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CONTRIBUTION AND EQUITY INTEREST PURCHASE AGREEMENT

Contribution Agreement

CONTRIBUTION AND EQUITY INTEREST PURCHASE AGREEMENT | Document Parties: ConAgra Foods Food Ingredients Company, Inc | CONAGRA FOODS, INC | FREEBIRD HOLDINGS, LLC | FREEBIRD I, LLC | FREEBIRD II, LLC | FREEBIRD INTERMEDIATE HOLDINGS, LLC You are currently viewing:
This Contribution Agreement involves

ConAgra Foods Food Ingredients Company, Inc | CONAGRA FOODS, INC | FREEBIRD HOLDINGS, LLC | FREEBIRD I, LLC | FREEBIRD II, LLC | FREEBIRD INTERMEDIATE HOLDINGS, LLC

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Title: CONTRIBUTION AND EQUITY INTEREST PURCHASE AGREEMENT
Governing Law: New York     Date: 3/27/2008
Industry: Food Processing     Law Firm: Jones Day;Kirkland Ellis     Sector: Consumer/Non-Cyclical

CONTRIBUTION AND EQUITY INTEREST PURCHASE AGREEMENT, Parties: conagra foods food ingredients company  inc , conagra foods  inc , freebird holdings  llc , freebird i  llc , freebird ii  llc , freebird intermediate holdings  llc
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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

 

          Page
ARTICLE I. DEFINITIONS AND USAGE    2
Section 1.1.    Definitions    2
Section 1.2.    Usage    18
ARTICLE II. CONTRIBUTION; PURCHASE AND SALE OF EQUITY INTERESTS; CLOSING    20
Section 2.1.    Reorganization; Contribution of CTG Business Assets    20
Section 2.2.    Purchase and Sale of Equity Interests in CTG Business    21
Section 2.3.    Payment of Purchase Price by Investor    21
Section 2.4.    Closing    22
Section 2.5.    Closing Obligations    22
Section 2.6.    Final Balance Sheet; Payments; Disputes    25
Section 2.7.    Additional Amounts.    26
Section 2.8.    Tax Matters Relating to the PIK Notes and the Warrant    31
Section 2.9.    Investor Right to Substitute Cash for PIK Notes    31
Section 2.10.    Investor Right to Issue PIK Notes to CAG    32
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE CAG PARTIES AND THE LLCs    32
Section 3.1.    Organization and Good Standing    32
Section 3.2.    Enforceability; Authority; No Conflict    32
Section 3.3.    CTG Company Records    33
Section 3.4.    Company Interests; Title; Sufficiency of Assets    34
Section 3.5.    No Material Adverse Change    35
Section 3.6.    Employee Benefits    35
Section 3.7.    Compliance with Legal Requirements; Governmental Authorizations    37
Section 3.8.    Legal Proceedings; Orders    37
Section 3.9.    Contracts; No Defaults    38
Section 3.10.    Insurance    39
Section 3.11.    Employees    40
Section 3.12.    Intellectual Property Assets    41
Section 3.13.    Taxes    41
Section 3.14.    Brokers or Finders    42
Section 3.15.    Environmental Compliance    43
Section 3.16.    Financial Statements; No Undisclosed Liabilities    44
Section 3.17.    Real Properties.    45
Section 3.18.    Affiliate Agreements    46
Section 3.19.    Material Financial Assurances    46
Section 3.20.    FCPA    46
Section 3.21.    Recent Developments    46
Section 3.22.    Export Controls    47
Section 3.23.    Inventory    47
Section 3.24.    Suppliers and Customers    48

 

(i)

 


Section 3.25.    No Other Representation    48
Section 3.26.    Joint Ventures    48
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER PARTIES    48
Section 4.1.    Organization and Good Standing    48
Section 4.2.    Enforceability; Authority; No Conflict    49
Section 4.3.    Compliance with Legal Requirements; Governmental Authorizations    49
Section 4.4.    Legal Proceedings    50
Section 4.5.    Brokers or Finders    50
Section 4.6.    Available Funds    50
Section 4.7.    No Other Representation    50
ARTICLE V. CONDITIONS PRECEDENT TO BUYER PARTIES’ OBLIGATION TO CLOSE    51
Section 5.1.    Accuracy of Representations    51
Section 5.2.    Performance    51
Section 5.3.    Material Consents and Governmental Approvals    51
Section 5.4.    Additional Documents    51
Section 5.5.    Orders    51
Section 5.6.    Material Adverse Effect    51
Section 5.7.    Closing Certificate    51
Section 5.8.    Reorganization    52
Section 5.9.    Debt Financing    52
Section 5.10.    Equity Financing    52
Section 5.11.    Rating Agency.    52
ARTICLE VI. CONDITIONS PRECEDENT TO THE CAG PARTIES’ OBLIGATION TO CLOSE    52
Section 6.1.    Accuracy of Representations    52
Section 6.2.    Investor's Performance    52
Section 6.3.    Material Consents and Governmental Approvals    52
Section 6.4.    Additional Documents    52
Section 6.5.    Orders    52
Section 6.6.    Material Adverse Effect    53
Section 6.7.    Closing Certificate    53
Section 6.8.    Release of Financial Assurances; CAG Letters of Credit    53
Section 6.9.    CTG Purchase Price Debt Matters    53
Section 6.10.    ABL Financing    53
ARTICLE VII. ADDITIONAL COVENANTS    53
Section 7.1.    Conduct of CTG Companies    53
Section 7.2.    Information and Access    55
Section 7.3.    Notices of Certain Events    56
Section 7.4.    Filings; Reasonable Best Efforts to Close    57
Section 7.5.    Financial Statements    57
Section 7.6.    Employees and Employee Benefits    58

Section 7.7.

   Retention of and Access to Records    65

 

(ii)

 


Section 7.8.    Further Assurances.    66
Section 7.9.    No Shop    66
Section 7.10.    Transition Plans; Novation    66
Section 7.11.    Termination of Certain Agreements    67
Section 7.12.    Insurance    68
Section 7.13.    Change of Names    68
Section 7.14.    Financing    69
Section 7.15.    Noncompete.    70
Section 7.16.    Contribution of Foreign Buyer and Freebird to Freebird II    71
Section 7.17.    Confidential Information.    71
ARTICLE VIII. TERMINATION    72
Section 8.1.    Termination    72
Section 8.2.    Effect of Termination    72
Section 8.3.    Termination Fees.    73
ARTICLE IX. INDEMNIFICATION    75
Section 9.1.    Survival    75
Section 9.2.    Indemnification and Reimbursement by CAG    75
Section 9.3.    Indemnification and Reimbursement by Investor and the LLCs    76
Section 9.4.    Limitations; Exclusive Remedy    76
Section 9.5.    Third-Party Claims    79
Section 9.6.    Other Claims    80
Section 9.7.    Tax Provisions    80
Section 9.8.    Indemnification Payments    81
Section 9.9.    Allocation of Certain Taxes    82
ARTICLE X. GENERAL PROVISIONS    82
Section 10.1.    Expenses    82
Section 10.2.    Public Announcements and Confidentiality    82
Section 10.3.    Tax Matters    83
Section 10.4.    Notices    88
Section 10.5.    Jurisdiction; Waiver of Jury Trial    89
Section 10.6.    Waiver; Remedies Cumulative    90
Section 10.7.    Entire Agreement and Modification    90
Section 10.8.    Assignments, Successors and no Third-Party Rights    90
Section 10.9.    Severability    91
Section 10.10.    Headings    91
Section 10.11.    Governing Law    91
Section 10.12.    Execution of Agreement    91
Section 10.13.    Specific Performance    91
Section 10.14.    Netting and Set-Off on the Closing Date    92
Section 10.15.    Incorporation of Schedules    92
Section 10.16.    NO RECOURSE.    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) .

 

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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.

 

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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

 

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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) .

 

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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 .

 

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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

 

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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).

 

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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.

 

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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,

 

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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.

 

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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) .

 

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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.

 

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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

 

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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:

 

  (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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