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Case 12-02872-als11 Doc 363-3 Filed 04/18/13 Entered 04/18/13 15:52:48 Desc

Exhibit B - Amended Auction & Bidding Procedures (redline) Page 1 of 7

AMENDED EXHIBIT B TO MOTION TO SELL

AND

AMENDED EXHIBIT C TO ASSET PURCHASE AGREEMENT

AUCTION AND BIDDING PROCEDURES

On September 11, 2012 (the “Filing Date”), NATURAL PORK PRODUCTION II, LLP
(the “Selling Debtor”), filed its voluntary petition for bankruptcy under Chapter 11 of the United
States Bankruptcy Code. These bidding procedures set forth the process by which the Selling
Debtor is authorized to conduct a sale by auction (the “Auction”) of the Sale Assets (defined
below), including the sales transaction contemplated by the Asset Purchase Agreement dated
March___22, 2013 (the “Stalking Horse APA”) between Selling Debtor and AMVC
CRAWFORDSVILLE, LLC (“Stalking Horse Bidder”).1

Capitalized terms used, but not defined, herein shall have the meanings assigned to them
in the form of asset purchase agreement attached to the Sale Motion of which these Amended
Auction and Bidding Procedures are a part (the “Approved APA”), which agreement is identical
to the Stalking Horse APA (defined herein) in all material respects.

Sale Assets. The “Sale Assets” are the Acquired Assets as defined in the Stalking Horse

1.
APA and Approved APA.

Stalking Horse Auction. The Sale Assets will be marketed and sold utilizing an auction
2.
conducted by Selling Debtor pursuant to Section 363 of the Bankruptcy Code and the Bidding
Procedures Order. Pursuant to the Stalking Horse APA, (i) Debtor has agreed to sell, and
Stalking Horse Bidder has agreed to acquire, the Sale Assets for a purchase price of
$1,700,000.00 (the “Stalking Horse Bid”), subject to the adjustments set forth in the Stalking
Horse APA, the outcome of the Auction and Bankruptcy Court approval and (ii) in the event the
Sale Assets are not sold to the Stalking Horse Bidder, the Selling Debtor has agreed to pay the
Stalking Horse Bidder a Cost and Expense Reimbursement in the fixed amount of $50,000.00.
As required under the Stalking Horse APA, the Stalking Horse Bidder has deposited earnest
monies totaling $50,000.00 with the Escrow Agent First American Title Insurance Company.
The Sale Assets will be marketed and bids will be received (i) in bulk, as a standalone
transaction and (ii) in bulk, as part of a portfolio transaction, involving certain properties and
assets owned by Affiliates of Selling Debtor each as debtor and Debtor-in-possession in
separately administered Chapter 11 Cases, including (A) the property and assets of
Crawfordsville, LLC), located at and used in connection with its swine production facility and
other locations in Montgomery County, Indiana (the “Crawfordsville Assets”) and (B) the
property and assets of South Harlan, LLC (“South Harlan”) located at and used in connection

1 On _______________, 2013 (Docket Item _____), the United States Bankruptcy Court for the Southern District of
Iowa (the “Bankruptcy Court”) (in which the Chapter 11 Case, administered under Case No. 12-02872-11, of the
Selling Debtor is pending) entered the “Bidding Procedures Order” approving these Amended Auction and Bbidding
procedures.


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Exhibit B - Amended Auction & Bidding Procedures (redline) Page 2 of 7

with South Harlan’s swine production operations in Shelby County, Iowa (the “South Harlan
Assets”) (For purposes of these Amended Auction and Bidding Pprocedures, Selling Debtor,
NPPII, and South Harlan may be referred to collectively as the “NPPII Affiliates”) (For purposes
of these Amended Auction and Bidding Procedures the Sale Assets, Crawfordsville Assets and
South Harlan Assets maybe referred to, collectively, as the “NPPII Portfolio Assets”).

Due Diligence.

Immediately after the Filing Date and upon execution of a
3.
Confidentiality Agreement (as defined below), any party with the intent to timely consummate a
standalone or portfolio transaction in terms of scope and value that is of interest to the Selling
Debtor and that wishes to conduct reasonable due diligence on the Sale Assets may be granted
access to relevant business and financial information that will enable such party to evaluate the
Sale Assets for the purpose of submitting a competing offer for the Sale Assets and/or NPPII
Portfolio Assets; provided, however, that the Selling Debtor has no obligation to provide
information after the Bid Deadline (defined below); and provided, further, that the Selling
Debtor may decline to provide information to parties that, in its sole and absolute discretion,
have not established that they intend in good faith to and/or have the ability to consummate a
purchase of the Sale Assets or NPPII Portfolio Assets, as applicable. Whenever reference herein
is made to the Selling Debtor’s sole and absolute discretion or sole satisfaction, it shall mean in
consultation with the Official Committee of Unsecured Creditors (the “Official Committee”),
First National Bank of Omaha (“FNBO”), by its counsel, and the Inter-Creditor Committee
(“ICC”), represented by Michael P. Mallaney, Esq.

Auction Participation. Only the Stalking Horse Bidder and Qualifying Bidders may
4.
participate in the Auction for the Sale Assets, provided Selling Debtor may, at the close of the
Auction, elect to conduct a Portfolio Auction (as defined herein) for the NPPII Portfolio Assets
(including the Sale Assets) as provided in Section 9 of these Auction and Bidding and Auction
Procedures. A “Qualifying Bidder” is a party that has: (i) submitted a Qualifying Bid (defined
below) to the Selling Debtor; and (ii) executed a confidentiality agreement in form and substance
satisfactory to the Selling Debtor (a “Confidentiality Agreement”).

5.

Qualifying Bids. A “Qualifying Bid” is a written offer that:

a.


states that the bidder offers to purchase all of the Sale Assets upon terms and
conditions substantially as set forth in the Approved APA (an “Unmodified APA”) or such
alternate purchase and sale agreement that the Selling Debtor determines, in its sole and absolute
discretion, is no less favorable than the terms and conditions of the Approved APA (a “Modified
APA”);

b.


results in a value to the Selling Debtor, in its sole and absolute discretion that is
more than the “Minimum Bid,” which is the sum of the Stalking Horse Bid, Cost and Expense
Reimbursement and $50,000.00 (the Cost and Expense Reimbursement andplus the $50,000.00
shall be deemed the “Initial Minimum Overbid”);

c.


reimbursement, termination, or similar type of fee or payment;

does not request or entitle the bidder to any transaction or break up fee, expense

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Exhibit B - Amended Auction & Bidding Procedures (redline) Page 3 of 7

d.


minimum bid amount, which amount (a “Deposit”) shall be deposited with the Escrow Agent;

is accompanied by a cash deposit in the amount of ten percent (10%) of the



e.

is accompanied by a clean and duly executed Unmodified APA or Modified APA;

f.


variations from the Approved APA;

is accompanied by a marked Modified APA, if applicable, reflecting the

g.


assumption and assignment of which is a condition to closing;

identifies with particularity each and every Contract and unexpired lease, the

h.


the transactions contemplated by the Unmodified APA or Modified APA;

contains a representation that the bidder is financially capable of consummating

i.


contains financial and other information that the Selling Debtor determines in its
sole discretion is sufficient to allow it to evaluate and confirm the bidder’s financial and other
capabilities to consummate the transactions contemplated by the Unmodified APA or Modified
APA, including evidence reasonably satisfactory to the Selling Debtor that such bidder has
received, in writing, debt and/or equity funding commitments (without contingencies) or has
financial resources readily available and sufficient in the aggregate to finance the purchase of the
Sale Assets, and financial and other information establishing adequate assurance of future
performance under Section 365 of the Bankruptcy Code (which information may be served by
the Selling Debtor on contract or lease counterparties);



j.

does not contain any due diligence or financing contingencies of any kind;

k.

fully discloses the identity of each entity that will be bidding for the Sale Assets

or otherwise participating in connection with such bid, and the complete terms of any such
participation;

l.


Court;

states that the offering party consents to the core jurisdiction of the Bankruptcy

m.


includes evidence of authorization and approval from the bidder’s board of
directors (or comparable governing body) with respect to the submission, execution, delivery and
closing of the Unmodified APA or Modified APA; and

n.


Modified APA.

otherwise complies in all respects with the terms of the Unmodified APA or

Each Qualifying Bid shall remain open and irrevocable until the later of the fourteenth (14th) day
following the date of entry of the Sale Order approving the sale of the Acquired Assets by the
Bankruptcy Court or the twenty first (21st) day following the date of the Auction (as defined
below) (the “Offer Expiration Date”) or such earlier date as may be determined by the Selling
Debtor in its sole and absolute discretion.

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Exhibit B - Amended Auction & Bidding Procedures (redline) Page 4 of 7

6.
Bid Deadline. Each party other than the Stalking Horse Bidder wishing to participate in
the Auction must submit a written offer (via email, fax or other means) so as to be received prior
to 5:00 p.m. (prevailing Central time), _________April 24, 2013 (the “Bid Deadline”), by:

Michael A. Fixler
Managing Director
Variant Capital Advisors, LLC
77 West Wacker Drive, Suite 4000
Chicago, Illinois 60601
Fax: (312) 251-1952
Email: [email protected]









Potential bidders may obtain copies of the Approved APA from Michael Fixler at the address
above. Copies of bids received by Mr. Fixler shall be disseminated to the Selling Debtor, FNBO,
IPC, the ICC and the Official Committee upon receipt.

7.
Determination of Qualifying Bids. The Selling Debtor shall, by no later than two (2)
business days after the Bid Deadline at 5:00 p.m. (prevailing Central time), or as soon as
reasonably practicable (the “Bid Determination Deadline”):

a.


Qualifying Bid; and

determine in its sole and absolute discretion whether a written offer is a

b.


Qualifying Bid.; and

notify each party submitting a written offer whether that written offer is a

c.


other Qualifying Bidders and the Official Committee, FNBO and the ICC.

provide copies of each Qualifying Bidder’s APA to the Stalking Horse Bidder, all

8.
Auction Procedures. In the event that the Selling Debtor receives one or more Qualifying
Bids, the Auction shall take place beginning at 10:00 a.m. _____________April 30, 2013. The
Auction shall be organized and conducted by the Selling Debtor at the offices of Bradshaw,
Fowler, Proctor & Fairgrave, P.C., 801 Grand Avenue, Suite 3700, Des Moines, Iowa.

The Auction shall be governed by the following procedures:

a.

The Stalking Horse Bidder and each Qualifying Bidder shall appear in person or

through a duly authorized representative;

b.


confirm that it has not engaged in any collusion with respect to the bidding or the sale;

The Stalking Horse Bidder and each Qualifying Bidder shall be required to

c.

Only the Stalking Horse Bidder and Qualifying Bidders shall be entitled to submit


bids;

d.


prior to the Auction;

Bidding shall commence at the amount of the highest Qualifying Bid submitted

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Exhibit B - Amended Auction & Bidding Procedures (redline) Page 5 of 7

e.

The Selling Debtor reserves the right to determine, in its sole and absolute
discretion, whether a bid constitutes a higher and better offer than previous bids, based upon
factors including, but not limited to, the amount of the purchase price, the form of consideration
being offered, the likelihood of the bidder’s ability to close a transaction and the timing thereof,
the number, type and nature of any requested changes to the APA, the scope and nature of any
obligations or liabilities of Selling Debtor to be assumed by the bidder, the impact of any
rejection damages in the event that the bidder elects not to assume the Debtor’s Weaned Pig
Purchase Agreement with Indiana Packers Corporation (“IPC”), and the net benefit to the Selling
Debtor’s estate;

f.


Bids must be at least $50,000.00 (the “Auction Bid Increment”) higher than the
outstanding highest bid; provided, however, that any further bid made by the Stalking Horse
Bidder shall include a credit against the Purchase Price equal to the Cost and Expense
Reimbursement; and provided, further, that nothing in the foregoing clause shall be deemed to
release Selling Debtor from any liability to the Stalking Horse Bidder for the Cost and Expense
Reimbursement in the event the Stalking Horse Bidder is not the successful bidder;

g.

The Stalking Horse Bidder and Qualifying Bidders may make additional
modifications to the Stalking Horse APA, Unmodified APA or Modified APA, as applicable,
during the Auction, provided, however, that any such modifications, on an aggregate basis, shall
not be less favorable to the Selling Debtor as determined by the Selling Debtor in its sole and
absolute discretion, taking into consideration the factors set forth in paragraph 8 e above;

h.

The Selling Debtor intends to continue the Auction until the Selling Debtor
determines, in its sole and absolute discretion, taking into consideration the factors set forth in
paragraph 8e above, that it has received the highest and/or best offer (such offer, the “Prevailing
Bid,” and the bidder submitting such offer, the “Prevailing Bidder”).

i.

Upon consultation with the Official Committee, tThe Selling Debtor may, at any
time prior to the commencement of the Sale Hearing (defined below), continue the Auction from
time to time, adjourn the Auction, and reopen the Auction; and

j.

The auction and bidding procedures outlined herein may not be modified, except
upon order of the Bankruptcy Court, or upon the consensual discretion of the Selling Debtor and
the Official Committee in their reasonable business judgment after consultation with their
respective counsel and sales professionals;

Portfolio Auction. In the event one or more Persons submits prior to the Bid Deadline an
9.
offer to purchase two (2) or all of the NPPII Portfolio Assets as part of a portfolio transaction
which is of interest to Selling Debtor in terms of scope and value, Selling Debtor shall evaluate
such offer(s) to determine in its sole and absolute discretion, taking into consideration the factors
set forth in paragraph 8e above, whether any such offer (a) provides for the purchase two (2) or
all of the NPPII Portfolio Assets on terms and conditions in the aggregate no less favorable than
the terms and conditions of the approved asset purchase agreements for each of the standalone
transactions, (b) results in a value to the Selling Debtor that is at least equal to the aggregate
value of the required minimum bids for each of the standalone transactions and (c) otherwise
complies, in the aggregate, with all applicable, material requirements for qualifying bids for the

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Exhibit B - Amended Auction & Bidding Procedures (redline) Page 6 of 7

standalone transactions (any such offer, a “Qualifying Portfolio Bid” and any such offeror a
“Qualifying Portfolio Bidder”). If Selling Debtor receives more than one Qualifying Portfolio
Bid, then Selling Debtor shall proceed to auction two (2) or all of the NPPII Portfolio Assets as a
portfolio transaction (a “Portfolio Auction”). The Stalking Horse Bidder shall be deemed to be a
Qualifying Portfolio Bidder with respect to the Sale Assets and the Crawfordsville Assets and
shall be entitled to participate in any Portfolio Auction with an initial Portfolio Bid of
$12,200,000.00. Any auction between Qualifying Portfolio Bidders (the “Portfolio Auction”)
shall be conducted immediately following the close of the Auction for standalone transactions,
using auction procedures substantially identical to those used for the standalone Auction. Upon
completion of the Portfolio Auction, Selling Debtor shall compare the prevailing portfolio bid to
the aggregate of the prevailing standalone bids and shall determine, in its sole and absolute
discretion, taking into consideration the factors set forth in paragraph 8e above, whether the
prevailing portfolio bid is the highest and/or best bid. The Selling Debtor reserves the right to
return or reopen the auctions for the Sale Assets individually after the Portfolio Auction has
concluded, subject to the provisions of paragraph 8e above. If Selling Debtor determines that the
prevailing portfolio bid is the highest and/or best bid, then such bid shall be deemed the
“Prevailing Bid” and the bidder making such bid shall be deemed the “Prevailing Bidder” as to
the Sale Assets , or two or all of the other NPPII Portfolio Assets.

10.
No Qualifying Bids. If no Qualifying Bid and no Qualifying Portfolio Bid (other than the
Stalking Horse Portfolio Bid) is submitted by the Bid Deadline, the Selling Debtor shall cancel
the Auction and accept the Stalking Horse Bid, in which case, the Prevailing Bid shall be the
Stalking Horse Bid, and the Prevailing Bidder shall be the Stalking Horse Bidder.

Announcement of Prevailing Bidder and Execution of APA. Within one (1) business day
11.
after the conclusion of the Auction or cancellation thereof, the Selling Debtor shall announce the
identity of the Prevailing Bidder, and the Selling Debtor and Prevailing Bidder shall complete
and execute all necessary agreements, contracts, instruments and other documents to
memorialize the Prevailing Bid and thereafter proceed toward Closing pursuant to terms and
conditions of the Prevailing Bid and the terms of the Stalking Horse APA, Unmodified APA or
Modified APA, as applicable.

12.
Selling Debtor’s Acceptance of Prevailing Bid Subject to Bankruptcy Court Approval.
The Prevailing Bid will be subject to approval by the Bankruptcy Court at the Sale Hearing. The
Selling Debtor shall be deemed to have accepted the Prevailing Bid only when the Prevailing Bid
has been approved by the Bankruptcy Court. has approved such Prevailing Bid as highest and
best pursuant to section 363 of the Bankruptcy Code.

13.
Sale Hearing. A hearing (the “Sale Hearing”) will be held to approve the sale of the Sale
Assets to the Prevailing Bidder before the Honorable Anita L. Shodeen in the United States
Bankruptcy Court for the Southern District of Iowa, 110 East Court Avenue, Des Moines, Iowa,
Courtroom 1, at __1:__00 p.m. (prevailing Central time), _______May 1, 2013, or at such time
thereafter as counsel may be heard, or at such other time as the Bankruptcy Court may
determine. The Sale Hearing may be adjourned by the Bankruptcy Court from time to time
without further notice to creditors or parties in interest other than by announcement of the
adjournment in open court on the date scheduled for the Sale Hearing.

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Exhibit B - Amended Auction & Bidding Procedures (redline) Page 7 of 7

14.
Failure to Consummate. If for any reason a Person submitting a Prevailing Bid fails to
consummate the acquisition of the Sale Assets or NPPII Portfolio Assets, as applicable, the
bidder offering the next highest or best bid, whether for the Sale Assets in a standalone
transaction or the NPPII Portfolio Assets as a portfolio transaction (as determined by the Selling
Debtor, after consultation with the Committee) will automatically be determined to have
submitted the Prevailing Bid, and the Selling Debtor is authorized to effect the sale of the Sale
Assets to such offeror (the “Alternate Bidder”) as soon as is commercially reasonable without
further Order of the Bankruptcy Court. If such failure to consummate the purchase is the result
of a breach by a Person submitting a Prevailing Bid, any Deposit deposited by such Person with
the Selling Debtor shall be forfeited to the Selling Debtor, except as otherwise set forth in the
respective purchase agreement as approved by the Bankruptcy Court.

15.
Return of Deposits. Except as otherwise provided in the Stalking Horse APA, the
Deposits (including interest or investment income accrued thereon, if any) shall be returned to
any bidder who is not the Prevailing Bidder no later than five (5) business days following
conclusion of the Auction; provided, however, that, if there is no Auction, all Deposits will be
returned no later than five (5) business days following the announcement of the Prevailing
Bidder.

16. Miscellaneous. The Auction and Bidding Procedures are solely for the benefit of the
Selling Debtor, and nothing contained in the Bidding Procedures Order shall create any rights in
any other Person, including any bidder, other than the rights expressly granted to a Successful
Bidder under the Bidding Procedures Order. Except as provided in the Bidding Procedures
Order, the Bankruptcy Court shall retain jurisdiction to hear and determine all matters arising
from or relating to the implementation of the Bidding Procedures Order.

17. Cure Notice. No later than twelve (12) days prior to the Sale Hearing, the Debtor shall
cause notice to be provided to all counterparties to unexpired leases that may be Assumed and
Assigned Contracts (the “Cure Notice”). The Cure Notice shall provide the counterparties to the
possible Assumed and Assigned Contracts notice of the amount that the Debtor believes must be
cured upon the assumption and assignment as required under Section 365 of the Bankruptcy
Code (the “Cure Amount”). Except for Indiana Packers Corporation and Choice Connection,
tThe Ddeadline for Objections, if any, to the proposed assumption and assignment of the
Assumed and Assigned Contracts, including, but not limited to, objections relating to the Cure
Amount and/or adequate assurances of future performance, must be filed on or before 5:00 p.m.
(prevailing Central Time) on Monday April 29, 2013 (the “Regular Objection Deadline”). In the
case of Indiana Packers Corporation and Choice Connection, their deadline for objections, if any,
shall be at the Sale Hearing.

Rights of AgStar and First Farmers Bank and Trust. The rights of AgStar and First
18.
Farmers Bank and Trust, as holders of fully secured claims, to credit bid, pursuant to
Bankruptcy Code Section 363(k), for post-petition interest and attorney fees and costs, pursuant
to Bankruptcy Code Section 506(b), and for payment in full of their respective claims at closing
of the sale transaction, are specifically reserved.



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