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
Date of Report September 27, 1994
(Date of earliest event reported)
CURTICE-BURNS FOODS, INC.
(Exact name of registrant as specified in its charter)
New York 1-7605 16-0845824
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
90 Linden Place, P.O. Box 681
Rochester, NY 14603
(Address of principal executive offices)
(716) 383-1850
(Registrant's telephone number, including area code)
<PAGE>2
Item 5. Other Events.
As previously announced, the Company had been
pursuing an acquisition proposal submitted by Dean Foods
Company ("Dean Foods") to acquire all of the outstanding
shares of the Company's Class A and Class B Common Stock,
each of par value $0.99 per share (together, the "Shares"),
at a maximum cash price of $20 per Share, subject to a
number of contingencies, including resolution of a dispute
between the Company and Pro-Fac Cooperative, Inc.
("Pro-Fac").
As previously announced, on August 5, 1994, the
Company received a letter from Pro-Fac setting forth a
revised proposal by Pro-Fac to acquire all the outstanding
Shares for $19 per Share in cash and, on August 8, 1994, the
Board of Directors of the Company elected not to take any
definitive action with respect to this revised proposal
until a number of contingencies involving that proposal had
been clarified or resolved.
After further consideration, the Board of
Directors of the Company, at a meeting held on September 27,
1994, approved and adopted an Agreement and Plan of Merger
among Pro-Fac, PF Acquisition Corp., a wholly-owned
subsidiary of Pro-Fac (the "Purchaser") and the Company (the
"Merger Agreement"), approved the Offer (as defined below),
the Merger (as defined below), the Agreement among Agway
Holdings, Inc. ("Agway"), Pro-Fac and the Purchaser (the
"Stockholder Agreement") and the transactions contemplated
by the Merger Agreement and the Stockholder Agreement and
determined that the terms of the Offer and the Merger were
fair to and in the best interests of the shareholders of the
Company and recommended that the shareholders of the Company
accept the Offer and tender their Shares to the Purchaser
pursuant to the Offer. The Merger Agreement and the
Stockholder Agreement were executed on the evening of
September 27, 1994, and the transaction was publicly
announced on September 28, 1994. A copy of the press
release, dated September 28, 1994, relating to the Offer and
the execution of the Merger Agreement and the Stockholder
Agreement is attached hereto as Exhibit 99.
Pursuant to the Merger Agreement, the Purchaser
will make a cash tender offer for all the outstanding Shares
at a price of $19 per Share (the "Offer") and then,
following the successful completion of the Offer, the
Company will be merged with the Purchaser (the "Merger").
<PAGE>3
Subject to the terms and conditions of the Offer and the
Merger Agreement, the Purchaser shall, and Pro-Fac shall
cause the Purchaser to, pay for all Shares validly tendered
and not withdrawn that the Purchaser becomes obligated to
purchase as soon as practicable after the expiration of the
Offer. The obligation of the Purchaser to purchase Shares
in the Offer is conditioned upon, among other things, at
least 90% of the Shares of each class of common stock being
tendered in the Offer and receipt by the Purchaser of
financing.
The Company has terminated all its discussions
with Dean Foods relating to its acquisition proposal.
Pursuant to the Stockholder Agreement, Agway has
agreed to tender all of its Shares pursuant to the Offer
within five business days after the commencement of the
Offer. However, Agway may decline to tender or may, upon
one business day's notice, withdraw the tender of any and
all Shares if (i) the amount or form of consideration is
less than cash in the amount of $19 per Share net to Agway,
or (ii) the Merger Agreement is terminated.
The foregoing summary is qualified in its entirety
by reference to the Merger Agreement, a copy of which has
been filed as Exhibit 2 hereto, and to the Schedule 14D-9
filed by the Company on September 28, 1994.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 2. Agreement and Plan of Merger dated
as of September 27, 1994, among
Pro-Fac Cooperative, Inc., PF
Acquisition Corp. and Curtice-Burns
Foods, Inc.
Exhibit 99. Press Release
<PAGE>4
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.
CURTICE-BURNS FOODS,
INC.
Date: October 7, 1994 By: /s/ William Petty
J. William Petty
President and Chief
Executive Officer
<PAGE>5
EXHIBIT INDEX
Agreement and Plan of Merger dated as of
September 27, 1994, among Pro-Fac
Cooperative, Inc., PF Acquisition Corp. and
Curtice-Burns Foods, Inc. . . . . . . . . . . . . . 2
Press Release . . . . . . . . . . . . . . . . . . . 99
EXHIBIT 2
============================================================
AGREEMENT AND PLAN OF MERGER
Among
PRO-FAC COOPERATIVE, INC.,
PF ACQUISITION CORP.
and
CURTICE-BURNS FOODS, INC.
Dated as of September 27, 1994
============================================================
<PAGE>2
TABLE OF CONTENTS
Page
ARTICLE I
The Offer
SECTION 1.01 The Offer . . . . . . . . . . . . . . . . 2
SECTION 1.02 Company Actions . . . . . . . . . . . . . 4
ARTICLE II
The Merger
SECTION 2.01. The Merger . . . . . . . . . . . . . . . 6
SECTION 2.02. Closing . . . . . . . . . . . . . . . . . 6
SECTION 2.03. Effective Time . . . . . . . . . . . . . 6
SECTION 2.04. Effects of the Merger . . . . . . . . . . 7
SECTION 2.05. Certificate of Incorporation and
By-laws . . . . . . . . . . . . . . . . 7
SECTION 2.06. Directors . . . . . . . . . . . . . . . . 7
SECTION 2.07. Officers . . . . . . . . . . . . . . . . 7
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock . . . . . . . . . 8
SECTION 3.02. Exchange of Certificates . . . . . . . . 9
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the
Company . . . . . . . . . . . . . . . . 11
SECTION 4.02. Representations and Warranties of
Parent and Sub . . . . . . . . . . . . 28
<PAGE>3
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business . . . . . . . . . . . 35
ARTICLE VI
Additional Agreements
SECTION 6.01. Shareholder Approval; Preparation of
Proxy Statement . . . . . . . . . . . . 39
SECTION 6.02. Access to Information; Confidentiality . 40
SECTION 6.03. Reasonable Efforts; Notification . . . . 40
SECTION 6.04. Stock Options . . . . . . . . . . . . . . 42
SECTION 6.05. Benefit Plans . . . . . . . . . . . . . . 43
SECTION 6.06. Indemnification . . . . . . . . . . . . . 44
SECTION 6.07. Fees and Expenses . . . . . . . . . . . . 45
SECTION 6.08. Public Announcements . . . . . . . . . . 46
SECTION 6.09. Real Estate Taxes . . . . . . . . . . . . 47
SECTION 6.10. Appraisals . . . . . . . . . . . . . . . 47
SECTION 6.11. Integrated Agreement . . . . . . . . . . 47
SECTION 6.12. Other Offers . . . . . . . . . . . . . . 47
SECTION 6.13. No Waiver . . . . . . . . . . . . . . . . 48
SECTION 6.14. Release . . . . . . . . . . . . . . . . . 48
SECTION 6.15. Directors . . . . . . . . . . . . . . . . 49
SECTION 6.16. Exchange of Class B Common Stock for
Class A Common Stock . . . . . . . . . 50
SECTION 6.17. Stockholder Agreement . . . . . . . . . . 50
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation To
Effect the Merger . . . . . . . . . . . 51
SECTION 7.02. Conditions to Obligations of Parent
and Sub . . . . . . . . . . . . . . . . 52
SECTION 7.03. Conditions to Obligation of the Company . 53
<PAGE>3
ARTICLE VIII
Board Actions
SECTION 8.01. Board Actions . . . . . . . . . . . . . . 54
ARTICLE IX
Termination, Amendment and Waiver
SECTION 9.01. Termination . . . . . . . . . . . . . . . 55
SECTION 9.02. Effect of Termination . . . . . . . . . . 58
SECTION 9.03. Amendment . . . . . . . . . . . . . . . . 58
SECTION 9.04. Extension; Waiver . . . . . . . . . . . . 58
SECTION 9.05. Procedure for Termination, Amendment,
Extension or Waiver . . . . . . . . . . 59
ARTICLE X
General Provisions
SECTION 10.01. Nonsurvival of Representations and
Warranties . . . . . . . . . . . . . . 59
SECTION 10.02. Notices . . . . . . . . . . . . . . . . 59
SECTION 10.03. Definitions . . . . . . . . . . . . . . 61
SECTION 10.04. Interpretation . . . . . . . . . . . . . 62
SECTION 10.05. Counterparts . . . . . . . . . . . . . . 62
SECTION 10.06. Entire Agreement; No Third-Party
Beneficiaries; Effect on
Arbitration Agreement . . . . . . . . 62
SECTION 10.07. Governing Law . . . . . . . . . . . . . 63
SECTION 10.08. Assignment . . . . . . . . . . . . . . . 63
SECTION 10.09. Enforcement . . . . . . . . . . . . . . 63
Exhibit A Conditions of the Offer
Exhibit B Certificate of Incorporation of
Surviving Corporation
<PAGE>4
AGREEMENT AND PLAN OF MERGER dated as of
September 27, 1994, among PRO-FAC COOPERATIVE
INC., a New York cooperative corporation
("Parent"), PF ACQUISITION CORP., a New York
corporation and a wholly owned subsidiary of
Parent ("Sub"), and CURTICE-BURNS FOODS,
INC., a New York corporation (the "Company").
WHEREAS the respective Boards of Directors of
Parent, Sub and the Company have approved the acquisition of
the Company by Parent on the terms and subject to the
conditions of this Agreement;
WHEREAS in furtherance of such acquisition, Parent
proposes to causes Sub to make a tender offer (as it may be
amended from time to time as permitted hereunder, the
"Offer") to purchase all the issued and outstanding shares
of Class A Common Stock, par value $.99 per share, of the
Company (the "Class A Common Stock") and Class B Common
Stock, par value $.99 per share, of the Company (the "Class
B Common Stock" and, together with the Class A Common Stock,
the "Common Stock"), at a price per share of Common Stock of
$19.00 net to the seller in cash, upon the terms and subject
to the conditions of this Agreement; and the Board of
Directors of the Company has adopted resolutions approving
the Offer and the Merger (as hereinafter defined) and
recommending that the Company's shareholders accept the
Offer and, if necessary, vote in favor of the Merger;
WHEREAS the respective Boards of Directors of
Parent, Sub and the Company have approved the merger of Sub
into the Company as set forth below (the "Merger"), upon the
terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of
Common Stock not owned directly or indirectly by Parent or
the Company, except shares of Common Stock held by persons
who object to the Merger and comply with all the provisions
of New York law concerning the right of holders of Common
Stock to dissent from the Merger and require appraisal of
their shares of Common Stock ("Dissenting Shareholders"),
shall be converted into the right to receive the per share
consideration paid pursuant to the Offer, or, if no shares
of Common Stock are purchased pursuant to the Offer, the
highest price per share offered by Sub in the Offer; and
<PAGE>5
2
WHEREAS Parent, Sub and the Company desire to make
certain representations, warranties, covenants and
agreements in connection with the Offer and the Merger and
also to prescribe various conditions to the Offer and the
Merger.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements
contained in this Agreement, the parties agree as follows:
ARTICLE I
The Offer
SECTION 1.01. The Offer. (a) Subject to the
provisions of this Agreement, as promptly as practicable but
in no event later than five business days from the date of
public announcement of the terms of this Agreement, Sub
shall, and Parent shall cause Sub to, commence the Offer.
The obligation of Sub to, and of Parent to cause Sub to,
accept for payment, and pay for, any shares of Common Stock
tendered pursuant to the Offer shall be subject to the
conditions set forth in Exhibit A (any of which may, subject
to the next sentence, be waived by Sub in its sole
discretion) and to the terms and conditions set forth in
this Agreement. Sub expressly reserves the right to modify
the terms of the Offer, except that, without the consent of
the Company, Sub shall not (i) reduce the number of shares
of Common Stock subject to the Offer, (ii) reduce the price
per share of Common Stock to be paid pursuant to the Offer,
(iii) add to or amend in a manner adverse to the holders of
shares the conditions set forth in Exhibit A, (iv) except as
provided in the next sentence, extend the Offer, (v) change
the form of consideration payable in the Offer, (vi) amend
the Offer in any way such that holders of Class A Common
Stock receive consideration that differs from the
consideration received by holders of Class B Common Stock or
(vii) accept for payment shares of Common Stock that do not
represent, in the aggregate, at least 58% of all the
outstanding shares of Class A Common Stock, at least a
majority of all the outstanding shares of Class B Common
Stock and at least two-thirds of all the outstanding shares
of Common Stock, in each case on a fully diluted basis.
Notwithstanding the foregoing, Sub may, without the consent
of the Company (and, in the cases of clauses (i) and (ii)
below, shall, unless the Company otherwise consents),
<PAGE>6
3
(i) extend the Offer if at any scheduled expiration date of
the Offer any condition to Sub's obligation to purchase
shares of Common Stock (other than the condition described
in clause (iii) of the first sentence of Exhibit A) shall
not be satisfied, to allow additional time for such
condition to be satisfied or waived, (ii) extend the Offer
if at any scheduled expiration date of the Offer the
condition described in clause (f) of the second sentence of
Exhibit A shall exist, to allow additional time to cause
such condition no longer to exist (provided that, if Parent
or Sub has signed definitive agreements for financing that
would be sufficient to consummate the Offer and the Merger
on the terms contemplated by this Agreement, Sub may not
extend the Offer pursuant to this clause (ii) to a date that
is more than five business days after the date of signing of
the last such definitive agreement to be signed),
(iii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and
Exchange Commission (the "SEC") or the staff thereof
applicable to the Offer and (iv) extend the Offer for any
reason for a period of not more than 15 business days beyond
the latest expiration date that would otherwise be permitted
under clause (i), (ii) or (iii) of this sentence; provided,
however, that Sub may not extend the Offer pursuant to
clause (i), (ii) or (iv) of this sentence (A) to a date
later than December 15, 1994, or (B) if such extension would
be reasonably likely to result in any of the conditions
(other than any condition irrevocably waived in writing by
Parent and Sub prior to such extension) to Sub's obligations
to purchase shares of Common Stock not being satisfied at
the proposed new scheduled expiration date of the Offer.
Subject to the terms and conditions of the Offer and this
Agreement, Sub shall, and Parent shall cause Sub to, pay for
all shares of Common Stock validly tendered and not
withdrawn pursuant to the Offer that Sub becomes obligated
to purchase pursuant to the Offer as soon as practicable
after the expiration of the Offer.
(b) As soon as practicable on the date of
commencement of the Offer, Parent and Sub shall file with
the SEC a Tender Offer Statement on Schedule 14D-1 with
respect to the Offer, which shall contain an offer to
purchase and a related letter of transmittal and summary
advertisement (such Schedule 14D-1 and the documents therein
pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the "Offer Documents"),
shall hand deliver a copy of the Offer Documents to the
Company at its principal executive office, shall give the
<PAGE>7
4
telephonic notice required by SEC Rule 14d-3(a)(3) to the
American Stock Exchange (if practicable prior to the opening
of such Exchange) and shall mail a copy of the Offer
Documents to the American Stock Exchange by means of first-
class mail. Each of Parent, Sub and the Company shall
promptly correct any information provided by it for use in
the Offer Documents if and to the extent that such
information shall have become false or misleading in any
material respect, and each of Parent and Sub further agrees
to take all steps necessary to cause the Offer Documents as
so corrected to be filed with the SEC and to be disseminated
to the Company's shareholders, in each case as and to the
extent required by applicable Federal securities laws.
Parent and Sub shall provide the Company and its counsel in
writing with any comments Parent, Sub or their counsel may
receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
SECTION 1.02. Company Actions. (a) The Company
hereby approves of and consents to the Offer and represents
that the Board of Directors of the Company, at a meeting
duly called and held, has duly approved this Agreement, the
Offer and the Merger (including for the purposes of Section
912 of the New York Business Corporation Law (the "BCL"))
and the Agreement, dated as of the date hereof (the
"Stockholder Agreement"), among Parent, Sub and Agway
Holdings, Inc. ("AHI"), determined that the terms of the
Offer and the Merger are fair to, and in the best interests
of, the Company and the Company's shareholders, recommended
that the Company's shareholders accept the Offer and tender
their shares pursuant to the Offer, approved the
transactions contemplated by this Agreement and the
Stockholder Agreement and waived the Company's rights under
Article 4(d) of the Company's certificate of incorporation
with respect to shares of Class B Common Stock to be sold to
and purchased by Sub pursuant to the Offer. The Company
further represents that Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ") and Goldman, Sachs & Co.
("Goldman Sachs" and, together with DLJ, the "Advisors")
have each delivered to the Board of Directors of the Company
its written opinion that, in the case of DLJ, the
consideration to be received by holders of shares of Class A
Common Stock of the Company pursuant to the Offer and the
Merger is fair to such holders from a financial point of
view, and in the case of Goldman Sachs, the $19 per share of
Class B Common Stock in cash to be received by the holders
of shares of Class B Common Stock in the Offer and the
<PAGE>8
5
Merger is fair to such holders. The Company has been
advised that all its directors and executive officers
currently intend to tender their Shares pursuant to the
Offer.
(b) As soon as practicable on the date the
recommendation of the Company with respect to the Offer is
first published or sent or given to the shareholders of the
Company, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the
determinations and recommendations regarding the Offer
described in Section 1.02(a), shall hand deliver a copy of
the Schedule 14D-9 to Sub at its principal office, shall
give the telephonic notice required by SEC Rule 14d-9(a)(2)
to the American Stock Exchange (if possible prior to the
opening of the market), shall mail a copy of the Schedule
14D-9 to the American Stock Exchange by means of first-class
mail and shall mail the Schedule 14D-9 to the shareholders
of the Company. Each of the Company, Parent and Sub shall
promptly correct any information provided by it for use in
the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any
material respect, and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the SEC and disseminated to the Company's
shareholders, in each case as and to the extent required by
applicable Federal securities laws. The Company shall
provide Parent and its counsel in writing with any comments
the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments.
(c) In connection with the Offer, the Company
shall cause its transfer agent to furnish Sub promptly with
mailing labels containing the names and addresses of the
record holders of Common Stock as of a recent date and of
those persons becoming record holders subsequent to such
date, together with copies of all lists of shareholders,
security position listings and computer files and all other
information in the Company's possession or control regarding
the record and beneficial owners of Common Stock, and shall
furnish to Sub such information and assistance (including
updated lists of shareholders, security position listings
and computer files) as Parent may reasonably request in
communicating the Offer to the Company's shareholders.
Subject to the requirements of applicable law, and except
<PAGE>9
6
for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate
the Merger, until the consummation of the Merger Parent and
Sub shall hold in confidence the information contained in
any such labels, listings and files, shall use such
information only in connection with the Offer and the Merger
and, if this Agreement shall be terminated, shall, upon
request, deliver to the Company all copies of such
information then in their possession.
ARTICLE II
The Merger
SECTION 2.01. The Merger. Upon the terms and
subject to the conditions set forth in this Agreement, and
in accordance with the BCL, Sub shall be merged with and
into the Company at the Effective Time of the Merger (as
defined in Section 2.03). Following the Merger, the
separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation (the
"Surviving Corporation") and shall succeed to and assume all
the rights and obligations of Sub in accordance with the
BCL.
SECTION 2.02. Closing. The closing of the Merger
(the "Closing") shall take place at 10:00 a.m. on a date to
be specified by the parties, which (subject to satisfaction
or waiver of the conditions set forth in Sections 7.02 and
7.03) shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in
Section 7.01 (the "Closing Date"), at the offices of
Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue,
New York, N.Y. 10019, unless another date or place is agreed
to in writing by the parties hereto.
SECTION 2.03. Effective Time. As soon as practi-
cable following the satisfaction or waiver of the conditions
set forth in Article VII, the parties shall file a certifi-
cate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") executed in accordance
with the relevant provisions of the BCL and shall make all
other filings or recordings required under the BCL, it being
understood that if Sub then owns at least 90% of the
outstanding shares of each class of Common Stock the Merger
shall be effected under the procedures permitted by
Section 905 of the BCL. The Merger shall become effective
<PAGE>10
7
at such time as the Certificate of Merger is duly filed with
the New York Secretary of State, or at such other time as
Sub and the Company shall agree should be specified in the
Certificate of Merger (the time the Merger becomes effective
being the "Effective Time of the Merger").
SECTION 2.04. Effects of the Merger. The Merger
shall have the effects set forth in the BCL, including
Section 906 thereof.
SECTION 2.05. Certificate of Incorporation and
By-laws. (a) The Certificate of Incorporation of the
Surviving Corporation shall be amended, to the extent
necessary, to read as provided in Exhibit B, until there-
after changed or amended as provided therein or by applica-
ble law.
(b) The By-laws of Sub as in effect at the
Effective Time of the Merger shall be the By-laws of the
Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
SECTION 2.06. Directors. The directors of Sub at
the Effective Time of the Merger shall be the directors of
the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
SECTION 2.07. Officers. With the exception of
the Company's Chairman of the Board, the officers of the
Company at the Effective Time of the Merger shall be the
officers of the Surviving Corporation, until the earlier of
their resignation or removal or until their respective
successors are duly elected and qualified, as the case may
be; provided, however, that the Chairman of the Board and,
at the request of Parent or Sub, any officer who would be
entitled, under the terms of any severance or similar plan,
to receive severance benefits upon such officer's voluntary
departure from the Company upon completion of the Merger,
shall tender their resignations immediately following the
Effective Time of the Merger.
<PAGE>11
8
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock. As of the
Effective Time of the Merger, by virtue of the Merger and
without any action on the part of the holder of any shares
of Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and
outstanding share of the capital stock of Sub shall be
converted into and become one fully paid and nonassess-
able share of Common Stock, par value $0.01 per share,
of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent
Owned Stock. Each share of Common Stock that is owned
by the Company or by any subsidiary of the Company and
each share of Common Stock that is owned by Parent, Sub
or any other subsidiary of Parent shall automatically
be canceled and retired and shall cease to exist, and
no consideration shall be delivered in exchange
therefor.
(c) Conversion of Common Stock. Subject to
Sections 3.01(b) and 3.01(d), each issued and
outstanding share of Common Stock shall be converted
into the right to receive from Parent the cash price
per share of Common Stock paid pursuant to the Offer
or, if no shares of Common Stock are purchased pursuant
to the Offer, the highest price per share offered by
Sub in the Offer (the "Merger Consideration"). As of
the Effective Time of the Merger, all such shares of
Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing
any such shares of Common Stock shall cease to have any
rights with respect thereto, except the right to
receive the Merger Consideration without interest.
(d) Shares of Dissenting Shareholders. Notwith-
standing anything in this Agreement to the contrary,
any issued and outstanding shares of Common Stock held
by a Dissenting Shareholder shall not be converted as
described in Section 3.01(c) but shall become the right
to receive such consideration as may be determined to
be due to such Dissenting Shareholder pursuant to the
<PAGE>12
9
laws of the State of New York; provided, however, that
the shares of Common Stock outstanding immediately
prior to the Effective Time of the Merger and held by a
Dissenting Shareholder who shall, after the Effective
Time of the Merger, withdraw his demand for appraisal
or lose his right of appraisal, in either case pursuant
to the BCL, shall be deemed to be converted as of the
Effective Time of the Merger, into the right to receive
the Merger Consideration. The Company shall give
Parent (i) prompt notice of any written demands for
appraisal of shares of Common Stock received by the
Company and (ii) the opportunity to direct all negotia-
tions and proceedings with respect to any such demands.
The Company shall not, without the prior written
consent of Parent, voluntarily make any payment with
respect to, or settle, offer to settle or otherwise
negotiate, any such demands.
SECTION 3.02. Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time of the
Merger, Parent shall select a bank or trust company to act
as exchange agent (the "Exchange Agent") for the exchange of
the Merger Consideration upon surrender of certificates
representing Common Stock.
(b) Parent To Provide Merger Consideration.
Parent shall take all steps to provide to the Exchange Agent
promptly after the Effective Time of the Merger all the
funds payable in exchange for the outstanding shares of
Common Stock pursuant to Section 3.01.
(c) Exchange Procedure. As soon as reasonably
practicable after the Effective Time of the Merger, the
Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the
Effective Time of the Merger represented outstanding shares
of Common Stock (the "Certificates") whose shares were
converted into the right to receive the Merger Consideration
pursuant to Section 3.01, (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall
be in a form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effect-
ing the surrender of the Certificates in exchange for the
Merger Consideration. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or
agents as may be appointed by the Parent, together with such
<PAGE>13
10
letter of transmittal, duly executed, and such other docu-
ments as may reasonably be required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration into which the
shares of Common Stock theretofore represented by such
Certificate shall have been converted pursuant to
Section 3.01 and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of
ownership of Common Stock which is not registered in the
transfer records of the Company, payment may be made to a
person other than the person in whose name the Certificate
so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay
any transfer or other taxes required by reason of the
payment to a person other than the registered holder of such
Certificate or establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered as contemplated by this
Section 3.02, each Certificate shall be deemed at any time
after the Effective Time of the Merger to represent only the
right to receive upon such surrender the Merger
Consideration, without interest, into which the shares of
Common Stock theretofore represented by such Certificate
shall have been converted pursuant to Section 3.01. No
interest will be paid or will accrue on the Merger
Consideration upon the surrender of any Certificate.
(d) No Further Ownership Rights in Common Stock.
All Merger Consideration paid upon the surrender of
Certificates in accordance with the terms of this
Article III shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of
Common Stock theretofore represented by such Certificates,
subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distributions with a
record date prior to the Effective Time of the Merger which
may have been declared or made by the Company on such shares
of Company Common Stock in accordance with the terms of this
Agreement or prior to the date of this Agreement and which
remain unpaid at the Effective Time of the Merger and have
not been paid prior to surrender, and there shall be no
further registration of transfers on the stock transfer
books of the Surviving Corporation of the shares of Common
Stock which were outstanding immediately prior to the
Effective Time of the Merger. If, after the Effective Time
of the Merger, Certificates are presented to the Surviving
<PAGE>14
11
Corporation for any reason, they shall be canceled and
exchanged as provided in this Article III.
(e) No Liability. None of Parent, Sub, the
Company or the Exchange Agent shall be liable to any person
in respect of any Merger Consideration delivered to a public
official pursuant to any applicable abandoned property,
escheat or similar law. If any Certificates shall not have
been surrendered prior to three years after the Effective
Time of the Merger (or immediately prior to such earlier
date on which any payment pursuant to this Article III would
otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 4.01(d))), the
payment in respect of such Certificate shall, to the extent
permitted by applicable law, become the property of the
Surviving Corporation, free and clear of all claims or
interest of any person previously entitled thereto.
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of
the Company. The Company represents and warrants to Parent
and Sub as follows:
(a) Organization, Standing and Corporate Power.
Each of the Company and each of its subsidiaries is a
corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in
which it is incorporated and has the requisite corpo-
rate power and authority to carry on its business as
now being conducted, except where the failure to be so
organized, existing or in good standing or to have such
power would not, individually or in the aggregate, have
a material adverse effect on the Company. Each of the
Company and each of its subsidiaries is duly qualified
or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than
in such jurisdictions where the failure to be so
qualified or licensed (individually or in the
aggregate) would not have a material adverse effect on
the Company. The Company has delivered to Parent
complete and correct copies of its Certificate of
Incorporation and By-laws and the certificates of
<PAGE>15
12
incorporation and by-laws of its subsidiaries, in each
case as amended to the date of this Agreement.
(b) Subsidiaries. The disclosure schedule
previously delivered by the Company to Parent (the
"Disclosure Schedule") lists each subsidiary of the
Company. All the outstanding shares of capital stock
of each such subsidiary have been validly issued and
are fully paid and nonassessable and, except as set
forth in the Disclosure Schedule, are owned by the
Company, by another subsidiary of the Company or by the
Company and another such subsidiary, free and clear of
all pledges, claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever
(collectively, "Liens"), except as set forth in the
Disclosure Schedule. Except for the capital stock of
its subsidiaries and except for the ownership interests
set forth in the Disclosure Schedule, the Company does
not own, directly or indirectly, any capital stock or
other ownership interest in any corporation, part-
nership, joint venture or other entity.
(c) Capital Structure. The authorized capital
stock of the Company consists of 10,125,000 shares of
Class A Common Stock and 4,050,000 shares of Class B
Common Stock. At the close of business on
September 27, 1994, (i) 6,633,129 shares of Class A
Common Stock and 2,056,876 shares of Class B Common
Stock were issued and outstanding, (ii) no shares of
Common Stock were held by the Company in its treasury
and (iii) 474,153 shares of Class A Common Stock were
reserved for issuance pursuant to options outstanding
under the Stock Plans (as defined in Section 6.04).
Except as set forth above, at the close of business on
September 27, 1994, no shares of capital stock or other
voting securities of the Company were issued, reserved
for issuance or outstanding. There are no outstanding
stock appreciation rights which were not granted in
tandem with a related Employee Stock Option (as defined
in Section 6.04). All outstanding shares of capital
stock of the Company are, and all shares which may be
issued pursuant to the Stock Plans (as defined in
Section 6.04) will be, when issued, duly authorized,
validly issued, fully paid and nonassessable and not
subject to preemptive rights. There are not any bonds,
debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote)
<PAGE>16
13
on any matters on which shareholders of the Company may
vote. Except as set forth above, as of the date of
this Agreement, there are not any securities, options,
warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the
Company or any of its subsidiaries is a party or by
which any of them is bound obligating the Company or
any of its subsidiaries, directly or indirectly, to
offer, issue, deliver or sell, or cause to be offered,
issued, delivered or sold, additional shares of capital
stock or other voting securities of the Company or of
any of its subsidiaries or obligating the Company or
any of its subsidiaries, directly or indirectly, to
offer, issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking (other than this
Agreement). As of the date of this Agreement, there
are not any outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock
of the Company or any of its subsidiaries (other than
this Agreement).
(d) Authority; Noncontravention. The Company has
the requisite corporate power and authority to enter
into this Agreement and, subject, in the case of the
Merger, to approval of this Agreement by the Required
Company Shareholder Vote (as defined in
Section 4.01(m)) (except as otherwise permitted by
Section 905 of the BCL), to consummate the transactions
contemplated by this Agreement. The execution and
delivery of this Agreement by the Company and the
consummation by the Company of the transactions contem-
plated by this Agreement have been duly authorized by
all necessary corporate action on the part of the
Company, subject, in the case of the Merger, to
approval of this Agreement by the Required Company
Shareholder Vote (except as otherwise permitted by
Section 905 of the BCL). This Agreement has been duly
executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforce-
able against the Company in accordance with its terms.
The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated
by this Agreement and compliance with the provisions of
this Agreement will not, conflict with, or result in
any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right
<PAGE>17
14
of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or
result in the creation of any Lien upon any of the
properties or assets of the Company or any of its
subsidiaries under, (i) subject, in the case of the
Merger, to approval of this Agreement by the Required
Company Shareholder Vote, the Certificate of
Incorporation or By-laws of the Company or the
comparable charter or organizational documents of any
of its subsidiaries, (ii) subject to the receipt of the
consents specifically listed in Items 3 and 5 of the
Disclosure Schedule, any loan or credit agreement,
note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or
license applicable to the Company or any of its
subsidiaries or their respective properties or assets
or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to the Company or any of its
subsidiaries or their respective properties or assets,
other than, in the case of clause (ii) or (iii), any
such conflicts, violations, defaults, rights or Liens
that individually or in the aggregate would not
(x) have a material adverse effect on the Company,
(y) impair the ability of the Company to perform its
obligations under this Agreement or (z) prevent, enjoin
or materially delay the consummation of or alter the
terms of any of the transactions contemplated by this
Agreement. No consent, approval, order or authoriza-
tion of, or registration, declaration or filing with,
any Federal, state or local government or any court,
administrative or regulatory agency or commission or
other governmental authority or agency, domestic or
foreign (a "Governmental Entity"), is required by or
with respect to the Company or any of its subsidiaries
in connection with the execution and delivery of this
Agreement by the Company or the consummation by the
Company of the transactions contemplated by this
Agreement, except for (i) the filing of a premerger
notification and report form by the Company under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act"), (ii) the filing with the SEC of (w)
the Schedule 14D-9, (x) the Information Statement (as
defined in Section 4.01(f)), (y) a proxy statement or
information statement relating to the approval by the
Company's shareholders of this Agreement, if such
approval is required by law (as amended or supplemented
<PAGE>18
15
from time to time, the "Proxy Statement"), and (z) such
reports under Section 13(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as may be
required in connection with this Agreement and the
transactions contemplated by this Agreement, (iii) the
filing of the Certificate of Merger with the New York
Secretary of State and appropriate documents with the
relevant authorities of other states in which the
Company is qualified to do business, (iv) such notices,
filings and consents as may be required under the
Illinois Responsible Property Transfer Act of 1988 and
the Indiana Responsible Property Transfer Law, (v) such
filings as may be required in connection with the taxes
described in Section 6.09, (vi) the filings required by
Article 16 of the BCL and (vii) such other consents,
approvals, orders, authorizations, registrations,
declarations and filings as are specifically set forth
in the Disclosure Schedule.
(e) SEC Documents; Financial Statements;
Undisclosed Liabilities. The Company has filed, as and
when required, all required reports, schedules, forms,
statements and other documents with the SEC since
June 25, 1994 (the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all
material respects with the requirements of the
Securities Act of 1933 (the "Securities Act") or the
Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of the SEC
Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading. Except to the
extent that information contained in any SEC Document
has been revised or superseded by a later Company Filed
SEC Document (as defined in Section 4.01(g)), none of
the SEC Documents contains any untrue statement of a
material fact or omits to state any material fact
required to be stated therein or necessary in order to
make the statements therein, in light of the circum-
stances under which they were made, not misleading.
The financial statements of the Company included in the
SEC Documents comply as to form in all material
respects with applicable accounting requirements and
the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with
<PAGE>19
16
generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by
Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated
in the notes thereto) and fairly present the
consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit
adjustments). The consolidated balance sheet for the
Company and its subsidiaries as of June 25, 1994,
contained in the Disclosure Schedule fairly presents
the consolidated financial position of the Company and
its consolidated subsidiaries as of that date (subject
to annual year-end audit adjustments). Except as set
forth in the Company Filed SEC Documents or in the
Disclosure Schedule, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or
otherwise) required by generally accepted accounting
principles to be set forth on a consolidated balance
sheet of the Company and its consolidated subsidiaries
or in the notes thereto and which, individually or in
the aggregate, could reasonably be expected to have a
material adverse effect on the Company.
(f) Information Supplied. None of the informa-
tion supplied or to be supplied by the Company for
inclusion or incorporation by reference in the Offer
Documents or the information statement to be filed by
the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the
"Information Statement") and none of the information in
the Schedule 14D-9 or, if approval of this Agreement by
the shareholders of the Company is required by law, the
Proxy Statement, will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information
Statement, at the respective times the Offer Documents,
the Schedule 14D-9 and the Information Statement are
filed with the SEC or published, sent or given to the
Company's shareholders, or, in the case of any Proxy
Statement, at the date the Proxy Statement is filed
with the SEC or at the time the Proxy Statement is
first mailed to the Company's shareholders or at the
time of the meeting of the Company's shareholders held
to vote on approval of this Agreement, contain any
untrue statement of a material fact or omit to state
<PAGE>20
17
any material fact required to be stated therein or
necessary in order to make the statements therein, in
light of the circumstances under which they are made,
not misleading (except that no representation or
warranty is made by the Company with respect to
information supplied by Parent or Sub for inclusion in
the Schedule 14D-9, the Information Statement or the
Proxy Statement). The Schedule 14D-9, the Information
Statement and any Proxy Statement will comply as to
form in all material respects with the requirements of
the Exchange Act and the rules and regulations there-
under.
(g) Absence of Certain Changes or Events. Except
as disclosed in the SEC Documents filed and publicly
available prior to the date of this Agreement (the
"Company Filed SEC Documents") or the Disclosure
Schedule, since the date of the most recent financial
statements included in the Company Filed SEC Documents,
the Company and its subsidiaries have conducted their
business only in the ordinary course in all material
respects, and there has not been (i) any material
adverse change, or any event or condition which could
reasonably be expected to result in a material adverse
change, in the Company, other than changes, events or
conditions after the date hereof relating to any
violation of or default under the Company Finance
Documents (as defined in Section 10.03) unless such
violation or default (A) is a default in the payment
when due of any interest on or principal of the
indebtedness thereunder or (B) results in an
acceleration of the maturity of the indebtedness
thereunder or the taking of any action by the lenders
under the Company Finance Documents to realize on the
collateral securing such indebtedness, (ii) subject to
Section 5.01(a)(i), except for the regular quarterly
dividends not in excess of $.16 per share of Common
Stock with customary record and payment dates, any
declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or
property) with respect to any of the Company's capital
stock, (iii) any split, combination or reclassification
of any of its capital stock or any issuance or the
authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for shares
of its capital stock (other than pursuant to this
Agreement), (iv) (A) any granting by the Company or any
of its subsidiaries to any director, officer or
<PAGE>21
18
employee of the Company or any of its subsidiaries of
any increase in compensation or benefits, except in the
ordinary course of business consistent with prior
practice or as was required under employment agreements
in effect as of the date of this Agreement and listed
in the Disclosure Schedule, (B) any granting by the
Company or any of its subsidiaries to any such
director, officer or employee of any increase in
severance or termination pay or similar benefit, except
as was required under employment, severance or
termination agreements or plans in effect as of the
date of this Agreement and listed in the Disclosure
Schedule or (C) any entry by the Company or any of its
subsidiaries into any employment, deferred
compensation, severance or termination agreement or
other similar agreement (or any amendment to any such
existing agreement) with any such director, officer or
employee, (v) any damage, destruction or loss, whether
or not covered by insurance, that has or could have a
material adverse effect on the Company, (vi) any change
in accounting methods, principles or practices by the
Company or its subsidiaries, except insofar as may have
been required to ensure compliance with generally
accepted accounting principles, (vii) prior to the date
of this Agreement, any (A) incurrence, assumption or
guarantee by the Company or any of its subsidiaries of
any indebtedness, other than in the ordinary course of
business in amounts and on terms consistent with past
practices, (B) issuance or sale of any securities
convertible into or exchangeable for debt securities of
the Company or any of its subsidiaries or (C) issuance
or sale of options or other rights to acquire from the
Company or any of its subsidiaries, directly or
indirectly, debt securities of the Company or any of
its subsidiaries or any securities convertible into or
exchangeable for any such debt securities, (viii) prior
to the date of this Agreement, any creation or
assumption by the Company or any of its subsidiaries of
any Lien on any material asset, other than in the
ordinary course of business consistent with past
practices or as required by the Company Finance
Documents, (ix) prior to the date of this Agreement,
any making of any loan, advance or capital contribution
to or investment in any person other than loans,
advances or capital contributions to or investments in
(A) wholly owned subsidiaries of the Company made in
the ordinary course of business consistent with past
practice, (B) Parent and (C) directors, officers and
<PAGE>22
19
employees of the Company and its subsidiaries made in
the ordinary course of business consistent with past
practice, (x) prior to the date of this Agreement, any
transaction or commitment made, or any contract or
agreement entered into, by the Company or any of its
subsidiaries that is material to the Company, other
than those contemplated by this Agreement, or (xi) any
agreement or arrangement made by the Company or any of
its subsidiaries to take any action which, if taken
prior to the date hereof, would have made any
representation or warranty in this Section 4.01(g)
untrue or incorrect in any material respect.
(h) Litigation. Except as disclosed in the
Company Filed SEC Documents or in the Disclosure
Schedule, there is no investigation by any Governmental
Entity, suit, action or proceeding pending or, to the
knowledge of the Company, threatened against or affect-
ing the Company or any of its subsidiaries or any of
their respective properties or assets (and the Company
is not aware of any basis for any such investigation,
suit, action or proceeding) that, individually or in
the aggregate, could reasonably be expected to (i) have
a material adverse effect on the Company, (ii) impair
the ability of the Company to perform its obligations
under this Agreement or (iii) prevent, enjoin or
materially delay the consummation of or alter the terms
of any of the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunc-
tion, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any of
its subsidiaries having, or which, insofar as reason-
ably can be foreseen, in the future would have, any
such effect.
(i) Absence of Changes in Benefit Plans. Except
(i) as disclosed in the Company Filed SEC Documents,
(ii) as contemplated by Section 6.04(a) and (iii) for
the change to the KES Plan (as defined in
Section 6.05(b)) expressly contemplated by the
Disclosure Schedule, since the date of this Agreement,
there has not been any adoption or amendment in any
material respect by the Company or any of its
subsidiaries of any collective bargaining agreement or
any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death
<PAGE>23
20
benefit, hospitalization, medical or other plan,
arrangement or understanding (whether or not legally
binding) providing benefits to any current or former
employee, officer or director of the Company or any of
its subsidiaries (collectively, "Benefit Plans").
Except as disclosed in the Company Filed SEC Documents
or in the Disclosure Schedule, there exist no
employment, consulting, severance, termination or
indemnification agreements, arrangements or
understandings, written or oral, between the Company or
any of its subsidiaries and any current or former
officer, director, employee or consultant of the
Company or any of its subsidiaries which require
aggregate annual payments or total payments over the
life of such agreement, arrangement or understanding to
such officer, director, employee or consultant in
excess of $25,000 or $40,000, respectively, other than
any such agreement, arrangement or understanding
terminable without penalty by the Company or the
applicable subsidiary upon not more than one month's
notice. The Company has delivered to Parent a true and
complete copy of each such agreement and an accurate
summary of each such other arrangement or
understanding.
(j) ERISA Compliance. (i) The Disclosure
Schedule contains a list and brief description of all
"employee pension benefit plans" (as defined in
Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), "employee welfare
benefit plans" (as defined in Section 3(1) of ERISA)
and all other Benefit Plans maintained, or contributed
to, by the Company or any of its subsidiaries for the
benefit of any current or former employees, officers or
directors of the Company or any of its subsidiaries.
The Company has delivered to Parent true, complete and
correct copies of (w) each Benefit Plan (or, in the
case of any unwritten Benefit Plans, descriptions
thereof), (x) the most recent annual report on Form
5500 filed with the Internal Revenue Service with
respect to each Benefit Plan (if any such report was
required), (y) the most recent summary plan description
for each Benefit Plan for which such summary plan
description is required and (z) each trust agreement
and group annuity contract relating to any Benefit
Plan.
<PAGE>24
21
(ii) Except as disclosed in the Disclosure
Schedule, all Benefit Plans that are employee benefit
pension plans (each, a "Pension Plan") have been the
subject of determination letters from the Internal
Revenue Service to the effect that such Pension Plans
are qualified and exempt from Federal income taxes
under Sections 401(a) and 501(a), respectively, of the
Internal Revenue Code of 1986, as amended (the "Code"),
and no such determination letter has been revoked nor,
to the knowledge of the Company, has revocation been
threatened, nor has any such Pension Plan been amended
since the date of its most recent determination letter
or application therefor in any respect that would
adversely affect its qualification or materially
increase its costs.
(iii) The Company has furnished to Parent the most
recent actuarial report or valuation with respect to
each Pension Plan subject to Title IV of ERISA, other
than any Pension Plan that is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of
ERISA; collectively, the "Multiemployer Pension
Plans"). The information supplied to the actuary by
the Company for use in preparing those reports or
valuations was true and correct in all material
respects. None of the Pension Plans has an
"accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA or Section 412 of the
Code), whether or not waived. Parent has received a
true and complete copy of the most recent actuarial
report prepared by the Company's actuaries. The
assumptions used in such actuarial report and applied
in making such determination were, and continue to be,
reasonable. None of the Company, any of its
subsidiaries, any officer of the Company or any of its
subsidiaries or any of the Benefit Plans which are
subject to ERISA, including the Pension Plans, any
trusts created thereunder or any trustee or administra-
tor thereof, has engaged in a "prohibited transaction"
(as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) or any other breach of
fiduciary responsibility that could subject the Com-
pany, any of its subsidiaries or any officer of the
Company or any of its subsidiaries to the tax or
penalty on prohibited transactions imposed by such
Section 4975 or to any liability under Section 502(i)
or (1) of ERISA. Neither any of such Benefit Plans nor
any of such trusts has been terminated, nor has there
<PAGE>25
22
been any "reportable event" (as that term is defined in
Section 4043 of ERISA) with respect thereto, during the
last five years. Neither the Company nor any of its
subsidiaries has suffered or otherwise caused a "com-
plete withdrawal" or a "partial withdrawal" (as such
terms are defined in Sections 4203 and Section 4205,
respectively, of ERISA) since the effective date of
such Sections 4203 and 4205 with respect to any of the
Multiemployer Pension Plans.
(iv) With respect to any Benefit Plan that is an
employee welfare benefit plan, except as disclosed in
the Disclosure Schedule, (x) no such Benefit Plan is
unfunded or funded through a "welfare benefits fund",
as such term is defined in Section 419(e) of the Code
and (y) each such Benefit Plan that is a "group health
plan", as such term is defined in Section 5000(b)(1) of
the Code, complies with the applicable requirements of
Section 4980B(f) of the Code.
(k) Taxes. Except as set forth in the Disclosure
Schedule, each of the Company and each of its
subsidiaries has timely filed all tax returns and
reports required to be filed by it and has paid (or the
Company has paid on its behalf) all taxes required to
be paid by it, and the most recent financial statements
contained in the Company Filed SEC Documents reflect an
adequate reserve for all taxes payable by the Company
and its subsidiaries for all taxable periods and
portions thereof through the date of such financial
statements. No deficiencies for any taxes have been
proposed, asserted or assessed against the Company or
any of its subsidiaries, and no requests for waivers of
the time to assess any such taxes are pending. The
Federal income tax returns of the Company and each of
its subsidiaries consolidated in such returns have been
examined by and settled with the United States Internal
Revenue Service for all years through 1988. As used in
this Agreement, "taxes" shall include all Federal,
state, local and foreign income, property, sales,
excise and other taxes, tariffs or governmental charges
of any nature whatsoever and all penalties and interest
with respect thereto. The Disclosure Schedule sets
forth the Company's most recent estimate of the basis,
as defined in Section 1012 of the Code, as of
December 24, 1993, of the Company's assets (by asset
categories). Such estimate was made in good faith,
applying reasonable assumptions.
<PAGE>26
23
(l) No Excess Parachute Payments. Except as set
forth in the Disclosure Schedule, any amount that could
be received (whether in cash or property or the vesting
of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer
or director of the Company or any of its affiliates who
is a "disqualified individual" (as such term is defined
in proposed Treasury Regulation Section 1.280G-1) under
any employment, severance or termination agreement,
other compensation arrangement or Benefit Plan cur-
rently in effect would not be characterized as an
"excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code). Except as set forth
in the Disclosure Schedule, no "covered employee" (as
such term is defined in Section 162(m) of the Code) of
the Company or any of its subsidiaries is entitled to,
or as a result of the transactions contemplated hereby
or of a change in control of the Company would be
entitled to, "applicable employee remuneration" (as
such term is defined in Section 162(m) of the Code) not
deductible by reason of Section 162(m) of the Code.
(m) Voting Requirements. In the event
Section 905 of the BCL does not eliminate the need for
the approval and adoption by the shareholders of the
Company of this Agreement and the plan of merger
included herein, the affirmative votes of (i) the
holders of two-thirds of the outstanding shares of
Class A Common Stock and Class B Common Stock, voting
as one class, (ii) the holders of a majority of the
outstanding shares of the Class A Common Stock and
(iii) the holders of a majority of the outstanding
shares of the Class B Common Stock approving this
Agreement (the "Required Company Shareholder Vote") are
the only votes of the holders of any class or series of
the Company's capital stock necessary to consummate the
Merger.
(n) State Takeover Statutes. The Board of
Directors of the Company has approved the Offer, the
Merger and this Agreement, and such approval is suffi-
cient to render inapplicable to the Offer, the Merger,
this Agreement and the transactions contemplated by
this Agreement the provisions of Section 912 of the
BCL. To the best of the Company's knowledge, other
than Article 16 and Section 912 of the BCL, no state
takeover statute or similar statute or regulation
applies or purports to apply to the Offer, the Merger,
<PAGE>27
24
this Agreement or any of the transactions contemplated
by this Agreement.
(o) Brokers; Schedule of Fees and Expenses. No
broker, investment banker, financial advisor or other
person, other than the Advisors, is entitled to any
broker's, finder's, financial advisor's or other
similar fee or commission in connection with the
transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The
Company has provided to Parent true and complete copies
of its agreements with the Advisors.
(p) Compliance with Laws. (i) Each of the
Company and its subsidiaries has in effect all Federal,
state, local and foreign governmental approvals,
authorizations, certificates, filings, franchises,
licenses, notices, permits and rights ("Permits")
necessary for it to own, lease or operate its
properties and assets and to carry on its business as
now conducted, and there has occurred no default under
any such Permit, except for the absence of Permits and
for defaults under Permits which absence or defaults,
individually or in the aggregate, could not reasonably
be expected to have a material adverse effect on the
Company. Except as disclosed in the Company Filed SEC
Documents, the Company and its subsidiaries are in
compliance with all applicable statutes, laws,
ordinances, regulations, rules, judgments, decrees or
orders of any Governmental Entity, except for possible
noncompliance which, individually or in the aggregate,
could not reasonably be expected to have a material
adverse effect on the Company.
(ii) The Company has provided Parent with certain
environmental materials relating to the facilities and
operations of the Company and its subsidiaries, which
materials are identified in the Disclosure
Schedule (the "Environmental Materials"). Except as
set forth in the Disclosure Schedule, (A) neither the
Company nor any of its subsidiaries have received any
written communication from a Governmental Entity that
alleges that the Company or any subsidiary is not in
compliance in any material respect with any
Environmental Laws, (B) each of the Company and its
subsidiaries hold, and are in compliance with, all
Permits required for the Company and its subsidiaries
to conduct their respective businesses under
<PAGE>28
25
Environmental Laws, and are in compliance with all
Environmental Laws, except for the absence of such
Permits and incidents of noncompliance which absence or
noncompliance, individually or in the aggregate, could
not reasonably be expected to have a material adverse
effect on the Company, and (C) the Company has no
knowledge of any environmental materials, events or
facts or information other than as set forth in the
Disclosure Schedule which disclose or could reasonably
be expected to give rise to an environmental liability
which would have a material adverse effect on the
Company. As used in this Agreement, the term
"Environmental Laws" means, as of the Closing Date, any
applicable treaties, laws, regulations, enforceable
requirements, orders, decrees or judgments issued,
promulgated or entered into by any Governmental Entity,
which relate to (A) pollution or protection of the
environment or (B) Hazardous Materials (as hereinafter
defined) generation, storage, use, handling, disposal
or transportation including the Comprehensive
Environmental Response, Compensation and Liability Act
of 1980, as amended, 42 U.S.C. Sections 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act,
as amended, 42 U.S.C. Sections 6901 et seq., the
Federal Water Pollution Control Act, as amended,
33 U.S.C. Sections 1251 et seq., the Clean Air Act
of 1970, as amended, 42 U.S.C. Sections 7401 et seq.,
the Toxic Substances Control Act of 1976, 15 U.S.C.
Sections 2601 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801 et seq.,
and any similar or implementing state or local law, and
all amendments or regulations promulgated thereunder.
As used in this Agreement, the term "Hazardous
Materials" means all explosive or regulated radioactive
materials or substances, hazardous or toxic substances,
wastes or chemicals, petroleum or petroleum
distillates, asbestos or asbestos containing materials,
and all other materials or chemicals regulated pursuant
to any Environmental Law, including materials listed in
49 C.F.R. Section 172.101 and materials defined as
hazardous pursuant to Section 101(14) of CERCLA.
(q) Contracts; Debt Instruments. (i) Neither
the Company nor any of its subsidiaries is in violation
of or in default under (nor does there exist any
condition which upon the passage of time or the giving
of notice would cause such a violation of or default
under) any loan or credit agreement, note, bond,
mortgage, indenture, lease, permit, concession,
<PAGE>29
26
franchise, license or any other contract, agreement,
arrangement or understanding, to which it is a party or
by which it or any of its properties or assets is
bound, except as set forth in the Disclosure Schedule
and except for violations or defaults that would not,
individually or in the aggregate, result in a material
adverse effect on the Company.
(ii) Set forth in the Disclosure Schedule is (x) a
list of all loan or credit agreements, notes, bonds,
mortgages, indentures and other agreements and
instruments pursuant to which any indebtedness of the
Company or any of its subsidiaries in an aggregate
principal amount in excess of $1,000,000 is outstanding
or may be incurred and (y) the respective principal
amounts outstanding thereunder, in each case as of
February 26, 1994. The Company has provided to Parent
a true and complete copy of all such documents and
instruments. For purposes of this Agreement,
"indebtedness" shall mean, with respect to any person,
without duplication, (A) all obligations of such person
for borrowed money, or with respect to deposits or
advances of any kind to such person, (B) all
obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (C) all
obligations of such person upon which interest charges
are customarily paid, (D) all obligations of such
person under conditional sale or other title retention
agreements relating to property purchased by such
person, (E) all obligations of such person issued or
assumed as the deferred purchase price of property or
services (excluding obligations of such person to
creditors for raw materials, inventory, services and
supplies incurred in the ordinary course of such
person's business), (F) all capitalized lease
obligations of such person, (G) all obligations of
others secured by any lien on property or assets owned
or acquired by such person, whether or not the
obligations secured thereby have been assumed, (H) all
obligations of such person under interest rate or
currency hedging transactions (valued at the
termination value thereof), (I) all letters of credit
issued for the account of such person (excluding
letters of credit issued for the benefit of suppliers
to support accounts payable to suppliers incurred in
the ordinary course of business) and (J) all guarantees
and arrangements having the economic effect of a
<PAGE>30
27
guarantee of such person of any indebtedness of any
other person.
(iii) Set forth in the Disclosure Schedule is a
list of (A) any letter of intent, agreement in
principle, other understanding or agreement in effect
on the date hereof for the future sale, lease or other
disposition by the Company or any of its subsidiaries
of any assets, except for sales of inventory or assets
no longer used or useful in the conduct of its
business, in each case in the ordinary course and
consistent with past practice, (B) any letter of
intent, agreement in principle, other understanding or
agreement in effect on the date hereof to which the
Company or any of its subsidiaries is a party and that
substantially limits the freedom of the Company or any
of its subsidiaries to (1) compete in any line of
business or with any person or in any area or which
would so limit the freedom of the Company or any
subsidiaries after the Effective Time of the Merger
(other than any such agreement that has been in effect
for longer than seven years if the Company and all its
subsidiaries are currently in material compliance with
such agreement) or (2) sell, lease or otherwise dispose
of any significant portion of the assets of the Company
(determined on a consolidated basis) or (C) any other
agreement in effect on the date hereof not made in the
ordinary course of business and material to the Company
under which the Company or any of its subsidiaries has
material unperformed obligations, if entered into less
than seven years prior to the date hereof, or, with
respect to such agreements entered into before such
date, would, if entered into as of the date hereof, be
considered made not in the ordinary course. The
Company has provided the Parent with a true and
complete copy of all such contracts and agreements.
(r) Title to Properties. (i) Except as set
forth in the Disclosure Schedule, each of the Company
and each of its subsidiaries has good and marketable
title to, or valid leasehold interests in, all its
properties and assets, except for such as are no longer
used or useful in the conduct of its businesses or as
have been disposed of in the ordinary course of
business and except for defects in title, easements,
restrictive covenants and similar encumbrances or
impediments that, in the aggregate, do not and will not
materially interfere with its ability to conduct its
<PAGE>31
28
business as currently conducted. All such assets and
properties, other than assets and properties in which
the Company or any of its subsidiaries has leasehold
interests, are free and clear of all Liens other than
those set forth in the Disclosure Schedule and except
for Liens that, in the aggregate, do not and will not
materially interfere with the ability of the Company
and its subsidiaries to conduct their respective
businesses, as currently conducted.
(ii) Except as set forth in the Disclosure
Schedule, each of the Company and each of its
subsidiaries has complied in all material respects with
the terms of all material leases to which it is a party
and under which it is in occupancy, and all such leases
are in full force and effect. Each of the Company and
each of its subsidiaries enjoys peaceful and
undisturbed possession under all such material leases.
(s) Intellectual Property. The Company and its
subsidiaries own, or are validly licensed or otherwise
have the right to use, all patents, patent rights,
trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights
and other proprietary intellectual property rights and
computer programs (collectively, "Intellectual Property
Rights") which are material to the conduct of the
business of the Company and its subsidiaries as
currently conducted. The Disclosure Schedule sets
forth a description of all Intellectual Property Rights
which are material to the conduct of the business of
the Company and its subsidiaries as currently
conducted. Except as set forth in the Disclosure
Schedule, no claims are pending or, to the knowledge of
the Company, threatened that the Company or any of its
subsidiaries is infringing or otherwise adversely
affecting the rights of any person with regard to any
Intellectual Property Right. To the knowledge of the
Company, except as set forth in the Disclosure
Schedule, no person is infringing the rights of the
Company or any of its subsidiaries with respect to any
Intellectual Property Right.
<PAGE>32
29
SECTION 4.02. Representations and Warranties of
Parent and Sub. Parent and Sub represent and warrant to the
Company as follows:
(a) Organization, Standing and Corporate Power.
Each of Parent and Sub is a corporation duly organized,
validly existing and in good standing under the laws of
the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to carry on
its business as now being conducted, except where the
failure to be so organized, existing or in good
standing or to have such power would not, individually
or in the aggregate, have a material adverse effect on
Parent. Parent has provided the Company with complete
and correct copies of its and Sub's Certificate of
Incorporation and By-laws.
(b) Capital Structure. The authorized capital
stock of Parent consists of 5,000,000 shares of
Preferred Stock, par value $25 per share, and
5,000,000 shares of common stock, par value $5 per
share. At the close of business on September 19, 1994,
(i) 2,043,493 shares of Parent Common Stock and
2,623,604 shares of Parent Preferred Stock were issued
and outstanding. As of the date of this Agreement, the
authorized capital stock of Sub consists of
10,000 shares of common stock, par value $0.01 per
share, all of which have been validly issued, are fully
paid and nonassessable and are owned by Parent free and
clear of any Liens.
(c) Authority; Noncontravention. Parent and Sub
have all requisite corporate power and authority to
enter into this Agreement and to consummate the trans-
actions contemplated by this Agreement. The execution
and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement have
been duly authorized by all necessary corporate action
on the part of Parent and Sub. This Agreement has been
duly executed and delivered by Parent and Sub and
constitutes a valid and binding obligation of such
party, enforceable against such party in accordance
with its terms. The execution and delivery of this
Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compli-
ance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or
<PAGE>33
30
both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to
loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or
assets of Parent or any of its subsidiaries under,
(i) the certificate of incorporation or by-laws of
Parent or Sub or the comparable charter or
organizational documents of any other subsidiary of
Parent, (ii) subject to the receipt of the consents
specifically listed in Items 3 and 5 of the Disclosure
Schedule, any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license
applicable to Parent or Sub or their respective
properties or assets or (iii) subject to the
governmental filings and other matters referred to in
the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable
to Parent, Sub or any other subsidiary of Parent or
their respective properties or assets, other than, in
the case of clause (ii) or (iii), any such conflicts,
violations, defaults, rights or Liens that individually
or in the aggregate would not (x) have a material
adverse effect on Parent, (y) impair the ability of
Parent and Sub to perform their respective obligations
under this Agreement or (z) prevent, enjoin or
materially delay the consummation of or alter the terms
of any of the transactions contemplated by this
Agreement. No consent, approval, order or
authorization of, or registration, declaration or
filing with, any Governmental Entity is required by or
with respect to Parent, Sub or any other subsidiary of
Parent in connection with the execution and delivery of
this Agreement or the consummation by Parent or Sub, as
the case may be, of any of the transactions
contemplated by this Agreement, except for (i) the
filing of a premerger notification and report form
under the HSR Act, (ii) the filing with the SEC of
(x) the Offer Documents and (y) such reports under
Sections 13 and 16 of the Exchange Act as may be
required in connection with this Agreement and the
transactions contemplated by this Agreement, (iii) the
filing of the Certificate of Merger with the New York
Secretary of State and appropriate documents with the
relevant authorities of other states in which the
Company is qualified to do business, (iv) such filings
as may be required in connection with the taxes
described in Section 6.09, (v) such notices, filings
<PAGE>34
31
and consents as may be required under the Illinois
Responsible Property Transfer Act of 1988 and the
Indiana Responsible Property Transfer Law, (vi) the
filings required by Article 16 of the BCL and
(vii) such other consents, approvals, orders,
authorizations, registrations, declarations and filings
as may be required under the "takeover" or "blue sky"
laws of various states. Neither Parent nor any of its
Affiliates or Associates (as each such term is defined
in Section 912 of the BCL) is, at the date of execution
and delivery of this Agreement, an Interested
shareholder (as such term is defined in 912 of the BCL)
of the Company.
(d) SEC Documents; Financial Statements;
Undisclosed Liabilities. Parent has filed, as and when
required, all required reports, forms and other
documents with the SEC since June 26, 1993 (the "Parent
SEC Documents"). As of their respective dates, the
Parent SEC Documents complied in all material respects
with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder
applicable to such Parent SEC Documents, and none of
the Parent SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to
make the statements therein, in light of the
circumstances under which they were made, not mis-
leading. Except to the extent that information
contained in any Parent SEC Document has been revised
or superseded by a later Parent Filed SEC Document (as
defined in Section 4.02(f)), none of the Parent SEC
Documents contains any untrue statement of a material
fact or omits to state any material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading. The financial
statements of Parent included in the Parent SEC
Documents comply as to form in all material respects
with applicable accounting requirements and the
published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with
generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by
Form 10-Q of the SEC) applied on a consistent basis
during the periods involved and fairly present the
consolidated financial position of Parent and its
<PAGE>35
32
consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Parent Filed
SEC Documents, neither Parent nor any of its
subsidiaries has any material liabilities or
obligations required by generally accepted accounting
principles to be recognized or disclosed on a
consolidated balance sheet of Parent and its consoli-
dated subsidiaries or in the notes thereto and which,
individually or in the aggregate, would have a material
adverse effect on Parent.
(e) Information Supplied. None of the informa-
tion supplied or to be supplied by Parent or Sub for
inclusion or incorporation by reference in the
Schedule 14D-9 or, if approval of this Agreement by the
shareholders of the Company is required by law, the
Proxy Statement, and none of the information in the
Offer Documents or the Information Statement will, in
the case of the Offer Documents, the Schedule 14D-9 and
the Information Statement, at the respective times the
Offer Documents, the Schedule 14D-9, and the
Information Statement are filed with the SEC or
published, sent or given to the Company's shareholders,
or, in the case of the Proxy Statement, at the date any
Proxy Statement is first mailed to the Company's
shareholders or at the time of the meeting of the
Company's shareholders held to vote on approval of this
Agreement, contain any untrue statement of a material
fact or omit to state any material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they are made, not misleading (except that no
representation or warranty is made by Parent or Sub
with respect to information supplied by the Company for
inclusion in the Offer Documents or the Information
Statement). The Offer Documents will comply as to form
in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
(f) Absence of Certain Changes or Events. Except
as disclosed in the Parent SEC Documents filed and
publicly available prior to the date of this Agreement
(the "Parent Filed SEC Documents") or the Disclosure
Schedule, since the date of the most recent financial
statements contained in the Parent Filed SEC Documents,
<PAGE>36
33
Parent has conducted its business only in the ordinary
course and there has not been (i) any material adverse
change, or any event or condition which could
reasonably be expected to result in a material adverse
change, in Parent, (ii) except for regular annual
dividends (in an amount determined in a manner
consistent with Parent's past practice) with customary
record and payment dates, any declaration, setting
aside or payment of any dividend or distribution
(whether in cash, stock or property) with respect to
any of Parent's capital stock, (iii) any split,
combination or reclassification of any of its capital
stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock
or (iv) any change in accounting methods, principles or
practices by Parent, except insofar as may have been
disclosed in the Parent SEC Documents or required to
ensure compliance with generally accepted accounting
principles.
(g) Litigation. Except as disclosed in the
Parent Filed SEC Documents or in the Disclosure
Schedule, there is no investigation by any Governmental
Entity, suit, action or proceeding pending or, to the
knowledge of Parent, threatened against or affecting
Parent or any of its subsidiaries or any of their
respective properties or assets that, individually or
in the aggregate, could reasonably be expected to
(i) have a material adverse effect on Parent,
(ii) impair in any material respect the ability of
Parent to perform its obligations under this Agreement
or (iii) prevent, enjoin or materially delay the
consummation of or alter the terms of any of the
transactions contemplated by this Agreement, nor is
there any judgment, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding
against Parent or any of its subsidiaries having, or
which is reasonably likely to have, any such effect.
(h) Brokers. No broker, investment banker,
financial advisor or other person, other than Dillon,
Read & Co. Inc., the fees and expenses of which will be
paid by Parent, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission
in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on
behalf of Parent or Sub.
<PAGE>37
34
(i) Contracts; Debt Instruments. Neither Parent
nor any of its subsidiaries is in violation of or in
default under (nor does there exist any condition which
upon the passage of time or the giving of notice would
cause such a violation of or default under) any loan or
credit agreement, note, bond, mortgage, indenture,
lease or other contract, agreement, arrangement or
understanding, to which it is a party or by which it or
any of its properties or assets is bound, except for
violations or defaults that could not, individually or
in the aggregate, reasonably be expected to result in a
material adverse effect on Parent.
(j) Title to Properties. Parent and its
subsidiaries have good and marketable title to, or
valid leasehold interests in, all their material
properties and assets, except as otherwise indicated in
the Disclosure Schedule or for such as are no longer
used or useful in the conduct of its businesses or as
have been disposed of in the ordinary course of
business and except for defects in title, easements,
restrictive covenants and similar encumbrances or
impediments that, in the aggregate, do not and will not
materially interfere with its ability to conduct its
business as currently conducted. All such material
properties and assets, other than properties and assets
in which Parent or any of its subsidiaries has
leasehold interests, and other than as reflected in the
Disclosure Schedule are free and clear of all Liens,
except for Liens that, in the aggregate, do not and
will not materially interfere with the ability of
Parent and its subsidiaries to conduct business as
currently conducted.
(k) Financing. Parent and Sub have funds avail-
able on hand or available pursuant to binding
commitments or "highly confident" letters from
financing sources sufficient to consummate the Offer
and the Merger on the terms contemplated by this
Agreement, and, at the Effective Time of the Merger,
Parent and Sub will have available all of the funds
necessary (x) to repay the indebtedness outstanding
under the Commercial Bank Credit Agreement (as defined
in Section 10.03(b)), (y) to perform their respective
obligations under this Agreement and (z) to pay all the
related fees and expenses in connection with the
foregoing. Parent has provided to the Company true and
correct copies of all commitment letters, "highly
<PAGE>38
35
confident" letters and other evidence satisfactory to
the Company that Parent has such sufficient funds.
Parent and Sub shall use all commercially reasonable
efforts to complete and satisfy all conditions to
lending under such finance commitments.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business. (a) Conduct
of Business by the Company. During the period from the date
of this Agreement to the Effective Time of the Merger, or,
if earlier, the consummation of the Offer, the Company
shall, and shall cause its subsidiaries to, carry on their
respective businesses in the usual, regular and ordinary
course in substantially the same manner as heretofore
conducted and, to the extent consistent therewith, use all
reasonable efforts to preserve intact their current business
organizations, keep available the services of their current
officers and employees and preserve their relationships with
customers, suppliers, licensors, licensees, distributors and
others having business dealings with them to the end that
their goodwill and ongoing businesses shall be unimpaired at
the Effective Time of the Merger. Without limiting the
generality of the foregoing, during the period from the date
of this Agreement to the Effective Time of the Merger, or,
if earlier, the consummation of the Offer, except as set
forth in the Disclosure Schedule, the Company shall not, and
shall not permit any of its subsidiaries to:
(i) (x) except for regular quarterly dividends not
in excess of $.16 per share of Common Stock with
customary record and payment dates, declare, set aside
or pay any dividends on, or make any other
distributions in respect of, any of its capital stock,
other than dividends and distributions by any direct or
indirect wholly owned subsidiary of the Company to its
parent (provided that the Company shall not set as the
record date for a dividend a date earlier than
November 15, 1994), (y) split, combine or reclassify
any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock
or (z) purchase, redeem or otherwise acquire any shares
of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any
<PAGE>39
36
rights, warrants or options to acquire any such shares
or other securities;
(ii) offer, issue, deliver, sell, pledge or
otherwise encumber any shares of its capital stock, any
other voting securities or any securities convertible
into, or any rights, warrants or options to acquire,
any such shares, voting securities or convertible
securities (other than (x) the issuance of Common Stock
upon the exercise of Employee Stock Options outstanding
on the date of this Agreement in accordance with their
present terms and (y) the issuance of shares of Class A
Common Stock on a one for one basis in connection with
any requested conversion of outstanding shares of
Class B Common Stock to shares of Class A Common Stock
by the holders of Class B Common Stock);
(iii) amend its certificate of incorporation, by-
laws or other comparable charter or organizational
documents;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any
business or any corporation, partnership, joint
venture, association or other business organization or
division thereof or (y) any assets that are material,
individually or in the aggregate, to the Company and
its subsidiaries, taken as a whole, except purchases of
inventory and other assets in the ordinary course of
business consistent with past practice;
(v) except as required by the Company's Finance
Documents (as in effect on the date hereof, true and
complete copies of which have been delivered to Parent)
in the case of any property of the Company (including
after-acquired property) in which the Company is
obligated to deliver to the secured party thereunder a
security interest or mortgage or except as permitted by
the Company's Finance Documents (as in effect on the
date hereof) with respect to capitalized lease
obligations or purchase money debt, mortgage or other-
wise encumber or subject to any Lien (other than any
Lien arising by operation of law) or, except for sales
in the ordinary course of business consistent with past
practice of inventory or assets no longer used or
usable by the Company or such subsidiary, sell, lease
or otherwise dispose (or enter into any letter of
<PAGE>40
37
intent, agreement in principle, other understanding or
commitment to sell, lease or otherwise dispose) of any
of its properties or assets;
(vi) (y) incur any indebtedness for borrowed money
or guarantee any such indebtedness of another person,
issue or sell any debt securities or warrants or other
rights to acquire, directly or indirectly, any debt
securities of the Company or any of its subsidiaries or
any securities convertible into or exchangeable for
debt securities of the Company or any of its
subsidiaries, guarantee any debt securities of another
person, enter into any "keep well" or other agreement
to maintain any financial statement condition of
another person or enter into any arrangement having the
economic effect of any of the foregoing, except for
(A) short-term borrowings incurred in the ordinary
course of business consistent with past practice if
pursuant to or permitted by the Company Finance
Documents (as in effect on the date hereof) and
(B) indebtedness to Parent, or (z) make any loans,
advances or capital contributions to, or investments
in, any other person, other than to or in (A) the Com-
pany or any direct or indirect wholly owned subsidiary
of the Company made in the ordinary course of business
consistent with past practice, (B) Parent and
(C) directors, officers and employees of the Company
and its subsidiaries made in the ordinary course of
business consistent with past practice so long as such
loans and advances do not, as to any one director,
officer or employee, exceed $10,000 and such loans and
advances do not, as to all such loans and advances,
exceed $50,000 in aggregate;
(vii) make or agree to make any capital expenditures
except as have been set forth in the Company's approved
capital budget for 1994, as amended prior to the date
hereof by the Boards of Directors of Parent and the
Company; provided, however, that (A) the Company may
make any necessary or appropriate capital expenditures
resulting from the fire at the Southern Frozen Foods
plant in Montezuma, GA, to the extent such expenditures
are (I) permitted or required by paragraphs 18 and 19
of the Integrated Agreement (as defined in
Section 6.07(d)) or (II) are made out of the proceeds
of insurance payments or are reasonably expected by the
Company to be reimbursed by insurance, and (B) the
Company or its subsidiaries may make emergency capital
<PAGE>41
38
expenditures, not exceeding $25,000 as to any single
emergency, in accordance with the Company's Corporate
Policy Manual concerning capital expenditures and
consistent with past practice;
(viii) make any material tax election (unless
required by law) or settle or compromise any material
income tax liability;
(ix) pay, discharge or satisfy any claims, liabili-
ties or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in
accordance with their terms, of liabilities reflected
or reserved against in, or contemplated by, the most
recent consolidated financial statements (or the notes
thereto) of the Company included in the Company Filed
SEC Documents, disclosed in the Disclosure Schedule or
incurred in the ordinary course of business consistent
with past practice, or waive the benefits of, or agree
to modify in any manner, any confidentiality, stand-
still or similar agreement to which the Company or any
of its subsidiaries is a party;
(x) enter into any agreement, contract,
transaction or commitment other than in the ordinary
course of business consistent with past practice and,
if material to the Company, other than on terms
reasonably acceptable to Parent;
(xi) enter into any agreement, contract,
transaction or commitment that limits the freedom of
the Company or any of its subsidiaries to compete in
any line of business or with any person or in any area
or which would so limit the freedom of the Company or
any subsidiaries after the Effective Time of the
Merger; or
(xii) authorize any of, or commit or agree to take
any of, the foregoing actions.
(b) Other Actions. The Company and Parent shall
not, and shall not permit any of their respective subsidi-
aries to, take any action that would result in, or omit to
take any action the omission of which would result in
(i) any of the representations and warranties of such party
set forth in this Agreement that are qualified as to
<PAGE>42
39
materiality becoming untrue, (ii) any of such representa-
tions and warranties that are not so qualified becoming
untrue in any material respect (except for the
representations and warranties in Sections 4.01(c) and (g)
that are not so qualified, which shall not be permitted to
become untrue in any respect) or (iii) except as
contemplated by Section 8.01(a), any of the conditions to
the Merger set forth in Article VII not being satisfied.
(c) Notwithstanding any provision of this
Section 5.01 or any other Section of this Agreement or of
the Integrated Agreement to the contrary, the Company's
Board of Directors may declare, and the Company may pay, a
cash dividend not in excess of $.16 per share of Common
Stock with a record date therefor on or after November 15,
1994, and prior to December 31, 1994.
ARTICLE VI
Additional Agreements
SECTION 6.01. Shareholder Approval; Preparation
of Proxy Statement. (a) If approval of this Agreement by
the shareholders of the Company is required by law, the
Company shall, following the expiration or consummation of
the Offer, duly call, give notice of, convene and hold a
meeting of its shareholders (the "Company Shareholders
Meeting") for the purpose of approving this Agreement and
the transactions contemplated by this Agreement. The
Company shall, through its Board of Directors, recommend to
its shareholders approval of this Agreement and the
transactions contemplated by this Agreement, except to the
extent that the Board of Directors of the Company shall have
withdrawn or modified its approval or recommendation of this
Agreement or the Merger as contemplated by Section 8.01(a).
Notwithstanding the foregoing, if Sub shall own at least 90%
of the outstanding shares of each class of Common Stock, and
provided the conditions set forth in Section 7.01 shall have
been satisfied or waived, the parties shall take all
necessary and appropriate action to cause the Merger to
become effective simultaneously with or as soon as
practicable after acceptance of shares of Common Stock for
payment pursuant to the Offer without the approval of the
shareholders of the Company in accordance with Section 905
of the BCL.
<PAGE>43
40
(b) If approval of this Agreement by the
shareholders of the Company is required by law, as promptly
as practicable following expiration or consummation of the
Offer, the Company shall prepare and file with the SEC the
Proxy Statement. The Company shall use its best efforts to
cause the Proxy Statement to be mailed to the Company's
shareholders as promptly as practicable after such filing.
(c) If approval of this Agreement by the
shareholders of the Company is required by law, Parent shall
cause all shares of Common Stock owned by it, Sub or any
other subsidiary of Parent to be voted in favor of the
approval of this Agreement.
SECTION 6.02. Access to Information; Confiden-
tiality. The Company shall, and shall cause each of its
subsidiaries to, afford to Parent, and to Parent's officers,
employees, accountants, counsel, financial advisers and
other representatives, reasonable access during normal busi-
ness hours during the period prior to the Effective Time of
the Merger to all their respective properties, books, con-
tracts, commitments, personnel and records and, during such
period, the Company shall, and shall cause each of its sub-
sidiaries to, furnish promptly to Parent (i) a copy of each
report, schedule, registration statement and other document
filed by it during such period pursuant to the requirements
of Federal or state securities laws and (ii) all other
information concerning its business, properties and
personnel as Parent may reasonably request. Parent shall
hold, and shall cause its Representatives (as defined in the
Confidentiality Agreement dated February 16, 1994 (the
"Confidentiality Agreement"), between the Company and
Parent) to hold, any Evaluation Material (as defined in the
Confidentiality Agreement) in confidence in accordance with
the terms of the Confidentiality Agreement and, in the event
of termination of this Agreement for any reason, Parent
shall promptly return or destroy, and cause to be returned
or destroyed, all Evaluation Material in accordance with the
terms of the Confidentiality Agreement.
SECTION 6.03. Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth
in this Agreement, unless, as contemplated by
Section 8.01(a), the Board of Directors of the Company
approves or recommends a superior takeover proposal, each of
the parties shall use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in
<PAGE>44
41
doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious
manner practicable, the Offer, the Merger and the other
transactions contemplated by this Agreement, including
(i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities
and the making of all necessary registrations and filings
(including filings with Governmental Entities, if any) and
the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining
of all necessary consents, approvals or waivers from third
parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of any of the
transactions contemplated by this Agreement, including
seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or
reversed, and (iv) the execution and delivery of any addi-
tional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of,
this Agreement. In connection with and without limiting the
foregoing, the Company and its Board of Directors shall
(A) cooperate and cause its officers to cooperate with and
assist Parent and Sub in obtaining financing, of the nature
described in the commitment letters and "highly confident"
letters referred to in Section 4.02(k), sufficient to
consummate the Offer and the Merger, and to complete the
Offer and the Merger, on the terms contemplated by this
Agreement, (B) take all action necessary to ensure that no
state takeover statute or similar statute or regulation
(other than Article 16 of the BCL) is or becomes applicable
to the Offer, the Merger, this Agreement or any of the other
transactions contemplated by this Agreement and (C) if any
state takeover statute or similar statute or regulation
(other than Article 16 of the BCL) becomes applicable to the
Offer, the Merger, this Agreement or any other transaction
contemplated by this Agreement, take all action necessary to
ensure that the Offer, the Merger and the other transactions
contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such
statute or regulation on the Offer, the Merger and the other
transactions contemplated by this Agreement. Without
limiting the foregoing, Parent and Sub shall take all
reasonable actions necessary, proper or advisable to obtain
as promptly as practicable financing, consistent with the
terms of the commitment letters and "highly confident"
<PAGE>45
42
letters referred to in Section 4.02(k) or otherwise
satisfactory to Parent and Sub, sufficient to consummate the
Offer and the Merger on the terms contemplated by this
Agreement. Notwithstanding the foregoing, the Board of
Directors of the Company shall not be prohibited from taking
any action permitted by Section 8.01(a) or Section 9.01(c).
(b) The Company shall give prompt notice to
Parent, and Parent or Sub shall give prompt notice to the
Company, of (i) any representation or warranty made by it
contained in this Agreement becoming untrue or inaccurate in
any material respect, (ii) the failure by it to comply with
or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it under
this Agreement, (iii) any written notice or other
communication from any person alleging that the consent of
such person is or may be required in connection with the
transactions contemplated by this Agreement or (iv) any
notice or other communication from any Governmental Entity
in connection with the transactions contemplated by this
Agreement; provided, however, that no such notification
shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
SECTION 6.04. Stock Options. (a) As soon as
practicable following the date of this Agreement, the Board
of Directors of the Company (or, if appropriate, any commit-
tee administering the Stock Plans) shall adopt such resolu-
tions or take such other actions as are required to adjust
the terms of all outstanding employee stock options to
purchase shares of Common Stock ("Employee Stock Options")
heretofore granted under any stock option or stock purchase
plan, program or arrangement of the Company (collectively,
the "Stock Plans") to provide that each Employee Stock
Option outstanding immediately prior to the Effective Time
of the Merger shall be vested and exercisable. The Company
may discharge its obligations under this Section 6.04(a)
with respect to the 144,180 Employee Stock Options that were
issued in March and June 1993 and not by their terms
currently vested by causing such Employee Stock Options to
terminate without the requirement of any payment by the
Company immediately prior to the Effective Time of the
Merger and the Company shall do so with respect to any such
options held by any director of the Company (other than
Messrs. Call and Myers); and Parent and the Company shall
jointly approach each other holder of any such option to
consent to such termination.
<PAGE>46
43
(b) The Stock Plans shall terminate as of the
Effective Time of the Merger, and the provisions in any
other Benefit Plan providing for the issuance, transfer or
grant of any capital stock of the Company or any interest in
respect of any capital stock of the Company shall be deleted
as of the Effective Time of the Merger, and the Company
shall ensure that following the Effective Time of the Merger
no holder of an Employee Stock Option or any participant in
any Stock Plan or other Benefit Plan shall have any right
thereunder to acquire any capital stock of the Company or
the Surviving Corporation.
SECTION 6.05. Benefit Plans. (a) Parent shall
cause the Surviving Corporation to maintain in effect the
deferred compensation agreements with current and past
directors and employees as in effect on the date of this
Agreement. Parent shall cause the Surviving Corporation to
provide, for at least one year after the Effective Time of
the Merger, or, if earlier, the consummation of the Offer,
benefits to employees of the Company and its subsidiaries
that are no less favorable in the aggregate to such
employees than those in effect on the date of this
Agreement; provided, however, that neither Parent nor the
Surviving Corporation shall be obligated (i) to provide or
maintain such benefits to the extent they exceed, in the
aggregate, benefits generally provided to employees engaged
in similar industries and working in similar markets or in
competing markets or to the extent the provision or
maintenance thereof could reasonably likely be expected to
materially adversely affect the Surviving Corporation,
(ii) to offer such benefits to persons hired upon or after
the Effective Time of the Merger or the consummation of the
Offer, as applicable, (iii) to offer such benefits to the
extent such benefits would have expired, by their terms,
absent an agreement otherwise or (iv) to provide any
employees of the Company or its subsidiaries with any stock
options or other rights to acquire stock or with monetary or
other benefits in lieu of the right to receive stock options
or such other rights.
(b) Without limiting the generality of
Section 6.05(a), after the consummation of the Offer the
Company and, after the Effective Time of the Merger, the
Surviving Corporation shall, and Parent shall cause the
Company and the Surviving Corporation to, honor and perform
or discharge when due all the obligations of the Company
under the Company's Key Executive Severance Plan (the "KES
Plan"), the Company's Non-Qualified Profit-Sharing Plan, the
<PAGE>47
44
Company's Deferred Profit Sharing Plan, the Company's
Supplemental Executive Retirement Plan, the Company's
Management Incentive Plan and the agreements listed under
the heading "Executive Agreements" in Item 5 of the
Disclosure Schedule, in each case as in effect on the date
of execution of this Agreement. The Company and Parent
acknowledge that the Effective Time of the Merger (or, if
earlier, the consummation of the Offer) shall constitute a
"Change of Control" and a "Special Change of Control" within
the meaning of the KES Plan (and therefore also of any of
the other benefit plans and agreements listed above that
incorporates such definitions from the KES Plan), as in
effect on the date hereof, and that such "Change of Control"
and "Special Change of Control" shall take place at such
time. This Section 6.05(b) is intended to be for the
benefit of, and may be enforced by, each person entitled to
participate in any of the benefit plans and agreements
listed above.
SECTION 6.06. Indemnification. Parent and Sub
agree that all rights to indemnification for acts or
omissions occurring prior to the Effective Time of the
Merger now existing in favor of the current or former
directors or officers of the Company and its subsidiaries as
provided in their respective certificates of incorporation
or by-laws shall survive the Merger and shall continue in
full force and effect in accordance with their terms for a
period of not less than six years from the Effective Time of
the Merger. Parent shall cause to be maintained for a
period of not less than three years from the Effective Time
of the Merger the Company's current directors' and officers'
insurance and indemnification policy to the extent that it
provides coverage for events occurring prior to the
Effective Time of the Merger (the "D&O Insurance") for all
persons who are directors and officers of the Company on the
date of this Agreement, so long as the annual premium
therefor would not be in excess of $100,000 per year (the
"Maximum Premium"). If the existing D&O Insurance cannot be
maintained (because such policy is obtained through Agway
Inc.), expires, is terminated or canceled during such three-
year period, Parent shall use all reasonable efforts to
cause to be obtained as much D&O Insurance as can be
obtained for the remainder of such period for an annualized
premium not in excess of the Maximum Premium, on terms and
conditions no less advantageous than the existing D&O
Insurance.
<PAGE>48
45
SECTION 6.07. Fees and Expenses. (a) Except in
the case of a wilful and material breach of this Agreement
by the other party or as otherwise set forth in this
Section 6.07, all fees and expenses incurred in connection
with the Offer, the Merger, this Agreement and the
transactions contemplated by this Agreement shall be paid by
the party incurring such fees or expenses, whether or not
the Merger is consummated. Prior to the Effective Time of
the Merger or, if earlier, the consummation of the Offer,
the Company shall not incur or pay any such fees and
expenses other than (i) fees and expenses required to be
paid under the terms of its agreements with the Advisors
(and only at or after the times required by such
agreements), (ii) fees and expenses of other agents and
advisors and (iii) reasonable fees and expenses not payable
to agents and advisors, in each case unless otherwise
approved by Parent.
(b) The Company shall pay Parent a termination
fee of $2,500,000 if this Agreement is terminated (i) in
connection with a superior takeover proposal, (ii) by Parent
pursuant to Section 9.01(d) if the Board of Directors of the
Company or any committee thereof shall have withdrawn or
modified, or resolved to withdraw or modify, in a manner
adverse to Parent or Sub its approval or recommendation of
the Offer, the Merger or this Agreement unless (A) such
withdrawal or modification shall have resulted primarily
from facts not known to the Board of Directors on the date
of this Agreement or developments occurring after the date
of this Agreement and (B) at the time of such withdrawal or
modification there shall not be pending any takeover
proposal (as defined in Section 8.01(a)) (other than by
Parent) made after the date of this Agreement or (iii) by
Parent pursuant to Section 9.01(d) and, in the case of this
clause (iii), within one year from such termination any
person (other than Parent or one of its subsidiaries)
acquires a controlling equity interest in the voting
securities, or substantially all the assets, of the Company
or engages in any merger or other business combination with
the Company (an "Alternative Acquisition") (unless any
termination fee shall have previously been paid pursuant to
clause (i) or (ii) above). Such payment shall be paid in
immediately available funds, promptly, but in no event later
than five business days, after the termination of this
Agreement or, in the case of a payment pursuant to
clause (iii) above, after such Alternative Acquisition.
<PAGE>49
46
(c) Notwithstanding anything to the contrary
contained herein, if this Agreement is terminated (i) in
circumstances in which a termination fee is due pursuant to
Section 6.07(b), (ii) by Parent pursuant to Section 9.01(d)
or (iii) pursuant to Section 9.01(b)(i) or 9.01(b)(ii) (if
due to the Company's breach) and, in the case of this
clause (iii), within two years from such termination, any
person (or an affiliate thereof) (other than Parent or one
of its subsidiaries) who, between April 1, 1993, and the
date of such termination, had made, indicated to the Board
of Directors of the Company or any committee thereof, to the
chief executive officer or chief financial officer of the
Company or to either Advisor its interest in making or was
approached by the Company to make, a takeover proposal
consummates an Alternative Acquisition, then the Company
shall reimburse Parent for all fees and expenses incurred by
Parent prior to the termination date (including the
reasonable fees and expenses of Parent's counsel and
financial advisors and any institutions that have prior to
the date hereof made a commitment to provide financing to
Parent, Sub or the Surviving Corporation for the
transactions contemplated hereby) in connection with this
Agreement and the transactions contemplated hereby, up to a
maximum reimbursement of $3,000,000.
(d) Notwithstanding anything to the contrary in
the Integrated Agreement (the "Integrated Agreement") dated
as of June 27, 1992, between Parent and the Company, any
amounts payable by the Company pursuant to Section 6.07(b)
or 6.07(c) shall not be taken into account for the purposes
of determining any amounts due from the Company to Parent,
or from Parent to the Company, pursuant to paragraphs 48
through 52 of the Integrated Agreement.
SECTION 6.08. Public Announcements. Parent and
Sub, on the one hand, and the Company, on the other hand,
shall consult with each other before issuing, and provide
each other the opportunity to review and comment upon, any
press release or other public statements with respect to the
transactions contemplated by this Agreement, including the
Merger, and shall not issue any such press release or make
any such public statement prior to such consultation, except
as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any
national securities exchange. The parties agree that the
initial press release to be issued with respect to the
transactions contemplated by this Agreement shall be in the
<PAGE>50
47
form agreed to by the parties hereto prior to the execution
of this Agreement.
SECTION 6.09. Real Estate Taxes. Parent and Sub
agree that the Surviving Corporation shall pay the New York
State Real Property Transfer Tax, the New York State Real
Property Transfer Gains Tax, the Pennsylvania Realty
Transfer Tax, and the Washington State Excise Tax on Real
Estate Sales (collectively, the "Gains Taxes"), if any, and
any penalties or interest with respect to the Gains Taxes,
payable in connection with the consummation of the Merger
without any offset, deduction, counterclaim or deferment of
price to be paid for Common Stock in the Merger. The
Company shall cooperate with Parent and Sub in the filing of
any returns with respect to the Gains Taxes, including
supplying in a timely manner a complete list of all real
property interests held by the Company that are located in
the applicable state and any information with respect to
such property that is reasonably necessary to complete such
returns. The portion of the consideration to be received by
holders of Common Stock in connection with the Merger that
is allocable to the real property of the Company and its
subsidiaries in the applicable state shall be determined by
Parent and the Company or, if they are unable to agree, an
independent appraiser selected by Parent and the Company.
The shareholders of the Company shall be deemed to have
agreed to be bound by the allocation established pursuant to
this Section 6.09 in the preparation of any return with
respect to the Gains Taxes.
SECTION 6.10. Appraisals. Prior to the Effective
Time of the Merger, Parent shall have the right to conduct
or have conducted on its behalf appraisals of all or part of
such assets and businesses of the Company and its
subsidiaries as Parent may reasonably request.
SECTION 6.11. Integrated Agreement. Prior to the
Effective Time of the Merger, the Company shall not
terminate or take any action to terminate the Integrated
Agreement between the Company and the Parent.
SECTION 6.12. Other Offers. From the date
hereof, neither the Company, any of its subsidiaries nor any
officer, director, employee or any agent of the Company or
any of its subsidiaries shall, directly or indirectly,
(i) solicit, initiate or (subject to Section 8.01(a))
encourage any takeover proposal or (ii) subject to
Section 8.01(a), engage in negotiation with or disclose any
<PAGE>51
48
nonpublic information relating to the Company or any of its
subsidiaries or afford access to the properties, books or
records of the Company or any of its subsidiaries to any
person (other than Parent) that has made or that the Company
has reason to believe is considering making a takeover
proposal. The Company shall, and shall cause its
subsidiaries to, terminate any and all existing discussions
or negotiations with any person (other than Parent) relating
to any takeover proposal. The Company shall not be
responsible for any breach of this Section 6.12 by Roy
Myers, Robert Call, Jr., or any employee of the Company
involved primarily in managing the business of Parent or any
other employee of the Company acting at the request of any
of the foregoing.
SECTION 6.13. No Waiver. By entering into and
delivering this Agreement, neither the Company nor Parent
has, and neither of them shall be deemed to have, waived any
of its rights or claims against the other with respect to
the Integrated Agreement or otherwise or to have agreed with
the characterization of any arrangement, obligation, dispute
or claim involving the Company and Parent disclosed in the
Disclosure Schedule.
SECTION 6.14. Release. From and after the
Effective Time of the Merger, or, if earlier, the
consummation of the Offer, (i) Parent, the Company and the
Surviving Corporation (each a "Releasor") shall release and
discharge each director, officer, employee, agent and
advisor of the Company (each, a "Releasee") from any and all
claims, demands, causes of action, actions, suits,
proceedings and liabilities of any nature whatsoever
(collectively, "Claims") that may exist at such time in
favor of any such Releasor against any such Releasee to the
extent arising out of or based upon (A) the Integrated
Agreement, including the write-down by the Company of
certain assets at the end of fiscal 1993 and in the first
half of fiscal 1995, the actions by the Company in
connection with the termination by Parent in March 1994 of
certain crops, the management by the Company of the business
of Parent prior to the date hereof or the inclusion of
certain "change-of-control" expenses in the profits of the
Company for fiscal 1994 to be shared with Parent pursuant to
the Integrated Agreement, or (B) the transactions leading up
to this Agreement; provided, however, that the foregoing
release shall not apply to any Claim to the extent such
Claim (I) arises after the date of this Agreement,
(II) either (x) is based upon behavior of the applicable
<PAGE>52
49
Releasee that is not generally consistent with the behavior
of such Releasee prior to the date hereof or (y) is based
upon any action taken by such Releasee, or failure by such
Releasee to take any action, with intentional disregard for
what such Releasee in good faith believes to be the rights
of Parent under the Integrated Agreement (it being agreed
that any action or failure to take action consistent with
such Releasee's understanding of the advice (written or
oral) of counsel shall be deemed to have been without
intentional disregard for what such Releasee in good faith
believes to be the rights of Parent), and (III) is made in
writing by Parent to such Releasee promptly upon Parent or
Sub becoming aware of facts giving rise to such Claim if
they so became aware prior to the Effective Time of the
Merger or, if earlier, the consummation of the Offer (it
being acknowledged by Parent and Sub that neither the
Company nor any Releasee concedes that a Claim made that is
consistent with this proviso is necessarily a valid claim
against any Releasee, none of whom is a party to the
Integrated Agreement); and (ii) Parent shall release and
discharge the Company from any and all claims, demands,
causes of action, actions, suits, proceedings and
liabilities of any nature whatsoever that may exist in favor
of Parent against the Company to the extent arising out of
or based upon the Integrated Agreement or the transactions
leading up to this Agreement.
SECTION 6.15. Directors. Promptly upon the
acceptance of any shares of Common Stock for payment
pursuant to the Offer, the number of directors constituting
the Board of Directors of the Company shall be reduced to
not less than seven, and Sub shall be entitled to designate
such number of directors on the Board of Directors of the
Company as shall give Sub, subject to compliance with
Section 14(f) of the Exchange Act, majority representation
on such Board of Directors, and the Company shall, at such
time, cause Sub's designees to be elected to the Board of
Directors of the Company. Notwithstanding the foregoing, if
Sub's designees are appointed or elected to the Board of
Directors of the Company, (a) immediately following such
appointment or election the Board of Directors of the
Company shall also include at least three directors who are
directors on the date hereof and who are approved by the
Board of Directors of the Company immediately prior to such
appointment or election (the "Independent Directors") and
(b) if the number of Independent Directors shall be reduced
below three for any reason whatsoever, (i) any remaining
Independent Directors (or Independent Director, if there
<PAGE>53
50
shall be only one remaining) shall be entitled to designate
persons to fill such vacancies who shall be deemed to be
Independent Directors for purposes of this Agreement or (ii)
if no Independent Directors then remain, the other directors
shall designate three persons to fill such vacancies who
shall not be officers, shareholders or affiliates of the
Company, Parent or Sub, and such persons shall be deemed to
be Independent Directors for purposes of this Agreement.
Subject to applicable law, the Company shall take all action
requested by Parent necessary to effect any such election,
including mailing to its shareholders an Information
Statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. This Section 6.15 shall terminate upon the
Effective Time of the Merger.
SECTION 6.16. Exchange of Class B Common Stock
for Class A Common Stock. If, at any time on or after the
acceptance for payment of shares pursuant to the Offer, Sub
shall own more than 90% of the outstanding shares of Class B
Common Stock, and (i) Sub shall own less than 90% of the
outstanding shares of Class A Common Stock, the Company
shall forthwith issue to Sub such number of shares of
Class A Common Stock as shall be sufficient to cause Sub to
own at least 90% of the outstanding shares of Class A Common
Stock or (ii) Sub shall own 90% or more of the outstanding
shares of Class A Common Stock, the Company shall at Sub's
request issue to Sub additional shares of Class A Common
Stock, in each case in exchange for an equivalent number of
shares of Class B Common Stock surrendered by Sub to the
Company; provided, however, that the foregoing exchange
shall only be effected to the extent that the surrender of
such shares of Class B Common Stock shall not result in Sub
owning less than 90% of the outstanding shares of Class B
Common Stock after giving effect to such surrender.
SECTION 6.17. Stockholder Agreement. Parent and
Sub shall not exercise the option granted by AHI pursuant to
the Stockholder Agreement unless Sub is simultaneously
accepting, or has previously accepted, for payment pursuant
to the Offer at least 44% of the outstanding shares of Class
A Common Stock.
<PAGE>54
51
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obliga-
tion To Effect the Merger. The respective obligation of
each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Shareholder Approval. If required by
applicable law, this Agreement shall have been approved
and adopted by the Required Company Shareholder Vote.
(b) HSR Act. The waiting period (and any
extension thereof) applicable to the Merger under the
HSR Act shall have been terminated or shall have
expired.
(c) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction
or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in
effect, no proceeding challenging this Agreement or
seeking to prohibit, prevent or materially delay, or
alter any of the terms of, the transactions
contemplated hereby shall have been instituted by any
Governmental Entity and be pending and no other
proceeding challenging this Agreement or seeking to
prohibit, prevent or materially delay, or alter any of
the terms of, the transactions contemplated hereby
shall have been instituted by any other person and be
pending if, in the written opinion of counsel for the
party seeking to invoke this condition, such other
proceeding is reasonably likely to have a material
adverse affect on the Company; provided, however, that
each of the parties shall have used its reasonable best
efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any
injunction or other order that may be entered.
<PAGE>55
52
SECTION 7.02. Conditions to Obligations of Parent
and Sub. Unless Sub shall have accepted shares of Common
Stock for payment pursuant to the Offer, the obligations of
Parent and Sub to effect the Merger are further subject to
the following conditions:
(a) Representations and Warranties. The repre-
sentations and warranties of the Company set forth in
this Agreement that are qualified as to materiality
shall be true and correct, and the representations and
warranties of the Company set forth in this Agreement
that are not so qualified shall be true and correct in
all material respects (except that the representations
and warranties in Sections 4.01(c) and 4.01(g) shall be
true and correct in all respects), in each case as of
the date of this Agreement and as of the Closing Date,
as though made on and as of the Closing Date, except as
otherwise contemplated by this Agreement, and Parent
shall have received a certificate signed on behalf of
the Company by the chief executive officer and the
chief financial officer of the Company to such effect.
(b) Performance of Obligations of the Company.
The Company shall have performed in all material
respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date,
and Parent shall have received a certificate signed on
behalf of the Company by the chief executive officer
and the chief financial officer of the Company to such
effect.
(c) Employee Stock Options. Other than the
144,180 Employee Stock Options granted in March and
June 1993 that are not by their terms currently vested,
each Employee Stock Option shall have been exercised or
terminated.
(d) Consents. Parent shall have received, or be
satisfied that it will receive, any consents, filings,
approvals or waivers from third parties required to
consummate the Merger, other than such consents,
filings, approvals or waivers the absence of which
would not, individually or in the aggregate, have a
material adverse effect on the operation of the
business of the Company after the Effective Time of the
Merger substantially in the manner now conducted.
<PAGE>56
53
(e) Financing. Parent shall have received
financing sufficient to consummate the Merger on the
terms contemplated by this Agreement.
(f) Advisors' Termination. Parent shall have
received evidence, reasonably satisfactory to it, of
the termination of the contracts, agreements and other
arrangements between the Company and each Advisor,
terminating as of the Effective Time of the Merger all
of the Company's (or any successor's) obligations
thereunder, except the obligations to make the expense
reimbursements and other payments in connection with
the Offer and the Merger required by the agreements
previously delivered to Parent and referred to in
Section 4.01(o), and the indemnification and
contribution obligations for services performed before
the Effective Time of the Merger, as set out in such
agreements previously delivered to Parent.
(g) Other Documents. The Parent shall have
received all other documents it may reasonably request
relating to the existence of the Company and its
corporate authority for this Agreement, all in form and
substance reasonably satisfactory to the Parent.
SECTION 7.03. Conditions to Obligation of the
Company. Unless Sub shall have accepted shares of Common
Stock for payment pursuant to the Offer, the obligation of
the Company to effect the Merger is further subject to the
following conditions:
(a) Representations and Warranties. The
representations and warranties of Parent and Sub set
forth in this Agreement that are qualified as to
materiality shall be true and correct, and the
representations and warranties of Parent and Sub set
forth in this Agreement that are not so qualified shall
be true and correct in all material respects, in each
case as of the date of this Agreement and as of the
Closing Date, as though made on and as of the Closing
Date, except as otherwise contemplated by this
Agreement, and the Company shall have received a
certificate signed on behalf of each of Parent and Sub
by the chief executive officer and the chief financial
officer of such entity to such effect.
(b) Performance of Obligations of the Parent and
Sub. Each of Parent and Sub shall have performed in
<PAGE>57
54
all material respects all obligations required to be
performed by it under this Agreement at or prior to the
Closing Date, and the Company shall have received a
certificate signed on behalf of each of Parent and Sub
by the chief executive officer and the chief financial
officer of such entity to such effect.
ARTICLE VIII
Board Actions
SECTION 8.01. Board Actions. (a) Notwith-
standing any other provision of this Agreement to the
contrary, to the extent required by the fiduciary obliga-
tions of the Board of Directors of the Company, as deter-
mined in good faith by a majority of the disinterested
members thereof based on the written advice of the Company's
outside counsel:
(i) the Company may, in response to an unsolicited
request therefor, participate in discussions or
negotiations with, or furnish information with respect
to the Company pursuant to a customary confidentiality
agreement (as determined by the Company's outside
counsel) to, any person who a majority of such
disinterested directors believes (A) intends to submit
a takeover proposal and (B) has the financial ability
to make (or the ability to obtain financing for) a
superior takeover proposal (for purposes of this
Agreement, "takeover proposal" means any proposal for a
merger or other business combination involving the
Company or any proposal or offer to acquire in any
manner, directly or indirectly, a controlling equity
interest in any voting securities of, or a substantial
portion of the assets of, the Company, other than the
transactions contemplated by this Agreement); and
(ii) the Board of Directors of the Company may
approve or recommend (and, in connection therewith,
withdraw or modify its approval or recommendation of
this Agreement, the Offer or the Merger) a superior
takeover proposal and the Company may enter into an
agreement with respect to such superior takeover
proposal (for purposes of this Agreement, "superior
takeover proposal" means a bona fide takeover proposal
made by a third party (A) that a majority of the
disinterested members of the Board of Directors of the
<PAGE>58
55
Company determines in its good faith judgment (based on
the advice of the Company's independent financial
advisor) to be more favorable to the Company's
shareholders than the Offer and the Merger, (B) for
which financing, to the extent required, is then
committed or the subject of "highly confident" letters
issued by reputable, nationally recognized investment
banking firms and (C) that is not subject to any
condition requiring the sale by the Company of any
material asset unless a reputable, financially capable
person has agreed, or entered into a letter of intent,
subject only to customary conditions to purchase such
asset on terms that would satisfy such condition).
(b) The Company promptly shall advise Parent
orally and in writing of any takeover proposal or any
inquiry with respect to or which could lead to any takeover
proposal and the identity of the person making any such
takeover proposal or inquiry. The Company shall keep Parent
fully informed of the status and details of any such take-
over proposal or inquiry and shall provide copies of all
such proposals, together with any financing commitments,
"highly confident" letters, letters of intent and other
relevant documents.
(c) For purposes of this Section 8.01, a member
of the Board of Directors of the Company shall be
"disinterested" unless he or she is an executive officer of
the Company or Parent or an executive officer or director of
Agway Inc.
ARTICLE IX
Termination, Amendment and Waiver
SECTION 9.01. Termination. This Agreement may be
terminated at any time prior to the Effective Time of the
Merger, whether before or after approval of the transactions
contemplated by this Agreement, by the shareholders of the
Company:
(a) by mutual written consent of Parent and the
Company;
<PAGE>59
56
(b) by notice from either Parent or the Company to
the other:
(i) unless Sub shall have accepted shares of
Common Stock for payment pursuant to the Offer,
if, upon a vote at a duly held Company
Shareholders Meeting or any adjournment thereof,
the required approval of the shareholders of the
Company shall not have been obtained as
contemplated by Section 6.01(a);
(ii) unless Sub shall have accepted shares of
Common Stock for payment pursuant to the Offer, if
the Merger shall not have been consummated on or
before February 28, 1995, unless the failure to
consummate the Merger is the result of a wilful
and material breach of this Agreement by the party
seeking to terminate this Agreement; provided,
however, that the passage of such period shall be
tolled for any part thereof during which any party
shall be subject to a nonfinal order, decree,
ruling or action restraining, enjoining or other-
wise prohibiting the consummation of the Merger or
the calling or holding of the Company Shareholders
Meeting; or
(iii) if any Governmental Entity shall have
issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or
otherwise prohibiting the Merger and such order,
decree, ruling or other action shall have become
final and nonappealable;
(c) by notice to Parent from the Company if the
Board of Directors of the Company shall have
(i) withdrawn or modified its approval or
recommendation of this Agreement, the Offer or the
Merger, as contemplated by Section 8.01(a)(ii), or
(ii) determined to enter into an agreement with respect
to a superior takeover proposal as contemplated by
Section 8.01(a); provided, however, that, in either
case, the Company shall have entered into a binding
agreement with respect to such superior takeover
proposal within five business days of its notice to
Parent of such termination (and, if the Company shall
not have done so, such notice of termination shall be
null and void and any amounts paid to Parent or Sub
<PAGE>60
57
pursuant to Section 6.07 shall be promptly returned by
Parent to the Company);
(d) by notice to the Company from Parent
if (i) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified in a
manner adverse to Parent or Sub its approval or
recommendation of the Offer, the Merger or this
Agreement, or approved or recommended any superior
takeover proposal, (ii) the Company shall have entered
into any agreement with respect to any superior
takeover proposal (other than a confidentiality
agreement as contemplated by Section 8.01(a)(i)) or
(iii) the Board of Directors of the Company or any
committee thereof shall have resolved to do any of the
foregoing;
(e) unless Sub shall have accepted shares of
Common Stock for payment pursuant to the Offer, by
notice to the Company from Parent if any Governmental
Entity shall have issued an order, decree or ruling
that (i) shall have become final and unappealable and
(ii) would, in the reasonable judgment of Parent, have
a material adverse effect on the operation after the
Effective Time of the Merger of the business of the
Company and its subsidiaries substantially in the
manner now conducted;
(f) by notice from either Parent or the Company to
the other if Sub shall not have accepted shares of
Common Stock for payment pursuant to the Offer within
ten business days after expiration of the Offer;
provided, however, that such notice shall have been
given within 15 business days after expiration of the
Offer; and
(g) by notice from either Parent or the Company to
the other if Sub shall not have accepted shares of
Common Stock for payment pursuant to the Offer by
10:00 a.m., New York time, on December 16, 1994;
provided, however, that the Company shall not have the right
to terminate this Agreement pursuant to clause (f) or (g)
above if (i) at the time of expiration of the Offer the
Minimum Tender Condition (as defined in Exhibit A) shall not
have been satisfied and (ii) at least five business days
prior to the time of expiration of the Offer, Sub shall have
publicly disclosed that it has executed definitive
<PAGE>61
58
agreements or otherwise has commitments reasonably
satisfactory to the Company, subject only to customary
closing conditions, for financing that would be sufficient
to consummate the Offer and the Merger on the terms
contemplated by the Agreement.
SECTION 9.02. Effect of Termination. In the
event of termination of this Agreement by either the Company
or Parent as provided in Section 9.01, this Agreement shall
forthwith become void and have no effect, without any
liability or obligation on the part of Parent, Sub or the
Company, other than the provisions of Section 4.01(o),
Section 4.02(h), the last sentence of Section 6.02,
Section 6.05, Section 6.07, Section 6.14, Section 6.15, this
Section 9.02 and Article X and except to the extent that
such termination results from the wilful and material breach
by a party of any of its representations, warranties,
covenants or agreements set forth in this Agreement;
provided, however, that if the Offer is not consummated
prior to termination of this Agreement, Sections 6.05, 6.14
and 6.15 shall not survive such termination.
SECTION 9.03. Amendment. This Agreement may be
amended by the parties at any time before or after any
required approval of the transactions contemplated by this
Agreement by the shareholders of the Company; provided,
however, that, after any such approval, there shall not be
made any amendment that by law requires further approval by
such shareholders without the further approval of such
shareholders. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the
parties.
SECTION 9.04. Extension; Waiver. At any time
prior to the Effective Time of the Merger, the parties may
(a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive
any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered
pursuant to this Agreement or (c) subject to the proviso of
Section 9.03, waive compliance with any of the agreements or
conditions contained in this Agreement. Any agreement on
the part of a party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed
on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement
or otherwise shall not constitute a waiver of those rights.
<PAGE>62
59
SECTION 9.05. Procedure for Termination, Amend-
ment, Extension or Waiver. A termination of this Agreement
pursuant to Section 9.01, an amendment of this Agreement
pursuant to Section 9.03 or an extension or waiver pursuant
to Section 9.04 shall, in order to be effective, require
(a) in the case of Parent, Sub or the Company, action by its
Board of Directors or the duly authorized designee of its
Board of Directors and (b) in the case of the Company,
action by a majority of the members of the Board of
Directors of the Company who were members thereof on the
date of this Agreement and remain as such hereafter or the
duly authorized designee of such members; provided, however,
that in the event that Sub's designees are appointed or
elected to the Board of Directors of the Company as provided
in Section 6.15, after the acceptance for payment of shares
of Common Stock pursuant to the Offer and prior to the
Effective Time of the Merger, the affirmative vote of a
majority of the Independent Directors, in lieu of the vote
required pursuant to clause (b) above, shall be required to
(i) amend or terminate this Agreement by the Company,
(ii) exercise or waive any of the Company's rights or
remedies under this Agreement or (iii) extend the time for
performance of Parent's and Sub's respective obligations
under this Agreement.
ARTICLE X
General Provisions
SECTION 10.01. Nonsurvival of Representations and
Warranties. None of the representations and warranties in
this Agreement or in any instrument delivered pursuant to
this Agreement shall survive the Effective Time of the
Merger, or, if earlier, the consummation of the Offer. This
Section 10.01 shall not limit any covenant or agreement of
the parties which by its terms contemplates performance
after the Effective Time of the Merger.
SECTION 10.02. Notices. All notices, requests,
claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if
delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses
<PAGE>63
60
(or at such other address for a party as shall be specified
by like notice):
(a) if to Parent or Sub, to
Pro-Fac Cooperative, Inc.
90 Linden Place
P.O. Box 682
Rochester, New York 14603
Attention: Roy A. Myers
Fax: (716) 383-1606
Harris Beach & Wilcox
The Granite Building
130 East Main Street
Rochester, New York 14604-1687
Attention: Thomas M. Hampson
Fax: (716) 232-6925
and
Howard, Darby & Levin
1330 Avenue of the Americas
New York, New York 10019
Attention: Scott F. Smith
Fax: (212) 841-1010
(b) if to the Company, to
Curtice-Burns Foods, Inc.
90 Linden Place
Rochester, New York 14603
Attention: Mr. J. William Petty
Fax: (716) 383-0719
<PAGE>64
61
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention: Alan C. Stephenson, Esq.
Fax: (212) 474-3700
SECTION 10.03. Definitions. For purposes of this
Agreement:
An "affiliate" of any person means another person
that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under
common control with, such first person.
"Company Finance Documents" means, collectively,
(1) the Credit Agreement dated as of September 4, 1992,
as amended (the "Commercial Bank Credit Agreement"),
among the Company, The Chase Manhattan Bank, N.A.
("Chase"), as agent, and the banks party thereto (the
"Commercial Banks"), (2) the Guaranty dated July 2,
1990, as amended, between the Company and Springfield
Bank for Cooperatives ("Springfield") pursuant to which
the Company has agreed to guarantee the obligations of
Parent, under (A) the Master Agreement dated October 8,
1981, as amended, (B) the Seasonal Loan Agreement dated
December 10, 1992, as amended, (C) the Seasonal Loan
Agreement (Letters of Credit) dated February 9, 1993,
as amended, and (D) various Term Loan Agreements dated
various dates, each as amended and including future
Term Loan Agreements, (3) the related agreements
securing such obligations of the Company, including (I)
each of the Security Agreement and the Trademark
Collateral Assignment and Agreement, each dated as of
September 1, 1993, among the Company, Chase and the
Commercial Banks and (II) the Security Agreement dated
as of September 1, 1993, between the Company and
Springfield and (4) the other agreements related to any
of the agreements referred to in the foregoing clauses
(1), (2) and (3), which agreements are listed in the
Disclosure Schedule.
"Material adverse change" or "material adverse
effect" means, when used in connection with the Company
or Parent, any change or effect (or any development
<PAGE>65
62
that, insofar as can reasonably be foreseen, is likely
to result in any change or effect) that is materially
adverse to the business, properties, assets, condition
(financial or otherwise), results of operations or
prospects of the Company and its subsidiaries, taken as
a whole, or Parent and its subsidiaries, taken as a
whole, as the case may be.
A "person" means an individual, corporation,
partnership, joint venture, association, trust, unin-
corporated organization or other entity.
A "subsidiary" of any person means another person,
an amount of the voting securities, other voting
ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no
such voting interests, 50% or more of the equity
interests of which) is owned directly or indirectly by
such first person.
SECTION 10.04. Interpretation. When a reference
is made in this Agreement to a Section, such reference shall
be to a Section of this Agreement unless otherwise
indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation".
SECTION 10.05. Counterparts. This Agreement may
be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 10.06. Entire Agreement; No Third-Party
Beneficiaries; Effect on Arbitration Agreement. (a) This
Agreement (i) constitutes the entire agreement and
supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the
subject matter of this Agreement, other than the agreement
with respect to arbitration dated August 16, 1994, between
the Company and Parent (the "Arbitration Agreement") and the
Confidentiality Agreement, and (ii) except for the
provisions of Article III and Sections 6.05(b), 6.06 and
<PAGE>66
63
6.14, is not intended to confer upon any person other than
the parties any rights or remedies hereunder.
(b) Notwithstanding anything to the contrary in
the Arbitration Agreement, (i) the references in the
Schedule to the Arbitration Agreement to "signing Merger
Agreement" and to "signing" shall be construed as references
to November 15, 1994, or the first date prior thereto on
which Parent or Sub shall be in breach in any material
respect of its obligations hereunder, including the
penultimate sentence of Section 6.03, and (ii) the
Arbitration Agreement shall be null and void if this
Agreement shall have been terminated pursuant to Section
9.01(b)(ii) (if the Merger shall not have been consummated
due to the Company's breach of this Agreement).
SECTION 10.07. Governing Law. This Agreement
shall be governed by, and construed in accordance with, the
laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of
conflict of laws thereof.
SECTION 10.08. Assignment. Neither this
Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part,
by operation of law or otherwise by any of the parties
without the prior written consent of the other parties,
except that Sub may assign its rights and obligations
hereunder to any other wholly owned subsidiary of Parent.
Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.
SECTION 10.09. Enforcement. The parties agree
that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement in any court of the
United States located in the State of New York or in New
York state court, this being in addition to any other remedy
to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit
itself to the personal jurisdiction of any Federal court
located in the State of New York or any New York state court
in the event any dispute arises out of this Agreement or any
<PAGE>67
64
of the transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave
from any such court and (c) agrees that it will not bring
any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court
other than a Federal or state court sitting in the State of
New York or a New York state court.
IN WITNESS WHEREOF, Parent, Sub and the Company
have caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of the date first
written above.
PRO-FAC COOPERATIVE, INC.,
by
/s/ Roy Myers
Name: Roy A. Myers
Title: General Manager
PF ACQUISITION CORP.,
by
/s/ Roy Myers
Name: Roy A. Myers
Title: President
CURTICE-BURNS FOODS, INC.,
by
/s/ William Petty
Name: J. William Petty
Title: President and Chief
Executive Officer
<PAGE>68
65
EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or
this Agreement, Sub shall not be required to accept for
payment or, subject to any applicable rules and regulations
of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered
shares of Common Stock after the termination or withdrawal
of the Offer), to purchase or pay for any shares of Common
Stock tendered pursuant to the Offer unless (i) there shall
have been validly tendered and not withdrawn prior to the
expiration of the Offer that number of shares of Common
Stock which would represent at least 90% of the shares of
Class A Common Stock and 90% of the shares of Class B Common
Stock outstanding at the time of expiration of the Offer
(the "Minimum Tender Condition"), (ii) any waiting period
under the HSR Act applicable to the purchase of shares of
Common Stock pursuant to the Offer shall have expired or
been terminated and (iii) Parent or Sub shall have received
financing sufficient to consummate the Offer and the Merger
on the terms contemplated by this Agreement. Furthermore,
notwithstanding any other term of the Offer or this
Agreement, Sub shall not be required to commence the Offer
(and, if the Offer shall have commenced, Sub may terminate
or (subject to Section 1.01(a) of this Agreement) amend the
Offer) if any of the conditions set forth in clauses (a),
(b) or (d) below shall exist or if the Company is in
material breach of its obligations hereunder, nor shall Sub
be required to accept for payment or, subject as aforesaid,
to pay for any shares of Common Stock and Sub may terminate
or (subject to Section 1.01(a)) amend the Offer, if, at any
scheduled expiration date of the Offer or following the
expiration of the Offer but before the acceptance of such
shares for payment or the payment therefor, any of the
following conditions shall exist:
(a) any temporary restraining order, preliminary
or permanent injunction or other order shall have been
issued by any court of competent jurisdiction, or any
other legal restraint or prohibition shall be in
effect, that, directly or indirectly, prohibits or
delays materially Sub from purchasing or paying for
shares of Common Stock pursuant to the Offer, or
consummation of the Merger, any proceeding challenging
this Agreement or the Stockholder Agreement or seeking
to prohibit, prevent or materially delay, or alter any
of the terms of, the transactions contemplated hereby
or thereby shall have been instituted by any
<PAGE>69
66
Governmental Entity and be pending or any other
proceeding challenging this Agreement or the
Stockholder Agreement or seeking to prohibit, prevent
or materially delay, or alter any of the terms of, the
transactions contemplated hereby, shall have been
instituted by any other person and be pending if, in
the written opinion of counsel for the party seeking to
invoke this condition, such other proceeding is
reasonably likely to have a material adverse effect on
the Company; provided, however, that Parent and Sub
shall have used their reasonable best efforts to
prevent the entry of such injunction or other order and
to appeal as promptly as possible any injunction or
other order that may be entered;
(b) any of the representations and warranties of
the Company set forth in this Agreement that are
qualified as to materiality, or set forth in
Section 4.01(c) or 4.01(g), or any of the
representations and warranties of AHI set forth in the
Stockholder Agreement, shall not be true and correct or
any of the other representations and warranties set
forth in this Agreement shall not be true and correct
in all material respects; in each case as if each such
representation and warranty were made as of such time;
(c) the Company or AHI shall have breached or
failed to perform when required in any material respect
any obligation required to be performed by it under
this Agreement or the Stockholder Agreement;
(d) this Agreement shall have been terminated in
accordance with its terms, or the Offer shall have been
amended or terminated with the consent of the Company;
(e) Parent shall not have received, or not be
satisfied that it shall receive, all consents, filings,
approvals or waivers from third parties required to
consummate the Offer or the Merger, other than such
consents, filings, approvals or waivers the absence of
which would not, individually or in the aggregate, have
a material adverse effect on the operation of the
business of the Company in the manner now conducted; or
(f) Parent shall not have received evidence,
reasonably satisfactory to it, of the termination of
the contracts, agreements and other arrangements
between the Company and each Advisor terminating as of
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the Effective Time of the Merger all of the Company's
(or any successor's) obligations thereunder, except the
obligations to make the expense reimbursements and
other payments in connection with the Offer and the
Merger required by the agreements previously delivered
to Parent and referred to in Section 4.01(o), and the
indemnification and contribution obligations for
services performed before the Effective Time of the
Merger, as set out in such agreements previously
delivered to Parent.
The foregoing conditions are for the sole benefit
of Sub and Parent and may be asserted by Sub or Parent
regardless of the circumstances giving rise to such
condition or (subject to Section 1.01(a)) may be waived by
Sub and Parent in whole or in part at any time and from time
to time in their sole discretion. The failure by Parent,
Sub or any other affiliate of Parent at any time to exercise
any of the foregoing rights shall not be deemed a waiver of
any such right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a
waiver with respect to any other facts and circumstances and
each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
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EXHIBIT B
Certificate of Incorporation of
Surviving Corporation
FIRST. The name of the corporation is Curtice-
Burns Foods, Inc.
SECOND. The purpose of the corporation is to
engage in any lawful act or activity for which corporations
may be organized under the Business Corporation Law of the
State of New York but not to engage in any act or activity
requiring the consent or approval of any state official,
department, board, agency or other body without such consent
or approval first being obtained.
THIRD. The office of the corporation in the State
of New York is to be located in the County of Monroe.
FOURTH. The aggregate number of shares which the
corporation shall have authority to issue is 10,000 common
shares of the par value of $.01 per share.
FIFTH. The Secretary of State of the State of New
York is designated as agent of the corporation upon whom
process in any action or proceeding against it may be
served. The address to which the Secretary of State shall
mail a copy of any process against the corporation served
upon him is in care of Curtice-Burns Foods, Inc., 90 Linden
Place, P.O. Box 681, Rochester, New York 14603, Attention:
Corporate Secretary.
SIXTH. By-laws of the corporation may be adopted,
amended or repealed by the Board of Directors of the
corporation by the vote of a majority of the directors
present at a meeting of the Board of Directors at which a
quorum is present, subject to the power of the holders of
stock having voting power thereon to alter, amend or repeal
the By-laws adopted by the Board of Directors.
SEVENTH. No holder of shares of any class of the
corporation, now or hereafter authorized, shall as such
holder have any preferential or preemptive right to
subscribe for, purchase or receive any shares of the
corporation of any class, now or hereafter authorized, or
any options or warrants for such shares, or any rights to
subscribe for or purchase such shares, or any bonds,
debentures, notes or other securities convertible into or
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69
exchangeable for such shares, which may at any time be
issued, sold or offered for sale by the corporation.
EIGHTH. To the fullest extent permitted by the
Business Corporation Law of the State of New York as the
same exists or may hereafter be amended, no director shall
be personally liable to the corporation or any of its
shareholders for damages for any breach of duty as a
director; provided, however, that the foregoing provision
shall not eliminate or limit the liability of a director if
a judgment or other final adjudication adverse to him
establishes that his acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of
law or that he personally gained in fact a financial profit
or other advantage to which he was not legally entitled or
that his acts violated Section 719 of the Business
Corporation Law of the State of New York.
NINTH. The corporation reserved the right to
amend, alter, change or repeal any provision contained in
this Certificate of Incorporation in the manner now or
hereafter prescribed by law, and all rights and powers
conferred herein on stockholders, directors and officers are
subject to this reserved power.
