Deal Summary | Cooperation | Conditions Precedent |Defense Strategy | Litigation Commitments | Remedy Commitments | Reverse Break Fees | Termination Provisions
(a) Deal Summary. On March 4, 2013, ConAgra Foods, Cargill and CHS Inc. entered into an agreement to form a joint venture, Ardent Mills, to combine the North American flour milliing operations of the four parties. ConAgra and Foods and Cargill would each hold 44% of the total share capital of Ardent Mills and CHS would hold 12% of the total issued shared capital. The parties agreed that parties could initially terminate the transaction twelve months after signing (March 31, 2014), though the agreement permitted extensions under certain conditions with a maximum of 15 months (June 30, 2014). The DOJ required the parties to divest four competitively significant flour mills in order to proceed with the formation of Ardent Mills, a flour milling joint venture. The parties amended the agreement on May 25, 2014 and completed the transaction on May 29, 2014.
(b) Cooperation. §5.03(g)(xxi), (xxiv), §7.05(h): (xxiv) The Parents will, to the greatest extent reasonably practicable and permitted by applicable Law, prior to engaging in any substantive discussions with any representatives of a Governmental Entity concerning the Contemplated Transactions, agree upon the anticipated substance of the discussions and the content of any written materials they intend to provide to or review with such representatives, and will jointly participate in such discussions. In the event it is impracticable for a Parent to comply with its obligations in the preceding sentence, as soon as practicable following any such discussions the Parent will advise the other Parents of the discussions, the identity of the parties participating in the discussions and the substance of the discussions, and will provide the other Parents with copies of any written materials provided to, reviewed with or received from representatives of the Governmental Entity.
§7.05 (h) Cooperation in Defense and Settlement. With respect to any Third-Party Claim for which a Party may have Liability under this Agreement or any of the Transaction Documents, the Parties agree to cooperate fully and maintain a joint defense (in a manner that will preserve the attorney-client privilege, joint defense or other privilege with respect thereto) so as to minimize such Liabilities and defense costs associated therewith. In connection therewith, the Parties agree to make available to the Party defending such Third-Party Claim their respective officers, employees and representatives with knowledge of such matter and any records or information that pertains to such claim. Any Party that is not responsible for managing the defense of such Third-Party Claims will, upon reasonable request, be consulted with respect to significant matters relating thereto and may retain counsel to monitor or assist in the defense of such claims at its own cost.
(c) Conditions Precedent. §6.01: Conditions to Obligations of Each Parent’s Group. The obligations of each Parent’s Group to commence the Closing as contemplated by Section 2.01 are subject to the satisfaction (or waiver by each Parent) at or prior to the Closing of the following conditions:
(a) any Consents under the Antitrust Laws in each of the jurisdictions set forth on Schedule 6.01(a) shall have been obtained;
(b) no Governmental Entity of competent jurisdiction shall have enacted, issued, promulgated or enforced, and there shall be no Law or final, permanent, nonappealable injunction or Order which is in effect and which would reasonably be expected to prohibit the Closing or have, individually or in the aggregate, a Material Adverse Effect;
(c) there shall be no then-pending lawsuit or administrative action initiated by any Governmental Entity asserting that the Contemplated Transactions violate Antitrust Laws and seeking to enjoin the Closing;
(d) no Governmental Entity shall have threatened in a letter to the Parties to commence a lawsuit or administrative action that asserts that the Contemplated Transactions violate Antitrust Laws and seeking to enjoin the Closing (or unwind any material portion of the Contemplated Transactions should the Closing occur), or, if such threat was made, it shall have been retracted; and
(e) the Contributed Subsidiaries shall have received as of the Closing proceeds from the Financing in an amount no less than $600 million from third-party lenders that are unaffiliated with any of the Parties, on terms that are commercially reasonable and that do not alter any of the terms of the Contemplated Transactions or require any credit support to be provided by the Parent or any of their Affiliates.
(d) Defense Strategy. None identified other than what is included in (e) Litigation Commitments below.
(e) Litigation Commitments. § 5.03(g)(xxi): (xxi) Each of the Parents will use its reasonable best efforts to resolve objections, if any, that may be asserted by any Governmental Entity with respect to the Contemplated Transactions under any Antitrust Laws. If any Proceeding is initiated (or threatened to be initiated) by a Governmental Entity challenging the Contemplated Transactions as violative of any Antitrust Law or any other applicable Law, the Parties will each cooperate to contest and resist any such Proceeding, and to have vacated, lifted, reversed or overturned any decree, judgment, injunction, ruling, decision, finding or other Order (whether temporary, preliminary, or permanent) until such time as a final, non-appealable Order has been entered. In furtherance and not limitation of the preceding two sentences, but subject to Section 5.03(b)(iv) below, each Parent will offer to take (and if such offer is accepted, commit to take) all necessary steps to avoid or eliminate impediments under any antitrust Law that may be asserted by any Governmental Entity with respect to the Contemplated Transactions that would result in the failure of the condition set forth in Section 6.01(a) or Section 6.01(b) to be satisfied, in each case to enable the Closing to occur by November 29, 2013 or as expeditiously thereafter as possible, including the sale, divestiture or disposition of Assets of its Business (or otherwise take any action that limits the freedom of action with respect to, or its ability to retain, any of its businesses, product lines, or assets or those of Newco or the Contributed Subsidiaries).
(f) Remedy Commitments. § 5.03(g)(xxii)-(xxiii): (xxii) If, in order to obtain an Governmental Approval needed pursuant to any applicable Antitrust Laws to consummate the Contemplated Transactions or to avoid or eliminate impediments under any antitrust Law that may be asserted by any Governmental Entity with respect to the Contemplated Transactions, a Parent is required to divest or hold separate one of its businesses or certain of its Assets that will be Conveyed to the Contributed Subsidiaries pursuant to the Contemplated Transactions (a “Disposition Order,” and the Assets to be divested or held separate, the “Divesting Assets”): (A) The Parents will cooperate in good faith to prepare for sale and sell the Divesting Assets, either in a single transaction to one buyer or in multiple transactions to multiple buyers. Although the Parents will be permitted to enter into a divestiture agreement prior to the Closing, any sale of Divesting Assets will take place only after the Closing (in other words, the Divesting Assets will be Conveyed to the Contributed Subsidiaries pursuant to the Contemplated Transactions at the Closing and then will be subsequently sold by the relevant Contributed Subsidiary, not by the Parents). The relevant Contributed Subsidiary will be entitled to all of the proceeds of the sale. Until the sale is effected, the Contributed Subsidiary will hold the relevant Divesting Assets separate from its other businesses to the extent that doing so is necessary or desirable to obtain any Governmental Approval needed pursuant to any applicable Antitrust Laws to consummate the Contemplated Transactions or to avoid or eliminate impediments under any antitrust Law that may be asserted by any Governmental Entity with respect to the Contemplated Transactions. (B) The Parents will negotiate in good faith to seek to maximize the sale price of the Divesting Assets, including with respect to the sale terms to be offered to prospective buyers of the Divesting Assets, such as representations, warranties and indemnity terms (which terms may be different than the corresponding terms contained in this Agreement). The terms of these divestiture agreements may include an assignment of Newco’s rights hereunder to indemnification in respect of the Divesting Assets to the buyer of the Divesting Assets. The Parent contributing the relevant Divesting Asset will not be required to assume liability or indemnification exposure that is greater in any material respect than the liability or indemnification exposure that the Parent would have if Newco had retained the Divesting Asset permanently.
(xxiii) Notwithstanding anything in this Section 5.03(b) to the contrary, no Parent will be required, in order to obtain any approvals under Antitrust Laws or to avoid or eliminate impediments under any antitrust Law that may be asserted by any Governmental Entity with respect to the Contemplated Transactions, (A) to divest any material Assets that are not related to its Group’s Business or effect other material structural or behavioral changes that relate to businesses other than the Group’s Business, or (B) to divest any Assets if the aggregate divestures to collectively be made by the Parents pursuant to Section 5.03(b)(iii), taken all together, would result in the disposition of assets that would reasonably be expected to generate, in the aggregate, annual EBITDA (calculated taking into account the synergies that the Parties anticipate) expected in year three following the Closing in excess of 10% of the Go-Forward EBITDA Amount.
(g) Reverse Break Fees. N/A.
(h) Time Period and Other Conditions Under Which the Parties May Walk Away from the Agreement. §8.01: Termination. This Agreement may be terminated at any time prior to the Closing:
(d) by any Parent if the Closing will not have been consummated by March 31, 2014 (the “Outside Date”); provided, however, that if the only reason that such Closing has not taken place by such date is a failure of the condition set forth in Section 6.01(e) to be satisfied or waived, then Oracle or Watson shall have the right by providing written notice to the other Parties on or before March 31, 2014 to extend the Outside Date to June 30, 2014;provided, further, that a Parent may not terminate this Agreement pursuant to this Section 8.01(b) if the Closing will not have been consummated by such date by reason of the failure of such Parent to perform, or to cause its Affiliates to perform, in all material respects any of its or their respective covenants or agreements contained in this Agreement;