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The Disclosure Schedule further stated:“Items disclosed for any one section of this Disclosure Schedule aredeemed to be disclosed for all other sections of this Disclosure Schedule tothe extent that it is reasonably apparent that such disclosure is applicableto other such section(s).”Tyson contended that the foregoing Disclosure Schedule wording was insufficientto make Schedule 5.11 applicable to representations that the Merger Agreement did notexpressly qualify thereby. The Court found that the Merger Agreement was ambiguouson this point, which made the consideration of parole evidence appropriate, andsuggested that the “sort of hair splitting [advocated by Tyson] has no rational commercialpurpose” and would be “unreal to men of business and practical affairs.” The Courtwrote that “New York law disfavors a reading of a contract that produces capricious andabsurd results, in favor of a reading that is reasonable in the commercial context in whichthe parties were contracting.” The Court referenced a Comment to Section 7.1 of theABA Model Stock Purchase Agreement (1995), from which Section 7.1 of the ModelAsset Purchase Agreement was derived, as follows:According to IBP, Schedule 5.11 specifically permits IBP torecognize further liabilities on account of the accounting improprieties atDFG. Thus, according to IBP, the Annexes protect IBP by ensuring thatits specific contractual right to do so does not result in a technical breachof a more general representation and warranty that permits Tyson to walk.IBP supports this contention by pointing to the Model Stock PurchaseAgreement produced by the American Bar Association’s Committee onNegotiated Acquisitions. The Committee Commentary states:The Sellers may also request that the ‘bring down’ clause[i.e., the Annexes] be modified to clarify that the Buyerwill not have a ‘walk right’ if any of the Sellers’representations is rendered inaccurate as a result of anoccurrence specifically contemplated by the acquisitionagreement. The requested modification entails inserting thewords ‘except as contemplated or permitted by thisAgreement’ (or some similar qualification).The Court concluded that IBP’s position was the more commercially reasonableone, that Tyson’s negotiators knew that IBP believed Schedule 5.11 covered the DFGliabilities and a resulting restatement of IBP’s financial statements and that, if Tyson’snegotiators disagreed, they should have spoken up. The Court was influenced by the factthat Schedule 5.11 was not brought to the attention of the Chairman or the President ofTyson until the litigation commenced, nor disclosed in the proxy materials in connectionwith Tyson’s shareholder approval of the deal, and drew therefrom the inference that theDFG situation did not influence Tyson’s decision to terminate the Merger Agreement.3068470v1Appendix H – Page 10