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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 1-7626
UNIVERSAL FOODS CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-0561070
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
433 East Michigan Street, Milwaukee, Wisconsin 53202
(Address of principal executive offices)
Registrant's telephone number, including area code: (414) 271-6755
NONE
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or such shorter period that the
Registrant was required to file such reports) and (2) has been subject to
such filing requirements for at least the past 90 days. Yes X
No
Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock as of the latest practicable date.
Class Outstanding at June 30, 1994
Common Stock, par value $0.10 per share 26,044,040 shares
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<PAGE>
UNIVERSAL FOODS CORPORATION
INDEX
Page No.
PART I, FINANCIAL INFORMATION:
Consolidated Condensed Balance Sheets
- June 30, 1994 and September 30, 1993. 1
Consolidated Condensed Statements of Earnings
- Three and Nine Months Ended
June 30, 1994 and 1993. 2
Consolidated Condensed Statements of Cash Flows
- Nine Months Ended June 30, 1994 and 1993. 3
Notes to Consolidated Condensed
Financial Statements. 4
Management's Discussion and Analysis of
Results of Operations, Financial Condition
and Forward Looking Information 6
PART II, OTHER INFORMATION
Item 5, Other Information 8
Item 6, Exhibits and Reports on Form 8-K. 13
Signatures. 14
<PAGE>
PART I
FINANCIAL INFORMATION
<PAGE>
UNIVERSAL FOODS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
($000's Omitted)
June 30
1994 September 30
ASSETS (Unaudited) 1993
CURRENT ASSETS:
Cash and cash equivalents $ 46,369 $ 11,356
Trade accounts receivable 115,708 94,339
Inventory:
Finished and in-process products 131,855 114,178
Raw materials and supplies 47,857 60,404
Prepaid expenses and other current assets 40,025 31,841
------- -------
TOTAL CURRENT ASSETS 381,814 312,118
INVESTMENTS AND OTHER ASSETS 36,070 28,502
INTANGIBLES 109,862 107,381
PROPERTY, PLANT AND EQUIPMENT:
Cost:
Land and buildings 136,681 131,709
Machinery and equipment 382,305 340,446
-------- --------
518,986 472,155
Less accumulated depreciation 219,005 190,163
------- --------
299,981 281,992
-------- --------
TOTAL ASSETS $827,727 $729,993
======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 73,288 $ 14,945
Accounts payable, accrued expenses
and other liabilities 137,424 142,980
Federal and state income taxes 15,719 11,035
Current maturities on long-term debt 4,827 5,663
-------- -------
TOTAL CURRENT LIABILITIES 231,258 174,623
DEFERRED INCOME TAXES 20,127 20,557
OTHER DEFERRED LIABILITIES 19,722 20,571
ACCRUED EMPLOYEE AND RETIREE BENEFITS 40,139 37,269
LONG-TERM DEBT 194,132 171,907
SHAREHOLDERS' EQUITY:
Common stock 2,698 2,698
Additional paid-in capital 80,179 79,826
Earnings reinvested in the business 273,224 246,939
-------- --------
356,101 329,463
Less: Treasury stock, at cost 25,992 14,693
Other 7,760 9,704
-------- --------
322,349 305,066
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $827,727 $729,993
======== ========
See accompanying Notes to Consolidated Condensed Financial Statements.
<PAGE>
<TABLE>
UNIVERSAL FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
($000's Omitted Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Nine Months
Ended June 30 Ended June 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Total Revenue $249,467 $228,036 $707,340 $654,073
Cost of Products Sold 168,268 151,751 470,072 433,112
------- ------- ------- -------
Gross Profit 81,199 76,285 237,268 220,961
Selling and Administrative
Expenses 52,816 49,815 154,899 143,428
-------- -------- -------- --------
Operating Income 28,383 26,470 82,369 77,533
Interest Expense 4,170 3,699 11,702 11,506
-------- -------- -------- --------
Earnings Before Income Taxes 24,213 22,771 70,667 66,027
Income Taxes 8,903 8,431 26,323 24,760
-------- -------- -------- --------
Earnings Before Accounting Changes 15,310 14,340 44,344 41,267
Accounting Changes --- --- --- 23,563
-------- -------- -------- --------
Net Earnings $ 15,310 $ 14,340 $ 44,344 $ 17,704
======== ======== ======== ========
Weighted Average Number of
Common Shares Outstanding 26,040,000 26,357,000 26,159,000 26,344,000
========== ========== ========== ==========
Earnings Per Common Share:
Earnings Before Accounting
Changes $ .59 $ .55 $1.70 $1.57
Accounting Changes .-- .-- .-- (.90)
----- ----- ----- ----
Net Earnings $ .59 $ .55 $1.70 $ .67
----- ----- ----- -----
Dividends Per Common Share $ .23 $ .22 $ .69 $ .66
----- ----- ----- -----
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
<PAGE>
<TABLE>
UNIVERSAL FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
($000's Omitted)
(Unaudited)
<CAPTION>
Nine Months Ended
June 30,
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 44,344 $ 17,704
Adjustments to reconcile net earnings to cash
provided by (used in) operating activities:
Cumulative effect of accounting changes --- 23,563
Depreciation and amortization 29,913 27,112
Changes in operating assets and liabilities
and other adjustments (24,406) (30,055)
------- -------
Net cash provided by operating activities 49,851 38,324
Cash flows from investing activities:
Acquisition of property, plant and equipment (40,645) (26,113)
Acquisition of new businesses (15,043) (9,637)
Proceeds from sale of property, plant and equipment
and other productive assets 480 344
Increase in investments (6,867) (2,044)
------- -------
Net cash used in investing activities (62,075) (37,450)
Cash flows from financing activities:
Proceeds from additional borrowings 135,373 33,544
Reductions in long-term debt (56,460) (19,499)
Proceeds from options exercised and dividend
reinvestment 502 299
Purchase of treasury stock (14,118) ---
Dividends paid (18,060) (17,390)
------- --------
Net cash provided by (used in) financing
activities 47,237 (3,046)
Net increase (decrease) in cash and cash equivalents 35,013 (2,172)
Cash and cash equivalents at beginning of period 11,356 11,030
------- -------
Cash and cash equivalents at end of period $ 46,369 $ 8,858
======= =======
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ 10,703 $ 10,735
Income taxes 22,284 23,252
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
<PAGE>
UNIVERSAL FOODS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position as of June 30,
1994 and September 30, 1993, and the results of operations and
cash flows for the three and nine month periods ended June 30,
1994 and 1993. The results of operations for any interim period
are not necessarily indicative of the results to be expected for
the full fiscal year.
2. Refer to the footnotes in the Company's annual financial
statements for the year ended September 30, 1993, for a
description of the accounting policies, which have been continued
without change, and additional details of the Company's financial
condition. The details in those notes have not changed except as
a result of normal transactions in the interim.
3. Expenses are charged to operations in the year incurred. However,
for interim reporting purposes, certain of these expenses are
charged to operations based on an annual estimate rather than as
expenses are actually incurred.
4. On December 15, 1993, the Company issued $20,000,000 of 6.38%
senior notes, due in four annual principal payments of $5,000,000
beginning December 15, 2000, and $20,000,000 of 6.70% senior
notes, due in nine annual principal payments of $2,222,000
beginning December 15, 2001.
5. During the nine months ended June 30, 1994, the Company
repurchased 450,700 shares of common stock for an aggregate price
of $14,118,000.
6. For the nine months ended June 30, 1994, depreciation and
amortization were $25,532,000 and $4,381,000, respectively. For
the nine months ended June 30, 1993, depreciation and amortization
were $23,084,000 and $4,028,000 respectively.
7. The Company acquired Destillaciones Garcia de la Fuente, S.A.
(DGF), a specialty flavor and fragrance company, effective January
1, 1994. The acquisition has been accounted for as a purchase
and, accordingly, the results of operations and financial position
of DGF are reflected in the Consolidated Condensed Financial
Statements from the effective date of the acquisition. The impact
of the acquisition on the financial statements of the Company is
not material.
8. The Company acquired Campbell Foods PLC, a processor of air and
freeze-dried vegetables, effective June 8, 1994. The acquisition
has been accounted for as a purchase and, accordingly, the results
of operation and financial position of this business are reflected
in the Consolidated Condensed Financial Statements from the
effective date of the acquisition. The impact of the acquisition
on the financial statements of the Company is not material.
9. The Company acquired Champlain Industries Limited (Champlain), a
manufacturer of savory flavorings and flavor enhancers, effective
July 7, 1994. The acquisition will be accounted for as a purchase
and the results of operations and financial position of Champlain
will be reflected in the Consolidated Condensed Financial
Statements from the effective date of the acquisition. The impact
of the acquisition on the financial statements of the Company is
not material.
10. Effective August 1, 1994, the Company sold for cash its Frozen
Foods Division to ConAgra, Inc. The agreement provides for a
purchase price which reflects a premium over book value. See Item
5 of this Report for a discussion of and pro forma financial
statements relating to this transaction.
11. Cash and cash equivalents at June 30, 1994 includes funds
available to finance our on-going acquisition program including
the purchase of Champlain Industries Limited, as discussed in Note
9.
12. Effective October 1, 1992, the Company adopted the provisions of
Statement of Accounting Standards No. 106 (SFAS No. 106),
"Employer's Accounting for Postretirement Benefits Other Than
Pensions" and Statement of Accounting Standards No. 112 (SFAS No.
112), "Employer's Accounting for Postemployment Benefits", whereby
the cost of postretirement and postemployment benefits is accrued
during an employee's active service period rather than expensed as
incurred. The after-tax transition effect of adopting SFAS No.
106 and 112 on an immediate recognition basis, as of October 1,
1992, reduced fiscal 1993 first quarter earnings by $23,563,000,
or $.90 per share. In addition, application of SFAS No. 106 and
112 decreased the nine months ended June 30, 1993 Earnings Before
Accounting Changes by $1,957,000, net of tax, or $.07 per share.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS, FINANCIAL CONDITION
AND FORWARD LOOKING INFORMATION
RESULTS OF OPERATIONS:
Third quarter revenue from operations of $249,467,000 represents a
9.4% increase from the same quarter in 1993. Revenue for the
first nine months of 1994 was $707,340,000, a 8.1% increase from
$654,073,000 for 1993.
The gross profit margin for the third quarter was 32.5% compared
with 33.5% for the same quarter last year. For the first nine
months, the gross margin decreased slightly to 33.5% from 33.8%.
Selling and administrative expenses decreased to 21.2% of revenue
during the third quarter compared with 21.8% during the same
period last year. For the first nine months of fiscal 1994,
selling and administrative expenses remained unchanged at 21.9%.
Interest expense increased in the third quarter to $4,170,000 from
$3,699,000 for the third quarter of 1993. Interest expense for
nine months has slightly increased to $11,702,000 in 1994 from
$11,506,000 for 1993. The increase in interest expense is
primarily attributed to higher average outstanding debt, partially
offset by lower interest rates compared with the same periods last
year.
The income tax provision for the third quarter and the first nine
months of fiscal 1994 exceeded the 34% statutory rate primarily as
a result of the state income tax provision and the non-tax
deductibility of certain expenses such as the amortization of
intangibles.
FINANCIAL CONDITION:
At June 30, 1994, the current ratio was 1.7:1, a decrease from
1.8:1 at September 30, 1994. The net working capital at June 30,
1994 was $150,556,000. This is an increase of $13,061,000 from
the net working capital of $137,495,000 at September 30, 1993.
For the nine months ended June 30, 1994, the net cash used in
investing activities was $62,075,000. Capital expenditures, the
most sizeable investing activity, were $40,645,000 for this
period. The capital expenditure program reflects the Company's
continuing commitment to maintain and enhance product quality,
further automate and upgrade manufacturing processes, and expand
the business through internal growth. Major projects currently
underway include an expansion of the confection room at the Flavor
Divisions Amboy Plant and an upgrade of the software used by the
North American operations of the Flavor Division. Also included
in investing activities is the acquisition of new businesses of
$15,043,000. Further details of these acquisitions can be found
in Notes 7 - 9 on pages 4 and 5.
Net cash provided by financing activities was $47,237,000 for the
nine months ended June 30, 1994. Included in financing activities
are proceeds from additional borrowings of $135,373,000 and
reductions of debt of $56,460,000 for the nine month period. The
net increase in debt was used primarily to fund capital
expenditures, purchase of treasury stock and the acquisition of
new businesses noted above.
FORWARD LOOKING INFORMATION:
Management is pleased with the operating and financial results of
the Company despite the slow growth in the food industry. The
Company is focused on improving unit sales, product mix and
productivity and anticipates continued growth in operating
earnings in the fourth quarter.
<PAGE>
PART II
OTHER INFORMATION
<PAGE>
Item 5. OTHER INFORMATION
a. Sale of Stock
On August 1, 1994, the company consummated the sale of its frozen
foods business (the Division ) to ConAgra, Inc., a Delaware
corporation ( ConAgra ). The transaction took the form of the
sale of the stock of Universal Frozen Foods Co., a subsidiary of
the Company (the Subsidiary ), pursuant to the Stock Purchase
Agreement, dated as of April 15, 1994, among ConAgra, the Company
and Universal Holding, Inc. (the Stock Purchase Agreement ).
There is no material relationship between ConAgra and the Company
or any of its affiliates, directors or officers or any of their
associates.
The Division produced frozen potato products for U.S. and
international markets. It was headquartered in Boise, Idaho and
operated processing facilities in Idaho, Oregon and Washington,
employing approximately 2,000 people.
The cash purchase price for the Division consisted of base
consideration that was paid at the closing and earnout
consideration that is payable over a five year period. The base
consideration was $163 million, subject to certain adjustments
based upon the net equity of the Division as of the closing date.
The earnout consideration of approximately $57 million is an
annual amount payable for each of the five years following the
closing. The amount of the earnout consideration is 50% of the
sales margin for the business (based upon net sales of the
business less direct manufacturing costs) subject to the following
maximum amounts applicable to each such year: (a) $16 million
for the first year; (b) $14 million for the second year; (c) $12
million for the third year; (d) $10 million for the fourth year;
and (e) $5 million for the fifth year. The earnout consideration
is payable in quarterly installments during each year. In
connection with the transaction, the Company also agreed to make
an election under Section 338(h) (10) of the Internal Revenue Code
of 1986 to treat the sale of stock of the Subsidiary as a sale of
all of the assets of the Subsidiary for federal income tax
purposes and state income tax purposes.
The foregoing summary description of the terms of the transaction
is qualified in its entirety by reference to the Stock Purchase
Agreement, attached as Exhibit 2 hereto, which exhibit is
incorporated by reference herein.
The foregoing description is included herein in lieu of reporting
the transaction on a Form 8-K current Report.
b. Financial Statements and Pro Forma Information
The following unaudited Pro Forma Condensed Consolidated Balance
Sheet as of June 30, 1994 and the Pro Forma Condensed Consolidated
Statements of Income for the 9 month period then ended and the
year ended September 30, 1993 give effect to the sale of the
Company s frozen foods business. The adjustments related to the
Pro Forma Condensed Consolidated Balance Sheet assume the
transaction was consummated at June 30, 1994, while the
adjustments to the Pro Forma Condensed consolidated Income
Statements assume the transaction was consummated at the beginning
of the period presented. The actual sale occurred on August 1,
1994. The pro forma information is based on the historical
financial statements for the Company which have been adjusted to
reflect the discontinued operations. These unaudited Pro Forma
Condensed Consolidated Financial Statements are not necessarily
indicative of the results that actually would have occurred if the
sale had been in effect as of and for the periods presented, or
what may be achieve by the Company's continuing operations in the
future. The unaudited Pro Forma Condensed Consolidated Financial
Statements should be reviewed in conjunction with the company s
historical financial statements and notes thereto, contained in
the company s annual report on form 10-K for the year ended
September 30, 1993.
<PAGE>
<TABLE>
UNIVERSAL FOODS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1994
(000'S OMITTED)
(UNAUDITED)
<CAPTION>
(a)
Consolidated Pro Forma Pro Forma
6-30-94 Adjustments Consolidated
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 46,369 $ 73,000 (b) $119,369
Trade accounts receivable 115,708 (21,867) 93,841
Inventory:
Finished and in-process products 131,855 (37,270) 94,585
Raw materials and supplies 47,857 (6,300) 41,557
Prepaid expenses and other current assets 40,025 (9,186) 30,839
--------- --------- --------
TOTAL CURRENT ASSETS 381,814 (1,623) 380,191
INVESTMENTS AND OTHER ASSETS 36,070 (514) 35,556
INTANGIBLES 109,862 (16,952) 92,910
PROPERTY PLANT AND EQUIPMENT:
Cost:
Land and buildings 136,681 (29,104) 107,577
Machinery and equipment 382,305 (103,755) 278,550
------- --------- --------
518,986 (132,859) 386,127
Less accumulated depreciation 219,005 (47,604) 171,401
------- --------- --------
299,981 (85,255) 214,726
-------- --------- --------
TOTAL ASSETS
$827,727 $(104,344) $723,383
======== ========= ========
CURRENT LIABILITIES:
Short-term borrowings $ 73,288 $ (68,000)(b) $5,288
Accounts payable, accrued expenses and
other liabilities 137,424 (16,529) 120,895
Federal and state income taxes 15,719 14,490 (c) 30,209
Current maturities on long-term debt 4,827 4,827
-------- --------- -------
TOTAL CURRENT LIABILITIES 231,258 (70,039) 161,219
DEFERRED INCOME TAXES 20,127 20,127
OTHER DEFERRED LIABILITIES 19,722 19,722
ACCRUED EMPLOYEE AND RETIREE BENEFITS 40,139 (2,305) 37,834
LONG-TERM DEBT 194,132 (34,000)(b) 160,132
SHAREHOLDERS' EQUITY
Common Stock 2,698 2,698
Additional paid-in capital 80,179 80,179
Earnings reinvested in the business 273,224 2,000 275,224
-------- --------- ---------
356,101 2,000 358,101
Less: Treasury stock, at cost 25,992 25,992
Other 7,760 7,760
-------- --------- ---------
322,349 2,000 324,349
-------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $827,727 $(104,344) $723,383
======== ========= =========
<FN>
(a) - Universal Foods consolidated is adjusted by Universal Frozen Foods balances as of
June 30, 1994 on a line by line basis.
(b) - As of the date of this balance sheet, the estimated proceeds would have been
approximately $175 million and is used to reduce short term and long term debt with
the balance reflected as an increase in cash.
(c) - Estimated income tax liability resulting from the sale transaction.
</TABLE>
<PAGE>
UNIVERSAL FOODS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED JUNE 30, 1994
(000's omitted, except Per Share Data)
(UNAUDITED)
(a)
Consolidated Pro Forma Pro Forma
6-30-94 Adjustments Consolidated
Total Revenue $707,340 $(214,085) $493,255
Cost of Goods Sold 470,072 (159,814) 310,258
-------- -------- --------
Gross Profit 237,268 (54,271) 182,997
Selling and Administrative
Expenses 154,899 (40,132) 114,767
-------- -------- --------
Operating Income 82,369 (14,139) 68,230
Interest Expense 11,702 (2,231)(b) 9,471
-------- --------- --------
Earnings Before Income Taxes 70,667 (11,908) 58,759
Income Taxes 26,323 (4,436) 21,887
-------- --------- --------
Earnings Before Accounting
Changes $ 44,344 $ (7,472) $ 36,872
======== ========= ========
Weighted Average Number of
Common Shares Shares
Outstanding 26,159 26,159
======== ========
Earnings Per Common Share:
Earnings Before Accounting
Changes $1.70 $1.41
===== =====
(a) - Universal Foods consolidated is adjusted by Universal Frozen Foods
for the period ending June 30, 1994 on a line by line basis.
(b) - Reflects the interest expense impact related to Universal Foods
reduction of average short term debt of approximately
$67 million for the period ending June 30, 1994.
<PAGE>
UNIVERSAL FOODS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1993
(000's omitted, except Per Share Data)
(UNAUDITED)
(a)
Consolidated Pro Forma Pro Forma
9-30-93 Adjustments Consolidated
Total Revenue $891,566 $(266,572) $624,994
Cost of Goods Sold 589,735 (192,866) 396,869
-------- --------- --------
Gross Profit 301,831 (73,706) 228,125
Selling and Administrative
Expenses 196,102 (49,951) 146,151
-------- --------- --------
Operating Income 105,729 (23,755) 81,974
Interest Expense 15,172 (2,328)(b) 12,844
-------- -------- --------
Earnings Before Income Taxes 90,557 (21,427) 69,130
Income Taxes 33,959 (8,035) 25,924
-------- -------- --------
Earnings Before Accounting
Changes $ 56,598 $ (13,392) $ 43,206
======== ======== ========
Weighted Average Number of
Common Shares Shares
Outstanding 26,350 26,350
===== =======
Earnings Per Common Share:
Earnings Before Accounting
Changes $2.15 $1.64
===== =====
(a) - Universal Foods consolidated is adjusted by Universal Frozen Foods
for the period ending September 30, 1993.
(b) - Reflects the interest expense impact related to Universal Foods
reduction of average short term debt of approximately
$66 million for the period ending September 30, 1993.
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 2 - Stock Purchase Agreement, dated as of April 15,
1994, among ConAgra, Inc., Universal Foods
Corporation and Universal Holding, Inc.
(b) No reports on Form 8-K were required to be filed during the
quarter ended June 30, 1994.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
UNIVERSAL FOODS CORPORATION
Date: August 12, 1994 By: /s/ Terrence M. O'Reilly
Terrence M. O'Reilly, Vice President,
Secretary and General Counsel
Date: August 12, 1994 By: /s/ John E. Heinrich
John E. Heinrich, Vice President and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
2 Stock Purchase Agreement, dated as of April 15, 1994, among
ConAgra, Inc., Universal Foods Corporation and Universal
Holding, Inc.
Exhibit 2
CONFORMED COPY
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("Agreement"), dated as of April 15, 1994,
among ConAgra, Inc., a Delaware corporation ("Purchaser"), Universal Foods
Corporation, a Wisconsin corporation ("Parent"), and Universal Holdings,
Inc., a Nevada corporation ("Seller").
RECITALS:
(a) Universal Frozen Foods Company, an Oregon corporation (the
"Company"), is engaged in the business of processing and
selling frozen potato products. Seller owns all of the
issued and outstanding shares of capital stock of the Company
(the "Company Stock").
(b) The Company's headquarters are located in Boise, Idaho, and
the Company's production facilities (the "Facilities") are
located at Twin Falls, Idaho (the "Idaho Facility"); Pasco,
Washington (the "Washington Facility"); and Hermiston, Oregon
(the "Oregon Facility"). Purchaser desires to purchase the
Company Stock from Seller and Seller desires to sell the
Company Stock to Purchaser upon the terms and conditions
contained herein.
(c) Seller is a wholly-owned subsidiary of Parent. Parent
desires Seller to consummate the transactions contemplated by
this Agreement.
(d) Purchaser is willing to enter into and perform this Agreement
only if the Seller and/or Parent agrees to pay Purchaser
certain amounts on the conditions contained in Section 14.3.
AGREEMENT:
NOW, THEREFORE, in consideration of the recitals which are
incorporated with and are made a contractual part of this Agreement, and
in further consideration of the mutual covenants and agreements herein
contained, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows:
1. Purchase and Sale of Stock. At Closing on the Closing Date
(as defined in Section 5), Seller shall sell, transfer, assign, convey and
deliver to Purchaser, free and clear of all liens,claims and encumbrances,
all of the Company Stock, and Purchaser will accept and acquire the
Company Stock from Seller.
2. Consideration. As consideration for the Company Stock,
Purchaser shall pay to Seller, in accordance with the terms and
conditions set forth herein, an amount equal to the Base Consideration
plus the Earnout Consideration (as such terms are defined below). All
payments thereof shall be made by wire transfer of immediately available
funds to an account designated by Seller not less than 48 hours prior to
the time for payment specified herein.
3. Base Consideration. The "Base Consideration" shall be an
amount equal to the sum of (a) $163,000,000 plus (b) the amount, if any,
by which the Net Equity (as defined in Section 6.3) exceeds $128,000,000,
and minus (c) the amount, if any, by which $128,000,000 exceeds the Net
Equity. One Hundred Sixty-Three Million Dollars ($163,000,000) of the
estimated Base Consideration shall be paid at Closing. The balance, if
any, shall be paid on the Settlement Date (as defined in Section 6.4).
4. Earnout Consideration. The "Earnout Consideration" shall be
an annual amount payable for each of the five (5) Fiscal Years (as defined
below) following Closing. In the event the aggregate Earnout
Consideration paid with respect to such five Fiscal Years is less than
$57,000,000, the Earnout Consideration shall also be paid for the sixth
Fiscal Year following Closing. The Earnout Consideration will be an
amount equal to 50% of Sales Margin (as defined below) for such Fiscal
Year. Except as set forth in Section 4.2, Purchaser shall not be required
to pay Earnout Consideration for any Fiscal Year in excess of the amounts
set forth in Section 4.2 below (the "Annual Cap"). The maximum aggregate
Earnout Consideration payable by Purchaser pursuant to this Section 4
shall be $57,000,000, subject to increase pursuant to Section 4.2 (the
"Maximum Amount").
4.1 Sales Margin. For purposes of this Agreement, "Sales Margin"
shall mean Net Sales of the Company less direct manufacturing
costs (consisting of direct labor, direct materials and
supplies and direct factory overhead) of the Company, all
determined in accordance with generally accepted accounting
principles, consistently applied, provided that "Net Sales"
shall mean Company's annual pounds of production multiplied
by the Purchaser's average net selling price per pound,
calculated by each production item. Notwithstanding the
foregoing:
4.1.1 For any goods delivered by the Company to Purchaser or
any subsidiary/Purchaser or any of their other
subsidiaries, Sales Margin shall reflect reasonable
arm's length revenues, and for any goods delivered to
the Company by Purchaser or any subsidiary of
Purchaser or any of their other subsidiaries, Sales
Margin shall reflect reasonable arm's length material
costs;
4.1.2 Regardless of the corporate form that the Company may
take in the future, Purchaser shall maintain, or cause
to be maintained appropriate books and records for
purposes of calculating Sales Margin, which, among
other things, must enable the identification of the
pounds of production of the Company and the average
net selling price per pound for each production item
of Purchaser;
4.1.3 If, in any Fiscal Year, the Earnout Consideration paid
by Purchaser is less than the Annual Cap applicable to
such Fiscal Year, Purchaser shall compute and present
to Parent a statement setting forth Sales Margin
within forty-five (45) days following the end of each
Fiscal Year (the "Annual Sales Margin Statement").
The Annual Sales Margin Statement shall fairly present
in all material respects the Sales Margin of the
Company for the relevant Fiscal Year in accordance
with the principles set forth above;
4.1.4 During the five Fiscal Years following Closing,
Purchaser shall not allow the Company to sell or
shutdown the Idaho Facility or the Washington Facility
without the prior written consent of Parent, which
consent shall not be unreasonably withheld; provided,
however, if such consent is withheld, Purchaser may,
at its option, pay to Parent an amount equal to the
then unpaid Maximum Amount discounted to the date of
payment at 6% per annum from the scheduled payment
dates set forth in Section 4.4. In the event of such
payment, Purchaser shall have no further obligations
pursuant to this Section 4;
4.1.5 Purchaser shall cause the Company to maintain business
interruption insurance in reasonable amounts, and any
proceeds received by the Company or by Purchaser or
any subsidiary with respect to the Company's
operations shall be included in Net Sales of the
Company for purposes of calculating Sales Margin.
4.2 Annual Cap. The Annual Cap for each Fiscal Year shall be as
follows:
Fiscal Year Annual Cap
1 $16,000,000
2 $14,000,000
3 $12,000,000
4 $10,000,000
5 $5,000,000
If, in any Fiscal Year, the Earnout Consideration is less
than the Annual Cap applicable to such Fiscal Year, the
amount of such shortfall plus 6% shall be added to the Annual
Cap for the following Fiscal Year and in any such event the
6% amount shall increase the Maximum Amount. In addition,
if, in any Fiscal Year, the Earnout Consideration is less
than the Annual Cap applicable to such Fiscal Year, Seller,
at its own cost and expense, may retain a nationally
recognized, independent accounting firm to audit or review
the books and records of the Company for purposes of
verifying Sales Margin, and Purchaser shall make such books
and record reasonably available to such auditor at the
offices where such books and records are located.
4.3 Fiscal Year. For purposes of this Agreement, the first
Fiscal Year shall be the year beginning on the first day of
Purchaser's first fiscal month beginning immediately
following Closing and end on the last day of the twelfth
fiscal month thereafter and the subsequent Fiscal Years shall
be the years that begin and end on the respective
anniversaries of such dates.
4.4 Payment. The Earnout Consideration payable with respect to
each Fiscal Year shall be paid to Seller as follows:
4.4.1 Within ten (10) days following the end of each of the
first three fiscal quarters of each Fiscal Year,
Purchaser shall pay to Seller in immediately available
funds an amount equal to twenty-five percent (25%) of
the Annual Cap (the "Estimated Payment").
Notwithstanding the foregoing, Purchaser shall not be
required to make an Estimated Payment to the extent
that the aggregate of such Estimated Payment together
with prior net payments of Earnout Consideration
exceed the Maximum Amount.
4.4.2 The settlement of the Earnout Consideration for each
Fiscal Year shall take place within ten days following
the delivery by Purchaser of the Annual Sales Margin
Statement for such Fiscal Year in accordance with
Section 4.1 or, if no Annual Sales Margin Statement is
required for such Fiscal Year, the date 45 days after
the last day of the Fiscal Year (the "Earnout
Settlement Date"). On the Earnout Settlement Date,
Purchaser shall pay to Seller in immediately available
funds the amount, if any, by which the Earnout
Consideration for such Fiscal Year exceeds the
aggregate of the Estimated Payments paid by Purchaser
for such Fiscal Year, or Seller shall refund to
Purchaser in immediately available funds the amount,
if any, by which the aggregate of the Estimated
Payments paid by Purchaser for such Fiscal Year
exceeds the Earnout Consideration for such Fiscal
Year. All amounts owed pursuant to this Section 4.4.2
shall include interest from the last day of the Fiscal
Year for which such Earnout Consideration is being
paid to the date of the payment at a rate per annum
equal to the rate of interest announced from time to
time by Citibank, N.A., as its "prime rate" calculated
on the basis of a 365-day year (the "Prime Rate").
5. Closing. Subject to the terms and conditions contained in
this Agreement, the consummation of the transactions contemplated herein
(the "Closing") will take place at the offices of Purchaser, Omaha,
Nebraska, on the later of (i) June 1, 1994, (ii) the fifth business day
after the date on which the waiting period under the HSR Act (as defined
in Section 7.9) shall have expired or otherwise been terminated or (iii)
at such other date or place as the parties hereto may mutually agree (the
"Closing Date"). Notwithstanding the foregoing, if the Closing does not
take place on the date referred to in the preceding sentence because any
condition to the obligations of Parent and Seller, on the one hand, or
Purchaser, on the other hand, under this Agreement is not met on that
date, the other party may postpone the Closing from time to time to any
designated subsequent business day not more than ten business days after
the original or postponed date on which the Closing was to occur by
delivering notice of such postponement on the date the Closing was to
occur.
5.1 Purchaser's Obligation at Closing. At the Closing, Purchaser
shall:
5.1.1 Payment. Pay to Seller $163,000,000 in immediately
available funds.
5.1.2 Legal Opinion. Deliver the legal opinion of McGrath,
North, Mullin & Kratz, P.C., counsel for Purchaser, in
the form attached hereto as Exhibit 5.1.2.
5.1.3 Certificate. Execute and deliver the certificate
contemplated in Section 13.3 hereof.
5.2 Sellers' Obligations at Closing. At the Closing, Seller
and/or Parent shall:
5.2.1 Stock Certificates. Deliver to Purchaser certificates
representing all of the Company Stock duly endorsed in
blank, with all necessary transfer tax and other
revenue stamps acquired at Seller's expense.
5.2.2 Legal Opinion. Deliver to Purchaser the legal opinion
of Foley & Lardner, counsel for the Seller in the form
attached hereto as Exhibit 5.2.2.
5.2.4 Resignations. Deliver to Purchaser written
resignations of the officers and directors of the
Company.
5.2.5 Certificate. Execute and deliver the certificate
contemplated in Section 12.4 hereof.
6. Post Closing Matters.
6.1 Closing Balance Sheet. Within 60 days after the Closing
Date, Seller shall prepare, or cause to be prepared, in
accordance with generally accepted accounting principles
applied on a basis consistent with the Company's prior
accounting practices and in accordance with the principles
set forth on Exhibit 6.1 hereto a special purpose balance
sheet of the Company as of the Closing Date. Seller and
Parent warrant and covenant that such special purpose balance
sheet shall fairly present in all material respects the
financial position of the Company as of the Closing Date in
conformity with generally accepted accounting principles
consistently applied and in accordance with principles set
forth on Exhibit 6.1 hereto. To prepare such special purpose
balance sheet, Parent and Seller shall conduct a physical
inventory as of the Closing Date in accordance with generally
accepted accounting principles and shall permit Purchaser and
its accountants to observe and participate in such inventory.
Such special purpose balance sheet shall be audited by
Deloitte & Touche ("CPA"). CPA shall be engaged by Parent to
issue its report stating that such balance sheet presents
fairly in all material respects the financial position of the
Company as of the Closing Date, in conformity with generally
accepted accounting principles applied on a consistent basis
and in accordance with the provisions of this Agreement.
Seller shall pay all of the fees, costs and expenses of CPA.
Notwithstanding the foregoing, the Closing Balance Sheet (i)
shall not reflect any assets, including intangibles, that
have been expensed or fully depreciated or are not then or
have not in the past been reflected on the Company's books
for obsolescence or other reasons, (ii) shall not reflect any
liabilities (whether as reserves, deferred taxes or accrued
liabilities or otherwise) for foreign, federal, state or
local income or franchise taxes or other taxes payable
imposed upon or measured by net income or receipts of the
Company, (iii) shall reflect adequate reserves for transition
obligations under SFAS No. 106 with respect to then current
employees (but not SFAS No. 106 as it relates to persons then
retired and not SFAS No. 112), (iv) shall reflect inventory
(including raw products, work in process and finished goods)
at the lower of cost or market value, with sufficient
reserves for obsolete or unusable materials and (v) shall not
reflect any liabilities or reserve for workmens'
compensation.
6.2 Preliminary Report. CPA shall submit a draft report in
writing to Purchaser and Parent. CPA shall permit Purchaser
(together with Purchaser's agents and representatives,
including, without limitation, Purchaser's independent
auditors) to review and inspect it's workpapers in connection
with such draft report. Within thirty (30) days following
receipt of the draft report, Purchaser shall submit in
writing to CPA and Parent any objections that it may have to
the draft report or such balance sheet. Parent and Purchaser
shall use their best efforts to resolve all objections to the
draft report within forty-five (45) days following the
issuance of the draft report. CPA shall not issue its final
report until Parent and Purchaser have mutually resolved such
objections and such resolutions are fully reflected in the
Closing Balance Sheet.
6.3 Net Equity; Closing Balance Sheet. For purposes of this
Agreement, (a) the term "Closing Balance Sheet" shall mean
the balance sheet of the Company as of the Closing Date as
finally determined pursuant to Section 6.2, and (b) the term
"Net Equity" shall mean the stockholders equity of the
Company as reflected in the Closing Balance Sheet as finally
reported on by CPA.
6.4 Settlement. The settlement of the Base Consideration shall
take place within 10 days following the parties' acceptance
of the Closing Balance Sheet as reported on by CPA (the
"Settlement Date"). On the Settlement Date, Purchaser shall
pay to Seller or Parent the amount, if any, by which the Base
Consideration exceeds the payment made by Purchaser on the
Closing Date, or Seller and/or Parent shall refund to
Purchaser the amount, if any, by which the amount paid by
Purchaser on the Closing Date exceeds the Base Consideration.
All amounts owed pursuant to this Section 6.4 shall include
interest from the Closing Date to the date of payment at the
Prime Rate.
6.5 Access. Purchaser shall permit Parent and Seller, their
accountants and respective representatives, during normal
business hours, to have reasonable access to, and to examine
and make copies of, all books and records of the Company,
which documents and access are necessary to prepare the
balance sheet to be delivered in accordance with this Section
6.
7. Representations and Warranties of Seller and Parent. Seller
and Parent hereby jointly and severally represent and warrant to and with
Purchaser as follows:
7.1 Organization, Good Standing and Corporate Power. Parent,
Seller and the Company are corporations duly organized,
validly existing and in good standing under the laws of their
respective states of incorporation. The Company is qualified
to do business in those jurisdictions set forth in
Section 7.1 of the Disclosure Schedule ("Disclosure
Schedule"), dated the date hereof and delivered to Purchaser
as a separate document, the contents of which are
incorporated herein by reference. Such jurisdictions
constitute all jurisdictions in which such qualification or
authorization is required, except for jurisdictions in which
failure to be so qualified or authorized would not have a
material adverse effect on the business or operations of the
Company. Seller is a wholly-owned subsidiary of Parent.
7.2 Articles and By-Laws. Seller has previously furnished to
Purchaser complete and correct copies of (a) the Articles of
Incorporation of the Company as amended to the date
furnished, certified by the Secretary of State of its state
of incorporation; and (b) the By-Laws of the Company as in
effect on the date furnished, certified by the Secretary of
the Company. Such Articles of Incorporation and By-Laws have
not been further amended and are in full force and effect,
and the Company is not in violation of any provisions
thereof. Seller has also furnished to Purchaser a full and
complete copy of the corporate minute book for the Company.
7.3 Authorized Capital. The authorized and issued capital stock
of the Company is set forth in Section 7.3 of the Disclosure
Schedule. All of such shares are duly authorized, validly
issued, fully paid and nonassessable with no statutory or
other liability attaching to the ownership thereof.
7.4 No Options, Warrants, Rights. The Company has no outstanding
or authorized options, warrants, calls, rights, commitments
or any other agreements of any character obligating it to
issue any shares of its capital stock or any securities
convertible into or evidencing the right to purchase any
shares of its capital stock. None of Parent, Seller or the
Company is a party to any agreements, arrangements or
understandings with respect to the voting of the Company
Stock on any matter or the transfer or assignment of the
Company Stock.
7.5 Corporate Authorization; Binding Agreement. The execution,
delivery and performance of this Agreement and the other
agreements, instruments and documents contemplated hereby
(such other agreements, instruments and documents, the
"Ancillary Agreements") by Parent and Seller have been duly
and validly authorized by all necessary corporate, director
and shareholder action and have been unanimously approved by
Seller's and Parent's directors. A certified copy of the
resolutions adopted by Seller's and the Parent's boards of
directors has been provided to Purchaser. This Agreement
constitutes the valid and legally binding agreement of Seller
and Parent enforceable in accordance with its terms, and,
when executed and delivered, each Ancillary Agreement will be
the valid and legally binding agreements of Parent and/or
Seller, as the case may be, each enforceable in accordance
with its terms.
7.6 Title to Company's Shares. Seller is the lawful and
equitable owner of all of the shares of Company Stock, free
and clear of all liens, claims, options, charges and
encumbrances. The shares of Company Stock constitute all of
the issued and outstanding shares of capital stock of the
Company.
7.7 Subsidiaries. The Company does not directly or indirectly
control or own, nor within the past five (5) years has
directly or indirectly controlled or owned, any equity
interest in any corporation, partnership, joint venture or
other business association or entity (whether as direct
subsidiaries or through intervening subsidiaries).
7.8 Effect of Agreements. The execution, delivery and
performance of this Agreement and the Ancillary Agreements
and the consummation of the transactions contemplated hereby
and thereby will not, with or without the giving of notice or
the lapse of time or both, (a) violate any provision of law,
statute, rule or regulation to which Parent, Seller or the
Company is subject; (b) violate any judgment, order, writ or
decree of any court applicable to Parent, Seller or the
Company; (c) have any adverse effect on any of the material
permits, licenses, orders or approvals held or utilized by
the Company that are material to the business or operations
of the Company or (d) result in the material breach of, or
materially conflict with, any term, covenant, condition or
provision of, result in the modification or termination of,
constitute a material default under, or result in the
creation or imposition of any lien, security interest, charge
or encumbrance upon any of the properties or assets of
Parent, Seller or the Company pursuant to any corporate
charter, by-law, commitment, contract, note, bond, lease or
other agreement or instrument to which Parent, Seller or the
Company is a party or by which the Company is or may be bound
or affected or from which Parent, Seller or the Company
derives substantial benefits.
7.9 No Government Authorization Required. Except for compliance
with the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), no consent, authorization
or approval of, or exemption by, or filings with, any
governmental, public or self-regulatory body or authority is
required in connection with the execution, delivery and
performance of this Agreement or the Ancillary Agreements by
Seller or Parent.
7.10 Financial Statements. Section 7.10 of the Disclosure
Schedule contains copies of the Company's unaudited balance
sheets as of September 30, 1993, 1992, 1991 and 1990 and for
each monthly period ended since September 30, 1993, and
related unaudited statements of operations, stockholders
equity, and cash flows for the years and period then ended,
(collectively, the "Financial Statements"). The Financial
Statements present fairly in all material respects the
financial position of the Company as of the periods set forth
above and the results of operations and changes in financial
position for the years and period then ended, in conformity
with generally accepted accounting principles applied on a
consistent basis (except as set forth in Section 7.10 of the
Disclosure Schedule and except for the absence of footnote
disclosures). Neither Seller, Parent nor the Company has
used any improper accounting practice for the purpose of
incorrectly reflecting or not reflecting in the Financial
Statements or books and records of the Company any of the
Company's properties, assets, liabilities, revenues or
expenses. The Financial Statements do not contain any
material items of special or nonrecurring income or revenues
or other income or revenues not earned in the ordinary course
of business.
7.11 Absence of Undisclosed Liabilities. As of September 30,
1993, the Company had no material (individually or in the
aggregate) obligation, liability or commitment whether
secured or unsecured and whether absolute, accrued,
contingent or otherwise, and whether due or to become due,
except as disclosed in Section 7.11 of the Disclosure
Schedule and except to the extent accrued or reserved against
in the September 30, 1993 Financial Statements.
7.12 Conduct of Business Since September 30, 1993. Except as
disclosed in Section 7.12 of the Disclosure Schedule, since
September 30, 1993:
7.12.1 The business and affairs of the Company have been
conducted and carried on in the ordinary course
consistent with its past practices.
7.12.2 Except for personal property purchased, sold or leased
in the ordinary course of business consistent with
past practices, the Company has not purchased, sold,
leased, mortgaged, pledged or otherwise acquired or
disposed of any material (individually or in the
aggregate) properties or assets.
7.12.3 The Company has not declared or paid any dividend on,
or made any other distribution or payment (whether
cash or in kind) in respect of, any shares of stock or
other securities.
7.12.4 There has been no material increase or other change
made in the rate or nature of the compensation,
including wages, salaries, bonuses and benefits under
employee benefit plans, which has been paid, or will
be paid or payable, by the Company to any of its
directors, officers or key employees and there has
been no increases or other change made in the rate or
nature of the compensation, including wages, salaries,
bonuses and benefits under employee benefit plans,
which has been paid or payable by the Company to any
of its other employees that is material (individually
or in the aggregate) to the Company as a whole.
7.12.5 The Company has not sustained or incurred any material
loss, damage or destruction (whether or not insured
against) on account of fire, flood, earthquake,
accident or other calamity.
7.12.6 The Company has not entered into any transaction,
contract or commitment which, by reason of its size,
nature or otherwise, is not in the ordinary course of
business.
7.12.7 There has been no material adverse change in or with
respect to the financial condition, operations,
results of operations, assets, management, liabilities
or business of the Company or with the relations of
the Company with its respective employees, creditors,
customers, suppliers or others having business
relationships with it and, to the knowledge of Seller
and Parent, no state of facts exists which may
reasonably be expected to give rise to any such
material adverse change.
7.12.8 The Company has not incurred any material
(individually or in the aggregate) liability or
obligation, other than liabilities and obligations
incurred in the ordinary course of business and of a
nature, and in an amount, consistent with the
liabilities accrued in the September 30, 1993
Financial Statements.
7.12.9 There has been no change by the Company in any method
of accounting or accounting practice, whether tax or
otherwise.
7.13 Tax Matters.
7.13.1 Definitions. For purposes of this Section 7.13 and
Section 16, the term (i) "Subsidiaries" shall mean the
Company, together with any existing or previously
existing subsidiaries or affiliates, and (ii) "Tax
Affiliate" shall mean the Subsidiaries together with
any affiliates or predecessors of the Subsidiaries,
and any joint venture, partnership, trust or other
entity in which any Subsidiary has been or is a member
or owner. For purposes of this Agreement, "Taxes"
shall include, without limitation, all federal,
foreign, state and local taxes of any kind or nature,
estimates, installments in respect of taxes, charges
in lieu of taxes, additions to tax, penalties and
interest. All federal, state, local, foreign and
other governmental taxes imposed on or with respect to
the gross or net income of the Company are herein
referred to collectively as "Income Taxes."
7.13.2 Affiliated Group. The Company has been a member of
Parent's affiliated group since July 12, 1985 and has
filed consolidated federal Income Tax and state
consolidated (or combined) Income Tax returns with
Parent and its other permitted Subsidiaries since such
time, except as otherwise disclosed in Section 7.13.2
of the Disclosure Schedule with respect to certain
state Income Tax returns. To the knowledge of Parent
and Seller, all tax periods with respect to operations
of the Company prior to July 12, 1985 have closed and
the Company has no further liability for Taxes with
respect to such periods.
7.13.3 Tax Return. To the knowledge of Parent and Seller,
the Company, its Tax Affiliates and, to the extent
that failure to do so could adversely affect the
Company, the Parent have duly and accurately prepared
and timely filed with all applicable Tax authorities
all Tax returns required by law to be filed on or
before the Closing Date and paid or made adequate
provision for the payment of, all Taxes due, or which
have become due, whether by law or pursuant to any
judgment, settlement, assessment, deficiency, notice,
30-day letter or similar notice received by any of
them.
7.13.4 Withholding. All monies required to be withheld by
the Company or any Tax Affiliate from employees have
been collected or withheld, and either paid to the
respective Tax authorities or set aside for such
purpose, or accrued or reserved as a current
liability.
7.13.5 Consent. The Company has not filed or executed a
consent to the application of Section 341(f) of the
Internal Revenue Code of 1986, as amended (the
"Code").
7.13.6 Taxes Incurred in the Ordinary Course of Business.
With respect to any period of time through the Closing
Date for which Tax returns have not yet been filed, or
for which Taxes are not yet due or owing, neither the
Company nor its Tax Affiliates have incurred Tax
liabilities material to the business or the operations
of the Company, other than normally recurring
liabilities for Taxes in the ordinary and regular
course of their business.
7.13.7 Waivers of Periods of Limitations and Pending Audits.
Except as otherwise disclosed in Section 7.13.7 of the
Disclosure Schedule, no presently effective agreement
extending the period for assessment or collection of
any Taxes has been executed or filed by the Company or
any Tax Affiliate with any applicable Tax authority on
or after July 12, 1985. To the knowledge of Parent
and Seller, no such presently effective agreement has
been executed or filed before July 12, 1985.
7.13.8 Pending or Threatened Tax Proceedings. Except as set
forth in Schedule 7.13.8 of the Disclosure Schedule,
neither the Company nor any Tax Affiliate is a party
or parties to any pending claim, action, proceeding or
examination, nor, to the knowledge of the Parent and
Seller, is any claim, action, proceeding, examination,
review, audit or investigation being threatened or
asserted by any governmental authority for assessment
or collection of Taxes.
7.14 Title to Properties; Absence of Liens. The Company has good
title to all of its assets and properties reflected in its
books and records as being owned, free and clear of all
pledges, leases, licenses, equities, security interests,
easements, covenants, restrictions, claims, liens,
encumbrances, or defects, other than (a) those set forth in
Section 7.14 of the Disclosure Schedule, (b) easements,
covenants or restrictions which alone or in the aggregate do
not materially detract from the value, or materially
interfere with the present use, of the assets and properties
of the Company or otherwise materially impair the business of
the Company, (c) those relating to liabilities reflected in
the September 30, 1993 Financial Statements, (d) liens for
current taxes not yet due and payable or being contested by
the Company, (e) purchase money security interests and liens
securing rental payments under leases incurred in the
ordinary course of business and (f) liens arising by
operation of law in favor of mechanics, materialmen and
similar parties to the extent the obligation secured thereby
is not at the time required to be paid or is being contested
by the Company. Except as set forth in Section 7.14 of the
Disclosure Schedule, neither Parent nor Seller are aware of
any existing conditions with respect to the Company's assets
that will require capital expenditures in the aggregate in
excess of $500,000 in order for the Facilities to continue to
operate consistent with past practices. Section 7.14 of the
Disclosure Schedule sets forth a list of all outstanding
capital expenditure projects (whether or not approved) that
have been submitted by the Company. Copies of such capital
requests have been provided to Purchaser. The assets owned
or used by the Company have been maintained in accordance
with good business and maintenance practices and in a manner
consistent with the Company's prior operations.
7.15 Real Property. Section 7.15 of the Disclosure Schedule
contains a true, complete and correct list and description of
all real estate owned by the Company. The buildings and
improvements owned by the Company do not encroach, in any
material respects, on any property not owned by the Company
and, to the knowledge of Seller and Parent, no buildings or
improvements not owned by the Company encroach, in any
material respects, on real property owned by the Company.
Section 7.15 of the Disclosure Schedule sets forth a list of
all real property leases that the Company is a party to
(whether as lessor or lessee). Seller has provided to
Purchaser true and correct copies of all leases referred to
in Section 7.15 of the Disclosure Schedule. Except as set
forth in Section 7.15 of the Disclosure Schedule, the Company
is not in material default under any such lease. The Company
has not received any written or, the knowledge of Seller and
Parent, oral notification that there is any violation of any
building, zoning or other law, ordinance or regulation in
respect of such buildings, structures and other improvements.
Parent has provided to Purchaser copies of available title
insurance policies and surveys with respect to each parcel of
real estate owned by the Company.
7.16 Leased Tangible Personal Property. Section 7.16 of the
Disclosure Schedule lists all material (individually or in
the aggregate) tangible personal property leases to which the
Company is a party (whether as lessor or lessee). The
Company is not in material default under such leases.
7.17 List of Contracts and Other Data. Section 7.17 of the
Disclosure Schedule sets forth a listing of the following:
7.17.1 A list of all policies of liability, theft, fidelity,
life, fire and other forms of insurance presently or
within the last three (3) years held by or for the
benefit of the Company specifying the insurer, amount
of coverage, type of insurance, policy number,
material pending claims thereunder of which the
Company has notice and a summary of material claims
made by the Company under such policies of insurance
during the past three (3) years. The Company does not
presently, and has not in the past three (3) years,
(i) participated in, or owned, a captive insurance
company, or (ii) participated in a self-insured
program or held a policy with a deductible exceeding
$300,000 or a retrospective premium policy. Prior to
such three (3) year period, the Company did not
participate, own, or hold any such captive insurance
company or such policy or program, except to the
extent that all liabilities or obligations of the
Company with respect thereto have been fully
satisfied. The Company has not during the past three
(3) years been denied or had revoked or rescinded by a
carrier any policy of insurance. To the knowledge of
Seller and Parent, the Company has not failed to give
any notice or present any material claim under any
insurance policy in due and timely fashion. Except as
set forth in Section 7.17 of the Disclosure Schedule,
there are no current requirements or recommendations
by any insurance company that issued any such policy
with respect to any of the properties and assets of
the Company or by any Board of Fire Underwriters or
similar body exercising similar functions or by any
governmental authority which requires or recommends
changes in the conduct of the business or requiring
any repairs or other work to be done or with respect
to any of the properties, assets or operations of the
Company or requiring any equipment or facilities to be
installed on or in connection with any of the
properties or assets of the Company.
7.17.2 All material contracts and commitments (including,
without limitation, mortgages, licenses, leases,
indentures, guaranty and indemnification agreements,
loan agreements, dealer, franchisee, partnership,
joint venture, distributor and similar agreements,
advertising contracts, powers of attorney, patent,
trademark and similar licenses, raw material supply
agreements and extended term sales contracts), whether
written or oral, to which the Company is a party, or
to which it or any of its assets or properties are
subject.
7.17.3 All employment and consulting agreements, executive
compensation plans, bonus plans, deferred compensation
agreements, employee pension plans, employee stock
ownership plans or retirement plans, golden
parachutes, thrift plans, severance pay plans,
employee profit sharing plans, savings plans, group
life insurance, post-retirement plans, health
insurance or other plans or arrangements or contracts,
whether written or oral, providing for benefits for
employees or past employees of the Company.
7.17.4 The rate and nature of all compensation (including
wages, salaries, bonuses and benefits under the
pension, profit sharing, deferred compensation and
similar plans or programs) which has been paid or will
be paid or payable by the Company to any of its
executive employees or its directors or consultants.
7.17.5 The name of each bank in which the Company has an
account or safety deposit box, together with the
account numbers and the persons authorized to draw
thereon or procure credit therefrom.
7.17.6 A list of current officers and directors of the
Company.
7.18 Licenses, Permits and Orders. The Company has all
qualifications, registrations, filings, privileges,
franchises, immunities, approvals, authorizations, consents,
licenses, orders and other permits necessary to conduct its
business, and is presently not in material violation of any
thereof.
7.19 Accounts, Notes and Other Receivables. All accounts, notes
and other receivables of the Company, whether reflected in
the Financial Statements or otherwise, arose out of bona fide
transactions in the ordinary course and in a manner
consistent with past credit practices and the reserves shown
on the Financial Statements have been established in
accordance with generally accepted accounting principles,
consistently applied, and are considered by the Seller and
Parent to be adequate.
7.20 Inventories. The inventories of the Company consist of items
of a quality and quantity usable and saleable in accordance
with the normal pricing and marketing practices of the
Company.
7.21 Related Party Transactions. Section 7.21 of the Disclosure
Schedule sets forth a description of services provided by
Seller, Parent or their respective subsidiaries and
affiliates to the Company and material (individually or in
the aggregate) transactions between the Company and Seller,
Parent or their respective subsidiaries or affiliates.
Except as disclosed in Section 7.21 of the Disclosure
Schedule, to the knowledge of Seller and Parent, no director,
officer or executive employee of the Seller, the Company or
Parent, (i) owns any shares of stock or other securities of,
or has any other direct or indirect material interest in, any
person, firm, corporation or entity (other than a publicly-
held corporation whose stock is traded on a national
securities exchange or in the over-the-counter market and
less than one percent (1%) of the stock or securities of
which are beneficially owned by any of such person) which has
a material business relationship (as creditor, lessor,
lessee, supplier, dealer, distributor, franchisee, customer
or otherwise) with the Company, (ii) owns, or has any other
direct or indirect interest in, any invention, process, know-
how, formula, trade secret, patent, trademark, trade name,
service mark, service name, copyright or other right,
property or asset which is used in or which may be required
in the ownership or operation by the Company of its
properties and assets, or to otherwise carry on and conduct
its businesses and affairs, or (iii) has any contractual
relationship with the Company (other than as an employee of
the Company).
7.22 Litigation. Section 7.22 of the Disclosure Schedule contains
a true, complete and correct list and caption of each pending
lawsuit, administrative proceeding, arbitration, governmental
inspection or investigation and material (individually or in
the aggregate) workers' compensation claims to which the
Company is a party or which involve or affect the operations
or assets of the Company. Seller has given Purchaser copies
of all material pleadings relating to such litigation. With
respect to each such proceeding, Section 7.22 of the
Disclosure Schedule discloses a brief description of each
proceeding, the name of the counsel for each party, location
of the proceeding and its current status. To the knowledge
of Parent and Seller, there are no material (individually or
in the aggregate) legal actions or governmental
investigations threatened against the Company. Neither the
Company, nor, to the knowledge of Parent and Seller, any of
its officers, directors or key employees have been
permanently or temporarily enjoined or barred by order,
judgment or decree of any court or other tribunal or any
agency or self-regulatory body from engaging in or continuing
any conduct or practice in connection with the businesses
engaged in by the Company. There is no continuing order,
judgment or decree of any federal, state or local court,
arbitrator or other tribunal or any governmental or
administrative agency or self-regulatory body enjoining the
Company from taking or requiring it to take any action of any
kind or to which the Company or its respective businesses,
properties or assets are subject or by which it is or may be
bound. The Company is not in default under any order, writ,
injunction or decree of any federal, state or local court.
To the knowledge of Parent and Seller, there is no existing
state of facts, circumstances or contemplated event that is
reasonably likely to give rise to a material action,
proceeding or investigation against the Company.
7.23 Labor Relations. The Company is not a party to any
collective bargaining agreement except as set forth in
Section 7.23 of the Disclosure Schedule. There are no
material controversies pending, or to the knowledge of Parent
and Seller, threatened (in a reasonably serious manner)
between the Company and any of its employees. There are no
unfair labor practices or age, sex, religion or national
origin discrimination complaints pending or, to the knowledge
of Parent and Seller, threatened (in a reasonably serious
manner) against the Company before any federal, state or
local board, department, commission or agency. There are no
existing or, to the knowledge of Parent and Seller,
threatened (in a reasonably serious manner) labor strikes, or
material (individually or in the aggregate) disputes,
grievances, controversies or other material labor troubles
affecting the Company. There are no pending, or to the
knowledge of Parent and Seller, threatened (in a reasonably
serious manner) representation questions respecting the
employees of the Company and there are no arbitration
proceedings arising out of or under any union contract
pending or, to the knowledge of Parent and Seller,
threatened.
7.24 Employee Plans. For purposes of this Section 7.24, the term
"Employee Plan" includes all pension, retirement, disability,
medical, dental or other health insurance plans, life
insurance or other death benefit plans, profit sharing,
deferred compensation, stock option, bonus or other incentive
plans, vacation benefit plans, severance plans or other
employee benefit plans or arrangements, including, without
limitation, any "pension plan" ("Pension Plan"), as defined
in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and any "welfare plan", as
defined in Section 3(1) of ERISA, whether or not any of the
foregoing is funded, (a) to which the Company is a party or
by which it is bound; or (b) with respect to which the
Company has made any payments or contributions; or (c) to
which the Company may otherwise have any liability.
"Employee Plan" shall not include any government sponsored
employee benefit arrangements. Except as reflected in
Section 7.17 of the Disclosure Schedule:
7.24.1 There are no Employee Plans relating to any past or
present employees of the Company.
7.24.2 The Company, each Employee Plan, and the administrator
and fiduciaries of each Employee Plan have complied in
all material respects with all applicable legal
requirements governing each Employee Plan. No
lawsuits or written complaints to, or by, any person
or government entity have been filed and are pending
with respect to any Employee Plan.
7.24.3 To the knowledge of Parent and Seller, neither the
Company, any Employee Plan, nor any administrator or
fiduciary of any Employee Plan has taken any action,
or failed to take any action, that could subject it or
him or her or any other person to any liability for
any excise tax or for breach of fiduciary duty with
respect to or in connection with any Employee Plan.
7.24.4 To the knowledge of Parent and Seller, neither the
Company, any Employee Plan, any administrator or
fiduciary of any Employee Plan nor any other person
has any liability to any plan participant, beneficiary
or other person under any provision of ERISA or any
other applicable law by reason of any payment of
benefits or other amounts or failure to pay benefits
or any other amounts, or by reason of any credit or
failure to give credit for any benefits or rights
(such as, but not limited to, vesting rights) with
respect to benefits under or in connection with any
Employee Plan. The Company is not in arrears with
respect to any contributions under any Employee Plan.
7.24.5 Each funded Employee Plan that is a Pension Plan and
is intended to be qualified is qualified under Section
401(a) of the Code and the trust or trusts maintained
in connection with such Employee Plan is or are exempt
from tax under Section 501(a) of the Code.
7.24.6 The Company is not now, and has not been during the
past 5-year period, a participating employer in a
multi-employer plan (as defined in Section 3(37) of
ERISA).
7.24.7 None of the Pension Plans are a "defined benefit plan"
as defined in Section 3(35) of ERISA.
7.24.8 None of the Pension Plans have incurred an
"accumulated funding deficiency", as defined in
Section 412 of the Code, whether waived or not.
7.24.9 The assets of the Pension Plans do not include any
stock or security issued by the Company.
7.24.10 The present value of all accrued benefits under
each of the Pension Plans, subject to Title IV
of ERISA, does not exceed the value of the
assets of each such Plans, based upon actuarial
assumptions set forth in Section 7.24 of the
Disclosure Schedule.
7.24.11 All accrued obligations of the Company whether
arising by operation of law, by contract or by
past custom or practice, for payments by it to
trust or other funds or to any governmental or
administrative agency, with respect to pension
benefits, unemployment compensation benefits,
social security benefits or any other benefits
for employees of the Company have been paid or
adequate accruals therefor have been made in
the Financial Statements, and none of the
foregoing has been rendered not due by reason
of any extension, whether at the request of the
Company or otherwise.
7.24.12 All obligations of the Company whether arising
by operation of law, by contract, by past
custom or practice or otherwise, for salaries,
vacation and holiday pay, bonuses and other
forms of compensation which were payable to its
officers, directors or other employees have
been paid or adequate accruals therefor have
been made in the Financial Statements.
7.24.13 The Company is not a party to, or obligated to
make severance payments to any officer,
director or employee of any Company under any
change of control agreement, golden parachutes,
severance pay plans, or other similar
agreements, whether written or oral.
7.24.14 The Company has at all times complied with the
requirements of the Consolidated Omnibus Budget
Reconciliation Act of 1985.
7.24.15 Other than John T. Pool, no employee of the
Company is a participant in the Universal
Supplemental Executive Retirement Plan or the
Universal Pension Plan Milwaukee Participating
Group. Other than John T. Pool and Sam Lowman,
no employee of the Company is a participant in
the Universal Executive Income Deferral
Plan/Universal Management Income Deferral Plan.
7.25 Patents, Trademarks and Similar Rights. Section 7.25 of the
Disclosure Schedule contains a true, complete and correct
list of: (i) all issued patents and all pending applications
for patent registrations which the Company owns ("Patents"),
(ii) all agreements, contracts and commitments, whether
written or oral, pursuant to which the Company is licensing
from or to one or more third parties the right to use patents
or pending applications for patents ("Licensed Patent
Agreements"); (iii) all trademarks, service marks, and trade
names, and all registrations and pending applications
relating thereto, which the Company owns ("Trademarks"), (iv)
all agreements, contracts and commitments, whether written or
oral, pursuant to which the Company is licensing from or to
one or more third parties the right to use any trademark,
service mark or trade name ("Licensed Trademark Agreements"),
and (v) all copyrights and all copyright registrations and
applications relating thereto which the Company owns or is
using or the use of which is necessary for the conduct of its
business ("Copyrights").
Except as set forth in Section 7.25 of the Disclosure
Schedule, and except for such exceptions as will
(individually or in the aggregate) have no material adverse
effect on any Patent or Trademark or any intellectual
property subject to any Licensed Patent Agreement or any
Licensed Trademark Agreement (collectively, the "License
Agreements") or on the operations of the Company:
(i) The Company owns all right, title and interest in and
to the Patents, Trademarks and Copyrights;
(ii) All of the Patents, Trademarks and Copyrights are in
full force and effect in accordance with their terms
and, to the knowledge of Parent and Seller, are valid;
(iii) None of the Trademarks or Patents and, to the
knowledge of Parent and Seller, none of the
intellectual property subject to any License Agreement
is involved in, or is the subject of any pending or,
to the knowledge of Parent and Seller, threatened (in
a reasonably serious manner) infringement,
interference, opposition or similar action, suit or
proceeding;
(iv) To the knowledge of Seller and Parent, no impediment
exists to the Company's exclusive ownership, use and
validity of any of the Trademarks, Patents and
Copyrights;
(v) To the knowledge of the Seller and Parent, no other
person, corporation, partnership, joint venture,
organization, association or entity owns any interest
in or uses in any way any of the Trademarks, Patents
and Copyrights; and
(vi) To the knowledge of the Seller and Parent, neither the
ownership or operation by the Company of its
properties or its business, nor the production,
manufacture, marketing, sale or distribution by the
Company of its products, nor the use of any product of
the Company for the purposes for which sold, infringes
upon or conflicts with any patent, trademark, trade
name, service mark, copyright, privilege, franchise,
immunity or right of any other person, firm,
corporation or entity.
The License Agreements are valid, binding and enforceable in
accordance with their respective terms for the periods stated
therein, and there is not under any of them any existing
material defaults or been a material default or any event
which with notice and/or lapse of time would constitute a
material default on the part of the Company or, to the
knowledge of Parent and Seller, on the part of any third
party thereto.
To the knowledge of Parent and Seller, other than Patents,
Trademarks and intellectual property subject to the License
Agreements, the Company does not use or utilize other issued
patents, pending applications for patents, trademarks,
service marks or trade names (including all registrations and
pending applications relating thereto) and further, the
Company is not involved, or the subject of, any pending or,
to the knowledge of Parent and Seller, threatened (in a
reasonably serious manner) infringement, interference,
opposition or similar action, suit or proceeding with respect
to such use or utilization.
7.26 Compliance with Agreements. The Company is not in material
default under any contract, agreement, lease, indenture, loan
agreement or other instrument or agreement to which it is a
party or by which the Company or any of its assets is bound,
and to the knowledge of Parent and Seller, no other party is
in material default under any such agreements.
7.27 Compliance with Laws. The Company has owned and operated,
and currently owns and operates, its business, properties and
assets in substantial compliance with all applicable federal,
foreign, state and local laws, ordinances, rules and
regulations. The Company has not received any notice of a
material violation that is now pending and unresolved of any
such applicable law, ordinance, regulation, order or
requirement relating to its operations or properties.
7.28 Environmental Matters. For purposes of this Agreement,
"Hazardous Substances" shall have the same meaning as the
term "Hazardous Substance" in 42 U.S.C. 9601(14) as now in
effect and the term "Pollutants or Contaminants" shall have
the same meanings as the term "Pollutant or Contaminant" in
42 U.S.C. 9601(33) as now in effect. In addition, "Hazardous
Substances" and "Pollutants or Contaminants" shall include
any hazardous substances or pollutants and contaminants or
other dangerous, toxic, or hazardous substances, materials,
or wastes as defined in or governed by any other applicable
federal, state or local statute, law, regulation or other
requirement relating to any Hazardous Substances, Pollutants
or Contaminants, or to human health and safety of the
environment in each case as now in effect. The terms
Hazardous Substances and Pollutants and Contaminants shall
include, without being limited to, urea-formaldehyde,
polychlorinated biphenyls, asbestos-containing materials,
nuclear fuel or waste, petroleum products (to the extent
regulated by any of the legal or regulatory sources
referenced above), and any other waste, material, substance,
pollutant or contaminant which might subject the Company to
any claims, demands, damages, costs, expenses or other
liabilities under any applicable federal, state, or local
statute, law, regulation or other requirement, in each case
as now in effect.
No person, entity, or governmental agency has asserted
against the Company any written requests for damages, costs,
or expenses, demands, causes of action, or claims, however
defined, arising out of or due to the emission, disposal,
discharge or other release or threatened release of any
Hazardous Substances or Pollutants or Contaminants in
connection with or related to any of the Company's past or
present facilities, properties or assets, owned, leased or
otherwise (collectively, the "Company's Assets"), or arising
out of or due to any injury to human health or the
environment by reason of the current condition or operation
of the Company's Assets, or past conditions and operations or
activities on the Company's Assets. There is no
environmental condition, situation, or incident on, at or
concerning the Company's Assets that could give rise to any
material (individually or in the aggregate) action or
liability under any law, rule, ordinance, or common law
theory and the Company has no material (individually or in
the aggregate) liability under 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.) ("TSCA") or under
any other applicable statute, including state law, in
connection with such an environmental situation or incident.
There has not been, and is not now occurring, any release (as
that term is defined in 42 U.S.C. 9601(22)), or threatened
release, emission, disposal, discharge at or from the
Company's Assets of any Hazardous Substances or Pollutants or
Contaminants, except in compliance in all material respects
with all applicable federal, state and local laws and
requirements. No part of the Company's Assets has been used
as a landfill, dump, or other disposal area for Hazardous
Substances, Pollutants or Contaminants and the Company has
not caused or permitted the Company's Assets to be used to
generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer or process Hazardous Substances or
Pollutants or Contaminants, or other solid wastes, except in
compliance in all material respects with all applicable
federal, state, and local laws and regulations or
requirements. Except as disclosed in Section 7.28 of the
Disclosure Schedule, no underground storage tanks or
underground pipelines (whether or not currently in use) are
located at the Company's Assets. Except as set forth in
Section 7.28 of the Disclosure Schedule, there have been no
investigations, inspections, or inquiries of any kind with
respect to the Company's Assets by any governmental authority
which in any way pertain to Hazardous Substances or
Pollutants or Contaminants or the violation or potential
violation of any statutes, laws, regulations or other
requirements relating to the environment or human health or
safety (other than routine OSHA or similar inspections).
There are no state or federal liens encumbering the Company's
Assets resulting from any clean up or response actions
related to Hazardous Substances or Pollutants or Contaminants
at the Company's Assets or from the Company's Assets by state
or federal authorities.
To the knowledge of Parent and Seller, the Company's Assets
are not identified on the current or proposed National
Priorities List under 40 CFR 300, Appendix B, the
Comprehensive Environmental Response Compensation and
Liability Inventory Systems (CERCLIS), or to the knowledge of
Parent and Seller, any list arising under similar state laws.
The Company has complied in all material respects with the
provisions of any legal requirement relating to public or
community right-to-know or notification, including the
provisions of Sections 102 and 103 of CERCLA (42 U.S.C. 9602
and 9603), Section 133 of the Clean Water Act
(33 U.S.C. 1321), and the Emergency Planning and Community
Right-to-Know Act of 1986.
Seller and Parent have no knowledge of impending changes or
events that will require capital expenditures (other than
those described in the capital requests listed in Section
7.14 of the Disclosure Schedule) in order for the Company to
continue to comply with environmental legal requirements or
to obtain and maintain in effect the governmental
authorizations or licenses necessary for the operation of the
Company's Assets.
7.29 All Assets. Except as set forth in Section 7.29 of the
Disclosure Schedule, there are no assets owned or used by the
Company in the conduct of its business other than (i) those
assets owned by the Company, and (ii) those assets leased or
licensed to the Company.
7.30 Brokers and Finders. Neither Parent, Seller nor the Company
has employed any investment banker, broker or finder, or
incurred any liability for any brokerage fees, commissions or
finders fees in connection with the transactions contemplated
by this Agreement, except for Goldman, Sachs & Co., the fees
and expenses of whom shall be borne by Parent.
7.31 Disclosure and Reliance. To the knowledge of Parent and
Seller, none of the information, documents, certificates or
instruments furnished or to be furnished by Parent, Seller or
the Company or any of their respective representatives to
Purchaser or any of its representatives in connection with
this Agreement or otherwise in connection with the
transactions contemplated thereby are false or misleading in
any material respect or contain any misstatement of fact or
omit to state any facts required to be stated to make the
statements therein not misleading in light of the
circumstances in which made. The representations and
warranties made herein are made by Parent and Seller with the
expectation that Purchaser is placing reliance thereon.
8. Representations and Warranties of Purchaser. Purchaser
represents and warrants to and with Seller as follows:
8.1 Organization, Standing and Power. Purchaser is a corporation
duly organized, validly existing and in good standing under
the laws of the state of Delaware and has the corporate power
to carry on its business as it is now being conducted.
8.2 Corporate Authorization; Binding Agreement. The execution,
delivery and performance of this Agreement and the Ancillary
Agreements by Purchaser have been duly and validly authorized
by all necessary corporate action on the part of Purchaser.
This Agreement constitutes the valid and legally binding
agreement of Purchaser, enforceable in accordance with its
terms, and, when executed and delivered, each Ancillary
Agreement will be the valid and legally binding agreement of
Purchaser, each enforceable in accordance with its respective
terms.
8.3 No Government Authorization Required. Except for compliance
with the HSR Act, no consent, authorization or approval of,
or exemption by, or filings with, any governmental, public or
self-regulatory body or authority is required in connection
with the execution, delivery and performance by Purchaser of
this Agreement or the Ancillary Agreements.
8.4 Effect of Agreement. The execution, delivery and performance
of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and
thereby will not, with or without the giving of notice or the
lapse of time or both, (a) violate in any material respects
any provision of law, statute, rule or regulation to which
Purchaser is subject; (b) violate any judgment, order, writ
or decree of any court applicable to Purchaser; or (c) result
in the material breach of, or material conflict with, any
term, covenant, condition or provision of, result in the
modification or termination of, constitute a material default
under, or result in the creation or imposition of any lien,
security interest, charge or encumbrance upon any of the
properties or assets of Purchaser pursuant to any corporate
charter, by-law, commitment, contract, note, bond, lease or
other agreement or instrument to which Purchaser is a party
or by which Purchaser is or may be bound or affected or from
which Purchaser derives substantial benefits.
8.5 Brokers and Finders. Purchaser has not employed any
investment banker, broker or finder, or incurred any
liability for any brokerage fees, commissions or finder's
fees in connection with the transactions contemplated by this
Agreement or the Ancillary Agreements.
8.6 Acquisition for Investment. Purchaser is acquiring the
shares of Company Stock for investment and not with a view
toward, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or
selling such shares of Company Stock.
9. Covenants of Parent and Seller.
9.1 Conduct of Business. During the period from the date hereof
to the Closing Date, Seller and Parent covenant that they
shall cause the Company to conduct and operate its business
in the usual and ordinary course and that the Company shall
not, without the prior written consent of Purchaser:
9.1.1 Except as required by any union contract or written
employment agreement disclosed in the Disclosure
Schedule, (a) increase or change the compensation of
any key or executive employee except for normal
increases and changes in the ordinary course of
business consistent with prior practice; (b) pay or
agree to pay a pension, severance benefit, retirement
allowance or other employee benefit to any employees
not required by any existing plan, agreement or
arrangement to any such person, other than any profit
sharing or retirement contributions paid by Parent;
(c) commit itself to pay additional pension, profit
sharing, bonus, incentive, deferred compensation,
stock purchase, stock option, group insurance,
severance pay, retirement or other employee benefit
plan, agreement or arrangement or employee agreement
with or for the benefit of any past or present
employees of the Company; or (d) modify any agreement
providing for employee benefits for employees of the
Company except as required by law;
9.1.2 Permit any current insurance policies to be cancelled
or terminated or any of the coverage thereunder to
lapse unless such policies are replaced with
comparable coverage at similar costs;
9.1.3 Enter into any material (individually or in the
aggregate) transaction other than in the ordinary
course of business, or execute any agreement the terms
of which would be violated by the consummation of the
transactions contemplated by this Agreement;
9.1.4 Agree to become subject to any material liability or
obligation (absolute or contingent), except
liabilities or obligations incurred in the ordinary
course of business consistent with past practices;
9.1.5 Enter into or terminate any material lease of real or
personal property;
9.1.6 Sell, abandon or otherwise dispose of, or pledge,
mortgage or otherwise encumber, any of the assets of
the Company (including, without limitation, machinery,
equipment, parts and supplies) other than in the
ordinary course of business, or make any commitment
relating to any such assets or property other than in
the ordinary course of business, or cancel or waive
any claim or right of substantial value (other than
the compromise of accounts receivable in the ordinary
course of business);
9.1.7 Amend any charter documents or by-laws or take any
action with respect to any such amendment;
9.1.8 Enter into any collective bargaining agreement;
9.1.9 Declare or make any payment or distribution to any
shareholder, or purchase, redeem or otherwise acquire,
any shares of Company Stock;
9.1.10 Except for the capital expenditures described in
Section 9.1.10 of the Disclosure Schedule, make any
capital expenditures, capital additions, or capital
improvements which involve an amount in excess of
$100,000 or $500,000 in the aggregate;
9.1.11 Merge or consolidate with any other corporation or
acquire or agree to acquire any stock or substantially
all of the assets of any other person, firm,
association, corporation or other business
organization; or
9.1.12 Change to or use any invalid or materially
inconsistent tax accounting method, practice or
election in respect to any period beginning prior to
the Closing Date, except as required by generally
accepted accounting principles.
Notwithstanding the foregoing, prior to Closing, (i) the
Company shall execute and deliver to Parent an assignment, in
form and substance satisfactory to Parent and Purchaser, of
all right, title and interest of the Company in and to the
trademarks, patents, trade secrets, know-how and other
intellectual property identified in Exhibit 9.1 hereto, and
(ii) Parent shall execute and deliver to the Company an
assignment, in form and substance satisfactory to Parent and
Purchaser, of all right, title and interest of Parent (or any
of its other subsidiaries) in and to any trademarks, patents,
trade secrets, know-how or other intellectual property owned
by Parent (or such subsidiaries) and used by the Company,
other than the trademarks, patents and other intellectual
property identified in Exhibit 9.1.
9.2 Advise of Changes. Seller and Parent shall, from the date
hereof until the Closing Date, give prompt notice to
Purchaser in writing with respect to any of the following of
which Parent or Seller has knowledge (i) any material changes
or supplements required in the Disclosure Schedule in order
to make the statements contained herein true and correct at
the Closing Date; (ii) the receipt by the Company, Parent or
Seller of any notice of, or other communication relating to,
a default or an event of default or an event which with the
lapse of time could become a default under any instrument or
agreement relating to the Company or to which the Company is
a party or by which the Company is bound; (iii) the receipt
by the Company, Parent or Seller of any notice or other
communication from any third party alleging that the consent
of such third party is or may be required in connection with
the transactions contemplated by this Agreement; and (iv) any
matter or event which, if it had occurred as of the date
hereof, would constitute a material breach of the
representations and warranties of the Seller or Parent
contained in this Agreement.
9.3 Preservation of Business. Seller and Parent covenant that,
from the date hereof through the Closing Date, they shall
cause the Company to use all reasonable efforts to preserve
intact the business organization of the Company, to keep
available the services of its and their present officers and
key employees, and to preserve the good will of those having
business relationships with it; provided, however, that
Parent shall retain John T. Pool and shall be responsible for
all compensation and other benefits payable (whether now or
in the future) to John T. Pool;
9.4 Standstill. None of Parent, the Company, Seller nor any of
their respective agents, employees or representatives shall
(i) solicit or otherwise entertain, directly or indirectly,
any offer, bid, proposal or inquiry to acquire any of the
outstanding capital stock of the Company or any material
(individually or in the aggregate) assets of the Company,
(ii) furnish to any other person or entity any information,
materials or other data concerning the Company or any of its
assets or operations for the purpose of evaluating or
investigating any such acquisition, or (iii) furnish to any
other person or entity any proprietary information concerning
the transactions contemplated by this Agreement except as may
be necessary or desirable to consummate such transactions.
Seller and/or Parent will promptly advise Purchaser of any
such offer, bid, proposal or inquiry (or requests for
information) and the substance thereof.
9.5 Information and Access. Parent and Seller shall cause the
Company to give Purchaser and its counsel, accountants and
other representatives access during normal business hours to
all properties, books, contracts, documents and records with
respect to the affairs of the Company as Purchaser may
reasonably request at such times and in such manner as will
not disrupt or interfere with the conduct of the Company.
All such information shall be held confidential by Purchaser
pursuant to the terms of that certain confidentiality
agreement dated June 3, 1993 between Seller and Purchaser
(the "Confidentiality Agreement"). Notwithstanding the
foregoing, such access shall be coordinated through Richard
F. Hobbs, Vice President and Corporate Controller of Parent.
9.6 Intercompany Accounts. Prior to Closing, Parent shall cause
the Company to repay all amounts owed to Parent, Seller or
other subsidiaries and affiliates of Parent, and Parent shall
pay, or cause to be paid, all amounts owed to the Company by
Parent, Seller or any other subsidiary or affiliates of
Parent.
10. Covenants of Purchaser.
10.1 Notice of Breach. During the period from the date of this
Agreement to the Closing, Purchaser will give prompt notice
to Seller of the occurrence of any event which, if it had
occurred prior to the date hereof, would have constituted a
material breach of the representations of Purchaser contained
in this Agreement.
10.2 Confidentiality. Purchaser will comply with the terms and
conditions of the Confidentiality Agreement, which terms and
conditions are hereby incorporated herein by reference.
10.3 Preservation of Records. Following the Closing, Purchaser
shall cause the Company to preserve and maintain any and all
corporate records of the Company existing on the Closing Date
and in the Company's possession at Closing for a minimum
period of five years following the Closing Date, and shall at
the reasonable request of Parent, grant Parent access to such
records, including the right to copy such records, at
Parent's expense, at any time for any reasonable purpose
during reasonable business hours. As to any such records
that Parent shall, by written notice delivered prior to the
expiration of such five-year period, request Purchaser to
preserve and maintain for an additional reasonable period,
(i) Purchaser shall maintain such records for such period or
(ii) prior to destroying any such records, Purchaser shall
notify Parent to determine whether Parent wishes to have such
records returned to it. Notwithstanding the foregoing,
during such 5-year period, the Company may destroy any of
such records if, at least 30 days prior to such destruction,
either the Company or Purchaser gives written notice to
Parent describing the records to be destroyed. If such
notice is given, Parent may, during such 30-day period, at
Parent's expense, obtain from the Company the files to be
destroyed.
10.4 Corporate Names and Marks. As soon as practicable following
the Closing, Purchaser shall, and shall cause the Company to,
take any and all action necessary to eliminate any reference
to and not employ the name "Universal," provided, however,
the Company shall be permitted to use all existing packaging
and advertising material.
10.5 Investment. Purchaser shall not sell, transfer, offer for
sale, pledge, hypothecate or otherwise dispose of any of the
shares of Company Stock without registration under the
Securities Act of 1933, as amended, and applicable state law
counterparts, except pursuant to a valid exemption from such
registration.
11. Joint Covenants; Other Matters.
11.1 General. Subject to the terms and conditions of this
Agreement, each of the parties hereto will use its reasonable
efforts to take, or cause to be taken, all action and to do,
or cause to be done, all things reasonably necessary, proper
or advisable under applicable laws and regulations to
consummate and to make effective the transactions
contemplated by this Agreement. In the event of an
injunction or other legal bar that prevents the Closing by
reason of the operation of Sections 12.5 and 13.4, the
parties hereto shall use reasonable efforts to cause such
injunction or other legal bar to be lifted as soon as
reasonably practicable and, in such case, to proceed with the
Closing as expeditiously as possible. Parent shall take or
cause Seller to take all actions required to be taken by
Seller pursuant to this Agreement.
11.2 Consents.
11.2.1 Without limiting the generality of Section 11.1, each
of the parties hereto will use reasonable efforts to
obtain all permits, authorizations, consents and
approvals of all persons and governmental authorities
necessary, proper or advisable in connection with the
consummation of the transactions contemplated by this
Agreement; provided, however, that no party shall be
required to agree to any material modification in the
terms of any instrument under which a consent is
sought or to deliver consideration to a third party to
receive any permit, authorization, consent or approval
(other than filing and other fees imposed by
governmental authorities).
11.2.2 As soon as practicable after the date hereof (and in
any event not later than the fifth business day after
the date hereof), Parent and Purchaser will file with
the United States Federal Trade Commission and the
Antitrust Division of the United States Department of
Justice pursuant to the HSR Act all requisite
documents and notifications in connection with the
transactions contemplated by this Agreement. Parent
will make or cause to be made all such other filings
and submissions under laws and regulations applicable
to Parent, if any, as may be required of Parent for
the consummation of the transactions contemplated by
this Agreement. Purchaser will make or cause to be
made all such other filings and submissions under laws
and regulations applicable to Purchaser, if any, as
may be required of Purchaser for the consummation of
the transactions contemplated by this Agreement.
Parent and Purchaser will coordinate and cooperate
with one another in exchanging such information and
assistance as any of the parties hereto may reasonably
request in connection with all of the foregoing.
11.3 Certain Notifications. Each party shall promptly notify the
other in writing of the occurrence of any event that will or
could reasonably be expected to result in the failure to
satisfy any of the conditions specified in Section 12 or
Section 13.
11.4 Certain Employee Matters.
11.4.1 Neither Purchaser nor the Company shall assume or be
responsible for any Employee Plan sponsored by Parent
or Seller. As of the Closing Date, the interests of
employees of the Company in the Employee Plans
sponsored by Parent or Seller which are Pension Plans
shall be 100% vested and shall be fully
nonforfeitable.
11.4.2 Parent and Seller shall be liable and responsible for,
and shall indemnify and hold the Company and Purchaser
harmless from, continuation coverage, as described in
Section 4980B of the Internal Revenue Code, with
respect to employees and former employees of the
Company resulting from qualifying events occurring on
or before the Closing Date. The liability and
responsibility for such continuation coverage with
respect to those employees of the Company actively
employed as of the Closing Date resulting from
qualifying events after the Closing Date shall be
solely that of the Company.
11.4.3 The parties specifically agree to the following:
(i) Parent and Seller shall be liable and
responsible for, and shall indemnify and hold
the Company and Purchaser harmless from, all
claims and benefit payments under all Welfare
Plans for expenses incurred before the Closing
Date.
(ii) Seller and Parent shall be liable and
responsible for continuation of existing
medical and dental benefits for employees and
former employees of the Company who cease
employment with the Company before the Closing
Date and their dependents and spouses.
(iii) Seller and Parent shall be liable and
responsible for continuation of existing
disability payments and employee benefits for
employees and former employees of the Company
who become disabled before the Closing during
the period of disability.
(iv) Seller and Parent shall be liable and
responsible for all severance and separation
payments and benefits for employees and former
employees of the Company who cease employment
with the Company before the Closing.
(v) Seller and Parent shall be liable and
responsible for medical benefits for employees
of the Company who are not actively employed by
the Company on the Closing Date until such
employee returns to active employment with the
Company. Seller and Parent shall be liable and
responsible for medical benefits for dependents
and spouses of employees of the Company who are
hospitalized on the Closing Date until the
hospitalization ends.
11.4.4 Immediately following Closing, Purchaser will place
employees of the Company as of the Closing Date under
Lamb-Weston, Inc. benefit and welfare plans under
which other comparable Lamb-Weston, Inc. employees
participate. Such employees will be given credit for
periods of service with Seller, Parent and/or the
Company for purposes of eligibility and vesting under
welfare, 401(k) and retirement plans. Subject to
11.4.3(iv) above, such employees who were eligible for
Company medical benefits on or before the Closing Date
will not be subject to pre-existing conditions
limitations.
11.4.5 The Closing Balance Sheet shall not reflect an accrual
for vacation pay for accrued, but not taken, vacation
of employees of the Company, and Parent shall pay
Company employees for all accrued vacation as the
Closing Date. The Purchaser shall cause the Company
to provide unpaid days off after the Closing to
Company employees in accordance with the normal
vacation cycle for these employees.
11.4.6 For purposes hereof, active employment shall include
those employees who are physically present for work,
those employees who are eligible for work but are not
scheduled to work as of the applicable time, and those
employees who are on vacation, holiday, jury duty or
similar limited duration time off. Employees are not
actively employed during a sick leave, disability
leave, or other personal leave of absence. Employees
who are not actively employed by the Company on the
Closing Date shall be offered reinstatement to active
employment by the Company immediately upon the
conclusion of such leave. As of the end of such
leave, the welfare benefits for such employees shall
cease to be the obligation of Seller and Parent and
shall become the obligation of Purchaser and the
Company regardless of the commencement of active work.
11.5 Insurance Claims; Pending Litigation.
11.5.1 From and after Closing, Parent shall pay and be
responsible for all, and shall indemnify Purchaser and
the Company from and against, all Losses (as defined
in Section 15.1) (including workers compensation
matters) resulting from occurrences prior to Closing
that are subject to coverage under Parent's or
Seller's existing insurance program, policies or
agreements, including all Losses falling within
deductible or self insurance retainage. Without
limiting the foregoing, from and after Closing, the
Company shall be entitled to submit claims to Parent
or Seller with respect to which insurance coverage may
exist under insurance policies maintained by Parent or
Seller applicable to the Company prior to the Closing,
which claims Parent or Seller shall forward to its
insurance carriers and administer on behalf of the
Company. Purchaser shall ensure that the Company does
not submit claims directly to any such insurance
carrier.
11.5.2 From and after Closing, Parent shall pay and be
responsible for, and shall indemnify Purchaser and the
Company from and against, any Losses (as defined in
Section 15.1) relating to, or resulting from, any
pending litigation, administrative proceeding,
arbitration or labor grievance pending against the
Company, Parent or Seller as of the Closing Date.
12. Conditions Precedent to Obligations of Purchaser. The
obligation of Purchaser to consummate the transactions contemplated herein
is subject to the satisfaction, at or prior to the Closing Date, of all of
the following conditions:
12.1 Accuracy of Representations and Warranties. The
representations and warranties of Seller and Parent contained
in this Agreement shall have been true in all material
respects when made and, in addition, shall be true in all
material respects on and as of the Closing Date with the same
force and effect as though made on and as of the Closing
Date.
12.2 Performance of Agreements. Seller and Parent shall have
performed all obligations and agreements and complied, in all
material respects, with all covenants and conditions
contained in this Agreement to be performed and complied with
by them on or prior to the Closing Date.
12.3 Certificate. At the Closing, Seller and Parent shall have
delivered to Purchaser an officer's certificate, dated the
Closing Date, with respect to the matters set forth in
Sections 12.1 and 12.2.
12.4 Absence of Injunction. There shall be pending no temporary
or permanent injunction or order from any court or government
body or authority prohibiting, restraining or making unlawful
the consummation of the transactions contemplated by this
Agreement or materially limiting the ability of the Company
to operate its business or materially limiting the ability of
Purchaser to effectively exercise full rights of ownership of
the Company.
12.6 HSR Act. All applicable waiting periods specified in the HSR
Act shall have expired.
13. Conditions Precedent to Obligations of Parent and Seller.
The obligation of Parent and Seller to consummate the transactions
contemplated herein is subject to the satisfaction, at or prior to the
Closing Date, of all of the following conditions:
13.1 Accuracy of Representations and Warranties. The
representations and warranties of Purchaser contained in this
Agreement shall have been true in all material respects when
made and, in addition, shall be true in all material respects
on and as of the Closing Date with the same force and effect
as though made on and as of the Closing Date.
13.2 Performance of Agreements. Purchaser shall have performed
all obligations and agreements, and shall have complied with
all covenants contained in this Agreement to be performed and
complied with by it at or prior to the Closing Date.
13.3 Certificate. At the Closing, Purchaser shall have delivered
to Parent and Seller an officer's certificate, dated the
Closing Date, stating that Purchaser has fulfilled the
obligations set forth in Sections 13.1 and 13.2.
13.4 Absence of Injunction. There shall be pending no temporary
or permanent injunction or order from any court or government
body or authority prohibiting, restraining or making unlawful
the consummation of the transactions contemplated by this
Agreement.
13.5 HSR Act. All applicable waiting periods specified in the HSR
Act shall have expired.
14. Termination.
14.1 Events of Termination. The transactions contemplated by this
Agreement may be terminated on or before the Closing Date as
follows:
14.1.1 Mutual Agreement. By mutual written agreement of
Parent and Purchaser.
14.1.2 Court Order. By Purchaser or Parent if any court of
competent jurisdiction shall have issued an order,
decree or ruling restraining, enjoining or otherwise
prohibiting the consummation of the transactions
contemplated by this Agreement and such order shall
have become final and nonappealable.
14.1.3 Parent and Seller Breach. By Purchaser, if there has
been a material breach by Parent or Seller of a
material agreement, representation or warranty
contained in this Agreement that has rendered the
satisfaction of any condition to the obligations of
Purchaser impossible, and such breach has not been
waived by Purchaser.
14.1.4 Purchaser's Breach. By Parent, if there has been a
material breach by Purchaser of a material agreement,
representation or warranty contained in this Agreement
that has rendered the satisfaction of any condition to
the obligations of Seller impossible, and such breach
has not been waived by Parent.
14.1.5 Failure to Close. After August 31, 1994, by either
the Purchaser or Parent if the Closing has not
occurred for any reason other than a breach of this
Agreement by the terminating party.
14.2 Procedure and Effect of Termination. In the event of
termination of this Agreement and the abandonment of the
transactions contemplated hereby by any or all of the parties
hereto pursuant to Section 14.1, the terminating party or
parties shall forthwith give written notice thereof to the
other party or parties and this Agreement shall terminate and
the transactions contemplated hereby shall be abandoned,
without further action by any of the parties hereto. If this
Agreement is terminated as provided herein, then (a) no party
hereto nor any of its directors, officers or affiliates shall
have any liability or further obligation to the other party
or any of its directors, officers or affiliates pursuant to
this Agreement except as stated in this Section 14.2 and in
Section 14.3 and in the Confidentiality Agreement, each of
which shall survive such termination, and except that nothing
herein shall relieve any party from liability for any breach
of this Agreement; and (b) all filings, applications and
other submissions made pursuant to Sections 11.1 and 11.2
shall, to the extent practicable, be withdrawn from the
agency or other person to which made.
14.3 Inducement. As a condition and inducement to Purchaser's
willingness to enter into and perform this Agreement, if (a)
this Agreement is terminated, (b) at the time of such
termination, Purchaser is not in material breach of this
Agreement, and (c) within twelve months following the date of
such termination either, (i) Parent and/or Seller enter into
an agreement to sell all or any part of the Company Stock or
the Idaho Facility or the Washington Facility, or (ii) a
"Change of Control" occurs, and (d) in the event an agreement
described in clause (i) above is entered into, such sale is
consummated, then one business day after the event described
in (i) or (d) above, Parent shall pay to Purchaser the
greater of (i) $2,000,000, or (ii) an amount equal to 50% of
the amount by which the consideration for the Company Stock
or the Facilities (or allocable thereto) exceeds
$217,000,000. Such amount shall be payable in immediately
available funds within five (5) business days following the
occurrence of the event giving rise to such payment. For
purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred if (i) any person, entity or group
(as such terms are used in the Securities Exchange Act of
1934, as amended) acquires the beneficial ownership of 50% or
more of the outstanding shares of stock of Parent, or (ii) a
merger, consolidation or other similar business combination
is consummated by Parent in which the common stock of Parent
is changed or exchanged or if Parent sells assets
constituting 50% or more of the market value or earning power
of Parent on a consolidated basis (it being understood that
stock of subsidiaries constitute assets of Parent for
purposes of this Section).
15. Indemnification.
15.1 Indemnification of Purchaser and the Company by the Seller
and Parent. Subject to the terms, conditions, and
limitations set forth in this Section 15, Seller and Parent
shall and hereby agree to, jointly and severally, defend,
indemnify and hold Purchaser and the Company ("Purchaser
Parties") harmless against and in respect of any and all
claims, demands, losses, costs, expenses, damages or other
liability (collectively, "Losses") relating to or arising by
reason of:
15.1.1 Any breach or default by Seller or Parent under this
Agreement or any misrepresentation, breach of warranty
or nonfulfillment of any agreement on the part of
Seller or Parent under this Agreement, or from any
misrepresentation in or omission from any certificate
or other instrument furnished or to be furnished to
Purchaser hereunder.
15.1.2 Any debts, liabilities, expenses and obligations of
the Company, (and any predecessors thereof) of any
nature, whether accrued, absolute, contingent, or
known or unknown, existing or arising on or resulting
from events which occurred or failed to occur on or
before the Closing Date (except to the extent
reflected as a liability in the Closing Balance
Sheet).
15.1.3 Any liability, fines, cleanup obligation, expenses,
damages, debts or third party claims resulting from
the use, disposal, storage or release by the Company
of any Hazardous Substances, Pollutants or
Contaminants on or prior to the Closing Date.
15.2 Indemnification of Parent and Seller by Purchaser. Purchaser
shall and hereby agrees to defend, indemnify and hold Parent
and Seller harmless against and in respect of any and all
Losses relating to or arising by reason of any breach or
default by Purchaser under this Agreement and any
misrepresentations, breach of warranty or nonfulfillment of
any agreement on the part of Purchaser under this Agreement,
or from any misrepresentation in or omission from any
certificate furnished or to be furnished to Parent and Seller
hereunder.
15.3 Notice of Claims. Purchaser agrees to give Parent notice
(and Parent and/or Seller agrees to give Purchaser notice) of
any and all claims for which indemnification is or may be
sought under this Section 15. Such notice shall be given
within a reasonable time after receipt of written notice of
such claim by the party seeking indemnity. Failure to give
such notice shall not abrogate or diminish the indemnifying
party's obligation under this Section 15 if the indemnified
party has or receives knowledge of the existence of any such
claim by any other means or if such failure does not
materially prejudice the indemnifying party's ability to
defend such claim.
15.4 Defense of Claim. The obligations and liabilities of any
party to indemnify any other party under this Section 15 with
respect to any suit, action, claim, liability, obligation or
other matter brought or asserted by any third party (a "Third
Party Claim") shall be subject to the following terms and
conditions:
15.4.1 After the party or parties seeking to be indemnified
(whether one or more, the "Indemnified Party") give
the party or parties from whom indemnification is
sought (the "Indemnifying Party") written notice of
the Third Party Claim, the Indemnifying Party shall
have the right to select legal counsel to represent
the Indemnified Party and, notwithstanding any other
provision herein to the contrary, at the sole cost and
expense of the Indemnifying Party, to otherwise
control the defense of the Third Party Claim. If the
Indemnifying Party elects to control such Third Party
Claim, the Indemnified Party shall at all times have
the right to fully participate in the defense at its
own expense. So long as the Indemnifying Party is
defending in good faith any Third Party Claim, the
Indemnified Party shall not settle such Third Party
Claim. If the Indemnifying Party shall, within a
reasonable time after notice, fail to defend, the
Indemnified Party shall have the right, but not the
obligation, to undertake the defense of and to
compromise or settle such Third Party Claim on behalf,
for the account, and at the risk of the Indemnifying
Party. If the Third Party Claim is one that cannot by
its nature be defended solely by the Indemnifying
Party, then the Indemnified Party shall make available
all information and assistance as the Indemnifying
Party may reasonably request.
15.4.2 Notwithstanding the foregoing provisions of this
Section 15, should the subject matter of any Third
Party Claim include a claim against the Indemnified
Party seeking permanent injunctive relief, the
Indemnified Party shall have the right to take
exclusive control of the defense of the entire
proceeding.
15.5 Costs Included. The term "Losses" shall extend to and
include the actual attorneys' fees, accountants' fees, costs
of litigation and other reasonable expenses incurred by an
Indemnified Party in the defense of any claim asserted
against an Indemnified Party and any amounts paid in
settlement or compromise of any claims asserted against such
Indemnified Party to the extent that the claim asserted would
have been subject to the indemnification provisions of this
Section 15.
15.6 Limitations. The indemnification provided for in Section
15.1 is subject to the following limitations:
15.6.1 Parent and Seller will be liable to the Purchaser
Parties with respect to any Losses only if Parent
receives written notice thereof within 18 months after
the Closing, except that the foregoing limitation
shall not apply to (i) the representations,
warranties, covenants and agreements of Parent and/or
Seller under Section 16 or Section 7.13 relating to
Taxes or (ii) Seller's or Parent's obligations under
the provisions of Sections 4.4.2, 9.3 (to the extent
related to John T. Pool), 11.4, 11.5.
15.6.2 Parent and Seller shall not be obligated to pay and
the Purchaser Parties shall not be entitled to recover
amounts from Parent and/or Seller under Section 15.1
unless the aggregate amount of all Losses of the
Purchaser Parties exceeds $2,000,000 , and if the
aggregate amount of all such Losses of the Purchaser
Parties exceeds $2,000,000 then Parent and Seller
shall be obligated to pay and the Purchaser Parties
shall be entitled to recover amounts only to the
extent the aggregate of all Losses exceed $2,000,000,
except that the foregoing limitations shall not apply
to Seller's or Parent's obligations pursuant to
Sections 4.4.2, 6.4, 7.13, 9.3 (to the extent related
to John T. Pool), 9.6, 11.4, 11.5, 14.3 or 16.
15.6.3 Parent and Seller shall not be liable for any Losses
the Purchaser Parties may suffer, sustain or become
subject to the extent that such Losses exceed the then
remaining Earnout Consideration except that the
foregoing limitations shall not apply to Seller's or
Parents obligations under Sections 4.4.2, 6.4, 7.13,
9.3 (to the extent related to John T. Pool), 11.4,
11.5, 14.3 or 16.
15.6.4 Losses of the Purchaser Parties shall be adjusted to
give credit to Parent and Seller for any amounts
received by the Purchaser Parties with respect to the
matter for which the Purchaser Parties are being
indemnified under insurance policies of the Company
that existed prior to Closing, that reduce Losses that
would otherwise be sustained.
15.7 Setoff. The Purchaser Parties shall have the right to recoup
or setoff all or any portion of any Losses the Purchaser
Parties suffer, sustain or become subject to against any
amounts due to Parent or Seller under this Agreement. In the
event the Purchaser Parties exercise such right of setoff and
it is later finally determined by a court of competent
jurisdiction that neither Seller nor Parent owed the setoff
amount to the Purchaser Parties, the Purchaser shall pay such
setoff amount to Seller plus interest thereon from the date
of setoff to the date of payment at 6% per annum.
16. Tax Matters.
16.1 Section 338(h)(10) Election. Parent and Seller agree that
each will cause the affiliated group of which the Company is
a member to make an election or join in making an election
under Section 338(h)(10) of the Internal Revenue Code of
1986, as amended ("Code"), to treat the sale of the Company
Common Stock as a sale of all of the assets of the Company as
provided by such Code Section for federal Income Tax purposes
and an election under the statutes of such states as permit
an equivalent election to treat the sale of the Company
Common Stock as a sale of all of its assets as provided by
such states' applicable laws for state Income Tax purposes.
The parties agree that the Base Consideration and the Earnout
Consideration shall be allocated to the assets of the Company
in accordance with Exhibit 16.1 hereto. Each party covenants
to report gain or loss or cost basis, as the case may be, in
a manner consistent with Exhibit 16.1 for federal and state
Income Tax purposes. The parties shall exchange mutually
acceptable IRS Forms 8594 reflecting such allocations which
shall be filed with the IRS and any applicable state or local
Tax authorities. Parent and Seller shall, jointly and
severally, pay all Taxes incurred in connection with the Code
Section 338(h)(10) election (or its state equivalent)
described in Section 16.1.
16.2 Returns.
16.2.1 Income Tax Returns. Purchaser shall cause the Company
and its Subsidiaries to consent to join, for all Tax
periods of Company and the Subsidiaries ending on or
before the Closing Date for which the Company and the
Subsidiaries are eligible to do so, in any
consolidated or combined federal, state, local or
foreign Income Tax returns which Seller shall request
the Company and the Subsidiaries to join. Parent and
Seller shall cause to be prepared and timely filed all
such consolidated or combined federal, state, local or
foreign Income Tax returns as well as any separate
federal, state, local or foreign Income Tax returns
for the Company or the Subsidiaries for all Tax
periods of the Company and the Subsidiaries ending on
or before or including the Closing Date. For state
Income Tax purposes, the parties acknowledge and agree
that all state Income Tax returns shall be filed on
the basis that the applicable state equivalent of the
Section 338(h)(10) election terminates the Tax period
of the Company and the Subsidiaries as of the close of
the Closing Date to the extent required or permitted
under applicable state law. Purchaser agrees to
cooperate with Parent, Seller and their affiliates in
the preparation of the portions of such returns
pertaining to the Company and the Subsidiaries.
Seller shall be entitled to utilize the services of
Company personnel who would have been responsible for
preparing the consolidated, combined or separate
Income Tax returns as they relate to the Company and
the Subsidiaries, to the extent reasonably necessary
in preparing said returns on a timely basis.
Purchaser shall also provide Seller with adequate
space at the Company's offices and full access to
applicable records to enable Seller to prepare said
returns. The provisions of (i) the services of
Company personnel, (ii) space at the Company's
offices, and (iii) access to applicable records, shall
be at no charge to the extent such items are merely
incidental and not extraordinary. Except to the
extent accrued as a current Income Tax liability on
the Closing Balance Sheet, Parent and Seller shall,
jointly and severally, pay on a timely basis all
Income Taxes, to which such returns relate for all
periods or matters covered by such returns; provided,
that Purchaser shall pay or cause the Company to pay
on a timely basis (i) the portion of such Income Taxes
which has been accrued as a current Income Tax
liability on the Closing Balance Sheet and (ii) all
Income Taxes, if any, attributable to the portion of
any period occurring after the Closing Date. Seller
shall make available to Purchaser copies of the
portions of such returns relating to the Company or
the Subsidiaries. Purchaser shall prepare and file
all required federal, state, local and foreign Income
Tax returns of the Company relating to Tax periods
beginning after the Closing Date. Purchaser shall
cause Company and the Subsidiaries to pay all Income
Taxes to which such returns relate for all periods
covered by such returns.
16.2.2 Non-Income Tax Returns. The Parent and Seller shall
cause to be prepared and timely filed in an accurate
manner all non-Income Tax Returns for all Tax periods
ending on or before the Closing Date. The Purchaser
shall cause the Company to prepare and timely file in
an accurate manner all non-Income Tax Returns for all
Tax periods ending after the Closing Date. The
parties and their employees, agents and
representatives shall cooperate with each other with
respect to the preparation and filing of such Tax
returns, including without limitation, reasonable
access to information, personnel, a reasonable
opportunity to review drafts of any such Tax Return at
least twenty (20) days prior to filing, and/or
designation of a party or its agent as an attorney-in-
fact for another party under an appropriate power of
attorney. Such cooperation shall be provided at no
charge to the extent it is merely incidental and not
extraordinary in nature. Except to the extent accrued
as a current non-Income Tax liability on the Closing
Balance Sheet, Parent and Seller shall, jointly and
severally, pay on a timely basis all non-Income Taxes
to which such returns relate for all periods or
matters covered by such returns; provided, that
Purchaser shall pay or cause the Company to pay on a
timely basis (i) the portion of such non-Income Taxes
which has been accrued as a current non-Income Tax
liability on the Closing Balance Sheet and (ii) all
non-Income Taxes, if any, attributable to the portion
of any period occurring after the Closing Date. Each
party shall make available to the other parties copies
of the returns that are reasonably relevant to the
determination of the non-Income Taxes which are
indemnified hereunder.
16.2.3 Allocations. In any case where any Tax return covers
a Tax period beginning before and ending after the
Closing Date, the amount of Taxes allocable between
the Parent and Seller on one hand, and the Purchaser
and the Company on the other hand, shall be determined
by closing the books of the Company as of and
including the Closing Date, or if an allocation of an
item, income, deduction, or credit cannot be
specifically allocated to an ascertainable date, such
item, income, deduction, or credit shall be allocated
on a daily basis. In case of the Taxes attributable
to the portion of such Tax period including the
Closing Date, Parent and Seller shall be liable for
such Taxes except to the extent such Taxes are accrued
as a current Tax liability on the Closing Balance
Sheet. In case of (i) the Taxes attributable to the
portion of such Tax period following the Closing Date
and (ii) the portion of Taxes accrued as a current Tax
liability on the Closing Balance Sheet, the Purchaser
and the Company shall be liable for such Taxes.
16.3 Indemnification. Parent and Seller will, jointly and
severally, defend and hold harmless the Purchaser, the
Company and the Subsidiaries against any and all Taxes for
which Parent and/or Seller is responsible under Sections 16.1
and 16.2 hereof. Purchaser and the Company will, jointly and
severally defend and hold harmless the Parent and the Seller
against any and all Taxes for which the Purchaser and/or the
Company is responsible under Sections 16.1 and 16.2 hereof.
Any indemnity payable by a party to the other pursuant to
this Section 16 shall be paid within the later of ten (10)
days of the indemnified party's request therefor or ten (10)
days prior to the date on which the liability upon which the
indemnity is based is required to be satisfied.
16.4 Allocation of Benefits. If any adjustments shall be made to
any federal, state, local, or foreign Income Tax returns
relating to Company, any Subsidiary and Seller for any Tax
period ending on or before or including the Closing which
result in any Income Tax detriment to Seller or any affiliate
of Seller with respect to such period and any Income Tax
benefit to Company, any Subsidiary, Purchaser or any
affiliate of Purchaser for any Tax period ending after the
Closing (to the extent such Income Tax benefit is realized
for a portion of the period occurring after the date of the
Closing), Seller shall be entitled to the benefit of such
Income Tax benefit (except to the extent accrued as an asset
on the Closing Balance Sheet), and Purchaser shall cause
Company to pay to Seller the amount of such Income Tax
benefit at such time or times as and to the extent that
Company, any Subsidiary, Purchaser or any affiliate of
Purchaser actually realizes such benefit through a refund of
Income Tax or reduction in the amount of Income Tax which
Company, any Subsidiary, Purchaser or any affiliate of
Purchaser would otherwise have had to pay if such adjustment
had not been made.
If any adjustments shall be made to any federal, state,
local, or foreign Income Tax returns relating to Company or
any Subsidiary for any Tax period ending after Closing which
result in any Income Tax detriment to Purchaser, the Company,
any Subsidiary or any affiliate of Purchaser with respect to
such period and any Income Tax benefit to Seller or any
affiliate of Parent or Seller for any Tax period ending on or
before or including the Closing Date, Purchaser shall be
entitled to the benefit of such Income Tax benefits, and
Parent or Seller shall pay to Purchaser the amount of such
Income Tax benefit at such time or times as and to the extent
that Parent or Seller or any affiliate of Parent or Seller
actually realizes such benefit through a refund of Income Tax
or reduction in the amount of Income Taxes which Parent or
Seller or any such affiliate would otherwise have had to pay
if such adjustment had not been made.
16.5 Refunds. Any refunds of Taxes received by Company
attributable to Tax periods ending on or prior to the Closing
Date (or for the portion of any Tax Period occurring on or
before the Closing Date) shall be for the benefit of Seller,
and Purchaser shall cause Company to pay over to Seller any
such refunds within ten (10) days of receipt thereof, except
to the extent accrued as an asset on the Closing Balance
Sheet.
16.6 Cooperation. After the Closing Date, Parent, Seller and
Purchaser shall make available to the other, as reasonably
requested, all information, records or documents relating to
Tax liabilities or potential Tax liabilities of the Company
or any Subsidiary for all periods prior to or including the
Closing Date (or any matter, transaction or event occurring
on or before the Closing Date that may affect a Tax
liability) and each such person shall preserve all such
available information, records and documents until the
expiration of any applicable statute of limitations or
extensions thereof. Each such person shall provide the
other(s) and the pertinent Taxing authority with all
available information and documentation necessary to comply
with all Tax audit information requests made of any such
person relating to such Tax liabilities or potential Tax
liabilities (or any matter, transaction or event occurring on
or before the Closing Date that may affect a Tax liability).
16.7 Audits. Purchaser shall promptly notify Parent in writing
upon receipt by Purchaser, any affiliate of Purchaser or
Company, and Parent shall promptly notify Purchaser in
writing upon receipt by Parent, Seller or any affiliate of
Parent or Seller, of notice of (i) any pending or threatened
federal, state, local or foreign Income or other Tax audits
or assessments of, or pertaining to, the Company or any
Subsidiary, so long as Tax periods ending on or prior to or
including the Closing Date remain open, and (ii) any pending
or threatened federal, state, local or foreign Income or
other Tax audits or assessments of Purchaser or any affiliate
of Purchaser, or Parent, Seller or any affiliate of Parent or
Seller, respectively, which may affect the Tax liabilities of
Company, or any Subsidiary, in each case for Tax periods
ending on or prior to or including the Closing Date. Seller
shall have the sole right to represent Company's interests in
any Tax audit or administrative or court proceeding relating
to Tax periods for which Seller is responsible under this
Section 16, and to employ counsel of its choice at its
expense; provided, however, that no party shall have the
right to compromise or alter the allocation made by the
parties pursuant to Exhibit 16.1 without the consent of the
other parties. Purchaser shall have the sole right to
represent the Company's interests in any Tax audit or
administrative or court proceeding relating to Tax periods
for which Purchaser is responsible under Section 16, and to
employ counsel of its choice at its expense. Each party
hereto agrees that it will cooperate with any other party and
its counsel in the defense against or compromise of any claim
in any said proceedings.
16.8 Purchaser's Taxes. Purchaser shall pay, or cause to be paid,
and shall indemnify Seller and its affiliates against and
hold them harmless from any liability for Taxes for Tax
periods of Company or any Subsidiary beginning after the
Closing Date, including any such liability with respect to
operations of the Company or any Subsidiary and dispositions
of assets by the Company or any Subsidiary after the Closing
Date.
16.9 Carrybacks. Parent and Seller, jointly and severally, shall
pay the Company or Purchaser any refund or reduction in Taxes
which Parent, Seller, or any affiliate of Parent or Seller
actually realizes, that arises from the carryback of any Tax
benefit from a period ending after the Closing Date to a
period ending on or before or including the Closing Date,
provided, however, the foregoing shall not apply to any
Income Tax for the Seller and/or Parent filed on a
consolidated or combined Income Tax Return.
16.10 Survival. The representations, warranties and obligations of
the parties under Section 7.13 and Section 16, shall survive
the Closing until the expiration of the applicable or
underlying Tax statute of limitations (including any
extensions).
17. Miscellaneous. The following miscellaneous provisions shall
apply to this Agreement:
17.1 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given, if delivered
personally or by facsimile transmission (with receipt
confirmed), sent by verified telex or telegram or mailed by
registered or certified mail (return receipt requested) or
overnight courier, express mail, postage prepaid, as follows:
If to Parent or Seller: Universal Foods Corporation
433 East Michigan Street
Milwaukee, WI 53201
Attn: Guy R. Osborne
Fax Number: 414-347-4794
With a copy to: Universal Foods Corporation
General Counsel
433 East Michigan Street
P.O. Box 737
Milwaukee, WI 53201
Fax Number: 414-347-4794
If to Purchaser: ConAgra, Inc.
One ConAgra Drive
Omaha, NE 68102
Attn: Controller
Fax Number: 402-595-4075
With a copy to: ConAgra Diversified Products Companies
7450 Metro Boulevard
Edina, MN 55439
Attn: Vice-President-Legal Services
Fax Number: 612-835-9421
or at such other address for a party as shall be specified by
like notice. If personally delivered, such communications
shall be deemed delivered upon actual receipt; if
electronically transmitted pursuant to this Section, such
communication shall be deemed delivered the next business day
after transmission (and sender shall bear the burden of proof
of delivery); if sent by overnight courier pursuant to this
Section, such communication shall be deemed delivered upon
receipt; and if sent by U.S. mail pursuant to this Section,
such communication shall be deemed delivered as of the date
of delivery indicated on the receipt issued by the relevant
postal service or, if the addressee fails or refuses to
accept delivery, as of the date of such failure or refusal.
17.2 Amendments and Waivers; Consents. This Agreement may not
be modified or amended, except by instrument or instruments
in writing, signed by the party against whom enforcement of
any such modification or amendment is sought. Either Parent
and Seller on the one hand, or Purchaser on the other hand,
may, by an instrument in writing, waive compliance by the
other party with any term or provision of this Agreement on
the part of such other party to be performed or complied
with. Any waiver by Parent shall bind Seller. No action
taken, pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed
to constitute a waiver by the party taking such action of
compliance with any representation, warranty or agreement
contained herein. The waiver by any party hereto of a breach
of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach. Whenever
this Agreement requires or permits consents by or on behalf
of any party or parties hereto, such consents shall be given
in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 17.2.
17.3 Expenses. Except as otherwise provided herein, whether or
not this Agreement shall be consummated, Seller and Parent,
on the one hand, and Purchaser, on the other hand, shall each
pay its own expenses incident to the preparation, execution
and consummation of this Agreement.
17.4 Survival of Representations, Warranties, Covenants and
Indemnifications. All representations, warranties, covenants
and indemnities made in or pursuant to this Agreement shall
survive the Closing hereunder.
17.5 Entire Agreement. This Agreement constitute the entire
agreement among the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and
understandings, oral and written, among the parties hereto
with respect to the subject matter hereof, other than the
Confidentiality Agreement which shall remain in full force
and effect.
17.6 Applicable Law. This Agreement shall be governed, construed
and interpreted as to all matters, including but not limited
to matters of validity, construction, effect, performance and
remedies, according to the internal laws of the state of
Oregon, excluding any choice of law rules of such state or
any other jurisdiction that may direct the application of the
laws of another jurisdiction.
17.7 Binding Effect; Benefits. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, successors and assigns; nothing in this
Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their respective
heirs, successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this
Agreement.
17.8 Assignability. Neither this Agreement nor any of the
parties' rights hereunder shall be assignable by any party
hereto without the prior written consent of the other party
hereto.
17.9 Effect of Headings. The headings of the various sections and
subsections herein are inserted merely as a matter of
convenience and for reference and shall not be construed as
in any manner defining, limiting, or describing the scope or
intent of the particular sections to which they refer, or as
affecting the meaning or construction of the language in the
body of such sections.
17.10 Interpretation. As used in this Agreement, (a) the term
"person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency
thereof; (b) the term "subsidiary" when used in reference to
any other person shall mean any corporation of which
outstanding securities having ordinary voting power to elect
a majority of the Board of Directors of such corporation are
owned directly or indirectly by such other person; (c) the
term "affiliate" shall have the meaning set forth in Rule
12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934; and (d) any representation
or warranty made to the "knowledge" of any party is made only
to the actual knowledge of the principal executive officers
of the party making the representation or warranty after due
and reasonable inquiry and investigation. Without limiting
the foregoing, Seller and Parent represent and warrant that
they have made due and reasonable inquiry of the Company's
principal executive and operating officers with respect to
the representations and warranties set forth in Section 7.
17.11 Exhibits; Disclosure Schedule. All exhibits referred to in
this Agreement are attached hereto and are incorporated
herein by reference as if fully set forth herein. For
purposes of this Agreement, any item in the Disclosure
Schedule shall be deemed disclosed only in connection with
the specific representation or warranty to which it is
specifically referenced.
17.12 Severability. Any term or provision of this Agreement, which
is invalid or unenforceable in any jurisdiction, shall be
ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms
or other provisions of this Agreement in any other
jurisdiction.
17.13 Construction. The language in all parts of this Agreement
shall in all cases be construed as a whole according to its
fair meaning, strictly neither for nor against any party
hereto, and without implying a presumption that the terms
thereof shall be more strictly construed against one party by
reason of the rule of construction that a document is to be
construed more strictly against the person who himself
drafted same. It is hereby agreed that representatives of
both parties have participated in the preparation hereof.
17.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be regarded as an original
and all of which shall constitute one and the same
instrument.
17.15 Public Announcements. Any announcement (whether public or
otherwise), press release or other publicity concerning this
Agreement or the transactions contemplated hereby to be
issued or released by any party hereto shall be subject to
the prior written approval of Purchaser and Parent, which
approval shall not be unreasonably withheld. The preceding
sentence shall not apply to any disclosure required to be
made by law or the regulations of any federal or state
governmental agency or any national stock exchange as
reasonably determined by counsel to the person desiring to
make such disclosure, except such person, whenever
practicable, shall be required to consult with the other
party concerning the timing and content of the disclosure
before making it. Notwithstanding the foregoing, nothing in
this Section will preclude any party from making any
disclosures necessary or proper in conjunction with the
filing of any tax return or document required to be filed
with any federal, state or local governmental body, authority
or agency or giving of notice as required under any license
or contract. The parties will keep this Agreement
confidential and not disclose the provisions of this
Agreement to any other person (except as necessary to comply
with the HSR Act and except as otherwise required by law or
regulation or a rule of any national stock exchange).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
CONAGRA, INC. UNIVERSAL FOODS CORPORATION
By: s/Stephen L. Key By: s/Kenneth Manning
UNIVERSAL HOLDINGS, INC.
By: s/Elizabeth A. Jadin
<PAGE>
EXHIBIT 5.1.2 Purchaser's Counsel Opinion*
EXHIBIT 5.2.2 Seller's Counsel Opinion*
EXHIBIT 6.1 Balance Sheet Matters*
EXHIBIT 9.1 Certain Intellectual Property Matters*
EXHIBIT 16.1 Allocation of Purchase Price*
___________________
* Pursuant to Item 601(b)(2) of Regulation S-K, this exhibit is not
filed herewith. Universal Foods Corporation agrees to furnish
supplementally a copy of any such omitted exhibit to the Commission
upon request.
