning set forth in Section 4.6
.
“ Liability
” means with respect to any Person, any Indebtedness,
liability or obligation of such Person of any kind, character or
description, whether known or unknown, absolute or contingent,
accrued or unaccrued, disputed or undisputed, liquidated or
unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined, determinable
or otherwise, and whether or not the same is required by GAAP to be
accrued on the financial statements of such Person.
“ LLC Welfare
Plans ” has the meaning set forth in
Section 7.6(c) .
“ LLCs ”
has the meaning set forth in the preamble.
“ Losses ”
means any and all damages, losses, liabilities, costs and expenses,
and any and all claims, demands or suits (by any Person, including
without limitation any Governmental Body), including without
limitation the costs and expenses of any and all actions, suits,
proceedings, charges, demands, assessments, judgments,
-12-
deficiencies, Taxes,
interest, penalties, diminution of value (relating to or arising
out of the breach of a representation or warranty or covenant made
by a CAG Party in this Agreement), loss of profits, and (to the
extent payable to Third Parties) punitive damages including
reasonable attorneys’ fees and expenses in connection
therewith, but excluding any multiple of profits and exemplary (to
the extent not payable to Third Parties), punitive, special,
indirect, remote, speculative, or consequential damages.
“ Material
Consents ” means those certain CAG Required Consents and
the Investor Required Consents the failure of which to be obtained
would reasonably be expected to have a CTG Material Adverse
Effect.
“ Material
Governmental Approvals ” means the expiration or
termination of all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and any required approval of the Mexican Federal Competition
Commission, the Republic of South Africa Competition Commission,
and any other Governmental Authorization where the failure to
obtain such a Governmental Authorization would constitute more than
an immaterial violation of a Legal Requirement relating to
competition or merger control and where the parties have been
unable to implement alternative arrangements pursuant to Section
7.8(b) .
“ Multiemployer
Plan ” has the meaning set forth in
Section 3.6(a) .
“ Noncompete
Period ” has the meaning set forth in Section
7.15(a) .
“ Off-Site
Contamination ” means: (a) Contamination at any real
property previously (but not currently) owned, leased or operated
by the CTG Companies or CAG and its Subsidiaries, insofar as it
relates to the CTG Business or CTG Business Assets;
(b) Contamination, to the extent arising from pre-Closing
actions or inactions, at real property at which the CTG Companies
or CAG and its Subsidiaries, insofar as it relates to the CTG
Business, have ever conducted product storage or handling for third
parties; or (c) Contamination, to the extent arising from
pre-Closing actions or arrangements, at any off-site location or
locations to which the CAG and its Subsidiaries, insofar as it
relates to the CTG Business, or the CTG Companies transported,
arranged for the transportation of, disposed of, or arranged for
disposal of Hazardous Substances generated by the CTG Companies or
CAG and its Subsidiaries, insofar as it relates to the CTG
Business, in each and every of the foregoing cases excluding
Contamination on the Owned Real Property and Leased Real Property.
Off-Site Contamination shall not mean or include the effects or
results of migration outside or beyond the boundary lines of the
Owned Real Property and Leased Real Property.
“ On-Site
Contamination ” means Contamination exceeding applicable
cleanup standards or remediation thresholds and the physical
effects of such Contamination, in, on, under or about or emanating
or migrating from the Owned Real Property or Leased Real Property.
On-Site Contamination shall mean and include the effects or results
of migration outside or beyond the boundary lines of the Owned Real
Property and Leased Real Property.
-13-
“ Order ”
means any order, writ, injunction, judgment, decree, ruling,
assessment or arbitration award of any Governmental Body or
arbitrator (in each case whether preliminary or final).
“ Ordinary Course of
Business ” means the ordinary course of business of a
Person; provided that an action taken by a Person will be
deemed to have been taken in the ordinary course of business if
that action is substantially consistent with the past practices of
such Person.
“ Owned Real
Property ” has the meaning set forth in Section
3.17(a) .
“ Parent US
Plans ” has the meaning set forth in
Section 7.6(c) .
“ Party ”
has the meaning set forth in the preamble.
“ Permissible
Trading Activities ” means the conduct of any aspect of
the trading businesses comprising part of the CTG Business in the
Ordinary Course of Business.
“ Permitted
Encumbrance ” means (a) any Encumbrance for Taxes,
assessments, government charges or levies not yet due or delinquent
or being contested in good faith by appropriate proceedings for
which appropriate reserves have been established in accordance with
GAAP, (b) any statutory Encumbrance arising in the Ordinary
Course of Business by operation of Legal Requirements with respect
to a Liability that is not yet due or delinquent or that is being
contested in good faith by appropriate proceedings for which
appropriate reserves have been established in accordance with GAAP,
(c) Encumbrances of vendors, suppliers, carriers,
warehousemen, mechanics, materialmen and repairmen incurred in the
Ordinary Course of Business that are not material in nature,
(d) pledges or deposits to secure obligations under
workers’ compensation laws or similar legislation or to
secure public or statutory obligations, (e) easements,
covenants, conditions, rights-of-way or minor title or survey
exceptions and other similar restrictions, in each case that are
not violated by, or would not adversely affect, current use of the
real property affected thereby in any material respect and
(f) Encumbrances incurred in the Ordinary Course of Business
to secure Indebtedness of any CTG Company or any CTG Company
obligations under Trading Agreements incurred in the Ordinary
Course of Business.
“ Person ”
means any natural person, corporation, general partnership, limited
partnership, limited liability company, joint venture, trust,
union, proprietorship, Governmental Body or other entity,
association or organization of any nature, however and wherever
organized or constituted.
“ PIK Notes
” means the Purchase Price PIK Notes and the 10.75% Earnout
Amount PIK Notes, each substantially in the form of Exhibit
A attached hereto.
“ Policies
” has the meaning set forth in Section 3.10(a)
.
-14-
“ Post-Closing Tax
Period ” means any taxable period that begins after the
Closing Date.
“Pre-Closing
Adjusted Pre-Tax Profits ” has the meaning set forth in
Section 2.7(b)(ii) .
“ Pre-Closing
Adjusted Pre-Tax Profits Objection Notice ” has the
meaning set forth in Section 2.7(b)(ii) .
“ Pre-Closing Tax
Period ” has the meaning set forth in Section
9.2(d) .
“ Proceeding
” means any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether public or
private) commenced, brought, conducted or heard by or before any
Governmental Body or arbitrator.
“ Proposed
Allocation Schedule ” has the meaning set forth in
Section 10.3(d)(ii) .
“ Proposed Final
Balance Sheet ” has the meaning set forth in Section
2.6(a) .
“ Proposed Final Net
Equity Book Value ” has the meaning set forth in
Section 2.6(a) .
“ Purchase Price
” has the meaning set forth in Section 2.3
.
“ Purchase Price PIK
Notes ” means, collectively, the 10.5% Purchase Price PIK
Notes, the 10.75% Purchase Price PIK Notes and the 11% Purchase
Price PIK Notes.
“ Ratings
” means ratings for the ABL Financing obtained within
forty-five (45) days prior to the Closing (but giving effect
to the Closing) provided by each Rating Agency.
“ Rating Agency
” means each of Moody’s Investor Service, Inc. and
Standard & Poor’s, a division of the McGraw-Hill
Companies, Inc.
“ Ratings Adjustment
Amount ” means: (a) the aggregate principal amount
at Closing of all Purchase Price PIK Notes issued at Closing
multiplied by (b) 0.075.
“ Reference Balance
Sheet ” means the combined balance sheet of the LLCs and
the CTG Foreign Companies as of February 24, 2008 (assuming
consummation of the Reorganization), prepared in accordance with
GAAP as of the date of such balance sheet showing the assets,
liabilities and stockholders’ equity of the CTG Business as
of such date, including the components thereof attached hereto as
Schedule 1.1(e) .
“ Related
Agreements ” means the Warrant, the Byproducts Services
Agreement, the Grain Storage and Handling Agreement, the Building
11 Sublease, the Transition Services Agreement, the Assignment and
Assumption Agreement, the Dried Dairy Products Agreement and the
PIK Notes.
-15-
“ Reorganization
” has the meaning set forth in Section 2.1
.
“ Representative
” means with respect to a particular Person, any director,
officer, manager, employee, agent, consultant, advisor, accountant,
financial advisor, legal counsel or other representative of that
Person.
“ Restricted
Business ” has the meaning set forth in Section
7.15(a) .
“ Retained
Liabilities ” means (i) any liabilities of the CAG
Parties or the CTG Companies to the extent not related to the
domestic and international grain merchandising, fertilizer
distribution, agricultural and energy commodities trading and
services, and grain, animal and oil seed byproducts merchandising
and distribution business, as engaged in by the CAG Parties or the
CTG Companies on or prior to the date hereof and (ii) except
to the extent such liabilities are reflected in the Closing Balance
Sheet and included in the calculation of the Purchase Price, any
Liabilities with respect to each CAG Plan that is not a Trade Group
Plan.
“ Schedule
” means each schedule provided by CAG or Investor, as
applicable, in accordance with this Agreement.
“ Section 338(g)
Election ” has the meaning set forth in
Section 10.3(h) .
“ Section 9.2
Indemnified Persons ” has the meaning set forth in
Section 9.2.
“ Section 9.3
Indemnified Persons ” has the meaning set forth in
Section 9.3 .
“ Securities Act
” means the Securities Act of 1933 and any statute successor
thereto, in each case as amended from time to time.
“ Straddle
Period ” means any taxable period that begins before and
ends after the Closing Date.
“ Subsidiary
” means, with respect to any Person, another Person (other
than a natural person), of which such first Person is entitled,
directly or indirectly through one or more Subsidiaries, through
the ownership or control of voting securities, other voting
ownership or voting partnership interests or otherwise, to elect at
least a majority of its board of directors or other managing
authority or to otherwise, directly or indirectly, control the
management of such Person; provided that for purposes
of this Agreement (but only prior to Closing), the CTG Companies
shall be deemed to be Subsidiaries of CAG.
“ Tangible Personal
Property ” means all office equipment, computer hardware,
vehicles and other items of tangible personal property of every
kind, together
-16-
with any express or implied
warranty by the Third Party manufacturers or sellers or lessors of
any item or component part thereof and all maintenance records and
other documents relating thereto.
“ Tax ” or
“Taxes” means any income, gross receipts, license,
payroll, employment, excise, capital gains or corporation tax on
capital gains, severance, stamp, stamp duty reserve tax,
occupation, premium, property, environmental (including taxes under
Section 59A of the Code), windfall profit, customs, vehicle,
airplane, boat, vessel or other title or registration, capital
stock, franchise, employees’ income withholding, foreign or
domestic withholding, social security, unemployment, disability,
real property, personal property, asset, sales, use, transfer,
documentary, value added, alternative, add-on minimum and other
tax, fee, assessment, levy, tariff, charge or duty of any kind
whatsoever and any interest, penalty, addition or additional amount
thereon imposed, assessed or collected by or under the authority of
any Governmental Body or payable under any tax sharing agreement or
any other Contract, including any amount due in respect of Taxes by
reason of Treasury Regulations Section 1.1502-6 or similar
state, local or foreign Tax Laws, or as a transferee or successor,
by agency or by contract, indemnity or otherwise.
“ Tax Benefit
” shall mean the actual cash permanent reduction in income
Tax that results from an item of income, loss, deduction or credit
(or any other item).
“ Tax Claim
” has the meaning set forth in Section 9.7(a)
.
“ Tax Laws
” means the Legal Requirements of any Governmental Body
relating to any Tax.
“ Tax Return
” means any return (including any information return),
report, statement, schedule, notice, form, declaration, or claim
for refund (including any amended return, report, statement,
schedule, notice, form, declaration, or claim for refund) filed
with or submitted to, or required to be filed with or submitted to,
any Governmental Body with respect to Taxes.
“ Third Party
” means a Person other than CAG, Investor, the LLCs or any of
their respective Subsidiaries.
“ Third-Party
Claim ” means any claim against any Indemnified Person by
a Third Party, whether or not involving a Proceeding.
“ Trade Group
Foreign Plan ” has the meaning set forth in Section
3.6(a) .
“ Trade Group
Plans ” has the meaning set forth in Section
3.6(a) .
“ Trade Group US
Plan ” has the meaning set forth in Section 3.6(a)
.
“ Trading
Agreement ” means any contract, agreement or other
document (whether or not documented on an ISDA Master Agreement) to
effect any Commodity Transaction to which any CTG Company is
party.
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“ Transfer Date
” has the meaning set forth in Section 7.6(a)(ii)
.
“ Transfer Taxes
” has the meaning set forth in Section 10.3(c)
.
“ Transferred
Assets ” means all the assets that will be held by the
LLCs on the Closing Date, and which will be deemed to be acquired
by Holdco directly from the CAG Parties for U.S. federal income Tax
purposes.
“ Transferred
Companies ” means the LLCs and the CTG Foreign
Companies.
“ Transferred
Foreign Interests ” has the meaning set forth in
Section 2.2 .
“ Transferred
Interests ” has the meaning set forth in Section
2.2 .
“ Transferred LLC
Interests ” has the meaning set forth in Section
2.2 .
“ Transferred US
Employees ” has the meaning set forth in
Section 7.6(a)(i) .
“ Transition
Services Agreement ” means that certain Transition
Services Agreement by and among CAG, CTG and any other party to
such agreement, substantially in the form of Exhibit F
attached hereto.
“ Unresolved
Allocation Changes ” has the meaning set forth in
Section 10.3(d)(iii) .
“ Unresolved
Changes ” has the meaning set forth in Section
2.6(c) .
“ Warrant
” means that certain Warrant to acquire equity of Holdco in
the form of Exhibit G attached hereto.
Section 1.2.
Usage .
(a) Interpretation .
In this Agreement, unless a clear contrary intention
appears:
(i) the singular number
includes the plural number and vice versa;
(ii) reference to any Person
includes such Person’s successors and assigns but, if
applicable, only if such successors and assigns are not prohibited
by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or
individually;
(iii) reference to either
gender includes the other gender;
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(iv) reference to any
agreement, document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time
in accordance with the terms thereof;
(v) reference to any Legal
Requirement means such Legal Requirement as amended, modified,
codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated
thereunder, and reference to any section or other provision of any
Legal Requirement means that provision of such Legal Requirement
from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or reenactment
of such section or other provision;
(vi) “hereunder,”
“hereof,” “hereto,” and words of similar
import shall be deemed references to this Agreement as a whole and
not to any particular Article, Section or other provision
hereof;
(vii) “including”
(and with correlative meaning “include”) means
including without limiting the generality of any description
preceding such term;
(viii) with respect to the
determination of any period of time, “from” means
“from and including” and “to” means
“to but excluding”;
(ix) the term “
knowledge ” (and similar terms, including “
aware ”), when used in the phrase “ to the
knowledge of CAG ” (or when used in similar phrases to
refer to the knowledge or awareness of any CTG Company), shall
mean, and shall be limited to, the actual knowledge of the
individuals set forth on Schedule 1.2(a)(ix)(1) as of the
date the representation is given, in each case after (i) a
review of their own files and (ii) having made inquiry to
those members of management who reasonably would be expected to be
most knowledgeable about the relevant subject matter. The term
“ knowledge ” (and similar terms, including
“ aware ”), when used in the phrase “
to the knowledge of Investor ” (or when used in
similar phrases to refer to the knowledge or awareness of
Investor), shall mean, and shall be limited to, the actual
knowledge of the individuals set forth on Schedule
1.2(a)(ix)(2) as of the date the representation is given, in
each case after (i) a review of their own files and
(ii) having made inquiry to those members of management who
reasonably would be expected to be most knowledgeable about the
relevant subject matter;
(x) all references to
“dollar” or “$” are references to United
States dollars and, where the context requires, to the equivalent
thereof in any foreign currency;
(xi) the word
“or” shall not be deemed to be exclusive;
and
(xii) references to
documents, instruments or agreements shall be deemed to refer as
well to all addenda, exhibits, schedules or amendments
thereto.
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(b) Accounting Terms and
Determinations . Unless otherwise specified herein, all
accounting terms used herein shall be interpreted and all
accounting determinations hereunder shall be made in accordance
with GAAP.
(c) Legal Representation
of the Parties. This Agreement was negotiated by the Parties
with the benefit of legal representation, and any rule of
construction or interpretation otherwise requiring this Agreement
to be construed or interpreted against any Party shall not apply to
any construction or interpretation hereof.
ARTICLE II.
CONTRIBUTION; PURCHASE AND
SALE OF EQUITY INTERESTS; CLOSING
Section 2.1.
Reorganization; Contribution of CTG Business Assets
.
(a) Prior to the Closing
Date, the CAG Parties, as appropriate, shall consummate the
transactions described in Schedule 2.1 attached hereto
together with the transactions contemplated by the Assignment and
Assumption Agreement (the “Reorganization ”);
provided that no Person shall be required to
consummate any portion of the Reorganization unless all other
conditions to Closing set forth in Article VI have been
satisfied or waived in writing and each of the Parties is prepared
to consummate the Closing immediately following the
Reorganization.
(b) With respect to any
agreement, contract, license, lease, easement, right-of-way or
permit which (1) is material to the operation of the CTG
Business as it is currently operated by CTG, (2) is intended
to be contributed to the LLCs pursuant to the Reorganization and
(3) requires consent for the assignment and contribution
thereof to the LLCs or requires consent in connection with the sale
of the Transferred LLC Interests to Investor hereunder, the CAG
Parties shall take (and shall cause their respective Subsidiaries
to take) such actions as are commercially reasonable and necessary,
and Investor shall cooperate with the CAG Parties and their
respective Subsidiaries on a commercially reasonable and necessary
basis, to obtain such consents and to effect the assignment and
contribution thereof to the LLCs on or before the Closing Date. In
the event that the CAG Parties or any of their respective
Subsidiaries are unable to obtain the requisite approval for the
assignment and contribution of any such agreement, contract,
license, lease, easement, right-of-way or permit, or in the event
such agreement, contract, license, lease, easement, right-of-way or
permit is required to be amended or supplemented and is not so
amended or supplemented as of the Closing Date, at the request of
Investor (except where such action would be unlawful or prohibited
by such agreement, contract, license, lease, easement, right-of-way
or permit), the CAG Parties shall (x) retain any such
agreement, contract, license, lease, easement, right-of-way or
permit and shall in good faith enter into an arrangement with the
LLCs, reasonably acceptable to each of the Parties, to provide the
LLCs with the benefits of such agreement, contract, license, lease,
easement, right-of-way or permit, provided that the
LLCs shall perform the CAG Parties’ and their respective
Subsidiaries’ obligations thereunder arising on and after the
Closing Date (and indemnify the CAG Parties and their respective
Subsidiaries against any Losses suffered in connection therewith
pursuant to Section 9.3(c) ) until such agreement, contract,
license, lease, easement, right-of-way or permit is assigned to the
LLCs or expires at the earliest opportunity in accordance with its
terms, or is properly amended or supplemented, and (y) take
all commercially reasonable actions required to
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assign to the LLCs, or amend or
supplement any such agreement, contract, license, lease, easement,
right-of-way or permit as soon as practicable after the Closing
Date. Each of the CAG Parties and the LLCs shall report to the
other Party, as reasonably requested by the other Party, on the
status of its efforts pursuant to this Section 2.1(b) and
the Parties shall work jointly to cause such assignment to occur
and the release of CAG and any of its Subsidiaries from any
obligations under such agreement, contract, license, lease,
easement, right-of-way or permit,
(c) Notwithstanding the CAG
Parties’ obligations pursuant to Section 2.1(b) , the
assignment of any agreement, contract, license, lease, easement,
right-of-way or permit to be transferred to the LLCs which requires
consent for assignment, or amendment or supplement, may be effected
after the Closing Date. Except as otherwise provided herein, the
closing of the Contemplated Transactions shall not be delayed, by
reason of any inability to obtain consent for assignment of any
agreement, contract, license, lease, easement, right-of-way or
permit or any such amendment or supplement. Any agreement,
contract, license, lease, easement, right-of-way or permit that may
not be properly assigned to the LLCs because of the failure to
obtain a required consent or that may not be operated or used by
the CAG Parties for the LLCs’ benefit shall not be included
in the assets to be transferred to the LLCs in the Reorganization;
provided that the foregoing shall not affect the rights of Investor
pursuant to any other provision of this Agreement with respect to
the failure to obtain any such required consent or the inability of
the CAG Parties to so operate or use for the LLCs’
benefit.
Section 2.2. Purchase
and Sale of Equity Interests in CTG Business . Upon the terms
and subject to the conditions set forth in this Agreement,
effective as of the Closing, in exchange for the Purchase Price:
(a) the CAG Parties shall sell, transfer and deliver to
Investor, and Investor shall purchase from the CAG Parties all of
the issued and outstanding Equity Interests of the LLCs (the
“ Transferred LLC Interests ”); and (b) CAG
shall cause the CTG Foreign Sellers to sell, transfer and deliver,
or cause to be sold, transferred and delivered, to Foreign Buyer,
100% (90% in the case of Compania Terminal de Tuxpan, S.A. de C.V.)
of the stock or other Equity Interests in the CTG Foreign Companies
(the “Transferred Foreign Interests ” and,
together with the Transferred LLC Interests, the
“Transferred Interests ”).
Section 2.3. Payment
of Purchase Price by Investor . For purposes of this Agreement,
the aggregate purchase price to be paid by Investor and Foreign
Buyer to the CAG Parties and CTG Foreign Sellers for the
Transferred Interests (the “Purchase Price ”)
shall be an amount equal to the sum of the (a) Closing Net
Equity Book Value with respect to the Transferred Companies plus
(b) six hundred million dollars ($600,000,000) plus
(c) if (i) Investor issues Purchase Price PIK Notes at
the Closing and (ii) the Company does not obtain the Ratings,
or one or both of the Ratings are not Investment Grade Ratings, the
Ratings Adjustment Amount, which shall be paid in cash. The portion
of the Purchase Price payable with respect to each CTG Foreign
Company shall be equal to each CTG Foreign Company’s net book
value as shown on the Closing Balance Sheet. CAG will determine and
direct the allocation of the Purchase Price between CAG and CFFIC,
subject to the approval of Investor (such approval not to be
unreasonably withheld, conditioned or delayed); provided ,
however , that at least five hundred fifty million dollars
($550,000,000) of the Purchase Price must be allocated to CFFIC.
The portion of the Purchase Price payable to CAG for the interests
in Freebird will be paid in cash. The portion of the Purchase Price
payable to CFFIC for the interests in Freebird II shall, at the
option of Investor, be payable in cash or be payable in Purchase
Price PIK Notes in an
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aggregate principal amount equal to 25%
of the Purchase Price; provided that to the extent
the Purchase Price payable at the Closing is less than two billion
one hundred million dollars ($2,100,000,000), then the original
aggregate principal amount of the Purchase Price PIK Notes shall be
equal to five hundred twenty-five million dollars ($525,000,000),
and to the extent the Purchase Price payable at the Closing is
greater than two billion two hundred million dollars
($2,200,000,000), then the original aggregate principal amount of
the Purchase Price PIK Notes shall be equal to five hundred fifty
million dollars ($550,000,000); and provided further
that for purposes of this sentence only, all references to Purchase
Price shall be deemed to exclude that portion of the Purchase Price
attributable to (i) the increase in Closing Net Equity Book
Value resulting from payment of Fertilizer Payables during the
period beginning ten (10) Business Days prior to Closing and
ending three (3) Business Days prior to Closing and
(ii) the Ratings Adjustment Amount, if applicable.
Section 2.4.
Closing . The consummation of the transactions contemplated
hereby (other than the Reorganization) (the “Closing
”) shall be held at 10:00 a.m. Central Time on the first day
that is at least two (2) Business Days after, each of the
conditions precedent set forth in Articles V and VI
has been satisfied or waived (other than conditions relating to
deliveries of documentation at Closing; provided that
all such conditions are satisfied or waived at Closing), or at such
other time as CAG and Investor shall agree in writing. The Closing
(the date of Closing, the “Closing Date ”) shall
be held at the offices of Jones Day, 222 East 41 st Street, New York, New York 10017 or at
such other place as CAG and Investor shall agree in
writing.
Section 2.5. Closing
Obligations . In addition to any other documents to be
delivered under other provisions of this Agreement, at the
Closing:
(a) CAG, CFFIC and the CTG
Foreign Sellers shall cause to be delivered to Investor instruments
of sale, transfer and conveyance in form and substance reasonably
satisfactory to Investor evidencing and effecting the sale of the
Transferred Interests to Investor and Foreign Buyer, upon payment
of the Purchase Price;
(b) CAG shall deliver or
cause to be delivered to Investor (for the benefit of Investor and
the LLCs):
(i) each Related Agreement to
which it, CFFIC, the CTG Foreign Sellers, the LLCs or any of their
respective Subsidiaries is a party, duly executed and
delivered;
(ii) evidence of the receipt
of all Material Consents, if such consents are set forth on
Schedule 2.5(b)(ii) , and Material Governmental
Approvals;
(iii) a certificate executed
by CAG dated as of the Closing Date, in accordance with Section
5.7 ;
(iv) the Closing Balance
Sheet (which shall have been delivered to Investor at least two
(2) Business Days prior to the Closing Date);
(v) a non-foreign affidavit
dated as of the Closing Date, sworn under penalty of perjury, and
in form and substance required under the Treasury Regulations
issued pursuant to Code Section 1445 stating that neither CAG
nor CFFIC is a “Foreign Person” as defined in Code
Section 1445;
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(vi) a certificate of the
Secretary of State of the State of Delaware as to the legal
existence and good standing of the CAG Parties and certificates of
the Secretary of State of the respective states of incorporation as
to the legal existence and good standing of each of the CTG
Companies incorporated in the United States, and any substantially
equivalent certificate issued by a foreign Governmental Body for
each CTG Foreign Company to the extent reasonably
obtainable;
(vii) a certificate of the
Secretary or Assistant Secretary of each of the CAG Parties
attesting to the incumbency of its officers or authorized
Representatives executing this Agreement and the Related Agreements
to which any of the CAG Parties is a party and the authenticity of
the resolutions authorizing the transactions contemplated hereby
and thereby;
(viii) such evidence as may
reasonably be required by Investor of the release of any
Encumbrances on any of the CTG Business Assets, other than
(x) Permitted Encumbrances, and (y) Encumbrances relating
to, resulting from or arising out of the Debt Financing or as
otherwise imposed by Investor at the Closing;
(ix) such evidence as may
reasonably be required by Investor of the payment of all
Indebtedness for Borrowed Money of the CTG Companies and their
Subsidiaries and payment of Fertilizer Payables during the period
beginning ten (10) Business Days prior to Closing and ending
three (3) Business Days prior to Closing;
(x) a certificate of a duly
authorized officer of CAG, dated as of the Closing Date, certifying
that, subject to the provisions of Sections 2.1(b) and
2.1(c) , the Reorganization has been consummated;
(xi) a cross receipt executed
by CAG, CFFIC and the CTG Foreign Sellers; and
(xii) certificates and/or
such other agreements, documents or instruments of transfer or
conveyance as reasonably required by Investors to fully and
effectively vest in Investor the Transferred LLC
Interests.
(c) Investor shall deliver
(or shall cause to be delivered) to CAG, CFFIC and the CTG Foreign
Sellers, to the account or accounts designated by CAG, the CAG Cash
Purchase Price, the CFFIC Cash Purchase Price and the CTG Foreign
Sellers Cash Purchase Price, in each case by wire transfer of
immediately available funds; provided that none of
the CAG Cash Purchase Price, the CFFIC Cash Purchase Price, or the
CTG Foreign Sellers Cash Purchase Price shall be financed, directly
or indirectly, through the issuance of any CTG Purchase Price Debt,
other than the ABL Financing in an aggregate principal amount that
is in excess of the CTG Purchase Price Debt Threshold;
provided further that CTG Purchase Price
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Debt that is Junior Indebtedness and
that is otherwise on terms reasonably satisfactory to the CAG
Parties as of the Closing may be used to finance the CAG Cash
Purchase Price or the CFFIC Cash Purchase Price without respect to
the limitation set forth in the immediately proceeding proviso. Any
such Junior Indebtedness shall (i) be priced at market rates,
(ii) mature after the latest maturity date of the Purchase
Price PIK Notes and Earnout Amount PIK Notes and (iii) not be
redeemed, repurchased or repaid while any Purchase Price PIK Notes
or Earnout Amount PIK Notes remain outstanding (other than, for
purposes of this clause (iii), pursuant to any refinancing of such
CTG Purchase Price Debt with new facilities, the maturities of
which extend beyond the latest maturity date of the Purchase Price
PIK Notes and Earnout Amount PIK Notes and other than as expressly
permitted by the terms of the PIK Notes); and provided
further that at least $900,000,000 of the aggregate CAG Cash
Purchase Price and the CFFIC Cash Purchase Price shall be funded
through (x) equity financing to Investor, (y) Junior
Indebtedness or (z) any combination of the foregoing. For
purposes of this Agreement ‘Junior Indebtedness” means
Indebtedness that ranks junior in right and priority of payment to
the Purchase Price PIK Notes and Earnout Amount PIK Notes
(including with respect to restrictions on cash interest
payments).
(d) The Buyer Parties shall
deliver to the CAG Parties:
(i) the Purchase Price PIK
Notes, duly executed and delivered by Investor to CFFIC and CAG, as
applicable;
(ii) the Warrant, duly
executed and delivered by Holdco to CAG;
(iii) evidence of the receipt
of all Material Consents, if such consents are set forth on
Schedule 2.5(d)(iii) , and the Material Governmental
Approvals;
(iv) each Related Agreement
to which it is a party, duly executed and delivered by
Investor;
(v) such evidence as may
reasonably be required by CAG as to the conformity of any CTG
Purchase Price Debt with the requirements of Section 2.5(c)
(which shall have been delivered to CAG at least two
(2) Business Days prior to the Closing Date);
(vi) a certificate executed
by Buyer Parties, dated as of the Closing Date, in accordance with
Section 6.7 ;
(vii) a certificate of the
Secretary of State of Delaware as to the legal existence and good
standing of each Buyer Party;
(viii) a certificate of the
Secretary or Assistant Secretary of each Buyer Party attesting to
the incumbency of its officers or authorized Representatives
executing this Agreement and the Related Agreements to which
Investor is a party and the authenticity of the resolutions
authorizing the transactions contemplated hereby and thereby;
and
(ix) a cross receipt executed
by each Buyer Party.
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(e) The LLCs shall deliver to
CAG a certified copy of the certificates of amendment to the
certificates of incorporation, or comparable document under
applicable law, of each of the entities listed on Schedule 2.5(e)
filed with the Secretary of State of the State of Delaware, or
other applicable Governmental Body, to change the name of such
Person to the name set forth opposite such Person’s name on
Schedule 2.5(e) , or, if no such name is indicated, a name
that does not include a reference to ConAgra or CTG.
Section 2.6. Final
Balance Sheet; Payments; Disputes.
(a) As promptly as
practicable after the Closing Date, but no later than ninety
(90) days thereafter, CAG shall prepare and deliver (with
assistance as reasonably requested from the LLCs) to Investor, a
combined balance sheet of the Transferred Companies and their
respective Subsidiaries (the “Proposed Final Balance
Sheet ”) as of the Closing Date. The Proposed Final
Balance Sheet shall reflect the Closing Net Equity Book Value
together with the Agreed Adjustments (the “Proposed Final
Net Equity Book Value ”) of the Transferred Companies and
their respective Subsidiaries as of 12:01 a.m. Central Time on the
Closing Date and shall be prepared in accordance with GAAP on a
basis consistent with the Closing Balance Sheet (but including the
Agreed Adjustments).
(b) Investor will have
forty-five (45) Business Days following delivery of the
Proposed Final Balance Sheet during which to notify CAG in writing
(the " Investor Notice of Objection ”) of any
objections to the preparation of the Proposed Final Balance Sheet
or the calculation of the Proposed Final Net Equity Book Value,
setting forth in reasonable detail the basis of its objections and,
if practical, the U.S. dollar amount of each objection. In
reviewing the Proposed Final Balance Sheet, Investor shall be
entitled to reasonable access to all relevant books, records and
personnel of the LLCs, the CTG Companies and their respective
Representatives to the extent Investor reasonably requests such
information and reasonable access to complete its review of the
Proposed Final Balance Sheet. If Investor fails to deliver an
Investor Notice of Objection in accordance with this Section
2.6(b) , the Proposed Final Balance Sheet, together with
CAG’s calculation of the Proposed Final Net Equity Book Value
reflected thereon, shall be conclusive and binding on all Parties
and they shall become the “ Final Balance Sheet
” and “Final Net Equity Book Value .” If
Investor submits an Investor Notice of Objection, then (i) for
twenty (20) Business Days after the date CAG receives the
Investor Notice of Objection, Investor and CAG will use their
commercially reasonable efforts to agree on the calculation of the
Final Net Equity Book Value and (ii) failing such agreement
within twenty (20) Business Days of such notice, the matter
will be resolved in accordance with Section 2.6(c)
.
(c) Any amounts remaining in
dispute at the conclusion of such twenty (20) Business Day
period that were properly included in the Investor Notice of
Objection (the “ Unresolved Changes ”) shall be
submitted to PricewaterhouseCoopers or such other international
accounting or financial services firm as the Parties shall
otherwise agree (the “Expert ”). If Investor and
CAG are unable to mutually agree on an Expert, Investor and CAG
shall select Deloitte & Touche. CAG and Investor agree to
execute, if requested by the Expert, a reasonable engagement
letter. Within ten (10) Business Days of the selection of the
Expert, Investor and CAG will each deliver to the other and to the
Expert a notice setting forth in reasonable detail their
calculation of the Final Net Equity Book Value. The Expert shall
act as an arbitrator to determine, based on the provisions of this
Section 2.6 and the definitions referred to herein,
only
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the Unresolved Changes. The Expert shall
be instructed to determine its best estimate of the calculation of
the Final Net Equity Book Value based on its determination of the
Unresolved Changes, which estimate shall be no higher than the
higher of the Parties’ calculations nor lower than the lower
of the Parties’ calculations, and provide a written
description of the basis for such determination within forty-five
(45) Business Days after such matter has been submitted to the
Expert, which written determination shall be final, binding and
conclusive. Each of the parties shall furnish, at its own expense,
the Expert and the other Party with such documents and other
written information as the Expert may request. Each Party may also
furnish to the Expert such other written information and documents
as such Party deems relevant; provided , that copies
of all such documents and materials shall be concurrently delivered
to the other Party in the same manner as such materials are
delivered to the Expert. The Expert may, at its discretion, conduct
one or more conferences with respect to the dispute between the
Parties, at which conference each Party shall have the right to
present such additional documents, materials and other information
and to be accompanied or represented by such Representatives as
each Party shall choose in its sole discretion. The fees and
expenses of the Expert shall be paid pro rata by Investor and CAG
in accordance with the percentage of the disputed amounts awarded
to the other Party as a result of the Expert’s decision. Each
Party will bear the costs of its own counsel, witnesses (if any)
and employees.
(d) If the Final Net Equity
Book Value exceeds the Closing Net Equity Book Value, Investor
shall pay (within ten (10) Business Days) an amount equal to
such excess by wire transfer in immediately available funds to CAG
and CFFIC to one or more accounts (and in such amounts) as
specified by CAG. If the Final Net Equity Book Value is less than
the Closing Net Equity Book Value, CAG and CFFIC shall pay, within
ten (10) Business Days of the receipt of such Final Balance
Sheet, an amount equal to such deficit to Investor by wire transfer
in immediately available funds to an account specified by
Investor.
(e) The dispute resolution
provisions of this Section 2.6 shall not apply to, and the
scope of the Expert’s authority herein shall not extend to,
any dispute of the Parties relating to the interpretation, breach
or enforcement of any provisions of this Agreement.
Section 2.7.
Additional Amounts .
(a) In accordance with the
terms and conditions of this Section 2.7 , Investor shall
pay to the CAG Parties, as additional Purchase Price hereunder, the
Earn-Out Amount (defined below) achieved in respect of each full or
partial quarterly Fiscal Period that ends after the Closing,
beginning immediately following the Closing and through and
including December 21, 2008 (each such quarterly Fiscal Period
or partial quarterly Fiscal Period, an “Earn-Out
Period ”); provided that such full or
partial quarterly Fiscal Periods shall be based on CAG’s
quarterly Fiscal Periods. The “Earn-Out Amount ”
achieved in each Earn-Out Period shall be based upon the aggregate
Adjusted Pre-Tax Profits (as defined in Section 2.7(b) ) of
the LLCs and its Subsidiaries for such Earn-Out Period and shall be
equal to the product of (i) 0.5 and (ii) the excess, if
any, of such Adjusted Pre-Tax Profits over $36,000,000 for each
full or partial quarterly Fiscal Period that ends after the Closing
and through and including December 21, 2008; provided
that with respect to the first (if the Closing does not occur
on the first day of a quarterly Fiscal Period) and last Earn-Out
Periods, such $36,000,000 threshold shall be prorated for the
actual number of days of such Earn-Out Period as compared to the
actual number of days
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in such quarterly Fiscal Period;
provided further that in no event shall the aggregate
Earn-Out Amounts due to the CAG Parties pursuant to this Section
2.7 exceed an amount equal to (i) $150,000,000 less
(ii) the sum of the Pre-Closing Adjusted Pre-Tax Profits, if
any, of the CTG Business for the period from January 21, 2008
to the Closing (the “Earn-Out Cap ”).
(b)
(i) “ Adjusted
Pre-Tax Profits ” means, with respect to any Earn-Out
Period, the profit before tax of the LLCs and their Subsidiaries
(or with respect to any period prior to the Closing, the CTG
Business), in each case determined on a consolidated basis in
accordance with the accounting principles utilized in preparing the
audited combined balance sheets of the CTG Business as of
May 27, 2007 and the related combined statement of operations
and cash flows for the year ended May 27, 2007, including any
notes thereto), as adjusted to exclude the effect of the following
items:
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(1) |
purchase accounting and other similar step-up adjustments,
including related depreciation charges; |
| |
(2) |
amortization and other transaction and transaction financing
costs (including one-time costs relating to the LLCs’
financing for post-Closing operations) and any post-Closing
interest expense other than interest expense related to the ABL
Financing that does not constitute CTG Purchase Price Debt
(including letters of credit charges); |
| |
(3) |
pre-tax profits from any business or businesses acquired after
the Closing and all related financing costs for such business or
businesses, including for acquisition financing; |
| |
(4) |
interest expense due to borrowings that do not fund the
LLCs’ and their Subsidiaries’ operations or debt
service requirements; |
| |
(5) |
charges resulting from any one-time items as mutually agreed by
the CAG Parties and Investor; and |
| |
(6) |
any management fees or other similar fees payable to Ospraie
Advisors or any of its Affiliates; |
provided
further , that only the amount of pre-tax profits in excess
of any mark to market adjustment made under the Agreed Adjustments
as set forth on Schedule 1.1(a) will be considered in
determining the Earn-Out Amount under this Section 2.7
.
(ii) “Pre-Closing
Adjusted Pre-Tax Profits ” means the profit before tax of
the CTG Business, determined on a consolidated basis consistent
with the historical internal management reporting practices of CTG
and the calculation
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methodology set forth on
Schedule 2.7(b)(ii) attached hereto. As promptly as
practicable, but no later than thirty (30) days following the
Closing Date, CAG shall in good faith prepare and deliver to
Investor a written computation of the Pre-Closing Adjusted Pre-Tax
Profits for the period from January 21, 2008 to the Closing.
CAG shall permit Investor and its Representatives to have
reasonable access to the books, records and other documents
(including work papers) pertaining to or used in connection with
CAG’s determination of the Pre-Closing Adjusted Pre-Tax
Profits for such period and provide Investor with copies thereof
(as reasonably requested by Investor). If Investor disagrees with
CAG’s determination of the Pre-Closing Adjusted Pre-Tax
Profits for such period, Investor shall notify CAG in writing of
such disagreement (a “Pre-Closing Adjusted Pre-Tax Profits
Objection Notice ”) within thirty (30) days after
Investor’s receipt of CAG’s determination of the
Pre-Closing Adjusted Pre-Tax Profits for such period. The
Pre-Closing Adjusted Pre-Tax Profits Objection Notice should set
forth Investor’s computation of the Pre-Closing Adjusted
Pre-Tax Profits for such period and describe in reasonable detail
the basis for its disagreement with CAG’s computation. The
CAG Parties and Investor shall thereafter negotiate in good faith
to resolve any such disagreements. If Investor and the CAG Parties
are unable to resolve all such disagreements within thirty
(30) days after Investor’s delivery of the Pre-Closing
Adjusted Pre-Tax Profits Objection Notice, Investor and the CAG
Parties shall submit all unresolved disagreements to the Expert. If
Investor and CAG are unable to mutually agree on an Expert,
Investor and CAG shall select Deloitte & Touche. Investor
and the CAG Parties agree to execute, if requested by the Expert, a
reasonable engagement letter. Within ten (10) Business Days of
the selection of the Expert, Investor and the CAG Parties will each
deliver to the other and to the Expert a notice setting forth in
reasonable detail their calculation of the Pre-Closing Adjusted
Pre-Tax Profits for such period. The Expert shall act as an
arbitrator to determine, based on the provisions of this Section
2.7 and the definitions referred to herein, only the amount
remaining in dispute. The Expert shall be instructed to determine
its best estimate of the calculation of the Pre-Closing Adjusted
Pre-Tax Profits for such period based on its determination of the
amount remaining in dispute, which estimate shall be no higher than
the higher of the Parties’ calculations nor lower than the
lower of the Parties’ calculations, and provide a written
description of the basis for such determination within thirty
(30) days after such matter has been submitted to the Expert,
which written determination shall be final, binding and conclusive.
Each of the Parties shall furnish, at its own expense, the Expert
and the other Party with such documents and other written
information as the Expert may request. Each Party may also furnish
to the Expert such other written information and documents as such
Party deems relevant; provided , that copies of all
such documents and materials shall be concurrently delivered to the
other Party in the same manner as such materials are delivered to
the Expert. The Expert may, at its discretion, conduct one or more
conferences with respect to the dispute between the Parties, at
which conference each Party shall have the right to present such
additional documents, materials and other information and to be
accompanied or represented by such Representatives as
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each Party shall choose in
its sole discretion. The fees and expenses of the Expert shall be
paid pro rata by Investor and the CAG Parties in accordance with
the percentage of the disputed amounts awarded to the other Party
as a result of the Expert’s decision. Each Party will bear
the costs of its own counsel, witnesses (if any) and
employees.
(c) As promptly as
practicable, but no later than thirty (30) days following the
end of each Earn-Out Period following the Closing Date, Investor
shall in good faith prepare and deliver to the CAG Parties a
written computation of the Adjusted Pre-Tax Profits for such
Earn-Out Period. The LLCs and Investor shall permit the CAG Parties
and their Representatives to have reasonable access to the books,
records and other documents (including work papers) pertaining to
or used in connection with Investor’s determination of the
Adjusted Pre-Tax Profits for such Earn-Out Period and provide the
CAG Parties with copies thereof (as reasonably requested by the CAG
Parties). If the CAG Parties disagree with Investor’s
determination of the Adjusted Pre-Tax Profits for such Earn-Out
Period, the CAG Parties shall notify Investor in writing of such
disagreement (an “Adjusted Pre-Tax Profits Objection
Notice ”) within thirty (30) days after the CAG
Parties’ receipt of Investor’s determination of the
Adjusted Pre-Tax Profits for such Earn-Out Period. All Adjusted
Pre-Tax Profits Objection Notices should set forth the CAG
Parties’ computation of the Adjusted Pre-Tax Profits for such
Earn-Out Period and describe in reasonable detail the basis for
their disagreement with Investor’s computation. The CAG
Parties and Investor shall thereafter negotiate in good faith to
resolve any such disagreements. If Investor and the CAG Parties are
unable to resolve all such disagreements within thirty
(30) days after the CAG Parties’ delivery of the
Adjusted Pre-Tax Profits Objection Notice, Investor and the CAG
Parties shall submit all unresolved disagreements to the Expert. If
Investor and CAG are unable to mutually agree on an Expert,
Investor and CAG shall select Deloitte & Touche. Investor
and the CAG Parties agree to execute, if requested by the Expert, a
reasonable engagement letter. Within ten (10) Business Days of
the selection of the Expert, Investor and the CAG Parties will each
deliver to the other and to the Expert a notice setting forth in
reasonable detail their calculation of the Adjusted Pre-Tax Profits
for such Earn-Out Period. The Expert shall act as an arbitrator to
determine, based on the provisions of this Section 2.7 and
the definitions referred to herein, only the amount remaining in
dispute. The Expert shall be instructed to determine its best
estimate of the calculation of the Adjusted Pre-Tax Profits for
such Earn-Out Period based on its determination of the amount
remaining in dispute, which estimate shall be no higher than the
higher of the Parties' calculations nor lower than the lower of the
Parties’ calculations, and provide a written description of
the basis for such determination within thirty (30) days after
such matter has been submitted to the Expert, which written
determination shall be final, binding and conclusive. Each of the
Parties shall furnish, at its own expense, the Expert and the other
Party with such documents and other written information as the
Expert may request. Each Party may also furnish to the Expert such
other written information and documents as such Party deems
relevant; provided , that copies of all such
documents and materials shall be concurrently delivered to the
other Party in the same manner as such materials are delivered to
the Expert. The Expert may, at its discretion, conduct one or more
conferences with respect to the dispute between the Parties, at
which conference each Party shall have the right to present such
additional documents, materials and other information and to be
accompanied or represented by such Representatives as each Party
shall choose in its sole discretion. The fees and expenses of the
Expert shall be paid pro rata by Investor and the CAG Parties in
accordance with the percentage of the disputed amounts awarded to
the other Party as a result of the Expert’s decision. Each
Party will bear the costs of its own counsel, witnesses (if any)
and employees.
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(d) As promptly as
practicable, but no later than ten (10) Business Days after
the Adjusted Pre-Tax Profits for an Earn-Out Period is finally
determined pursuant to Section 2.7(b) or Section
2.7(c) , Investor shall pay to the CAG Parties an amount equal
to the Earn-Out Amount for such Earn-Out Period (as determined in
accordance with Section 2.7(a) ); provided that any
Earnout Amount PIK Notes payable hereunder will be allocated
between CFFIC and CAG based on the relative earnings of the LLCs.
Such payment shall be made as follows:
(i) the first $50,000,000 of
all Earn-Out Amounts shall be paid, at the election of Investor,
either by (i) wire transfer of immediately available funds to
the account(s) designated by the CAG Parties or (ii) the
issuance to CFFIC of 10.75% Earnout Amount PIK Notes in the
aggregate principal amount of such Earn-Out Amounts;
(ii) the next $50,000,000 of
such Earn-Out Amounts shall be paid by wire transfer of immediately
available funds to the account(s) designated by the CAG Parties;
provided that to the extent and only to the extent
that the payment of such cash amount would result in a default
under the credit facility for the ABL Financing as in effect at the
Closing (as certified by the chief financial officer of Investor),
if the Investor elected to pay a portion of the Purchase Price in
PIK Notes, such amounts shall be paid by the issuance to CFFIC of
10.75% Earnout Amount PIK Notes in the aggregate principal amount
of such Earn-Out Amounts; and
(iii) all remaining Earn-Out
Amounts shall be paid, at the election of Investor, either by
(i) wire transfer of immediately available funds to the
account(s) designated by the CAG Parties or (ii) if the
Investor elected to pay a portion of the Purchase Price in PIK
Notes, the issuance to CFFIC of 10.75% Earnout Amount PIK Notes in
the aggregate principal amount of such Earn-Out Amounts.
(e) Commencing on the Closing
Date and continuing until the earlier of (x) December 21,
2008 and (y) the date on which the CAG Parties have received
an amount equal to the Earn-Out Cap (through payments pursuant to
this Section 2.7 and/or through payments made by Investor
under Section 2.7(h)), Investor shall not, and shall
not permit any other Person to, without the prior written consent
of the CAG Parties, require or otherwise cause the LLCs or any of
its Subsidiaries, directly or indirectly, to:
(i) take any action intended
to or that could reasonably be expected to adversely affect the CAG
Parties’ right to Earn-Out Amounts, the amount thereof or the
ability to calculate the amount thereof;
(ii) dispose of any of its
assets or businesses (other than sales of assets in the Ordinary
Course of Business) that affect the amount of the Earn-Out
Amounts;
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(iii) postpone to any periods
following December 21, 2008, any revenues or profits that
would otherwise be expected to occur prior to December 21,
2008; or
(iv) accelerate to any
periods prior to December 21, 2008, any costs of goods sold or
operating or other expenses that would otherwise be expected to
occur after December 21, 2008.
(f) In the event the Closing
occurs following April 20, 2008 due to a delay by Investor in
completing the Debt Financing and the Equity Financing or due to a
delay in the satisfaction of a condition to Closing within
Investor’s control, for all purposes of this Section
2.7 , all references to December 21, 2008 in this
Section 2.7 shall automatically be updated to reflect the
last date in the next succeeding monthly Fiscal Period (for
example, in the event of a ten day delay, the date would be updated
to January 18, 2009). All payments made pursuant to this
Section 2.7 shall be treated by all parties for tax purposes
as adjustments to the Purchase Price.
(g) The dispute resolution
provisions of Sections 2.7(b)(ii) and 2.7(c) shall
not apply to, and the scope of the Expert’s authority herein
shall not extend to, any dispute of the parties relating to the
interpretation, breach or enforcement of any provisions of this
Agreement.
(h) Investor may at any time
elect to pay to the CAG Parties by wire transfer of immediately
available funds an amount equal to the Earn-Out Cap, less any
payments previously made under this Section 2.7 and
upon such payment, all of the obligations of the Investor under
this Section 2.7 shall cease.
Section 2.8. Tax
Matters Relating to the PIK Notes and the Warrant . The Parties
agree that, for U.S. federal income Tax purposes (and, where
applicable, state, local, and foreign Tax purposes): (i) the
purchase and sale of the Transferred LLC Interests constitutes a
direct acquisition by Holdco from the CAG Parties of all of the
Transferred Assets; (ii) the Purchase Price PIK Notes and the
10.75% Earnout Amount PIK Notes (if any) shall have an issue price
equal to their aggregate principal amounts when issued;
(iii) the Warrant shall have a fair market value at issuance
of $250,000, which amount shall be treated as a portion of the
consideration paid for the Transferred Assets (and, should the
Warrant be later sold, repurchased or exercised, no portion of the
property then received for such Warrant shall be treated as
consideration for the Transferred Assets); and (iv) any cash
paid, and the principal amount of any 10.75% Earnout Amount PIK
Notes issued, pursuant to Section 2.7 shall be considered
payments of additional consideration from Holdco to the CAG Parties
for the Transferred Assets. The Parties also agree to file all Tax
Returns (including amended returns and claims for refund) and
information reports in a manner consistent with the
foregoing.
Section 2.9. Investor
Right to Substitute Cash for PIK Notes . Notwithstanding
anything herein to the contrary, Investor may elect to pay (or
cause the payment of ) cash in lieu of Purchase Price PIK Notes
otherwise issuable at Closing hereunder. If Investor exercises such
option, all covenants and conditions herein related to the delivery
of the PIK Notes at Closing shall be deemed to have been satisfied
by the delivery of cash in the amount equal to the principal amount
of the corresponding series of PIK Notes.
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Section 2.10.
Investor Right to Issue PIK Notes to CAG . Notwithstanding
anything herein to the contrary, Investor may elect to issue PIK
Notes, including all or a portion of the Purchase Price PIK Notes,
to CAG as partial consideration for the purchase of the limited
liability company interests of Freebird rather than issuing all or
a portion of such PIK Notes to CFFIC as consideration for the
purchase of the limited liability company interests of Freebird II.
Investor may make such election for any reason. In the event of
such election, the specific obligations of Investor with respect to
delivery of the PIK Notes, including pursuant to
Section 2.5(d)(i) , as well as the definition of CAG
Cash Purchase Price, CFFIC Cash Purchase Price and other provisions
hereof, shall be deemed to be modified as appropriate to give
effect to such election.
ARTICLE III.
REPRESENTATIONS AND
WARRANTIES OF THE CAG PARTIES AND THE LLCs
Each of the CAG Parties and
the LLCs, jointly and severally make to the Buyer Parties, as of
the date hereof, and, unless otherwise specified, as of the
Closing, each of the representations and warranties contained in
this Article III , it being agreed that disclosure of any
item in any section or subsection of the Schedules hereto shall
also be deemed disclosed with respect to any other section or
subsection to which the relevance of such item is readily
apparent.
Section 3.1.
Organization and Good Standing .
(a) Each of the CAG Parties
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full
corporate power and authority to conduct its business as it is now
being conducted. Except as set forth on Schedule 3.1(a), each of
the LLCs and the CTG Companies is duly organized, validly existing
and in good standing under the laws of the jurisdiction in which
the LLCs and such CTG Company, respectively, is
organized.
(b) Each of the CAG Parties,
the LLCs and the CTG Companies has full corporate or other entity
power and authority to conduct the CTG Business as it is now being
conducted and to own or use the properties and assets, including
the properties and assets of the CTG Companies, that they purport
to own or use in conducting the CTG Business.
(c) Except as set forth on
Schedule 3.1(c) , the CTG Companies include any and all
direct or indirect Subsidiaries of the CAG Parties engaged in the
CTG Business.
Section 3.2.
Enforceability; Authority; No Conflict .
(a) This Agreement
constitutes the legal, valid and binding obligation of the CAG
Parties and the LLCs enforceable against each in accordance with
its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer or similar laws affecting the enforcement of
creditors’ rights generally and general principles of equity
(whether considered in a proceeding at law or in equity). Upon the
execution and delivery by the CAG Parties and the LLCs of the
Related Agreements to which each is a party, each of such Related
Agreements will constitute the legal, valid and binding obligation
of such CAG Parties and the LLCs, enforceable against each in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization,
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fraudulent conveyance or transfer or
similar laws affecting the enforcement of creditors’ rights
generally and general principles of equity (whether considered in a
proceeding at law or in equity). Each of the CAG Parties and each
of the LLCs has the requisite right, power and authority to execute
and deliver this Agreement and each of the Related Agreements to
which each is a party, and to perform its obligations hereunder and
thereunder and consummate the Contemplated Transactions and the
transactions contemplated under the Related Agreements, and such
action has been duly authorized by all necessary corporate or other
entity action.
(b) The execution, delivery
and performance by each CAG Party and the LLCs of this Agreement or
the execution and delivery any of the Related Agreements to which
each is a party, and the consummation of the Contemplated
Transactions and the transactions contemplated under the Related
Agreements, does not and will not: (i) except as set forth on
Schedule 3.2(b) , violate any provision of its or any of the
CTG Companies’ Governing Documents, or any resolution adopted
by its board of directors or shareholders (or similar management
group); (ii) violate or conflict with any material provisions
of any Legal Requirements or any Order to which it or any of the
CTG Companies may be subject; (iii) except as set forth on
Schedule 3.2(b) (the “CAG Required Consents
”), violate, conflict with, result in a material breach of,
constitute (with due notice or lapse of time or both) a material
default or cause any material obligation, penalty, premium or other
payment to arise or accrue under any CTG Business Material Contract
to which it or any of the CTG Companies is a party or by which it
or any of the CTG Companies is bound or to which any of its or the
CTG Companies’ respective properties or assets is subject; or
(iv) result in the creation or imposition of any Encumbrance
(except Permitted Encumbrances and any Encumbrances imposed
directly or indirectly by Investor) upon any of the properties or
assets of the CTG Business.
(c) Except as set forth in
Schedule 3.2(c) , no material consent, approval,
authorization of, declaration, filing, or registration with, any
Governmental Body or any other Person is required to be made or
obtained by any of the CAG Parties, the LLCs or any of the CTG
Companies in connection with the execution, delivery, and
performance of this Agreement (excluding for this purpose
Section 7.10(b)(ii) ) or the execution and delivery of the
Related Agreements or the consummation of the Contemplated
Transactions or the transactions contemplated under the Related
Agreements.
Section 3.3. CTG
Company Records
(a) The CAG Parties have
provided or made available to Investor or one or more of its
Representatives true, correct and complete copies of the Governing
Documents of the CTG Companies, in each case as amended and in
effect on the date hereof.
(b) The minute books of the
CTG Companies (or similar books and records kept in accordance with
the Governing Documents of such CTG Company) previously made
available to Investor or one or more of its Representatives are all
of such minute books or similar books and records and contain true,
correct and materially complete records of all meetings for at
least the last three (3) years prior to the date hereof, and
reflect all other material action of the shareholders and board of
directors or similar management group (including committees
thereof) of the CTG Companies during such time. The share
certificate books and share transfer ledgers, or similar books and
records of Equity Interests of the CTG Companies, as previously
made available to Investor or one or more of its Representatives,
are all of such books, ledgers and books and records and are true,
correct and materially complete.
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(c) All books and records of
the CTG Companies (and all other books and records of CAG and its
Subsidiaries relating exclusively to the CTG Business) are accurate
and complete in all material respects and are maintained in all
material respects in accordance with good business practice and all
applicable Legal Requirements.
Section 3.4. Company
Interests; Title; Sufficiency of Assets .
(a) The Equity Interests of
the CTG Companies are as listed in Schedule 3.4(a) and,
except as set forth in Schedule 3.4(a) , all of such Equity
Interests (i) are issued and outstanding, (ii) have been
duly authorized and are validly issued, and, if stock of a
corporation, fully paid, and nonassessable, (iii) were issued
in compliance with all applicable securities laws, (iv) were
not issued in breach of any Equity Commitments, and (v) are
held of record and owned beneficially by CAG or one or more of its
Subsidiaries. Except as set forth on Schedule 3.4(a) ,
(A) no Equity Commitments of any of the CTG Companies exist,
(B) no Contracts exist with respect to the voting or transfer
of any of the CTG Companies’ Equity Interests, (C) no
Person is obligated to redeem or otherwise acquire any of the CTG
Companies’ Equity Interests and (D) CAG or one or more
of its Subsidiaries has, and, immediately following the Closing,
the LLCs or one or more of their Subsidiaries will have good and
marketable title to the CTG Companies’ Equity Interests free
and clear of all Encumbrances except as set forth on Schedule
3.4(a) and for Encumbrances in favor of CAG or its Affiliates
that will be discharged prior to the Closing Date and for any
Encumbrances imposed directly or indirectly by Investor.
(b) Immediately prior to the
Closing, after giving effect to the Reorganization, CAG and CFFIC
will be the record and beneficial owners of all of the outstanding
Equity Interests of the LLCs. At the Closing, CAG and CFFIC, as
applicable, shall sell and deliver to Investor good and marketable
title to the Transferred LLC Interests, free and clear of all
Encumbrances other than restrictions under federal and state
securities laws and the operating agreement or other governing
documents of Investor. All such Transferred LLC Interests, when
sold to and purchased by Investor, shall have been validly
issued.
(c) After giving effect to
the Reorganization and except as set forth on Schedule
3.4(c) , from and after the Closing Date, the CTG Business
Assets and those assets to be made available to Freebird pursuant
to the Transition Services Agreement, constitute all of the
material assets that are used in or otherwise necessary for the
conduct of the CTG Business immediately following the Closing in
substantially the same manner as currently conducted by CAG and its
Subsidiaries consistent with past practices. The CTG Business
Assets have been maintained, repaired and replaced in the Ordinary
Course of Business (ordinary wear and tear excepted), and are and
will be immediately following the Closing free and clear of all
Encumbrances, other than Permitted Encumbrances and any
Encumbrances imposed directly or indirectly by Investor.
(d) The Equity Interests of
the JVs that are held by CAG or one or more of its Subsidiaries are
held of record and owned beneficially by CAG or one or more of its
Subsidiaries. CAG or one or more of its Subsidiaries has (and
immediately following the
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Closing, the LLCs or one or more of
their Subsidiaries will have) good and marketable title to such
Equity Interests free and clear of all Encumbrances except for
Encumbrances in favor of CAG or its Affiliates that will be
discharged prior to the Closing Date and for any Encumbrances
imposed directly or indirectly by Investor.
Section 3.5. No
Material Adverse Change . Except as described in Schedule
3.5 , (a) since May 27, 2007 and through the date
hereof, except as part of the Reorganization, CAG and the CTG
Companies, as applicable, have conducted the CTG Business in the
Ordinary Course of Business and, (b) since May 27, 2007
and through the date hereof, there has not been any event or
circumstance in respect of the CTG Business, including without
limitation its financial condition, operations, or assets that,
individually or in the aggregate with other known events or
circumstances, has resulted or would reasonably be expected to
result in a CTG Material Adverse Effect.
Section 3.6. Employee
Benefits .
(a) Schedule 3.6(a)(i)
contains a true and complete list of each “employee benefit
plan” (within the meaning of Section 3(3) of ERISA, but
other than any multiemployer plans within the meaning of
Section 3(37) of ERISA)), and all equity, equity incentive,
severance, change-in-control, bonus, incentive, stock purchase,
employment, retention, deferred compensation, salary continuation,
employee loan and all other material employee benefit (including
fringe benefit) plans, agreements, programs, policies or other
arrangements in which any current employee of the CTG Business or
current employee of CAG or its Subsidiaries listed on Schedule
3.11(a) (the “CTG Business Employees ”) has
any present or future right to payments or benefits and which are
contributed to, sponsored by or maintained by any of the CTG
Companies, CAG or any of their respective Subsidiaries or ERISA
Affiliates, or under which any of the CTG Companies or any of their
respective Subsidiaries has any material present or future
liability (actual or contingent) (all such plans, agreements,
programs, policies and arrangements shall be collectively referred
to as the “CAG Plans ”). Schedule
3.6(a)(ii) separately contains a true and complete list of each
CAG Plan that will be sponsored or maintained by Freebird or any of
the CTG Companies or any of their respective Subsidiaries following
the Closing Date or with respect to which the LLCs or any of the
CTG Companies or any of their respective Subsidiaries is expected
to have any liability (collectively, the “Trade Group
Plans ”). Schedules 3.6(a)(i) and (ii)
separately identify CAG Plans that are maintained outside the
jurisdiction of the United States, or that primarily cover any CTG
Business Employees residing or performing services outside the
United States (the “CTG Foreign Business Employees
”) (each, a “ CAG Foreign Plan ,” and each
CAG Foreign Plan that qualifies as a Trade Group Plan, a
“Trade Group Foreign Plan ”) from those CAG
Plans that are maintained inside the jurisdiction of the United
States, or that primarily cover any CTG Business Employee residing
or performing services inside the United States (the “CTG
US Business Employees ”) (each, a “CAG US
Plan ,” and each CAG US Plan that qualifies as a Trade
Group Plan, a “ Trade Group US Plan ”).
Schedule 3.6(a)(ii) separately identifies each
“multiemployer plan” (within the meaning of
Section 3(37) of ERISA) to which the LLCs or any of the CTG
Companies or any of their respective Subsidiaries will have an
obligation to contribute as of the Closing Date pursuant to a
Collective Bargaining Agreement (each, a Multiemployer Plan
”).
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(b) With respect to each
Trade Group US Plan, CAG has provided to Investor a current,
accurate and complete copy (or to the extent no such copy exists an
accurate description) thereof and, to the extent applicable:
(i) any related trust agreement or other funding instrument;
(ii) the most recent determination letter, if applicable; and
(iii) any summary plan description.
(c) Each Trade Group US Plan
has been established and administered in all material respects in
accordance with its terms and in substantial compliance with the
applicable provisions of ERISA, the Code and other applicable Legal
Requirements; (ii) each Trade Group US Plan which is intended
to be qualified within the meaning of Section 401(a) of the
Code has received a favorable determination letter as to its
qualification, and to the knowledge of CAG nothing has occurred,
whether by action or failure to act, that could reasonably be
expected to cause the revocation of such letter or the loss of such
qualification, and each Trade Group Plan that is a Trade Group
Foreign Plan has been duly registered with the applicable
Governmental Body where required by applicable Legal Requirements;
(iii) no nonexempt “prohibited transaction” (as
such term is defined in Section 406 of ERISA and
Section 4975 of the Code) that could result in a material tax
or penalty has occurred with respect to any Trade Group US Plan;
(iv) except as set forth on Schedule 3.6(c)(iv) , none
of the CTG Companies has incurred any liability in respect of
post-employment or post-retirement health, medical or life
insurance benefits for CTG Business Employees, except as required
to avoid an excise tax under Section 4980B of the Code or
otherwise except as may be required pursuant to any other
applicable Legal Requirements; and (v) all material
contributions and premium payments required to be made as of the
date hereof in respect of (x) each Trade Group Plan and
(y) each CAG Plan, with respect to CTG Business Employees,
have been timely made.
(d) Other than any
Multiemployer Plan and except as may be required by any Collective
Bargaining Agreement: (i) none of the Trade Group Plans is
subject to Title IV of ERISA, and (ii) none of the CTG
Companies will have any liability (direct or indirect) in respect
of any CAG Plan that is subject to Title IV of ERISA after the
Closing Date. None of the Trade Group Foreign Plans is a defined
benefit pension plan or provides benefits pursuant to a formula
that requires benefits to be funded on actuarial
principles.
(e) With respect to any Trade
Group US Plan: (i) no material actions, suits or claims are
pending or, to the knowledge of CAG, threatened; (ii) no facts
or circumstances exist that could reasonably be expected to give
rise to any such material actions, suits or claims; and
(iii) no administrative investigation, audit or other
administrative proceeding by the Department of Labor, the Pension
Benefit Guaranty Corporation, the Internal Revenue Service or other
governmental agencies are pending, to the knowledge of CAG
threatened, or in progress.
(f) Except as disclosed on
Schedule 3.6(f) or as provided in Section 7.6 ,
no CAG Plan or Trade Group Plan as a result of the execution of
this Agreement or the Contemplated Transactions (whether alone or
in connection with any other event(s)) would, with respect to any
CTG Business Employee:
(i) result in severance pay
or any increase in severance pay upon any termination of service;
or
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(ii) accelerate the time of
payment or vesting or result in any payment or funding (through a
grantor trust or otherwise) of compensation or benefits under or,
increase the amount payable.
(g) The execution of this
Agreement or the Contemplated Transactions (whether alone or in
connection with other events), will not result in any payment under
any Trade Group US Plan that would not be deductible under
Section 280G of the Code.
Section 3.7.
Compliance with Legal Requirements; Governmental
Authorizations .
(a) Except as set forth in
Schedule 3.7(a) , since the date that is two years prior to
the date of this Agreement, CAG and the CTG Companies are not and
have not been in material violation of any Legal Requirements
(which term for this purpose shall not include Environmental Laws
or Legal Requirements relating to Taxes) applicable to the
ownership or operation of the CTG Business.
(b) Except as set forth on
Schedule 3.7(b) , for the past three years, none of CAG or
the CTG Companies has received any written notice or, to the
knowledge of the CAG Parties, other notice, from any Governmental
Body regarding any actual, alleged, possible or potential violation
of, or failure to comply with, any material Legal Requirement
(which term for this purpose shall not include Environmental Laws
or Legal Requirements relating to Taxes) applicable to it in
connection with the conduct or operation of the CTG
Business.
(c) Each material
Governmental Authorization (which term for this purpose shall not
include Governmental Authorizations relating to Environmental
Matters or Taxes) that is held by the CAG Parties and/or the CTG
Companies in connection with the CTG Business has been issued to
the holder thereof and is valid and in full force and effect; such
Governmental Authorizations constitute all that are required for
the operation of the CTG Business as currently conducted; and, to
the knowledge of the CAG Parties, there has been no threatened
termination or revocation of any such Governmental
Authorization.
Section 3.8. Legal
Proceedings; Orders .
(a) Except for Environmental
Matters which are the subject of Section 3.15 and
except as set forth in Schedule 3.8(a) , there is no
pending, or, to CAG’s knowledge, threatened, material
Proceeding by or against the CAG Parties or their Subsidiaries
relating to the CTG Business (including without limitation any
Proceeding by or against any CTG Company) or that could reasonably
be expected to prevent, materially delay, make illegal or otherwise
materially interfere with, any of the Contemplated
Transactions.
(b) Except as set forth in
Schedule 3.8(b) , there is no Order in regard to the CTG
Companies (other than orders of general applicability not specific
to any of the CTG Companies) that, individually or in the
aggregate, is material to the properties, assets or operations of
the CTG Companies.
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Section 3.9.
Contracts; No Defaults .
(a)(i) Schedule 3.9(a)
contains, as of the date hereof, an accurate and complete list of
each CTG Business Material Contract (or in the case of forms
described in clause (ii) of this Section 3.9(a)
, a listing of such forms) and (ii) except for multiple
agreements that are substantially similar to a standard form, in
which case only such form has been made available, the CTG
Companies have made available to Investor or one or more of its
Representatives accurate and complete copies of all such CTG
Business Material Contracts and such standard forms.
(b) Except as set forth in
Schedule 3.9(b) , to the knowledge of CAG:
(i) each CTG Business
Material Contract and material Trading Agreement is in full force
and effect and is a valid and enforceable obligation of each CTG
Company that is a party thereto except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity
(whether considered in a proceeding at law or in equity);
and
(ii) no event or condition
exists that constitutes or, after notice or a lapse of time or
both, will constitute, a material default on the part of CAG or any
of its Subsidiaries, or any of the CTG Companies under any such CTG
Business Material Contract or material Trading
Agreement.
(c) For purposes of this
Agreement, “CTG Business Material Contract ”
shall mean any of the following Contracts used by or in support of
the CTG Business (excluding any Contracts to be executed and
delivered pursuant to this Agreement):
(i) any outstanding
Indebtedness exceeding $5,000,000 individually that is related
exclusively to the CTG Business;
(ii) any Contract of surety,
guarantee or indemnification by any CTG Company outside of the
Ordinary Course of Business of the CTG Business;
(iii) any Contract containing
a covenant not to compete with respect to the CTG Business or any
CTG Company that is currently in full force and effect;
(iv) any Affiliate Agreement
(other than Financial Assurances) which will survive the
Closing;
(v) any Contract guaranteeing
the payment to any CTG Business Employee of total annual
compensation in excess of $250,000;
(vi) other than Trading
Agreements, any Contract which may not be terminated by the CTG
Business without penalty on 180 days or fewer notice and which
could reasonably be expected either to (A) commit any CTG
Company to aggregate expenditures of more than $5,000,000 in any
calendar year or (B) give rise to anticipated receipts of more
than $5,000,000 in any calendar year;
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(vii) any written Contract in
respect of an equity investment or relating to on-going rights and
obligations with respect to a formal written partnership agreement
or a material contractual joint venture;
(viii) other than customary
provisions included in Trading Agreements, agreements with respect
to the sharing, allocation or indemnities of Taxes or Tax costs
that will survive the Closing (other than any agreements which are
described in Sections 3.9(c)(i)–(vi) or
3.9(c)(xi)–(xv) , or would be so described in
Section 3.9(c)(i) but for the $5,000,000 threshold, or
would be so described in Section 3.9(c)(vi) but for the
limitations in Section 3.9(c)(vi)(A) or (B)
);
(ix) agreements for the sale
of any assets, property or rights or for the grant of any options
or preferential rights to purchase any assets, property or rights,
in each case for consideration in excess of $5,000,000;
(x) documents granting any
power of attorney with respect to the material affairs of the CTG
Business, excluding powers of attorney granted in the Ordinary
Course of Business with respect to international
operations;
(xi) agreements evidencing
settlement of litigation with outstanding obligations in excess of
$1,000,000;
(xii) any Contracts not made
in the Ordinary Course of Business;
(xiii) full requirements
purchase or supply contracts with a remaining term of more than 36
months;
(xiv) tolling (financial
and/or physical), energy management or other similar
agreements;
(xv) any Contract with
respect to a Commodity Transaction that (A) has a term longer
than one (1) year and has a positive or negative fair market
value in excess of $1,000,000 or (B) has a positive or
negative fair market value in excess of $3,000,000, in each as
calculated as of February 21, 2008; and
(xvi) any material
amendments, modifications, extensions or renewals of any of the
foregoing.
Section 3.10.
Insurance .
(a) Schedule 3.10(a)
sets forth a true and complete list of all current policies of
property and casualty insurance (including liability, errors or
omissions, and business interruption insurance) insuring the
properties, assets, employees and/or operations of the CTG Business
(collectively, the “Policies ”), along with the
entities covered by such Policies, aggregate coverage amount and
type of each of the Policies.
(b) All Policies are in full
force and effect. None of CAG or any of its Subsidiaries is in
default under any material provisions of the Policies, and, except
as set forth on
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Schedule 3.10(b) , there is no
claim by CAG or any of its Subsidiaries or any other Person pending
under any of the Policies as to which coverage has been questioned,
denied or disputed by the underwriters or issuers of such
Policies.
Section 3.11.
Employees .
(a) Schedule 3.11(a)
contains a complete list of all of the CTG Business Employees as of
the respective dates shown thereon, specifying their position,
location, status and date of hire, together with a notation next to
the name of any employee on such list who is subject to any written
or oral employment, change of control or severance agreement (aside
from the collective bargaining agreements described in Schedule
3.11(b)) (the “CTG Employment Agreements ”).
CAG has made available to Investor or one or more of its
Representatives true, correct and complete copies of the written
CTG Employment Agreements, and summaries of any such oral CTG
Employment Agreements with respect to CTG US Business Employees and
any material CTG Employment Agreements with respect to CTG Foreign
Business Employees. Except as disclosed in Schedule 3.11(a)
, as of the date hereof, no CTG Business Employee is on disability
or other type of leave.
(b) Except as set forth on
Schedule 3.11(b) :
(i) None of the CTG Companies
is a party to or otherwise bound by any Collective Bargaining
Agreement with a labor union or labor organization, no pending
representation election petition or application for certification
has been received by any CTG Company that names the CTG Business
Employees as potentially represented parties, and to CAG’s
knowledge, there is no union organizing campaign or other attempt
to organize or establish a labor union, employee organization or
labor organization or group involving CTG Business Employees, nor,
as of the date hereof, are any of the CTG Companies the subject of
any material Proceeding asserting that any of the CTG Companies has
committed an unfair labor practice or seeking to compel them to
bargain with any labor union or labor organization, nor is there
pending or, to the knowledge of CAG, threatened, nor has there been
for the past five years, any strike, walk-out, work stoppage,
slowdown or lockout involving any of the CTG Companies;
and
(ii) The CTG Companies are in
material compliance with all applicable Legal Requirements
regulating employment and labor relations. There are no material
Proceedings relating to employment with any CTG Companies or
compliance with Legal Requirements regulating employment and labor
pending or, to the knowledge of CAG, threatened, by any
Governmental Body, any employees or former employees, any party or
parties representing any of such employees, or any former employer
of a current employee, against any of the CTG Companies before any
court, arbitrator or other tribunal. There are no charges of
discrimination, wrongful termination or other similar complaints,
including complaints related to unpaid wages, bonuses or other
compensation or immigration laws pending against Freebird or the
CTG Companies under any applicable federal or foreign (including
international) Legal Requirement involving employees now or
previously employed by the CTG Companies that, if adversely
determined, could be material to any of the CTG
Companies.
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Section 3.12.
Intellectual Property Assets .
(a) The term " CTG
Intellectual Property Assets " means all material intellectual
property exclusively relating to or used by or in connection with
the CTG Business. The applicable CTG Companies are the owners of
all right, title and interest in and to each of the CTG
Intellectual Property Assets free and clear of all Encumbrances
(except Permitted Encumbrances), or the applicable CTG Companies
have a valid and existing license to use the CTG Intellectual
Property Assets. Schedule 3.12(a) sets forth a complete and
accurate list of all such licenses, copies of which have been made
available to Investor. Except for IP that will be made available
under the Transition Services Agreement, there is no material
intellectual property not exclusively relating to or used by or in
connection with the CTG Business that is necessary to operate the
CTG Business as operated immediately prior to Closing.
(b) To CAG’s knowledge,
(i) neither the use of any CTG Intellectual Property Assets
nor the conduct of the CTG Business (as conducted by the CTG
Companies immediately prior to the date hereof and to the Closing
consistent with past practices) infringes on any intellectual
property rights of any Third Party, and (ii) no such claims
have been asserted that have not been resolved.
(c) To the knowledge of CAG,
(i) no Third Party is infringing on any of the CTG
Intellectual Property Assets, and (ii) no such claims are
pending by CAG, its Subsidiaries or the CTG Companies or threatened
by CAG, its Subsidiaries or the CTG Companies against any Third
Party.
(d) The execution, delivery
or performance of this Agreement or any of the Related Agreements
by CAG or any of its Subsidiaries or the consummation of the
Contemplated Transactions and the transactions contemplated under
the Related Agreements will not result in the material loss or
impairment of any of the CTG Intellectual Property Assets and will
not restrict or otherwise impair in any material respect the
LLCs’ and the CTG Companies’ right to use any of the
CTG Intellectual Property Assets after the Closing Date without
payment of any additional amounts or consideration other than
ongoing fees, royalties, or payments that would otherwise be
required to be paid by CAG or its Subsidiaries had the Contemplated
Transactions not occurred.
Section 3.13.
Taxes . Except as set forth on Schedule 3.13(a)
:
(a)(i) Each of CAG and the
CTG Companies has timely filed (or caused to be timely filed) all
material Tax Returns that it was required to file by or with
respect to, the CTG Companies and the CTG Business; (ii) all
material Taxes shown to be due and payable on such Tax Returns have
been paid, except for Taxes being contested in good faith through
appropriate proceedings; (iii) all Taxes due by or with
respect to the income, assets or operations of the CTG Companies
and the CTG Business for all Pre-Closing Tax Periods and, with
respect to any Straddle Period, for the portion thereof ending on
the Closing Date (as determined pursuant to Section 9.9
) shall have been paid or accrued and reserved against in the
Closing Balance Sheet;
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(iv) no CTG Company will be required to
include any material item of income in, or exclude any material
item of deduction from, taxable income for a Post-Closing Tax
Period and with respect to any Straddle Period, for the portion
thereof beginning on the first day after the Closing Date (as
determined pursuant to Section 9.9), that is attributable to a
transaction (including any adjustment pursuant to
Section 481(a) of the Code) the economic benefit of which has
been realized prior to the Closing, by virtue of any closing
agreement with any Taxing Authority or as a result of any deferred
intercompany transaction, installment sale or similar transactions;
(v) no CTG Company is party to or bound by any income Tax
allocation, indemnity, sharing or similar agreement pursuant to
which a material amount of Taxes is or may be payable in
Post-Closing Tax Periods and with respect to any Straddle Period,
for the portion thereof beginning on the first day after the
Closing Date (as determined pursuant to Section 9.9),
(vi) no CTG Company has engaged in any "listed transaction" as
defined in Treasury Regulation Section 1.6011-4(b)(2);
(vii) no withholding is required under Section 1445 of
the Code in respect of the consideration payable under this
Agreement for the Transferred LLC Interests and the CTG Foreign
Companies; and (viii) each CTG Company has duly paid or has
procured to be paid all stamp duty or stamp duty land tax on
documents or in connection with land transactions to which it is
party or in which it is interested and which are liable to stamp
duty or stamp duty land tax.
(b) To the knowledge of CAG,
except as set forth on Schedule 3.13(b) , (i) there are
no material Liens for Taxes upon any of the assets of the CTG
Business, except for Liens for Taxes not yet due and payable or
being contested in good faith through appropriate proceedings;
(ii) no material Tax Return of, or that includes, any CTG
Company is currently being examined by, and no written notice of
any such examination or of a proposed assessment or other
adjustment in respect of such Tax Return has been received from,
any Taxing Authority, which examination, assessment or adjustment
could reasonably be expected to result in a liability for a
material amount of Taxes; and (iii) there are no outstanding
written agreements or waivers extending the statute of limitations
applicable to any such Tax Return or, in the case of any asset
selling corporation, a Tax Return to the extent related solely to
the CTG Business, which agreements or waivers could reasonably be
expected to result in a liability for a material amount of
Taxes.
(c) Each of the CTG Companies
and the CTG Business have withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor,
stockholder, or other third party, and all Internal Revenue Service
Forms W-2 and 1099 required with respect thereto have been properly
completed and timely filed.
(d) None of the CTG Companies
has distributed stock of another Person, or has had its stock
distributed by another Person, in a transaction that was purported
or intended to be governed in whole or in part by Section 355
or 361 of the Code.
(e) None of the assets of the
CTG Foreign Companies are "United States real property interests"
as defined in Section 897(c) of the Code.
Section 3.14. Brokers
or Finders . None of CAG, CFFIC, the CTG Companies, or any of
their Representatives has incurred any obligation or liability,
contingent or otherwise, for brokerage or finders’ fees or
agents’ commissions or other similar payments in connection
with the Contemplated Transactions for which Investor, the LLCs or
any of the CTG Companies could be liable.
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Section 3.15.
Environmental Compliance . Except as set forth on
Schedule 3.15 :
(a) (i) the CTG
Companies are, and for the last five (5) years were, and
insofar as it affects the CTG Business, CAG and its Subsidiaries
are in material compliance with all applicable Environmental Laws,
(ii) CAG and its Subsidiaries insofar as it affects the CTG
Business, and the CTG Companies and the CTG Business possess, and
for the last five (5) years have been in material compliance,
with all Environmental Permits, and (iii) all applications
required by Environmental Laws to renew or obtain any Environmental
Permit have been made in a timely fashion so as to allow the CTG
Companies to operate in material compliance with applicable
Environmental Laws.
(b) There are no pending or,
to the knowledge of CAG, threatened, material Proceedings under or
relating to any Environmental Law that would reasonably be expected
to impose, on CAG or its Subsidiaries, insofar as it affects the
CTG Business, or on any CTG Company, any material Environmental
Liability. In the last five (5) years, none of the CTG
Companies, nor CAG nor any of its Subsidiaries, insofar as it
affects the CTG Business, has received written notice of or has
knowledge of any material claim or demand made or threatened by any
Person against the CTG Companies, CTG Business, Owned Real
Property, Leased Real Property, or CAG or any of its Subsidiaries,
insofar as it affects the CTG Business, relating to material
Environmental Liability for (A) actual or alleged On-Site
Contamination; (B) any alleged material violation of
Environmental Laws by the CTG Companies or CAG or any of its
Subsidiaries insofar as it affects the CTG Business;
(C) actual or alleged Off-Site Contamination. None of the CTG
Companies, or insofar as it affects the CTG Business, neither CAG
nor any of its Subsidiaries is subject to any Order or third party
agreement or Encumbrance with respect to any Environmental Law or
any Environmental Liability that materially and adversely affects,
or could reasonably be expected to materially and adversely affect,
the operations or business of the CTG Companies or the CTG
Business.
(c) To the knowledge of CAG,
no On-Site Contamination exists and no Hazardous Substance has been
disposed of, arranged to be disposed of, released or threatened to
be released at or from, any of the properties or facilities
currently or formerly owned, leased or operated by any of the CTG
Companies, or, to the knowledge of CAG, by CAG or any of its
Subsidiaries with respect to the CTG Business, in each case in a
manner or condition that could reasonably be expected to result in
a material Environmental Liability.
(d) None of the CTG Companies
and neither CAG nor its Subsidiaries, insofar as it affects the CTG
Business, has been identified by a Governmental Body as potentially
responsible within the meaning of applicable Environmental Law for
material Environmental Liabilities associated with any site or
location formally identified by a Governmental Body as requiring or
recommended for environmental investigation or cleanup.
(e) None of the CTG
Companies, nor CAG nor any of its Subsidiaries insofar as it
affects the CTG Business, has expressly assumed or provided
indemnity against any material Environmental Liability of any other
Person under or relating to any Environmental Laws.
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(f) Neither the Owned Real
Property nor the Leased Property has been formally identified by
any Governmental Body as requiring environmental investigation or
cleanup.
(g) The CTG Companies, and
CAG and its Subsidiaries, insofar as it affects the CTG Business,
have delivered to Investor copies of all documents, records and
information in their possession or under their reasonable control
relevant to Environmental Matters affecting the CTG Business
sufficient to enable Investor to determine whether material
Environmental Liabilities exist with respect to the current or
former operations of the CTG Business, CTG Companies, Owned Real
Property or Leased Real Property, including, without limitation,
environmental compliance audits, environmental site assessments,
health and safety assessments, and inspection reports and notices
of violation from and correspondence with environmental
Governmental Bodies.
(h) This Section 3.15
sets forth the sole and exclusive representations and warranties of
the CAG Parties and the CTG Companies with respect to Environmental
Matters.
Section 3.16.
Financial Statements; No Undisclosed Liabilities
.
(a) Schedule 3.16(a)
contains true and complete copies of (i) the audited combined
balance sheets of the CTG Companies as of May 27, 2007 and
May 28, 2006 and the related combined statements of operations
and cash flows for the year ended May 27, 2007 and
May 28, 2006, including any notes thereto (the " Audited
Financial Statements ") and (ii) the unaudited combined
balance sheets of the CTG Companies as of February 24, 2008
and the related combined statements of operations and cash flows
for the quarterly period ended February 24, 2008 (the "
Interim Fiscal Period Financials "). The Audited Financial
Statements have been prepared in conformity with GAAP (except in
each case as described in the notes thereto) and fairly present, in
all material respects, the financial condition and results of
operations of the CTG Business as of the respective dates thereof
and for the respective periods indicated therein.
(b) The CTG Companies do not
have any Liabilities that are required by GAAP to be reflected on
the Audited Financial Statements and the Interim Fiscal Period
Financials that are not reflected thereon other than:
(i) Liabilities incurred
since May 27, 2007 in the Ordinary Course of
Business;
(ii) Liabilities under the
Related Agreements or incurred in connection with the Contemplated
Transactions and the transactions contemplated under the Related
Agreements;
(iii) as set forth on
Schedule 3.16(b) ;
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(iv) any other Liabilities
which, individually do not exceed $1,000,000, and, in the
aggregate, do not exceed $3,000,000; and
(v) liabilities of the type
and in the amount that will be reflected on the Closing Balance
Sheet and included in the determination of the Purchase
Price.
Section 3.17. Real
Properties .
(a) Schedule 3.17(a)
sets forth the name of the owning entity, the address and summary
description of all material land that, together with all buildings,
structures, improvements and fixtures located thereon, and all
easements and other rights and interests appurtenant thereto,
immediately prior to the Closing, after giving effect to the
Reorganization, will be owned by the LLCs or one of their
Subsidiaries (except real properties sold or otherwise disposed of
since the date hereof in the Ordinary Course of Business) (the "
Owned Real Property "). The Owned Real Property constitutes
all material real property owned by the CTG Companies and used in
connection with the CTG Business. None of the Owned Real Property
is subject to a mortgage or deed of trust. With respect to each
Owned Real Property, on the Closing Date (i) the LLCs or one
of their Subsidiaries (as the case may be) shall have good and
marketable fee simple title to such Owned Real Property, which
shall be free and clear of all Encumbrances as of the Closing Date,
except Permitted Encumbrances (other than a mortgage or deed of
trust); (ii) except as set forth in Schedule 3.17(a) ,
the LLCs or their Subsidiaries shall not have leased or otherwise
granted to any Person the right to use or occupy such Owned Real
Property or any portion thereof; and (iii) except as set forth
in Schedule 3.17(a) and other than the right of Investor
pursuant to this Agreement, there will be no outstanding options,
rights of first offer or rights of first refusal to purchase such
Owned Real Property or any portion thereof or interest therein. To
CAG’s knowledge, (i) the LLCs have access to each parcel
of Owned Real Property sufficient for the operation of the CTG
Business (as conducted by the CTG Companies immediately prior to
the date hereof and to the Closing consistent with past practices)
and (ii) each parcel of Owned Real Property is serviced by and
has access to public utilities or utilities are available for each
parcel of Owned Real sufficient for the operation of the CTG
Business (as conducted by the CTG Companies immediately prior to
the date hereof and to the Closing consistent with past practices).
There is no pending, or, to CAG’s knowledge, threatened,
condemnation, proposed condemnation or similar proceeding affecting
any Owned Real Property that could reasonably be expected to
prevent, delay, make illegal or otherwise interfere with, the
operation of the CTG Business (as conducted by the CTG Companies
immediately prior to the date hereof and to the Closing consistent
with past practices).
(b) Schedule 3.17(b)
lists the address of all material real property that immediately
prior to the Closing, after giving effect to the Reorganization,
will be leased or subleased by the LLCs and/or one of their
Subsidiaries (except for leases that have expired by their terms
since the date hereof) (the " Leased Real Property "). The
Leased Real Property and the Owned Real Property constitute all
interests in real property owned, leased or subleased by the LLCs
in connection with the CTG Business. Except as disclosed on
Schedule 3.17(b) , CAG has delivered to Investor a true and
complete copy, in all material respects (except for exhibits
thereto), of each Lease Agreement. Except as set forth in
Schedule 3.17(b) , as of the Closing Date, with respect to
each Lease Agreement: (i) such Lease Agreement shall be legal,
valid, binding, enforceable and in full force and effect, subject
to the application of any bankruptcy or
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other creditor’s rights laws and
the LLCs and/or one of their Subsidiaries will have the benefits as
a lessee thereunder; and (ii) the LLCs or a Subsidiary (as
applicable) will not be in breach or default under any Lease
Agreement, and to the knowledge of CAG, no event will have occurred
or circumstance exist which, with the delivery of notice, the
passage of time or both, would constitute such a breach or default,
except to the extent such breach or default, individually or in the
aggregate would not reasonably be expected to materially adversely
affect the operation of the CTG Business (as conducted by the CTG
Companies immediately prior to the date hereof and to the Closing
consistent with past practices). Neither the LLCs nor any of the
CTG Companies has received a written notice of default with respect
to any such Lease Agreement which has not been cured and to the
knowledge of the CAG Parties, no other party to such Lease
Agreement is in default thereunder. Neither the LLCs nor any of the
CTG Companies has mortgaged, pledged or otherwise encumbered its
interest in any such Leased Real Property.
Section 3.18.
Affiliate Agreements . Schedule 3.18 provides a
complete list of all Contracts between (i) any CTG Company and
(ii) CAG or any director, officer, or Subsidiary or affiliate
of CAG (other than another CTG Company and other than Trading
Agreements in respect of Commodities or securities traded on a
regulated commodities or securities exchange) (each referred to
herein as an " Affiliate Agreement " and together the "
Affiliate Agreements ") that are in effect on the date
hereof.
Section 3.19.
Material Financial Assurances . Schedule 3.19
contains a complete list of all of the guarantees, letters of
credit, comfort letters, "keep whole" agreements, bonds or other
financial security arrangements or other credit support
arrangements of any type or kind whatsoever, whether or not
accrued, absolute, contingent or otherwise (" Financial
Assurances ") under which any CTG Company or CAG is obligated
or could reasonably be expected to be obligated for an amount in
excess of $500,000, and the amount of each (including any amount
drawn or used) as of February 24, 2008, in each case to the
extent such Financial Assurances have been provided to or for the
benefit of any creditor or counterparty of any CTG Company under
which CAG or any of its Subsidiaries (other than the CTG Companies)
are responsible or otherwise obligated.
Section 3.20.
FCPA . Neither CAG nor any of its Subsidiaries, nor, to the
knowledge of CAG, any officer, director or employee thereof, has
violated any provisions of the FCPA, or the rules and regulations
promulgated thereunder in connection with the operation of the CTG
Business. To the knowledge of CAG, no claim has ever been filed
against CAG or any of the CTG Companies for violation of the FCPA
with respect to the CTG Business. To the knowledge of CAG, neither
CAG nor any of the CTG Companies, nor any Representatives acting on
any of their behalf, has (i) used assets of CAG or any of the
CTG Companies, or made any promise or undertaking in such regard,
for any other illegal payments to or for the benefit of any Person
or the establishment or maintenance of a secret or unrecorded fund
for illegal payments; or (ii) made any false or fictitious
entries in the books or records of CAG or any of the CTG
Companies.
Section 3.21. Recent
Developments . Except as set forth on Schedule 3.21 or
as expressly permitted under Section 7.1 after the date
hereof, since May 27, 2007, the CAG Parties and the CTG
Companies and their Subsidiaries have conducted the CTG Business
only in the Ordinary Course of Business and have not, with respect
to the CTG Business or the CTG Business Assets:
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(a) suffered any CTG Material
Adverse Effect;
(b) mortgaged, pledged or
subjected to any Encumbrance, any of the CTG Business Assets,
except in the Ordinary Course of Business;
(c) sold, transferred, leased
to others or otherwise disposed of any of property, business or
assets, tangible or intangible, of the CTG Business, except for
inventory sold in the Ordinary Course of Business;
(d) received any notice of
termination of any CTG Business Material Contract or suffered any
material damage, destruction or loss (whether or not covered by
insurance);
(e) transferred or granted
any material rights under, or entered into any settlement regarding
the breach or infringement of, any CTG Intellectual Property Assets
used in the CTG Business, or knowingly modified any existing
material rights with respect thereto;
(f) except as set forth on
Schedule 3.21(f) , and except pursuant to normal performance
reviews and in connection with promotions or increases in
responsibilities, made any change in the rate of compensation,
commission, bonus or other direct or indirect remuneration payable,
or paid or agreed or orally promised to pay, conditionally or
otherwise, any bonus, incentive, retention or other compensation,
retirement, welfare, fringe or severance benefit or vacation pay,
to or in respect of, any CTG Business Employee or any independent
sales representative, distributor or agent employed or engaged with
respect to the CTG Business;
(g) encountered any labor
union organizing activity, had any actual or threatened employee
strikes, stoppages, slowdowns or lockouts, or had any material
adverse change in its relations with its employees, agents,
customers or suppliers as a group
(h) made any capital
expenditures or capital additions or improvements in respect of a
single project in excess of an aggregate of $500,000; or
(i) taken any action or
omitted to take any action that would result in the occurrence of
any of the foregoing.
Section 3.22. Export
Controls . With respect to the CTG Business, the CAG Parties
and the CTG Companies and their respective Subsidiaries have at all
times been in compliance in all material respects with all Legal
Requirements relating to export control and trade embargoes. To the
knowledge of the CAG Parties, no product sold or service provided
by the CTG Business during the last five (5) years has been,
directly or indirectly, sold to or performed on behalf of any
country or Person to which trade is embargoed, including without
limitation Cuba or Iran.
Section 3.23.
Inventory . All Inventory included in the CTG Business
Assets consists of, and as of the Closing Date will consist of,
products of good quality and of a quality and quantity usable and
saleable within a reasonable period of time in the Ordinary Course
of Business, subject only to the reserves for inventory write-downs
or unmarketable. All obsolete, damaged, slow moving or discontinued
items have been written off or properly reserved for on the Audited
Financial Statements and the Final Balance Sheet.
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Section 3.24.
Suppliers and Customers . Schedule 3.24 hereto sets
forth a list, for the preceding two (2) yearly Fiscal Periods,
of (i) the ten largest suppliers of the CTG Business by the
dollar volume of goods or services supplied, together with the
aggregate value of goods and services supplied by such supplier,
and (ii) a list of the ten largest customers of the CTG
Business by dollar volume of goods or services purchased, and the
amount purchased by each such customer. None of the customers or
suppliers listed or required to be listed on Schedule 3.24
has discontinued or materially curtailed its sales to, or purchases
from, the CTG Companies over the last two yearly Fiscal Periods or
to the knowledge of CAG notified CAG or any CTG Company in writing
of an intention to do so in the future or as a result of the
Contemplated Transactions or the transactions contemplated under
the Related Agreements.
Section 3.25. No
Other Representation . Except for the representations and
warranties contained in this Article III , none of the CAG
Parties nor any other Person acting on behalf of the CAG Parties
makes any representation or warranty, express or implied, regarding
the CAG Parties or any of their Subsidiaries.
Section 3.26. Joint
Ventures . To the actual knowledge (without any duty of further
inquiry) of Colleen Batcheler and Robert J. Sharpe, Jr.,
(i) since the date that is two years prior to the date of this
Agreement, the JVs are not and have not been in material violation
of any Legal Requirements applicable to the ownership or operation
of the CTG Business, and (ii) the JVs do not have any
Liabilities that are required by GAAP to be reflected on the
Audited Financial Statements and the Interim Fiscal Period
Financials that are not reflected thereon other than
(A) Liabilities incurred since May 27, 2007 in the
Ordinary Course of Business; and (B) liabilities of the type
and in the amount that will be reflected on the Closing Balance
Sheet and included in the determination of the Purchase Price.
There are no Financial Assurances under which any CTG Company or
CAG is obligated or could reasonably be expected to be obligated
for an amount in excess of $500,000 in each case to the extent such
Financial Assurances have been provided to or for the benefit of
any creditor or counterparty of any JV under which CAG or any of
its Subsidiaries (other than the CTG Companies) are responsible or
otherwise obligated.
ARTICLE IV.
REPRESENTATIONS AND
WARRANTIES OF BUYER PARTIES
Each of the Buyer Parties
hereby makes to CAG, CFFIC and the LLCs as of the date hereof, and,
unless otherwise specified, as of the Closing, each of the
representations and warranties contained in this Article IV
.
Section 4.1.
Organization and Good Standing . Each Buyer Party is a
limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
organization.
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Section 4.2.
Enforceability; Authority; No Conflict .
(a) This Agreement
constitutes the legal, valid and binding obligation of each Buyer
Party enforceable against it in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer or similar laws
affecting the enforcement of creditors’ rights generally and
general principles of equity (whether considered in a proceeding at
law or in equity). Upon the execution and delivery by each Buyer
Party of the Related Agreements to which it is a party, each of
such Related Agreements will constitute the legal, valid and
binding obligation of each Buyer Party, enforceable against it in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer or similar laws affecting the enforcement of
creditors’ rights generally and general principles of equity
(whether considered in a proceeding at law or in equity). Each
Buyer Party has the requisite right, power and authority to execute
and deliver this Agreement and each of the Related Agreements to
which it is a party, and to perform its obligations and consummate
the Contemplated Transactions and the transactions contemplated
under the Related Agreements, and such action has been duly
authorized by all necessary corporate (or other entity)
action.
(b) Except as set forth on
Schedule 4.2(b) (such actions listed on Schedule
4.2(b) , the " Investor Required Consents "), the
execution, delivery and performance by each Buyer Party of this
Agreement (excluding, for this purpose, Section 7.10(b)(ii)
) or any of the Related Agreements to which it is a party, and the
consummation of the Contemplated Transactions and the transactions
contemplated under the Related Agreements, does not and will not:
(i) violate any provision of the Governing Documents of such
Buyer Party, or any resolution adopted by the board of directors or
shareholders (or similar management group) of such Buyer Party;
(ii) violate or conflict with any material provisions of any
Legal Requirements or any Order to which such Buyer Party may be
subject; or (iii) violate, conflict with, result in a material
breach of, constitute (with due notice or lapse of time or both) a
material default or cause any material obligation, penalty or
premium to arise or accrue under any Contract to which such Buyer
Party is a party or by which it is bound or to which any of its
properties or assets is subject. Each Buyer Party has all necessary
limited liability company authorizations and approvals necessary in
connection with this Agreement or the Related Agreements or the
consummation of the Contemplated Transactions or the transactions
contemplated under the Related Agreements.
(c) Except as set forth in
Schedule 4.2(c) , no material consent, approval,
authorization of, declaration, filing, or registration with, any
Governmental Body is required to be made or obtained by each Buyer
Party in connection with the execution, delivery, and performance
of this Agreement (excluding, for this purpose, Section
7.10(b)(ii) ) or the Related Agreements or the consummation of
the Contemplated Transactions, including the conduct of the CTG
Business.
Section 4.3.
Compliance with Legal Requirements; Governmental
Authorizations .
(a) Except as set forth in
Schedule 4.3(a) , to the knowledge of each Buyer Party, each
Investor is not and has not been in material violation of any
material Legal Requirements.
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(b) Except as set forth on
Schedule 4.3(b) , each Buyer Party has not received any
written notice or, to the knowledge of Investor, other notice, from
any Governmental Body regarding any actual, alleged, possible or
potential violation of, or failure to comply with, any material
Legal Requirement applicable to it.
(c) With respect to each
Governmental Authorization that is held by each Buyer Party,
(i) each has been issued to the holder thereof and is valid
and in full force and effect except where the failure to be in full
force and effect could not reasonably be expected to have a
material effect on the ability to conduct the CTG Business
following the Closing; (ii) except as set forth on Schedule
4.3(c) , no Proceeding is pending or, to the knowledge of
Investor, threatened to revoke or amend any such Governmental
Authorization; and (iii) neither Buyer Parties nor any of
their affiliates has received written notice or, to the knowledge
of Investor, other notice from any applicable Governmental Body
that (A) any such existing Governmental Authorization will be
revoked or (B) any pending application for any such new
Governmental Authorization or renewal of any existing Governmental
Authorization will be denied.
Section 4.4. Legal
Proceedings . Except for such of the following matters as,
individually or in the aggregate, have not resulted in, and would
not reasonably be expected to result in, an Investor Material
Adverse Effect, there is no pending, or, to the knowledge of
Investor, threatened, Proceeding by or against either Buyer or that
could reasonably be expected to prevent, materially delay, make
illegal or otherwise materially interfere with, any of the
Contemplated Transactions.
Section 4.5. Brokers
or Finders . Except as set forth on Schedule 4.5 ,
neither Holdco nor any of its Subsidiaries or any of their
Representatives has incurred any obligation or liability,
contingent or otherwise, for brokerage or finders’ fees or
agents’ commissions or other similar payments in connection
with the Contemplated Transactions for which CAG, the LLCs or the
CTG Companies could be liable.
Section 4.6.
Available Funds . Holdco has received written commitments
from various lenders (the " Lenders ") to make available to
the LLCs on the Closing Date asset-backed financing in the
aggregate amount of $1,500,000,000 (the " Debt Financing "),
a complete and correct copy of which commitments has been delivered
to CAG. Holdco has received a letter from its own investors with
respect to the equity financing required to complete the
transaction contemplated hereby (the " Equity Financing "),
a complete and correct copy of which commitments has been delivered
to CAG. Nothing in this Section 4.6 is to be
interpreted as a representation, warranty or covenant of Investor
to personally provide any financing to the LLCs.
Section 4.7. No Other
Representation . Except for the representations and warranties
contained in this Article IV , neither Buyer Party nor any
other Person acting on its behalf makes any representation or
warranty, express or implied, regarding Investor or any of its
Subsidiaries.
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ARTICLE V.
CONDITIONS PRECEDENT TO BUYER
PARTIES’ OBLIGATION TO CLOSE
The obligation of the Buyer
Parties to consummate the transactions provided for in this
Agreement is subject to the satisfaction, as of the Closing, of
each of the following conditions (any of which may be waived in
writing by Investor, in whole or in part):
Section 5.1. Accuracy
of Representations . Each of the CAG Parties’ and
LLCs’ representations and warranties in Article III of
this Agreement shall be true and accurate in all respects (without
regard to any express qualifier therein as to materiality or CTG
Material Adverse Effect), except for such inaccuracies that have
been cured prior to Closing or that, individually or in the
aggregate, have not resulted in a CTG Material Adverse
Effect.
Section 5.2.
Performance . The covenants and obligations that CAG or any
of its Subsidiaries is required to perform or to comply with
pursuant to this Agreement at or prior to the Closing shall have
been duly performed or complied with in all material respects,
except for such non-performance and non-compliance that has been
cured prior to Closing or that, individually or in the aggregate,
have not resulted in a CTG Material Adverse Effect.
Section 5.3. Material
Consents and Governmental Approvals . Each of the Material
Consents set forth on Schedule 2.5(b)(ii) and Schedule
2.5(d)(iii) and Material Governmental Approvals shall have been
obtained and shall be in full force and effect, and none of such
Material Governmental Approvals shall impose terms or conditions
that, individually or in the aggregate with other terms and
conditions, have resulted in or would reasonably be expected to
result in a CTG Material Adverse Effect.
Section 5.4.
Additional Documents . CAG shall have caused the agreements,
documents and instruments required by Section 2.5 to be
executed and delivered by the CAG Parties and the LLCs, as
applicable, and each such document and instrument shall be in full
force and effect and shall not have been materially breached by any
party thereto (other than Investor).
Section 5.5.
Orders . There shall not be in effect any Order of any
Governmental Body of competent jurisdiction enjoining the
consummation of the Contemplated Transactions. There shall not be,
at the time of Closing, any pending suit, action or proceeding
before any Governmental Body seeking to restrain or prohibit the
consummation of the Closing in accordance with the terms and
conditions hereof, which, considering the merits of the claims, the
defenses (procedural and substantive) available thereto and the
likelihood that the opposing parties will ultimately prevail, is
likely to have a CTG Material Adverse Effect or an Investor
Material Adverse Effect.
Section 5.6. Material
Adverse Effect . There shall not have occurred since the date
hereof and be continuing a CTG Material Adverse Effect.
Section 5.7. Closing
Certificate . CAG shall have delivered (or caused to be
delivered) to the Buyer Parties a certificate of a duly authorized
officer of CAG, dated as of the Closing Date, certifying that the
conditions set forth in Sections 5.1 and 5.2 have
been met and satisfied.
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Section 5.8.
Reorganization . Subject to the provisions of Sections
2.1(b) and 2.1(c) , the Reorganization shall have been
consummated on terms and conditions satisfactory to Investor and
Investor shall have received the evidence described in Section
2.5(b)(viii) .
Section 5.9. Debt
Financing . The LLCs shall have received the Debt Financing in
form and substance satisfactory to Investor.
Section 5.10. Equity
Financing . Holdco shall have received the Equity Financing in
form and substance satisfactory to Investor.
Section 5.11. Rating
Agency . CTG or Freebird shall have received the
Ratings.
ARTICLE VI.
CONDITIONS PRECEDENT TO THE
CAG PARTIES’ OBLIGATION TO CLOSE
The obligation of CAG, CFFIC
and the CTG Foreign Sellers to sell and deliver the Transferred LLC
Interests and to take the other actions required to consummate the
transactions provided for in this Agreement is subject to the
satisfaction, as of the Closing, of each of the following
conditions (any of which may be waived in writing by CAG in whole
or in part):
Section 6.1. Accuracy
of Representations . Each of the representations and warranties
in Article IV of this Agreement shall be true and accurate
in all respects (without regard to any express qualifier therein as
to materiality or material adverse effect), except for such
inaccuracies that, singly or in the aggregate, have not resulted in
an Investor Material Adverse Effect.
Section 6.2.
Investor’s Performance . The covenants and obligations
that the Buyer Parties are required to perform or to comply with
pursuant to this Agreement at or prior to the Closing shall have
been duly performed or complied with in all material respects,
except for such non-performance and non-compliance that has been
cured prior to Closing or that, individually or in the aggregate,
have not resulted in an Investor Material Adverse
Effect.
Section 6.3. Material
Consents and Governmental Approvals . Each of the Material
Consents set forth on Schedule 2.5(b)(ii) and Schedule
2.5(d)(iii) and Material Governmental Approvals shall have been
obtained and shall be in full force and effect, and none of such
Material Consents or Material Governmental Approvals shall impose
terms or conditions that, individually or in the aggregate with
other terms and conditions, have resulted in or would reasonably be
expected to result in a CTG Material Adverse Effect.
Section 6.4.
Additional Documents . The Buyer Parties shall have caused
the agreements, documents and instruments required by Section
2.5(c)-(d) to be executed and delivered by the
appropriate Buyer Party, and each such document and instrument
shall be in full force and effect and shall not have been
materially breached by any party thereto (other than CAG or its
Subsidiaries).
Section 6.5.
Orders . There shall not be in effect any Order of any
Governmental Body of competent jurisdiction enjoining the
consummation of the Contemplated Transactions. There shall not be,
at the time of Closing, any pending suit, action or proceeding
before any Governmental Body seeking to restrain or prohibit the
consummation of the Closing in
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accordance with the terms and conditions
hereof, which, considering the merits of the claims, the defenses
(procedural and substantive) available thereto and the likelihood
that the opposing parties will ultimately prevail, is likely to
have a CTG Material Adverse Effect or an Investor Material Adverse
Effect.
Section 6.6. Material
Adverse Effect . There shall not have occurred and be
continuing an Investor Material Adverse Effect.
Section 6.7. Closing
Certificate . The Buyer Parties shall have delivered (or caused
to be delivered) to CAG a certificate of a duly authorized officer
of Investor, dated as of the Closing Date, certifying that the
conditions set forth in Sections 6.1 , 6.2 and
6.9 have been met and satisfied.
Section 6.8. Release
of Financial Assurances; CAG Letters of Credit . CAG shall be
reasonably satisfied that, pursuant to an agreement with, or
release, waiver or otherwise from, the applicable Third Party,
immediately following the Closing, CAG and its Subsidiaries (other
than the CTG Companies) shall have no liability or obligation with
respect to the Financial Assurances set forth on Schedule
6.8 , except for those that the CAG Parties will continue
pursuant to Section 7.14 provided CAG shall have
received the letter or letters of credit contemplated by Section
7.14 .
Section 6.9. CTG
Purchase Price Debt Matters . Any CTG Purchase Price Debt shall
comply in all respects with the requirements of Section
2.5(c) .
Section 6.10. ABL
Financing . The ABL Financing shall be consistent in all
material respects with the written commitment therefor delivered to
CAG as described in Section 4.6, and the final
financial covenants provided for in the ABL Financing shall, when
considered in relation to the CTG Business’s existing
earnings projections and the anticipated financial covenant levels
previously delivered to CAG, not give rise to a circumstance where
it is substantially less likely that the PIK Notes will be paid in
accordance with their scheduled maturities as a result of such
final financial covenants.
ARTICLE VII.
ADDITIONAL
COVENANTS
Section 7.1. Conduct
of CTG Companies . From and after the date hereof until the
Closing, except as set forth on Schedule 7.1 and subject to
Section 7.14 with respect to the release of Financial
Assurances, CAG shall (and shall cause its Subsidiaries to)
continue to take such action necessary to operate the CTG Companies
and the CTG Business in the Ordinary Course of Business and to
maintain their properties in the Ordinary Course of Business and in
a condition suitable for their current use. Notwithstanding the
foregoing, except (i) as part of the Reorganization,
(ii) as a reorganization of an entity into an entity eligible
to be treated as a pass through entity for purposes of U.S.
federal, state or local Tax law, or (iii) for purposes of
satisfying the closing conditions set forth in Article VI ,
or (iv) as required (including by virtue of being an express
condition to Closing) or as explicitly permitted by the terms of
this Agreement or the Related Agreements, without the prior written
consent of Investor (such consent not to be unreasonably withheld,
conditioned or delayed), CAG shall (and shall cause its
Subsidiaries to):
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(a) not amend or otherwise
alter (or propose any amendment or alteration to) the Governing
Documents of the LLCs or any of the CTG Companies;
(b) not create or issue any
Equity Commitments, or redeem any Equity Interest, of the LLCs or
any of the CTG Companies;
(c) with respect to CAG and
its Subsidiaries other than the CTG Companies, continue to provide
all services previously provided to the CTG Companies in accordance
with the Ordinary Course of Business;
(d) not make any sale,
assignment, transfer, abandonment, or other conveyance of any asset
(other than inventory in the Ordinary Course of Business) used in
the CTG Business or any Contract relating to the CTG Business
(other than any Trading Agreement), in each such case unless such
asset or Contract is not material to the CTG Companies;
(e) with respect to the CAG
Parties and their Subsidiaries (other than solely by the CTG
Companies), not create or permit to be created (i) any
Encumbrance on the Transferred Interests or (ii) any
Encumbrance (other than a Permitted Encumbrance) on any asset of
the CTG Companies other than in the Ordinary Course of Business or
as contemplated in this Agreement or any of the Related
Agreements;
(f) not enter into or
materially amend, modify, extend, renegotiate or terminate any CTG
Business Material Contract (as defined solely in subsections
(i) through (xi) of Section 3.9(c) ,
excluding CTG Business Material Contracts as defined in Section
3.9(c)(x) that are in respect of trading authority or Trading
Agreements);
(g) not change any method of
accounting or accounting principle that relates to the CTG
Companies;
(h) not make or change any
Tax election, change an annual accounting period, adopt or change
any accounting method with respect to Taxes, file any amended Tax
Return, settle or compromise any proceeding with respect to any Tax
claim or assessment relating to the CTG Companies, surrender any
right to claim a refund of Taxes, consent to any extension or
waiver of the limitations period applicable to any Tax claim or
assessment relating to the CTG Companies; or take any other similar
action relating to the filing of any Tax Return or the payment of
any Tax relating to the CTG Companies, if such changes or actions
would have the effect of increasing the Tax liability of any CTG
Company for any Post-Closing Tax Period and with respect to any
Straddle Period, for the portion thereof beginning on the first day
after the Closing Date (as determined pursuant to
Section 9.9 ); provided that , notwithstanding
the foregoing, this Section 7.1(h) shall not apply to
any changes or actions that arise on account of the
Reorganization);
(i) not purchase or otherwise
acquire (x) any material assets (other than in the Ordinary
Course of Business or otherwise in connection with any Trading
Agreements) whether in one transaction or a series of related
transactions for an aggregate purchase price exceeding $10,000,000,
or (y) any Equity Interest in any entity whose equity is not
publicly traded other than in the Ordinary Course of Business, or a
five percent (5%) or greater Equity Interest in any entity
whose equity is publicly traded;
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(j) not agree, consent to or
otherwise permit an increase in or modification to, or grant
exceptions to, the “value at risk” limits for the CTG
Companies in effect as of March 21, 2008 (as set forth on
Schedule 7.1(j) hereto), which individually or together
constitute an increase in permitted “value at risk”
limits for the CTG Companies of 20% or more above those limits in
effect as of March 21, 2008, except for such increase,
modification or exception permitted or granted on a temporary basis
consistent with past practice or as reasonably required due to
changes in market conditions;
(k) except as disclosed on
Schedule 7.1(k) , (i) not materially alter the total
compensation of any CTG Business Employee with an annual base
compensation in excess of $150,000 (a “Designated
Employee”), (ii) not grant any severance or termination
pay to any CTG Business Employee other than in accordance with
Schedule 7.6(f) , (iii) not establish, adopt, enter
into, amend or terminate any Trade Group Plan or Collective
Bargaining Agreement (other than (1) as may be required by the
terms of an existing Trade Group Plan or collective bargaining
agreement, (2) as may be required by applicable law or in
order to qualify under Sections 401 and 501 or to resolve any
non-material grievance or other non-material dispute with any
collective bargaining representative or (3) with respect to
any CAG Plan if the establishment, adoption, execution, amendment
or termination of such CAG Plan does not otherwise affect any CTG
Business Employee, or (iv) not grant any equity or
equity-based awards to any CTG Business Employee; or
(l) not take any action to do
or engage (or commit to do or engage) in any of the
foregoing.
Section 7.2.
Information and Access . Prior to Closing, CAG shall (and
shall cause its Subsidiaries to) (a) permit Investor and its
Representatives to have reasonable access during normal business
hours, and in a manner so as not to interfere with the normal
operations, to all premises, properties, personnel, accountants,
books, records, contracts and documents of or pertaining to the CTG
Business; and (b) furnish Investor and its Representatives
with all such information and data concerning the CTG Business as
Investor or its Representatives reasonably may request in
connection with their review of information in accordance with
subsection (a) of this Section 7.2 , except to
the extent that such information is subject to attorney-client
privilege or furnishing any such information or data would violate
any Legal Requirement, Order or Contract applicable to CAG or any
of its Subsidiaries or by which any of the assets of the CTG
Companies are bound; provided that CAG shall (and
shall cause its Subsidiaries to) use commercially reasonable
efforts to remove any limitation or restriction on access to
Investor and its Representatives. Notwithstanding anything in this
Section 7.2 , subject to Section 10.3 , CAG will not
be required to permit access to or furnish Tax Returns, books,
records, contracts, documents, information or data relating to
Taxes that do not exclusively relate to the CTG
Business.
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Section 7.3. Notices
of Certain Events .
(a) Prior to the Closing,
each of CAG and Investor shall (and shall cause their Subsidiaries
to) promptly notify the other Party of:
(i) any written notice or
other written communication from any Person alleging that the
Consent of such Person is or may be required in connection with the
Contemplated Transactions;
(ii) any material written
notice or other material written communication to or from any
Governmental Body in connection with the Contemplated
Transactions;
(iii) promptly after such
Party’s obtaining knowledge of the same, any fact, change,
condition, circumstance, event, occurrence or non-occurrence that
has caused or is reasonably likely to cause any material
inaccuracy, or material violation or material breach by such
Person, of any of its representations, warranties or covenants
herein; and
(iv) any event or condition
that is reasonably likely to prevent, hinder or delay the
consummation of the Contemplated Transactions, including but not
limited to the institution of or the threat of institution of any
Proceeding related to this Agreement or the Contemplated
Transactions;
provided that the delivery
of any notice pursuant to this Section 7.3(a) shall not
limit or otherwise affect the remedies available hereunder to the
Party receiving such notice, or the representations, warranties or
covenants of, or the conditions to the obligations of, the
parties.
(b) Prior to the Closing, CAG
shall (and shall cause its Subsidiaries to) promptly notify (and
with respect to subsections (i) and (ii) below,
consult to the extent reasonably practicable, with) Investor
regarding:
(i) the resignation or
termination of any CTG Business Employee with an annual base
compensation in excess of $150,000 (a “ Designated
Employee ”); and
(ii) any CTG Company entering
into, materially amending, modifying, extending or renegotiating
any CTG Business Material Contract of the type described in
subsections (xiii), (xiv) or (xv) of Section
3.9(c) .
(c) Prior to the Closing, CAG
and Investor shall cooperate and consult with each other in
connection with the preparation of any presentations by Investor to
any Rating Agency and no Party or any Representative of such Party
shall contact any Rating Agency on behalf of Investor, by telephone
or in person, in connection with the Contemplated Transactions
without the prior approval or participation of the other Party and
each of CAG and Investor shall provide reasonable advance notice to
and consult with the other Party prior to any meetings, by
telephone or in person, with any of the Rating Agencies in
connection with the Contemplated Transactions (including meeting on
behalf of CAG), and each of CAG and Investor shall have the right
(to the extent permitted by the applicable Rating Agency) to have a
Representative present at any such meeting on behalf of
Investor.
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Section 7.4. Filings;
Reasonable Best Efforts to Close .
(a) Until the Closing Date,
CAG and Investor shall (and shall cause their respective
Subsidiaries to), as promptly as practicable, (i) use their
reasonable best efforts (except as otherwise specified in
Section 7.10(b) ) to obtain all consents, approvals or
actions of, make all filings with and give all notices to any
Governmental Body or any other Person required of the Parties, as
the case may be, to consummate the transactions contemplated hereby
and by the Related Agreements to which it is a party, including all
Material Governmental Approvals and the items set forth on
Schedules 3.2(b), 3.2(c), 4.2(b) and 4.2(c) ; (ii) use
their reasonable best efforts (except as otherwise specified in
Section 7.10(b) ) to obtain all consents, approvals or
actions of, make all filings with and give all notices to any
Governmental Body or any other Person necessary for Investor to
obtain Governmental Authorizations from the same Governmental
Bodies and on substantially the same terms and conditions as those
Governmental Authorizations set forth in Schedule 7.4(a)(ii)
(“ Investor Governmental Licenses ”);
(iii) provide such other information and communications to any
such Governmental Body or other Persons as such Governmental Body
or other Persons may reasonably request in connection with the
activities listed in Section 7.14 and in connection with all
matters relating to the consummation of the Reorganization; and
(iv) provide reasonable cooperation to the other Party in
connection with the performance of their obligations under this
Section 7.14 . The Parties will provide prompt notification
to each other when any such consent, approval, action, filing or
notice referred to in clauses (i) and (ii) above
is obtained, taken, made or given, as applicable, will keep each
other reasonably informed as to the progress of any such actions
and will advise each other of any communications (and, if
reasonably requested by the other Party, unless precluded by any
Legal Requirement, provide copies of any such communications that
are in writing) with any Governmental Body or other Person with
respect to any of the foregoing regarding any of the transactions
contemplated by this Agreement or any of the Related
Agreements.
(b) Upon the terms and
subject to the conditions set forth in this Agreement, each of CAG
and Investor shall (and shall cause their respective Subsidiaries
to) use their reasonable best efforts (except to the extent a
different standard is expressly provided for in this Agreement) to
consummate the transactions contemplated by this Agreement.
Notwithstanding anything to the contrary in this Agreement, nothing
contained in this Agreement shall require CAG, Investor or any of
their respective Subsidiaries to (or to agree to) dispose of any
material assets, make material change in a material portion of its
business, or pay Cash or give any other material consideration to a
Third Party to obtain the approval, consent or other action of any
Governmental Body or other Person in connection with the
transactions contemplated hereby or any Related Agreements, except
as set forth in Section 7.14 .
Section 7.5.
Financial Statements . For the period beginning
February 25, 2008 through the Closing Date, within twenty
(20) days after the end of each monthly Fiscal Period, CAG
shall provide Investor with copies of the unaudited management and
operating reports of the CTG Companies or relating to the CTG
Business prepared in accordance with past practice for each such
Fiscal Period.
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Section 7.6.
Employees and Employee Benefits .
(a) Employees
.
(i) Each CTG US Business
Employee who is or will be employed by the LLCs or a CTG Company or
any of their respective Subsidiaries immediately prior to the
Closing (including those who are actively employed or on vacation,
layoff, leave or other permitted absence from employment other than
short-term or long-term disability leave) shall remain an employee
of the LLCs or such CTG Company or such Subsidiary immediately
following the Closing (such CTG US Business Employees, the “
Transferred US Employees ”); provided
that neither the LLCs nor their Subsidiaries shall have any
obligation to continue employing such Transferred US Employees for
any length of time thereafter except as required by applicable
Legal Requirements, any employment Contract or a Collective
Bargaining Agreement.
(ii) With respect to those
CTG US Business Employees who are not actively at work on the
Closing Date because they are (A) on approved long-term
disability leave in accordance with the CAG Plans or (B) on
approved short-term disability leave in accordance with the CAG
Plans but do not return to active employment on or prior to the
expiration of such short-term disability leave (the “
Inactive US Employees ”), from and after the Closing
Date, CAG shall continue to provide such Inactive US Employees with
disability benefit coverage under the CAG Plans to the extent
consistent with the terms of the CAG Plans; provided
that , if any such Inactive US Employee returns to active
work at the conclusion of such leave (and with it being understood
that the LLCs and their Subsidiaries shall offer employment to each
such Inactive US Employee who becomes ready, willing and able to
return to active work within twelve (12) months after the
Closing Date or as otherwise required by applicable Legal
Requirements), such Inactive US Employee shall become a “
Transferred US Employee ” for purposes hereunder as of
the date of such person’s return to active employment with
the LLCs or any of their Subsidiaries (the “ Transfer
Date ”).
(iii) The transfer of those
CTG Business Employees employed in jurisdictions outside the United
States shall be governed by the Legal Requirements of the
applicable jurisdictions.
(b) Employee Benefits
Liabilities: CAG and Trade Group Plans . Effective as of the
Closing, CAG shall retain and satisfy any and all responsibility,
and Investor and the LLCs shall have no liability or responsibility
whatsoever, for any and all claims, liabilities and obligations,
whether contingent or otherwise, except to the extent such
liabilities, claims and obligations are accrued on the Closing
Balance Sheet, relating to the CAG Plans that are not Trade Group
Plans, whether arising on, prior to, or after the Closing Date.
Effective as of the Closing, the LLCs and their Subsidiaries shall
assume, retain and satisfy any and all responsibility, and CAG
shall have no liability or responsibility whatsoever, for any and
all claims, liabilities and obligations, whether contingent or
otherwise, relating to the Trade Group Plans, whether arising on,
prior to, or after the Closing Date.
(c) Employee Benefits;
General . As of the Closing Date, except as otherwise provided
in the Transition Services Agreement, the LLCs, the CTG Companies
and each of their respective Subsidiaries shall cease to be
participating employers under the CAG US Plans that
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are not Trade Group US Plans (“
Parent US Plans ”). Except as set forth in
Section 7.6(e)(i) , as of the Closing Date (or Transfer
Date, if applicable), Transferred US Employees shall cease to
accrue any further benefits as active participants and shall have
no rights to continue as active participants under the Parent US
Plans (without derogation of their rights as vested, terminated
participants). For Transferred US Employees, subject to Legal
Requirements, Investor will cause the LLCs and their Subsidiaries
to provide such Transferred US Employees (as a group), during the
period beginning immediately following the Closing Date (or
Transfer Date, if applicable) and ending on the first anniversary
of the Closing Date or such other time as may be required under a
Collective Bargaining Agreement (the “ Continuation
Period ”), with compensation and employee benefits (other
than (i) defined benefit pension benefits, (ii) retiree
health, life and other welfare benefits, and
(iii) equity-based plans, programs and policies, except as may
be required by a Collective Bargaining Agreement) that are
reasonably comparable in the aggregate to the compensation and
employee benefits provided as of the date hereof under the CAG
Plans (any such employee health and welfare benefit plans of the
LLCs or its Subsidiaries in which Transferred US Employees become
eligible to participate after the Closing Date shall be referred
hereinafter as “ LLC Welfare Plans ”).
Notwithstanding the foregoing, CAG shall amend all applicable CAG
Plans that provide health and welfare benefits to CTG Business
Employees immediately prior to Closing to provide that such CTG
Business Employees shall continue participation in such plans from
the Closing Date through December 31, 2008 in accordance with
the Transition Services Agreement.
(d) LLC Welfare Plans
. With respect to the LLC Welfare Plans, except to the extent
otherwise required by applicable Legal Requirements, Investor shall
cause the LLCs and their Subsidiaries to use commercially
reasonable best efforts:
(i) with respect to each such
plan that is a medical or health plan, to waive, or cause the
waiver of, any exclusions for pre-existing conditions and waiting
periods for each Transferred US Employee and his/her dependents to
the extent that such pre-existing condition exclusions and waiting
periods were previously satisfied under the comparable CAG Plan or
Trade Group Plan for the plan year that includes such
transfer;
(ii) with respect to each
such plan that is a medical or health plan, to provide each
Transferred US Employee with credit for any deductibles and
out-of-pocket expenses paid or incurred by such Transferred US
Employee prior to his or her transfer to the applicable LLC Welfare
Plan (to the same extent such credit was given under the comparable
CAG Plan or Trade Group Plan) in satisfying any applicable
deductible or out-of-pocket requirements under such LLC Welfare
Plan for the plan year that includes such transfer; and
(iii) to recognize service of
the Transferred US Employees credited by CAG solely for purposes of
eligibility to participate and vesting in any LLC Welfare Plan in
which the Transferred US Employees are eligible to participate
after the Closing Date to the extent that such service was
recognized for that purpose under the comparable CAG Plan or Trade
Group Plan prior to such transfer; provided , that in no
event shall the Transferred US Employees be entitled to any credit
to the extent that it would result in a duplication of benefits
with respect to the same period of service. CAG will make available
to Investor employee participation data and year-to-date
deductibles and out-of-pocket expenses as of the Closing
Date.
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(e) U.S. Retirement
Benefits .
(i) Non-Union Defined
Benefit Pension . Effective as of the Closing Date, each
Transferred US Employee who is not subject to a Collective
Bargaining Agreement and who participates in the ConAgra Foods,
Inc. Pension Plan for Salaried Employees or the ConAgra Foods, Inc.
Pension Plan for Hourly Rate Production Employees (the “
CAG Non-Union Retirement Benefits ”) will cease to
accrue benefits under the CAG Non-Union Retirement Benefits,
provided that, effective as of the Closing Date, CAG shall amend
the CAG Non-Union Retirement Benefits to provide that (A) any
service of such non-union Transferred US Employees with the LLCs,
the CTG Companies or their respective Subsidiaries, or their
respective ERISA Affiliates from the Closing Date through
December 31, 2012 and attained age through the earlier of
(i) the date of termination of such non-union Transferred US
Employee’s employment following the Closing Date or
(ii) December 31, 2012 will be recognized solely for
purposes of determining eligibility for subsidized early retirement
benefits (but not for any other purpose) under the CAG Non-Union
Retirement Benefits and (B) all such non-union Transferred US
Employees shall be fully vested in their accrued benefits under the
CAG Non-Union Retirement Benefits as of the Closing Date. None of
Investor or its Affiliates (including the LLCs, the CTG Companies
and their Subsidiaries), any retirement plan of any of them or any
trust thereunder will have or acquire any interest in or right with
respect to any of the assets of the CAG Non-Union Retirement
Benefits or any trust related thereto, and CAG will retain full
power and authority with respect to the amendment and termination
of the CAG Non-Union Retirement Benefits and the investment and
disposition of assets held in the CAG Non-Union Retirement Benefits
and in any trust related thereto.
(ii) Union Defined Benefit
Pension . To the extent required by the terms of any Collective
Bargaining Agreement covering Transferred US Employees, effective
as of the Closing Date Investor will cause the LLCs or their
appropriate Subsidiary to, extend coverage to Transferred US
Employees who participated immediately prior to the Closing Date in
the ConAgra Foods, Inc. Pension Plan for Hourly Rate Production
Employees or the ConAgra Foods, Inc. Jointly Administered Grain
Millers Pension Plan (the “ CAG Union Retirement Plan
”) under one or more new defined benefit pension plans (each,
a “ CTG Union Pension Plan ”) that is intended
to be qualified under Section 401(a) of the Code and satisfies
all terms and conditions of the applicable Collective Bargaining
Agreements. In addition, Investor will cause the LLCs or their
appropriate Subsidiary to, establish a related trust, which is
intended to be exempt from taxation under Section 501(a) of
the Code. Investor will cause each CTG Union Pension Plan to credit
each Transferred US Employee participating therein for all purposes
(including, but not limited to, purposes of eligibility to
participate,
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vesting, benefit accrual and
eligibility for early retirement and any benefit subsidies) with
all service which is credited to such Transferred US Employee for
such purposes under the CAG Union Retirement Plan as of the Closing
Date; provided, however, that benefits payable under each CTG Union
Pension Plan to each Transferred US Employee participating therein
or his beneficiary shall be offset by benefits payable to such
Transferred US Employee or his beneficiary under the CAG Union
Retirement Plan. None of Investor or its Affiliates (including the
LLCs and their Subsidiaries), any retirement plan of any of them or
any trust thereunder will have or acquire any interest in or right
with respect to any of the assets of the CAG Union Retirement Plan
or any trust related thereto, and CAG will retain full power and
authority with respect to the amendment and termination of the CAG
Union Retirement Plan and the investment and disposition of assets
held in the CAG Union Retirement Plan and in any trust related
thereto. None of CAG or its Affiliates (as determined after the
Closing), the CAG Union Retirement Plan or any trust thereunder
will have any Liabilities with respect to the CTG Union Pension
Plan or any benefit required to be provided thereunder by any
Collective Bargaining Agreement. No provision of this Agreement
shall be construed to provide any Transferred US Employee with
credit for service following the Closing with Investor, the LLCs,
or any of their respective Subsidiaries for any purpose under the
CAG Union Retirement Plan.
(iii) 401(k) Plans .
Effective on or as soon as practicable after of the Closing Date,
but not later than 60 days following the Closing, Investor will
cause to be established, and will cause to be extended coverage to
the Transferred US Employees who participated in the ConAgra Foods
Retirement Savings Plan or the ConAgra Foods Retirement Income
Savings Plan for Hourly Rate Production Employees (the “
CAG 401(k) Plan ”) immediately prior to the Closing
Date under, one or more new defined contribution plans (each, a
“ CTG 401(k) Plan ”) that is intended to be
qualified pursuant to Sections 401(a) and 401(k) of the Code and
has a related trust which is intended to be exempt from taxation
under Section 501(a) of the Code. The CTG 401(k) Plan will
comply with all applicable terms of any Collective Bargaining
Agreements covering Transferred US Employees. Effective as of the
Closing Date, each Transferred US Employee who was a participant in
the CAG 401(k) Plan immediately prior to the Closing Date will be
credited under the CTG 401(k) Plan for purposes of eligibility to
participate and vesting with all service recognized for such
purposes under the CAG 401(k) Plan as of the Closing
Date.
(iv) Effective as of the
Closing Date, CAG shall cause each Transferred US Employee who
participates in the CAG 401(k) Plan immediately prior to the
Closing Date to become fully vested in such employee’s
unvested account balances under the CAG 401(k) Plan and shall cause
all employee and employer contributions for such Transferred US
Employees with respect to all periods immediately prior to the
Closing Date to be paid into the CAG 401(k) Plan as soon as
reasonably practicable following the Closing Date but prior to any
transfer of account balances to the CTG 401(k) Plan in accordance
with this Section 7.6(e)(iv) . As soon as practicable
following the Closing Date, the account
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balances of each Transferred
US Employee who participates in the CAG 401(k) Plan immediately
prior to the Closing Date will be transferred in cash or in kind
(including in the form of any participant promissory notes)
pursuant to the requirements of Section 414(l) of the Code
from the CAG 401(k) Plan to the CTG 401(k) Plan. Effective as of
the Closing Date, each Transferred US Employee will cease to be
eligible to contribute to, or receive employer contributions in
respect of, such employee’s accounts under the CAG 401(k)
Plan.
(f) Severance and Salary
Protection . Investor shall cause Freebird and its Subsidiaries
to provide severance benefits to Transferred US Employees who
experience a qualifying termination of employment during the
Continuation Period on terms substantially comparable to those
described in Schedule 7.6(f).
(g) Vacation, Sick Leave
and Flex Days . Investor shall cause Freebird and its
Subsidiaries to honor each Transferred Employee’s unused
vacation, sick leave and flex days accrued by such employee at CAG
or the CTG Companies as of the Closing Date. For purposes of this
Agreement, such unused vacation, sick leave and flex days shall be
considered to be a Trade Group Plan.
(h) Retiree Medical .
CAG shall retain all liabilities under the CAG Plans with respect
to retiree medical benefits accrued under the terms of the CAG
Plans through the Closing Date on account of any CTG Business
Employee and former employees of the CTG Companies who have
satisfied the applicable eligibility requirements as of the Closing
Date for the receipt of such retiree medical benefits under the
terms of the CAG Plans assuming, for this purpose, that each
Transferred US Employee retired or terminated from employment on
the Closing Date, except that with respect to any Transferred US
Employee whose potential to become eligible for the CAG E Series
Retiree Medical Plan (the “ Retiree Medical Benefit
”) was grandfathered as of July 1, 2003, any service of
such a Transferred US Employee with the LLCs, the CTG Companies or
their respective Subsidiaries from the Closing Date through
December 31, 2008 will also be recognized for purposes of
determining eligibility for receipt of the Retiree Medical Benefit,
it being understood that CAG and its Affiliates may amend, modify
or terminate any such benefit at any time, in accordance with the
terms of the CAG Plans and applicable Legal Requirements, and
provided that such Transferred US Employee begins to receive early
Retiree Medical Benefits and early retirement benefits under the
applicable CAG defined benefit pension plan at the same time and
proves that continuous coverage under a health plan provided by the
LLCs, the CTG Companies or their respective Subsidiaries existed
from the Closing Date through the effective date of such
Transferred US Employee’s enrollment as a participant in the
early Retiree Medical Benefit.
(i) No Third Party
Beneficiary Rights . Nothing contained herein, whether express
or implied shall be treated as an amendment or other modification
of any compensation or benefit plan. This Section 7.6
shall inure exclusively to the benefit of, and be binding solely
upon, the parties to this Agreement and their respective
successors, permitted assigns, executors and legal representatives.
Nothing in this Section 7.6 , expressed or implied,
shall be construed to create any third-party beneficiary rights in
any present or former employee, service provider or any such
Person’s alternate payees, dependents or beneficiaries,
whether in respect of continued employment or resumed employment,
compensation, employee benefits or otherwise.
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(j) CAG will amend, restate,
replace or interpret the CAG Plans identified under item B of
Schedule 3.6(a)(i) to provide the following:
(i) with regard to the Plans
identified in items B - 2, 3, 4, 5, 6, 7, 10 and 19 of
Schedule 3.6(a)(i) (collectively, the “ 2008
Incentive Plans ”), the 2008 Incentive Plans will be
amended or replaced by CAG to have provisions that provide
substantially the same incentive pool opportunity as in effect
pursuant to the applicable plan terms in effect as of the date of
this Agreement, and to further provide that: (A) the
applicable fiscal, plan or measurement period will begin
May 28, 2007, and end as of the earlier of the Closing Date or
May 25, 2008 (the “ Modified Period ”);
(B) any awards payable to CTG Business Employees that are
based on such employees’ base salary will be based on base
salary in effect as of the end of the applicable Modified Period
(subject to adjustment as provided in the applicable 2008 Incentive
Plan); (C) in the case of awards that are not subject to
Section 409A of the Code, such awards will be paid at the time
they normally have been paid in accordance with past practice, but
no later than two and one-half months after the calendar year
during which the Closing Date occurs; (D) CAG will retain
discretion to determine company performance for the applicable
Modified Period for each 2008 Incentive Plan against targets that
are pro-rated for the applicable Modified Period, and to determine
the amount of the pool and any adjustment thereto for each 2008
Incentive Plan (the pool approved by CAG for each 2008 Incentive
Plan is the “Pool” for such 2008 Incentive Plan);
(E) a committee consisting of the individuals who are
currently members of the “Incentive Committee” under
the CAG 2008 Trade Incentive Plan and who are Transferred US
Employees (or the replacement for any such individual whose
employment with the LLCs, the CTG Companies and their respective
Subsidiaries terminates) will have discretion to determine
individual awards, and for this purpose there will be no cap on
individual awards, other than that the plans may specify the manner
in which the individual awards must fall within the Pool or Pools
for the plans; (F) the new plan terms will have provisions
that are reasonably intended to comply with Section 409A of
the Code, to the extent Section 409A of the Code is applicable
(but CAG is not providing a warranty that such provisions will
comply with Section 409A of the Code), and CAG may obtain an
agreement or release from any affected individual with respect to
such compliance; (G) Investor must agree that the 2008
Incentive Plan terms to be in effect comply with applicable Legal
Requirements and that such terms would not result in a failure of
the 2008 Incentive Plans to meet any applicable provision of
Section 409A of the Code before payments pursuant to those
terms are made, and such agreement shall not be unreasonably
withheld; (H) any authority of the Incentive Committee to
interpret the 2008 Incentive Plans, resolve issues regarding the
2008 Incentive Plans and special requests for exceptions may be
removed from the Incentive Committee and vested in CAG; and
(I) CAG may interpret the Contemplated Transactions to
constitute a “material change”;
(ii) with regard to the plan
identified in item B - 16 and 17 of Schedule
3.6(a)(i) , such plan may be amended or replaced by CAG so
that: (A) the plan terms will be reasonably intended to comply
with Section 409A of the Code, to the extent Section 409A
of
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the Code is applicable (but
CAG is not providing a warranty that such provisions will comply
with Section 409A of the Code), and CAG may obtain an
agreement or release from any affected individual with respect to
such compliance; (B) the Incentive Committee may consist of
individuals who are currently members of the “Incentive
Committee” under the CAG 2008 Trade Incentive Plan and who
are Transferred US Employees (or the replacement for any such
individual whose employment with the LLCs, the CTG Companies and
their respective Subsidiaries terminates); (C) any authority
of the Incentive Committee to interpret the plan, resolve issues
regarding the plan and special requests for exceptions may be
removed from the Incentive Committee and vested in CAG; and
(D) Investor must agree that the plan terms to be in effect
comply with applicable Legal Requirements and that such terms would
not result in a failure of the applicable plan to meet any
applicable provision of Section 409A of the Code before
payments pursuant to those terms are made, and such agreement shall
not be unreasonably withheld;
(iii) with regard to the
plans identified in items B - 8 and 18 of Schedule
3.6(a)(i) (collectively, the “ Senior Executive
Incentive Plans ”), (A) CAG may interpret the Senior
Executive Incentive Plans to provide that (x) the Contemplated
Transactions constitute a “material change” and
(y) solely for purposes of determining the amount of any
payment to be made under the 2008 Senior Executive Incentive Plan,
the Contemplated Transactions constitute a “Qualifying
Divestiture”; (B) the Senior Executive Incentive Plan
terms will be revised in a manner that is reasonably intended to
comply with Section 409A of the Code, to the extent
Section 409A of the Code is applicable (but CAG is not
providing a warranty that such provisions will comply with
Section 409A of the Code), and CAG may obtain an agreement or
release from any affected individual with respect to such
compliance; and (C) Investor must agree that the plan terms to
be in effect comply with applicable Legal Requirements and that
such terms would not result in a failure of the Senior Executive
Incentive Plans to meet any applicable provision of
Section 409A of the Code before payments pursuant to those
terms are made, and such agreement shall not be unreasonably
withheld, conditioned or delayed;
(iv) with regard to the
arrangement identified in item B-15 of Schedule 3.6(a)(i) ,
CAG may amend that arrangement to provide that payment shall occur
in the form of cash, rather than CAG stock; and
(v) with regard to the plans
identified in items B-2, 8, 10, 11, 12, 13, 14, 15, 16, 18, and 19
of Schedule 3.6(a)(i) and the Fiscal Year 2007 Trade
Incentive Plan, CAG may take any action necessary or appropriate to
provide that amounts paid under those plans will not be considered
compensation for purposes of any CAG Plan to any extent such
amounts are paid after Closing, except as otherwise required by the
terms of a specific CAG Plan.
(k) With respect to each CAG
federal income Tax period for which any Trade Group US Plan remains
in effect, Investor shall provide to CAG, no later than forty-five
(45)
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days after the end of such Tax period, a
written notice describing all payments made in accordance with the
Trade Group US Plans during such Tax period. Investor and CAG
acknowledge that such written notice shall include a description in
reasonable detail of the amount, date, and recipient of any such
payment, along with any other information reasonably requested by
CAG.
Section 7.7.
Retention of and Access to Records .
(a) After the Closing Date,
(i) CAG shall (and shall cause its respective Subsidiaries to)
retain those books and records not exclusively relating to the CTG
Business and not held by the CTG Companies and shall provide
Investor and its Representatives, subject to the execution of a
mutually satisfactory nondisclosure agreement, reasonable access to
such books and records relating in any manner to the CTG Business
(other than books and records relating to Taxes, access to which is
governed exclusively by Section 10.3(b) ), during normal
business hours and on reasonable notice, for purposes of preparing
financial statements or tax returns, dealing with tax audits or as
they may otherwise reasonably request and (ii) Investor shall
cause Freebird and its Subsidiaries to retain those books and
records not exclusively relating to the CTG Business and not held
by CAG and its Subsidiaries (other than the LLCs and the CTG
Companies) and shall provide CAG and its Representatives, subject
to the execution of a mutually satisfactory nondisclosure
agreement, reasonable access to such books and records relating in
any material manner to CAG and its Subsidiaries (other than the
LLCs and the CTG Companies) (other than books and records relating
to Taxes, access to which is governed exclusively by Section
10.3(b) ), during normal business hours and on reasonable
notice, for purposes of preparing financial statements or tax
returns, dealing with tax audits or as they may otherwise
reasonably request. In addition, Investor shall cause Freebird and
its Subsidiaries to provide reasonable cooperation with CAG in
connection with the preparation of CAG’s Form 10-K for fiscal
2008, including by responding to reasonable inquiries from
CAG’s independent public accountants.
(b) After the fifth
anniversary of the Closing Date, assuming the tax years are closed
with respect to such entities (or such later date as may be
required under applicable Legal Requirements), each of CAG or its
Subsidiaries, on the one hand, or Freebird and its Subsidiaries, on
the other hand, may elect to destroy any books and records
described in Section 7.7(a) (other than books and records
relating to Taxes, the disposition of which is governed exclusively
by Section 10.3(b) ); provided that at the written
request (made at least 30 days prior to the fifth anniversary of
the Closing Date) and expense of Freebird, on the one hand, or CAG,
on the other hand, CAG or its Subsidiary (as applicable) or
Freebird or its Subsidiary (as applicable) shall deliver such books
and records to Freebird or CAG, as applicable, in lieu of
destroying them. Notwithstanding anything in this Section
7.7(b) , CAG will only be required to deliver to Freebird the
portions of such books and records that relate to the CTG Business
or CTG Companies and may redact any statements or other information
on the portions of such books and records that do not relate to the
CTG Business or CTG Companies.
Section 7.8. Further
Assurances .
(a) The Parties shall (and
shall cause their respective Subsidiaries to) cooperate reasonably
with each other and with their respective
Representatives
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in connection with any steps required to
be taken as part of their respective obligations under this
Agreement, and shall furnish upon request to each other such
further information as the other Party may reasonably request for
the purpose of carrying out the intent of this Agreement, the
Contemplated Transactions and the transactions contemplated under
the Related Agreements.
(b) The Parties shall use
their reasonable best efforts to restructure the transactions
contemplated by this Agreement to permit the Closing to occur,
including by deferring the transfer of all or part of the CTG
Business in certain jurisdictions, liquidating trading positions or
other steps to avoid any delay in Closing; provided that no
Party shall be required to agree to take or refrain from taking any
action pursuant to this Section 7.8(b) that has more than an
immaterial impact on the economic benefits or risks of the
transactions contemplated by this Agreement to such
Party.
(c) Subject to the terms and
conditions of this Agreement, at any time or from time to time
after the date of this Agreement, at any Party’s reasonable
request and without further consideration, each Party shall do all
acts and things as may be necessary or desirable and are within its
control to carry out the intent of this Agreement and the Related
Agreements, including executing and delivering further instruments
of sale, transfer, conveyance, assignment, novation, confirmation
or other documents, and providing additional materials and
information, that may be reasonably required or
requested.
Section 7.9. No
Shop . CAG agrees that, between the date of this Agreement and
the date this Agreement is terminated or the Closing occurs, it
shall not, directly or indirectly, through any Subsidiary,
affiliate, Representative, consortium or otherwise, initiate,
solicit or encourage, participate in discussions, or enter into
negotiations of any type, directly or indirectly, or enter into a
confidentiality agreement, letter of intent or purchase agreement
or other similar agreement with respect to (a) any sale, lease
or other transfer (in whole or part) of any interest in the LLCs,
the CTG Business or the CTG Companies other than in connection with
the Reorganization, in the Ordinary Course of Business, or pursuant
to Permissible Trading Activities (including the granting of
Encumbrances described in clause (f) of the definition
of “Permitted Encumbrances” made in connection with
Permissible Trading Activities) or (b) any merger,
consolidation or business combination involving the LLCs, the CTG
Business or the CTG Companies other than any such transactions
among and with respect to CAG and its Subsidiaries and affiliates,
or (c) the purchase of all or any portion of the assets used
in the conduct of the CTG Business, other than in the Ordinary
Course of Business, or (d) any similar extraordinary
transaction with respect to the CTG Business or the CTG
Companies.
Section 7.10.
Transition Plans; Novation .
(a) Within 15 days after the
execution date of this Agreement, CAG and Investor shall form one
or more joint transition teams (including, as appropriate, members
selected from the CTG Companies) to plan for and perform various
activities set forth in this Section 7.10 , as well as other
activities to be performed between the date of this Agreement and
Closing.
(b) From the date of this
Agreement until the actions and events contemplated by clauses
(i) through (iii) below are completed, CAG
and Investor shall (and CAG shall cause
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its Subsidiaries to) use their
commercially reasonable efforts to cooperate in good faith and take
all reasonable steps necessary to (and without unreasonable
disruptions to):
(i) prior to Closing, conduct
a program to obtain all consents, approvals or actions of, make all
filings with and give all notices to any Governmental Body or any
other Person required of the Parties, as the case may be, to
consummate the Contemplated Transactions, including, without
limitation, as required to satisfy the conditions set forth in
Sections 5.3 and 6.3 ;
(ii) conduct a program to
secure consents, if any are required, from Third Parties to the
Trading Agreements and the CTG Business Material Contracts;
and
(iii) subject to Section
7.14 , cause CAG and its Subsidiaries to be released from any
guarantee, credit support or other financial arrangement for the
benefit of the customers and creditors of the CTG Companies,
including obtaining waivers and consents from any applicable
Persons to replace any such credit support with appropriate credit
support; provided, that, except as provided in
Section 7.14 , neither Investor nor CAG (nor any of its
Subsidiaries) shall be required to pay any amounts in connection
with any such release.
Section 7.11.
Termination of Certain Agreements .
(a) From and after the date
hereof until completed, CAG shall, and shall cause its Subsidiaries
to, terminate (without any default, charge, cost or penalty of any
kind to Investor or its Subsidiaries or the CTG Companies) all of
the Affiliate Agreements (including for this purpose, Trading
Agreements with Affiliates) other than those set forth on
Schedule 3.9(a) , with effect as of the Closing
Date.
(b) With effect as of
immediately prior to the Closing, CAG hereby releases and waives,
solely for the benefit of the LLCs, and shall cause all of its
Subsidiaries (other than the CTG Companies) to release and waive,
all rights and remedies of CAG and its Subsidiaries (other than the
CTG Companies) (whether now existing or hereafter arising and
including all common law, tort, contractual, equitable and
statutory rights and remedies) against the LLCs, the CTG Companies,
each of their Subsidiaries, and their respective employees, agents
and anyone else acting on any of their behalf in connection with
the CTG Business, except (i) claims arising under the
Affiliate Agreements set forth on Schedule 3.9(a) ,
subrogation rights under any guarantee or other financial assurance
and rights and remedies under this Agreement, any of the Related
Agreements or any Trading Agreements, (ii) with respect to
claims of fraud or misappropriation of material funds or assets, or
(iii) to the extent that Investor otherwise consents in
writing in its reasonable discretion following the date hereof with
respect to the pursuit of any such rights or remedies against
employees or other agents of the CTG Companies for conduct by such
persons occurring prior to the date hereof; provided
that , in connection with any Proceedings brought against
CAG or its Subsidiaries, the foregoing release and waiver shall in
no way limit the ability of CAG or its Subsidiaries to raise any
defenses or counterclaims related to such Proceedings.
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(c) With effect as of
immediately prior to the Closing, the Parties on behalf of the LLCs
and the CTG Companies hereby releases and waives, and shall cause
the LLCs and the CTG Companies to release and waive, all rights and
remedies of the CTG Companies (whether now existing or hereafter
arising and including all common law, tort, contractual, equitable
and statutory rights and remedies) against CAG and its Subsidiaries
(other than the CTG Companies), and their respective employees,
agents and anyone else acting on any of their behalf in connection
with the business of CAG and its Subsidiaries (other than the CTG
Business), except (i) claims arising under the Affiliate
Agreements set forth on Schedule 3.9(a) (which shall not
include any claim whatsoever of any employees, agents, officers or
directors of the LLCs or the CTG Companies), subrogation rights
under any guarantee or other financial assurance, and rights and
remedies under this Agreement, any of the Related Agreements or any
Trading Agreements, (ii) with respect to claims of fraud or
misappropriation of material funds or assets, (iii) claims
arising under this Agreement or the Related Agreements or
(iv) to the extent that CAG otherwise consents in writing in
its reasonable discretion following the date hereof with respect to
the pursuit of any such rights or remedies against employees or
other agents of CAG for conduct by such persons occurring prior to
the date hereof; provided that , in connection with
any Proceedings brought against the LLCs or the CTG Companies, the
foregoing release and waiver shall in no way limit the ability of
the LLCs or the CTG Companies to raise any defenses or
counterclaims related to such Proceedings.
Section 7.12.
Insurance .
(a) For all periods through
the Closing Date, CAG will, and will cause its Subsidiaries to,
maintain in effect policies of insurance covering the CTG Business
of a nature, in an amount, and against such risks as are
substantially consistent with past practice.
(b) To the extent that
coverage under certain Policies has, prior to the Closing, been
maintained or provided by CAG or its Subsidiaries (other than
solely by the CTG Companies), then from and after the Closing, CAG
shall (and shall cause its Subsidiaries to) use commercially
reasonable efforts to take all action necessary to permit the CTG
Companies to make any claims under such Policies (including
directors and officers insurance) with respect to Losses relating
to activities occurring on or before the Closing, and shall
promptly remit to Freebird any payments related to such claims
received by CAG and its Subsidiaries; provided that
if CAG or any of its Subsidiaries is pursuing any claim under any
such Policies and such claim is not reflected as an asset in the
Final Net Equity Book Value, then Investor shall (and shall cause
Freebird and its Subsidiaries to) use commercially reasonable
efforts to take all action necessary to permit CAG or its
Subsidiaries to make any claims under such Policies (including
directors and officers insurance) with respect to Losses, and CAG
and its Subsidiaries shall be entitled to retain any payments
related to such claims received by CAG and its
Subsidiaries.
Section 7.13. Change
of Names . Within one hundred eighty (180) days following
the Closing Date, Freebird shall (and Investor shall cause the LLC
to) and shall cause its Subsidiaries to remove from their
respective assets (excluding inventory, labeling and packaging),
properties, stationery, purchase orders, literature and Internet
websites any and all names, slogans, logos or trademarks which
include the word “ConAgra” or words or phrases
confusingly similar thereto and Freebird shall provide to CAG a
certification of such removal. Notwithstanding the foregoing,
(i) Freebird shall be entitled to continue to use the
name
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“ConAgra” for a reasonable
period of time (not to exceed 180 days) for purposes of identifying
itself and its businesses in the marketplace as successor to the
trading and agricultural merchandising segment of ConAgra, and
(ii) Freebird shall (and Investor shall cause Freebird to)
remove all signage bearing the name “ConAgra” from the
real properties and locations of the CTG Business (other than
properties and locations covered by the Building 11 Sublease)
within one hundred eighty (180) days following the Closing
Date.
Section 7.14.
Financing . CAG and the CTG Companies shall cooperate, and
will cause their respective officers, directors, employees, agents
and other Representatives and advisors to cooperate, with Investor
and the Lenders in connection with the Debt Financing and the
Equity Financing, as may be reasonably requested by Investor,
including (a) participation (upon reasonable advance notice)
in meetings, presentations, drafting sessions and due diligence
sessions, (b) furnishing Investor and the Lenders with
financial (including financial statements prepared in accordance
with GAAP and including those required to be delivered pursuant to
the written commitment for the Debt Financing delivered to CAG) and
other pertinent information regarding the LLCs, the CTG Companies
and the CTG Business in form reasonably requested by Investor,
(c) providing and executing documents as may be reasonably
requested by the investors and the Lenders; (d) taking all
corporate actions, subject to the occurrence of the Closing,
reasonably requested by the Investor to permit consummation of the
Equity Financing, the Debt Financing and the direct borrowing or
incurrence of all of the proceeds of the Debt Financing by Freebird
II in connection with the Closing; and (e) reviewing and
commenting on any information or other memoranda prepared and/or
distributed in connection with the syndication, including
confirming in the case of any public-side information memoranda
that no material non-public information is contained therein (it
being understood that any proposed public-side disclosure is
subject to the rights of CTG under the existing confidentiality
agreement); provided , that neither CAG, the LLCs or any of
the CTG Companies will be required to execute any pledge, security
document, financing document or other instrument that would
encumber any of the CTG Business Assets and that would be effective
at any time prior to the Closing. Notwithstanding anything in this
Agreement to the contrary, none of the CAG Parties or any of their
respective Subsidiaries shall be required to provide or continue
any financial or bank guarantees or other forms of financial
commitment (including, without limitation, credit support) to
Investor, the LLCs or any of their Subsidiaries; provided
that to the extent any such guarantees or other forms of
financial commitment cannot be replaced at reasonable cost (it
being understood that the cost of any requested letters of credit
shall be deemed reasonable) after Investor uses all commercially
reasonable efforts to effect or arrange such replacement, the CAG
Parties shall continue such guarantees or other forms of financial
commitment following the Closing subject to receipt of a letter of
credit satisfactory to CAG in an amount that is not less than the
amounts subject to such guarantees and financial commitments or
otherwise committed by the CAG Parties or any of their respective
Subsidiaries; and provided further that in no event shall
such continued guarantees or other forms of financial commitment by
the CAG Parties or any of the their respective Subsidiaries extend
beyond the duration (without giving effect to any post-Closing
extension, whether effected by action or inaction on the part of
any Party) of the applicable guarantee or other form of financial
commitment as in effect at Closing.
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Section 7.15.
Noncompete .
(a) Except as set forth
below, following the Closing and until the second anniversary of
the Closing Date (the “ Noncompete Period ”),
CAG and its Subsidiaries shall not, and shall cause their
respective affiliates not to, directly or indirectly,
(x) engage in the CTG Business as the CTG Business is
conducted as of immediately prior to the Closing, or in any
business that competes with the CTG Business as the CTG Business is
conducted as of immediately prior to the Closing (a “
Restricted Business ”), or (y) own, manage,
operate, control or participate in the management, operation or
control of any business, whether in corporate, proprietorship or
partnership form or otherwise, engaged in a Restricted Business and
shall be permitted also to continue to operate (i) the
Commerce City grain investment, (ii) the Lamb Weston Watts
Brothers fertilizer business, (iii) the activities
contemplated by the Dried Dairy Products Agreement and
(iv) any activity currently conducted by CAG’s milling
operations, all as currently conducted as of the date hereof;
provided that CAG and its Subsidiaries shall be permitted to
perform risk management services and trading activities for their
own account and for the accounts of their Subsidiaries and
affiliates and shall be permitted to market and sell excess raw
materials purchased or generated in the ordinary course of
business; provided further that, subject to the
Byproducts Services Agreement, CAG and its Subsidiaries shall be
permitted to merchandise and sell byproducts of their mill
operations. Notwithstanding the foregoing, CAG and its Subsidiaries
shall be permitted to acquire and operate a Restricted Business if
such business is ancillary to a larger acquired business and not
more than 25% of the revenues of such larger business are derived
from the Restricted Business; provided that , if more
than 25% of the revenues of such larger business are derived from
the Restricted Business and such Restricted Business is acquired
during the Noncompete Period, then the CAG Parties shall, promptly
following the acquisition and subject to the right of first offer
in favor of Freebird in Section 7.15(b) , begin steps
to dispose of such Restricted Business and diligently pursue such
disposition until completed.
(b) In the event that the CAG
Parties are required to dispose of any Restricted Business pursuant
to Section 7.15(a) during the Non-Compete Period, they
shall provide written notice to Freebird of such intended
disposition. Within fifteen (15) days after receipt of such
notice, Freebird will notify the CAG Parties in writing whether it
wishes to proceed with negotiations with the CAG Parties regarding
an acquisition of such Restricted Business. If so, the Parties will
negotiate in good faith to agree upon the terms of such an
acquisition for up to forty-five (45) days. If the parties are
unable to agree upon terms and conditions within such forty-five
(45) day period, the CAG Parties shall be free to dispose of
the Restricted Business to a third party.
(c) Each of the CAG Parties
covenants and agrees that such Person shall not, and shall cause
its respective Subsidiaries and affiliates not to, during the
Noncompete Period, for any reason or no reason, directly or
indirectly, hire, employ or otherwise engage any individual who is
an employee of any of the LLCs or their Subsidiaries or a
contractor or consultant performing services exclusively for the
benefit of any of the LLCs or their Subsidiaries on a routine and
continuing basis or solicit him or her to leave his or her
employment with, or terminate or substantially modify his or her
contractual arrangement with, the LLCs or their Subsidiaries, or
otherwise encourage or entice any such employee or contractor to do
so, without the written consent of the senior human resources
executive of Freebird. Each of the Investor and Freebird covenants
and agrees that none of it or and its respective Subsidiaries
shall, during the Noncompete Period for any reason or no reason,
directly or
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indirectly, hire, employ or otherwise
engage any individual who was an employee of any of the CAG Parties
or any of their respective Subsidiaries or a contractor or
consultant performing services for the benefit of any of the CAG
Parties or any of their respective Subsidiaries on a routine and
continuing basis or solicit him or her to leave his or her
employment with, or terminate or substantially modify his or her
contractual arrangement with, any of the CAG Parties or any of
their respective Subsidiaries, or otherwise encourage or entice any
such employee or contractor to do so, without the consent of the
senior human resources executive of CAG.
(d) In the event of the
breach or threatened breach of any portion of this Section
7.15 , the parties agree that the remedy at law for such breach
shall be inadequate and that, in addition to and not to the
exclusion of any other rights and remedies at law or in equity,
each Party shall be entitled to temporary and/or permanent
injunctive relief restraining any Person from any activities that
might result in or continue a breach of this Section 7.15 ,
and to a decree for specific performance of the provisions hereof,
without being required to show actual damage or irreparable harm or
to furnish any bond or other security. Further, the breaching Party
shall not plead in defense that there would be an adequate remedy
at law, and the Party asserting such breach shall be entitled to
reimbursement from the breaching Party for all costs, expenses and
damages which it may have incurred as a result of the breach of
this Section 7.15 . Such injunctive relief shall not be the
exclusive remedy of the Party asserting a breach of this Section
7.15 and, notwithstanding the existence of such right to obtain
injunctive relief, the Party asserting such breach may pursue any
and all other available legal and equitable remedies in the event
of a breach by a Party of any of the restrictive covenants set
forth in this Section 7.15 . If any of the provisions of
this Section 7.15 , or any part thereof, is hereafter
construed to be invalid or unenforceable, the same shall not affect
the remainder of the provisions of this Agreement, including the
other provisions of this Section 7.15 , which shall be given
full effect, without regard to the invalid or unenforceable
portions. If any of the provisions of this Section 7.15 , or
any part thereof, is held to be unenforceable because of the
duration of such provision, the area covered thereby or the type of
conduct restricted therein, the parties agree that the court making
such determination shall have the power to modify the duration,
geographic area and/or other terms of such provision and, as so
modified, said provision shall then be enforceable. In the event
that the courts of any one or more jurisdictions shall hold such
provisions wholly or partially unenforceable by reason of the scope
thereof or otherwise, it is the intention of the parties hereto
that such determination not bar or in any way affect a
Party’s right to the relief provided for herein in the courts
of any other jurisdictions as to breaches or threatened breaches of
such provisions in such other jurisdictions.
Section 7.16.
Contribution of Foreign Buyer and Freebird to Freebird II .
On the Closing date, immediately following the Closing, Investor
shall contribute, or shall cause to be contributed, directly or
indirectly, all of the Equity Interests of the CTG Foreign
Companies and Freebird to Freebird II.
Section 7.17.
Confidential Information . All information about the CTG
Business whether furnished before or after the date hereof, whether
oral or written, and regardless of the manner or form in which it
is furnished or the storage medium, is referred to in this
Agreement as “ Confidential Information .”
Confidential Information does not include, however, information
which (a) is or becomes generally available to the public
other than as a result of a disclosure by
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the CAG Parties, their affiliates or
their Representatives or (b) becomes available to the CAG
Parties after the Closing Date on a nonconfidential basis from a
Person other than the LLCs who is not otherwise bound by a
confidentiality agreement with the LLCs, or is not otherwise under
an obligation to the LLCs not to transmit the information to the
CAG Parties. Except as required by applicable securities laws and
regulations, each CAG Party agrees to keep all Confidential
Information confidential and not to disclose or reveal any
Confidential Information to any Person or use any Confidential
Information. In the event that the CAG Parties are required by
applicable law or regulation or by legal process to disclose any
other Confidential Information or any other information concerning
the CTG Business, the CAG Parties agree that they will provide
Freebird with prompt written notice of such requirement in order to
enable Freebird to seek an appropriate protective order or other
remedy. The CAG Parties will reasonably assist Freebird in
connection with any attempt it may make to obtain such order or
other remedy. If Freebird fails to obtain such a protective order
or other remedy, the CAG Parties shall furnish only that portion of
the Confidential Information which the CAG Parties are advised in
writing by counsel that it is legally required, and the CAG Parties
shall exercise their reasonable best efforts to obtain reliable
assurance that confidential treatment will be accorded such
Confidential Information. Notwithstanding anything above to the
contrary in this Section 7.17 , each Person otherwise
subject hereto may disclose any and all information related to the
U.S. federal, state, local or foreign Tax treatment or Tax
structure of any of the Contemplated Transactions.
ARTICLE VIII.
TERMINATION
Section 8.1.
Termination . This Agreement may be terminated at any time
prior to the Closing solely as follows:
(a) by mutual written consent
of CAG and Investor;
(b) ninety (90) days
after the date of the signing of this Agreement (the “ End
Date ”), by CAG or Investor by notice to the other (if
none of such terminating Party is then in material breach of this
Agreement which breach has caused the Closing not to occur prior to
such date), if the Closing has not occurred on or before the date
such notice is given;
(c) by CAG by notice to
Investor if any of the conditions set forth in Article VI
shall have become incapable of fulfillment on or before the End
Date, and shall not have been waived by CAG (unless the failure of
any such condition to have been fulfilled results primarily from
CAG breaching any representation or covenant contained in this
Agreement); or
(d) by Investor by notice to
CAG if any of the conditions set forth in Article V shall
have become incapable of fulfillment on or before the End Date, and
shall not have been waived by Investor (unless the failure of any
such condition to have been fulfilled results primarily from
Investor breaching any representation or covenant contained in this
Agreement).
Section 8.2. Effect
of Termination . In the event this Agreement is terminated
pursuant to Section 8.1 , all further obligations of the
Parties hereunder shall terminate and this agreement shall become
null and void and of no further force and effect, except for the
obligations set forth in Section 10.5 , this Section
8.2 , Section 8.3 and Article IX , and
except that such termination shall not relieve any Party of any
Liability for any intentional breach of this Agreement or fraud
prior to such termination.
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Section 8.3.
Termination Fees .
(a) In the event
that:
(i) this Agreement is
terminated by CAG or Investor pursuant to
Section 8.1(b) , Holdco has not yet received the Equity
Financing that is the subject of the condition set forth in
Section 5.10, and all other conditions to Closing for
the Parties hereunder have been satisfied or are capable of being
satisfied (or waived in the case of the CAG Parties), other than
any conditions that have not been satisfied or are not capable of
being satisfied (or waived in the case of the CAG Parties) because
of a breach by Investor of its obligations hereunder or any failure
of Holdco to receive the Equity Financing; or
(ii) this Agreement is
terminated by Investor pursuant to Section 8.1(d) , and
the condition in Article V that shall have become incapable
of fulfillment on or before the End Date is the condition in
Section 5.10 that Holdco shall have received the Equity
Financing, and all other conditions to Closing for the Parties
hereunder have been satisfied or are capable of being satisfied (or
waived in the case of the CAG Parties), other than any conditions
that have not been satisfied or are not capable of being satisfied
(or waived in the case of the CAG Parties) because of a breach by
Investor of its obligations hereunder or any failure of Holdco to
receive the Equity Financing); or
(iii) this Agreement is
terminated by CAG or Investor pursuant to
Section 8.1(b) , the Investor has breached its
obligation under this Agreement and all conditions to Closing for
the Parties hereunder have been satisfied or are capable of being
satisfied (or waived in the case of the CAG Parties), other than
any conditions that have not been satisfied or are not capable of
being satisfied (or waived in the case of the CAG Parties) because
of a breach by Investor of its obligations hereunder or any failure
of the LLCs to receive the Equity Financing;
then Holdco shall pay to CAG,
by wire transfer of immediately available funds to an account
designated by CAG, a termination fee in the amount of $27,500,000
as liquidated damages (the “ Equity Termination Fee
”). The Equity Termination Fee shall be paid by Holdco to CAG
no later than three (3) Business Days after the termination of
this Agreement pursuant to Section 8.1(b) or
Section 8.1(d) , as the case may be. Holdco shall have
no obligation to pay the Equity Termination Fee more than once
under this Section 8.3(a) .
(b) In the event
that:
(i)(A) this Agreement is
terminated by CAG or Investor pursuant to
Section 8.1(b) , the LLCs have not yet received the
Debt Financing that is the subject of the condition set forth in
Section 5.9 , one or more of the Lenders has breached
its obligations to Holdco under any of the written commitments for
the Debt Financing described in Section 4.6, and all
other conditions to Closing for
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the Parties hereunder have
been satisfied or are capable of being satisfied (or waived in the
case of the CAG Parties), other than any conditions that have not
been satisfied or are not capable of being satisfied (or waived in
the case of the CAG Parties) because of a breach by Investor of its
obligations hereunder or the failure of the LLCs to receive any
Debt Financing or the Equity Financing; or (B) this
Agreement is terminated by Investor pursuant to
Section 8.1(d) , the condition in Article V that
shall have become incapable of fulfillment on or before the End
Date is the condition in Section 5.9 that the LLCs
shall have received the Debt Financing, and one or more of the
Lenders has breached its obligations to Holdco under any of the
written commitments for the Debt Financing described in
Section 4.6 , and all other conditions to Closing for
the Parties hereunder have been satisfied or are capable of being
satisfied (or waived in the case of the CAG Parties), other than
any conditions that have not been satisfied or are not capable of
being satisfied because of a breach by Investor of its obligations
hereunder or any failure of the LLCs to receive the Debt Financing
or the Equity Financing); and
(ii) there is a reasonable
prospect of receipt of a material recovery from such breaching
Lender(s) if Holdco were to bring an action against and/or to enter
into settlement negotiations with such Lender(s) (any such action
or negotiation, a “ Lender Action ”);
then: Holdco shall pay to CAG
a termination fee (the “ Debt Termination Fee ”)
in the amount of up to $27,500,000 as liquidated damages; provided
that (x) Holdco shall bring and thereafter continue to pursue
a Lender Action only if the CAG Parties pay 50% of the ongoing
prosecution costs and other costs and expenses (including but not
limited to reasonable attorneys’ fees) incurred by Holdco in
connection with any Lender Action (including costs incurred in
defending any counterclaim), and (y) the sole source for the
payment of the Debt Termination Fee shall be 50% of any amounts
actually collected from such breaching Lender(s) in such Lender
Action. If there is not a reasonable prospect of receipt of a
material recovery from any Lender Action, Holdco shall have no
obligation to bring a Lender Action, and no Debt Termination Fee or
other amount will be payable to the CAG Parties pursuant to this
Section 8.3(b) .
(c) Notwithstanding anything
in this Agreement to the contrary, (i) the payment of the
Equity Termination Fee by Holdco when such Equity Termination Fee
shall become due and payable in accordance with
Section 8.3(a) , or the payment of the Debt
Termination Fee by Holdco when such Debt Termination Fee shall
become due and payable in accordance with
Section 8.3(b) , as the case may be, shall each be
considered liquidated damages and shall be the sole and exclusive
remedy of CAG and its Affiliates for all purposes under this
Agreement, and (ii) under no circumstances shall CAG or its
Affiliates seek, or be entitled to seek, any other remedy under
applicable Law (including equitable relief or specific performance)
except in connection with the enforcement of any rights under
Section 8.3(b) to require a Lender Action and related
matters.
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ARTICLE IX.
INDEMNIFICATION
Section 9.1.
Survival . All covenants and other agreements in this
Agreement to be performed after the Closing shall survive the
Closing and the consummation of the Contemplated Transactions until
so performed. All representations and warranties in this Agreement
shall survive the Closing and the consummation of the Contemplated
Transactions for a period of two (2) years from the Closing
Date, except that (i) the representations and warranties
contained in Sections 3.1 (Organization and Good Standing) ,
3.2 (Enforceability; Authority; No Conflict) ,
3.4(a)-(b) (Company Interests; Title) , 3.14
(Brokers or Finders) , 4.1 (Organization and Good
Standing) , 4.2 (Enforceability; Authority; No Conflict)
, and 4.5 (Brokers or Finders) shall survive indefinitely,
(ii) the representations and warranties contained in
Section 3.6 (Employee Benefits) shall survive until the
expiration of the applicable statute of limitations; (iii) the
representations and warranties contained in Section 3.15
(Environmental Compliance) shall survive the Closing and the
consummation of the Contemplated Transactions for a period of three
(3) years from the Closing Date; (iv) the representations
and warranties contained in Section 3.13 (Taxes) shall
survive until forty-five (45) days after the expiration of the
applicable statute of limitations; and (v) any claim pending
on the expiration date of any representation and warranty for which
notice has been given pursuant to Section 9.5 ,
Section 9.6 or Section 9.7 on or before
such expiration date may continue to be asserted and indemnified
against until finally resolved; provided that , for
the avoidance of doubt, no Indemnified Person shall be entitled to
duplicate indemnification for any Losses if such Losses are
indemnifiable under more than one Section of this Article IX
.
Section 9.2.
Indemnification and Reimbursement by CAG . Subject to the
limitations set forth in Section 9.4 , CAG will indemnify
and hold harmless, without duplication, the LLCs and their
Subsidiaries and Holdco, and each of their respective officers,
directors, agents, Affiliates, employees and other Representatives
(collectively, the " Section 9.2 Indemnified Persons "),
from and against any and all Losses relating to, resulting from or
arising out of:
(a) any breach of any
representation or warranty made by the CAG Parties or the LLCs in
Article III of this Agreement;
(b) any breach of or failure
to perform or comply with any covenant or agreement of the CAG
Parties (or the LLCs with respect to pre-Closing covenants) in this
Agreement;
(c) the Retained
Liabilities;
(d) any income Taxes
(including, for the avoidance of doubt, capital gains or
corporation tax on capital gains) with respect to any taxable
period of the CTG Companies for all taxable periods ending on or
before the Closing Date (" Pre-Closing Tax Period ") and
with respect to any Straddle Period, for the portion thereof ending
on the Closing Date (as determined pursuant to Section 9.9
);
(e) any income Taxes imposed
as a result of Treasury Regulation Section 1.1502-6 or
comparable provisions of foreign, state or local law, or as
transferee or successor, by
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agency or by contract, indemnity or
otherwise, on the CTG Companies or any other Person (other than the
CTG Companies) which is or has ever been affiliated with any of the
CTG Companies or with whom any of the CTG Companies otherwise joins
or has ever joined (or is or has ever been required to join) in
filing any consolidated, combined, group, unitary or aggregate Tax
Return, prior to the Closing Date;
(f) any payments required to
be made after the Closing Date to any Person that is not a CTG
Company under any Tax sharing, Tax indemnity, Tax allocation or
similar contracts (whether or not written) to which any of the CTG
Companies are obligated, or were a party, on or prior to the
Closing Date;
(g) Any Environmental
Liability for Off-Site Contamination. For purposes of this
Section 9.2(g), Off-Site Contamination shall not include any
matter identified in Schedule 3.15 .
(h) Any Environmental
Liability for On-Site Contamination existing on or before the
Closing Date. For purposes of this Section 9.2(h), On-Site
Contamination shall not include any matter identified in
Schedule 3.15 .
(i) Any Environmental
Liability for the Environmental Matters identified in Schedule
3.15 .
Section 9.3.
Indemnification and Reimbursement by Investor and the LLCs .
Subject to the limitations set forth in Section 9.4 ,
Investor will indemnify and hold harmless the CAG Parties, and each
of their officers, directors, agents, Affiliates, employees and
other Representatives (collectively, the “ Section 9.3
Indemnified Persons ”) from and against any Losses
relating to, resulting from or arising out of:
(a) any breach of any
representation or warranty made by Investor in Article IV of
this Agreement;
(b) any breach of or failure
to perform or comply with, any covenant or obligation of Investor
in this Agreement;
(c) the Assumed
Liabilities;
(d) any obligation, guarantee
or obligation to assure performance incurred or made by CAG or any
of its Subsidiaries, including any Financial Assurances, incurred
or made with respect to any of the Assumed Liabilities or any
liability or other obligation of any of the CTG Companies;
or
(e) Third-Party Claims that
arise out of the conduct of the CTG Business on or after the
Closing Date.
Section 9.4.
Limitations; Exclusive Remedy .
(a) CAG shall have no
liability with respect to claims under Section 9.2
(except under Sections 9.2(c) , 9.2(d) ,
9.2(e) , 9.2(f) and 9.2(i) ) until the total
of all Losses with
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respect to such matters exceeds fifteen
million dollars ($15,000,000) (the " Deductible ") and then
only for the amount by which such Losses exceed the Deductible. CAG
shall have no liability with respect to claims under
Section 9.2(i) until the total Losses attributed to the
Environmental Liability exceeds the sum of (i) the established
reserve on the Final Balance Sheet and (ii) $500,000 (such
sum, the “ Schedule 3.15 Deductible ”) and then
only for the amount by which the Losses attributed to the
Environmental Liability exceed the Schedule 3.15 Deductible. In no
event shall CAG’s liability for indemnification under
Sections 9.2 exceed six hundred million dollars
($600,000,000); provided, however, this limitation shall not apply
to CAG’s indemnification obligations under Sections
9.2(c) , 9.2(d) , 9.2(e) , 9.2(f) ,
9.2(g) , 9.2(h) and 9.2(i) or for a breach of
the representations and warranties contained in Sections 3.1
(Organization and Good Standing) , 3.2 (Enforceability;
Authority; No Conflict) , 3.4(a) (Company Interests) ,
3.4(b) (Title) or 3.14 (Brokers or Finders) . Neither
Investor nor the LLCs shall have any liability with respect to
claims under Section 9.3 (except under Sections
9.3(c) , 9.3(d) , and 9.3(e) until the total of
all Losses with respect to such matters exceeds the Deductible, and
then only for the amount by which such Losses exceed the
Deductible. In no event shall the aggregate liability of Investor
and the LLCs under Section 9.3 exceed six hundred million
dollars ($600,000,000); provided, however, this limitation shall
not apply to Investor’s indemnification obligation for a
breach of the representations and warranties contained in
Sections 4.1 (Organization and Good Standing) , 4.2
(Enforceability; Authority; No Conflict) , and 4.5 (Brokers
or Finders) and the covenants in Section 7.14
(Financing) or for Investor’s indemnification obligations
under Sections 9.3(c) and 9.3(d) .
(b) Notwithstanding anything
herein to the contrary, no Indemnified Person shall be entitled to
indemnification or reimbursement under any provision of this
Agreement for any amount to the extent such person or its affiliate
has been indemnified or reimbursed for such amount under any other
provision of this Agreement or any Related Agreement.
(c) Except in the case of
fraud, the exclusive remedy for any Indemnified Person for Losses
or other monetary damages arising from a breach of this Agreement,
including any remedy with respect to Environmental Matters, shall
be the indemnification provided under this Article IX ;
provided, however, an Indemnified Person may seek any remedy
available to it, at law or in equity, to enforce the
indemnification obligations under this Article IX
.
(d) In no event shall Losses
be subject to indemnification under Section 9.2 or
Section 9.3 to the extent such Losses were included as
liabilities (including any reserve) in the Final Balance Sheet;
provided that any Losses in excess of the amounts so
included as liabilities (including any reserve) in the Final
Balance Sheet shall be subject to indemnification hereunder in
accordance with and subject to the terms, conditions and
limitations of this Article IX . Notwithstanding anything
herein to the contrary, Losses shall be net of any insurance,
indemnity, contribution or other similar payment actually received
by an Indemnified Person in connection with the facts giving rise
to the right of indemnification. The Indemnified Person shall seek
full recovery under all insurance policies and indemnification
provisions covering any Losses to the same extent as it would if
such Losses were not subject to indemnification hereunder. Subject
to Section 7.12 , in the event that an insurance or other
recovery is made by any Indemnified Person with respect to any
Losses for which any such Person has been indemnified hereunder,
then a refund equal to the aggregate amount of the recovery less
the out-of-pocket costs to obtain such recovery shall be made
promptly to the Indemnifying Person.
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(e) EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, IN NO EVENT SHALL AN INDEMNIFYING
PERSON BE LIABLE FOR ANY EXEMPLARY (TO THE EXTENT NOT PAYABLE TO
THIRD PARTIES), PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL,
MULTIPLE OF PROFITS, REMOTE, OR SPECULATIVE DAMAGES;
provided , however , that if an
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