SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported) |
July 27, 2018 |
GREEN PLAINS INC.
(Exact name of registrant as specified in its charter)
Iowa
(State or other jurisdiction of incorporation)
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001-32924 |
84-1652107 |
(Commission file number) |
(IRS employer identification no.) |
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1811 Aksarben Drive, Omaha, Nebraska |
68106 |
(Address of principal executive offices) |
(Zip code) |
(402) 884-8700
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
Asset Purchase Agreement
On July 27, 2018, Green Plains Cattle Company LLC (“GPCC”) entered into an asset purchase agreement (the “Purchase Agreement”) to acquire two feeding operations from Bartlett Cattle Company, L.P. for $16.2 million, plus working capital of approximately $109 million. The transaction includes two feed yards located in Sublette, Kansas and Tulia, Texas and will add combined feedlot capacity of 97,000 head of cattle to the company’s operations. The Sublette and Tulia feeding operations consist of approximately 2,100 acres of land, supporting infrastructure and feed storage assets, and are strategically located near major meat packers.
The transaction closed on August 1, 2018 following receipt of regulatory approval. The transaction will be financed using cash on hand and proceeds from the Green Plains Cattle senior secured asset-based revolving credit facility.
The foregoing description of the Purchase Agreement is not complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 2.1 to this Current Report on Form
8-K, and is incorporated into this Item 1.01 by reference.
Green Plains Cattle Revolver
On July 31, 2018, GPCC entered into an amendment of its senior secured asset-based revolving credit facility with a group of lenders led by Bank of the West and ING Capital LLC. The amendment was completed to fund the additional working capital requirements related to the acquisition of the Sublette, Kansas and Tulia, Texas cattle feeding operations.
The revolving credit facility is used to finance the working capital for all of GPCC’s cattle feedlot operations up to the maximum commitment, based on eligible collateral equal to the sum of percentages of eligible receivables, inventories and other current assets, less miscellaneous adjustments. The amendment increases the maximum commitment from $425 million to $500 million and also includes an accordion feature that enables the credit facility to be increased by up to $100 million with agent approval.
All other terms and conditions of the credit facility remain the same. The credit increase is in accordance with the Sixth Amendment to the Credit Agreement. The Sixth Amendment will be filed in its entirety with our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.
Item 1.02.Termination of a Material Definitive Agreement.
On August 1, 2018, DKGP Energy Terminals LLC, the 50/50 joint venture between Delek Logistics Partners LP and Green Plains Partners LP, notified AMID Merger LP of its termination of the membership interest purchase agreement (MIPA), dated as of February 16, 2018, to acquire all of the membership interests of AMID Refined Products LLC. For a description of the material terms of the MIPA, please see our Current Report on Form 8-K filed on February 20, 2018.
The MIPA was terminated due to regulatory obstacles. The termination was made pursuant to Section 8.1 of the MIPA, without any liability, obligation or penalty incurred by either party.
Item 2.01.Completion of Acquisition or Disposition of Assets.
The information set forth above in Item 1.01 under “Asset Purchase Agreement” is incorporated into this Item 2.01 by reference.
Item 2.03.Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth above in Item 1.01 under “Green Plains Cattle Revolver” is incorporated into this Item 2.03 by reference.
Item 7.01.Regulation FD Disclosure.
On July 31, 2018, the company issued a press release announcing the Bartlett Cattle Company acquisition and the related amendment to the Green Plains Cattle senior secured asset-based revolving credit facility, which is included as Exhibit 99.1 and incorporated herein by reference.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed as part of this report.
Exhibit |
Description |
2.1 |
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99.1 |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: August 1, 2018 |
Green Plains Inc.
John Neppl (Principal Financial Officer) |
EXECUTION VERSION
Exhibit 2.1
ASSET PURCHASE AND SALE AGREEMENT
Among
BARTLETT CATTLE COMPANY, L.P.
(“Seller”)
And
GREEN PLAINS CATTLE COMPANY LLC
(“Buyer”)
Dated as of July 27, 2018
Site Locations: Tulia, Texas and Sublette, Kansas
Table of contents
Page
ARTICLE 1. DEFINITIONS |
1 |
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ARTICLE 2. SALE AND PURCHASE OF PURCHASED ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS |
9 |
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Section 2.1 |
Purchase and Sale........................................................................... |
9 |
Section 2.2 |
Assignment of Contracts and Permits.............................................. |
9 |
Section 2.3 |
Excluded Assets.............................................................................. |
9 |
Section 2.4 |
Assumed Obligations...................................................................... |
10 |
Section 2.5 |
Excluded Obligations...................................................................... |
10 |
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ARTICLE 3. PURCHASE PRICE AND PAYMENT |
12 |
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Section 3.2 |
Calculation and Payment of the Closing Date Purchase Price......... |
12 |
Section 3.3 |
Purchase Price Adjustment.............................................................. |
12 |
Section 3.4 |
Allocation of Purchase Price........................................................... |
14 |
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLER |
15 |
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Section 4.1 |
Existence, Good Standing, Residency............................................. |
15 |
Section 4.2 |
Due Authorization........................................................................... |
15 |
Section 4.3 |
Consents.......................................................................................... |
15 |
Section 4.4 |
Absence of Conflicts....................................................................... |
15 |
Section 4.5 |
Litigation and Violations................................................................. |
16 |
Section 4.6 |
Brokers............................................................................................ |
16 |
Section 4.7 |
Title to Purchased Assets................................................................ |
16 |
Section 4.8 |
Financial Statements........................................................................ |
16 |
Section 4.9 |
Undisclosed Liabilities................................................................... |
16 |
Section 4.10 |
Absence of Certain Changes, Events and Conditions...................... |
17 |
Section 4.11 |
Material Contracts........................................................................... |
17 |
Section 4.12 |
Condition and Sufficiency of Assets................................................ |
18 |
Section 4.13 |
Real Property.................................................................................. |
19 |
Section 4.14 |
Inventory......................................................................................... |
19 |
Section 4.15 |
Compliance With Laws; Permits..................................................... |
20 |
Section 4.16 |
Environmental Matters.................................................................... |
20 |
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Section 4.17 |
Employment Matters........................................................................ |
21 |
Section 4.19 |
Full Disclosure............................................................................... |
22 |
Section 4.20 |
Solvency.......................................................................................... |
23 |
Section 4.21 |
Adequacy of Instructions................................................................. |
23 |
Section 4.22 |
Disclaimer....................................................................................... |
23 |
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ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER |
23 |
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Section 5.1 |
Existence and Good Standing.......................................................... |
23 |
Section 5.2 |
Due Authorization........................................................................... |
24 |
Section 5.3 |
Absence of Conflicts....................................................................... |
24 |
Section 5.4 |
Litigation......................................................................................... |
24 |
Section 5.5 |
Brokers............................................................................................ |
24 |
Section 5.6 |
Ownership....................................................................................... |
24 |
Section 5.7 |
Availability of Funds...................................................................... |
24 |
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ARTICLE 6. COVENANTS OF SELLER AND BUYER |
25 |
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Section 6.1 |
Livestock......................................................................................... |
25 |
Section 6.2 |
Conduct of Seller Regarding Purchased Assets............................... |
25 |
Section 6.3 |
Consents and Acquisition of New Easement................................... |
25 |
Section 6.4 |
Access to Information, Inspections, and Books and Records.......... |
25 |
Section 6.5 |
Title Commitment............................................................................ |
26 |
Section 6.6 |
Vehicles............................................................................................ |
26 |
Section 6.7 |
Tax Matters and Property Tax Prorations........................................ |
26 |
Section 6.8 |
Payments Received........................................................................... |
28 |
Section 6.9 |
Prorations.......................................................................................... |
28 |
Section 6.10 |
Confidentiality.................................................................................. |
29 |
Section 6.11 |
Closing Conditions........................................................................... |
29 |
Section 6.12 |
Inventory Count............................................................................... |
29 |
Section 6.13 |
HSR Filings and Authorizations; Consummation............................. |
30 |
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ARTICLE 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER |
31 |
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Section 7.1 |
Accuracy of Representations and Warranties.................................. |
31 |
Section 7.2 |
Compliance with Agreements and Covenants.................................. |
31 |
Section 7.3 |
No Actions or Injunctions................................................................ |
32 |
Section 7.4 |
All approvals.................................................................................. |
32 |
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Section 7.5 |
No Material Adverse Effect............................................................ |
32 |
Section 7.6 |
Title................................................................................................. |
32 |
Section 7.7 |
Deliveries........................................................................................ |
32 |
Section 7.8 |
Employee Matters........................................................................... |
32 |
Section 7.9 |
Liens................................................................................................ |
33 |
Section 7.10 |
Remediation and Environmental Matters........................................ |
33 |
Section 7.11 |
Environmental Testing..................................................................... |
33 |
Section 7.12 |
HSR Act.......................................................................................... |
33 |
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ARTICLE 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
34 |
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Section 8.1 |
Accuracy of Representations and Warranties.................................. |
34 |
Section 8.2 |
Compliance with Agreements and Covenants.................................. |
34 |
Section 8.3 |
No Injunctions................................................................................. |
34 |
Section 8.4 |
Deliveries........................................................................................ |
34 |
Section 8.5 |
HSR Act.......................................................................................... |
34 |
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ARTICLE 9. EMPLOYEE RELATIONS AND BENEFITS |
34 |
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ARTICLE 10. CLOSING |
35 |
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Section 10.1 |
Closing............................................................................................ |
35 |
Section 10.2 |
Deliveries by Seller........................................................................ |
35 |
Section 10.3 |
Deliveries by Buyer........................................................................ |
36 |
Section 10.4 |
Post Closing Transfer of CAFO Permits and Other Permits and Licenses………………………………………………………….. |
37 |
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ARTICLE 11. TERMINATION |
37 |
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Section 11.1 |
Termination..................................................................................... |
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Section 11.2 |
Effect of Termination...................................................................... |
38 |
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ARTICLE 12. INDEMNIFICATION |
38 |
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Section 12.1 |
Indemnification by Seller................................................................ |
38 |
Section 12.2 |
Indemnification by Buyer................................................................ |
38 |
Section 12.3 |
Lost Profits/Consequential Damages............................................... |
39 |
Section 12.4 |
Additional Indemnifications Terms................................................. |
39 |
Section 12.5 |
Indemnification Procedures............................................................. |
39 |
Section 12.6 |
Payments......................................................................................... |
41 |
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Section 12.7 |
Tax Treatment of Indemnification Payments.................................... |
41 |
Section 12.8 |
Effect of Investigation..................................................................... |
41 |
Section 12.9 |
Environmental................................................................................. |
41 |
Section 12.10 |
Remedies......................................................................................... |
41 |
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ARTICLE 13. DESTRUCTION OF PURCHASED ASSETS |
42 |
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Section 13.1 |
Risk of Loss.................................................................................... |
42 |
Section 13.2 |
Termination upon Destruction......................................................... |
42 |
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ARTICLE 14. DEFAULT AND REMEDIES |
42 |
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Section 14.1 |
Seller Default.................................................................................. |
42 |
Section 14.2 |
Buyer’s Default............................................................................... |
42 |
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ARTICLE 15. MISCELLANEOUS |
43 |
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Section 15.1 |
Expenses......................................................................................... |
43 |
Section 15.2 |
Amendment...................................................................................... |
43 |
Section 15.3 |
Interpretation................................................................................... |
43 |
Section 15.4 |
Notices............................................................................................ |
43 |
Section 15.5 |
Waivers........................................................................................... |
44 |
Section 15.6 |
Successors and Assigns................................................................... |
44 |
Section 15.7 |
No Third Party Beneficiaries.......................................................... |
44 |
Section 15.8 |
Publicity.......................................................................................... |
44 |
Section 15.9 |
Further Assurances.......................................................................... |
44 |
Section 15.10 |
Severability..................................................................................... |
45 |
Section 15.11 |
Entire Understanding....................................................................... |
45 |
Section 15.12 |
Applicable Law.............................................................................. |
45 |
Section 15.13 |
Submission to Jurisdiction; Stipulation as to Venue........................ |
45 |
Section 15.14 |
Waiver of Jury Trial........................................................................ |
45 |
Section 15.15 |
Counterparts.................................................................................... |
45 |
Section 15.16 |
Passage of Title and Risk of Loss................................................... |
45 |
Section 15.17 |
Survival........................................................................................... |
45 |
iv
ASSET PURCHASE AND SALE AGREEMENT
This ASSET PURCHASE AND SALE AGREEMENT is made as of the 27th day of July, 2018 (the “Effective Date”), by and between Bartlett Cattle Company, L.P., a Texas limited partnership (“Seller”), and Green Plains Cattle Company LLC, a Delaware limited liability company (“Buyer”) (Seller and Buyer may be referred to collectively as the “Parties” or individually as a “Party”).
WHEREAS, Buyer desires to purchase from Seller, and Seller desire to sell to Buyer, the real property and certain other assets comprising feedyards currently operated by Seller at Tulia, Texas and Sublette, Kansas (each a “Feedyard” and collectively, the “Feedyards”), and Buyer is willing to assume certain obligations of Seller, all upon the terms and conditions hereinafter set forth; and,
NOW, THEREFORE, in consideration of the foregoing and the mutual warranties, representations, covenants and agreements herein contained, the Parties hereby agree as follows:
Certain capitalized terms used herein have the meanings set forth below.
“Accounts Receivable” shall mean trade receivables of Seller and amounts due to Seller as a result of goods sold or services provided by Seller prior to the Effective Time, including, without limitation, amounts previously billed to customers as well as unbilled amounts accrued prior to the Effective Time.
“Affiliate” shall mean, with respect to any specified Person, any other Person who, directly or indirectly, owns or controls, is under common ownership or control with, or is owned or controlled by, such specified Person. Without limiting the generality of the foregoing, a Person shall be deemed to “own” another Person if it owns, directly or indirectly, more than 50% of the capital stock or other equity interest of such other Person generally entitled to vote, without regard to specified contingencies, for the election of directors or equivalent governing body of such other Person.
“Agreement” shall mean this Asset Purchase and Sale Agreement, including all exhibits and schedules hereto, as it may be amended, supplemented or modified from time to time in accordance with its terms.
“Allocation Schedule” has the meaning set forth in Section 3.4.
“Ancillary Agreements” shall mean the Assignment and Assumption Agreements, the Conveyance Documents and the Transition Services Agreement.
“Antitrust Laws” has the meaning set forth in Section 6.13(c).
“Assignment and Assumption Agreements” shall mean the Assignment and Assumption Agreements to be executed by Seller and Buyer in the form reasonably acceptable to the Parties prior to the Closing Date.
“Assumed Obligations” has the meaning set forth in Section 2.4.
“Assumed Taxes” has the meaning set forth in Section 6.7(c).
“Balance Sheet” has the meaning set forth in Section 4.8.
“Balance Sheet Date” has the meaning set forth in Section 4.8.
“Base Purchase Price” has the meaning set forth in Section 3.1.
“Benefit Plan” means each plan, program, policy, agreement or other arrangement covering current or former employees, directors or consultants of Seller that is (a) an employee welfare plan within the meaning of Section 3(1) of ERISA (whether or not subject to ERISA), (b) an employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not subject to ERISA), (c) an equity or equity-related agreement, program or plan, (d) an individual employment, consulting, severance, retention or other similar agreement or (e) a bonus, incentive, deferred compensation, profit-sharing, retirement, post-retirement, vacation, severance or termination pay, benefit or fringe-benefit plan, program, policy, agreement or other arrangement, in each case that is sponsored, maintained, contributed or required to be contributed to by Seller for the benefit of current or former employees, directors or consultants of Seller or to which Seller has any liability with respect to current or former employees, directors or consultants of Seller.
“Business Day” shall mean any day of the year other than (a) any Saturday or Sunday; or (b) any other day on which banks located in New York, New York are generally closed for business.
“Buyer” has the meaning set forth in the Preamble hereto.
“Canyon Lease” shall mean that certain lease agreement, dated as of December 1, 2009, by and between The Lair Co., Inc., as landlord, and Seller, as tenant, with respect to the property located at #1 Hunley Hills Blvd. in Canyon, Texas.
“Claim” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.
“Closing” shall mean the consummation of the transactions contemplated herein in accordance with ARTICLE 10.
“Closing Futures” shall mean the net value of any related futures accounts used for the hedging of the Inventory as of the Closing Date.
“Closing Date” shall mean the date set forth in ARTICLE 10.
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“Closing Date Inventory” means the dollar value of Inventory determined in accordance with the Inventory Methodology as of the Effective Time.
“Closing Date Purchase Price” has the meaning set forth in Section 3.2(a).
“Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
“Consent” has the meaning set forth in Section 4.3.
“Consideration” has the meaning set forth in Section 3.4.
“Continuing Employees” has the meaning set forth in Section 9.3.
“Contracts” shall mean the contracts, leases, easements, licenses, sales orders, supply agreements, and any other agreements, commitments or understandings relating to the operation of the Feedyard that have been entered into by Seller prior to the Effective Time in the ordinary course of business of the Feedyard as described on Schedule 1.1(a) to this Agreement.
“Conveyance Documents” has the meaning set forth in Section 10.2(a).
“Deductible” has the meaning set forth in Section 12.4(c).
“Deed” shall mean special warranty deeds in recordable form conveying fee simple title to the Owned Real Property to Buyer subject only to Permitted Encumbrances.
“Disclosure Schedules” shall mean the disclosures schedules annexed hereto and made a part hereof.
“Easements Rights” shall mean all of Seller’s right, title and interest in and to any easement agreements which grant Seller the right to pipelines on properties adjacent to the Owned Real Property and that are required to operate the Feedyard as it has been operated prior to the Effective Date.
“Effective Date” shall mean the date inserted in the introductory paragraph of this Agreement.
“Effective Time” shall mean 12:01 a.m., Central Time, on the Closing Date.
“Encumbrance” shall mean any lien, option, pledge, security interest, mortgage, encroachment, right of first option, right of first refusal, or similar restriction.
“Environment” or “Environmental” shall mean soil, land surface, or subsurface strata, surface waters, groundwater, drinking water supply, stream sediments, ambient air (including indoor air), wild plant, and any other environmental medium or natural resource.
“Environmental Attributes” means any rights to surface waters, groundwater and drinking water supply that is necessary to operate the Feedyard business as operated as of the date of this Agreement.
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“Environmental Law” means any applicable Law to the protection of the Environment.
“Equipment and Fixed Assets” means (a) all equipment, fixtures, and fixed assets located on the Real Property and used in the operation of the Feedyards as of the Effective Time, including, but not limited to, processing hardware; shop equipment including welders, hoists, shop tools, oil tanks, and spare parts; cattle equipment including chute side computers, cattle hospital and processing barn equipment and tools; office equipment including desks, chairs, file cabinets, telephones, telephone numbers, and fax numbers; fuel storage tanks; pipes; and pumps and (b) all Seller’s office furniture, including desks, chairs and file cabinets located on the Premises as defined in that certain Lease Agreement, effective as of December 1, 2009, by and between the Seller and The Lair Co., Inc. of P.O. Box 865, Canyon, TX 79015 for #1 Hunley Hills Blvd., Canyon, TX 79015.
“Estimated Accounts Receivable” has the meaning set forth in Section 3.3(a).
“Estimated Closing Date Inventory” has the meaning set forth in Section 3.3(a).
“Excluded Assets” has the meaning set forth in Section 2.3.
“Excluded Taxes” has the meaning set forth in Section 6.7(b).
“Feedyard” and “Feedyards” each has the meaning set forth in the Recitals hereto.
“Feedyard Improvements” mean all buildings and other permanent improvements on the Owned Real Property including any office buildings, housing, horse barns, water tanks, drive alleys, processing barns, hospital barns, silage pits other structures, pens, hydraulic chutes, wells, well motors, well pumps, pipelines, lagoon pumps, cattle scales, grain scales, feedmill, grain storage tanks, and liquid supplement tanks.
“Final Accounts Receivable” has the meaning set forth in Section 3.3(c).
“Final Inventory” has the meaning set forth in Section 3.3(c).
“Financial Statements” has the meaning set forth in Section 4.8.
“Fraud” means, with respect to any party to this Agreement, (a) a false representation or warranty, (b) made by such Person with actual knowledge (as opposed to imputed or constructive knowledge) or belief of its falsity, (c) with an intent to deceive another party to this Agreement (as opposed to acting in an unintentional manner with respect to the making of such false representation and warranty) and (d) upon which such other party actually and reasonably relied.
“FTC” has the meaning set forth in Section 6.13(a).
“Governmental Authority” shall mean the government of the United States, or any other foreign country or any state, county, local, conservation district, provincial or political subdivision thereof and any entity, body or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
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“HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a et seq., as amended, and the rules and regulations promulgated thereunder.
“Indebtedness” means a Liability in connection with another Person’s (a) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (b) right to any equitable remedy for breach of performance if such breach gives rise to a right of payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
“Independent Accounting Firm” means an independent public accounting firm as mutually agreed to by Buyer and Seller.
“Initial Resolution Period” has the meaning set forth in Section 3.3(c).
“Inventory” means all of the inventory of fuel (including diesel and gasoline), feeds (including grains, feed ingredients, feed additives and silage), medicines, supplies and other items customarily expended in the care and feeding of livestock, Closing Futures for livestock, Closing Futures for all commodity grains, Livestock, and all other items used in the operation of the Feedyards and located on the Owned Real Property as of the Effective Time.
“Inventory Methodology” has the meaning set forth in Section 3.3(b).
“Law” shall mean, any law, statute, code, regulation, ordinance, or rule enacted or promulgated by any Governmental Authority including and currently in full force and effect as of the date of this Agreement.
“Liability” or “Liabilities” means, as to any Person, any debt, adverse claim, liability (including any liability that results from, relates to or arises out of tort or any other product liability claim), duty, responsibility, obligation, commitment, assessment, cost, expense, Loss, expenditure, charge, fee, penalty, fine, contribution or premium of any kind or nature whatsoever, whether known or unknown, asserted or unasserted, absolute or contingent, direct or indirect, accrued or unaccrued, liquidated or unliquidated, or due or to become due, and regardless of when sustained, incurred or asserted or when the relevant events occurred or circumstances existed.
“Litigation” has the meaning set forth in Section 4.5.
“Livestock” means those cattle owned by Seller and listed on Schedule 1.1(e), which shall include all other livestock owned by Seller located at custom cattle feeding operations outside of the Owned Real Property.
“Loss” or “Losses” shall mean any and all damages, losses, actions, proceedings, causes of action, liabilities, claims, Encumbrances, penalties, assessments, judgments, costs and expenses including, without limitation, removal or remediation costs, sales credits, but shall not include consequential, indirect, special, exemplary, punitive or incidental damages of any kind.
“Material Adverse Effect” means, when used in connection with Seller or Buyer, any change, development, event, occurrence, effect or state of facts that, individually or in the
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aggregate with all such other changes, developments, events, occurrences, effects or states of facts is materially adverse to the business, assets, financial condition or results of operations of such Party and its subsidiaries, taken as a whole; provided, that none of the following shall be deemed either alone or in combination to constitute, or be taken into account in determining whether there has been, or is reasonably likely to be, a Material Adverse Effect: (a) any change, development, event, occurrence, effect or state of facts arising out of or resulting from (i) capital market conditions generally or general economic conditions, including with respect to interest rates or currency exchange rates, (ii) geopolitical conditions or any outbreak or escalation of hostilities, acts of war or terrorism occurring after the date of this Agreement, (iii) any hurricane, tornado, flood, earthquake or other natural disaster occurring after the date of this Agreement, (iv) any change in applicable law, regulation or GAAP (or authoritative interpretation thereof) which is proposed, approved or enacted after the date of this Agreement, (v) general conditions in the industry in which such Party and its subsidiaries operate, and (vi) the announcement and pendency of this Agreement and the transactions contemplated hereby, compliance with the covenants contained herein, and any loss of or change in relationship with any customer, supplier, distributor or other business partner, or departure of any employee or officer, of such Party or any of its subsidiaries, except, in the cases of clause (iii), to the extent that such Party and its subsidiaries, taken as a whole, are materially disproportionately affected thereby compared with other participants in the industries in which such Party and its subsidiaries operate (in which case the incremental disproportionate impact or impacts may be deemed either alone or in combination to constitute, or be taken into account in determining whether there has been, or is reasonably likely to be, a Material Adverse Effect); (b) any existing event, occurrence or circumstance with respect to which a Party has knowledge as of the date hereof; and (c) any adverse change in or effect on the business of a Party and its subsidiaries that is cured by such Party before the earlier of (i) the Closing Date and (ii) the date on which this Agreement is terminated pursuant to ARTICLE 14.
“Material Contract” has the meaning set forth in Section 4.11.
“Objection Notice” has the meaning set forth in Section 3.3(c).
“Objection Period” has the meaning set forth in Section 3.3(c).
“Owned Real Property” means real property particularly described on Exhibit A to this Agreement upon which Seller operates the Feedyard, including all Feedyard Improvements.
“Permits” shall mean all existing permits, authorizations, licenses, certificates, and approvals under any Law or otherwise issued by any Governmental Authority relating to the operation of the Feedyard business obtained by Seller, including the permits listed in Schedule 4.15(b).
“Permitted Encumbrances” shall mean (a) liens for current Taxes, charges, levies or assessments not yet due and payable or the validity of which are being contested in good faith by appropriate proceedings with adequate reserves established in accordance with GAAP; (b) mechanics’, carriers’, workers’, repairmen’s, landlords’, vendors’, materialmen’s and other similar liens arising or incurred in the ordinary course with respect to charges not yet due and payable; (c) liens arising or incurred in connection with equipment leases or other leases for amounts not delinquent; (d) liens or pledges incurred in the ordinary course in connection with worker’s
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compensation, unemployment insurance, or other forms of governmental insurance or benefits; (e) zoning, building, fire, health, environmental and pollution control laws, ordinances, rules and safety regulations and other similar restrictions which do not materially interfere with the operation of the Feedyard as currently conducted; (f) with respect to Owned Real Property, any easements, rights-of-way, prescriptive rights, encroachments, protrusions, imperfections of title, rights, customary title exceptions and matters that would be shown by an accurate survey of the Owned Real Property which do not materially interfere with the operation of the Feedyard as currently conducted; (g) Encumbrances set forth in Schedule 1.1(b); and (h) Assumed Obligations. All Permitted Encumbrances which are monetary in nature, do not include Taxes with respect to real property and exceed $50,000 shall be listed in Schedule 1.1(b).
“Person” shall mean any individual, corporation, business trust, proprietorship, firm, partnership, limited partnership, limited liability partnership, limited liability company, trust, association, joint ventures, Governmental Authority or other entity.
“Post-Transfer Period” has the meaning set forth in Section 6.7(a).
“Pre-Transfer Period” has the meaning set forth in Section 6.7(a).
“Property Taxes” has the meaning set forth in Section 6.7(d).
“Proposed Accounts Receivable” has the meaning set forth in Section 3.3(c).
“Proposed Inventory” has the meaning set forth in Section 3.3(c).
“Purchase Price” has the meaning set forth in Section 3.1.
“Purchase Price Allocation” has the meaning set forth in Section 3.4.
“Purchased Assets” means, collectively, the Owned Real Property, Feedyard Improvements, Equipment and Fixed Assets, Vehicles, Records, Software, Contracts, Permits, Easement Rights, and Inventory, cattle located at the outside feedyard located in Satanta, KS; Hugoton, KS; Garden City, KS; and Pierceville, KS, but shall in no event include any of the Excluded Assets.
“Real Property” shall mean the Owned Real Property, and the Easement Rights.
“Records” shall mean all records, regardless of medium, relating to the operations of the Feedyard, but excluding any organizational documents or tax records of any of Seller.
“Remedial Action” has the meaning set forth in Section 6.13(c).
“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.
“Reviewing Party” has the meaning set forth in Section 3.3(d).
“Seller” has the meaning set forth in the Preamble hereto.
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“Seller’s Knowledge” means the actual knowledge of John Gillcrist, Bill Fellows, Joe Kovanda, Mike Gesling, and Heath Schulte.
“Software” means all rights in any software (including owned or licensed software) described on Schedule 1.1(c) to this Agreement.
“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) shall mean any federal, state, provincial, county, local or foreign taxes, charges, fees, duties (including customs duties), levies or other assessments from a Governmental Authority, including income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales, use, franchise, excise, value added, alternative, add-on minimum, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational, interest equalization, windfall profits, license, payroll, Environmental, capital stock, disability, severance, employee’s income withholding, other withholding, unemployment and Social Security taxes, which are imposed by any Governmental Authority, and such term shall include any interest, penalties, fines or additions to tax attributable thereto or associated therewith, and shall include any transferee or successor liability in respect of Taxes (whether by contract or otherwise).
“Tax Return” shall mean any report, return, report, statement, notice, form, declaration, claim for refund or other document or information filed, submitted to, or required to be supplied to a Governmental Authority in connection with the determination, assessment, collection or payment of any Tax, including any schedule or attachment thereto, and including any amendment thereof.
“Third Party” shall mean a Person other than Buyer, Seller, or their respective Affiliates.
“Third Party Claim” shall mean any claim, action, suit or proceeding made or brought by a Third Party.
“Title Company” means Professional Title Company, 222 S. 15th St. #240S, Omaha, NE 68102, and the title companies originally involved in purchasing the Owned Real Property which will issue the title insurance policies.
“Title Objection Period” has the meaning set forth in Section 6.5(c).
“Title Objections” has the meaning set forth in Section 6.5(c).
“Transition Services Agreement” means the Transition Services Agreement in the form attached hereto as Exhibit B, to be entered executed and delivered at Closing.
“Union” has the meaning set forth in Section 4.17(b)
“Vehicles” means those motor vehicles owned by Seller and listed on Schedule 1.1(d).
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(a) Subject to the terms and conditions of this Agreement and the need to obtain any required Consent from any Third Party listed in Schedule 4.3, on the Closing Date and as of the Effective Time, Seller shall assign and transfer to Buyer all of its respective right, title and interest in and to the Contracts and Permits, and Buyer shall assume all of the obligations of Seller under the Contracts and Permits, but only to the extent such Permits may be transferred under applicable Law. |
(b) If any Contracts or Permits are not assignable or transferable to Buyer without the Consent of any Governmental Authority or Third Party, and such Consent has not been obtained prior to the Closing Date and the Closing occurs, this Agreement and the Assignment and Assumption Agreements shall not constitute an assignment or transfer thereof unless and until such Consent is obtained. In such case, Seller shall use commercially reasonable efforts to obtain such Consents as soon as possible after the Closing Date, and Buyer shall cooperate with Seller in that endeavor. |
(a) Cash. All Cash of Seller and those bank accounts and lockboxes set forth on Schedule 2.3(a); |
(b) Records. All records and other protected business information of Seller; |
(c) Insurance Policies. All insurance policies of Seller and prepaid expenses associated therewith and any insurance proceeds for claims accruing prior to Closing; |
(d) Partnership Records. Seller’s formation documents, qualifications to conduct business as a foreign entity, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books, blank stock certificates, all books and records relating to Seller’s Tax Returns or otherwise relating to Tax matters of Seller, for all periods and other documents relating to the organization, maintenance, and existence of Seller as a limited partnership; |
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(e) Rights Under Agreement. Any of the rights of Seller under this Agreement, the Ancillary Agreements (or under any other agreement between Seller on the one hand and Buyer on the other hand entered into on or after the date of this Agreement); |
(f) Other Excluded Assets. All of the assets set forth on Schedule 2.3(f). |
(a) all Liabilities arising from the ownership of the Purchased Assets, arising after the Closing Date; |
(b) any Liabilities for trade and non-trade payables arising out of the conduct of the Feedyard business and incurred on or after the Closing Date; |
(c) open purchase orders as of the Effective Date, acceptable to Buyer set forth on Schedule 2.4(c) arising out of the conduct of the Feedyard business; |
(d) Assumed Taxes; and |
(e) all Liabilities set forth on Schedule 2.4(e). |
Although Buyer agrees to assume the Assumed Obligations, the Parties expressly agree and acknowledge this provision is not intended to provide any rights, contractual or otherwise, to any Third Party.
(a) Notwithstanding the provisions of Section 2.4 or any other provision in this Agreement to the contrary, Buyer shall not assume and shall not be responsible to pay, perform or discharge any Liabilities of Seller or any of its Affiliates of any kind or nature whatsoever other than the Assumed Obligations (the “Excluded Obligations”). Seller shall, and shall cause each of its Affiliates to, pay and satisfy in due course all Excluded Obligations which they are obligated to pay and satisfy. Without limiting the generality of the foregoing, the Excluded Obligations shall include, but not be limited to, the following (to the extent not an Assumed Obligation): |
(i) any Liabilities of Seller arising or incurred in connection with the negotiation, preparation, investigation and performance of this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby, including, without limitation, fees and expenses of counsel, accountants, consultants, advisers and others; |
(ii) any Excluded Taxes; |
(iii) any Liabilities relating to or arising out of the Excluded Assets; |
(iv) any Liabilities in respect of any pending or, to the Seller’s Knowledge, threatened, Claim arising out of, relating to or otherwise in respect of the operation of
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the Feedyard business or the Purchased Assets to the extent such Claim relates to such operation on or prior to the Closing Date; |
(v) any product Liability or similar Claim for injury to a Person or property which arises out of or is based upon any express or implied representation, warranty, agreement or guaranty made by Seller, or by reason of the improper performance or malfunctioning of a product sold or any service performed by Seller |
(vi) any recall, or similar Claims related to any products sold by Seller; |
(vii) any Liabilities of Seller arising under or in connection with any Benefit Plan; |
(viii) any Liabilities of Seller arising prior to the Effective Time for any present or former employees, officers, directors, retirees, independent contractors or consultants of Seller, including, without limitation, any Liabilities associated with any Claims for wages, employee benefits, bonuses, accrued vacation, workers’ compensation, severance, retention, termination or other similar payments; |
(ix) any Liabilities under Environmental Laws, to the extent arising out of or relating to facts, circumstances or conditions existing on the Owned Real Property on or prior to the Closing Date or otherwise to the extent arising out of any caused by Seller’s actions or omissions of Seller prior to the Closing Date, but excluding any exacerbation of any facts, circumstance or condition existing on or prior to the Closing Date to the extent arising out of or relating to any actions or omissions of Buyer after the Closing; |
(x) any Liabilities of the Feedyard business relating or arising from unfulfilled commitments, quotations, purchase orders, customer orders or work orders that (i) do not constitute part of the Purchased Assets issued by the Feedyard business’ customers to Seller on or before the Closing or (ii) are not validly and effectively assigned to Buyer pursuant to this Agreement; |
(xi) any Liabilities arising prior to the Effective Time to indemnify, reimburse or advance amounts to any present or former officer, director or employee of Seller (including with respect to any breach of fiduciary obligations by same), except as set forth under Article 12; |
(xii) any Liabilities under any Contracts which are not validly and effectively assigned to Buyer pursuant to this Agreement; |
(xiii) any Liabilities associated with debt, loans or credit facilities of Seller and/or the Feedyard business owing to financial institutions or third parties; and |
(xiv) any Liabilities arising out of, in respect of or in connection with the failure by Seller or any of its Affiliates to comply with any Law or Governmental Order that arose prior to the Closing Date and that relates to operation of the Feedyard business or the Purchased Assets on or prior to the Closing Date. |
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Section 3.1 Purchase Price. In consideration for the sale, assignment, conveyance, transfer and delivery of the Purchased Assets to Buyer, Buyer shall assume the Assumed Obligations and shall pay to Seller, as of the Effective Time (i) an aggregate amount of $16,190,000 (the “Base Purchase Price”), plus (ii) the Closing Date Inventory, plus (iii) the Final Accounts Receivable, plus (iv) costs related to any transfer taxes which are the obligation of Buyer pursuant to Section 6.6 and 50% of any transfer taxes imposed on or resulting from the transfer of the Purchased Assets, plus (v) 50% of the actual cost for the title insurance policy and survey relating to the Owned Real Property, minus (vi) the amount of Property Taxes apportioned to the Pre-Transfer Period pursuant to Section 6.7(d) (subject to the adjustments, if any, determined pursuant to Section 3.3, as so adjusted, the “Purchase Price”). |
(a) Calculation of the Closing Date Purchase Price. The Purchase Price paid by Buyer to Seller on the Closing Date shall be (i) the Base Purchase Price, plus (ii) the Estimated Closing Date Inventory, plus (iii) the Estimated Accounts Receivable, plus (iv) costs related to any transfer taxes which are the obligation of Buyer pursuant to Section 6.6 and 50% of any transfer taxes imposed on or resulting from the transfer of the Purchased Assets, plus (v) 50% of the actual cost for the title insurance policy and survey relating to the Owned Real Property, minus (vi) the amount of Property Taxes apportioned to the Pre-Transfer Period pursuant to Section 6.7(d) (the “Closing Date Purchase Price”), |
(b) Payment of the Purchase Price. The Purchase Price shall be paid by wire transfer of immediately available funds at Closing to the account of Seller as indicated by Seller. |
(a) Estimated Inventory and Accounts Receivable Certificate. At least two (2) Business Days prior to the Closing Date, Seller shall deliver to Buyer (i) a good faith estimate of the Closing Date Inventory (the “Estimated Closing Date Inventory”) along with sufficient detail supporting such good faith estimate which shall include the type of inventory, the amount of such inventory, the estimated market price and basis, as appropriate, assumed for such inventory, (ii) a good faith estimate of the dollar value of the Accounts Receivable as of the Effective Time (the “Estimated Accounts Receivable”) along with sufficient detail supporting such good faith estimate, and (iii) a certificate of an authorized officer of Seller certifying the foregoing. |
(b) Inventory Methodology. The Estimated Closing Date Inventory and the Closing Date Inventory (and the individual elements thereof, as applicable) shall be determined (and the Final Inventory shall be prepared) in accordance with and consistent with the policies, principles, procedures and methodologies as set forth in Annex I attached hereto and made a part hereof (the “Inventory Methodology”). Each of the applicable deliveries set forth in this Section 3.3 shall be prepared in accordance with the Inventory Methodology. |
(c) Final Inventory. Within thirty (30) calendar days following the Closing Date, Buyer shall prepare and deliver to Seller (i) its calculation of the Closing Date Inventory
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based upon and consistent with the Inventory count pursuant to Section 6.12 (the “Proposed Inventory”, and, in its final and binding form after resolution of any disputes pursuant to this Section 3.3(c), the “Final Inventory”), together with a copy of all of the books and records and supporting work papers utilized in the preparation and calculation of the Proposed Inventory; and (ii) its calculation of the dollar value of the Accounts Receivable as of the Effective Time (the “Proposed Accounts Receivable”, and, in its final and binding form after resolution of any disputes pursuant to this Section 3.3, the “Final Accounts Receivable”), together with a copy of all of the books and records and supporting work papers utilized in the preparation and calculation of the Proposed Accounts Receivable. The Proposed Inventory and Proposed Accounts Receivable shall be determined without giving effect to the transactions contemplated hereby and shall be based exclusively on the facts and circumstances as they immediately exist prior to the Closing. Seller shall have a period of thirty (30) calendar days (the “Objection Period”) after delivery of the Proposed Inventory and the Proposed Accounts Receivable in which to provide written notice to Buyer of any objections thereto (the “Objection Notice”), and such notice shall set forth in reasonable detail the item(s) of the calculation of the Proposed Inventory or Proposed Accounts Receivable, as applicable, to which each such objection relates and the basis for each such objection. If Seller gives any such Objection Notice within the Objection Period, then Seller and Buyer shall attempt in good faith to resolve any dispute concerning the item(s) subject to such Objection Notice. If Seller and Buyer do not resolve any dispute arising in connection with the Proposed Inventory and the Proposed Accounts Receivable within thirty (30) calendar days after the date of delivery of the Objection Notice, which 30-day period may be extended by written agreement of Buyer and Seller (such period, as it may be extended, the “Initial Resolution Period”), such dispute shall be resolved in accordance with the procedures set forth in Section 3.3(d) below. The Proposed Inventory and Proposed Accounts Receivable shall be deemed to be accepted by Seller, and shall become final and binding on the parties hereto, if Seller fails to deliver an Objection Notice prior to the expiration of the Objection Period or, if Seller delivers an Objection Notice prior to the expiration of the Objection Period, on such later date on which all objections have been resolved by the parties or the Reviewing Party (as defined below). |
(d) Dispute Resolution Mechanism. If Buyer and Seller have not been able to resolve the matters set forth in either the Objection Notice within the Initial Resolution Period, either party may submit such disputed matters to, and such disputed matters shall be resolved fully, finally and exclusively by the Independent Accounting Firm (the “Reviewing Party”). The fees and expenses of the Reviewing Party incurred in the resolution of the disputed matter(s) set forth in the Objection Notice shall be borne by the non-prevailing party in such disputed matter(s) (as determined by the Reviewing Party) or, if the Reviewing Party determines that neither party is non-prevailing, then such fees shall be borne equally by Buyer and Seller. In the event of a dispute involving an Objection Notice, the Reviewing Party shall determine (and written notice thereof shall be given to Seller and Buyer) as promptly as practicable, but in any event within thirty (30) days following the date on which the Proposed Inventory or Proposed Accounts Receivable, as applicable, is delivered to the Reviewing Party, based solely on written submissions detailing the disputed items and forwarded to it, (x) whether the Proposed Inventory or Proposed Accounts Receivable, as applicable, was prepared in accordance with the terms of this Agreement or, alternatively, (y) only with respect to the disputed items submitted to the Reviewing Party, (i) whether and to what extent (if any) the Proposed Inventory or Proposed Accounts Receivable, as applicable, require adjustment, (ii) a written explanation in reasonable detail of each such required adjustment, including the basis therefor, and (iii) a determination of the Final Inventory and the
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resulting calculation of the Closing Date Inventory or the Final Accounts Receivable, as applicable, resulting from such adjustments. The procedures of this Section 3.3(d) are exclusive and the determination of the Reviewing Party shall be final and binding on Buyer and Seller. The decision rendered pursuant to this Section 3.3(d) may be filed as a judgment in any court of competent jurisdiction. |
(e) Post-Closing Purchase Price Adjustments. In the event that (i) the Closing Date Inventory is less than the Estimated Closing Date Inventory, then the Purchase Price shall be reduced on a dollar-for-dollar basis by an amount equal to such deficit, and (ii) if the Closing Date Inventory is greater than the Estimated Closing Date Inventory, then the Purchase Price shall be increased on a dollar-for-dollar basis by an amount equal to such surplus. In the event that (i) the Final Accounts Receivable is less than the Estimated Accounts Receivable, then the Purchase Price shall be reduced on a dollar-for-dollar basis by an amount equal to such deficit, and (ii) if the Final Accounts Receivable is greater than the Estimated Accounts Receivable, then the Purchase Price shall be increased on a dollar-for-dollar basis by an amount equal to such surplus. |
(f) Payment Regarding Closing Date Inventory and Final Accounts Receivable. The amount of any decrease to the Purchase Price determined pursuant to Section 3.3(e), shall be paid by Seller to Buyer within five (5) Business Days after the Purchase Price is finally determined pursuant to Section 3.3, by wire transfer of immediately available funds to an account designated by Buyer. The amount of any increase to the Purchase Price, determined pursuant to Section 3.3(e), shall be paid by Buyer to Seller within five (5) Business Days after the Purchase Price is finally determined pursuant to Section 3.3, by wire transfer of immediately available funds to an account designated by Seller. |
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Except as set forth in the corresponding sections or subsections of the Disclosure Schedules, each of which disclosures shall qualify each Section or subsection hereof to the extent that it is reasonably apparent from the text of such disclosure that such disclosure qualifies such Section or subsection of this Agreement, Seller represents and warrants as of the date hereof and as of the Closing Date as follows:
the violation, conflict or breach would not have a Material Adverse Effect or (ii) for compliance with the applicable requirements (if any) of the HSR Act or any other Antitrust Law. |
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(a) event, occurrence or development that has had, individually or in the aggregate, a Material Adverse Effect; |
(b) entry into any Contract that would constitute a Material Contract; |
(c) incurrence, assumption or guarantee of any Indebtedness for borrowed money in connection with the Feedyard business in an aggregate amount exceeding $50,000 except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice; |
(d) transfer, assignment, sale or other disposition of any of the Purchased Assets shown or reflected in the Balance Sheet, except for the sale of Inventory in the ordinary course of business and except for any Purchased Assets having an aggregate value of less than $50,000; |
(e) cancellation of any debts or claims or amendment, termination or waiver of any rights constituting Purchased Assets, except in the ordinary course of business. |
(f) material damage, destruction or Loss, or any material interruption in use, of any Purchased Assets, whether or not covered by insurance; |
(g) acceleration, termination, material modification to or cancellation of any Material Contract or Permit listed on Schedule 4.15(b); |
(h) imposition of any Encumbrance upon any of the Purchased Assets, except for Permitted Encumbrances; |
(i) adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against Seller under any similar Law; |
(a) Schedule 4.11 lists each of the following (each a “Material Contract” and collectively, “Material Contracts”): |
(i) all Contracts that require Seller to purchase or sell a stated portion of the requirements or outputs of the Feedyard business or that contain “take or pay” provisions involving consideration in excess of $50,000; |
(ii) all Contracts with any Governmental Authority not already listed; |
(iii) all joint venture, partnership or similar Contracts; |
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(iv) All Contracts which involve dewatering (placement of effluent waste water) on neighboring properties (whether written or, to Seller’s Knowledge, verbal); |
(v) All Contracts regarding fresh water rights (whether written or, to Seller’s Knowledge, verbal); |
(vi) All other Contracts related to the Purchased Assets that are over one year in duration or $25,000 in the aggregate and not previously disclosed; |
(vii) all Contracts for the sale of any of the Purchased Assets or for the grant to any Person of any option, right of first refusal or preferential or similar right to purchase any of the Purchased Assets, other than in the ordinary course of business, for consideration in excess of $50,000; and |
(viii) any other Contracts that requires Seller or one of its Affiliates to make payments in excess of $100,000 and is not terminable by Seller or one of its Affiliates, as applicable, without penalty upon less than ninety (90) days’ prior written notice. |
(b) Each Material Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. Seller is not, and to Seller’s Knowledge, no other party thereto is in material breach of or default under any Material Contract (or is alleged to be in material breach of or default thereunder), or has received any notice of any intention to terminate any Material Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default, or result in a termination of, any Material Contract. Complete and correct copies of each written Material Contract (including all written modifications, amendments and supplements thereto and waivers thereunder) have been made available to Buyer. |
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(a) Schedule 4.13(a) sets forth a list of each parcel of Owned Real Property, including the address, location and use of each parcel of Owned Real Property. To Seller’s Knowledge, Seller has delivered to Buyer, to the extent in Seller’s possession, copies of the deeds and other instruments (as recorded) by which Seller acquired each parcel of Owned Real Property and copies of Seller’s existing title insurance policies with respect to the Owned Real Property. With respect to each parcel of Owned Real Property: |
(i) Seller has good and marketable fee simple title to such Owned Real Property, free and clear of all Encumbrances, except for Permitted Encumbrances, which in the aggregate do not exceed $100,000.00 (excluding non-delinquent real estate taxes and Permitted Encumbrances that will be released prior to or at Closing); |
(ii) Seller has not leased or otherwise granted to any Person the right to use or occupy such Owned Real Property or any portion thereof, except as otherwise set forth on Schedule 4.13(a); and |
(iii) there are no unrecorded outstanding options, rights of first offer or rights of first refusal to purchase such Owned Real Property or any portion thereof or interest therein. |
(c) Seller has not received any written notice of (i) existing violations of building codes and/or zoning ordinances or other governmental or regulatory Laws affecting the Owned Real Property, (ii) existing, pending or threatened condemnation proceedings affecting the Owned Real Property, or (iii) existing, pending or threatened zoning, building code or other moratorium proceedings, or similar matters which could reasonably be expected to adversely affect the ability to operate the Owned Real Property as currently operated. Neither the whole nor any material portion of the Owned Real Property or Feedyard Improvements has been damaged or destroyed by fire or other casualty. |
(d) The Owned Real Property is sufficient for the continued conduct of the Feedyard business after the Closing in substantially the same manner as conducted prior to the Closing. |
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(a) Except as set forth in Schedule 4.15(a), to Seller’s Knowledge, Seller has complied, and is in compliance with all Laws applicable to the conduct of the Feedyard business as currently conducted or the ownership and use of the Purchased Assets. |
(b) All Permits required for Seller to conduct the Feedyard business as currently conducted or for the ownership and use of the Purchased Assets, other than those Permits that are not material to the Business, have been obtained by Seller, are listed in Schedule 4.15(b), and are valid and in full force and effect. All material fees and charges with respect to such Permits as of the date hereof have been paid in full. All current Permits issued to Seller which are related to the conduct of the Feedyard business as currently conducted or the ownership and use of the Purchased Assets, including the names of the Permits and their respective dates of issuance and expiration, other than those Permits that are not material to the Business, are listed in Schedule 4.15(b). No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Permit required for Seller to conduct the Feedyard business as currently conducted or for the ownership and use of the Purchased Assets. |
(a) The operations of Seller with respect to the Feedyard business and the Owned Real Property are currently in material compliance with all Environmental Laws. Seller has not received from any Person, with respect to the Feedyard business or the Owned Real Property, any: (i) written notice or claim alleging a material liability of Environmental Law; or (ii) written request for information pursuant to Environmental Law, which, in each case, either remains pending or unresolved, or that includes actions that will result in material cost and are required to be implemented after the Closing Date. |
(b) Seller has obtained and is in material compliance with all Permits disclosed in Schedule 4.15(b) required pursuant to Environmental Laws for the conduct of the Feedyard business as currently conducted or the ownership, lease, operation of the Owned Real Property, and all such Permits are currently in full force and effect and shall be maintained in full force and effect by Seller through the Closing Date in accordance with Environmental Law, and, to Seller’s Knowledge, there are not any condition, event or circumstance that might prevent or materially impede, after the Closing Date, the conduct of the Feedyard business as currently conducted or the ownership, lease, operation or use of the Purchased Assets. With respect to any such Permits, Seller has undertaken, or will undertake prior to the Closing Date, all measures required by Environmental Laws to facilitate transferability of the same, and Seller is not aware of any condition, event or circumstance that might prevent or materially impede the transferability of the same, and has not received any written notice or written communication regarding any material adverse change in the status or terms and conditions of the same. |
(c) None of the Owned Real Property is listed on, or has been proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA, or any similar state list. |
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(d) To Seller’s Knowledge there has not been any material and unpermitted release of hazardous materials in contravention of Environmental Law to the Environment with respect to the Owned Real Property, and Seller has not received a written notice that any of the Owned Real Property (including soils, groundwater, surface water, buildings and other structure located thereon) has been contaminated with any hazardous material which could reasonably be expected to result in a material Claim against, or a material violation of Law or material term of any Permit by, Seller. |
(e) Seller has not retained or assumed, by contract, any currently pending and material Liabilities or obligations of third parties under Environmental Laws relating to the Owned Real Property. |
(f) Schedule 4.16(f) contains, to Seller’s Knowledge, as of the Closing Date, a complete and accurate list of all active or abandoned aboveground or underground storage tanks owned or operated by Seller in connection with the Feedyard business or the Purchased Assets. |
(g) Schedule 4.16(g) contains a complete and accurate list of all off-site hazardous materials treatment, storage, or disposal facilities used by Seller in the three (3) years prior to the date hereof in connection with the Feedyard business or the Purchased Assets as to which Seller may retain Liability, and, to Seller’s Knowledge, none of these facilities has been placed or proposed for placement on the National Priorities List (or CERCLIS) under CERCLA, or any similar state list, and Seller has not received any written notice regarding potential Liabilities with respect to such off-site hazardous materials treatment, storage, or disposal facilities or locations used by Seller to Seller’s Knowledge. |
(h) Seller has provided or otherwise made available to Buyer and listed in Schedule 4.16(h): (i) any and all non-privileged Environmental reports, studies, and Phase I site assessments, with respect to the Feedyard business or the Owned Real Property which are in the possession or control of Seller related to compliance with Environmental Laws, written claims currently pending and asserted pursuant to Environmental Laws or the material and unpermitted release of hazardous materials and (ii) any and all material documents concerning planned capital expenditures required to ensure compliance with current Environmental Laws (including, without limitation, costs of remediation, pollution control equipment and operational changes). |
(i) Other than as disclosed on Schedule 4.16(g), Seller owns and controls all Environmental Attributes necessary to operate the Feedyard business including all water wells on the Owned Real Property (a complete and accurate list of such Environmental Attributes is set forth in Schedule 4.16(i)). Seller has not entered into any contract or pledge to transfer, lease, license, guarantee, sell, mortgage, pledge or otherwise dispose of or encumber any Environmental Attributes as of the date hereof. Seller is not aware of any condition, event or circumstance that might prevent, impede or materially increase the costs associated with the transfer (if required) to Buyer of any Environmental Attributes after the Closing Date. |
(a) Schedule 4.17 contains a list of all Persons who are employees, independent contractors or consultants of the Feedyard business as of the date hereof, including any employee
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who is on a leave of absence of any nature, paid or unpaid, authorized or unauthorized, and sets forth for each such individual the following: (i) name; (ii) title or position (including whether full or part time); (iii) hire date; (iv) current annual base compensation rate; (v) commission, bonus or other incentive-based compensation; and (vi) a description of the material fringe benefits provided to each such individual as of the date hereof. As of the date hereof, all compensation, including wages, commissions and bonuses payable to all employees, independent contractors or consultants of the Feedyard business for services performed on or prior to the date hereof have been paid in full and there are no outstanding agreements, understandings or commitments of Seller with respect to any compensation, commissions or bonuses. |
(b) Seller is not, and have not been for the past three (3) years, a party to, bound by, or negotiating any collective bargaining agreement or other Contract with a union, works council or labor organization (collectively, “Union”), and there is not, and has not been for the past 3 years, any Union representing or purporting to represent any employee of Seller, and, to Seller’ Knowledge, no Union or group of employees is seeking or has sought to organize employees for the purpose of collective bargaining. There has never been, nor has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor disruption or dispute affecting Seller or any employees of the Feedyard business. Seller has no duty to bargain with any Union. |
(c) Seller is and has been, in all material respects, in compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate to employees of the Feedyard business, including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers’ compensation, leaves of absence and unemployment insurance. All individuals characterized and treated by Seller as consultants or independent contractors of the Feedyard business are properly treated as independent contractors under all applicable Laws. All employees of the Feedyard business classified as exempt under the Fair Labor Standards Act and state and local wage and hour Laws are properly classified. Except as set forth in Schedule 4.5 there are no Actions against Seller pending, or to Seller’s Knowledge, threatened to be brought or filed, by or with any governmental authority or arbitrator in connection with the employment of any current or former applicant, employee, consultant, or independent contractor of the Feedyard business, including, without limitation, any claim relating to unfair labor practices, employment discrimination, harassment, retaliation, equal pay, workers’ compensation, wrongful death, wages and hours or any other employment related matter arising under applicable Laws. |
Section 4.19 Full Disclosure. To Seller’s Knowledge, no representation or warranty by Seller in this Agreement and no statement contained in the Schedules to this Agreement or any
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certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading. |
Buyer represents and warrants as of the date hereof and as of the Closing Date:
Section 5.1 Existence and Good Standing. Buyer is a limited liability company duly organized, validly existing and in good standing under the Laws of Delaware and is qualified to
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do business in the States of Kansas and Texas. Buyer is in good standing in the States of Kansas and Texas. |
Section 5.5 Brokers. Buyer has not used any broker, finder or investment banker in connection with the transactions contemplated hereby. |
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Seller and Buyer hereby covenant as follows:
(a) Pre-Closing Access. After the Effective Date of this Agreement until the Closing Date Seller shall give Buyer and its authorized representatives, reasonable access during regular business hours and upon reasonable notice, to the Purchased Assets and of Seller’s books and records relating to the Purchase Assets, provided such access shall not include the right to conduct any Phase II environmental investigation nor any other intrusive investigation of the Environment other than as specifically provided in Section 7.11. |
(b) In order to facilitate the resolution of any Claims made against or incurred by either Party prior to and after the Closing, or for any other reasonable purpose, for a period of 18 months after the Closing, each Party shall: |
(i) retain the books and Records (including personnel files) relating to periods prior to the Closing in a manner reasonably consistent with the prior practices of Seller; and |
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(ii) upon reasonable notice, afford the other Party’s representatives reasonable access (including the right to make, at such requesting Party’s expense, photocopies), during normal business hours, to such books and Records. |
(c) Neither Party shall be obligated to provide the other party with access to any books or records (including personnel files) pursuant to this Section where such access would violate any Law. |
(a) Seller shall cause to be delivered to Buyer Owners Policies of Title Insurance, including for the Texas site one or more Texas T-7 title commitments issued by the Title Company in standard promulgated form, covering the Owned Real Property, together with legible copies of all title exception documents referred to therein (each, a “Title Commitment”), committing the Title Company to issue owner’s title insurance policies insuring fee simple title to the Owned Real Property, subject only to Permitted Encumbrances (each, a “Title Policy”). At Closing, Seller and Buyer shall each pay 50% of the cost for each Title Policy, with coverage equal to the value of the Owned Real Property set forth on Schedule 3.4, provided that any charge by the Title Company for endorsements requested by Buyer, including any endorsements or policy modifications as may be required to cause the Title Company to modify the survey exception set forth in the Title Commitments to refer to “shortages in area”, shall be borne by Buyer and the issuance of any such endorsements or modifications shall not be a condition to Closing. |
(b) Survey. Buyer may obtain a survey of the Owned Real Property (each, a “Survey”) reflecting the location of all boundaries, building lines, easements and encroachments and other Encumbrances disclosed by each Title Commitment. If Buyer elects to obtain any Survey, Buyer will provide copies of such to Seller and the Title Company. |
(c) Title Examination. Buyer shall be allowed five (5) Business Days after the Buyer receives the Title Commitment for the Owned Real Property (“Title Objection Period”), to notify the Seller of Buyer’s objections to any a title defect, exception to title or other Encumbrance that appear on the Title Commitment for the Owned Real Property (collectively, “Title Objections”). The Seller shall use commercially reasonable efforts to cure any Title Objections that are not Permitted Encumbrances prior to Closing; provided, however, that Seller shall not be obligated to expend any money to do so. |
(a) The Buyer shall promptly notify the Seller in writing upon receipt by the Buyer, of notice of any pending or threatened Tax Liabilities which relate to any taxable period
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ending on or prior to the Closing Date (“Pre-Transfer Period”) or to any Pre-Transfer Straddle Period or otherwise to any Excluded Taxes. The Seller shall have the sole right to control any Tax audit or administrative or court proceeding with respect to such Taxes and the Buyer agrees that it will cooperate fully with the Seller and its counsel in the defense against or compromise of any claim in any said proceeding. Seller agrees that it will either pay or reimburse Buyer for any reasonable out-of-pocket costs Buyer incurs as a result of its cooperation in accordance with the immediately preceding sentence. After the Closing, the Buyer shall make available to the Seller such records as the Seller may reasonably require for the preparation of any Tax Returns or other similar governmental reports or forms, and the preparation and defense of any audit or administrative or court proceeding. All refunds of Taxes for any Excluded Tax shall be for the account of the Seller. The Buyer shall reasonably cooperate with the Seller in its efforts to obtain such refunds and shall deliver any such refunds received by Buyer to the Seller immediately upon receipt thereof. Seller agrees to either pay or reimburse Buyer for any reasonable out-of-pocket costs it incurs as a result of its cooperation in accordance with the immediately preceding sentence. All other refunds of Taxes attributable to any taxable period (or portion thereof) beginning on or after the Closing Date (“Post-Transfer Period”) shall be for the account of the Buyer. The Seller shall reasonably cooperate with the Buyer in its efforts to obtain such refunds and shall deliver any such refunds received by Seller to the Buyer immediately upon receipt. Buyer agrees to either pay or reimburse Seller for any costs it incurs as a result of its cooperation in accordance with this Section 6.7. |
(b) The Seller shall be responsible for (and shall indemnify and hold the Buyer harmless from and against) all Taxes (other than Assumed Taxes) owed by Seller with respect to the Purchased Assets regardless of when due and payable, (i) with respect to all Pre-Transfer Periods, (ii) with respect to all taxable periods including but not ending on the Closing Date (each, a “Straddle Period”), but only with respect to the portion of such period up to and including the Effective Time as determined in accordance with Section 6.7(d) (such portion the “Pre-Transfer Straddle Period”) and (iii) other Taxes of Seller (or any owner or Affiliate of Seller of any kind or description (including any Liability for Taxes of Seller (or any stockholder or Affiliate of Seller) that becomes a Liability of Buyer under any common law doctrine of de facto merger or transferee or successor liability or otherwise by operation of contract or Law) (collectively, “Excluded Taxes”). Notwithstanding any other provision of this Agreement, the Seller shall have no obligation to indemnify the Buyer for any Taxes except as provided in this Section 6.7. |
(c) The Buyer shall be responsible for (and shall indemnify and hold the Seller harmless from and against) all Taxes with respect to the Purchased Assets, regardless of when due and payable, (i) with respect to all taxable periods beginning after the Effective Time, (ii) with respect to all Straddle Periods, but only with respect to the portion of such periods commencing after the Effective Time as determined in accordance with Section 6.7(d), (iii) of another Person payable pursuant to any Contract that is a Purchased Asset, and (iv) with respect to any Taxes for which the Buyer is liable under this Section 6.7 (collectively, “Assumed Taxes”). |
that an equal amount of Property Tax applies to each day of the relevant Taxable period regardless of how installment payments are billed or made (provided that, if as a result of the transactions contemplated by this Agreement or any transaction occurring after the Closing Date, the value of any asset is reassessed for purposes of determining the amount of such Taxes for the Straddle Period, any resulting increase in Tax shall be allocated to the Post-Transfer Period). The Seller shall be liable for all such Property Taxes apportioned to the Pre-Transfer Period. The Buyer shall be liable for all such Property Taxes apportioned to the Post-Transfer Period. If any other Tax relates to a Straddle Period, the Parties shall use the following conventions for determining the portion of such Tax that relates to a Pre-Transfer Period and the portion that relates to a Post-Transfer Period: (A) in the case of Taxes similar to Property Taxes which are imposed on a periodic basis, the amount of Taxes attributable to the Pre-Transfer Period shall be determined in the same manner as for Property Taxes; and (B) in the case of all other Taxes, the amount of Taxes attributable to the Pre-Transfer Period shall be determined as if a separate return was filed for the period ending as of the end of the day on the Closing Date using a “closing of the books methodology,” and the remaining amount of the Taxes for such period shall be attributable to the Post-Transfer Period; provided, however, that for purposes of clause (B), exemptions, allowances, or deductions that are calculated on an annual basis (including depreciation and amortization deductions) shall be apportioned between the Pre-Transfer Period and the Post-Transfer Period in proportion to the number of days in each such period.. |
(e) Property Taxes for which Seller is liable under Section 6.7(d) will be an adjustment to the Closing Date Purchase Price pursuant to Section 3.2(a) and the Purchase Price pursuant to Section 3.1. Except as otherwise expressly stated in this Section 6.7, Buyer shall pay all Property Taxes which become due and payable after the Effective Time. |
(f) The Parties acknowledge that the Owned Real Property is currently treated as being used for agricultural purposes for Property Tax purposes and the Parties contemplate that Buyer will continue the agricultural use of the Owned Real Property in a manner that does not result in any “roll back” Property Taxes. However, notwithstanding any other provisions of this Agreement, in the event that the transaction provided for in the Agreement or any sale or use by Buyer of the Owned Real Property after the Closing results in the assessment of any additional Property Taxes for any Pre-Transfer Period, including any “roll back” Property Taxes, any such additional Property Taxes shall be the obligation of Buyer. |
Expenses”). The Parties shall at Closing or immediately thereafter agree to a proration of those Straddle Expenses such that Seller shall bear any Straddle Expenses attributable to the Pre-Transfer Period, and Buyer shall bear any Straddle Expenses attributable to the Post-Transfer Period (which shall be among the Assumed Obligations). |
(a) From and after the Closing, Seller shall, and shall cause its Affiliates to, hold, and shall use their reasonable best efforts to cause their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning the Feedyard business, except to the extent that Seller can show that such information (i) is generally available to and known by the public through no fault of Seller, any of its Affiliates or their respective Representatives; or (ii) is lawfully acquired by Seller, any of its Affiliates or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation. If Seller or any of their Affiliates or their respective Representatives are compelled to disclose any information by judicial or administrative process or by other requirements of Law, Seller shall promptly notify Buyer in writing and shall disclose only that portion of such information which Seller is advised by their counsel in writing is legally required to be disclosed, provided that Seller shall use reasonable best efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information. |
(b) From and after the Closing, Buyer shall, and shall cause its Affiliates to, hold, and shall use their reasonable best efforts to cause their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning the Feedyard business, except to the extent that Buyer can show that such information (i) is generally available to and known by the public through no fault of Buyer, any of its Affiliates or their respective Representatives; or (ii) is lawfully acquired by Buyer, any of its Affiliates or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation. If Buyer or any of their Affiliates or their respective Representatives are compelled to disclose any information by judicial or administrative process or by other requirements of Law, Buyer shall promptly notify Seller in writing and shall disclose only that portion of such information which Buyer is advised by their counsel in writing is legally required to be disclosed, provided that Buyer shall use reasonable best efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information. |
sufficient to produce a proper count of such Inventory. Inventory shall be priced in accordance with the Inventory Methodology. Seller shall have the right to observe and participate in the verification of the count and the pricing of such inventory. The foregoing procedures and calculations shall be the basis for inclusion in Proposed Inventory and Final Inventory pursuant to Section 3.3(c). |
HSR Filings and Authorizations; Consummation
(c) Each of Buyer and Seller shall use commercially reasonable efforts to resolve such objections, if any, as may be asserted by any Governmental Authority with respect to the transactions contemplated by this Agreement under the HSR Act, the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and any other United States federal or state or foreign statutes, rules, regulations, orders, decrees, administrative or judicial doctrines or other Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or constituting anticompetitive conduct (collectively, the “Antitrust Laws”); provided, however, that in no event shall Buyer be obligated to take any action to sell or dispose of any particular businesses, product lines, assets or voting securities, or take any other similar actions to secure antitrust clearance from such Governmental Authority. Subject to the other terms of this Section 6.13(c), each of Buyer and Seller shall use commercially reasonable efforts to take such action as may be required to cause the expiration of the notice periods under the HSR Act or other Antitrust Laws with respect to such transactions as promptly as possible after the execution of this Agreement. In connection with and without limiting the foregoing, but subject to the other terms and conditions of this Section 6.13(c), Buyer agrees to use its reasonable efforts to take promptly any and all reasonable steps necessary to avoid or eliminate each and every impediment under any Antitrust Laws that may be asserted by any federal, state and local and non-United States antitrust or competition authority, so as to enable the parties hereto to close the transactions contemplated by this Agreement as expeditiously as possible (each, a “Remedial Action”); provided, however, that any Remedial Action may, at the discretion of Seller or Buyer, be conditioned upon the consummation of the Closing. |
The obligations of Buyer to consummate the transactions contemplated hereby are subject to the satisfaction or waiver by Buyer of the following conditions precedent on or before the Closing Date:
Section 7.2 Compliance with Agreements and Covenants. Seller shall have performed and complied in all material respects with all of its covenants, obligations and agreements
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contained in this Agreement to be performed and complied with by them on or prior to the Closing Date. |
Section 7.7 Deliveries. Seller shall have made, at the Closing, all of the deliveries set forth in Section 10.2. |
(a) Employees of Seller that Buyer desires to hire must be able to provide all documentation required to prove they are legally authorized to work in the United States to Buyer’s reasonable satisfaction. Should Buyer reasonably determine within seven (7) days of the date herof that it cannot adequately staff the Feedyards due to less than twenty-seven (27) employees remaining at the Feedyard located in Tulia, Texas and thirty-one (31) employees remaining at the Feedyard located in Sublette, Kansas passing through the E-verify system or being unable or unwilling to provide required documentation, or should they refuse to accept employment, Buyer shall have the right to terminate this Agreement within seven (7) days of the hereof. |
(b) Prior to Closing, Seller shall take all actions necessary (as allowed under the Law) to remove employees that are not Continuing Employees from housing provided by Seller. Should any of Seller’s employees that are not Continuing Employees remain in housing included in the Feedyard Improvements after the Closing Date, Seller shall bear all legal costs associated with eviction proceedings to accomplish Section 10.2(b), indicating Seller must deliver “possession of the Purchased Assets”. |
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(c) Seller shall have paid all Liabilities related to employees including without limitation, hourly pay, commission, bonus, salary, accrued vacation, workers’ compensation, wrongful death, fringe, pension or profit sharing benefits or severance pay for any period relating to the service with Seller at any time on or prior to the Closing Date. |
Section 7.10 Remediation and Environmental Matters. Seller will remove, or as applicable address, the items identified in Section 7.10(a) prior to Closing. |
(a) Items to be removed or addressed prior to Closing: |
(i) Debris located north of the pens at the Tulia Feedyard must be removed. Debris located at the barn west of the north residence must be removed at the Sublette Feedyard. |
(ii) An underground waste oil tank located on west side of the shop must be removed by a licensed contractor at the Sublette Feedyard. |
(iii) All locations of hydrocarbon staining (including, but not limited to, surrounding well and fuel filling areas), must be scraped and properly disposed of. Hydrocarbon staining at the Sublette Feedyard must be removed which is located at chute hydraulic unit at processing barn, in the equipment parking area located west of shop, and north of processing barn associated with the manure hauler’s equipment area. Hydrocarbon staining at the Tulia Feedyard must be removed which is located at the three active irrigation wellheads on the farmland property, and south of the maintenance shop where tractors and other feedyard equipment are parked. |
(b) For the avoidance of doubt, Buyer and Seller agree that Seller shall not undertake, nor be responsible for, either prior to Closing or following Closing, any other remediation and environmental tasks, including without limitation those tasks set forth on Schedule 7.10. |
Section 7.12 HSR Act. The approval under the HSR Act shall have been obtained and all applicable waiting periods (and any extension thereof) under the HSR Act shall have expired or been terminated. |
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The obligations of Seller to consummate the transactions contemplated hereby are subject to the satisfaction or waiver (to the extent permitted by applicable Law) by Seller of the following conditions precedent on or before the Closing Date:
Section 8.4 Deliveries. Buyer shall have made, or be prepared to make at the Closing, all of the deliveries set forth in Section 10.3. |
Section 8.5 HSR Act. The approval under the HSR Act shall have been obtained and all applicable waiting periods (and any extension thereof) under the HSR Act shall have expired or been terminated. |
Section 9.1Nothing contained in this Agreement shall be construed as requiring Buyer to hire Seller’s employees, nor shall Buyer be obligated to or responsible for any of Seller’s Liabilities, responsibilities, or obligations under any Benefit Plan during the period of their employment with Seller. The purchase contemplated in this Agreement is for the Purchased Assets only.
Section 9.2 Immediately prior to Closing, Seller shall terminate all employees of the Feedyard business who are employed and Seller shall bear any and all obligations related to such terminations.
Section 9.3Notwithstanding the terms of this Section, Buyer agrees to offer fulltime employment on at “at-will” basis to each of Seller’s employees, provided such employees are eligible for hire under applicable Law and Buyer’s policies and procedures. Upon the execution of this Agreement, Buyer is authorized to interact directly with Seller’s employees who work at the
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Feedyard for purposes of assisting Buyer in making any such employment arrangements. Each of Seller’s employees who accept such offer of employment from Buyer are referred to herein as “Continuing Employees”. Buyer shall offer such employment to Continuing Employees at compensation levels, with benefits, and on other terms, as such employees and Buyer shall determine in its sole discretion. Base wages and benefits shall be consistent and substantially comparable in the aggregate with prior levels in effect immediately prior to the Closing Date except any bonuses provided.
Section 9.4Seller shall be solely responsible, and Buyer shall have no obligations whatsoever for, any compensation or other amounts payable to any current or former employee, officer, director, independent contractor or consultant of the Feedyard business, including, without limitation, hourly pay, commission, bonus, salary, accrued vacation, workers’ compensation, wrongful death, fringe, pension or profit sharing benefits or severance pay for any period relating to the service with Seller at any time on or prior to the Closing Date and Seller shall pay all such amounts to all entitled Persons on or prior to the Closing Date.
Section 9.5Nothing contained in this Section 9 shall obligate Buyer or Seller to continue the employment of any employee of, or the service relationship of, or any particular term of employment of, any other service provider to Seller for any period of time after the Closing, and this Section 9 shall not be construed to limit the ability of Buyer or Seller to terminate the employment of any employee of, or the service relationship of, any other service provider to Seller following the Closing in accordance with applicable Law and any pre-existing contractual relationship. Further, this Section 9 shall be binding upon and inure solely to the benefit of the parties to this Agreement, and nothing in this Section 9, express or implied, shall confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 9 or be construed as an amendment, waiver, termination, or creation of any benefit or compensation plan, program, agreement, contract, policy, or arrangement of Buyer or Seller or to limit the ability of Buyer to establish, amend, modify or terminate any benefit or compensation plan, program, agreement, contract, policy or arrangement in accordance with applicable Law.
Section 10.2 Deliveries by Seller. At or prior to the Closing, Seller shall deliver to Buyer the following, each dated at or prior to the Closing Date and duly executed by Seller: |
(a) The Assignment and Assumption Agreements, the Deed, bills of sale and other conveyance documents (collectively, the “Conveyance Documents”) with respect to the Purchased Assets; |
(b) Possession of the Purchased Assets; |
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(c) Certificates of title for all Vehicles included in the Purchased Assets, duly endorsed for transfer to Buyer, along with an Application for Texas and Kansas Certificates of Title completed for each Vehicle with the information and signatures of Seller as needed. |
(d) Other instruments of transfer reasonably requested by Buyer to evidence the transfer of the Purchased Assets to Buyer and consummation of the transactions contemplated hereby, in each case duly executed by Seller; |
(e) Certificate of Seller attaching the organizational documents of Seller, the applicable resolutions of Seller, and otherwise evidencing the authority of the officers of Seller to enter into and perform this Agreement and to execute and deliver the Conveyance Documents in form reasonably acceptable to Buyer (“Seller’s Closing Certificate”). |
(f) The Consents required pursuant to Section 6.3 and Section 4.3 hereof and all Consents and waivers of any Governmental Authority or other Third Parties that are otherwise required in connection with the execution and delivery of this Agreement or any Ancillary Agreement, the performance of Seller of its obligations hereunder or thereunder, and the consummation of the transactions contemplated hereby and thereby, each of which shall be in form and substance reasonably satisfactory to Buyer; |
(g) A certificate, in the form prescribed by Treasury regulations under Section 1445 of the Code, that Seller is not a foreign Person within the meaning of Section 1445 of the Code; |
(h) Payment for the Title Policy to the extent required to be paid for by Seller under Section 6.5; |
(i) A closing statement prepared and signed by Seller and reflecting the various charges and prorations provided for in this Agreement to the extent then known (the “Closing Statement”); |
(j) An assignment of all Permits and any Easement Rights obtained prior to the Closing Date; |
(k) Such other documents and instruments as may be reasonably necessary to consummate the transactions contemplated by this Agreement and the Ancillary Agreements; |
(l) Payoff letters or releases regarding all Liens to be removed listed in Schedule 7.9 or other evidence of satisfaction of such matters reasonably acceptable to the Title Company and Buyer; and |
(m) Seller shall have executed and delivered the Transition Services Agreement. |
Section 10.3 Deliveries by Buyer. At the Closing, Buyer shall make the payment described in (b) and shall deliver to Seller the following, each dated the Closing Date and duly executed by Buyer: |
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(a) Evidence of authority of each Buyer to enter into and consummate the transactions contemplated hereby; |
(b) The Purchase Price Allocation form evidencing the information for each component of the Purchased Assets after the Purchase Price is finally determined in accordance with this Agreement and the final calculation of the Purchase Price Allocation as determined in accordance with Section 3.4. |
(c) All Consents and waivers of any Governmental Authority or other Third Party that are otherwise required in connection with the execution and delivery of this Agreement or any Ancillary Agreement, the performance of Buyer of its obligations hereunder or thereunder, and the consummation of the transactions contemplated hereby and thereby, each of which shall be in form and substance reasonably satisfactory to Seller; |
(d) Certificate of Buyer attaching the organizational documents of Buyer, the applicable resolutions of Buyer, and otherwise evidencing the authority of the officers of Buyer to enter into and perform this Agreement and to execute and deliver the Ancillary Agreements, in form reasonably acceptable to Seller (“Buyer’s Closing Certificate”); |
(e) Buyer shall have executed the Closing Statement; |
(f) Buyer shall have executed and delivered the Transition Services Agreement; and |
(g) Such other documents and instruments as may be reasonably required to consummate the transactions contemplated by this Agreement and the Ancillary Agreements. |
(a) By the mutual written agreement of Seller and Buyer; |
(b) By Seller or Buyer if the Closing shall not have taken place on or before August 1, 2018, provided, however, that the terminating party shall not have failed to fulfill any obligation under this Agreement or be in breach of any representation or warranty under this
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Agreement, which failure or breach was the primary cause of or primarily resulted in the failure of the Closing to occur on or before such date; |
(c) By Seller or Buyer, if any court of competent jurisdiction or other Governmental Authority shall have issued a final and non-appealable order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; and |
(d) By Seller or Buyer, if prior to the Closing Date, the other Party is in default or breach in any material respect of any representation, warranty, covenant, or agreement contained herein which default has prevented the satisfaction of any condition to the obligations of Buyer at the Closing, and such default or breach shall not be cured within ten (10) Business Days after the date notice of such breach is delivered by the Party claiming such default or breach to the Party in default or breach. |
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(a) For purposes of this Article, any inaccuracy in or breach of any representation or warranty shall be determined without regard to any materiality, Material Adverse Effect or other similar qualification contained in or otherwise applicable to such representation or warranty. |
(b) Seller shall not be required to make any indemnification payment or otherwise be liable for any Losses relating or arising from the matters set forth on Schedule 7.10. |
(c) Neither Buyer nor Seller shall be required to make any indemnification payment under this ARTICLE 12 for its respective obligations unless and until the aggregate amount of Losses exceeds two hundred, twenty-five thousand dollars ($225,000) (the “Deductible”), and Buyer or Seller, as the case may be, must only pay the amount by which Losses exceed the Deductible, provided, however, that items listed in Section 12.1(d) and 12.1(g) are not subject to the Deductible and Seller shall pay for such costs from the first dollar of Loss. |
(d) The aggregate liability of each of Buyer and Seller for its respective indemnification payments under this ARTICLE 12 shall not exceed two million, five hundred thousand dollars ($2,500,000). |
(e) Buyer and Seller shall not have any claim for Losses under this Agreement to the extent such claim for Loss was reflected or settled pursuant to Section 3.3. |
(f) The survival provisions of Section 15.17 of this Agreement shall be applicable to this ARTICLE 12. |
(a) Third Party Claims. If any Indemnified Party receives notice of a Third Party Claim against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 calendar days after receipt of such notice of such Third Party Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in the defense of any Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel, and the
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Indemnified Party shall cooperate in good faith in such defense. The Indemnified Party shall have the right to direct the defense against such claim. The fees and disbursements of counsel shall be at the expense of the Indemnifying Party. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available (subject to the provisions of Section 6.4(b)) records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim. |
(b) Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnified Party shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnifying Party, except as provided in this Section. If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnifying Party and provides, in customary form, for the unconditional release of each Indemnified Party from all Liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnified Party shall give written notice to that effect to the Indemnifying Party. If the Indemnifying Party fails to consent to such firm offer within ten days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnifying Party fails to consent to such firm offer and also fails to pay for defense of such Third Party Claim, the Indemnified Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnifying Party has paid for the defense pursuant to Section 12.6(a), the Indemnified Party shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed). |
(c) Direct Claims. Any Action by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a “Direct Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 30 days after the Indemnified Party becomes aware of such Direct Claim. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have 30 days after its receipt of such notice to respond in writing to such Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party’s investigation by giving such information and assistance (including access to the Indemnified Party’s premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such 30 day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies
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as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement. |
(d) To the extent there is any conflict between the provisions of this Section 12.5 and Section 6.7(a), the provisions of Section 6.7(a) shall control. |
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Section 15.2 Amendment. This Agreement may be amended, modified or supplemented only by a writing signed by Buyer and Seller. |
If to Seller, addressed as follows:
James Hebenstreit
4900 Main Street
Kansas City, Missouri 64112
Email: jbhebenstreit2@gmail.com
with copy to:
Winston & Strawn LLP
35 W. Wacker Drive
Chicago, Illinois 60601
Attention: Oscar A. David and Kristin D. Wickler
Facsimile: (312) 558-5700
Email: odavid@winston.com and kwickler@winston.com
If to Buyer, addressed as follows:
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Green Plains Cattle Company LLC
1811 Aksarben Dr.
Omaha, Nebraska 68106
Attn: Chief Legal and Administration Officer
Email: michelle.mapes@gpreinc.com
or to such other individual or address or facsimile number as a party hereto may designate for itself by notice given as herein provided.
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IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Asset Purchase and Sale Agreement as of the date first above written.
SELLER:
Bartlett Cattle Company, L.P.,
a Texas limited partnership
By: Bartlett GP, LLC
Its: General Partner
By: Bartlett and Company, LP
Its: Manager
By: Bartlett International, Inc.
Its: General Partner
By: |
/s/ James B. Hebenstreit |
Name: |
James B. Hebenstreit |
Title: |
Chairman |
BUYER:
GREEN PLAINS CATTLE COMPANY LLC,
a Delaware limited liability company
By: |
/s/ Patrich Simpkins |
Name: |
Patrich Simpkins |
Title: |
Chief Development Officer |
[Signature Page to Asset Purchase Agreement]
Green Plains Acquires Bartlett Cattle Company
OMAHA, Neb., Jul. 31, 2018 (GLOBE NEWSWIRE) Green Plains Inc. (NASDAQ:GPRE) today announced that its subsidiary, Green Plains Cattle Company, has signed a definitive agreement to acquire two cattle-feeding operations from Bartlett Cattle Company LC for approximately $16 million, plus working capital. The transaction includes two feed yard operations located in Sublette, Kansas and Tulia, Texas with combined capacity of approximately 97,000 head, increasing Green Plains Cattle’s feeding operations to 355,000 head of capacity.
“Our success in cattle feeding over the last four years gives us confidence to continue growing in this area and adding the Bartlett cattle-feeding operations fits seamlessly into our protein growth strategy,” commented Todd Becker, president and chief executive officer of Green Plains. “Expanding our feeding operations by 38% strengthens our ability to further supply our internal demand for the distillers grains and corn oil we produce. This acquisition will be immediately accretive to our earnings in the third quarter and enhances our ability to deliver more stable and consistent earnings to our shareholders.”
The acquisition includes the purchase of working capital, comprised of cattle, grain and other inventories totaling approximately $109 million. The two feedlots consist of approximately 2,100 acres of land, grain storage and excellent water sources.
In conjunction with the close of the transaction, the company will be amending the Green Plains Cattle senior secured revolving credit facility, increasing the maximum commitment from $425 million to $500 million to fund the additional working capital requirements related to the Bartlett acquisition. The amended credit facility includes an accordion feature that enables the credit facility to be increased by up to $100 million with agent approval.
The transaction is expected to close Aug. 1, 2018.
About Green Plains Inc.
Green Plains Inc. (NASDAQ:GPRE) is a diversified commodity-processing business with operations related to ethanol production, grain handling and storage, cattle feeding, food ingredients, and commodity marketing and logistics services. The company is one of the leading producers of ethanol in the world and, through its adjacent businesses, is focused on the production of high-protein feed ingredients and export growth opportunities. Green Plains owns a 62.5% limited partner interest and a 2.0% general partner interest in Green Plains Partners. For more information about Green Plains, visit www.gpreinc.com.
Forward-Looking Statements
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect management’s current views, which are subject to risks and uncertainties including, but not limited to, anticipated financial and operating results, plans and objectives that are not historical in nature. These statements may be identified by words such as “believe,” “expect,” “may,” “should,” “will” and similar expressions. Factors that could cause actual results to differ materially from those expressed or implied include risks related to Green Plains’ ability to realize the anticipated benefits of the feedlot acquisition and other risks discussed in Green Plains’ reports filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. Green Plains assumes no obligation to update any such forward-looking statements, except as required by law.
Contact: Jim Stark, Vice President - Investor and Media Relations, Green Plains Inc. (402) 884-8700
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