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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
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SUPER FOOD SERVICES, INC.
(Name of Subject Company)
NFC ACQUISITION CORPORATION
NASH-FINCH COMPANY
(Bidders)
COMMON SHARES, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
867884 10 8
(CUSIP Number of Class of Securities)
NORMAN R. SOLAND, ESQ.
NASH-FINCH COMPANY
7600 FRANCE AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55440
(612) 844-1153
(Name, Address and Telephone Numbers of Person Authorized to
Receive Notices and Communications on Behalf of Bidders)
Copies to:
MARK A. KIMBALL, ESQ.
OPPENHEIMER WOLFF & DONNELLY
3400 PLAZA VII BUILDING
45 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402
(612) 344-9272
OCTOBER 8, 1996
(Date of Event which Requires Filing of Statement on Schedule 13D)
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CALCULATION OF REGISTRATION FEE
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TRANSACTION VALUATION (1) AMOUNT OF FILING FEE (2)
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$174,248,272 $34,850
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(1) Determined in accordance with Rule 0-11(d) of the Securities Exchange Act of
1934, as amended. This Transaction Valuation assumes, solely for purposes of
calculating the filing fee for this Schedule 14D-1, the purchase of
11,241,824 shares of the common shares, par value $1.00 per share (together
with the associated preferred share purchase rights, the "Shares"), of Super
Food Services, Inc. at $15.50 per Share, net to seller in cash. Such number
of Shares represents all of the Shares outstanding as of October 8, 1996
plus the number of shares that may be issued upon the exercise of options
and stock purchase rights outstanding as of such date.
(2) 1/50 of 1% of Transaction Valuation.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
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Amount Previously Paid: Filing Party:
Form or Registration No.: Date Filed:
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CUSIP NO. 867884 10 8
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1. NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: NFC
ACQUISITION CORPORATION
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:* (A) / / (B) / /
3. SEC USE ONLY
4. SOURCE OF FUNDS: BK, AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or
2(f) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 577,491*
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES: / /
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7): Approximately 5.2%*
10. TYPE OF REPORTING PERSON: CO
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* SEE EXPLANATORY NOTE ON PAGE 4.
2
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CUSIP NO. 867884 10 8
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1. NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON: NASH-FINCH COMPANY
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:* (A) / / (B) / /
3. SEC USE ONLY
4. SOURCE OF FUNDS: BK
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or
2(f) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 577,491*
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES: / /
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7): Approximately 5.2%*
10. TYPE OF REPORTING PERSON: CO
</TABLE>
* SEE EXPLANATORY NOTE ON PAGE 4.
3
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EXPLANATORY NOTE
This Tender Offer Statement on Schedule 14D-1 relates to an offer by NFC
Acquisition Corporation, a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of Nash-Finch Company, a Delaware corporation ("Parent"), to
purchase all of the outstanding shares of the Common Shares, par value $1.00 per
share, including the associated preferred share purchase rights (collectively,
the "Shares"), of Super Food Services, Inc., a Delaware corporation (the
"Company"), at $15.50 per share, net to seller in cash without interest, upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
October 9, 1996 (the "Offer to Purchase") and in the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively (collectively, the "Offer"). The Offer is made pursuant to the
Agreement and Plan of Merger dated as of October 8, 1996 among Parent, the
Purchaser and the Company (the "Merger Agreement"), a copy of which is attached
hereto as Exhibit (c)(1).
Parent and the Purchaser and certain of the officers and directors of the
Company, including Jack Twyman, the Chairman and Chief Executive Officer, who
are stockholders of the Company (the "Tendering Stockholders") have entered into
a Stockholder Agreement, dated as of October 8, 1996 (the "Stockholder
Agreement"), pursuant to which, upon the terms and conditions set forth therein,
the Tendering Stockholders agreed to tender (and not withdraw, subject to
certain exceptions) pursuant to the Offer to Purchase and before the Expiration
Date (as defined in the Offer to Purchase) all of the Shares owned of record or
beneficially by such Tendering Stockholders on the date of the Stockholder
Agreement, together with any Shares thereafter acquired by any such Tendering
Stockholders prior to the termination of the Stockholder Agreement. The
Tendering Stockholders own in the aggregate 577,491 Shares, which represent
approximately 5.2% of all Shares outstanding on October 8, 1996. The number of
Shares subject to the Stockholder Agreement is reflected in rows 7 and 9 of the
tables above. The Stockholder Agreement will remain in effect until the earlier
of the following: (i) the date the Merger Agreement is terminated and (ii) the
Effective Date (as defined in the Offer to Purchase). The Stockholder Agreement
is more fully described in Section 11 ("Purpose of the Offer and Merger; Plans
for the Company; the Merger Agreement and Stockholder Agreement") of the Offer
to Purchase. Neither the Purchaser nor Parent will have any voting or
dispositive power with respect to the Shares which are the subject of the
Stockholder Agreement until acceptance and payment for such Shares is made
pursuant to the Offer to Purchase, and the Purchaser and Parent expressly
disclaim beneficial ownership of such Shares.
This Tender Offer Statement on Schedule 14D-1 shall also constitute a
Schedule 13D with respect to the Stockholder Agreement. A copy of the
Stockholder Agreement is filed as Exhibit (c)(2) hereto.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Super Food Services, Inc., a Delaware
corporation, and the address of its principal executive office is 3233
Newmark Drive, Dayton, Ohio 45342.
(b) The information set forth in the Introduction of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in Section 6 ("Market Prices of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) The information set forth in the Introduction, Section 9 ("Certain
and (g) Information Concerning the Purchaser and Parent") and Schedule A of
the Offer to Purchase is incorporated herein by reference.
(e)-(f) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Parent") of the Offer to Purchase is
incorporated herein by reference.
4
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ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning the Purchaser and Parent"), Section 10
("Background of the Offer"), Section 11 ("Purpose of the Offer and
Merger; Plans for the Company; the Merger Agreement and Stockholder
Agreement") and Section 13 ("Certain Conditions of the Offer and the
Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 12 ("Source and Amount of Funds")
of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 10 ("Background
of the Offer"), Section 11 ("Purpose of the Offer and Merger; Plans
for the Company; the Merger Agreement and Stockholder Agreement") and
Section 13 ("Certain Conditions of the Offer and the Merger") of the
Offer to Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 7 ("Certain Effects of the
Offer") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Company"), Section 9 ("Certain Information
Concerning the Purchaser and Parent"), Section 10 ("Background of the
Offer") and Section 11 ("Purpose of the Offer and Merger; Plans for
the Company; the Merger Agreement and Stockholder Agreement") of the
Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 9 ("Certain
Information Concerning the Purchaser and Parent"), Section 10 ("Background of
the Offer"), Section 11 ("Purpose of the Offer and Merger; Plans for the
Company; the Merger Agreement and Stockholder Agreement") and Section 13
("Certain Conditions of the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 17 ("Certain Fees
and Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning the
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
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(a) None.
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5
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(b)-(c) The information set forth in Section 2 ("Acceptance of and Payment for Shares")
and Section 15 ("Certain Legal Matters") of the Offer to Purchase is
incorporated herein by reference.
(d) The information set forth in Section 7 ("Certain Effects of the Offer") of the
Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the related Letter of
Transmittal, the Merger Agreement and the Stockholder Agreement, copies of which
are attached hereto as Exhibits (a)(1), (a)(2), (c)(1) and (c)(2), respectively,
is incorporated herein in its entirety.
</TABLE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated October 9, 1996.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(6) Text of Press Release dated October 8, 1996.
(a)(7) Text of Press Release dated October 9, 1996.
(a)(8) Form of Summary Advertisement dated October 9, 1996.
(a)(9) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(b)(1) Form of Credit Agreement among Parent, the Purchaser, Harris Trust and
Savings Bank as Administrative Agent, and Bank of Montreal and PNC
Bank, N.A. as Co-Syndication Agents.
(c)(1) Agreement and Plan of Merger dated as of October 8, 1996 among Parent,
the Purchaser and the Company.
(c)(2) Stockholder Agreement dated as of October 8, 1996 among Parent, the
Purchaser and the Tendering Stockholders.
(c)(3) Confidentiality Agreement dated February 29, 1996 between the Company
and Parent.
(d)-(f) Not applicable.
6
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SIGNATURES
After due inquiry and to the best of our knowledge and belief, we certify
that the information set forth in this statement is true, complete and correct.
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Dated: October 9, 1996 NASH-FINCH COMPANY
By: /s/ Alfred N. Flaten
Alfred N. Flaten
PRESIDENT AND CHIEF EXECUTIVE OFFICER
NFC ACQUISITION CORPORATION
By: /s/ Alfred N. Flaten
Alfred N. Flaten
PRESIDENT
</TABLE>
7
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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(a)(1) Offer to Purchase dated October 9, 1996.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.
(a)(6) Text of Press Release dated October 8, 1996.
(a)(7) Text of Press Release dated October 9, 1996.
(a)(8) Form of Summary Advertisement dated October 9, 1996.
(a)(9) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(b)(1) Form of Credit Agreement among Parent, Purchaser, Harris Trust and Savings Bank as
Administrative Agent, and Bank of Montreal and PNC Bank, N.A. as Co-Syndication Agents.
(c)(1) Agreement and Plan of Merger dated as of October 8, 1996 among Parent, the Purchaser and
the Company.
(c)(2) Stockholder Agreement dated as of October 8, 1996 among Parent, the Purchaser and the
Tendering Stockholders.
(c)(3) Confidentiality Agreement dated February 29, 1996 between the Company and Parent.
</TABLE>
8
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON SHARES
OF
SUPER FOOD SERVICES, INC.
AT
$15.50 NET PER SHARE
BY
NFC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NASH-FINCH COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, NOVEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF SUPER FOOD SERVICES, INC. HAS UNANIMOUSLY APPROVED
THE OFFER AND THE MERGER AGREEMENT (AS HEREINAFTER DEFINED), HAS DETERMINED THAT
THE TERMS OF THE OFFER AND THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST
INTERESTS OF THE STOCKHOLDERS OF SUPER FOOD SERVICES, INC. AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES (AS HEREINAFTER DEFINED)
PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS HEREINAFTER DEFINED)
A NUMBER OF SHARES OF SUPER FOOD SERVICES, INC. WHICH, TOGETHER WITH SHARES
BENEFICIALLY OWNED BY NASH-FINCH COMPANY, NFC ACQUISITION CORPORATION AND/OR
OTHER SUBSIDIARIES OF NASH-FINCH COMPANY, REPRESENTS AT LEAST A MAJORITY OF THE
TOTAL NUMBER OF SHARES THEN OUTSTANDING ON A FULLY DILUTED BASIS. THE PURCHASER
ESTIMATES THAT APPROXIMATELY 5,620,913 SHARES WILL NEED TO BE VALIDLY TENDERED
(AND NOT WITHDRAWN) TO SATISFY THIS MINIMUM CONDITION (AS HEREINAFTER DEFINED).
THE OFFER IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTIONS 1, 13 AND 16.
NASH-FINCH COMPANY HAS ENTERED INTO A STOCKHOLDER AGREEMENT WITH THE
DIRECTORS AND CERTAIN OFFICERS OF SUPER FOOD SERVICES, INC., INCLUDING JACK
TWYMAN, THE CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER OF SUPER FOOD
SERVICES, INC., PURSUANT TO WHICH, AMONG OTHER THINGS, SUCH PERSONS HAVE AGREED
(SUBJECT TO CERTAIN EXCEPTIONS) TO TENDER IN THE OFFER ALL SHARES OWNED BY THEM,
WHICH CONSTITUTE APPROXIMATELY 5.2% OF ALL OUTSTANDING SHARES.
------------------------
IMPORTANT
ANY STOCKHOLDER DESIRING TO TENDER ALL OR A PORTION OF SUCH STOCKHOLDER'S
SHARES (AS HEREINAFTER DEFINED) SHOULD EITHER (1) COMPLETE AND SIGN THE LETTER
OF TRANSMITTAL (OR A FACSIMILE THEREOF) IN ACCORDANCE WITH THE INSTRUCTIONS IN
THE LETTER OF TRANSMITTAL AND MAIL OR DELIVER THE LETTER OF TRANSMITTAL TOGETHER
WITH THE CERTIFICATE(S) EVIDENCING SUCH SHARES, AND ANY OTHER REQUIRED
DOCUMENTS, TO THE DEPOSITARY OR TENDER SUCH SHARES PURSUANT TO THE PROCEDURE FOR
BOOK-ENTRY TRANSFER SET FORTH IN SECTION 4, OR (2) REQUEST HIS BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE TRANSACTION FOR
HIM. A STOCKHOLDER WHOSE SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT SUCH BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF SUCH STOCKHOLDER
DESIRES TO TENDER SUCH SHARES.
A STOCKHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE CERTIFICATES
REPRESENTING SUCH SHARES ARE NOT IMMEDIATELY AVAILABLE, OR WHO CANNOT COMPLY
WITH THE PROCEDURES FOR BOOK-ENTRY TRANSFER ON A TIMELY BASIS, MAY TENDER SUCH
SHARES BY FOLLOWING THE PROCEDURE FOR GUARANTEED DELIVERY SET FORTH IN SECTION
4.
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT OR TO THE DEALER MANAGER AT THEIR RESPECTIVE ADDRESSES AND TELEPHONE
NUMBERS SET FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE. ADDITIONAL COPIES
OF THIS OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL, THE NOTICE OF GUARANTEED
DELIVERY AND OTHER RELATED MATERIALS MAY BE DIRECTED TO THE INFORMATION AGENT,
THE DEALER MANAGER, OR TO BROKERS, DEALERS, COMMERCIAL BANKS OR TRUST COMPANIES.
------------------------
The Dealer Manager for the Offer is:
PIPER JAFFRAY INC.
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TABLE OF CONTENTS
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SECTION PAGE
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INTRODUCTION............................................................................................... 1
1. Terms of the Offer; Expiration Date.................................................................... 3
2. Acceptance of and Payment for Shares................................................................... 3
3. Withdrawal Rights...................................................................................... 4
4. Procedures for Accepting the Offer and Tendering Shares................................................ 5
5. Certain Income Tax Consequences........................................................................ 8
6. Market Prices of Shares; Dividends..................................................................... 8
7. Certain Effects of the Offer........................................................................... 9
8. Certain Information Concerning the Company............................................................. 10
9. Certain Information Concerning the Purchaser and Parent................................................ 11
10. Background of the Offer................................................................................ 13
11. Purpose of the Offer and Merger; Plans for the Company; the Merger
Agreement and Stockholder Agreement..................................................................... 16
12. Source and Amount of Funds............................................................................. 21
13. Certain Conditions of the Offer........................................................................ 22
14. Dividend and Distributions............................................................................. 24
15. Certain Legal Matters.................................................................................. 24
16. Extension of Tender Period, Termination and Amendments................................................. 27
17. Certain Fees and Expenses.............................................................................. 28
18. Miscellaneous.......................................................................................... 28
Schedule A -- Directors and Executive Officers of Parent and the Purchaser................................. A-1
</TABLE>
i
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TO THE HOLDERS OF COMMON STOCK OF SUPER FOOD SERVICES, INC.:
INTRODUCTION
NFC Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Nash-Finch Company, a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of the Common
Shares, par value $1.00 per share, including the associated preferred share
purchase rights (collectively, unless the context otherwise requires, the
"Shares"), of Super Food Services, Inc., a Delaware corporation (the "Company"),
at $15.50 per Share, net to the seller in cash, without any interest, upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Letter of Transmittal (which together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares
pursuant to the Offer. The Purchaser will pay charges and reimbursable expenses
incurred in connection with the Offer by Piper Jaffray Inc., which is acting as
the Dealer Manager for the Offer (in such capacity, the "Dealer Manager"),
Norwest Bank Minnesota, N.A., which is acting as the Depositary (the
"Depositary") and D.F King & Co., Inc., which is acting as the Information Agent
(the "Information Agent"). See Section 17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS HEREINAFTER DEFINED)
A NUMBER OF SHARES WHICH REPRESENTS AT LEAST A MAJORITY OF THE TOTAL OF ALL
SHARES OUTSTANDING AT THE TIME OF PURCHASE ON A FULLY DILUTED BASIS (INCLUDING
ALL SHARES ISSUABLE UPON EXERCISE OF OPTIONS (DEFINED BELOW) OR OTHER STOCK
PURCHASE RIGHTS WHICH ARE OUTSTANDING AT THE TIME OF PURCHASE, WHETHER OR NOT
SUCH OPTIONS OR OTHER STOCK PURCHASE RIGHTS ARE EXERCISABLE OR FULLY VESTED
("FULLY DILUTED SHARES")) (THE "MINIMUM CONDITION"). SEE SECTION 13.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 8, 1996, by and among the Company, Parent and the Purchaser (the
"Merger Agreement"). The Merger Agreement provides, among other things, that as
soon as practicable after the consummation of the Offer and the satisfaction of
certain conditions, the Purchaser will be merged with and into the Company (the
"Merger") and the Company will become a wholly owned subsidiary of Parent. At
the effective time of the Merger (the "Effective Time"), each then outstanding
Share (other than Shares held by Parent, the Purchaser or any of their
subsidiaries, or in the treasury of the Company or by any subsidiary of the
Company, if any, all of which will be canceled, and other than Shares
("Dissenting Shares") held by stockholders who properly exercise and perfect
appraisal rights under the General Corporation Law of the State of Delaware
("DGCL")), will be converted into the right to receive $15.50 in cash, or such
higher price per Share as shall have been paid in the Offer. The Merger
Agreement is more fully described in Section 11.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE MERGER AGREEMENT, HAS DETERMINED THAT EACH OF THE OFFER AND
THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
ON OCTOBER 8, 1996, LAZARD FRERES & CO. LLC ("LAZARD FRERES"), THE COMPANY'S
FINANCIAL ADVISOR, DELIVERED A WRITTEN OPINION TO THE BOARD OF DIRECTORS OF THE
COMPANY THAT, BASED UPON AND SUBJECT TO VARIOUS CONSIDERATIONS AND ASSUMPTIONS
SET FORTH THEREIN, THE PROPOSED $15.50 PER SHARE CASH CONSIDERATION TO BE
RECEIVED BY THE STOCKHOLDERS OF THE COMPANY IN CONNECTION WITH THE OFFER AND THE
MERGER IS FAIR TO THE STOCKHOLDERS OF THE COMPANY FROM A FINANCIAL POINT OF
VIEW. A COPY OF THE OPINION RENDERED BY LAZARD FRERES TO THE BOARD OF DIRECTORS
OF THE COMPANY, SETTING FORTH THE PROCEDURES FOLLOWED, THE MATTERS CONSIDERED,
THE SCOPE OF THE REVIEW UNDERTAKEN AND THE ASSUMPTIONS MADE BY LAZARD FRERES IN
ARRIVING AT ITS OPINION, IS ATTACHED AS AN EXHIBIT TO THE COMPANY'S
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 THAT IS BEING MAILED TO
THE COMPANY'S STOCKHOLDERS HEREWITH.
The consummation of the Merger is subject to the satisfaction or waiver of a
number of conditions, including, if required by law, the approval and adoption
of the Merger Agreement by the stockholders of the Company. If the Minimum
Condition is satisfied, the Purchaser will have sufficient voting power under
<PAGE>
the DGCL to effect the Merger without the concurrence of any other stockholder
of the Company. Under the Merger Agreement, Parent and the Purchaser have agreed
to vote all Shares acquired in the Offer in favor of the Merger. If at least 90%
of the outstanding Shares are purchased in the Offer, the Purchaser will be able
to effect a short-form merger under Section 253 of the DGCL without prior notice
to, or any action by, any other stockholder of the Company. See Section 11.
According to the Company, as of October 8, 1996, there were 10,997,448
Shares issued and outstanding and 197,277 Shares subject to issuance upon the
exercise of outstanding options to purchase shares of Common Stock (the
"Options") granted under the Company's 1978 Stock Option Plan and 1986 Stock
Option Plan (together, the "Option Plans"). In addition, according to the
Company, up to 47,099 Shares may be issued under the Company's Employee Stock
Purchase Plan (the "Stock Purchase Plan"). Accordingly, 244,376 Shares issuable
upon the exercise of such Options or reserved for issuance under the Stock
Purchase Plan are included in the Fully Diluted Shares. According to the
Company, 180,272 of such Shares are issuable pursuant to Options with an
exercise price of less than $15.50 per Share.
Based on the foregoing, and assuming the number of Fully Diluted Shares
would be 11,241,824, the Purchaser would need to purchase 5,620,913 Shares for
the Minimum Condition to be satisfied. The Purchaser reserves the right (but is
not obligated), subject to the rules and regulations of the Securities and
Exchange Commission (the "Commission"), to waive or amend the Minimum Condition
and to purchase pursuant to the Offer fewer than the number of Shares necessary
to satisfy the Minimum Condition. The Merger Agreement requires the Company's
consent to a waiver of the Minimum Condition. See Section 1.
As of the date of this Offer to Purchase, the Company's Series A Preferred
Share Purchase Rights (the "Rights"), issued pursuant to the Rights Agreement,
dated as of January 27, 1989, as amended, between the Company and Chase
Manhattan Bank, N.A., as Rights Agent (the "Rights Agreement"), are evidenced by
the certificates representing Shares. The Company has informed Parent, however,
that the Rights will not become exercisable as a result of the Offer or the
Merger, or as a result of the transactions contemplated thereby, because the
Company's Directors, after receiving advice from a nationally recognized
investment banking firm selected by the Board of Directors, has determined that
the acquisition of the Shares by the Purchaser is at a price and on terms that
are fair to the Company's stockholders and is otherwise in the best interests of
the Company and its stockholders, and has unanimously approved the Offer, the
Merger Agreement, the acquisition of the Shares and the Merger so that the
Rights will not become exercisable as a result of the Offer or the Merger. The
Company has further represented in the Merger Agreement that the Rights
Agreement has been amended to provide that neither Parent nor the Purchaser will
be deemed to be an Acquiring Person or a Beneficial Owner (as such terms are
defined in the Rights Agreement). Pursuant to the Merger Agreement, the Company
has agreed, immediately prior to the consummation of the purchase of Shares
pursuant to the Offer, if requested by Parent, to redeem all of the outstanding
Rights. Should the Rights be so redeemed, record holders of Rights will be
entitled only to the payment of the redemption price therefor ($0.02 per Right).
Unless the Rights are so redeemed, by tendering Shares pursuant to the Offer, a
stockholder will also be tendering the associated Rights. Therefore, acceptance
for payment of, and payment for, Shares by the Purchaser will also constitute
the concurrent purchase of such Rights; accordingly, no additional or separate
consideration will be paid for Rights so purchased. See Section 3.
Simultaneously with entering into the Merger Agreement, Parent and the
Purchaser entered into a Stockholder Agreement (the "Stockholder Agreement")
with the directors and certain officers of the Company (the "Tendering
Stockholders"), including Jack Twyman, the Chairman of the Board and Chief
Executive Officer. Pursuant to the Stockholder Agreement, each Tendering
Stockholder has agreed to tender pursuant to the Offer and before the Expiration
Date all of the Shares owned of record or beneficially by such Tendering
Stockholder on the date of the Stockholder Agreement, together with any Shares
acquired by any such Tendering Stockholder prior to the termination of the
Stockholder Agreement. As of the date hereof, the Tendering Stockholders
beneficially owned 577,491 Shares, or approximately 5.2% of all outstanding
Shares.
2
<PAGE>
The Merger Agreement and the Stockholder Agreement are more fully described
in Section 11 of this Offer to Purchase. Stockholders are encouraged to read
that Section carefully, together with all other terms and conditions of the
Offer, before deciding whether to tender their Shares.
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY,
NOVEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING. ANY
SUCH SOLICITATION WOULD BE MADE ONLY PURSUANT TO SEPARATE PROXY OR SOLICITATION
MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE EXCHANGE ACT,
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions set forth in the Offer (including, if the Offer is extended or
amended, the terms and conditions of any extension or amendment), the Purchaser
will accept for payment and will pay for any and all Shares validly tendered on
or prior to the Expiration Date and not withdrawn in accordance with Section 3
of this Offer to Purchase. The term "Expiration Date" means 12:00 midnight, New
York City time, on Wednesday, November 6, 1996, unless the Purchaser, in its
sole discretion, shall have extended the period of time for which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by the Purchaser, shall expire. See
Section 16.
The Offer is subject to certain conditions set forth in Section 13,
including satisfaction of the Minimum Condition and the expiration or
termination of the waiting period applicable to the Purchaser's acquisition of
Shares pursuant to the Offer under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"). If any condition to the Purchaser's
obligation to purchase shares is not satisfied prior to the payment for any such
Shares, the Purchaser may (i) terminate the Offer and return all tendered Shares
to tendering stockholders, (ii) extend the Offer and, subject to withdrawal
rights as set forth in Section 3, retain all such Shares until the expiration of
the Offer as so extended, (iii) waive such condition and, subject to any
requirement to extend the period of time during which the Offer is open,
purchase all Shares validly tendered by the Expiration Date and not withdrawn,
or (iv) delay acceptance for payment of or payment for Shares, subject to
applicable law, until satisfaction or waiver of the conditions of the Offer.
The Merger Agreement provides that, unless previously approved by the
Company, and subject to certain rights of the Purchaser to extend the Offer, the
Purchaser will not reduce the price to be paid per Share pursuant to the Offer,
change the form of consideration to be paid in the Offer or the Merger, increase
or waive the Minimum Condition, change the Expiration Date, or amend the terms
of the Offer (including any of the conditions set forth in Section 13) in a
manner that is materially adverse to the holders of Shares. For a description of
the Purchaser's right to extend the period of time during which the Offer is
open, and to amend, delay or terminate the Offer, see Section 16.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares and will be furnished to brokers,
dealers, banks and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. ACCEPTANCE OF AND PAYMENT FOR SHARES. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the Purchaser will
purchase, by accepting for payment, and will pay for, any and all Shares
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<PAGE>
validly tendered and not withdrawn following the later of (i) the expiration or
termination of all waiting periods under the HSR Act that are applicable to the
purchase of Shares pursuant to the Offer, and (ii) the Expiration Date. In
addition, the Purchaser expressly reserves the right, in its sole discretion, to
delay the acceptance of or payment for Shares in order to comply, in whole or in
part, with any applicable law. See Section 15. In all cases, payment for Shares
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates for such Shares or timely confirmation of book-entry
transfer (a "Book-Entry Confirmation") of such Shares into the Depositary's
account at The Depository Trust Company or the Philadelphia Depository Trust
Company (each, a "Book-Entry Transfer Facility" and collectively, the
"Book-Entry Transfer Facilities") pursuant to the procedures set forth in
Section 4, a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) and any other documents required by the
Letter of Transmittal.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Shares as, if and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares for payment pursuant to the Offer. Payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
with the Depositary which will act as agent for tendering stockholders for the
purpose of receiving payment from the Purchaser and transmitting payments to
tendering stockholders. The Purchaser will not, under any circumstances, pay any
interest on the purchase price, regardless of any delay in making such payment.
If any tendered Shares are not purchased pursuant to the Offer, or if
certificates are submitted for more Shares than are tendered, certificates for
such unpurchased Shares will be returned, without expense to the tendering
stockholder (or, in the case of book-entry transfer within a Book-Entry Transfer
Facility, such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility), as promptly as practicable after the expiration
or termination of the Offer.
The Purchaser will pay all stock transfer taxes, if any, payable with
respect to the transfer to it of Shares purchased pursuant to the Offer. If,
however, payment of the purchase price is to be made to, or if unpurchased
Shares are to be registered in the name of any person other than the registered
holder (in the circumstances permitted by the Offer), or if tendered
certificates are registered in the name of any person other than the person
signing any Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder or such other person) payable on
account of such payment or transfer to such person will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes, or
exemption therefrom, is submitted.
The Purchaser expressly reserves the right to transfer or assign to Parent
or to one or more of Parent's direct or indirect wholly owned subsidiaries the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but no such transfer or assignment will relieve the Purchaser of its
obligations under the Offer or prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
If, prior to the Expiration Date, the Purchaser shall decide, in its sole
discretion, to increase the consideration offered to stockholders pursuant to
the Offer, such increased consideration shall be paid to all holders of Shares
accepted for payment and paid for pursuant to the Offer.
3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer will be
irrevocable, except that Shares tendered may be withdrawn at any time prior to
the Expiration Date and, unless previously accepted for payment, may also be
withdrawn after December 7, 1996. If the Purchaser is delayed in its acceptance
or purchase of or payment for Shares or is unable to purchase or pay for Shares
for any reason, then, without prejudice to the Purchaser's rights under Sections
1, 13 and 16, tendered Shares may be retained by the Depositary on behalf of the
Purchaser and may not be withdrawn except as permitted by this Section 3 and
subject to Rule 14e-1(c) under the Exchange Act. See Section 16.
4
<PAGE>
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
specified on the back cover of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and, if certificates
representing such Shares have been delivered or otherwise identified to the
Depositary, the name(s) in which such certificate(s) is (are) registered, if
different from the name of the person tendering such Shares. If certificates
have been delivered or otherwise identified to the Depositary, then prior to the
physical release of such certificates, the tendering stockholder must also
submit the serial numbers shown on the particular certificates evidencing such
Shares and the signature on the notice of withdrawal must be guaranteed by a
member firm of a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc. ("NASD"), a commercial bank or
trust company having an office, branch or agency in the United States or any
other institution that is a member of the Medallion Signature Guaranty Program
(each being referred to herein as an "Eligible Institution"). If Shares have
been tendered pursuant to the procedure for book-entry tender as set forth in
Section 4, the notice of withdrawal must specify the name and account number(s)
of the account(s) at the applicable Book-Entry Transfer Facility to be credited
with the withdrawn Shares, in which case a notice of withdrawal will be
effective if delivered to the Depositary by any method of delivery described in
the first sentence of this paragraph. None of Parent, the Purchaser, the Dealer
Manager, the Depositary or the Information Agent will be obligated to give
notice of any defects or irregularities in any notice of withdrawal, nor shall
any of them incur any liability for failure to give any such notice. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by the Purchaser, in its sole discretion, whose
determination shall be final and binding.
Withdrawals of Shares tendered may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. Withdrawn Shares, however, may be retendered by following one of the
procedures described in Section 4 at any time prior to the Expiration Date.
4. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
VALID TENDER: In order for a holder of Shares to validly tender Shares
pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), together with any required
signature guarantees and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase, on or prior to the Expiration
Date. Either (i) the certificates for such Shares must be delivered to the
Depositary or (ii) such Shares must be tendered pursuant to the procedure for
book-entry transfer set forth below and a Book-Entry Confirmation must be
received by the Depositary (including an Agent's Message (as defined below), if
the tendering stockholder has not delivered a Letter of Transmittal), in each
case on or prior to the Expiration Date. Delivery of documents to a Book-Entry
Transfer Facility does not constitute delivery to the Depositary. Alternatively,
the tendering stockholder may comply with the guaranteed delivery procedure set
forth below. The term "Agent's Message" means a message transmitted by a
Book-Entry Transfer Facility to and received by the Depositary and forming a
part of a Book-Entry Confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from a participant in the system
established by such Book-Entry Transfer Facility tendering the Shares which are
the subject of such Book-Entry Confirmation that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such Letter of Transmittal against such participant.
Unless the Rights are redeemed prior to the expiration of the Offer, holders
of Shares are also required to tender one Right for each Share tendered to
effect a valid tender of such Share. Until the Rights have separated from the
Shares, a tender of Shares pursuant to the Offer will constitute a tender of the
associated Rights evidenced by the certificates for such Shares. If Rights
certificates have been distributed to holders of Shares prior to the date of
tender pursuant to the Offer, Rights certificates
5
<PAGE>
representing a number of Rights equal to the number of Shares being tendered
must be delivered to the Depositary in order for such Shares to be validly
tendered. If the Rights have separated from the Shares, but the Rights
certificates have not been distributed prior to the time Shares are tendered
pursuant to the Offer, a tender of Shares constitutes an agreement by the
tendering stockholder to deliver Rights certificates representing a number of
Rights equal to the number of Shares tendered to the Depositary within three New
York Stock Exchange ("NYSE") trading days after the date Rights certificates are
distributed. The Purchaser reserves the right to require that it receive such
Rights certificates prior to accepting Shares for payment. In all cases, payment
for Shares tendered and purchased pursuant to the Offer will be made only after
timely receipt by the Depositary of, among other things, Rights certificates, if
such Rights certificates have been distributed to holders of Shares. If Rights
certificates are distributed, the Purchaser will deliver to holders of Shares
supplemental materials for use in connection with the tendering of Rights
certificates. Should the Rights be redeemed, the $.02 per Right redemption price
would be payable to the tendering stockholder with respect to Rights associated
with Shares accepted for payment pursuant to the Offer
BOOK-ENTRY TRANSFER: The Depositary will establish an account with respect
to the Shares at each Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry transfer of the Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account in
accordance with such Book-Entry Transfer Facility's procedure for such transfer.
Even if delivery of Shares is to be effected through book-entry transfer at a
Book-Entry Transfer Facility, the Letter of Transmittal (or a manually signed
facsimile thereof) along with any required signature guarantees and any other
required documents, or an Agent's Message, must be transmitted to and received
by the Depositary at one of its addresses set forth on the back cover page of
this Offer to Purchase on or prior to the Expiration Date, or the stockholder
must comply with the guaranteed delivery procedure set forth below.
SIGNATURE GUARANTEES. If the Letter of Transmittal is signed by the
registered holder of the Shares tendered therewith and payment is to be made
directly to such registered holder, or if Shares are tendered for the account of
an Eligible Institution, no signature guarantee is required. In all other cases,
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. If certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made or
certificates for Shares not accepted for payment or not tendered are to be
returned to a person other than the registered holder, then certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or the names of the registered owner or owners appear on
certificates, with the signature(s) on the certificates or stock powers
guaranteed as aforesaid. See Instructions 1 and 5 of the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such holder's certificates are not immediately available, or time
will not permit all required documents to reach the Depositary on or prior to
the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all of
the following conditions are met:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser is received by
the Depositary as provided below by the Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof) with any required signature guarantee and any other documents
6
<PAGE>
required by the Letter of Transmittal, or an Agent's Message, are received
by the Depositary within three NYSE trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by facsimile transmission, or by mail, to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
In all cases, payment for Shares tendered and purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of certificates
for such Shares (or a timely Book-Entry Confirmation), a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof) and
any other documents required by the Letter of Transmittal.
OTHER REQUIREMENTS. By executing a Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the Purchaser
as his proxies, in the manner set forth in the Letter of Transmittal, to the
full extent of such stockholder's rights with respect to the Shares tendered by
such stockholder and purchased by the Purchaser (and any and all other Shares
and other securities issued or issuable in respect thereof on or after October
9, 1996) prior to the time of any stockholder vote or other action. All such
proxies shall be irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
the Purchaser accepts such Shares for payment. Upon such appointment, all prior
proxies given by such stockholder with respect to such purchased Shares or other
securities will be revoked and no subsequent proxies may be given. The designees
of the Purchaser will, with respect to such Shares and other securities, be
empowered to exercise all voting and other rights of such stockholder as they,
in their sole discretion, may deem proper at any annual, special or adjourned
meeting of the Company's stockholders, by written consent or otherwise. The
Purchaser reserves the right to require that, in order for Shares to be validly
tendered, immediately upon the acceptance for payment of such Shares, the
Purchaser be able to exercise full voting and other rights of a record and
beneficial holder, including rights in respect of acting by written consent,
with respect to such Shares (and any and all other securities as set forth
above).
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING DELIVERY THROUGH A
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
STOCKHOLDER. IF DELIVERY IS TO BE BY MAIL, INSURED REGISTERED MAIL, RETURN
RECEIPT REQUESTED IS RECOMMENDED. AMPLE TIME SHOULD BE ALLOWED FOR SUCH
DOCUMENTS TO REACH THE DEPOSITARY. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION
4, DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
BACK-UP FEDERAL INCOME TAX WITHHOLDING. Under the federal income tax laws,
the Depositary will be required to withhold 31% of the amount of any payments
made to certain stockholders pursuant to the Offer. To prevent such backup
federal income tax withholding, each such stockholder must provide the
Depositary with his correct taxpayer identification number and certify that such
stockholder is not subject to such backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser and Parent, in their sole
discretion, whose determination will be final and binding. The Purchaser and
Parent reserve the absolute right to reject any or all tenders determined by
them not to be in proper form or the acceptance of or payment for which may, in
the opinion of the Purchaser's counsel, be unlawful. The Purchaser and Parent
also reserve the absolute right to waive any of the conditions of the Offer or
any defect in any tender with respect to any particular Shares or any particular
stockholder. No tender of Shares will be deemed to have been validly made until
all defects and irregularities relating thereto have been cured or waived. None
of Parent, the Purchaser, the Dealer Manager, the Depositary or the Information
Agent will be obligated to give notice of any defects or irregularities in
tenders, nor shall any of them incur any liability for failure to give any such
notice. The Purchaser's and Parent's interpretation of the terms and
7
<PAGE>
conditions of the Offer (including the Letter of Transmittal and instructions
thereto) will be final and binding.
5. CERTAIN INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to the Offer or for Shares pursuant to the Merger will be taxable for
federal income tax purposes and may be taxable under applicable state, local,
foreign and other tax laws. The tax consequences of such receipt may vary
depending upon, among other things, the particular circumstances of the
stockholder. In general, a stockholder will recognize gain or loss equal to the
difference between the amount of cash received and his tax basis for his Shares.
Such gain or loss will generally be capital gain or loss provided that such
stockholder held his Shares as a capital asset, and will be long-term capital
gain or loss if, on the date of sale, such Shares were held for more than one
year. Otherwise, such gain or loss will be short-term capital gain or loss.
The foregoing may not be applicable to stockholders who acquired their
Shares pursuant to the exercise of employee stock options or otherwise as
compensation or who are not citizens or residents of the United States or who
are otherwise subject to special tax treatment under the Internal Revenue Code
of 1986, as amended (the "Code") (such as life insurance companies, tax exempt
entities and regulated investment companies).
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH STOCKHOLDER IS URGED TO CONSULT HIS OWN TAX ADVISORS TO
DETERMINE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO SUCH
STOCKHOLDER, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS.
6. MARKET PRICES OF SHARES; DIVIDENDS. The Shares are traded on the NYSE
under the symbol "SFS." The following table sets forth, for the fiscal periods
shown, the range of high and low sales prices for the Shares as listed on the
NYSE for such periods, in each case as reported by published financial sources,
and the cash dividend paid by the Company for each such quarter.
<TABLE>
<CAPTION>
QUARTERLY
HIGH LOW DIVIDEND
-------- -------- ---------
<S> <C> <C> <C>
YEAR ENDED AUGUST 27, 1994
1st Quarter (12 weeks).......................... $ 13 $ 101/4 $ .09
2nd Quarter (12 weeks).......................... $ 137/8 $ 125/8 $ .09
3rd Quarter (12 weeks).......................... $ 143/8 $ 113/4 $ .09
4th Quarter (16 weeks).......................... $ 14 $ 101/2 $ .09
YEAR ENDED AUGUST 26, 1995
1st Quarter (12 weeks).......................... $ 121/4 $ 103/8 $ .095
2nd Quarter (12 weeks).......................... $ 121/4 $ 101/4 $ .095
3rd Quarter (12 weeks).......................... $ 115/8 $ 101/4 $ .095
4th Quarter (16 weeks).......................... $ 137/8 $ 101/2 $ .095
YEAR ENDING AUGUST 31, 1996
1st Quarter (12 weeks).......................... $ 121/4 $ 14 $ .095
2nd Quarter (12 weeks).......................... $ 113/4 $ 133/4 $ .10
3rd Quarter (12 weeks).......................... $ 11 $ 13 $ .10
4th Quarter (17 weeks).......................... $ 10 $ 123/4 $ .10
</TABLE>
On October 7, 1996, the last full day of trading prior to the announcement
of the Purchaser's intention to make the Offer, the last reported sale price for
the Shares, as reported on the NYSE, was $11.25 per Share, according to
published sources. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET PRICES FOR
THE SHARES.
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7. CERTAIN EFFECTS OF THE OFFER. The purchase of Shares pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
may also be expected to reduce the number of holders of Shares. Such reductions
could adversely affect the liquidity and market value of the remaining Shares
held by the public, if any.
STOCK QUOTATION. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements of the NYSE for
continued listing. According to the NYSE's published guidelines, the NYSE would
consider delisting the Shares if, among other things, the number of record
holders of at least 100 Shares were to fall below 1,200, the number of publicly
held Shares (exclusive of management or other concentrated holdings) were to
fall below 600,000 or the aggregate market value of publicly held Shares were to
not exceed $5 million. According to the Company, as of October 8, 1996, there
were 10,997,448 Shares outstanding. If, as a result of the purchase of Shares
pursuant to the Offer or otherwise, the Shares no longer meet the requirements
of the NYSE for continued listing and the Shares are no longer listed, the
market for Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on other securities exchanges or in the over-the-counter
market and that price quotations would be reported by such exchanges or through
the Nasdaq Stock Market or other sources. The extent of the public market for
the Shares and the availability of such quotations would, however, depend upon
the number of holders of Shares remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act, as described
below, and other factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of the
Company to the Securities and Exchange Commission (the "Commission") if the
Shares are not listed on a national securities exchange and there are fewer than
300 record holders of Shares. Termination of registration of the Shares under
the Exchange Act would substantially reduce the information required to be
furnished by the Company to its stockholders and the Commission and would make
certain provisions of the Exchange Act (such as the short-swing profit recovery
provisions of Section 16(b) and the requirement of furnishing a proxy or
information statement in connection with stockholders' meetings pursuant to
Section 14(a) or (c) and the related requirement of an annual report) no longer
applicable to the Company. Furthermore, the ability of "affiliates" of the
Company and persons holding "restricted securities" of the Company to dispose of
such securities pursuant to Rule 144 or Rule 144A promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), may be impaired or,
with respect to certain persons, eliminated. If, as a result of purchases
pursuant to the Offer or otherwise, the Company is no longer required to
maintain registration of the Shares under the Exchange Act, the Purchaser
intends to cause the Company to apply for termination of such registration.
MARGIN REGULATIONS. The Shares are presently "margin securities" under the
rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing brokers
to extend credit on the collateral of such securities for the purpose of buying,
carrying or trading in securities ("Purpose Loans"). In the event that the
Shares were no longer listed on the NYSE (which depends on factors such as the
number of holders of the Shares and the number and market value of publicly-held
Shares (see "Stock Quotation" above)), it is possible the Shares may no longer
constitute "margin securities" for purposes of the Federal Reserve Board's
margin regulations and, therefore, could no longer be used as collateral for
Purpose Loans made by brokers. In addition, if registration of the Shares under
the Exchange Act were terminated, the Shares would no longer constitute "margin
securities."
RULE 13E-3. The Commission has adopted Rule 13e-3 under the Exchange Act,
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or other transactions
following the purchase of Shares pursuant to the Offer in which the
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<PAGE>
Purchaser seeks to acquire the remaining shares not held by it. However, Rule
13e-3 would be inapplicable if (i) the Shares are deregistered under the
Exchange Act prior to the Merger or other transactions or (ii) the Merger or
another business combination is consummated within one year after the purchase
of the Shares pursuant to the Offer and the amount paid per Share for each class
of Share in the Merger or other business combination is at least equal to the
amount paid per Share for such class of Shares in the Offer. If applicable, Rule
13e-3 requires, among other things, that certain financial information
concerning the fairness of the proposed transaction and the consideration
offered to minority stockholders in such transaction be filed with the
Commission and disclosed to stockholders prior to the consummation of the
transaction.
8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware
corporation with its principal executive offices located at 3233 Newmark Drive,
Dayton, Ohio 45342, telephone (513) 439-7500. According to information filed by
the Company with the Commission, the Company is primarily engaged in the
wholesale distribution of groceries.
Set forth below is a summary of certain selected financial information with
respect to the Company and its subsidiaries for the fiscal years ended on August
26, 1995, August 27, 1994 and August 28, 1993 and for the thirty-six weeks ended
May 4, 1996 and May 6, 1995, which has been excerpted or derived from the
audited consolidated financial statements contained in the Company's Annual
Reports on Form 10-K for the fiscal years ended on August 26, 1995, August 27,
1994 and August 28, 1993, and from unaudited consolidated financial statements
contained in the Company's Quarterly Report on Form 10-Q for the thirty-six
weeks ended May 4, 1996. More comprehensive financial information is included in
such reports and other documents filed by the Company with the Commission, and
the following summary is qualified in its entirety by reference to such
documents and all of the financial statements and related notes contained
therein.
SUPER FOOD SERVICES, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
36 WEEKS ENDED FISCAL YEAR ENDED
---------------------- ----------------------------------------
MAY 4, MAY 6, AUGUST 26, AUGUST 27, AUGUST 28,
1996 1995 1995 1994 1993
---------- ---------- ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Sales and other income....................... $ 815,512 $ 792,439 $ 1,154,955 $ 1,130,095 $ 1,165,520
Total costs and expenses..................... 804,421 782,330 1,140,144 1,115,844 1,150,362
Income before income taxes................... 11,091 10,109 14,811 14,251 15,158
Net income................................... 6,846 6,170 9,065 8,827 9,216
Earnings per share........................... $ .62 $ .56 $ .83 $ .81 $ .85
Average shares outstanding................... 10,983 10,949 10,949 10,943 10,893
BALANCE SHEET DATA:
Total current assets......................... $ 174,262 $ 175,211 $ 157,325 $ 160,480 $ 157,858
Total assets................................. 274,259 276,298 256,899 259,344 248,238
Total current liabilities.................... 71,556 80,783 57,333 67,048 54,988
Long-term debt............................... 35,000 35,405 35,000 31,602 34,867
Total stockholders' equity................... 141,893 136,024 137,878 132,973 127,641
</TABLE>
The information concerning the Company contained in this Offer to Purchase
or incorporated herein by reference has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources or was provided by the Company. Although the Purchaser has no
10
<PAGE>
knowledge that would indicate that any statements contained herein based on such
documents and records are untrue, neither Parent nor the Purchaser can take
responsibility for the accuracy or completeness of the information contained in
such documents and records, or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information which are unknown to Parent or the Purchaser.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated to file reports and other
information with the Commission relating to its business, financial condition
and other matters. Information, as of particular dates, concerning the Company's
business, principal physical properties, capital structure, material pending
legal proceedings, operating results, financial condition, the Company's
directors and officers, their remuneration, stock options and restricted stock
granted to them, the principal holders of the Company's securities, any material
interests of such persons in transactions with the Company and other matters, is
required to be disclosed in proxy statements and annual reports distributed to
the Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information may be inspected at the Commission's public
reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549, and
should also be available for inspection at the following regional offices of the
Commission: 7 World Trade Center, Suite 1300, New York, New York 10048; and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and copies may be
obtained, by mail, for prescribed rates from the principal office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT. The Purchaser
is a newly incorporated Delaware corporation and a wholly owned subsidiary of
Parent. To date, the Purchaser has engaged in no activities other than those in
connection with the Offer. The principal executive offices of the Purchaser and
Parent are located at 7600 France Avenue South, Edina, Minnesota 55435,
telephone (612) 832-0534.
The name, business address, citizenship, present principal employment or
occupation and em-ployment history for the past five years of each of the
directors and executive officers of the Purchaser and Parent are set forth in
Schedule A to this Offer to Purchase.
Parent, a Delaware corporation, was organized in 1921 as the successor to a
business founded in 1885. Parent is one of the largest food wholesalers in the
United States, serving approximately 1,400 affiliated and other independent
retail supermarkets, other retail stores and outlets, and institutional
accounts, such as military base commissaries, restaurants, schools and
hospitals, as of December 1995. Parent also owns and operates 113 of its own
supermarkets and warehouse stores, as of December 1995.
Except as set forth in this paragraph or elsewhere in this Offer to
Purchase, neither the Purchaser nor Parent nor, to the best of their knowledge,
any of the persons listed in Schedule A hereto nor any associate or majority
owned subsidiary of any of the foregoing, beneficially owns or has a right to
acquire any equity securities of the Company, and neither the Purchaser nor
Parent nor, to the best of their knowledge, any of the persons or entities
referred to above, nor any director, executive officer or subsidiary of any of
the foregoing, has effected any transaction in such equity securities during the
past 60 days.
Except as set forth in this Offer to Purchase, neither the Purchaser nor
Parent nor, to the best of the knowledge of Parent and the Purchaser, any of the
persons listed in Schedule A hereto, has any contract, arrangement,
understanding or relationship (whether or not legally enforceable) with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or the voting of any of such securities, joint ventures, loan or
option arrangements, puts or calls, guarantees of loans, guarantees against
loss, or the giving or withholding of proxies. Except as set forth in this Offer
to Purchase, there have been no contacts, negotiations or transactions which
have occurred since August 29, 1993, between Parent, the Purchaser, or any of
Parent's other subsidiaries or, to the best of the knowledge of Parent and the
Purchaser, any of the persons listed in Schedule A hereto, on the one hand, and
the Company or its affiliates, on the other hand, concerning: a merger,
consolidation or acquisition; a tender offer or other acquisition of securities;
an
11
<PAGE>
election of directors; or a sale or other transfer of a material amount of
assets. Except as described in this Offer to Purchase, neither the Purchaser nor
Parent nor, to the best of the knowledge of Parent and the Purchaser, any of the
persons listed in Schedule A hereto, has since August 29, 1993 had any
transaction with the Company or any of its executive officers, directors or
affiliates which would require disclosure under the rules and regulations of the
Commission applicable to the Offer.
Except as set forth in this Offer to Purchase, during the last five years,
neither the Purchaser nor Parent nor, to the best knowledge of Parent and the
Purchaser, have any of the persons listed on Schedule A (i) been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding been or become subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, Federal or state securities laws or finding
any violation of such laws.
Until immediately prior to the time the Purchaser purchases the Shares
pursuant to the Offer, it is not anticipated that the Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer. Because the Purchaser is a newly formed corporation and has
minimal assets and capitalization, no meaningful financial information regarding
the Purchaser is available.
Parent is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is obligated to file reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning Parent's business, principal physical properties, capital structure,
material pending legal proceedings, operating results, financial condition,
directors and executive officers, their remuneration, stock options granted to
them, the principal holders of Parent's securities and any material interest of
such persons in transactions with Parent and other matters is required to be
disclosed in proxy statements and annual reports distributed to Parent's
stockholders and filed with the Commission. Such reports, proxy statements and
other information may be examined, and copies may be obtained from the
Commission in the same manner set forth in Section 8 with respect to information
concerning the Company.
Set forth below is a summary of certain selected financial information of
Parent and its subsidiaries for the fiscal years ended December 30, 1995,
December 31, 1994 and January 1, 1994 and for the 24 week periods ended June 15,
1996 and June 17, 1995, which has been excerpted or derived from the audited
consolidated financial statements contained in Parent's Annual Report on Form
10-K for the fiscal years ended December 30, 1995 and December 31, 1994 and from
unaudited financial information contained in the Company's Quarterly Report on
Form 10-Q for the quarter ended June 15, 1996. More comprehensive financial
information is included in such reports and other documents filed by Parent with
the Commission, and the following summary is qualified in its entirety by
reference to such documents and all of the financial statements and related
notes contained therein.
12
<PAGE>
NASH-FINCH COMPANY
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
24 WEEKS ENDED FISCAL YEAR ENDED
-------------------------- ----------------------------------------
JUNE 15, JUNE 17, DECEMBER 30, DECEMBER 31, JANUARY 1,
1996 1995 1995 1994 1994
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total revenues.......................... $ 1,419,736 $ 1,300,112 $2,888,836 $2,832,000 $ 2,723,535
Cost of sales........................... 1,228,460 1,109,894 2,469,841 2,410,292 2,325,249
Selling, general and administrative and
other operating expenses.............. 155,521 156,709 350,201 352,683 332,349
Interest expense........................ 6,003 5,585 10,793 11,384 10,114
Earnings before income taxes............ 14,952 14,354 28,595 25,810 26,678
Net earnings............................ 8,896 8,541 17,414 15,480 15,874
Earnings per share...................... $ 0.82 $ 0.79 $ 1.60 $ 1.42 $ 1.46
Weighted average number of common shares
outstanding........................... 10,905 10,875 10,875 10,873 10,872
BALANCE SHEET DATA (AT END OF PERIOD):
Total current assets.................... $ 360,127 $ 309,189 $ 311,690 $ 309,522 $ 294,925
Total assets............................ 616,509 524,648 514,260 531,604 521,654
Total current liabilities............... 234,998 210,586 207,688 220,065 215,021
Long-term debt.......................... 141,378 83,583 71,030 85,289 89,811
Total stockholders' equity.............. 220,403 210,902 215,313 206,269 199,264
</TABLE>
10. BACKGROUND OF THE OFFER: On January 16, 1996, Mr. Alfred N. Flaten,
the President and Chief Executive Officer of Parent, was approached by Dr.
Thomas S. Haggai, a member of the Board of Directors of the Company, to
determine whether Parent was interested in exploring the possibility of
acquiring the Company. Mr. Flaten responded that Parent was interested in
exploring such a transaction.
On January 22, 1996, Mr. Jack Twyman, the Chairman of the Board and Chief
Executive Officer of the Company, telephoned Mr. Flaten to introduce himself,
and the parties began to discuss the possibilities of a business combination
between Parent and the Company.
On February 12, 1996, Mr. Flaten informed members of an ad hoc committee of
the Board of Directors of Parent of his conversations with Dr. Haggai and Mr.
Twyman concerning a possible acquisition of the Company.
On February 14, 1996, Mr. Flaten met with representatives of KPMG Peat
Marwick to discuss various possible acquisition candidates for Parent, including
the Company.
On February 29, 1996, Parent and the Company executed a Confidentiality
Agreement pursuant to which, among other things, Parent agreed to maintain the
confidentiality of certain information to be provided by the Company. In
addition, Parent agreed for a period of two years not to acquire or make any
offer to acquire any securities or property of the Company without the approval
of the Board of Directors of the Company. Following the execution of the
Confidentiality Agreement, Messrs. Flaten and Twyman spoke briefly concerning
the possible benefits of a business combination between Parent and the Company
and Mr. Twyman indicated that the Company would forward various confidential
information concerning
13
<PAGE>
the Company to Parent for evaluative purposes. From approximately the middle of
March through early April 1996, representatives of Parent received and reviewed
confidential information concerning the Company and requested additional
information from the Company.
On April 9, 1996, at a meeting of the Board of Directors of Parent, the
Board discussed briefly the topic of a possible acquisition of the Company, but
no action of any kind was taken in connection therewith.
Throughout April and early May 1996, senior management of Parent continued
to receive, review and evaluate information concerning the Company and potential
synergies that may arise from a business combination between Parent and the
Company.
On May 7, 1996, Mr. David Collins, the Director of Financial Planning of
Parent, met with representatives of senior management of the Company, including
Mr. Twyman, Mr. John Demos, the Vice Chairman of the Board, Secretary and
General Counsel of the Company, and Mr. Robert F. Koogler, the Senior Vice
President--Finance, Treasurer and Assistant Secretary of the Company to discuss
in detail various aspects of the confidential information that had been provided
to Parent and to discuss operations of the Company.
At a meeting of the Board of Directors of Parent on May 14, 1996, Mr. Flaten
advised the Board concerning the preliminary discussions and financial analyses
that had been undertaken by the senior management of Parent. Mr. Flaten was
instructed by the Board of Directors of Parent to determine the valuation of the
Company and to engage independent financial advisors to assist Parent in
analyzing the value of the Company to Parent. On May 16, 1996, members of senior
management of Parent, including Mr. Flaten, Mr. Collins, Mr. John R. Scherer,
the Vice President and Chief Financial Officer of Parent, and Mr. Norman R.
Soland, the Vice President, Secretary and General Counsel of Parent, met in
Chicago, Illinois with Messrs. Twyman, Demos and Koogler concerning Parent's
continuing due diligence and financial analyses concerning the possible business
combination between Parent and the Company.
In early June 1996, Parent interviewed various independent financial
advisory firms and a market survey firm to conduct a survey and market study of
the Company's customer base. In July 1996, KPMG Peat Marwick ("KPMG") was
engaged by Parent to conduct a due diligence investigation of the Company and to
advise Parent concerning the valuation of the Company and Piper Jaffray Inc.
("Piper Jaffray"), a nationally-recognized investment banking firm, was engaged
by Parent to provide various investment banking services, including, if
requested, the delivery of a fairness opinion with respect to a proposed
transaction with the Company. On July 24 and 25, 1996 representatives of KPMG
conducted due diligence investigations at the offices of the Company's
independent auditors in Cincinnati, Ohio and met with Messrs. Koogler and Demos
concerning due diligence matters. Also on July 25, 1996, Mr. Flaten and Mr.
Twyman had extensive discussions regarding various due diligence matters.
On July 30, 1996, representatives of KPMG, representatives of Piper Jaffray
and Mr. Collins met at the offices of the Company's independent auditors in
Cincinnati to discuss various due diligence matters.
Throughout August and early September 1996, representatives of Parent and
representatives of the Company continued to discuss various due diligence
matters and potential synergies that might arise from a business combination. In
addition, senior management of Parent had various meetings with representatives
of KPMG and Piper Jaffray concerning the results of the due diligence
investigations and various financial and valuation analyses conducted by KPMG
and Piper Jaffray.
On September 4, 1996, members of senior management of Parent together with
representatives of KPMG and Piper Jaffray met with members of senior management
of the Company. Representatives of Lazard Freres also attended the meeting. At
this meeting, representatives of Parent made a presentation to the Company
concerning the various financial and valuation analyses undertaken by Parent,
the conclusion of which was that a price of $15.10 per Share was considered by
Parent to be fair to the respective parties. Mr. Twyman responded that he
believed a price of approximately $16.00 per Share was fair to the
14
<PAGE>
respective parties. In addition to these preliminary valuation discussions, the
parties discussed various other aspects of a possible business combination,
including timing, structure, potential synergies arising from a combination,
employee benefit and severance arrangements and management following the
combination.
On September 16, 1996, members of senior management of Parent and Mr. Twyman
met with representatives of various financial institutions concerning the
arranging of financing for the possible acquisition of the Company by Parent.
Also on September 16, 1996, Messrs. Flaten and Soland and Parent's legal
advisors met with Messrs. Twyman and Demos and the Company's legal advisors
concerning various aspects of a possible business combination, including timing,
structure, employee benefits and severance issues, continuing due diligence and
financing.
On September 19, 1996, Mr. Flaten and Mr. Twyman met and discussed various
aspects of the possible acquisition, including pricing, the structure of the
transaction, various employee benefits and severance issues and various due
diligence matters.
On September 24, 1996, at a meeting of the Board of Directors of Parent, the
possible acquisition of the Company by Parent was discussed at length, including
the status of the discussions between the respective companies and the status of
the financing arrangements. The Board of Directors of Parent authorized Mr.
Flaten to continue discussions concerning the acquisition within the range of
prices that had been established as a result of the previous discussions between
the principals of the respective companies.
Over the next several days, Mr. Flaten and Mr. Twyman had various
conversations concerning various aspects of the acquisition, including pricing,
lock-up arrangements and break-up fees and expenses. As a result of these
discussions, Mr. Flaten and Mr. Twyman each agreed to recommend to their
respective Boards of Directors that the respective companies enter into an
Agreement and Plan of Merger providing for the acquisition of all outstanding
Shares at a price of $15.50 per Share.
On October 2, 1996, the Board of Directors of the Company met and
representatives of senior management of the Company, its legal advisors and
Lazard Freres made various presentations concerning the proposed transaction and
the status of the negotiations. The Board of Directors of the Company authorized
Mr. Twyman to continue negotiations with Parent.
Throughout the first week in October, representatives of the respective
companies and their legal advisors continued to negotiate the terms of the
proposed Agreement and Plan of Merger.
On the morning of October 8, 1996, after completion of the negotiations
concerning the proposed Agreement and Plan of Merger, the Board of Directors of
the Company held a special meeting to review, with the advice and assistance of
the Company's legal advisors and Lazard Freres, the proposed Agreement and Plan
of Merger and the transactions contemplated thereby, including the Offer and the
Merger. At the meeting, counsel to the Company reviewed the terms of the Merger
Agreement and Lazard Freres presented an update of its financial analyses and
rendered to the Board its written opinion that, based upon and subject to
various considerations and assumptions set forth therein, the cash consideration
of $15.50 per Share to be received by the holders of the Shares pursuant to the
Merger Agreement is fair from a financial point of view to such stockholders.
Following a number of questions from, and discussion among the directors, the
Company's Board of Directors unanimously (i) approved the Merger Agreement and
the transactions contemplated thereby and authorized the execution and delivery
thereof, (ii) determined that the Offer and the Merger, taken together, are fair
to, and in the best interests of, the Company and its stockholders, and (iii)
recommended that the Company's stockholders accept the Offer and tender their
Shares to Purchaser.
Simultaneously with the meeting of the Board of Directors of the Company on
October 8, 1996, the Board of Directors of Parent held a special meeting to
review, with the advice and assistance of Parent's
15
<PAGE>
financial and legal advisors, the proposed Agreement and Plan of Merger and the
transactions contemplated thereby, including the Offer and the Merger. At such
meeting, Parent's management, financial advisors and legal advisors made
presentations to the Board concerning the transaction and Parent's financial
advisor, Piper Jaffray, provided its written opinion to the effect that the
consideration to be paid by Parent pursuant to the Merger Agreement is fair to
Parent from a financial point of view. Following a number of questions from, and
discussion among the Directors, Parent's Board of Directors unanimously approved
the Merger Agreement and the transactions contemplated thereby, and authorized
the execution and delivery thereof.
Immediately following the respective meetings of the Board of Directors of
the Company and Parent, the Agreement and Plan of Merger was executed and
delivered by the Company, Parent and Purchaser, and the Company and Parent
issued a joint press release concerning the Offer and the Merger Agreement.
11. PURPOSE OF THE OFFER AND MERGER; PLANS FOR THE COMPANY; THE MERGER
AGREEMENT AND STOCKHOLDER AGREEMENT. The purpose of the Offer, the Merger and
the Merger Agreement is for Parent to acquire control of, and the entire equity
interest in, the Company. The Offer is intended to increase the likelihood that
such acquisition will be effected and to permit Parent to acquire control of the
Company at the earliest practicable date. The purpose of the Merger is to
acquire all outstanding Shares not tendered and purchased pursuant to the Offer.
Except as indicated in this Offer to Purchase, the Purchaser has no present
plans or proposals which relate or would result in an extraordinary corporate
transaction, such as a merger, reorganization, liquidation, relocation of
operations, or sale or transfer of assets, involving the Company or any of its
subsidiaries, or any material changes in the Company or any of its subsidiaries,
or any material changes in the Company's corporate structure, capitalization or
business or the composition of its management or personnel. Following completion
of the Merger, Jack Twyman, Chairman of the Board and Chief Executive Officer of
the Company, and John Demos, Vice Chairman of the Board, Secretary and General
Counsel, will leave the Company, although Mr. Twyman is expected to assist
Parent in the integration of the operations of the Company.
THE MERGER AGREEMENT. The Merger Agreement provides for the commencement of
the Offer as promptly as practicable, and in any event within five business
days, after the first public announcement of the Purchaser's intention to make
the Offer. The obligations of Parent to cause the Purchaser to commence the
Offer and the obligation of Parent and the Purchaser to consummate the Offer and
accept for payment or pay for any Shares tendered pursuant to the Offer is
subject only to the satisfaction of certain conditions, including the Minimum
Condition, which are described in Section 13.
The Merger Agreement provides that, subject to the terms and conditions of
the Merger Agreement and the DGCL, as soon as practicable after consummation of
the Offer, the Purchaser and the Company will be merged. At the Effective Time
each Share outstanding immediately prior to the Effective Time (other than
Shares held by Parent, the Purchaser or any of their subsidiaries or in the
treasury of the Company or by any subsidiary of the Company, all of which will
be canceled, and other than Dissenting Shares) will be converted into the right
to receive $15.50 net in cash per Share or such higher price as shall have been
paid in the Offer.
The Company is permitted to make adjustments to all outstanding Options,
whether such Options are currently exercisable or fully vested, to provide that
each such Option will be exercisable in full prior to the Effective Time. In
addition, the Company will have the right, at any time prior to the Effective
Time, to pay to each holder of an Option an amount equal to the difference
between $15.50 and the exercise price of such Option, if it is lower than
$15.50, in exchange for the surrender and cancellation of such Option. Prior to
the Effective Time, the Company may elect to accelerate the exercisability or
vesting of the Options, and the Board of Directors of the Company has indicated
that it intends to do so. At the Effective Time, any Options not exercised in
full or surrendered for cancellation will terminate.
16
<PAGE>
The Merger Agreement provides that the Stock Purchase Agreement will be
amended to provide that each participant in the Stock Purchase Plan will
receive, in lieu of such participant's account balance, the amount determined by
dividing the account balance by $11.10 (the purchase price for Shares subscribed
for under the Stock Purchase Plan), and multiplying the result by $15.50.
The Merger Agreement contains representations and warranties by the Company
regarding, among other things, its organization, its capitalization, its
authority relative to the Merger Agreement, consents and approvals necessary for
the Offer and the Merger, the absence of certain changes in its business, its
publicly filed reports and certain employee matters, and by each of Parent and
the Purchaser regarding, among other things, its organization, its authority
relative to the Merger Agreement and the Offer, and consents and approvals
necessary for the Offer and the Merger.
The Company has also represented in the Merger Agreement that the Company's
Board of Directors, after receiving advice from a nationally recognized
investment banking firm selected by the Board of Directors, has determined that
the acquisition of the Shares by the Purchaser is at a price and on terms that
are fair to the Company's stockholders and is otherwise in the best interests of
the Company and its stockholders and has unanimously approved the Offer, the
Merger Agreement, the acquisition of the Shares and the Merger so that the
Rights issued pursuant to the Rights Agreement will not become exercisable as a
result of the Offer or the Merger. The Company has further represented in the
Merger Agreement that the Rights Agreement has been amended to provide that
neither Parent nor the Purchaser will be deemed to be an Acquiring Person or a
Beneficial Owner (as such terms are defined in the Rights Agreement). In the
Merger Agreement, the Company has agreed, if Parent so requests, to redeem the
Rights in accordance with the terms of the Rights Agreement immediately prior to
the acceptance for payment of Shares pursuant to the Offer. The Company has also
agreed that, from and after the date of the Merger Agreement, the Company will
not (i) take or fail to take any action which would permit the Rights to become
nonredeemable by the Company, (ii) except as otherwise provided in the Merger
Agreement, redeem the Rights, (iii) except as otherwise required to permit the
commencement or consummation of the Offer or consummation of the Merger, amend
the Rights Agreement, or (iv) approve any transaction, offer or agreement (other
than an Approved Offer, as defined below) with any party other than Parent and
the Purchaser under the Rights Agreement such that the Rights would not become
exercisable as a result of such transaction, offer or agreement.
The obligations of the parties to effect the Merger are subject to the
satisfaction or waiver, where permissible, of the following conditions: (i) the
Merger Agreement, the Merger and the transactions contemplated by the Merger
Agreement shall have been approved and adopted by the requisite vote of the
holders of the Shares, if such vote is required by applicable law in order to
consummate the Merger; (ii) no statute, rule, regulation, executive order,
decree or injunction shall have been enacted, entered, promulgated or enforced
by any court or governmental authority which prohibits, restrains, enjoins or
restricts consummation of the Merger; and (iii) any waiting period (and any
extension thereof) applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated.
The Company has agreed that, prior to the Effective Time, the Company and
its subsidiaries will each conduct its operations according to its ordinary and
usual course of business and consistent with past practice and the Company will
use reasonable efforts to preserve intact in all material respects the business
organization of the Company, use reasonable efforts to keep available the
services of its current officers and key employees, and use reasonable efforts
to preserve in all material respects the good will of those having advantageous
business relationships with it and its subsidiaries, and the Company will not,
without the prior written consent of Parent, (i) issue, sell or pledge, or
authorize or propose the issuance, sale or pledge of (A) additional shares of
capital stock of any class (including the Shares), or securities convertible
into any such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities, or grant or accelerate any right to
convert or exchange any securities of the Company for Shares, other than (1)
Shares issuable pursuant to the terms of Options outstanding on October 8, 1996
or Shares issuable pursuant to the Stock Purchase Plan, or (2) the issuance of
shares of capital stock to the Company
17
<PAGE>
by a wholly owned subsidiary of the Company, or (B) any other securities in
respect of, in lieu of or in substitution for Shares outstanding on October 8,
1996; (ii) purchase or otherwise acquire, or propose to purchase or otherwise
acquire, any of its outstanding securities (including the Shares); (iii) split,
combine or reclassify any shares of its capital stock, declare, set aside or pay
any dividend or distribution on any shares of capital stock of the Company; (iv)
make any acquisition of a material amount of assets (by merger, consolidation or
acquisition of stock or assets) or securities, any disposition of a material
amount of assets or securities or any material change in its capitalization, or
enter into a material contract or release or relinquish any material contract
rights not in the ordinary course of business (except as otherwise permitted
pursuant to the Merger Agreement); (v) intentionally incur any liability or
obligation (absolute, accrued, contingent or otherwise) other than in the
ordinary and usual course of business and either consistent with past practice
or in the reasonable business judgment of the officers of the Company (including
borrowing in the ordinary course pursuant to existing loan agreements or debt
instruments) or issue any debt securities or assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any
other individual or entity in any case in an amount material to the Company and
its subsidiaries, taken as a whole; (vi) propose or adopt any amendments to the
Certificate of Incorporation or Bylaws of the Company; (vii) make any change in
accounting methods, principles or practices; (viii) other than as contemplated
or permitted by the Merger Agreement, (A) enter into any new employment
agreements with any officers, directors or key employees or grant any material
increases in the compensation or benefits to officers, directors and key
employees other than increases in the ordinary course of business and consistent
with past practice, (B) pay or agree to pay any pension, retirement allowance or
other employee benefit not required or permitted by any existing plan, agreement
or arrangement to any such director, officer or key employee in amounts material
to the Company and its subsidiaries, taken as a whole, (C) commit itself (other
than pursuant to any collective bargaining agreement) to any additional pension,
profit-sharing, bonus, extra compensation, incentive, defined compensation,
stock purchase, stock option, stock appreciation right, group insurance,
severance pay, retirement or other employee benefit plan, agreement or
arrangement, or to any employment or consulting agreement with or for the
benefit of any director, officer or key employee, whether past or present, in
amounts material to the Company and its subsidiaries, taken as a whole, or (D)
except as required by applicable law, amend in any material respect any such
plan, agreement or arrangement; or (ix) agree in writing or otherwise to take
any of the foregoing actions or any action which would make any representation
or warranty in the Merger Agreement untrue or incorrect.
The Company has also agreed that neither the Company, its subsidiaries, nor
any of their respective officers, directors, employees, financial advisors,
counsel, representatives, agents and affiliates will, directly or indirectly,
encourage, solicit, initiate, or, subject to the fiduciary duties of the Board
of Directors, officers or stockholders of the Company under applicable law as
advised by outside counsel, enter into any agreement with respect to, or
participate in discussions or negotiations with, or provide any confidential
information to, any person other than Parent, Purchaser or their affiliates (a
"Third Party") concerning any tender offer (including a self-tender offer),
exchange offer, merger, sale of substantial assets, sale of securities or
similar transactions involving the Company or any of its material subsidiaries
or divisions (each proposal, announcement or transaction being referred to as an
"Acquisition Proposal"). The Company has agreed to promptly inform Parent of any
offer which it may receive in respect of an Acquisition Proposal (including the
terms thereof and the identity of the Third Party making such offer).
The Company's Board of Directors may, however, approve, accept and recommend
to its stockholders an Acquisition Proposal if (i) the Board of Directors
determines in good faith, in exercising its fiduciary duties under applicable
law and after consultation with its outside counsel and financial advisors, that
the Acquisition Proposal would be more favorable to the Company's stockholders
from a financial point of view than the Offer (such other offer, an "Approved
Offer") and (ii) Parent does not make, within five business days of Parent's
receiving notice of such Third-Party offer, an offer which the Company's Board
of Directors, after consultation with its financial advisors, determines is
superior to such Third-Party offer.
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Parent has agreed that all rights to indemnification or exculpation now
existing in favor of the directors, officers, employees and agents of the
Company as provided in the Company's Certificate of Incorporation or Bylaws or
otherwise in effect on the date of the Merger Agreement shall survive the Merger
and continue in full force and effect for a period of six years after the
Effective Time. Parent has also agreed to maintain in effect for a period of
five years after the Effective Time the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may substitute policies of at least the same coverage amounts containing terms
and conditions which are no less advantageous) in the amount of $15,000,000 in
the first year after the Effective Time, and $10,000,000 for years two through
five after the Effective Time, subject to an agreed upon maximum on the premiums
that Parent shall be obligated to pay.
The Merger Agreement provides that, if required by applicable law, the
Company will call a meeting of its stockholders for the purpose of voting upon
the Merger Agreement and the Merger. In connection therewith, except as
otherwise expressly permitted by the Merger Agreement, the Company will, through
its Board of Directors, recommend to its stockholders approval of such matters
and take all reasonable actions to solicit such approval, including without
limitation preparing and filing a proxy statement under the Exchange Act.
Subject to the terms and conditions of the Merger Agreement, and to the
fiduciary duties of the Company's Board of Directors, each of the parties has
also agreed to use its reasonable efforts to take, or cause to be taken, all
appropriate actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Merger Agreement.
Pursuant to the Merger Agreement, Parent has agreed to maintain, until the
later of 45 days after the purchase of the Shares pursuant to the Offer or
December 31, 1996, for the benefit of the officers and employees of the Company
employee benefits at least comparable in the aggregate to those provided under
the Company's benefit plans. To the extend practicable and appropriate, Parent
has agreed to continue existing Company benefit plans during such period.
Thereafter, such officers and employees will be entitled to participate in the
benefit plans maintained by Parent for its similarly situated employees, upon
the same terms and conditions that apply to such employees of Parent. Parent has
also agreed to honor all existing employment, severance, consulting or other
compensation agreements or arrangements and benefit contracts between the
Company and any officer, director or employee of the Company. Each employee of
the Company as of the Effective Time will, for purposes of determining
eligibility and vesting under any benefit plan of Parent, be given credit for
all service with the Company prior to the Effective Time.
The Merger Agreement provides that, promptly upon the acceptance for payment
of and payment by the Purchaser in accordance with the Offer for, Shares
satisfying the Minimum Condition, and from time to time thereafter, the
Purchaser will be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as will give the
Purchaser representation on the Board of Directors equal to at least that number
of directors which equals the product of the total number of directors on the
Board of Directors multiplied by the percentage that such number of Shares so
accepted for payment and paid for or owned by Parent or the Purchaser bears to
the total number of Shares outstanding; provided, however that at all times
prior to the Merger there shall be at least three members of the Board of
Directors of the Company selected by the current members of such Board. In the
Merger Agreement, the Company has agreed to cause the Purchaser's designees to
be elected to the Company's Board of Directors (including mailing to the
Company's shareholders the information required by Section 14(f) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
promulgated thereunder) and to increase the number of the Company's directors or
to exercise its best efforts to secure the resignations of current directors, as
may be directed by Parent and required to implement the foregoing.
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TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
the Company: (a) by mutual written consent of the Boards of Directors of Parent,
the Purchaser and the Company; (b) by either the Company or Parent (i) if (1)
the Offer terminates or expires in accordance with its terms or if Parent
terminates the Offer as the result of the occurrence of any of the conditions
described in Annex I to the Merger Agreement, or (2) Purchaser shall not have
purchased any Shares pursuant to the Offer on or before December 31, 1996
(provided, however, that the right to terminate the Merger Agreement shall not
be available to any party whose failure to fulfill any of its obligations
thereunder or whose misrepresentation thereunder results in the cause for such
termination); (ii) if the Merger shall not have been consummated on or before
six months after the date of the Merger Agreement, unless the failure to
consummate the Merger is the result of a material breach of the Merger Agreement
by the party seeking to terminate it; or (iii) if any court of competent
jurisdiction or any other governmental body shall have issued an order, decree
or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable; (c) by the Company if (i) the Offer
has not been timely commenced in accordance with Section 1.1 of the Merger
Agreement; or (ii) Parent or Purchaser fails to perform in any material respect
any of its respective obligations under the Merger Agreement; (d) by Parent or
Purchaser if the Company fails to perform in any material respect any of its
obligations under the Merger Agreement; or (e) by the Company if the Board of
Directors of the Company has accepted an Approved Offer in accordance with
Section 6.2 of the Merger Agreement.
EXPENSES UPON TERMINATION. If neither Purchaser nor Parent is in material
breach of any of its obligations under the Merger Agreement and, prior to
acceptance of Shares for payment pursuant to the Offer or the payment therefor,
the Merger Agreement is terminated (i) as a result of a material
misrepresentation by the Company, withdrawal or modification by the Board of
Directors of the Company of its recommendation of the Offer or the commencement
of a tender offer or acquisition of 20% or more of the Shares by another party;
or (ii) by Parent as a result of a breach by the Company; or (iii) by the
Company if it accepts an Approved Offer; then the Company shall reimburse Parent
for all reasonable out-of-pocket expenses and fees incurred by Parent in good
faith in connection with the the Merger Agreement and the financing thereof,
subject to a maximum reimbursement of $5,000,000.
TERMINATION FEES. If neither Purchaser nor Parent is in material breach of
any of its obligations under the Merger Agreement and, prior to acceptance of
Shares for payment pursuant to the Offer or the payment therefor, the Merger
Agreement is terminated (i) as a result of a material misrepresentation by the
Company, withdrawal or modification by the Board of Directors of the Company of
its recommendation of the Offer or the announcement or commencement of a tender
offer or acquisition of 20% or more of the Shares by another party or; (ii) by
Parent as a result of a breach by the Company; or (iii) by the Company if it
accepts an Approved Offer; and either prior to such termination or within twelve
(12) months thereafter, any person A) acquires the Company by merger or
otherwise; (B) acquires more than 50% in value of the total assets of the
Company and its subsidiaries taken as a whole; or (C) acquires beneficial
ownership of securities representing more than 50% of the outstanding voting
securities of the Company; or the Board of Directors of the Company accepts,
approves or recommends any third party acquisition; or the Board of Directors of
the Company shall have withdrawn or modified in any material respect its
recommendation of the Offer; then the Company shall pay Parent a termination fee
of $6,500,000 in addition to the payment of expenses described above.
STOCKHOLDER AGREEMENT. Parent and the Tendering Stockholders have entered
into the Stockholder Agreement, which provides that, not later than the fifth
business day after commencement of the Offer, each Tendering Stockholder will
tender all Shares beneficially owned by such Tendering Stockholder. Parent's
obligation under the Stockholder Agreement to accept for payment and pay for
Shares in the Offer, including the Shares beneficially owned by such Tendering
Stockholders, is subject to the terms and conditions of the Offer. If the Merger
Agreement is terminated, the Offer is terminated without the purchase of Shares
thereunder or the Minimum Condition is not satisfied (other than by waiver) upon
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termination of the Offer, the Shares tendered pursuant to the Stockholder
Agreement by each Tendering Stockholder shall be returned to such Stockholder.
During the term of the Stockholder Agreement, and except as otherwise
provided therein or with the prior written consent of Parent, each tendering
Stockholder may not (i) sell, pledge or otherwise dispose of any of its Shares,
(ii) deposit its Shares into a voting trust or enter into a voting agreement or
arrangement with respect to such Shares, (iii) grant any proxy,
power-of-attorney or other authorization in or with respect to such Shares, or
(iv) enter into any contract, option or other arrangement or undertaking with
respect to the direct or indirect sale, assignment, transfer or other
disposition of such Shares. The Stockholder Agreement requires each tendering
Stockholder to abide by the terms of the non-solicitation provisions of the
Merger Agreement summarized in "The Merger Agreement" set forth above in this
Section 11.
The Stockholder Agreement will terminate upon the earlier to occur of: (i)
the termination of the Merger Agreement, and (ii) December 31, 1996.
The preceding descriptions of the terms and provisions of the Merger
Agreement and the Stockholder Agreement are qualified in their entirety by
reference to the texts of such agreements, which are exhibits to the Tender
Offer Statement on Schedule 14D-1 filed by the Purchaser and Parent with the
Commission and which is available for inspection and copying at the principal
office of the Commission in the manner set forth in Section 9.
AMENDMENT OF EMPLOYMENT AGREEMENTS. Mr. Twyman originally executed an
employment agreement with the Company in 1976. That agreement was amended in
1981, at which time the Company also entered in an employment agreement with
John Demos. Prior to the execution and delivery of the Merger Agreement, the
Company entered into amendments to these employment agreements which provide for
acceleration of the benefits that would have been payable to Mr. Twyman and Mr.
Demos through the end of the stated termination dates of those agreements (March
2, 1999 for Mr. Twyman and March 2, 1998 for Mr. Demos) so that, effective upon
the acquisition by Purchaser of any shares pursuant to the Offer or, if no
Shares are purchased pursuant to the Offer prior to the Merger, the date that
the Merger is completed (such effective date being referred to as the "Payment
Date"), the Company shall pay to the respective employees the sum of: (i) the
amount of all unpaid salary and benefits accrued under the Employment Agreement
through the Payment Date that has not previously been paid, and (ii) an amount
equal to his full base salary for the period from the Payment Date through the
date the Employment Agreement would have otherwise terminated, determined
without discount. Based on an assumed Payment Date of November 15, 1996, the
amount payable to Mr. Twyman would be approximately $1,206,042, and the amount
payable to Mr. Demos would be approximately $263,336. Upon such payments, the
Employment Agreements will terminate with no further liability or obligation of
either party thereunder. In the event that the Merger Agreement is terminated
for any reason prior to the Payment Date, the amendments of the Employment
Agreements described above will terminate and be of no further force or effect.
12. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Purchaser to purchase all presently outstanding Shares pursuant to the Offer and
the Merger and to pay related fees and expenses is estimated to be approximately
$180,000,000 million. Such funds will be obtained by the Purchaser or provided
by Parent or one or more of its subsidiaries to the Purchaser from available
cash on hand and pursuant to a $500 million credit facility (the "Credit
Facility") to be provided by a syndicate of banks (the "Banks") for whom Harris
Trust and Savings Bank acts as administrative agent (the "Administrative Agent")
and Bank of Montreal and PNC Bank, National Association, act as co-syndication
agents. The Credit Facility will be a $500 million senior unsecured revolving
facility maturing five (5) years from the date of the closing thereof, with a
mandatory commitment reduction, through subsequent debt issues or otherwise, to
$400 million by December 31, 1998. The Credit Facility contains a sublimit of
$25 million for the issuance of standby and commercial letters of credit. Any
outstanding letters of credit will reduce funds availability on a
dollar-for-dollar basis. Loans will be provided under the Credit Facility to
Parent, which
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can advance proceeds of such loans to the Purchaser and/or any other domestic
subsidiary of Parent (the Parent, in such capacity, being hereinafter referred
to as the "Borrower").
Each loan under the Credit Facility will bear interest, at the Borrower's
option from time to time, at a rate equal to either the "Base Rate" or the
"LIBOR Rate." The "Base Rate" for any day will mean the greater of (i) the rate
of interest announced by the Administrative Agent as its prime commercial rate
for such day or (ii) the "Federal Funds Effective Rate" in effect on such day
plus one half of one percent plus the Base Rate Margin, calculated on an actual
day/365-day basis and payable quarterly in arrears. "LIBOR Rate" generally will
mean the reserve adjusted LIBOR plus a LIBOR Margin, fixed for interest periods
of one, two, three or six months, calculated on an actual day/360-day basis and
payable on the last day of the applicable interest period (but in any case, at
least quarterly). LIBOR is defined, generally, as the London Interbank Offered
Rate reflected in the Telerate Service of the British Banker's Association, or
if such rate is unavailable, the rate at which deposits of U.S. dollars are
quoted two business days before commencement of the applicable interest period.
The LIBOR Margin ranges from .200% to .700% based on the ratings assigned to the
Parent's senior unsecured non-credit enhanced long-term indebtedness ("Parent's
Debt Ratings"). The Borrower may also request that the Administrative Agent
solicit competitive bids from the Banks through an auction for short term
borrowings priced either (i) at a margin above or below LIBOR or (ii) at an
absolute interest rate. The Credit Facility will also provide for customary
provisions relating to yield protection, availability and capital adequacy.
The Credit Facility will provide for the payment by Parent of certain fees
including a (i) facility fee at a rate ranging from .100% to .300% per annum
based on the Parent's Debt Ratings, (ii) certain structuring, underwriting and
administrative fees and (iii) certain letter of credit fees ranging from .200%
to .700% per annum (based on the Parent's Debt Ratings) applied to the face
amount of each letter of credit, a letter of credit fronting fee of one-tenth of
1% of the face amount of each standby letter of credit and customary fees in
connection with commercial letters of credit and standby letters of credit.
The Credit Facility will have customary conditions to borrowing,
representations and warranties, covenants and events of default. Without
limiting the generality of the foregoing, the Banks' obligation to fund shall be
conditioned upon the satisfaction of the Minimum Condition.
The subsidiaries of Parent (including the Purchaser and, upon consummation
of the Offer or the Merger, the Company and its subsidiaries) will
unconditionally guarantee the indebtedness, obligations and liabilities of the
Borrower under the Credit Facility.
The commitment of the Banks under the Credit Facility will expire five (5)
years from the date of its commencement. It is anticipated that borrowings under
the Credit Facility will be repaid from funds generated internally by Parent and
its subsidiaries (including the Company) and from other sources, which may
include debt or other bank financings.
13. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provisions
of the Offer and in addition to (and not in limitation of) Parent's right to
extend and amend the Offer (subject to the terms of the Merger Agreement),
Parent shall not be required to accept for payment or pay for, subject to Rule
14e-l(c) of the Exchange Act, any Shares not theretofore accepted for payment or
paid for and may terminate or amend the Offer (subject to the terms of the
Merger Agreement) as to such Shares if (i) the Minimum Condition shall not have
been satisfied or (ii) at any time on or after the date of commencement of the
Offer and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exist or shall occur and remain in
effect:
(a) there shall have occurred (i) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States
(whether or not mandatory), (ii) a formal declaration of war or national or
international calamity directly or indirectly involving the United States,
(iii) any limitation (whether or not mandatory) by any United States
governmental authority on the extension of credit by banks or other
financial institutions that materially affects the extension
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of credit by banks or other lending institutions, or (iv) in the case of any
of the foregoing existing at the time of commencement of the Offer, a
material acceleration or worsening thereof; or
(b) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted issued or deemed applicable to the Offer or the Merger by any court,
government or governmental authority or agency, domestic or foreign, which
(i) prohibits Parent's ownership or operation of all or a material portion
of its or the Company's (or any of their respective subsidiaries') business
or assets, or compels Parent to dispose of or hold separate all or a
material portion of its or the Company's (or any of their respective
subsidiaries') business or assets as a result of the Offer or the Merger,
(ii) prohibits, or makes illegal the acceptance for payment or payment for
Shares or the consummation of the Offer or the Merger, or (iii) imposes
material limitations on the ability of Parent or Purchaser effectively to
exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by Purchaser on all
matters properly presented to the Company's stockholders; provided, however,
that with respect to any action, ruling or order taken or made by any court,
government or governmental authority or agency that is preliminary, until
such action, ruling or order becomes final, Parent may not terminate the
Offer, but shall extend the expiration of the Offer and shall postpone
acceptance for payment or purchase of, or payment for, any Shares pursuant
to this paragraph (b); further provided, however, that in no event shall
Parent be obligated to attempt to cause any such decree, order or injunction
to be vacated or reversed or to extend the Offer beyond December 31, 1996;
or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) any of the representations and warranties of the Company set forth
in the Merger Agreement were inaccurate when made or became inaccurate at
any time thereafter (other than (i) any misrepresentations that, in the
aggregate, do not have a material adverse effect on the Company or (ii) any
misrepresentations that the Company cures within five (5) business days
after notice thereof is given by Parent (except that no cure period shall be
provided for a breach by the Company which, by its nature, cannot be cured))
or the Company shall have failed in any material respect to perform any
material obligation or covenant required by the Merger Agreement to be
performed or complied with by it which failure would have a material adverse
effect on the Company; or
(e) the Board of Directors of the Company shall have withdrawn or
modified in any material respect its recommendation of the Offer; provided,
however, that this condition shall not be deemed to exist, and Purchaser
shall have no right to terminate the Offer or not accept for payment or pay
for Shares, if as a result of the Company's receipt of a proposal for the
acquisition of all or a material portion of the business or assets of the
Company or the Shares, the Company withdraws, modifies or amends its
approval or recommendation of the Offer, the Merger or the Merger Agreement
by reason of taking and disclosing to the Company's stockholders a position
contemplated by Rule 14e-2(a)(2) or (3) promulgated under the Exchange Act
with respect to such proposal, the Offer, the Merger or the Merger Agreement
and if within five (5) business days of taking and disclosing to its
stockholders the aforementioned position, the Company publicly reconfirms
its recommendation of the Offer, the Merger and the Merger Agreement; or
(f) the waiting period (and any extension thereof) applicable to the
consummation of the Offer under the HSR Act shall not have expired or been
terminated; provided, however, that (i) until such HSR Act waiting periods
expire or terminate, Parent may not terminate the Offer (but shall extend
the expiration of the Offer and shall postpone acceptance for payment or
purchase of, or payment for, any Shares pursuant to this paragraph (f));
further provided, however, that in no event shall Parent be obligated to
extend the Offer beyond December 31, 1996 and (ii) unless Parent theretofore
shall have terminated the Offer in accordance with the terms of the Merger
Agreement, Parent shall continue to seek to resolve any action or proceeding
in accordance with the provisions of the Merger Agreement; or
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(g) (i) a tender or exchange offer for 20% or more of the Shares shall
have been publicly proposed to be made by another person or shall have been
publicly disclosed, (ii) a tender or exchange offer for 20% or more of the
Shares shall have been made by another person or (iii) Parent shall have
learned that any person, entity or "group" (as that term is used in Section
13(d)(3) of the Exchange Act), shall beneficially own (as that term is used
in Section 13(d)(3) of the Exchange Act), or shall have acquired, 20% or
more of the Shares, or shall have been granted any option or right,
condition or otherwise, to acquire 20% or more of the Shares;
which, in the reasonable judgment of Parent, in any case, and regardless of the
circumstances giving rise to any such condition, makes it inadvisable to proceed
with the Offer or with such acceptance for payment, purchase of, or payment for
Shares.
The foregoing conditions are for the sole benefit of Parent and may be
asserted by Parent regardless of the circumstances giving rise to any such
condition and may be waived by Parent, in whole or in part, at any time and from
time to time, in the sole discretion of Parent. The failure by Parent at any
time to exercise any of the foregoing rights will not be deemed a waiver of any
right and each right will be deemed an ongoing right which may be asserted at
any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.
14. DIVIDEND AND DISTRIBUTIONS. If, on or after October 8, 1996, the
Company should (i) split, combine or otherwise change the Shares or the
Company's capitalization, (ii) issue or sell any additional securities of the
Company or otherwise cause an increase in the number of outstanding securities
of the Company (except for Shares issuable upon the exercise of employee stock
options outstanding on the date of the Merger Agreement), (iii) acquire
currently outstanding Shares or otherwise cause a reduction in the number of
outstanding Shares, or (iv) disclose that it has taken any such action, then,
without prejudice to Purchaser's rights under Sections 1 and 13, the Purchaser
may, in its sole discretion, make such adjustments as it deems appropriate to
reflect such split, combination or other change in the purchase price and the
other terms of the Offer or the Merger (including, without limitation, the
number and type of securities offered to be purchased, the amounts payable
therefor and the fees payable hereunder).
If, on or after October 8, 1996, the Company should declare or pay any cash
or stock dividend or other distribution or issue any rights with respect to the
Shares, payable or distributable to stockholders of record on a date prior to
the transfer to the name of the Purchaser or its nominee or transferee on the
Company's stock transfer records of the Shares accepted for payment pursuant to
the Offer, then, without prejudice to the Purchaser's rights under Sections 1
and 13 and without limiting the rights of the Purchaser described in the
preceding paragraph of this Section 14, any such dividend, distribution or right
to be received by the tendering stockholders will be received and held by the
tendering stockholder for the account of the Purchaser and will be required to
be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of Purchaser, accompanied by appropriate
documentation and transfer. Pending such remittance, the Purchaser will be
entitled to all rights and privileges as owner of any such dividend,
distribution or right and may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by the Purchaser
in its sole discretion.
15. CERTAIN LEGAL MATTERS. Except as set forth in this Section 15, based
on a review of publicly available filings by the Company with the Commission and
other information concerning the Company provided to Parent, the Purchaser is
not aware of any license or other regulatory permit which appears to be material
to the business of the Company and that might be adversely affected by the
Purchaser's acquisition of Shares pursuant to the Offer (and the indirect
acquisition of the stock of the Company's subsidiaries), or of any approval or
other action by any domestic or foreign governmental or administrative agency
that would be required prior to the acquisition of Shares by the Purchaser
pursuant to the Offer. Should any such approval or other action be required, it
is the Purchaser's present intention that such
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additional approval or action would be sought. While the Purchaser does not
presently intend to delay the purchase of Shares tendered pursuant to the Offer
pending receipt of any such additional approval or the taking of any such
action, there can be no assurance that any such additional approval or action,
if needed, could be obtained without substantial conditions or that adverse
consequences might not result to the Company's or Parent's business, or that
certain parts of the Company's or Parent's business might not be required to be
disposed of or held separate or other substantial conditions complied with in
order to obtain such approval or action or in the event that such approvals were
not obtained or such actions were not taken. The Purchaser's obligation to
purchase and pay for Shares is subject to certain conditions relating to the
legal matters discussed in this Section 15. See Section 13.
ANTITRUST. Under the HSR Act, certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division of the Department of Justice (the "Antitrust Division") and the Federal
Trade Commission ("FTC") and certain waiting period requirements have been
satisfied. The acquisition of Shares pursuant to the Offer and the Merger
Agreement is subject to such requirements. On or about October 9, 1996, Parent
expects to file with the Antitrust Division and the FTC a Notification and
Report Form with respect to the Offer and the Merger.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares pursuant to the Offer may not be consummated prior to the expiration of a
15-calendar day waiting period following the filing by Parent, unless earlier
terminated. Accordingly, the Parent expects the waiting period applicable to the
Offer will expire at 11:59 p.m., New York City time, on or about October 24,
1996, unless Parent receives a request from either the FTC or the Antitrust
Division for additional information or documentary material, or the Antitrust
Division and the FTC terminate the waiting period prior thereto. If, within such
15-day waiting period either the Antitrust Division or the FTC requests
additional information or material from Parent concerning the Offer, the waiting
period will be extended and would expire at 11:59 p.m., New York City time, on
the tenth calendar day after the date of substantial compliance by Parent with
such request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the rules promulgated under the HSR Act.
Thereafter, the waiting period could be extended only by court order or with the
consent of the Purchaser. The additional 10-calendar-day waiting period may be
terminated sooner by the FTC or the Antitrust Division. In practice, complying
with a request for additional information or material can take a significant
amount of time. In addition, if the Antitrust Division or the FTC raises
substantive issues in connection with a proposed transaction, the parties
frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue. Although the
Company may be required to file certain information and documentary material
with the Antitrust Division and the FTC in connection with the Offer and the
Merger, neither the Company's failure to make such filings nor a request made to
the Company from the Antitrust Division or the FTC for additional information or
documentary material will extend the Offer period with respect to the purchase
of Shares pursuant to the Offer and the Merger Agreement. The Purchaser will not
accept for payment Shares tendered pursuant to the Offer unless and until the
waiting period requirements imposed by the HSR Act with respect to the Offer
have been satisfied. See Section 13.
If the acquisition of Shares is delayed pursuant to a request by the FTC or
the Antitrust Division for additional information or documentary material
pursuant to the HSR Act, the Offer may, at the discretion of the Purchaser, be
extended and, in any event, the purchase of and payment for Shares will be
deferred until ten days after the request is substantially complied with by
Parent, unless the ten-day extended period expires on or before the date when
the initial waiting period would otherwise have expired or unless the waiting
period is sooner terminated by the FTC and the Antitrust Division. See Section
2. Unless the Offer is extended, any extension of the waiting period will not
give rise to any additional withdrawal rights. See Section 3.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Merger. At
25
<PAGE>
any time before or after the Purchaser's purchase of Shares, the Antitrust
Division or the FTC could take such action under the antitrust laws as either
deems necessary or desirable in the public interest, including seeking to enjoin
the purchase of Shares pursuant to the Offer and the Merger or seeking
divestiture of Shares purchased thereunder or the divestiture of assets of the
Company, the Purchaser, Parent or any of their respective subsidiaries or
affiliates. Private parties as well as state attorneys general may also bring
legal actions under the antitrust laws under certain circumstances. If any such
action by the FTC, the Antitrust Division or any other person should be
instituted, the Purchaser could decline to accept for payment any Shares
tendered. See Section 13 for certain conditions to the Offer. Based upon an
examination of information relating to the businesses in which Parent and the
Company are engaged, Parent believes that the consummation of the Offer would
not violate any antitrust laws. However, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if a challenge
is made, what the result will be.
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
STATE TAKEOVER LAWS. The Company is incorporated under the laws of the
State of Delaware. Section 203 of the DGCL (the "Business Combinations Statute")
generally prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" (defined generally as
any person that directly or indirectly owns 15% or more of the outstanding
voting stock of the subject corporation) for a period of three years after the
date of the transaction in which the person became an interested stockholder,
unless certain exceptions apply, including that a majority of disinterested
directors approved in advance the transaction in which the interested
stockholder became an interested stockholder. The Board of Directors of the
Company has unanimously approved the acquisition of Shares pursuant to the Offer
and the Merger Agreement so that Section 203 of the DGCL is not applicable to
the transactions contemplated by the Merger Agreement. The foregoing is a
summary of the provisions of the DGCL which are applicable to the Offer, does
not purport to be complete and is qualified in its entirety by reference to the
provisions of the DGCL.
A number of states have adopted takeover laws which purport, to varying
degrees, to be applicable to attempts to acquire securities of corporations
which are incorporated in such states or which have substantial assets, security
holders, principal executive offices or principal places of business therein. To
the extent that certain provisions of certain of these state takeover statutes
purport to apply to the Offer or the Merger, the Purchaser believes that such
laws conflict with federal law and constitute an unconstitutional burden on
interstate commerce. In 1982, the Supreme Court of the United States, in EDGAR
V. MITE CORP., held that the Illinois Business Takeovers Statute, which as a
matter of state securities law made takeovers of corporations meeting certain
requirements more difficult, imposed a substantial burden on interstate commerce
and therefore was unconstitutional. In 1987, however, in CTS CORP. V. DYNAMICS
CORP. OF AMERICA, the Supreme Court of the United States held that the State of
Indiana could, as a matter of corporate law and, in particular, those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders, provided that such laws were
applicable only under certain conditions. The state law before the Supreme Court
was by its terms applicable only to corporations that had a substantial number
of stockholders in the state and were incorporated therein. Subsequently, a
number of federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside the
state of enactment.
Except as described herein, the Purchaser does not know whether the Offer is
subject to any state takeover statutes and neither Parent nor the Purchaser has
attempted to comply with any state takeover statutes in connection with the
Offer other than as indicated below. Should any person seek to apply any such
statute to the Offer, Parent and the Purchaser reserve the right to challenge
the validity or applicability of any state law allegedly applicable to the Offer
and nothing in this Offer to Purchase nor any
26
<PAGE>
action taken in connection herewith is intended as a waiver of that right. In
the event that any additional state takeover statute is found applicable to the
Offer and an appropriate court does not determine that such laws are
inapplicable or invalid as applied to the Offer, the Purchaser may be required
to file certain information with, or receive approvals from, the relevant state
authorities, or the Purchaser might be unable to purchase and accept for payment
or pay for Shares tendered pursuant to the Offer or be delayed in continuing
or-consummating the Offer. In the circumstances described above, the Purchaser
may not be obligated to accept for purchase and payment or pay for any Shares
tendered.
Although the Company is a Delaware corporation, its principal place of
business is in Ohio. Section 1707.041 of the Ohio Securities Law requires that
no control bid for any securities of a "subject company" shall be made pursuant
to a tender offer until the offeror files certain information with the Ohio
Division of Securities. As defined in the statute, "subject company" means an
issuer (i) that has its principal place of business or principal executive
office in Ohio or owns or controls assets within Ohio having a fair market value
of at least $1 million, and (ii) more than 10% of whose beneficial or record
equity security holders reside in Ohio. Because the Company falls within the
description of a "subject company" it has filed a Form 041 with the Ohio
Division of Securities providing the requisite information. The Company also has
facilities in Michigan and Kentucky. The laws of these states, however, do not
require comparable filings by foreign corporations in control bid acquisitions.
SUPER-MAJORITY VOTING PROVISION. The Board of Directors of the Company has
also taken actions to exempt the Company from the super-majority stockholder
vote provision of Article Sixth of the Company's Certificate of Incorporation,
which requires that the affirmative vote of the holders of at least 70% of the
total voting power of all outstanding shares must approve any merger of the
Company unless such merger has been approved by at least two-thirds of the then
authorized number of directors.
16. EXTENSION OF TENDER PERIOD, TERMINATION AND AMENDMENTS. The Merger
Agreement provides that the Offer may not be amended to reduce the price to be
paid per Share, change the form of consideration to be paid in the Offer or the
Merger, increase or waive the Minimum Condition, extend the Expiration Date, or
amend the terms of the Offer in a manner that is materially adverse to the
holders of the Shares. Subject to such restrictions, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time, to
extend the period during which the Offer is open by giving oral or written
notice of such extension to the Depositary. If the Purchaser shall decide, in
its sole discretion, to increase the consideration offered in the Offer to
holders of Shares or make any other material change in the terms of the Offer
(including the Minimum Condition) or the information concerning the Offer, the
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c) and 14d-6(d) under the Exchange
Act. The minimum period during which the Offer must remain open following
material changes in the terms of the Offer or information concerning the Offer,
other than a change in price or a change in percentage of securities sought,
will depend upon the facts and circumstances, including the relative materiality
of the terms or information. With respect to a change in price or a change in
percentage of securities sought, a minimum 10-business day period from the date
of announcement thereof is required to allow for adequate dissemination to
stockholders and investor response. If, prior to the Expiration Date, the
Purchaser should decide to increase the price per Share being offered in the
Offer, such increase will be applicable to all stockholders whose Shares are
accepted for payment pursuant to the Offer. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1 under the Exchange Act.
The Purchaser also expressly reserves the right (i) to delay payment for any
Shares, regardless of whether such Shares were theretofore accepted for payment,
or to terminate the Offer and not accept for payment or pay for any Shares not
theretofore accepted or paid for, upon the occurrence of any of the conditions
specified in Section 13 by giving oral notice thereof to the Depositary; and
(ii) subject to the restrictions set forth in the Merger Agreement, at any time
or from time to time, to amend the Offer in any respect. See Section 13. Any
extension, delay, termination, waiver or amendment of the Offer will be
followed, as soon as practicable, by public announcement thereof, and such
announcement in the case of
27
<PAGE>
an extension will be made in accordance with Rule 14e-1(d) no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled expiration date. Without limiting the manner in which the Purchaser
may choose to make any public announcement, the Purchaser shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to either the Dow Jones or Reuters
News Services and making any appropriate filings with the Commission.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in Section 3. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of the Offer.
17. CERTAIN FEES AND EXPENSES. Piper Jaffray Inc. is acting as Dealer
Manager for the Offer and as financial advisor to Parent in connection with the
transactions described in this Offer to Purchase. Pursuant to an engagement
letter dated July 19, 1996 and a Dealer Manager Agreement dated as of October 8,
1996, Parent has agreed to pay Piper Jaffray an aggregate amount of $900,000
upon consummation of an acquistion of the Company. Of this amount, Parent has
paid Piper Jaffray a cash retainer of $75,000 and has agreed to pay Piper
Jaffray an additional cash retainer of $25,000 if Parent is still in discussions
with the Company in regards to a transaction with the Company as of October 17,
1996 and a cash fee of $500,000 upon the rendering of its fairness opinion to
the Board of Directors of Parent. Parent has further agreed to pay Piper Jaffray
the remaining $300,000 as a cash success fee upon the consummation by Parent of
an acquisition of the Company. In the event Parent does not consummate an
acquisition of the Company but receives any form of gain, compensation or
non-expense reimbursement in connection with its attempt to complete an
acquisition of the Company, Parent has agreed to pay Piper Jaffray 10% of any
such gain, compensation or reimbursement, not to exceed $150,000. In addition,
Parent has agreed to reimburse Piper Jaffray for its reasonable out-of-pocket
expenses, including fees and disbursements of Piper Jaffray's legal counsel,
whether or not an acquisition of the Company is consummated, and has agreed to
indemnify Piper Jaffray against certain liabilities and expenses in connection
with its engagement.
The Purchaser has retained D.F. King & Co. to act as Information Agent and
Norwest Bank Minnesota, N.A. to act as Depositary in connection with the Offer.
The Information Agent may contact holders of Shares by mail, telephone, telex,
telegraph and personal interview and may request brokers, dealers and other
nominee stockholders to forward material relating to the Offer to beneficial
owners. The Information Agent and the Depositary will receive reasonable and
customary compensation for services relating to the Offer in addition to
reimbursement of reasonable out-of-pocket expenses. The Purchaser has agreed to
indemnify the Information Agent and the Depositary against certain liabilities
and expenses in connection with the Offer including certain liabilities under
the federal securities laws.
Neither Parent nor the Purchaser will pay any fees or commissions to any
broker, dealer or other person (other than the above-described fees to Piper
Jaffray) for soliciting tenders of Shares pursuant to the Offer. Brokers,
dealers, commercial banks and trust companies will, upon request, be reimbursed
by the Purchaser for reasonable and necessary costs and expenses incurred by
them in forwarding materials to their customers.
18. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction in which
the making of the Offer is not in compliance with applicable law. If the
Purchaser becomes aware of any jurisdiction in which the making of the Offer
would not be in compliance with applicable law, the Purchaser will make a good
faith
28
<PAGE>
effort to comply with any such law. If, after good faith effort, the Purchaser
cannot comply with any such law, the Offer will not be made to, nor will tenders
be accepted from or on behalf of, holders of Shares residing in any jurisdiction
in which the making of the Offer or acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such jurisdiction. In
any jurisdiction in which the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of the Purchaser by the Dealer Manager or by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
Parent and the Purchaser have filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of
the General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. Such Tender Offer Statement and any amendments thereto, including
exhibits, may be obtained in the manner described in Section 8 with respect to
information concerning the Company, except that such information will not be
available at the regional offices of the Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
NFC ACQUISITION CORPORATION
29
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The names, ages, present
principal occupation or employment and five-year employment history of each
director and executive officer of Parent are set forth below. Unless otherwise
indicated, all persons have held their current occupation or employment for at
least the last five years. The business address of each such person is 7600
France Avenue South, Edina, Minnesota 55435. All persons listed below are
citizens of the United States of America.
<TABLE>
<CAPTION>
YEAR FIRST ELECTED
OR APPOINTED AS AN PRESENT PRINCIPAL OCCUPATION
EXECUTIVE OFFICER OR EMPLOYMENT; FIVE-YEAR
NAME AND AGE OR DIRECTOR EMPLOYMENT HISTORY
- ------------------------------- ------------------- -------------------------------------------------------------
<S> <C> <C>
EXECUTIVE OFFICERS:
Alfred N. Flaten (61) 1991 President and Chief Executive Officer. Mr. Flaten was elected
Chief Executive Officer in November 1994. His election as
President and Chief Operating Officer was effective in
November 1991. He had been elected Executive Vice President,
Sales and Operations of Nash Finch in February 1991.
William T. Bishop (56) 1994 Senior Vice President, Sales and Logistics. Mr. Bishop was
elected as Senior Vice President, Sales and Logistics
effective in December 1994 after joining the Company in the
same month. He was previously employed by Scrivner, Inc., a
wholesale and retail food distribution company located in
Oklahoma City, Oklahoma, serving as its President and Chief
Operating Officer from 1987 to 1994.
Norman R. Soland (55) 1986 Vice President, Secretary and General Counsel.
Clarence T. Walters (59) 1988 Vice President, Management Information Systems.
Charles F. Ramsbacher (54) 1991 Vice President, Marketing.
Steven L. Lumsden (51) 1992 Vice President, Warehouse and Transportation. Mr. Lumsden was
elected Vice President, Warehouse and Transportation in May
1992. He previously served as Director, Warehouse and
Transportation from May 1990 to May 1992.
Gerald D. Maurice (63) 1993 Vice President, Store Development. Mr. Maurice was elected
Vice President, Store Development in May 1993. He previously
served as operating Vice President, Central Division for more
than five years.
</TABLE>
A-1
<PAGE>
<TABLE>
<S> <C> <C>
John R. Scherer (46) 1994 Vice President and Chief Financial Officer. Mr. Scherer was
appointed as Chief Financial Officer in November 1995. His
election as Vice President was effective in December 1994,
and he served as Vice President, Planning and Financial
Services from December 1994 to November 1995. He previously
served as Director of Strategic Planning and Financial
Services from April 1994 to December 1994, and Director of
Planning and Budgets from January 1988 through April 1994.
Charles M. Seiler (48) 1995 Vice President, Corporate Retail Operations. Mr. Seiler was
elected as Vice President, Corporate Retail Operations
effective in October 1994. He previously served as operating
Vice President, Iowa Division from May 1993 to October 1994
and Iowa Division Manager from June 1991 to May 1993.
Edgar F. Timberlake (49) 1995 Vice President, Human Resources. Mr. Timberlake was elected
as Vice President, Human Resources in November 1995. He
previously served as Director of Human Resources from January
1993, and Director of Training and Management Development
from February 1988 to January 1993.
David J. Richards (48) 1996 Vice President, Corporate Retail Stores. Mr. Richards was
elected Vice President, Corporate Retail Stores in July 1996,
having previously served as operating Vice President,
Southeast Division from December 1994 to July 1996. He was
previously employed by Scrivner, Inc., serving as Senior Vice
President, Store Development from July 1992 to August 1994
and as Executive Vice President, Retail Operations from
January 1991 to July 1992.
William E. May, Jr. (48) 1996 Vice President, Strategic Technology Programs and Marketing
Services. Mr May was elected as Vice President, Strategic
Technology Programs and Marketing Services in July 1996.
Previously, he was employed by Spartan Stores in Grand
Rapids, Michigan, having served as Senior Vice President,
Distribution, Procurement, MIS and Customer Service from July
1988 to June 1996.
John M. McCurry (47) 1996 Vice President, Independent Store Operations. Mr. McCurry was
elected Vice President, Independent Store Operations in May
1996. He previously served as Director, Independent Store
Operations from August 1993 to May 1996, as Director of
Grocery and Marketing from April 1993 to August 1993 and as
Distribution Center Manager, Sioux Falls, South Dakota from
January 1991 to April 1993.
Lawrence A. Wojtasiak (51) 1990 Controller.
</TABLE>
A-2
<PAGE>
<TABLE>
<S> <C> <C>
Suzanne S. Allen (32) 1996 Treasurer. Ms. Allen was elected as Treasurer effective as of
January 1996. She previously served as Assistant Treasurer
from May 1995, Treasury Manager from January 1993 to May
1995, and Treasury Assistant from September 1987 to January
1993.
DIRECTORS:
Carole F. Bitter (50) 1993 President and Chief Executive Officer of Harold Friedman,
Inc., an operator of retail supermarkets located in Butler,
Pennsylvania.
Richard A. Fisher (66) 1984 Retired Vice President -- Finance and Treasurer of Network
Systems Corporation, a manufacturer of data communications
system located in Brooklyn Park, Minnesota. Mr. Fisher
retired in December 1992 as Vice President -- Finance and
Treasurer of Network Systems Corporation, a position he had
held for more than five years.
Alfred E. Flaten (61) 1990 President and Chief Operating Officer of Parent.
Allister P. Graham (60) 1992 Chairman and Chief Executive Officer of the Oshawa Group
Limited, a food and pharmaceutical distributor in Toronto
Canada.
John H. Grunewald (60) 1992 Executive Vice President, Finance and Administration, Polaris
Industries, Inc., a manufacturer of recreational equipment
located in Plymouth, Minnesota. Mr. Grunewald has served as
Executive Vice President, Finance and Administration of
Polaris Industries since September 1993. He previously served
as Executive Vice President, Chief Financial Officer and
Secretary of Pentair, Inc. for more than five years, a
position from which he retired in June 1993.
Richard G. Lareau (68) 1984 Partner, Oppenheimer Wolff & Donnelly, a law firm located in
Minneapolis, Minnesota. Mr. Lareau has been a partner in the
law firm of Oppenheimer Wolff & Donnelly for over 30 years.
Russell N. Mammel (70) 1974 Retired President and Chief Operating Officer of Parent. Mr.
Mammel resigned in November 1991 as President and Chief
Operating Officer of Nash Finch, a position that he had held
for more than five years, in anticipation of his planned
retirement which was effective January 1, 1992.
Don E. Marsh (58) 1995 Chairman of the Board, President and Chief Executive Officer
of Marsh Supermarkets, Inc., a supermarket and convenience
store chain operator located in Indianapolis, Indiana.
Donald R. Miller (69) 1978 Management Consultant.
</TABLE>
A-3
<PAGE>
<TABLE>
<S> <C> <C>
Robert F. Nash (62) 1968 Retired Vice President and Treasurer of Parent. Mr. Nash
retired in January 1996 as Vice President & Treasurer of Nash
Finch, a position he had held for more than five years.
Jerome O. Rodysill (67) 1974 Retired Senior Vice President of Parent. Mr. Rodysill retired
in January 1994 as Senior Vice President, Store Development
and Construction of Nash Finch, a position he had held for
more than five years.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The names, ages,
present principal occupation or employment with the Purchaser of each of the
directors and executive officers of the Purchaser are set forth below. The
business address of each such person is 7600 France Avenue South, Edina,
Minnesota 55435. All persons listed below are citizens of the United States of
America. For information regarding the five-year employment history of such
persons, see "Directors and Executive Officers of Parent."
<TABLE>
<CAPTION>
YEAR FIRST ELECTED
OR APPOINTED AS AN PRESENT PRINCIPAL OCCUPATION
EXECUTIVE OFFICER OR EMPLOYMENT WITH PURCHASER;
NAME (AGE) OR DIRECTOR FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------------------------------- ------------------- ----------------------------------------------
<S> <C> <C>
Alfred N. Flaten (61) 1996 President and a Director.
Norman R. Soland (55) 1996 Secretary and a Director.
John R. Scherer (45) 1996 Treasurer and a Director.
</TABLE>
A-4
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank or other nominee to the
Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
NORWEST BANK MINNESOTA, N.A.
---------------------
<TABLE>
<S> <C> <C>
BY MAIL: BY OVERNIGHT COURIER: BY FACSIMILE TRANSMISSION:
Norwest Shareowner Services Norwest Shareowner Services (For Eligible Institutions
P.O. Box 64858 161 North Concord Exchange Only)
St. Paul, MN 55164-0858 Stock Transfer Department (612) 450-4163
South St. Paul, MN 55075 Confirm Facsimile By
Telephone:
(612) 450-4108
</TABLE>
<TABLE>
<S> <C> <C>
BY HAND:
Norwest Shareowner Services Norwest Trust Company of New York
161 North Concord Exchange OR 3 New York Plaza
2nd Floor 15th Floor
South St. Paul, MN 55075 New York, NY 10004
</TABLE>
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
other related materials may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and locations listed below. You
may also contact your broker, dealer, commercial bank or trust company or
nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (collect)
or
Call Toll Free: 1-800-859-8509
THE DEALER MANAGER FOR THE OFFER IS:
PIPER JAFFRAY INC.
222 South Ninth Street
Minneapolis, Minnesota 55402
Call Toll Free: 1-800-333-6000, Ext. 6373
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON SHARES
OF
SUPER FOOD SERVICES, INC.
PURSUANT TO THE OFFER TO
PURCHASE DATED OCTOBER 9, 1996
BY
NFC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NASH-FINCH COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, NOVEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
NORWEST BANK MINNESOTA, N.A.
<TABLE>
<S> <C> <C>
BY OVERNIGHT COURIER: BY MAIL: FACSIMILE TRANSMISSION
Norwest Shareowner Services Norwest Shareowner Services (For Eligible Institutions Only)
161 North Concord Exchange P.O. Box 64858 (612) 450-4163
Stock Transfer Department St. Paul, MN 55164-0858 Confirm Facsimile by Telephone:
South St. Paul, MN 55075 (612) 450-4108
</TABLE>
<TABLE>
<S> <C> <C>
BY HAND:
Norwest Shareowner Services Norwest Trust Company of New York
161 North Concord Exchange OR 3 New York Plaza
2nd Floor 15th Floor
South St. Paul, MN 55075 New York, NY 10004
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders if
certificates for Shares (as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined in Section 4 of the Offer to Purchase) is
utilized, if delivery of Shares is to be made by book-entry transfer to the
accounts maintained by Norwest Bank Minnesota, N.A., as Depositary (the
"Depositary"), at The Depository Trust Company or the Philadelphia Depository
Trust Company (each a "Book-Entry Transfer Facility" and collectively the
"Book-Entry Transfer Facilities") pursuant to the procedures set forth in
Section 4 of the Offer to Purchase. Holders of Shares whose certificates for
Shares are not immediately available, or who are unable to deliver their Shares
or confirmation of the book-entry tender of their Shares into the Depositary's
account at a Book-Entry Transfer Facility ("Book Entry Confirmation") and all
other documents required by this Letter of Transmittal to the Depositary on or
prior to the Expiration Date (as defined in the Offer to Purchase), must tender
their Shares according to the guaranteed delivery procedure set forth in Section
4 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
NAME OF TENDERING INSTITUTION ............................................
CHECK BOX OF BOOK-ENTRY TRANSFER FACILITY:
/ / THE DEPOSITORY TRUST COMPANY
/ / PHILADELPHIA DEPOSITORY TRUST COMPANY
ACCOUNT NUMBER ............................................................
TRANSACTION CODE NUMBER ...................................................
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED
DELIVERY.
NAME(S) OF REGISTERED OWNER(S) ............................................
DATE OF EXECUTION OF NOTICE OF GUARANTEED DELIVERY ........................
NAME OF INSTITUTION WHICH GUARANTEED DELIVERY .............................
IF DELIVERED BY BOOK-ENTRY TRANSFER, CHECK BOX OF BOOK-ENTRY TRANSFER
FACILITY:
/ / THE DEPOSITORY TRUST COMPANY
/ / PHILADELPHIA DEPOSITORY TRUST COMPANY
ACCOUNT NUMBER ............................................................
TRANSACTION CODE NUMBER ...................................................
<PAGE>
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF TENDERED SHARES
<CAPTION>
NAME(S) AND ADDRESS(ES) OF
REGISTERED OWNERS(S)
(PLEASE FILL IN, IF BLANK,
EXACTLY AS NAME(S)
APPEAR(S) ON SHARE SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
CERTIFICATES) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
<S> <C> <C> <C>
<CAPTION>
TOTAL NUMBER OF
CERTIFICATE SHARES REPRESENTED NUMBER OF
NUMBER(S)* BY CERTIFICATE(S)* SHARES TENDERED**
<S> <C> <C> <C>
Total Shares
* Need not be completed by stockholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any
certificates delivered to the Depositary are being tendered. See Instruction 4.
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to NFC Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Nash-Finch
Company, a Delaware corporation ("Parent"), the above-described shares of the
Common Shares, par value $1.00 per share, including the associated preferred
share purchase rights (collectively, unless the context otherwise requires, the
"Shares"), of Super Food Services, Inc., a Delaware corporation (the "Company"),
pursuant to the Purchaser's offer to purchase all outstanding Shares at a price
of $15.50 per Share, net to the seller in cash, without any interest, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
October 9, 1996 (the "Offer to Purchase") and in this Letter of Transmittal
(which together constitute the "Offer"), receipt of which are hereby
acknowledged. The undersigned understands that the Purchaser reserves the right
to transfer or assign, in whole or from time to time in part, to Parent or one
or more of its other direct or indirect wholly owned subsidiaries the right to
purchase all or any portion of the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment for the Shares
tendered herewith in accordance with the terms and subject to the conditions of
the Offer, the undersigned hereby sells, assigns, and transfers to, or upon the
order of, the Purchaser all right, title and interest in and to all the Shares
that are being tendered hereby (and any and all other Shares and other
securities and property issued or issuable or distributed or distributable in
respect thereof on or after October 9, 1996 and prior to the transfer to the
name of the Purchaser or nominee or transferee of the Purchaser on the Company's
stock transfer records of the Shares tendered herewith (collectively, a
"Distribution")), and irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares (and any Distribution) with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest)
to: (i) deliver certificates for such Shares (and any Distribution), or transfer
ownership of such Shares (and any Distribution) on the account books maintained
by a Book-Entry Transfer Facility, together in any such case with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser, upon receipt by the Depositary, as the undersigned's agent, of the
purchase price (adjusted, if appropriate, as provided in the Offer to Purchase);
(ii) present such Shares (and any Distribution) for transfer on the books of the
Company; and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and any Distribution), all in accordance
with the terms and subject to the conditions of the Offer.
The preferred share purchase rights (the "Rights") are presently evidenced
by the certificates for Shares and a tender by a stockholder of his Shares will
also constitute a tender of the associated Rights unless the Rights are
redeemed. If the Rights are redeemed, the $.02 per Right redemption price will
be paid to the tendering stockholder. If separate Rights certificates have been
distributed to stockholders prior to the date of tender pursuant to the Offer,
Rights certificates representing a number of Rights equal to the number of
Shares being tendered must be delivered to the Depositary in order for the
Shares to be validly tendered. If stockholders are entitled to receive Rights
certificates but Rights certificates have not been distributed prior to the time
Shares are tendered pursuant to the Offer, a tender of Shares constitutes an
agreement by the tendering stockholder to deliver to the Depositary, within
three New York Stock Exchange trading days of the date Rights certificates are
distributed, Rights certificates representing a number of Rights equal to the
number of Shares tendered pursuant to the Offer. The Purchaser reserves the
right to require that it receive such Rights certificates, if any have been
issued, prior to accepting Shares for payment. In all cases, payment for Shares
tendered and purchased pursuant to the Offer will be made only after timely
receipt by the Depositary of, among other things, Rights certificates, if such
certificates have been distributed to stockholders.
The undersigned hereby irrevocably appoints the Purchaser, its officers and
its designees, and each of them, the attorneys-in-fact and proxies of the
undersigned, each with full power of substitution, to exercise all voting and
other rights of the undersigned in such manner as each such attorney-in-fact and
proxy or the substitute for any such attorney-in-fact and proxy shall in the
sole discretion of each such attorney-in-fact and proxy or his substitutes deem
proper, and otherwise act (including pursuant to written consent) with respect
to all of the Shares tendered hereby (and any Distribution) which have been
accepted for payment by the Purchaser prior to the time of such vote or other
action and which the undersigned is entitled to vote at any meeting of
stockholders (whether annual or special and whether or not an adjourned
meeting), or consent in lieu of any such meeting, or otherwise. This Proxy is
irrevocable and coupled with an interest and is granted in consideration of, and
is effective upon, the acceptance for payment of such shares by the Purchaser in
accordance with the terms of the offer. Such acceptance for payment shall
revoke, without further action, any other power of attorney and/ or proxy given
by the undersigned at any time with respect to such shares (and any
distribution) and no subsequent power of attorney or proxy may be given (and if
given will not be effective) with respect thereto by the undersigned. The
undersigned understands that the Purchaser expressly reserves the right to
require that, in order for Shares to be validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares (and any Distribution), the
Purchaser is able to exercise full voting rights and other rights of a record
and beneficial holder thereof, including rights in respect of acting by written
consent with respect to such Shares (and any Distribution) or voting at any
meeting of stockholders.
The undersigned hereby represents and warrants that: (i) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any Distribution) and (ii) when the same are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary, the Purchaser or Parent to be necessary or desirable
to complete the sale, assignment and transfer of the Shares tendered hereby (and
any Distribution). In addition, the undersigned shall promptly remit and
transfer to the Depositary for the account of the Purchaser the whole of any
dividend, distribution, interest payment or right issued to the undersigned on
or after October 9, 1996, in respect of the Shares tendered hereby, accompanied
by appropriate documentation of transfer. Pending such remittance, the Purchaser
shall be entitled to all rights and privileges as owner of any such dividend,
distribution, interest payment or right and may withhold the entire purchase
price or deduct from the purchase price the amount or value thereof, as
determined by the Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators and legal
representatives of the undersigned. Except as stated in the Offer to Purchase,
this tender is irrevocable.
The undersigned understands that the tender of Shares pursuant to any of the
procedures described in Section 4 of the Offer to Purchase and in the
instructions hereto will constitute the tendering stockholder's acceptance of
the terms and conditions of the Offer, as well as the tendering stockholder's
representation and warranty that such stockholder has the full power and
authority to tender and assign the Shares tendered (and any Distribution), as
specified in this Letter of Transmittal. The Purchaser's acceptance for payment
of Shares pursuant to the Offer will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or any certificates for Shares
not tendered or accepted for payment in the name(s) of the undersigned.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature. In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or return any certificates for Shares not tendered or
accepted for payment in the name(s) of, and deliver said check and/or return
such certificates to, the person or persons so indicated. The undersigned
recognizes that the Purchaser has no obligation pursuant to the Special Payment
Instructions to transfer any Shares from the name of the registered holder
thereof if the Purchaser does not accept for payment any of the Shares so
tendered.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
issued in the name of someone other than the undersigned.
Issue / / check / / certificates to:
Name ......................................................................
(Please Print)
Address ......................................................................
......................................................................
(Include Zip Code)
......................................................................
(Taxpayer Identification or Social Security Number)
(See Substitute Form W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
sent to someone other than the undersigned, or to the undersigned at an address
other than that shown above.
Mail / / check / / certificates to:
Name ......................................................................
(Please Print)
Address ......................................................................
......................................................................
(Include Zip Code)
<PAGE>
IMPORTANT
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
.............................................................................
.............................................................................
Signature(s) of Owner(s)
Dated: ................................................................ , 1966
(Must be signed by registered owner(s) exactly as name(s) appear(s) on
certificate(s) for Shares or on a security position listing or by person(s)
authorized to become registered owner(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, agents, officers of corporations or others
acting in a fiduciary or representative capacity, please provide the following
information. See Instruction 5.)
Name(s) ......................................................................
.............................................................................
(Please Print)
Capacity (full title) ........................................................
Address ......................................................................
.............................................................................
.............................................................................
(Include Zip Code)
Area Code and Telephone Numbers ..............................................
Taxpayer Identification
or Social Security No. ....................................................
(See Substitute Form W-9)
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Name .........................................................................
(Please Print)
Authorized Signature .........................................................
Name of Firm .................................................................
Address ......................................................................
.............................................................................
(including Zip Code)
Area Code and Telephone Number ...............................................
Dated: ................................................................ , 1966
<PAGE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<S> <C> <C>
PAYER'S NAME: NORWEST BANK MINNESOTA, N.A.
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT ------------------------------
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Social Security Number
OR
------------------------------
Employer Identification Number
DEPARTMENT OF THE TREASURY, PART 2 -- Certification -- Under Penalties of PART 3 --
INTERNAL REVENUE SERVICE Perjury, I certify that:
PAYER'S REQUEST FOR (1) The number shown on this form is my correct Awaiting
TAXPAYER Taxpayer Identification Number (or I am waiting TIN / /
IDENTIFICATION NUMBER (TIN) fora number to be issued to me and have checked
the box in Part 3) and
(2) I am not subject to backup withholding
because: (a) I am exempt from backup
withholding, or (b) I have not been notified by
the Internal Revenue Service (the "IRS") that I
am subject to backup withholding as a result of
a failure to report all interest or dividends,
or (c) the IRS has notified me that I am no
longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the
IRS that you are currently subject to backup withholding because of underreporting interest or
dividends on your tax return. However, if after being notified by the IRS that you were subject
to backup withholding you received another notification from the IRS that you are no longer
subject to backup withholding, do not cross out such item (2).
SIGNATURE --------------------------------------------- DATE -------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has
not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a Taxpayer Identification Number by the
time of payment, 31% of all reportable payments made to me will be withheld,
but that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
---------------------------------------------------------
---------------------------------------------------------, 1996
Signature Date
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in a Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" above, or (b)
if such Shares are tendered for the account of a firm which is a bank, broker,
dealer, credit union, savings association or other entity which is a member in
good standing of a recognized Medallion Signature Guarantee Program (each of the
foregoing being referred to as an "Eligible Institution"). In all other cases,
all signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5 of this Letter of Transmittal.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 4 of the Offer
to Purchase. Certificates for tendered Shares, or timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility, as well as this Letter
of Transmittal (or a facsimile hereof), properly completed and duly executed
with any required signature guarantees, or an Agent's Message in connection with
a book-entry transfer, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the front page of this Letter of Transmittal prior to the Expiration
Date. Stockholders whose certificates are not immediately available or who
cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis may tender their Shares by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedure set forth in Section 4 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or through
an Eligible Institution; (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Purchaser,
must be received by the Depositary prior to the Expiration Date; and (iii) the
certificates (or a Book-Entry Confirmation) representing all tendered Shares, in
proper form for transfer, in each case together with the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed with any required
signature guarantees (or, in the case of a book-entry delivery, an Agent's
Message) and any other documents required by this Letter of Transmittal, must be
received by the Depositary within three New York Stock Exchange ("NYSE") trading
days after the date of execution of such Notice of Guaranteed Delivery. If
certificates are forwarded separately to the Depositary, a properly completed
and duly executed Letter of Transmittal must accompany each such delivery.
The method of delivery of certificates for shares and all other required
documents, including delivery through any book-entry transfer facility, is at
the option and risk of the tendering stockholder. Delivery will be deemed made
only when actually received by the depositary. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended.
In all cases, sufficient time should be allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased (unless you are tendering all of the Shares
you own). All tendering stockholders, by execution of this Letter of Transmittal
(or a facsimile hereof), waive any right to receive any notice of the acceptance
of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate number(s) and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER.) If fewer than all of the Shares evidenced by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares which are to be tendered in the box entitled "Number of Shares
Tendered." In such a case, new Share certificate(s) for the Shares that were
evidenced by your old Share certificate(s), but were not tendered by you, will
be sent to you (unless otherwise provided in the appropriate box on this Letter
of Transmittal) as soon as practicable after the Expiration Date. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or not purchased are to be issued in the
name of a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the certificate(s)
for such Shares. Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay or cause to be paid any stock transfer taxes with
respect to the transfer and sale of Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificate(s) for Shares not tendered or accepted for payment are to be
registered in the name of, any person other than the registered holder(s), if a
transfer tax is imposed for any reason other than the sale or transfer of Shares
to Purchaser pursuant to the Offer, or if tendered certificate(s) are registered
in the name of any person other than the person(s) signing this Letter of
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder(s) or such person) payable on account of the transfer to such
person will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes or an exemption therefrom, is submitted.
Except as otherwise provided in this Instruction 6, it will not be necessary
for transfer tax stamps to be affixed to the certificate(s) listed in this
Letter of Transmittal.
<PAGE>
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other than
the person(s) signing this Letter of Transmittal, or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Stockholders tendering Shares by book-entry transfer may request that Shares not
purchased be credited to such account at any of the Book-Entry Transfer
Facilities as such stockholder may designate under "Special Payment
Instructions." If no such instructions are given, any such Shares not purchased
will be returned by crediting the account at the Book-Entry Transfer Facilities
designated above.
8. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. The Purchaser
reserves the absolute right to reject any or all tenders of Shares determined by
it not to be in proper form or the acceptance for payment of or payment for
tenders of Shares which may, in the opinion of the Purchaser's counsel, be
unlawful. The Purchaser also reserves the absolute right to waive any defect or
irregularity in any tender of Shares. No tender of Shares will be deemed to have
been properly made until all defects and irregularities relating thereto have
been cured or waived. The Purchaser's interpretation of the terms and conditions
of the Offer in this regard will be final and binding. None of the Purchaser,
the Dealer Manager, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defect or irregularity in
tenders or incur any liability for failure to give any such notification.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with a correct Taxpayer Identification Number
("TIN"), generally the stockholder's social security or federal employer
identification number, on Substitute Form W-9 below. Failure to provide the
information on the form may subject the tendering stockholder or other payee to
a $50 penalty. In addition, payments that are made to such stockholder or other
payee with respect to Shares purchased pursuant to the Offer may be subject to
31% federal income tax withholding on the payment of the purchase price.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting that individual's exempt status. A Form W-8 can be obtained
from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the Substitute Form W-9 certifying (i) that the TIN provided on the
Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN) and
(ii) that (a) such stockholder has not been notified by the Internal Revenue
Service that such stockholder is subject to backup withholding as a result of a
failure to report all interest or dividends or (b) the Internal Revenue Service
has notified such stockholder that such stockholder is no longer subject to
backup withholding.
The box in part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number in order to avoid backup withholding.
Notwithstanding that the box in part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, if the stockholder or
other payee does not provide a properly certified TIN to the Depositary within
60 days, the Depositary will withhold 31% of all payments made prior to the time
a properly certified TIN is provided to the Depositary.
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares or of
the last transferee appearing on the transfers attached to, or endorsed on, the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests
for assistance may be directed to the Information Agent at its address and
telephone numbers set forth below. Additional copies of the Offer to Purchase,
this Letter of Transmittal and the Notice of Guaranteed Delivery may also be
obtained from the Information Agent or the Dealer Manager or from brokers,
dealers, commercial banks or trust companies.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate evidencing
Shares has been lost, destroyed or stolen, the stockholder should promptly
notify ChaseMellon Securities Trust Company, c/o ChaseMellon Shareholder
Services, LLC, 85 Challenger Road, Overpeck Centre, Ridgefield Park, New Jersey
07660, Attention: Lost Securities Department, at 1-800-313-9450. The stockholder
will then be instructed as to the steps that must be taken in order to replace
the certificate. This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR
TO THE EXPIRATION DATE.
<PAGE>
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES
AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER
OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH BELOW:
THE DEPOSITARY FOR THE OFFER IS:
NORWEST BANK MINNESOTA, N.A.
------------------------
<TABLE>
<S> <C> <C>
BY MAIL: BY OVERNIGHT COURIER: FACSIMILE TRANSMISSION
Norwest Shareowner Services Norwest Shareowner Services (FOR ELIGIBLE INSTITUTIONS ONLY)
P.O. Box 64858 161 North Concord Exchange (612) 450-4163
St. Paul, MN 55164-0858 Stock Transfer Department CONFIRM FACSIMILE BY TELEPHONE:
South St. Paul, MN 55075 (612) 450-4108
</TABLE>
<TABLE>
<S> <C> <C>
BY HAND:
Norwest Shareowner Services Norwest Trust Company of New York
161 North Concord Exchange OR 3 New York Plaza
2nd Floor 15th Floor
South St. Paul, MN 55075 New York, NY 10004
</TABLE>
------------------------------
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, this Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent or the Dealer Manager as set forth below, and will be
furnished promptly at the Purchaser's expense. You may also contact your broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (call collect)
or
Call Toll Free: 1-800-859-8509
THE DEALER MANAGER FOR THE OFFER IS:
PIPER JAFFRAY INC.
222 South Ninth Street
Minneapolis, MN 55402
Call Toll Free: 1-800-333-6000, Ext. 6373
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON SHARES
OF
SUPER FOOD SERVICES, INC.
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates representing
shares of the Common Shares, par value $1.00 per share, including the associated
preferred share purchase rights (collectively, the "Shares"), of Super Food
Services, Inc., a Delaware Corporation (the "Company"), are not immediately
available or time will not permit all required documents to reach Norwest Bank
Minnesota, N.A. (the "Depositary") on or prior to the Expiration Date (as
defined in the Offer to Purchase), or the procedures for delivery by book entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand or facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution. See Section
4 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
NORWEST BANK MINNESOTA, N.A.
------------------------
<TABLE>
<S> <C> <C>
BY OVERNIGHT COURIER: BY MAIL: FACSIMILE TRANSMISSION
Norwest Shareowner Services Norwest Shareowner Services (For Eligible Institutions
Only)
161 North Concord Exchange P.O. Box 64858 (612) 450-4163
Stock Transfer Department St. Paul, MN 55164-0858 Confirm Facsimile by
Telephone:
South St. Paul, MN 55075 (612) 450-4108
</TABLE>
<TABLE>
<S> <C> <C>
BY HAND:
Norwest Shareowner Services Norwest Trust Company of New York
161 North Concord Exchange 3 New York Plaza
2nd Floor OR 15th Floor
South St. Paul, MN 55075 New York, NY 10004
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to NFC Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Nash-Finch
Company, a Delaware corporation ("Parent"), upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated October 9, 1996 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which together
constitute the "Offer"), receipt of each of which is hereby acknowledged, the
number of Shares indicated below pursuant to the guaranteed delivery procedure
set forth in Section 4 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares --------------------------- Name(s) of Record Holder(s) -----------------
--------------------------------------------
(Please Print)
Certificate No(s). (if available): Address(es):
- ---------------- ---------------------------------
- -------------------------------------------- --------------------------------------------
(Zip Code)
Area Code and Telephone Number(s):
--------------------------------------------
</TABLE>
(If Share(s) will be tendered by book entry transfer, check one box)
<TABLE>
<S> <C>
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
Account Number ---------------------------- Signature(s):
--------------------------------
Dated: -------------------------------------- --------------------------------------------
</TABLE>
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of the Securities Transfer
Association's Medallion Signature Guaranty Program (each an "Eligible
Institution"), hereby (a) represents that the tender of Shares effected hereby
complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended
and (b) guarantees to deliver to the Depositary, at one of its addresses set
forth above, either the certificates representing all tendered shares, in proper
form for transfer, a Book-Confirmation (as defined in the Offer to Purchase),
together with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or, in the case of
book-entry delivery of Shares, an Agent's Message (as defined in the Offer to
Purchase), and any other documents required by the Letter of Transmittal within
three New York Stock Exchange trading days after the date of execution of this
Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal (unless
an Agent's Message is utilized) and certificates for Shares to the Depositary
within the time period shown herein. Failure to do so could result in a
financial loss to such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm: ------------------------------ --------------------------------------------
(AUTHORIZED SIGNATURE)
Address: ------------------------------------ Name --------------------------------------
(PLEASE TYPE OR PRINT)
- -------------------------------------------- Title:
---------------------------------------
(Zip Code)
Area Code
and Telephone Number: ---------------------- Date: ---------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON SHARES
OF
SUPER FOOD SERVICES, INC.
AT
$15.50 NET PER SHARE
BY
NFC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NASH-FINCH COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, NOVEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
October 9, 1996
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by NFC Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Nash-Finch
Company, a Delaware corporation ("Parent"), to act as financial advisor and
Dealer Manager in connection with the Purchaser's offer to purchase all
outstanding shares of the Common Shares, par value $1.00 per share, including
the associated preferred share purchase rights (collectively, the "Shares"), of
Super Food Services, Inc., a Delaware corporation (the "Company"), at $15.50 per
Share, net to the seller in cash, without any interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated October 9,
1996 (the "Offer to Purchase") and the related Letter of Transmittal (which
together constitute the "Offer"). Please furnish copies of the enclosed
materials to those of your clients for whom you hold shares registered in your
name or in the name of your nominee.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated October 9, 1996;
2. Letter of Transmittal, for your use to tender Shares and for the
information of your clients;
3. Notice of Guaranteed Delivery for Shares to be used to accept the Offer
if certificates for Shares and all other documents are not immediately available
or cannot be delivered to Norwest Bank Minnesota, N.A. (the "Depositary") by the
Expiration Date (as defined in the Offer to Purchase) or if the procedures for
book-entry transfer cannot be completed by the Expiration Date;
4. A form of letter which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
5. Guidelines of the Internal Revenue Service for certification of Taxpayer
Identification Number on Substitute Form W-9;
6. Return envelope addressed to the Depositary; and
7. The letter to stockholders of the Company from the Chairman of the Board
and Chief Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
<PAGE>
YOUR PROMPT ACTION IS REQUESTED, WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, NOVEMBER 6, 1996,
UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the Expiration Date a number of Shares
which, together with the Shares beneficially owned by Parent, the Purchaser
and/or other subsidiaries of Parent, represents at least a majority of the total
number of Shares then outstanding on a fully diluted basis, and (ii) the
expiration of all waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder.
The Offer is also subject to other terms and conditions contained in the Offer
to Purchase. See the Introduction and Sections 1, 13 and 16.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry transfer of
Shares, and any other required documents should be sent to the Depositary, and
either certificates representing tendered Shares should be delivered to the
Depositary, or Shares should be tendered by book entry transfer into the
Depositary's account maintained at one of the Book Entry Transfer Facilities (as
defined in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Dealer Manager, as described in the Offer to
Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser
will, however, upon request, reimburse you for reasonable expenses incurred by
you in forwarding any of the enclosed materials to your clients. The Purchaser
will pay or cause to be paid any stock transfer taxes payable on the transfer of
the Shares to it, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at their respective addresses and telephone
numbers set forth on the back cover of the Offer to Purchase.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction.
Very truly yours,
PIPER JAFFRAY INC.
Minneapolis, MN
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE COMPANY, ANY AFFILIATE OF
THE FOREGOING, THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON SHARES
OF
SUPER FOOD SERVICES, INC.
AT
$15.50 NET PER SHARE
BY
NFC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NASH-FINCH COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, NOVEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
October 9, 1996
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated October 9,
1996 (the "Offer to Purchase") and the related Letter of Transmittal (which
together constitute the "Offer") and other materials relating to the Offer by
NFC Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Nash-Finch Company, a Delaware corporation
("Parent"), to purchase all outstanding shares of the Common Shares, par value
$1.00 per share, including the associated preferred share purchase rights
(collectively, the "Shares"), of Super Food Services, Inc., a Delaware
corporation (the "Company"), at $15.50 per Share, net to the seller in cash,
without any interest, upon the terms and subject to the conditions set forth in
the Offer. Holders of Shares whose certificates for such Shares are not
immediately available, or who cannot deliver their certificate and all other
required documents to Norwest Bank Minnesota, N.A. (the "Depositary") on or
prior to the Expiration Date (as defined in the Offer to Purchase), or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Shares according to the guaranteed delivery procedures set forth in
Section 4 of the Offer to Purchase.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all such Shares held by us for your account, pursuant to the terms
and subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $15.50 per Share, net to you in cash, without any
interest thereon, upon the terms and subject to the conditions set forth in the
Offer.
2. The Offer is being made for all outstanding Shares
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on Wednesday, November 6, 1996, unless the Offer is extended.
4. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer.
<PAGE>
5. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the Expiration Date, a number of
Shares which, together with the Shares beneficially owned by Parent, the
Purchaser and/or other subsidiaries of Parent, represents at least a majority of
the total number of Shares then outstanding on a fully diluted basis, and (ii)
the expiration of all waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder.
The Offer is also subject to other terms and conditions contained in the Offer
to Purchase. See the Introduction and Sections 1, 13 and 16.
6. The Board of Directors of the Company has unanimously approved the
Offer, the Merger (as defined in the Offer to Purchase) and the Merger Agreement
(as defined in the Offer to Purchase), has determined that the terms of the
Offer and the Merger contemplated thereby are fair to and in the best interests
of the stockholders of the Company and recommends that the stockholders accept
the Offer and tender their Shares pursuant to the Offer.
7. Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by the Depositary of (a) certificates for
tendered Shares or timely confirmation of the book-entry transfer of such Shares
into the account maintained by the Depositary at The Depository Trust Company or
the Philadelphia Depository Trust Company (collectively, the "Book-Entry
Transfer Facilities"), pursuant to the procedures set forth in Section 4 of the
Offer to Purchase, (b) the Letter of Transmittal or a facsimile thereof,
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase), in connection with a
book-entry delivery, and (c) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering stockholders
at the same time depending upon when certificates for or confirmations of book-
entry transfer of such Shares into the Depositary's account at a Book-Entry
Transfer Facility are actually received by the Depositary.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any such jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of the Purchaser by Piper Jaffray Inc., the Dealer Manager for the Offer,
or one or more registered brokers or dealers that are licensed under the laws of
such jurisdiction.
If you wish to have us tender any or all of your Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth below. An envelope to return your
instructions to us is enclosed. PLEASE FORWARD YOUR INSTRUCTIONS TO US IN AMPLE
TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION
DATE. The enclosed Letter of Transmittal is furnished to you as an example and
should not be used to tender Shares. IF YOU AUTHORIZE THE TENDER OF YOUR SHARES,
ALL SUCH SHARES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED ON THE INSTRUCTION
FORM SET FORTH BELOW.
<PAGE>
INSTRUCTIONS WITH RESPECT TO:
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON SHARES
OF
SUPER FOOD SERVICES, INC.
BY
NFC ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NASH-FINCH COMPANY
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated October 9, 1996 (the "Offer to Purchase") and the related
Letter of Transmittal (which together constitute the "Offer") in connection with
the offer by NFC Acquisition Corporation, a Delaware corporation and a wholly
owned subsidiary of Nash-Finch Company, a Delaware corporation, to purchase all
outstanding shares of the Common Shares, par value $1.00 per share, including
the associated preferred share purchase rights (collectively, the "Shares"), of
Super Food Services, Inc., a Delaware corporation, at a purchase price of $15.50
per Share, net to the Seller in cash, without any interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered: ____________________________________ Shares*
SIGN HERE
Signature(s):___________________________________________________________________
Signature(s): __________________________________________________________________
(Print Name(s)): _______________________________________________________________
(Print Address(es)): ___________________________________________________________
(Area Code and Telephone Number(s)): ___________________________________________
(Taxpayer Identification or Social Security Number(s)): ________________________
Dated: ___________, 1996
- ------------------------
*Unless otherwise indicated, it will be assumed that you instruct us to tender
all Shares held by us for your account.
<PAGE>
CONTACT: Norman R. Soland
(612) 844-1153
DATE: October 8, 1996
FOR IMMEDIATE RELEASE
- ---------------------
NASH-FINCH COMPANY AND SUPER FOOD SERVICES, INC.
ENTER INTO MERGER AGREEMENT
Minneapolis, October 8 -- Nash Finch Company (Nasdaq: NAFC), the fourth
largest public grocery wholesaler, and Super Food Services, Inc. (NYSE: SFS)
today announced that they have entered into a definitive merger agreement.
The agreement calls for Nash Finch to acquire Super Food in a tender offer.
The acquisition has been approved by the boards of directors of both companies.
Under the terms of the agreement, Nash Finch will initiate a cash tender
offer for all of the outstanding shares of Super Food common stock for $15.50
per share, to be followed by a merger in which any Super Food shares
remaining will be exchanged for the same cash price. Super Food has
approximately 11.2 million fully diluted shares outstanding, and the tender
offer is conditional, among other things, upon there being validly tendered
and not withdrawn shares representing at least a majority of such fully
diluted shares outstanding and upon expiration of the Hart-Scott-Rodino
waiting periods.
"This acquisition positions Nash Finch as a bigger player in the
consolidating grocery business. The merger of Super Food, with fiscal 1995
sales of approximately $1.2 billion, and Nash Finch, with 1995 sales
of approximately $2.9 billion, will create the third largest public grocery
wholesaler in the United States. We currently expect 1997 sales of the
combined companies to be approximately $4.5 billion. We also expect the
acquisition to be accretive to earnings for calendar year 1997," said Al
Flaten, Nash Finch president and chief executive officer. "There is no
significant geographic overlap of operations. Super Food has significant
market presence in Ohio, Michigan and Kentucky, while Nash Finch has
especially strong operations in the Midwest and Southeast market areas. With
Super Food's strengths in general merchandising and distribution of gourmet
foods and Nash Finch's strengths in retail operations, produce marketing,
technology and buying, we will be significantly enhancing our operational and
marketing opportunities. We welcome Super Food's employees and customers to
the Nash Finch family."
"We are very pleased to be joining Nash Finch," stated Jack Twyman,
chairman and chief executive officer of Super Food. "Both companies have
very similar cultures and very strong customer bases. Moreover, the merger
will enable us to provide an enhanced level of service for all of our
customers."
Flaten will continue to serve as president of the merged company, while
Twyman will remain with the company to assist with the transition.
<PAGE>
This release contains forward-looking statements that involve risks and
uncertainties, and actual results may differ materially based on factors such
as the results of operations of the two companies, the ability of Nash Finch
to integrate successfully the operations of Super Food, the ability of
Nash Finch to achieve the synergies expected to result from the acquisition,
general economic conditions and other risk factors.
Super Food Services, based in Dayton, Ohio is a wholesale grocery,
distributor, supplying a complete line of food and non-food products to more
than 850 retail stores in six states.
Nash Finch is one of the largest food wholesalers in the country, supplying
products to affiliated and independent supermarkets, other independent retailers
and military bases in approximately 30 states. The Company also owns and
operates approximately 110 supermarkets, warehouse stores and mass merchandise
stores in 16 states, and a produce marketing subsidiary in California.
# # #
<PAGE>
CONTACT: Norman R. Soland
(612) 844-1153
DATE: October 9, 1996
FOR IMMEDIATE RELEASE
- ---------------------
NASH-FINCH COMPANY BEGINS CASH TENDER OFFER
FOR SUPER FOOD SERVICES, INC.
Minneapolis, October 9 -- Nash Finch Company (Nasdaq: NAFC) today
announced that it has commenced its cash tender offer to purchase all of the
outstanding shares of the common stock of Super Food Services, Inc. for $15.50
per share. Unless extended, the offer is scheduled to expire at midnight,
New York City time, on Wednesday, November 6, 1996.
As announced yesterday, Nash Finch and Super Food entered into a merger
agreement, pursuant to which Nash Finch is making the tender offer. The
tender offer is conditional, among other things, upon there being validly
tendered and not withdrawn prior to the expiration of the tender offer, a
number of shares that represents at least a majority of the total outstanding
shares of Super Food common stock on a fully diluted basis and upon the
expiration of the Hart-Scott-Rodino waiting periods. Shares not acquired in
the tender offer will, subject to the terms of the merger agreement, be
exchanged in a subsequent merger for the same cash price paid in the tender
offer.
Super Food Services, based in Dayton, Ohio, is a wholesale grocery
distributor, supplying a complete line of food and non-food products to more
than 850 retail stores in six states.
Nash Finch is one of the largest food wholesalers in the country,
supplying products to affiliated and independent supermarkets, other
independent retailers and military bases in approximately 30 states. The
Company also owns and operates approximately 110 supermarkets, warehouse
stores and mass merchandise stores in 16 states, and a produce marketing
subsidiary in California.
<PAGE>
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN
OFFER TO SELL SHARES (AS DEFINED BELOW). THE OFFER (AS DEFINED BELOW) IS MADE
SOLELY BY THE OFFER TO PURCHASE DATED OCTOBER 9, 1996, AND THE RELATED LETTER OF
TRANSMITTAL, AND IS BEING MADE TO ALL HOLDERS OF SHARES. THE PURCHASER (AS
DEFINED BELOW) IS NOT AWARE OF ANY STATE WHERE THE MAKING OF THE OFFER IS
PROHIBITED BY ADMINISTRATIVE OR JUDICIAL ACTION PURSUANT TO ANY VALID STATE
STATUTE. IF THE PURCHASER BECOMES AWARE OF ANY VALID STATE STATUTE PROHIBITING
THE MAKING OF THE OFFER OR THE ACCEPTANCE OF SHARES PURSUANT THERETO, THE
PURCHASER WILL MAKE A GOOD FAITH EFFORT TO COMPLY WITH SUCH STATE STATUTE. IF
AFTER SUCH GOOD FAITH EFFORT, THE PURCHASER CANNOT COMPLY WITH SUCH STATE
STATUTE, THE OFFER WILL NOT BE MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON
BEHALF OF) THE HOLDERS OF SHARES IN SUCH STATE. IN ANY JURISDICTION WHERE THE
SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE OFFER TO BE MADE BY A LICENSED
BROKER OR DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF THE
PURCHASER BY PIPER JAFFRAY INC. OR ONE OR MORE REGISTERED BROKERS OR DEALERS
LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON SHARES
OF
SUPER FOOD SERVICES, INC.
at
$15.50 Net Per Share
by
NFC ACQUISITION CORPORATION
a wholly owned subsidiary of
NASH-FINCH COMPANY
NFC Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Nash-Finch Company, a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of the Common Shares,
par value $1.00 per share, including the associated preferred share purchase
rights (collectively, the "Shares"), of Super Food Services, Inc., a Delaware
corporation (the "Company"), at $15.50 per Share, net to the seller in cash,
without any interest, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated October 9, 1996 (the "Offer to Purchase") and in the
related Letter of Transmittal (which together constitute the "Offer"). Following
the Offer, the Purchaser intends to effect the Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, NOVEMBER 6, 1996, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER
TO PURCHASE) A NUMBER OF SHARES OF THE COMPANY WHICH, TOGETHER WITH THE SHARES
BENEFICIALLY OWNED BY PARENT, THE PURCHASER AND/OR OTHER SUBSIDIARIES OF PARENT,
REPRESENTS AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
<PAGE>
SHARES OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). THE
PURCHASER ESTIMATES THAT APPROXIMATELY 5,620,913 SHARES WILL NEED TO BE VALIDLY
TENDERED (AND NOT WITHDRAWN) TO SATISFY THE MINIMUM CONDITION.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of October 8, 1996 (the "Merger Agreement"), by and among Parent, the Purchaser
and the Company. Pursuant to the Merger Agreement, and subject to the
satisfaction or waiver of the conditions set forth therein, the Purchaser has
agreed to make the Offer and purchase all Shares validly tendered and not
withdrawn following the later of (i) the expiration or termination of all
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), applicable to the Offer and (ii) the Expiration
Date. After the completion of the Offer, the Purchaser will be merged with and
into the Company (the "Merger") and each Share then outstanding (other than
Shares held by Parent, the Purchaser or any subsidiary of Parent or the
Purchaser, or in the treasury of the Company or any subsidiary of Company, all
of which will be cancelled, and other than Shares held by stockholders who
properly exercise and perfect appraisal rights under the Delaware General
Corporation Law) will be converted upon effectiveness of the Merger (the
"Effective Time") into the right to receive $15.50 in cash, without any
interest. Following the consummation of the Merger, the Company will continue as
the surviving corporation and will be a wholly owned subsidiary of Parent.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE MERGER AGREEMENT, HAS DETERMINED THAT THE TERMS OF THE OFFER,
THE MERGER AND THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE
STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Simultaneously with entering into the Merger Agreement, Parent and the
Purchaser entered into a Stockholder Agreement (the "Stockholder Agreement")
with the directors and certain officers of the Company, including Jack Twyman,
the Chairman of the Board and Chief Executive Officer, who are stockholders of
the Company (the "Tendering Stockholders"). Pursuant to the Stockholder
Agreement, each Tendering Stockholder has agreed to tender (and not withdraw)
pursuant to the Offer and before the Expiration Date all of the Shares owned of
record or beneficially by such Tendering Stockholder (subject to certain
exceptions) on the date of the Stockholder Agreement, together with any Shares
acquired by any such Tendering Stockholder prior to the termination of the
Stockholder Agreement. As of the date hereof, the Tendering Stockholders
beneficially own 577,491 Shares, or approximately 5.2% of all outstanding
Shares.
The Offer is subject to certain conditions set forth in the Offer to
Purchase. If any such condition is not satisfied prior to the time of payment
for any Shares, the Purchaser may (i) terminate the Offer and return all
tendered shares to tendering stockholders, (ii) extend the Offer and, subject to
withdrawal rights as set forth below, retain all such Shares until the
expiration of the Offer as so extended, (iii) waive such condition and, subject
to any requirement to extend the period of time during which the Offer is open,
<PAGE>
purchase all Shares validly tendered by the Expiration Date and not withdrawn,
or (iv) delay acceptance for payment of or payment for Shares, subject to
applicable law, until satisfaction or waiver of the conditions of the Offer.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Shares as, if and when the
Purchaser gives oral or written notice to the Depositary (Norwest Bank
Minnesota, N.A.) of the Purchaser's acceptance of such Shares for payment
pursuant to the Offer. Payment for Shares purchased pursuant to the Offer will
be made by deposit of the purchase price with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from the
Purchaser and transmitting payments to tendering stockholders. The Purchaser
will not, under any circumstances, pay interest on the purchase price,
regardless of any delay in making such payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) the certificates evidencing the Shares or timely confirmation
of a book-entry transfer of such Shares into the Depositary's account at a
Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to
the procedures set forth in the Offer to Purchase, (ii) the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message (as defined in the
Offer to Purchase), and (iii) any other documents required by the Letter of
Transmittal.
The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time, to extend the period of time during which the Offer
is open (but subject to the terms and conditions of the Merger Agreement) by
giving oral or written notice of such extension to the Depositary. Any such
extension will be followed, as soon as practicable, by public announcement
thereof, no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date.
Tenders of Shares made pursuant to the Offer will be irrevocable, except
that Shares tendered may be withdrawn at any time prior to the Expiration Date
and, unless previously accepted for payment, may also be withdrawn after
December 7, 1996. If the Purchaser is delayed in its acceptance or purchase of
or payment for Shares or is unable to purchase or pay for Shares for any reason,
then, without prejudice to the Purchaser's rights, tendered Shares may be
retained by the Depositary on behalf of the Purchaser and may not be withdrawn
except as described in the Offer to Purchase.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
specified on the back cover of the Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and, if certificates
representing such Shares have been delivered or otherwise identified to the
Depositary, the name(s) in which such certificate(s) is (are) registered, if
different from the name of the person tendering such Shares. If certificates
have been delivered or otherwise identified to the Depositary, then prior to the
physical release of such certificates, the tendering stockholder must also
submit the serial numbers shown on the particular certificates evidencing such
Shares and the signature on the notice of withdrawal must be guaranteed by a
member firm of a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., a commercial bank or trust
company having an office, branch or agency in the United States or any other
institution that is a member of the Medallion Signature Guaranty Program (each
being referred to herein as an "Eligible Institution"). If Shares have been
tendered
<PAGE>
pursuant to the procedure for book-entry tender set forth in the Offer to
Purchase, the notice of withdrawal must specify the name and account number(s)
of the account(s) at the applicable Book-Entry Transfer Facility to be credited
with the withdrawn Shares. All questions as to the form and validity (including
time of receipt) of notices of withdrawal will be determined by the Purchaser,
in its sole discretion, whose determination shall be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares and will be furnished to brokers,
dealers, banks and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance or for additional copies of the Offer
to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or the Dealer Manager at
their respective telephone numbers and locations as set forth below, and copies
will be furnished promptly at the Purchaser's expense. The Purchaser will not
pay any fees or commissions to any broker or dealer or any other person (other
than the Dealer Manager) for soliciting tenders of Shares pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (call collect)
or
Call Toll Free: 1-800-848-3402
THE DEALER MANAGER FOR THE OFFER IS:
PIPER JAFFRAY INC.
222 South Ninth Street
Minneapolis, Minnesota 55402
Call Toll Free: 1-800-333-6000, Ext. 6373
October 9, 1996
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.--
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
-------------------------------------------- --------------------------------------------
GIVE THE GIVE THE EMPLOYER
SOCIAL SECURITY IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF-- FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------- -----------------------------------------------------
<C> <S> <C> <C> <C> <C>
1. An individual's The individual 9. A valid trust, The legal entity
2. account The actual owner of estate, or pension (Do not furnish the
Two or more the account or, if trust identifying number
individuals (joint combined funds, any of the personal
account) one of the representative or
individuals(1) trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
3. Husband and wife The actual owner of 10. Corporate account The corporation
(joint account) the account or, if 11. Religious, The corporation
joint funds, either charitable, or
person(1) educational
organization account
4. Custodian account of The minor(2) 12. Partnership account The partnership
a minor (Uniform Gift held in the name of
to Minors Act) the business
5. Adult and minor The adult or, if 13. Association, club or The organization
(Joint account) the minor is the other tax-exempt
only contributor, organization
the minor(1)
6. Account in the name The ward, minor, or 14. A broker or The broker or
of guardian or incompetent registered nominee nominee
committee for a person(3)
designated ward,
minor, or incompetent
person
7. a. The usual The
revocable grantor-trustee(1)
savings trust 15. Account with the The public entity
account (grantor Department of
is also trustee) Agriculture in the
name of a public
entity (such as a
State or
b. So-called trust The actual owner(1) local government,
account that is not a school district, or
legal or valid prison) that receives
trust under State agricultural program
law payments
8. Sole proprietorship The owner(4)
account
<CAPTION>
- ----------------------------------------------------- -----------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
- Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payers trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-
interest dividends under section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding.
FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE
PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE
FORM.
Certain payments, other than interest, dividends and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. - If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. - If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. - Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Credit Agreement
Dated as of
OCTOBER 8, 1996
Among
NASH-FINCH COMPANY,
THE BANKS SIGNATORY HERETO,
HARRIS TRUST AND SAVINGS BANK,
as Administrative Agent
and
BANK OF MONTREAL and PNC BANK, NATIONAL ASSOCIATION,
as Syndication Agents
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE COMMITTED FACILITIES. . . . . . . . . . . . . . . . . . . 1
Section 1.1. The Loan Commitments . . . . . . . . . . . . . . . . . . 1
Section 1.2. Letters of Credit. . . . . . . . . . . . . . . . . . . . 1
Section 1.3. Applicable Interest Rates. . . . . . . . . . . . . . . . 4
(a) Base Rate Loans . . . . . . . . . . . . . . . . . . 4
(b) Eurodollar Loans. . . . . . . . . . . . . . . . . . 5
(c) Applicable Margin . . . . . . . . . . . . . . . . . 6
(d) Rate Determinations . . . . . . . . . . . . . . . . 7
Section 1.4. Minimum Borrowing Amount . . . . . . . . . . . . . . . . 7
Section 1.5. Manner of Borrowing Committed Loans. . . . . . . . . . . 7
(a) Notice to the Administrative Agent. . . . . . . . . 7
(b) Notice to the Banks . . . . . . . . . . . . . . . . 8
(c) Borrower's Failure to Notify. . . . . . . . . . . . 8
(d) Disbursement of Committed Loans . . . . . . . . . . 8
Section 1.6. The Swing Line . . . . . . . . . . . . . . . . . . . . . 8
(a) Swing Loans . . . . . . . . . . . . . . . . . . . . 8
(b) Minimum Borrowing Amount. . . . . . . . . . . . . . 9
(c) Interest on Swing Loans . . . . . . . . . . . . . . 9
(d) Requests for Swing Loans. . . . . . . . . . . . . . 9
(e) Refunding Loans . . . . . . . . . . . . . . . . . . 9
(f) Participations. . . . . . . . . . . . . . . . . . . 10
SECTION 2. THE COMPETITIVE BID FACILITY . . . . . . . . . . . . . . . . 10
Section 2.1. The Bid Loans. . . . . . . . . . . . . . . . . . . . . . 10
Section 2.2. Requests for Bid Loans . . . . . . . . . . . . . . . . . 11
(a) Requests and Confirmations. . . . . . . . . . . . . 11
(b) Invitation to Bid . . . . . . . . . . . . . . . . . 11
(c) Bids. . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.3. Notice of Bids; Advice of Rate . . . . . . . . . . . . . 12
Section 2.4. Acceptance or Rejection of Bids. . . . . . . . . . . . . 12
Section 2.5. Notice of Acceptance or Rejection of Bids. . . . . . . . 13
(a) Notice to Banks Making Bids . . . . . . . . . . . . 13
(b) Disbursement of Bid Loans . . . . . . . . . . . . . 13
(c) Notice to the Banks . . . . . . . . . . . . . . . . 14
Section 2.6. Interest on Bid Loans. . . . . . . . . . . . . . . . . . 14
Section 2.7. Telephonic Notice. . . . . . . . . . . . . . . . . . . . 14
SECTION 3. GENERAL PROVISIONS APPLICABLE TO ALL LOANS. . . . . . . . . . 14
Section 3.1. Interest Periods . . . . . . . . . . . . . . . . . . . . 14
Section 3.2. Maturity of Loans. . . . . . . . . . . . . . . . . . . . 15
-i-
<PAGE>
Section 3.3. Voluntary Prepayments. . . . . . . . . . . . . . . . . . 15
(a) Committed Loans . . . . . . . . . . . . . . . . . . 15
(b) Fixed Rate Loans. . . . . . . . . . . . . . . . . . 16
(c) Reborrowings. . . . . . . . . . . . . . . . . . . . 16
Section 3.4. Default Rate . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.5. The Notes. . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.6. Commitment Reductions and Terminations . . . . . . . . . 17
(a) Voluntary . . . . . . . . . . . . . . . . . . . . . 17
(b) Upon Incurrence of Indebtedness or Securitization . 17
(c) Unused Credit . . . . . . . . . . . . . . . . . . . 17
(d) Scheduled Mandatory Reduction . . . . . . . . . . . 18
(e) Termination Date. . . . . . . . . . . . . . . . . . 18
(f) Effect of Termination or Reduction. . . . . . . . . 18
Section 3.7. Mandatory Prepayments. . . . . . . . . . . . . . . . . . 18
(a) Out of Proceeds of Indebtedness or Securitization . 18
(b) Upon Change of Control. . . . . . . . . . . . . . . 18
(c) Upon Termination of or Reduction in Commitments . . 19
Section 3.8. Funding Indemnity. . . . . . . . . . . . . . . . . . . . 19
Section 3.9. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . 19
SECTION 4. FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.1. Facility Fee . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.2. Letter of Credit Fees. . . . . . . . . . . . . . . . . . 20
Section 4.3. Bid Loan Fee . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.4. Agents' Fees . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.5. Fee Calculations . . . . . . . . . . . . . . . . . . . . 21
SECTION 5. PLACE AND APPLICATION OF PAYMENTS . . . . . . . . . . . . . . 21
Section 5.1. Place and Application of Payments. . . . . . . . . . . . 21
SECTION 6. DEFINITIONS; INTERPRETATION . . . . . . . . . . . . . . . . . 22
Section 6.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.2. Interpretation . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . 34
Section 7.1. Corporate Organization and Authority . . . . . . . . . . 35
Section 7.2. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.3. Corporate Authority and Validity of Obligations. . . . . 35
Section 7.4. Financial Statements . . . . . . . . . . . . . . . . . . 36
Section 7.5. Material Adverse Change. . . . . . . . . . . . . . . . . 36
Section 7.6. No Litigation; No Labor Controversies. . . . . . . . . . 36
Section 7.7. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.8. Approvals. . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.9. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 37
-ii-
<PAGE>
Section 7.10. Government Regulation. . . . . . . . . . . . . . . . . . 38
Section 7.11. Margin Stock . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.12. Licenses and Authorizations; Compliance with Laws. . . . 38
Section 7.13. Ownership of Property; Liens . . . . . . . . . . . . . . 38
Section 7.14. No Burdensome Restrictions; Compliance with Agreements . 39
Section 7.15. Tender Offer . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.16. Merger Agreement . . . . . . . . . . . . . . . . . . . . 39
Section 7.17. Disclosure . . . . . . . . . . . . . . . . . . . . . . . 40
(a) Loan. . . . . . . . . . . . . . . . . . . . . . . . 40
(b) Acquisition . . . . . . . . . . . . . . . . . . . . 40
(c) Generally . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . 40
Section 8.1. Initial Borrowing. . . . . . . . . . . . . . . . . . . . 41
Section 8.2. All Credit . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.3. Additional Conditions to Loans other than Refunding
Borrowings . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.4. Initial Tender Credit. . . . . . . . . . . . . . . . . . 42
Section 8.5. Initial Merger Credit. . . . . . . . . . . . . . . . . . 44
Section 8.6. Debt Refinancing Credit. . . . . . . . . . . . . . . . . 44
SECTION 9. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.1. Corporate Existence; Subsidiaries. . . . . . . . . . . . 45
Section 9.2. Maintenance. . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.3. Taxes and Assessments. . . . . . . . . . . . . . . . . . 46
Section 9.4. Insurance. . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.5. Financial Reports. . . . . . . . . . . . . . . . . . . . 46
Section 9.6. Inspection . . . . . . . . . . . . . . . . . . . . . . . 48
Section 9.7. Current Ratio. . . . . . . . . . . . . . . . . . . . . . 48
Section 9.8. Tangible Net Worth . . . . . . . . . . . . . . . . . . . 48
Section 9.9. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . 48
Section 9.10. Interest Coverage Ratio. . . . . . . . . . . . . . . . . 49
Section 9.11. Long-Term Debt . . . . . . . . . . . . . . . . . . . . . 49
Section 9.12. Limits on Aggregate Indebtedness . . . . . . . . . . . . 49
(a) Interim Limit on Borrower . . . . . . . . . . . . . 49
(b) Permanent Limit on Subsidiaries . . . . . . . . . . 49
Section 9.13. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 9.14. Investments, Acquisitions, Loans, Advances
and Guaranties . . . . . . . . . . . . . . . . . . . . . 50
Section 9.15. Mergers, Consolidations and Sales. . . . . . . . . . . . 52
Section 9.16. Maintenance of Subsidiaries. . . . . . . . . . . . . . . 53
Section 9.17. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.18. Compliance with Laws . . . . . . . . . . . . . . . . . . 54
Section 9.19. Change in the Nature of Business . . . . . . . . . . . . 54
Section 9.20. Use of Loan Proceeds . . . . . . . . . . . . . . . . . . 54
-iii-
<PAGE>
Section 10. Events of Default and Remedies . . . . . . . . . . . . . 54
Section 10.1. Events of Default. . . . . . . . . . . . . . . . . . . . 54
Section 10.2. Non-Bankruptcy Defaults. . . . . . . . . . . . . . . . . 56
Section 10.3. Bankruptcy Defaults. . . . . . . . . . . . . . . . . . . 57
Section 10.4. Collateral for Undrawn Letters of Credit . . . . . . . . 57
Section 10.5. Expenses . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.6. Notice of Default. . . . . . . . . . . . . . . . . . . . 58
SECTION 11. CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . 58
Section 11.1. Change of Law. . . . . . . . . . . . . . . . . . . . . . 58
Section 11.2. Unavailability of Deposits or Inability to
Ascertain, or Inadequacy of, LIBOR . . . . . . . . . . . 58
Section 11.3. Increased Cost and Reduced Return. . . . . . . . . . . . 59
Section 11.4. Lending Offices. . . . . . . . . . . . . . . . . . . . . 60
Section 11.5. Discretion of Bank as to Manner of Funding . . . . . . . 60
SECTION 12. THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 12.1. Appointment and Authorization. . . . . . . . . . . . . . 61
Section 12.2. Agent and Affiliates . . . . . . . . . . . . . . . . . . 61
Section 12.3. Action by Agent. . . . . . . . . . . . . . . . . . . . . 61
Section 12.4. Consultation with Experts. . . . . . . . . . . . . . . . 61
Section 12.5. Liability of Agent . . . . . . . . . . . . . . . . . . . 62
Section 12.6. Indemnification. . . . . . . . . . . . . . . . . . . . . 62
Section 12.7. Credit Decision. . . . . . . . . . . . . . . . . . . . . 62
Section 12.8. Resignation of Agent and Successor Agent . . . . . . . . 62
Section 12.9. Payments . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 12.10. Syndication Agents . . . . . . . . . . . . . . . . . . . 63
SECTION 13. THE GUARANTEES. . . . . . . . . . . . . . . . . . . . . . . . 63
Section 13.1. The Guarantees . . . . . . . . . . . . . . . . . . . . . 63
Section 13.2. Guarantee Unconditional. . . . . . . . . . . . . . . . . 64
Section 13.3. Discharge Only Upon Payment in Full;
Reinstatement in Certain Circumstances . . . . . . . . . 65
Section 13.4. Waivers. . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 13.5. Limit on Recovery. . . . . . . . . . . . . . . . . . . . 65
Section 13.6. Stay of Acceleration . . . . . . . . . . . . . . . . . . 65
SECTION 14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 14.1. Withholding Taxes. . . . . . . . . . . . . . . . . . . . 66
Section 14.2. No Waiver of Rights. . . . . . . . . . . . . . . . . . . 67
Section 14.3. Non-Business Day . . . . . . . . . . . . . . . . . . . . 67
Section 14.4. Documentary Taxes. . . . . . . . . . . . . . . . . . . . 67
Section 14.5. Survival of Representations. . . . . . . . . . . . . . . 67
-iv-
<PAGE>
Section 14.6. Survival of Indemnities. . . . . . . . . . . . . . . . . 68
Section 14.7. Sharing of Set-Off . . . . . . . . . . . . . . . . . . . 68
Section 14.8. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 14.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . 69
Section 14.10. Successors and Assigns . . . . . . . . . . . . . . . . . 69
Section 14.11. Participants . . . . . . . . . . . . . . . . . . . . . . 69
Section 14.12. Assignment Agreements. . . . . . . . . . . . . . . . . . 69
Section 14.13. Amendments . . . . . . . . . . . . . . . . . . . . . . . 70
Section 14.14. Headings . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 14.15. Legal Fees, Other Costs and Indemnification. . . . . . . 71
Section 14.16. Set-Off. . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 14.17. Entire Agreement . . . . . . . . . . . . . . . . . . . . 72
Section 14.18. Governing Law. . . . . . . . . . . . . . . . . . . . . . 72
Section 14.19. Submission to Jurisdiction;
Waiver of Jury Trial . . . . . . . . . . . . . . . . . . 72
Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
Exhibit A-1 Committed Note
Exhibit A-2 Swing Line Note
Exhibit B Bid Note
Exhibit C Bid Loan Request Confirmation
Exhibit D Invitation to Bid
Exhibit E Confirmation of Bid
Exhibit F Notice of Acceptance of Bid
Exhibit G Notice of Payment Request
Exhibit H Compliance Certificate
Exhibit I Subsidiary Guarantee Agreement
Exhibit J Employee Benefit Plans
Exhibit K Form of Opinion of Counsel
Exhibit L Existing NF Revolver Debt
Exhibit M Existing NF Term Debt
Exhibit N Existing Super Food Debt
Schedule 7.2 Subsidiaries
-v-
<PAGE>
CREDIT AGREEMENT
To each of the Banks signatory hereto
Ladies and Gentlemen:
The undersigned, Nash-Finch Company, a Delaware corporation (the
"BORROWER"), applies to you for your several commitments, subject to all the
terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth, to make available credit accommodations to be
divided into a committed facility for loans and letters of credit, a committed
facility for loans from one of you and a discretionary bid facility for loans,
all as more fully hereinafter set forth. Each of you is hereinafter referred to
as a "BANK", all of you are hereinafter referred to collectively as the "BANKS"
and Harris Trust and Savings Bank ("HARRIS BANK") in its capacity as agent
hereunder is hereinafter referred to as the "ADMINISTRATIVE AGENT", and Bank of
Montreal and PNC Bank, National Association ("PNC BANK"), in their capacity as
co-syndication agents hereunder are hereinafter referred to collectively as the
"SYNDICATION AGENTS".
SECTION 1. THE COMMITTED FACILITIES.
SECTION 1.1. THE LOAN COMMITMENTS. Subject to the terms and conditions
hereof, each Bank, by its acceptance hereof, severally agrees to make a loan or
loans (individually a "COMMITTED LOAN" and collectively "COMMITTED LOANS") to
the Borrower from time to time on a revolving basis in the amount of its
commitment to make Committed Loans set forth on the applicable signature page
hereof (its "COMMITMENT" and cumulatively for all the Banks the "COMMITMENTS")
(subject to any reductions thereof pursuant to the terms hereof) prior to the
Termination Date. The sum of the aggregate principal amount of outstanding
Loans (whether Committed Loans, Swing Loans or Bid Loans) and L/C Obligations
shall not exceed the Commitments then in effect. Each Borrowing of Committed
Loans shall be made ratably from the Banks in proportion to their respective
Percentages. As provided in Section 1.5(a) hereof, the Borrower may elect that
each Borrowing of Committed Loans be made available by means of (i) Eurodollar
Loans or (ii) Base Rate Loans, or any combination thereof. Each Borrowing of
Committed Loans may be repaid and the principal amount thereof reborrowed prior
to the Termination Date, subject to all reductions in the Commitments and all
other terms and conditions hereof.
SECTION 1.2. LETTERS OF CREDIT. (a) GENERAL TERMS. Subject to the terms
and conditions hereof, as part of the credit available under the Commitments,
the Administrative Agent shall from time to time issue standby or commercial
letters of credit (each a "LETTER OF CREDIT") for the Borrower's account
(whether or not also for the account of any Subsidiary as well) five (5)
calendar days prior to the Termination Date, in an aggregate undrawn face amount
up to the amount of the L/C Commitment, provided that the aggregate L/C
Obligations at any time outstanding shall not exceed the difference between the
Commitments in effect at such time and the aggregate principal amount of Loans
(whether
<PAGE>
Committed Loans, Swing Loans or Bid Loans) then outstanding. Each
Letter of Credit shall be issued by the Administrative Agent, but each Bank
shall be obligated to reimburse the Administrative Agent for its Percentage of
the amount of each drawing thereunder and, accordingly, the undrawn face amount
of each Letter of Credit shall constitute usage of the Commitment of each Bank
PRO RATA in accordance with each Bank's Percentage.
(b) TERM. Each Letter of Credit issued hereunder shall expire not later
than the earlier of (i) one year from the date issued (or if the same has a
longer expiry date or no expiry date, shall be cancelable not later than one
year from the date of issuance and, if the
<PAGE>
same can be renewed, shall be cancelable not later than one year from each
renewal or extension, as the case may be) or (ii) five (5) calendar days prior
to the Termination Date.
(c) GENERAL CHARACTERISTICS. Each Letter of Credit issued hereunder shall
be payable in U.S. Dollars, shall conform to the general requirements of the
Administrative Agent for the issuance of standby or commercial letters of
credit, as the case may be, as to form and substance, and shall be a letter of
credit which the Administrative Agent may lawfully issue.
(d) APPLICATIONS. At the time the Borrower requests any Letter of Credit
to be issued (or prior to the first issuance of a Letter of Credit, in the case
of a continuing application), the Borrower shall execute and deliver to the
Administrative Agent an application for such Letter of Credit in the form
customarily prescribed by the Administrative Agent for a Letter of Credit of the
type of Letter of Credit, whether standby or commercial, requested (individually
an "APPLICATION" and collectively the "APPLICATIONS"). Notwithstanding anything
contained in any Application to the contrary, (i) the Borrower shall pay fees in
connection with each Letter of Credit as set forth in Section 4.2 hereof,
(ii) except upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent will not call for the funding by the Borrower
of any amount under a Letter of Credit, or any other form of collateral security
for the Borrower's obligations in connection with such Letter of Credit, before
being presented with a drawing thereunder, and (iii) if the Administrative Agent
is not timely reimbursed in accordance with Section 1.2(e) hereof (whether out
of the proceeds of a Loan, including a Committed Loan made pursuant to
Section 1.5(c) hereof or otherwise) for the amount of any drawing under a Letter
of Credit on the date such drawing is paid, the Borrower's obligation to
reimburse the Administrative Agent for the amount of such drawing shall bear
interest (which the Borrower hereby promises to pay) from and after the date
such drawing is paid at a rate per annum equal to the sum of 2% PLUS the
Applicable Margin for Base Rate Loans PLUS the Base Rate from time to time in
effect. Notwithstanding anything contained in any Application to the contrary,
if the Administrative Agent issues any Letter of Credit with an expiration date
that is automatically extended unless the Administrative Agent gives notice that
the expiration date will not so extend beyond its then scheduled expiration
date, the Administrative Agent will give such notice of non-renewal before the
time necessary to prevent such automatic extension if before such required
notice date (i) the expiration date of such Letter of Credit if so extended
would be subsequent to the date which is five (5) calendar days prior to the
Termination Date, (ii) the Commitments have been terminated, or (iii) a Default
or Event of Default exists and the Required Banks have given the
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<PAGE>
Administrative Agent instructions not to so permit the extension of the
expiration date of such Letter of Credit. Notwithstanding anything contained in
any Application to the contrary, the Administrative Agent agrees to issue
amendments to the Letter(s) of Credit increasing the amount, or extending the
expiration date, thereof at the request of the Borrower subject to the
conditions of Section 8 and the other terms of this Section 1.2.
(e) THE REIMBURSEMENT OBLIGATIONS. Subject to Section 1.2(d) hereof, the
obligation of the Borrower to reimburse the Administrative Agent for all
drawings under a Letter of Credit (a "REIMBURSEMENT OBLIGATION") shall be
governed by the Application related to such Letter of Credit, except that
reimbursement of a drawing paid shall be made by no later than 11:00 a.m.
(Chicago time) on the date when a drawing is paid in immediately available funds
at the Administrative Agent's principal office in Chicago, Illinois; any payment
of a Reimbursement Obligation received after such time shall be deemed to have
been received by the Administrative Agent on the next Business Day. If the
Borrower does not make any such reimbursement payment on the date due and the
Participating Banks fund their participations therein in the manner set forth in
Section 1.2(f) below, then all payments thereafter received by the
Administrative Agent in discharge of any of the relevant Reimbursement
Obligations shall be distributed in accordance with Section 1.2(f) below.
(f) THE PARTICIPATING INTERESTS. Each Bank (other than the Bank then
acting as Administrative Agent in issuing Letters of Credit), by its acceptance
hereof, severally agrees to purchase from the Administrative Agent, and the
Administrative Agent hereby agrees to sell to each such Bank (a "PARTICIPATING
BANK"), an undivided percentage participating interest (a "PARTICIPATING
INTEREST"), to the extent of its Percentage, in each Letter of Credit issued by,
and each Reimbursement Obligation owed to, the Administrative Agent. Upon any
failure by the Borrower to pay any Reimbursement Obligation at the time required
on the date the related drawing is paid, as set forth in Section 1.2(e) above,
or if the Administrative Agent is required at any time to return to the Borrower
or to a trustee, receiver, liquidator, custodian or other Person any portion of
any payment of any Reimbursement Obligation, each Participating Bank shall, not
later than the Business Day it receives a certificate in the form of Exhibit G
hereto from the Administrative Agent to such effect, if such certificate is
received before 1:00 p.m. (Chicago time), or not later than the following
Business Day, if such certificate is received after such time, pay to the
Administrative Agent an amount equal to such Participating Bank's Percentage of
such unpaid or recaptured Reimbursement Obligation, such payment to be made in
lawful money in the United States, in immediately available funds at the
Administrative Agent's principal office in Chicago, Illinois, together with
interest on such amount accrued from the date the related payment was made by
the Administrative Agent to the date of such payment by such Participating Bank
at a rate per annum equal to (i) from the date the related payment was made by
the Administrative Agent to the date two (2) Business Days after payment by such
Participating Bank is due hereunder, the Federal Funds Rate for each such day
and (ii) from the date two (2) Business Days after the date such payment is due
from such Participating Bank to the date such payment is made by such
Participating Bank, the Base Rate in effect for each such day. Each such
Participating Bank shall thereafter be entitled to receive its Percentage of
each payment received in respect of the relevant Reimbursement Obligation
-3-
<PAGE>
and of interest paid thereon, with the Administrative Agent retaining its
Percentage as a Bank hereunder.
The several obligations of the Participating Banks to the Administrative
Agent under this Section 1.2 shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any set-
off, counterclaim or defense to payment which any Participating Bank may have or
have had against the Borrower, the Administrative Agent, any other Bank or any
other Person whatsoever. Without limiting the generality of the foregoing, such
obligations shall not be affected by any Default or Event of Default or by any
reduction or termination of any Commitment of any Bank, and each payment by a
Participating Bank under this Section 1.2 shall be made without any offset,
abatement, withholding or reduction whatsoever. The Administrative Agent shall
be entitled to offset amounts received for the account of a Bank under this
Agreement against unpaid amounts due from such Bank to the Administrative Agent
hereunder (whether as fundings of participations, indemnities or otherwise), but
shall not be entitled to offset against amounts owed to the Administrative Agent
by any Bank arising outside this Agreement.
(g) OUTSTANDING AMOUNT OF LETTERS OF CREDIT. For all purposes of this
Agreement, Letters of Credit shall be deemed outstanding as of any time in an
amount equal to the aggregate undrawn amount then available thereunder plus all
unpaid Reimbursement Obligations then outstanding. For such purposes, the
undrawn amount available under a Letter of Credit shall be the maximum amount
which can be drawn thereunder under any circumstances and over any period of
time.
(h) INDEMNIFICATION. The Participating Banks shall, to the extent of
their respective Percentages, indemnify the Administrative Agent (to the extent
not reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the Administrative Agent's gross negligence or
willful misconduct) that the Administrative Agent may suffer or incur in
connection with any Letter of Credit. The obligations of the Participating
Banks under this Section 1.2(h) and all other parts of this Section 1.2 shall
survive termination of this Agreement and of all other L/C Documents.
SECTION 1.3. APPLICABLE INTEREST RATES.
(a) BASE RATE LOANS. Each Base Rate Loan made by a Bank shall bear
interest (computed on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed) on the unpaid principal amount thereof from the
date such Loan is made until maturity (whether by acceleration or otherwise) at
a rate per annum equal to the sum of the Applicable Margin PLUS the Base Rate
from time to time in effect, payable on the last day of the applicable Interest
Period and at maturity (whether by acceleration or otherwise).
"BASE RATE" means for any day the greater of:
-4-
<PAGE>
(i) the rate of interest announced by the Administrative Agent from
time to time as its prime commercial rate, or equivalent, as in effect on
such day, with any change in the Base Rate resulting from a change in said
prime commercial rate to be effective as of the date of the relevant change
in said prime commercial rate; and
(ii) the sum of (x) the rate per annum (rounded upward, if necessary,
to the nearest 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with member banks of the Federal
Reserve System arranged by Federal funds brokers on such day, as set forth
opposite the caption "FEDERAL FUND (EFFECTIVE)" in the daily statistical
release designated as "COMPOSITE 3:30 P.M. QUOTATIONS FOR U.S. GOVERNMENT
SECURITIES", or any successor publication, published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day, PROVIDED
THAT (i) if such day is not a Business Day, the rate for such day shall be
such rate on such transactions on the immediately preceding Business Day as
so published on the next succeeding Business Day, and (ii) if no such rate
is so published on any such next succeeding Business Day, the rate for such
day shall be the average of the rates quoted to the Agent by two or more
New York or Chicago Federal funds brokers on such day for such transactions
as determined by the Agent, PLUS (y) 1/2 of 1% (0.50%).
(b) EURODOLLAR LOANS. Each Eurodollar Loan made by a Bank shall bear
interest (computed on the basis of a year of 360 days and actual days elapsed)
on the unpaid principal amount thereof from the date such Loan is made until
maturity (whether by acceleration or otherwise) at a rate per annum equal to the
sum of the Applicable Margin PLUS the Adjusted LIBOR, payable on the last day of
the applicable Interest Period and at maturity (whether by acceleration or
otherwise), and, if the applicable Interest Period is longer than three months,
on each day occurring every three months after the date such Loan is made.
"ADJUSTED LIBOR" means, for any Borrowing of Eurodollar Loans, a rate per
annum determined in accordance with the following formula:
LIBOR
------------------------------------
Adjusted LIBOR = 100% - Eurodollar Reserve Percentage
"LIBOR" means, for each Interest Period, (a) the LIBOR Index Rate for such
Interest Period, if such rate is available, and (b) if the LIBOR Index Rate
cannot be determined, the arithmetic average of the rate of interest per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) at which deposits
in U.S. Dollars in immediately available funds are offered to the Administrative
Agent at 11:00 a.m. (London, England time) two Business Days before the
beginning of such Interest Period by at least two major banks in the London
interbank eurodollar market for a period equal to such Interest Period and in an
amount equal or comparable to the applicable Eurodollar Loan scheduled to be
outstanding from the Administrative Agent during such Interest Period. Each
determination of LIBOR made by the Administrative Agent shall be conclusive and
binding on the Borrower and the Banks absent manifest error.
-5-
<PAGE>
"LIBOR INDEX RATE" means, for any Interest Period, the rate per annum for
deposits in U.S. Dollars for a period equal to such Interest Period which
appears on the Telerate Page 3750 as of 11:00 a.m. (London, England time) on the
date two Business Days before the commencement of such Interest Period.
"TELERATE PAGE 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Banker's
Association Interest Settlement Rates for U.S. Dollar deposits).
"EURODOLLAR RESERVE PERCENTAGE" means, for any Borrowing of Eurodollar
Loans, the daily average for the applicable Interest Period of the maximum rate
at which reserves (including, without limitation, any supplemental, marginal and
emergency reserves) are imposed during such Interest Period by the Board of
Governors of the Federal Reserve System (or any successor) under Regulation D on
"EUROCURRENCY LIABILITIES", as defined in such Board's Regulation D (or in
respect of any other category of liabilities that includes deposits by reference
to which the interest rate on Eurodollar Loans is determined or any category of
extension of credit or other assets that include loans by non-United States
offices of any Bank to United States residents), subject to any amendments of
such reserve requirement by such Board or its successor, taking into account any
transitional adjustments thereto. For purposes of this definition, the
Eurodollar Loans shall be deemed to be "EUROCURRENCY LIABILITIES" as defined in
Regulation D without benefit or credit for any prorations, exemptions or offsets
under Regulation D.
(c) APPLICABLE MARGIN. With respect to Committed Loans and the facility
fee payable under Section 4.1 hereof, the "Applicable Margin" shall mean the
rate specified for such Obligation below, subject to adjustment as hereinafter
provided:
<TABLE>
<CAPTION>
Applicable Applicable
Margin Margin Applicable
When Following For Base Rate For Eurodollar Margin
Status Exists Loans Is: Loans Is: For Facility Fee Is:
<S> <C> <C> <C>
Level I Status 0% .200% .100%
Level II Status 0% .250% .125%
Level III Status 0% .300% .175%
Level IV Status 0% .450% .200%
Level V Status 0% .700% .300%
</TABLE>
-6-
<PAGE>
PROVIDED, HOWEVER, that all of the foregoing is subject to the following:
(i) changes in the Applicable Margin resulting from a change in the
S&P Rating or Moody's Rating shall become effective five (5) Business Days
after the Administrative Agent is notified of the relevant change by the
Borrower (the Borrower hereby agreeing to notify the Administrative Agent
of any such change promptly upon the same becoming effective) or any Bank;
(ii) if a Single Rating Status determined solely by reference to the
S&P Rating (the "S&P ONLY STATUS") is more than one status level apart from
the Single Rating Status then determined solely by reference to the Moody's
Rating (the "MOODY'S ONLY STATUS"), then, notwithstanding anything herein
to the contrary, the Applicable Margin shall be the average of the
Applicable Margins for, respectively, the S&P Only Status and the Moody's
Only Status, as reasonably determined by the Administrative Agent;
(iii) the initial Applicable Margin in effect on the date hereof
shall be the Applicable Margin for Level II Status; and
(iv) if and so long as any Event of Default has occurred and is
continuing hereunder, notwithstanding anything herein to the contrary, upon
notice to the Borrower by the Administrative Agent at the request of the
Required Banks, the Applicable Margin shall be the Applicable Margin for
Level V Status.
(d) RATE DETERMINATIONS. The Administrative Agent shall determine each
interest rate applicable to the Committed Loans and its determination shall be
conclusive and binding except in the case of manifest error or willful
misconduct.
SECTION 1.4. MINIMUM BORROWING AMOUNT. Each Borrowing of Eurodollar
Loans shall be in an amount not less than $10,000,000, or any larger amount that
is an integral multiple of $1,000,000. Each Borrowing of Base Rate Loans shall
be in an amount not less than $5,000,000, or any larger amount that is an
integral multiple of $1,000,000.
SECTION 1.5. MANNER OF BORROWING COMMITTED LOANS.
(a) NOTICE TO THE ADMINISTRATIVE AGENT. In order to borrow any Committed
Loans, the Borrower shall give telephonic or telecopy notice to the
Administrative Agent (which notice shall be irrevocable once given and, if by
telephone, shall be promptly confirmed in writing) by no later than
(i) 11:00 a.m. (Chicago time) on the date at least three (3) Business Days prior
to the date of each requested Borrowing of Eurodollar Loans and (ii) 11:00 a.m.
(Chicago time) on the date of any requested Borrowing of Base Rate Loans. Each
such notice shall specify the date of the requested Borrowing (which shall be a
Business Day), the amount of the requested Borrowing, the type of Loans to
comprise such Borrowing, and, if such Borrowing is to be comprised of Eurodollar
Loans, the Interest Period applicable thereto. The Borrower agrees that the
Administrative Agent may rely on any such telephonic or telecopy notice given by
any person who identifies himself or herself
-7-
<PAGE>
as being an Authorized Representative of the Borrower without the necessity of
independent investigation and, in the event any telephonic notice conflicts with
the written confirmation, such telephonic notice shall govern if the
Administrative Agent has acted in reliance thereon.
(b) NOTICE TO THE BANKS. The Administrative Agent shall give prompt
telephonic or telecopy notice to each Bank of any notice from the Borrower
received pursuant to Section 1.5(a) above and, if such notice requests the Banks
to make Eurodollar Loans, the Administrative Agent shall give notice to the
Borrower and each of the Banks by like means of the interest rate applicable
thereto promptly after the Administrative Agent has made such determination.
(c) BORROWER'S FAILURE TO NOTIFY. In the event the Borrower fails to give
notice pursuant to Section 1.5(a) above of the reborrowing of the principal
amount of any maturing Borrowing of Committed Loans and has not notified the
Administrative Agent by 11:00 a.m. (Chicago time) on the day such Borrowing
matures that it intends to repay such Borrowing, the Borrower shall be deemed to
have requested a Borrowing of Base Rate Loans on such day in the amount of the
maturing Borrowing of Committed Loans, subject to Section 8.2 hereof. In the
event the Borrower fails to give notice pursuant to Section 1.5(a) above of a
Borrowing equal to the amount of a Reimbursement Obligation and has not notified
the Administrative Agent by 11:00 a.m. (Chicago time) on the day such
Reimbursement Obligation becomes due that it intends to repay such Reimbursement
Obligation through funds not borrowed under this Agreement, the Borrower shall
be deemed to have requested a Borrowing of Base Rate Loans on such day in the
amount of the Reimbursement Obligation then due, subject to Section 8 hereof,
which Borrowing shall be applied to pay the Reimbursement Obligation then due.
(d) DISBURSEMENT OF COMMITTED LOANS. Not later than 1:00 p.m. (Chicago
time) on the date of any Borrowing, each Bank shall make available its Committed
Loan in funds immediately available in Chicago, Illinois at the principal office
of the Administrative Agent, except to the extent such Borrowing is a
reborrowing, in whole or in part, of the principal amount of a maturing
Borrowing of Committed Loans (a "REFUNDING BORROWING"), in which case each Bank
shall record the Committed Loan made by it as a part of such Refunding Borrowing
on its books and records or on a schedule to its Committed Loan Note, as
provided in Section 3.5(c) hereof, and shall effect the repayment, in whole or
in part, as appropriate, of its maturing Committed Loan through the proceeds of
such new Committed Loan. Subject to Section 8 hereof, the Administrative Agent
shall make the proceeds of each non-Refunding Borrowing available to the
Borrower at the Administrative Agent's principal office in Chicago, Illinois.
SECTION 1.6. THE SWING LINE.
(a) SWING LOANS. Subject to all of the terms and conditions hereof,
Harris Bank agrees to make loans in U.S. Dollars to the Borrower under the Swing
Line ("SWING LOANS") which shall not in the aggregate at any time outstanding
exceed the lesser of (i) the Swing Line Commitment or (ii) the difference
between (x) the Commitments in effect at such time and (y) the Loans and
L/C Obligations outstanding at the time of computation. The Swing
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Line Commitment shall be available to the Borrower and may be availed of by the
Borrower from time to time and borrowings thereunder may be repaid and used
again during the period ending on the Termination Date. Without regard to the
face principal amount of the Swing Line Note, the actual principal amount at any
time outstanding and owing by the Borrower on account of the Swing Line Note on
any date during the period ending on the Termination Date shall be the sum of
all Swing Loans then or theretofor made thereon through such date less all
payments actually received thereon through such date.
(b) MINIMUM BORROWING AMOUNT. Each Swing Loan shall be in an amount not
less than $250,000.
(c) INTEREST ON SWING LOANS. Each Swing Loan shall bear interest
(computed on the basis of a year of 360 days and actual days elapsed) for the
Interest Period selected therefor at the Harris Bank's Quoted Rate for such
Interest Period, PROVIDED that if any Swing Loan is not paid when due (whether
by lapse of time, acceleration or otherwise) such Swing Loan shall bear interest
whether before or after judgment, until payment in full thereof through the end
of the Interest Period then applicable thereto at the rate set forth in
Section 3.4 hereof. Interest on each Swing Loan shall be due and payable on the
last day of each Interest Period applicable thereto, and interest after maturity
(whether by lapse of time, acceleration or otherwise) shall be due and payable
upon demand.
(d) REQUESTS FOR SWING LOANS. The Borrower shall give Harris Bank prior
notice (which may be written or oral) no later than 12:00 Noon (Chicago time) on
the date upon which the Borrower requests that any Swing Loan be made, of the
amount and date of such Swing Loan and the Interest Period selected therefor.
Within thirty (30) minutes after receiving such notice, Harris Bank shall quote
an interest rate determined in its discretion to the Borrower at which Harris
Bank would be willing to make such Swing Loan available to the Borrower for such
Interest Period (the rate so quoted for a given Interest Period being herein
referred to as "HARRIS BANK'S QUOTED RATE"). The Borrower acknowledges and
agrees that the interest rate quote is given for immediate and irrevocable
acceptance, and if the Borrower does not so immediately accept Harris Bank's
Quoted Rate for the full amount requested by the Borrower for such Swing Loan,
the Harris Bank's Quoted Rate shall be deemed immediately withdrawn and such
Swing Loan shall not be made. Subject to all of the terms and conditions
hereof, the proceeds of such Swing Loan shall be made available to the Borrower
on the date so requested at the offices of the Administrative Agent in Chicago,
Illinois. Anything contained in the foregoing to the contrary notwithstanding
(i) the obligation of Harris Bank to make Swing Loans shall be subject to all of
the terms and conditions of this Agreement and (ii) Harris Bank shall not be
obligated to make more than one Swing Loan during any one day.
(e) REFUNDING LOANS. In its sole and absolute discretion, Harris Bank may
at any time, on behalf of the Borrower (which hereby irrevocably authorizes
Harris Bank to act on its behalf for such purpose), request each Bank to make a
Committed Loan in an amount equal to such Bank's Percentage of the amount of the
Swing Loans outstanding on the date such notice is given. Unless any of the
conditions of Section 8.2 are not fulfilled on such
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date, each Bank shall make the proceeds of its requested Committed Loan
available to Harris Bank, in immediately available funds, at the principal
office of Harris Bank in Chicago, Illinois, before 12:00 Noon (Chicago time) on
the Business Day following the day such notice is given. The proceeds of such
Committed Loans shall be immediately applied to repay the outstanding Swing
Loans.
(f) PARTICIPATIONS. If any Bank refuses or otherwise fails to make a
Committed Loan when requested by Harris Bank pursuant to Section 1.6(e) above
(because the conditions in Section 8.2 are not satisfied or otherwise), such
Bank will, by the time and in the manner such Committed Loan was to have been
funded to Harris Bank, purchase from Harris Bank an undivided participating
interest in the outstanding Swing Loans in an amount equal to its Percentage of
the aggregate principal amount of Swing Loans that were to have been repaid with
such Committed Loans. Each Bank that so purchases a participation in a Swing
Loan shall thereafter be entitled to receive its Commitment Percentage of each
payment of principal received on the Swing Loan and of interest received thereon
accruing from the date such Bank funded to Harris Bank its participation in such
Loan. The obligation of the Banks to Harris Bank shall be absolute and
unconditional and shall not be affected or impaired by any Default or Event of
Default which may then be continuing hereunder.
SECTION 2. THE COMPETITIVE BID FACILITY.
SECTION 2.1. THE BID LOANS. The Borrower may request the Banks to offer
to make uncommitted loans (each a "BID LOAN" and collectively the "BID LOANS")
in the manner set forth in this Section 2 and in amounts such that (i) the
aggregate principal amount of all outstanding Loans (whether Committed Loans,
Swing Loans or Bid Loans) and L/C Obligations shall not exceed the Commitments
then in effect and (ii) no Bid Loan shall be made if, at the time thereof or
after giving effect thereto, the aggregate amount of Bid Loans would exceed the
Bid Loan Limit then in effect. The Banks may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no obligation to, accept
any such offers in the manner set forth in this Section 2. Each Bank may offer
to make Bid Loans in any amount (whether greater than, equal to, or less than
its Commitment), subject to the (a) limitations that (i) the aggregate principal
amount of all Loans (whether Committed Loans, Swing Loans or Bid Loans) and L/C
Obligations outstanding at any time shall not at any time exceed the Commitments
then in effect and (ii) no Bid Loan shall be made if, at the time thereof or
after giving effect thereto, the aggregate amount of Bid Loans would exceed the
Bid Loan Limit then in effect and (b) the other conditions of this Agreement.
Bid Loans may either bear interest at a stated rate per annum ("STATED RATE BID
LOANS") or at a margin above or below the applicable Adjusted LIBOR ("EURODOLLAR
BID LOANS"); PROVIDED that there may be no more than six (6) different Interest
Periods for both Stated Rate Bid Loans and Eurodollar Bid Loans outstanding at
the same time.
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SECTION 2.2. REQUESTS FOR BID LOANS.
(a) REQUESTS AND CONFIRMATIONS. In order to request a Borrowing of Bid
Loans (a "BID LOAN REQUEST"), the Borrower shall give telephonic notice to the
Administrative Agent no later than (i) in the case of a request for one or more
Eurodollar Bid Loans, 11:00 a.m. (Chicago time) on the date at least five (5)
Business Days before the proposed date of such borrowing, which must be a
Business Day (the "BORROWING DATE"), and (ii) in the case of a request for one
or more Stated Rate Bid Loans, 11:00 a.m. (Chicago time) on the date at least
one (1) Business Day before the proposed Borrowing Date, in each case followed
on the same day by a duly completed Bid Loan Request Confirmation, delivered by
telecopier or other means of facsimile communication, substantially in the form
of Exhibit C hereto or otherwise containing the information required by this
Section (a "BID LOAN REQUEST CONFIRMATION"), to be received by the
Administrative Agent no later than 11:30 a.m. (Chicago time) on such day. Bid
Loan Request Confirmations that do not conform substantially to the format of
Exhibit C or otherwise contain the information required by this Section 2.2 may
be rejected by the Administrative Agent, and the Administrative Agent shall give
telephonic notice to the Borrower of such rejection promptly after it determines
(which determination shall be conclusive) that the Bid Loan Request Confirmation
does not substantially conform to the format of Exhibit C or otherwise contain
the information required by this Section 2.2. Requests for Bid Loans shall in
each case refer to this Agreement and specify (i) the proposed Borrowing Date
(which must be a Business Day), (ii) the aggregate principal amount thereof
(which shall not be less than $5,000,000 and shall be an integral multiple of
$1,000,000, except as provided in Section 2.4(ii) hereof) and (iii) up to three
(3) Interest Periods with respect to the entire amount specified in such Bid
Loan Request (and, if so desired by the Borrower, specifying the maximum amount
the Borrower would borrow for any specific Interest Period), which in the case
of Stated Rate Bid Loans shall be 1 to 180 days after the Borrowing Date and in
the case of Eurodollar Bid Loans shall be 1, 2, 3, 4, 5, or 6 months after the
Borrowing Date, but with no maturity to extend beyond the Termination Date.
(b) INVITATION TO BID. Upon receipt by the Administrative Agent of a Bid
Loan Request Confirmation that conforms substantially to the format of Exhibit C
hereto or otherwise contains the information required by this Section 2.2, the
Administrative Agent shall, by telephone (no later than 1:00 p.m. (Chicago time)
on the same day the Administrative Agent receives a Bid Loan Request
Confirmation), promptly confirmed by a telecopy or other form of facsimile
communication in the form of Exhibit D hereto, invite each Bank to bid, on the
terms and conditions of this Agreement, to make Bid Loans pursuant to the Bid
Loan Request.
(c) BIDS. Each Bank may, in its sole discretion, offer to make a Bid Loan
or Loans (a "BID") to the Borrower responsive to the Bid Loan Request. Each Bid
by a Bank must be received by the Administrative Agent by telephone not later
than (i) 9:00 a.m. (Chicago time) on the proposed Borrowing Date in the case of
a Bid for a Stated Rate Loan and (ii) 11:00 a.m. (Chicago time) four (4)
Business Days prior to the proposed Borrowing Date in the case of a Bid for a
Eurodollar Loan, in each case promptly confirmed in writing by a duly completed
Confirmation of Bid delivered by telecopier or other means of
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facsimile communication substantially in the form of Exhibit E hereto or
otherwise containing the information required by this subsection (c) (a
"CONFIRMATION OF BID"), to be received by the Administrative Agent on the same
day; PROVIDED, HOWEVER, that any Bid made by the Administrative Agent must be
made by telephone to the Borrower by no later than fifteen minutes prior to the
time that Bids from the other Banks are required to be received. Each Bid and
each Confirmation of Bid shall refer to this Agreement and specify (i) the
principal amount (which shall not be less than $5,000,000 and shall be an
integral multiple of $1,000,000) of each Bid Loan that the Bank is willing to
make to the Borrower and the type of Bid Loan (i.e., Stated Rate Bid Loan or
Eurodollar Bid Loan), (ii) the interest rate (which shall be computed on the
basis of a 360 day year and actual days elapsed for a period equal to the
Interest Period applicable thereto) or spread above or below the applicable
Adjusted LIBOR, in each case at which the Bank is prepared to make each Bid Loan
and (iii) the Interest Period applicable to each such offered Bid Loan. The
Administrative Agent shall reject any Bid if such Bid (i) does not specify all
of the information specified in the immediately preceding sentence, (ii)
contains any qualifying, conditional, or similar language, (iii) proposes terms
other than or in addition to those set forth in the Bid Loan Request to which it
responds, or (iv) is received by the Administrative Agent later than the time
required for such Bid Loan. Any Bid submitted by a Bank pursuant to this
Section 2.2 shall be irrevocable and shall be promptly confirmed by a telecopy
or other form of facsimile communication in the form of Exhibit E; PROVIDED THAT
in all events the telephone Bid received by the Administrative Agent shall be
binding on the relevant Bank and shall not be altered, modified, or in any other
manner affected by any inconsistent terms contained in, or terms missing from,
the Bank's Confirmation of Bid. Each offer contained in a Bid to make a Bid
Loan in a certain amount, at a certain interest rate, and for a certain Interest
Period is referred to herein as an "OFFER".
SECTION 2.3 NOTICE OF BIDS; ADVICE OF RATE. The Administrative Agent
shall give telephonic notice to the Borrower of the number of Bids made, the
interest rate(s) and Interest Period(s) applicable to each Bid, the maximum
principal amount bid at each interest rate for each Interest Period, and the
identity of the Bank making such Bid, such notice to be given by (i) 10:00 a.m.
(Chicago time) on the Borrowing Date in the case of Bid Loan Requests for Stated
Rate Bid Loans or (ii) 1:00 p.m. (Chicago time) four (4) Business Days before
the proposed Borrowing Date in the case of Bid Loan Requests for Eurodollar Bid
Loans.
SECTION 2.4. ACCEPTANCE OR REJECTION OF BIDS. The Borrower may in its
sole and absolute discretion, subject only to the provisions of this
Section 2.4, irrevocably accept or reject, in whole or in part, any Offer
contained in a Bid. The Borrower shall give telephonic notice to the
Administrative Agent of whether and to what extent it has decided to accept or
reject any or all of the Offers contained in the Bids made in response to a Bid
Loan Request to be received by the Administrative Agent by no later than
10:30 a.m. (Chicago time) (i) on the proposed Borrowing Date, in the case of
Stated Rate Bid Loans or (ii) three (3) Business Days before the proposed
Borrowing Date, in the case of Eurodollar Bid Loans, which notice shall be
promptly confirmed by a telecopy or other form of facsimile communication;
PROVIDED, HOWEVER, that in the event any Offers are accepted (i) the Borrower
shall accept Offers for any of the Interest Periods specified by the Borrower in
its
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Bid Loan Request Confirmation solely on the basis of ascending interest rates or
spreads, as the case may be, for each such Interest Period, (ii) if the Borrower
accepts an Offer for a Bid Loan at a particular interest rate for a particular
Interest Period but declines to borrow, or is in such event restricted by any
other condition hereof from borrowing, the maximum principal amount of Bid Loans
in respect of which Offers at such particular interest rate for such particular
Interest Period have been made, then the Borrower shall accept a PRO RATA
portion of each such Offer at such rate and for such Interest Period, based as
nearly as possible on the ratio of the maximum aggregate principal amounts of
Bid Loans for which each such Offer was made by each Bank (PROVIDED THAT, if the
available principal amount of Bid Loans to be so allocated is not sufficient to
enable Bid Loans to be so allocated to each relevant Bank in integral multiples
of $1,000,000, then the Administrative Agent may round allocations up or down in
integral multiples not less than $500,000 as it shall deem appropriate), (iii)
the aggregate principal amount of all Offers accepted by the Borrower shall not
exceed the maximum amount contained in the related Bid Loan Request
Confirmation, (iv) no Offer of a Bid Loan shall be accepted in a principal
amount less than $5,000,000 and thereafter in integral multiples of $1,000,000,
except as provided in the immediately preceding clause (ii) and (v) no offer of
a Bid Loan shall be accepted if, at the time thereof or after giving effect
thereto, (x) the aggregate principal amount of all outstanding Loans (whether
Committed Loans, Swing Loans or Bid Loans) and L/C Obligations would exceed the
Commitments then in effect or (y) the aggregate amount of Bid Loans would exceed
the Bid Loan Limit then in effect. Any telephone notice given by the Borrower
pursuant to this Section 2.4 shall be irrevocable and shall not be altered,
modified, or in any other manner affected by any inconsistent terms contained
in, or terms missing from, any written confirmation of such notice.
SECTION 2.5. NOTICE OF ACCEPTANCE OR REJECTION OF BIDS.
(a) NOTICE TO BANKS MAKING BIDS. The Administrative Agent shall give
telephonic notice to each Bank whether any of the Offers contained in its Bid
has been accepted (and if so, in what amount, at what interest rate or spread,
as applicable, and for what Interest Period) no later than 11:00 a.m. (Chicago
time) (i) on the proposed Borrowing Date in the case of Stated Rate Bid Loans
and (ii) three (3) Business Days before the proposed Borrowing Date in the case
of Eurodollar Bid Loans, and each successful bidder will thereupon become bound,
subject to Section 8 and the other applicable conditions hereof, to make the Bid
Loan(s) in respect of which its Bid has been accepted. As soon as practicable
thereafter the Administrative Agent shall send written notice substantially in
the form of Exhibit F hereto to each such successful bidder; PROVIDED, HOWEVER,
that failure to give such notice shall not affect the obligation of such
successful bidder to disburse its Bid Loans as herein required.
(b) DISBURSEMENT OF BID LOANS. Not later than 12:00 noon (Chicago time)
on the Borrowing Date for each Borrowing of a Bid Loan(s), each Bank bound to
make a Bid Loan(s) in accordance with Section 2.5(a) shall make available to the
Administrative Agent the principal amount of each such Bid Loan in immediately
available funds at the Administrative Agent's principal office in Chicago,
Illinois. The Administrative Agent shall
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promptly thereafter make available to the Borrower like funds as received from
each Bank, at such office of the Administrative Agent in Chicago, Illinois.
(c) NOTICE TO THE BANKS. As soon as practicable after each Borrowing Date
for Bid Loans, the Administrative Agent shall notify each Bank of the aggregate
amount of Bid Loans advanced pursuant to a Bid Loan Request on such Borrowing
Date, the Interest Period(s) therefor, and the lowest and highest interest rates
or spreads, as applicable, at which Bid Loans were made for each Interest
Period.
SECTION 2.6. INTEREST ON BID LOANS. The Borrower shall pay interest on
the unpaid principal amount of each Stated Rate Bid Loan from the applicable
Borrowing Date to the maturity thereof at the rate of interest applicable to
such Stated Rate Bid Loan as determined pursuant to the above provisions
(calculated on the basis of a 360 day year and the actual number of days
elapsed) payable on the last day of the Interest Period applicable to such
Stated Rate Bid Loan and at maturity (whether by acceleration or otherwise),
and, if the applicable Interest Period is longer than 90 days, on each day
occurring every 90 days after the date such Loan is made. Each Eurodollar Bid
Loan made by a Bank shall bear interest, which interest shall be payable, as
provided in Section 1.3(b) hereof.
SECTION 2.7. TELEPHONIC NOTICE. Each Bank's telephonic notice to the
Administrative Agent of its Bid pursuant to Section 2.2(c), and the Borrower's
telephonic acceptance of any Offer contained in a Bid pursuant to Section 2.4,
shall be irrevocable and binding on such Bank and the Borrower and shall not be
altered, modified, or in any other manner affected by any inconsistent terms
contained in, or missing from, any telecopy or other confirmation of such
telephonic notice. It is understood and agreed by the parties hereto that the
Administrative Agent shall be entitled to act, or to fail to act, hereunder in
reliance on its records of any telephonic notices provided for herein and that
the Administrative Agent shall not incur any liability to any Person in so doing
if its records conflict with any telecopy or other confirmation of a telephone
notice or otherwise, provided that the Administrative Agent has acted, or failed
to act, in good faith.
SECTION 3. GENERAL PROVISIONS APPLICABLE TO ALL LOANS.
SECTION 3.1. INTEREST PERIODS. As provided in Section 1.5 hereof in the
case of Committed Loans, in Section 1.6(d) hereof in the case of Swing Loans and
in Section 2.2 hereof in the case of Bid Loans, at the time of each request for
the Borrowing of Loans hereunder, the Borrower shall select an Interest Period
applicable to such Loans from among the available options. The term "INTEREST
PERIOD" means the period commencing on the date a Borrowing of Loans is made and
ending, (a) in the case of Base Rate Loans, on the last day of the calendar
quarter in which such Loan is made (I.E. the first to occur of March 31, June
30, September 30, and December 31 following the date such Borrowing is made);
(b) in the case of Eurodollar Loans, the date, as the Borrower may select, 1, 2,
3 or 6 months thereafter; (c) in the case of Stated Rate Bid Loans, on the date,
as the Borrower may select, 1 to 180 days thereafter; (d) in the case of
Eurodollar Bid Loans, on the date, as the Borrower may select, 1, 2, 3, 4, 5, or
6 months thereafter; and (e) in the case of Swing
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Loans, on the date, as the Borrower may select, 1-7 days thereafter; PROVIDED,
HOWEVER, that:
(a) any Interest Period for a Borrowing of Base Rate Loans commencing
less than 90 days before the Termination Date shall end on the Termination
Date;
(b) with respect to any Borrowing of Fixed Rate Loans, the Borrower
may not select an Interest Period that extends beyond the Termination Date;
(c) whenever the last day of any Interest Period would otherwise be a
day that is not a Business Day, the last day of such Interest Period shall
be extended to the next succeeding Business Day, PROVIDED THAT, in the case
of an Interest Period for a Borrowing of Eurodollar Loans or Eurodollar Bid
Loans, if such extension would cause the last day of such Interest Period
to occur in the following calendar month, the last day of such Interest
Period shall be the immediately preceding Business Day;
(d) for purposes of determining the Interest Period for a Borrowing
of Eurodollar Loans or Eurodollar Bid Loans, a month means a period
starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month; PROVIDED, HOWEVER, that if
there is no numerically corresponding day in the month in which such an
Interest Period is to end or if such an Interest Period begins on the last
Business Day of a calendar month, then such Interest Period shall end on
the last Business Day of the calendar month in which such Interest Period
is to end; and
(e) prior to February 8, 1997, (i) neither any Eurodollar Loan nor
any Eurodollar Bid Loan shall have an Interest Period in excess of one
month and (ii) no Stated Rate Bid Loan shall have an Interest Period in
excess of 30 days.
SECTION 3.2. MATURITY OF LOANS. Each Loan shall mature and become due
and payable by the Borrower on the last day of the Interest Period applicable
thereto.
SECTION 3.3. VOLUNTARY PREPAYMENTS. (a) COMMITTED LOANS. The Borrower
shall have the privilege of prepaying without premium or penalty any Borrowing
of Base Rate Loans in whole or in part (but, if in part, then in an amount not
less than $1,000,000 and in integral multiples of $1,000,000 and in an amount
such that the minimum amount required for a Borrowing of Base Rate Loans
pursuant to Section 1.4 hereof remains outstanding) at any time upon prior
notice to the Administrative Agent (which shall advise each Bank thereof
promptly thereafter), such prepayment to be made by the payment of the principal
amount to be prepaid and accrued interest thereon to the date fixed for
prepayment. The Borrower may prepay any Borrowing of Eurodollar Loans in whole
or in part (but, if in part, then in an amount not less than $1,000,000 and in
integral multiples of $1,000,000 and in an amount such that the minimum amount
required for a Borrowing of Eurodollar Loans pursuant to Section 1.4 hereof
remains outstanding) at any time upon one (1) Business Day prior notice to the
Administrative Agent (which shall advise each Bank thereof promptly thereafter),
such prepayment to be made by the payment of the principal amount to be
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prepaid and accrued interest thereon to the date fixed for prepayment together
with any compensation required by Section 3.8 hereof.
(b) FIXED RATE LOANS. The Borrower may not voluntarily prepay any Bid
Loan or any Swing Loan in each case before its maturity.
(c) REBORROWINGS. Any amount paid or prepaid before the Termination Date
may, subject to the terms and conditions of this Agreement, be borrowed, repaid
and borrowed again.
SECTION 3.4. DEFAULT RATE. If any payment of principal on any Loan is
not made when due (whether by acceleration or otherwise), such Loan shall bear
interest (computed on the basis of a year of 360 days and actual days elapsed
or, if based on the Base Rate, on the basis of a year of 365 or 366 days, as
applicable, and the actual number of days elapsed) from the date such payment
was due until paid in full, payable on demand, at a rate per annum equal to:
(a) with respect to any Base Rate Loan, the sum of two percent (2%)
PLUS the Base Rate from time to time in effect PLUS the Applicable Margin;
and
(b) with respect to any Fixed Rate Loan, the sum of two percent (2%)
PLUS the rate of interest in effect thereon at the time of such default
(including the effect of any increase to Level V Status as a result of such
default) until the end of the Interest Period applicable thereto and,
thereafter, at a rate per annum equal to the sum of two percent (2%) PLUS
the Base Rate from time to time in effect PLUS the Applicable Margin for
Base Rate Loans.
SECTION 3.5. THE NOTES. (a) All Committed Loans made to the Borrower by
a Bank shall be evidenced by a promissory note of the Borrower (individually a
"COMMITTED LOAN NOTE" and collectively the "COMMITTED LOAN NOTES"), each such
Committed Loan Note to be payable to the order of the applicable Bank in the
principal amount of its Commitment and otherwise in the form of Exhibit A-1
hereto.
(b) All Swing Loans made to the Borrower by Harris Bank shall be evidenced
by a promissory note of the Borrower (the "SWING NOTE"), the Swing Note to be
payable to Harris Bank's order in the principal amount of its Swing Line
Commitment and otherwise in the form of Exhibit A-2 hereto.
(c) All Bid Loans made to the Borrower by a Bank shall be evidenced by a
promissory note of the Borrower in the form of Exhibit B hereto (individually a
"BID NOTE" and collectively the "BID NOTES"), each such Bid Note to be in the
form of Exhibit B hereto.
(d) Each Bank shall record on its books and records or on a schedule to
the appropriate Note the amount of each Loan made by it to the Borrower, the
Interest Period thereof, all payments of principal and interest and the
principal balance from time to time outstanding thereon, the type of such Loan,
and, in respect of any Fixed Rate Loan, the
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Interest Period and the interest rate applicable thereto; PROVIDED THAT prior to
the transfer of any Note such information relating to any outstanding Loans made
by such Bank shall be recorded on the back of such Note or on a schedule to such
Note. The record thereof, whether shown on such books and records of a Bank or
on a schedule to any Note, shall be PRIMA FACIE evidence as to all such matters;
PROVIDED, HOWEVER, that the failure of any Bank to record any of the foregoing
or any error in any such record shall not limit or otherwise affect the
obligation of the Borrower to repay all Loans made to it hereunder together with
accrued interest thereon. At the request of any Bank and upon such Bank
tendering to the Borrower the Note to be replaced, the Borrower shall furnish a
new Note to such Bank to replace any outstanding Note (which will be exchanged
for such new Note) and at such time the first notation appearing on a schedule
on the reverse side of, or attached to, such new Note shall set forth the
aggregate unpaid principal amount of all Loans, if any, then outstanding
thereon.
SECTION 3.6. COMMITMENT REDUCTIONS AND TERMINATIONS. (a) VOLUNTARY. The
Borrower shall have the right at any time and from time to time, upon five (5)
Business Days' prior written notice to the Administrative Agent, to terminate
without premium or penalty, in whole or in part, the Commitments, any partial
termination to be in an amount not less than $10,000,000 or any larger amount
that is an integral multiple of $1,000,000, and to reduce ratably each Bank's
Commitment; PROVIDED THAT the Commitments may not be reduced to an amount less
than the aggregate principal amount of Loans and L/C Obligations then
outstanding. Any reduction of the Commitments to a level below the Swing Line
Commitment shall effect a concurrent reduction in the Swing Line Commitment so
as to equal the total Commitments after giving effect to such reduction.
(b) UPON INCURRENCE OF INDEBTEDNESS OR SECURITIZATION. On the date of
receipt thereof by the Borrower or any of its Subsidiaries, the Commitments
shall reduce by an amount equal to (i) 100% of the gross proceeds (net of
reasonable costs directly incurred and payable as a result thereof) of the
incurrence after the date hereof of indebtedness for borrowed money by the
Borrower or any Subsidiary (other than (x) the Loans hereunder and (y) other
such indebtedness for borrowed money to the extent the aggregate amount of such
other indebtedness incurred in any one calendar year does not exceed $5,000,000
and incurred after the date hereof on a cumulative basis does not exceed
$10,000,000) or (ii) 50% of the gross proceeds (net of costs directly incurred
and payable as a result thereof) of the sale in a securitization or similar
transaction after the date hereof of accounts receivable by the Borrower or any
Subsidiary; PROVIDED, HOWEVER, that the Commitments shall not be reduced below
$350,000,000 as a result of this clause (b).
(c) UNUSED CREDIT. On April 8, 1997, the Commitments shall reduce by an
amount equal to the lesser of (i) $300,000,000 or (ii) the sum of:
(a) the principal amount then outstanding (or if a revolving credit
facility, then the maximum principal amount of credit then available) on
(i) the Existing Super Food Debt and (ii) the Existing NF Term Debt; plus
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(b) the excess (if any) of (i) $180,000,000 over (ii) the aggregate
cumulative principal amount of Acquisition Credit (excluding Refunding
Borrowings) extended on or prior to such date.
(d) SCHEDULED MANDATORY REDUCTION. On December 31, 1998, the Commitments
shall be reduced to $400,000,000 in the aggregate, unless sooner terminated or
reduced in part to such level pursuant to the above provisions of this
Section 3.6.
(e) TERMINATION DATE. Notwithstanding anything herein to the contrary, on
the Termination Date, the Commitments and the Swing Line Commitment shall in
each case be reduced to $0.
(f) EFFECT OF TERMINATION OR REDUCTION. Any termination or reduction of
the Commitments or the Swing Line Commitment pursuant to this Section 3.6 may
not be reinstated. Each such partial termination or reduction of the
Commitments shall reduce ratably each Bank's Commitment.
SECTION 3.7. MANDATORY PREPAYMENTS. (a) OUT OF PROCEEDS OF
INDEBTEDNESS OR SECURITIZATION. On the date of receipt thereof by the Borrower
or any of its Subsidiaries, the Borrower shall prepay the Loans and (in the
manner contemplated by Section 10.4 hereof) the L/C Obligations by an amount
equal to 100% of the gross proceeds (net of reasonable costs directly incurred
and payable as a result thereof) of (i) the incurrence after the date hereof of
indebtedness for borrowed money by the Borrower or any Subsidiary (other than
(x) the Loans hereunder and (y) other such indebtedness for borrowed money to
the extent the aggregate amount of such other indebtedness incurred in any one
calendar year does not exceed $5,000,000 and incurred after the date hereof on a
cumulative basis does not exceed $10,000,000) or (ii) the sale in any
securitization or similar transaction after the date hereof of accounts
receivable by the Borrower or any Subsidiary. Notwithstanding anything in this
Section 3.7(a) to the contrary, the Borrower shall not be required to make any
prepayment of any Fixed Rate Loan pursuant to this Section 3.7(a) until the last
day of the Interest Period with respect thereto SO LONG AS an amount equal to
the principal amount of such Fixed Rate Loan is deposited by the Borrower in a
segregated cash collateral account with the Administrative Agent for the ratable
benefit of the Banks to be held in such account on terms reasonably satisfactory
to the Administrative Agent. The amount held on deposit in such account shall
if and when requested by the Borrower be invested in direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America with a remaining maturity of one
year or less, or other investments mutually satisfactory to the Borrower and the
Administrative Agent. On the last day of such Interest Period, the amount held
in such account shall be applied so as to make such prepayment, and except
during the continuance of any Event of Default, any balance remaining on deposit
in such account after such application shall be remitted to the Borrower.
(b) UPON CHANGE OF CONTROL. If, within thirty (30) days after receiving
notice under Section 9.5 of a Change of Control, the Required Banks notify the
Borrower that they require prepayment of the Notes, on the date set forth in
such notice (which date shall be no
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earlier than (x) five (5) days after such notice is given or (y) the day on
which the Borrower repays any other Debt before its original scheduled due date,
whichever day is earlier), the Borrower shall pay in full all Obligations then
outstanding, including the prepayment of L/C Obligations in the manner
contemplated by Section 10.4 hereof, and the Commitments and Swing Line
Commitment shall terminate in full.
(c) UPON TERMINATION OF OR REDUCTION IN COMMITMENTS. Except to the extent
the second sentence of Section 3.7(a) provides otherwise, the Borrower shall, on
the date the Commitments or Swing Line Commitment are terminated or reduced in
whole or in part pursuant to Section 3.6 above, prepay the Notes by the amount,
if any, necessary to reduce the aggregate principal amount of Loans and
L/C Obligations to the amount to which the Commitments or Swing Line Commitment
in each case have been reduced, such prepayment to be accompanied by accrued
interest thereon to the date of prepayment together with any compensation due
the Banks under Section 3.8 hereof (with any prepayment of L/C Obligations to be
made in the manner contemplated by Section 10.4 hereof).
SECTION 3.8. FUNDING INDEMNITY. In the event any Bank shall incur any
loss, cost or expense (including, without limitation, any loss of profit, and
any loss, cost or expense incurred by reason of the liquidation or re-employment
of deposits or other funds acquired by such Bank to fund or maintain any Fixed
Rate Loan or the relending or reinvesting of such deposits or amounts paid or
prepaid to such Bank) as a result of:
(a) any payment or prepayment of a Fixed Rate Loan on a date other
than the last day of its Interest Period for any reason, whether before or
after default, and whether or not such payment is required by any
provisions of this Agreement, or
(b) any failure (because of a failure to meet the conditions of
Section 8 or otherwise) by the Borrower to borrow a Fixed Rate Loan on the
date specified in a notice given pursuant to Section 1.5, 1.6(d) or 2.4
hereof,
then, upon the demand of such Bank, the Borrower shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any Bank
makes such a claim for compensation, it shall provide to the Borrower, with a
copy to the Administrative Agent, a certificate executed by an officer of such
Bank setting forth the amount of such loss, cost or expense in reasonable detail
(including an explanation of the basis for and the computation of such loss,
cost or expense) and the amounts shown on such certificate if reasonably
calculated shall be conclusive.
SECTION 3.9. USE OF PROCEEDS. The proceeds of the Loans and Letters of
Credit shall only be used to (i) purchase of Super Food Shares tendered pursuant
to the Tender Offer and to pay Transaction Costs related to the Tender Offer
(each Loan and Letter of Credit, in each case to the extent used for such
purposes, being hereinafter referred to as "TENDER CREDIT") and (ii) make cash
payments in respect of the Super Food Shares which are converted into a right to
receive cash (including as a result of the exercise of appraisal rights) in
connection with the Merger and to pay Transaction Costs related to the Merger
(each Loan and Letter of Credit, in each case to the extent used for such
purposes, being
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hereinafter referred to as "MERGER CREDIT") and (iii) repay each and any issue
of the Existing Super Food Debt (each separate issue to the extent repaid, must
be repaid in full, not in part) and to pay Transaction Costs related to such
repayment (each Loan or Letter of Credit, in each case to the extent used for
such purposes, being hereinafter referred to as "SUPER FOOD DEBT REFINANCING
CREDIT") (the Tender Credit, Merger Credit and Super Food Debt Refinancing
Credit being hereinafter referred to collectively as "ACQUISITION CREDIT") and
(iv) repay each and any issue of the Existing NF Revolver Debt (each separate
issue to the extent repaid, must be repaid in full, not in part) and to pay
Transaction Costs related to such repayment (each Loan or Letter of Credit, in
each case to the extent used for such purposes, being hereinafter referred to as
"NF REVOLVER REFINANCING CREDIT") and (v) repay each and any issue of the
Existing NF Term Debt (each separate issue to the extent repaid, must be repaid
in full, not in part) and to pay Transaction Costs related to such repayment
(each Loan or Letter of Credit, in each case to the extent used for such
purposes, being hereinafter referred to as "NF TERM REFINANCING CREDIT") (Super
Food Debt Refinancing Credit, NF Revolver Refinancing Credit and NF Term
Refinancing Credit being hereinafter referred to collectively as "REFINANCING
CREDIT") and (vi) to provide working capital for the Borrower and its
Subsidiaries (each Loan or Letter of Credit, in each case to the extent used for
such purposes, being hereinafter referred to as "WORKING CAPITAL CREDIT");
PROVIDED, HOWEVER, that not more than $240,000,000 in aggregate cumulative
principal amount of the Loans and Letters of Credit shall constitute Acquisition
Credit.
SECTION 4. FEES.
SECTION 4.1. FACILITY FEE. The Borrower shall pay to the Administrative
Agent for the ratable account of the Banks a facility fee at the rate equal to
the Applicable Margin (as then determined and computed) on the average daily
amount of the Commitments hereunder (whether used or unused), payable in arrears
on the last day of each March, June, September, and December, commencing with
the first of such dates after the date hereof, and on the Termination Date.
SECTION 4.2. LETTER OF CREDIT FEES. On the date of issuance or
extension, or increase in the amount, of any standby Letter of Credit pursuant
to Section 1.2 hereof, the Borrower shall pay to the Administrative Agent for
its own account an issuance fee equal to 1/10 of 1% (0.10%) of the face amount
of (or of the increase in the face amount of) such standby Letter of Credit. In
addition, the Borrower shall pay to the Administrative Agent for its own account
(i) the Administrative Agent's standard issuance fee for each commercial Letter
of Credit and (ii) the Administrative Agent's standard drawing, negotiation,
amendment, and other administrative fees for each Letter of Credit (such
standard fees referred to in the preceding clauses (i) and (ii) may be
established by the Administrative Agent from time to time). Quarterly in
arrears, on the last day of each calendar quarter, commencing on the first of
such dates after the date hereof, the Borrower shall pay to the Administrative
Agent, for the ratable benefit of the Banks in accordance with their
Percentages, a letter of credit fee at a rate per annum equal to the Applicable
Margin for Eurodollar Loans in effect during each day of such quarter applied to
the daily average face amount of Letters of Credit outstanding during such
quarter.
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SECTION 4.3. BID LOAN FEE. The Borrower shall pay to the Administrative
Agent for its own account an administrative fee for each Bid Loan Request by the
Borrower, such fee to be in the amount agreed to in a letter exchanged between
the Borrower and the Agents dated October 4, 1996 and to be payable no later
than 3:00 p.m. (Chicago time) on the date each such Bid Loan Request is received
and to be deemed fully earned whether or not any Bid Loan is made pursuant to
such Bid Loan Request.
SECTION 4.4. AGENTS' FEES. The Borrower shall pay to the Agents the fees
agreed to in a letter exchanged between them dated October 4, 1996.
SECTION 4.5. FEE CALCULATIONS. All fees payable under Sections 4.1 and
4.2 hereof shall be computed on the basis of a year of 365 or 366 days, as
applicable, for the actual number of days elapsed.
SECTION 5. PLACE AND APPLICATION OF PAYMENTS.
SECTION 5.1. PLACE AND APPLICATION OF PAYMENTS. All payments of
principal of and interest on the Loans and the Reimbursement Obligations, and of
all other amounts payable by the Borrower under this Agreement, shall be made to
the Administrative Agent by no later than 12:00 noon (Chicago time) at the
principal office of the Administrative Agent in Chicago, Illinois (or such other
location in the State of Illinois as the Administrative Agent may designate to
the Borrower). Any payments received after such time shall be deemed to have
been received by the Administrative Agent on the next Business Day. All such
payments shall be made in U.S. Dollars, in immediately available funds at the
place of payment. All such payments shall be made, in all cases, without
set-off or counterclaim and, subject to Section 14.1 hereof, without reduction
for, and free from, any and all present or future taxes, levies, imposts,
duties, fees, charges, deductions, withholdings, restrictions or conditions of
any nature imposed by any government or any political subdivision or taxing
authority thereof (but excluding any taxes imposed or measured by the net income
of any Bank). The Administrative Agent will promptly thereafter (and in any
case before the close of business on the day the Administrative Agent receives
such funds, if timely received by the Administrative Agent) cause to be
distributed like funds relating to the payment of principal or interest on
Committed Loans or fees ratably to the Banks and like funds relating to the
payment of any other amount payable to any Bank to such Bank, in each case to be
applied in accordance with the terms of this Agreement. If the Administrative
Agent fails to distribute such payments to any Bank by such times, the
Administrative Agent shall pay to such Bank interest on the amount not paid in
respect of each day during the period commencing on the date such payment was
received by the Administrative Agent (or the following Business Day in the case
of payments received after 12:00 noon (Chicago time)) and ending on but
excluding the date the Administrative Agent pays such amount at a rate per annum
equal to the effective rate charged to the Administrative Agent for overnight
federal funds transactions with member banks of the federal reserve system for
each day as determined by the Administrative Agent (or in the case of a day
which is not a Business Day, then for the preceding day).
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Anything contained herein to the contrary notwithstanding, all payments and
collections received in respect of the indebtedness evidenced by the Notes and
Applications received, in each instance, by the Administrative Agent or any of
the Banks after the occurrence of an Event of Default shall be remitted to the
Administrative Agent and distributed as follows:
(a) first, to the payment of any reasonable outstanding costs and
expenses incurred by the Administrative Agent in protecting, preserving or
enforcing rights under this Agreement, the Notes and the Applications and
in any event including all reasonable costs and expenses of a character
which the Borrower has agreed to pay under Section 14.15 hereof (such funds
to be retained by the Administrative Agent for its own account unless it
has previously been reimbursed for such costs and expenses by the Banks, in
which event such amounts shall be remitted to the Banks to reimburse them
for payments theretofore made to the Administrative Agent);
(b) second, to the payment of any outstanding interest or other fees
or indemnification amounts due under the Notes, the Applications or this
Agreement other than for principal, ratably as among the Administrative
Agent and the Banks in accord with the amount of such interest and other
fees or amounts owing each;
(c) third, to the payment of the principal of the Notes, any
liabilities in respect of Reimbursement Obligations and to the
Administrative Agent to be held as collateral security for any undrawn
Letters of Credit (until the Administrative Agent is holding an amount of
cash equal to the then outstanding amount of all such Letters of Credit),
the aggregate amount paid to or held as collateral security for the Banks
to be allocated pro rata as among the Banks in accord with the then
respective aggregate unpaid principal balances of the Notes and the Letters
of Credit;
(d) fourth, to the Administrative Agent and the Banks ratably in
accord with the amounts of other Obligations owing to each of them (other
than those described above) unless and until all such indebtedness,
obligations and liabilities have been fully paid and satisfied; and
(e) fifth, to the Borrower or whoever may be lawfully entitled
thereto.
.
SECTION 6.1. DEFINITIONS. The following terms when used herein have the
following meanings:
"ACQUISITION" shall mean (x) the Tender Offer and (y) the Merger.
"ACQUISITION CREDIT" is defined in Section 3.9 hereof.
"ACQUISITION PERIOD" means the period commencing on the date of the initial
extension of Tender Credit and concluding with the Merger.
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"ADJUSTED LIBOR" is defined in Section 1.3(b) hereof.
"ADMINISTRATIVE AGENT" means Harris Trust and Savings Bank and any
successor pursuant to Section 12.8 hereof.
"AFFILIATE" shall mean any Person (i) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, the Borrower, (ii) which beneficially owns or holds 5% or more of
any class of the Voting Stock of the Borrower or (iii) 5% or more of the Voting
Stock (or in the case of a Person which is not a corporation, 5% or more of the
equity interest) of which is beneficially owned or held by the Borrower or a
Subsidiary. The term "CONTROL" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of Voting Stock, by contract or otherwise.
"AGENTS" mean the Administrative Agent and the Syndication Agents.
"APPLICABLE MARGIN" is defined in Section 1.3(c) hereof.
"APPLICATION" is defined in Section 1.2(d) hereof.
"AUTHORIZED REPRESENTATIVE" means those persons shown on the list of
officers provided by the Borrower pursuant to Section 8.1(d) hereof or on any
update of any such list provided by the Borrower to the Administrative Agent, or
any further or different officer(s) or employee(s) of the Borrower so named by
any Authorized Representative of the Borrower in a written notice to the
Administrative Agent.
"BANK" means each bank signatory hereto and its successors, and any
assignee of a Bank pursuant to Section 14.12 hereof.
"BASE RATE" is defined in Section 1.3(a) hereof.
"BASE RATE LOAN" means a Loan bearing interest at the rate specified in
Section 1.3(a) hereof.
"BID" is defined in Section 2.2(c) hereof.
"BID LOAN" is defined in Section 2.1 hereof.
"BID LOAN LIMIT" shall mean an amount (x) equal to the Commitments if and
so long as Level I Status, Level II Status or Level III Status exist, (y) equal
to 50% of the Commitments if and so long as Level IV Status exists and (z) equal
to $0 at all other times.
"BID LOAN REQUEST" is defined in Section 2.2(a) hereof.
"BID LOAN REQUEST CONFIRMATION" is defined in Section 2.2(a) hereof.
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"BID NOTE" is defined in Section 3.5(b) hereof.
"BORROWER" is defined in the introductory paragraph of this Agreement.
"BORROWING" means the total of Loans of a single type made by one or more
Banks on a single date and for a single Interest Period. Borrowings of
Committed Loans are made and maintained ratably from each of the Banks according
to their Percentages. Borrowings of Bid Loans are made from a Bank or Banks in
accordance with the procedures of Section 2 hereof. Borrowings of Swing Loans
are made from Harris Bank in accordance with the procedures of Section 1.6
hereof.
"BORROWING DATE" is defined in Section 2.2(a) hereof.
"BUSINESS DAY" means (a) any day other than a Saturday or Sunday on which
(x) banks are not authorized or required to close in Chicago, Illinois or New
York, New York and (y) the Federal Reserve Bank for such cities is generally
open for transaction of its business and (b) if the applicable Business Day
relates to the borrowing or payment of a Eurodollar Loan, any day satisfying the
criteria set forth in the immediately preceding clause (a) on which banks are
dealing in United States Dollar deposits in the interbank market in London,
England and Nassau, Bahamas.
"CAPITAL LEASE" means any lease of Property which in accordance with GAAP
is required to be capitalized on the balance sheet of the lessee.
"CAPITALIZED LEASE OBLIGATIONS" means, for any Person, the amount of such
Person's liabilities under Capitalized Leases determined at any date in
accordance with GAAP.
"CERCLA" is defined in Section 7.12(b) hereof.
"CHANGE OF CONTROL" means the occurrence of any of the following
circumstances:
(a) any Person or two or more Persons acting in concert acquire
beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the
Securities Exchange Act of 1934), directly or indirectly, of Securities of
the Borrower (or other Securities convertible into such Securities)
representing 25% or more of the combined voting power of all Securities of
the Borrower entitled to vote in the election of directors; or
(b) during any period of up to 12 consecutive months, whether
commencing before or after the date hereof, the membership of the Board of
Directors of the Borrower changes for any reason (other than by reason of
death, disability, or scheduled retirement) so that the majority of the
Board of Directors is made up of Persons who were not directors at the
beginning of such 12 month period.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"COMMITMENTS" is defined in Section 1.1 hereof.
"COMMITTED LOANS" in defined in Section 1.1 hereof.
"COMMITTED LOAN NOTE" is defined in Section 3.5(a) hereof.
"COMPLIANCE CERTIFICATE" means a certificate in the form of Exhibit H
hereto.
"CONFIRMATION OF BID" is defined in Section 2.2(c) hereof.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or net
loss) of the Borrower and its Subsidiaries for such period computed on a
consolidated basis in accordance with GAAP, but in any event excluding any
extraordinary profits and losses and also excluding any taxes on such profits
and any tax credits on account of such losses.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its Property is bound.
"CONTROLLED GROUP" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any Subsidiary, are treated as a single
employer under Section 414 of the Code.
"CREDIT EVENT" means the advancing of any Loan, including any Refunding
Borrowing, or the issuance of, or extension of the expiration date or increase
in the amount of, any Letter of Credit.
"CURRENT MATURITIES" shall mean, as applied to any Person as at any date of
determination, all payments of principal due under the terms of Indebtedness of
such Person within twelve calendar months after that date.
"CURRENT RATIO" means, at any time the same is to be determined, the
ratio of current assets of the Borrower and its Subsidiaries to current
liabilities of the Borrower and its Subsidiaries, all as determined on a
consolidated basis in accordance with GAAP consistently applied, but in any
event excluding the Loans from current liabilities for such purposes.
"DCGL" shall mean the Delaware General Corporation Law.
"DEBT" means, for any Person, any Indebtedness of such Person only of the
types described in clauses (i) through (v) of the definition of such term.
"DEBT REFINANCING CREDIT" is defined in Section 3.9 hereof.
"DEFAULT" means any event or condition the occurrence of which would, with
the passage of time or the giving of notice, or both, constitute an Event of
Default.
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"EBIT" means, for any period, Consolidated Net Income for such period PLUS
all amounts deducted in arriving at such Consolidated Net Income amount for such
period for Interest Expense and for federal, state and local income tax expense.
"EBITDA" means, for any period, Consolidated Net Income for such period
PLUS all amounts deducted in arriving at such Consolidated Net Income amount for
such period for Interest Expense and for federal, state and local income tax
expense and for amortization of intangibles and for depreciation of property,
plant and equipment in accordance with GAAP.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA AFFILIATE" shall mean with respect to any Person, any
(i) corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as such Person,
(ii) partnership or other trade or business (whether or not incorporated) under
common control (within the meaning of Section 414(c) of the Code) with such
Person, and (iii) member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as such Person, any corporation described
in clause (i) above or any partnership or trade or business described in
clause (ii) above.
"EURODOLLAR BID LOANS" is defined in Section 2.1 hereof.
"EURODOLLAR LOAN" means a Loan bearing interest at the rate specified in
Section 1.3(b) hereof.
"EURODOLLAR RESERVE PERCENTAGE" is defined in Section 1.3(b) hereof.
"EVENT OF DEFAULT" means any of the events or circumstances specified in
Section 10.1 hereof.
"EXISTING DEBT" means the Existing NF Revolver Debt, the Existing NF Term
Debt and the Existing Super Food Debt.
"EXISTING NF REVOLVER DEBT" means the revolving credit facilities currently
available to the Borrower and its Subsidiaries listed on Exhibit L attached
hereto.
"EXISTING NF TERM DEBT" means the term credit facilities currently
available to the Borrower and its Subsidiaries listed on Exhibit M attached
hereto.
"EXISTING SUPER FOOD DEBT" means the revolving and term credit facilities
currently available to Super Food and its subsidiaries listed on Exhibit N
attached hereto.
"FACILITY FEE" means the fee payable by the Borrower to the Banks under
Section 4.1 hereof.
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"FEDERAL FUNDS RATE" shall mean the Federal funds rate described in clause
(ii) (x) of the definition of Base Rate.
"FIXED RATE LOAN" means Eurodollar Loans, Swing Loans and Bid Loans.
"FOREIGN SUBSIDIARY" shall mean (i) each Subsidiary of the Borrower which
is organized under the laws of a jurisdiction other than the United States of
America or any State thereof and (ii) each Subsidiary of the Borrower of which a
majority of the revenues, earnings or total assets (determined on a consolidated
basis with that Subsidiary's subsidiaries) are located or derived from
operations outside of the United States of America.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Borrower and its Subsidiaries on a basis consistent
with the preparation of the Borrower's most recent financial statements
furnished to the Banks pursuant to Section 7.4(a) hereof.
"GUARANTOR" means each Subsidiary of the Borrower that executes and
delivers to the Administrative Agent a Subsidiary Guarantee Agreement in the
form of Exhibit I hereto along with the accompanying closing documents required
by Sections 8.1 or 9.1 hereof, as applicable.
"GUARANTY" by any Person means (a) all obligations (other than endorsements
in the ordinary course of business of negotiable instruments for deposit or
collection) of such Person to guarantee or otherwise indemnify in respect of, or
to purchase or otherwise acquire, or otherwise to assure a creditor against loss
in respect of, or to assure an obligee against failure to make payment in
respect of, Debt of others and (b) without duplication, all obligations of such
Person arising out of letters of credit (except to the extent such letters of
credit back up indebtedness that constitutes Debt of such Person). For the
purpose of all computations made under this Agreement, the amount of a Guaranty
in respect of any obligation shall be deemed to be equal to the maximum
aggregate amount of such obligation or, if the Guaranty is limited to less than
the full amount of such obligation, the maximum aggregate potential liability
under the terms of the Guaranty.
"HARRIS BANK" is defined in the introductory paragraph hereof.
"INDEBTEDNESS" means and includes, for any Person, all obligations of such
Person, without duplication, which are required by GAAP to be shown as
liabilities on its balance sheet, and in any event shall include all of the
following whether or not so shown as liabilities (i) obligations of such Person
for borrowed money, (ii) obligations of such Person representing the deferred
purchase price of property or services other than accounts payable arising in
the ordinary course of business on terms customary in the trade,
(iii) obligations of such Person evidenced by notes, acceptances, or other
instruments of such Person (iv) obligations, whether or not assumed, secured by
Liens or payable out of the proceeds or production from Property now or
hereafter owned or acquired by such Person, (v) Capitalized Lease Obligations of
such Person and (vi) obligations for which such Person is obligated pursuant to
a Guaranty.
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"INTEREST COVERAGE RATIO" means, for any period of four consecutive fiscal
quarters of the Borrower ending with the most recently completed such fiscal
quarter, the ratio of EBIT to Interest Expense for such period; PROVIDED,
HOWEVER, that
(a) the Interest Coverage Ratio as of the fiscal quarter of the
Borrower ending on or about March 22, 1997 shall mean the ratio of (x) the
quotient which results by dividing (i) EBIT for the fiscal quarter of the
Borrower then ended by (ii) 0.17 to (y) the quotient which results by
dividing (i) Interest Expense for the same one fiscal quarter by (ii) 0.25;
(b) the Interest Coverage Ratio as of the fiscal quarter of the
Borrower ending on or about June 14, 1997 shall mean the ratio of (x) the
quotient which results by dividing (i) EBIT for the two fiscal quarters of
the Borrower then ended by (ii) 0.43 to (y) the quotient which results by
dividing (i) Interest Expense for the same two fiscal quarters by (ii)
0.50; and
(c) the Interest Coverage Ratio as of the fiscal quarter of the
Borrower ending on or about October 4, 1997 shall mean the ratio of (x) the
quotient which results by dividing (i) EBIT for the three fiscal quarters
of the Borrower then ended by (ii) 0.75 to (y) the quotient which results
by dividing (i) Interest Expense for the same three fiscal quarters by (ii)
0.75.
"INTEREST EXPENSE" means, for any period, the sum of all interest charges
(including imputed interest charges with respect to Capitalized Lease
Obligations and all amortization of debt discount and expense) of the Borrower
and its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.
"INTEREST PERIOD" is defined in Section 3.1 hereof.
"INVESTMENTS" is defined in Section 9.14 hereof.
"L/C COMMITMENT" means $25,000,000.
"L/C DOCUMENTS" means the Letters of Credit, any draft or other document
presented in connection with a drawing thereunder, the Applications and this
Agreement.
"L/C OBLIGATIONS" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"LENDING OFFICE" is defined in Section 11.4 hereof.
"LETTER OF CREDIT" is defined in Section 1.2(a) hereof.
"LEVERAGE RATIO" means, as of any time the same is to be determined, the
ratio of Total Funded Debt at such time to EBITDA for the four most recently
completed fiscal quarters of the Borrower; PROVIDED, HOWEVER, that:
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(a) the Leverage Ratio as of the close of the fiscal quarter of the
Borrower ending on or about March 22, 1997 shall mean the ratio of (x)
Total Funded Debt at such time to (y) the quotient which results by
dividing (i) EBITDA for the fiscal quarter of the Borrower then ended by
(ii) 0.17;
(b) the Leverage Ratio as of the close of the fiscal quarter of the
Borrower ending on or about June 14, 1997 shall mean the ratio of (x) Total
Funded Debt at such time to (y) the quotient which results by dividing (i)
EBITDA for the two fiscal quarters of the Borrower then ended by (ii) 0.43;
and
(c) the Leverage Ratio as of the close of the fiscal quarter of the
Borrower ending on or about October 4, 1997 shall mean the ratio of (x)
Total Funded Debt at such time to (y) the quotient which results by
dividing (i) EBITDA for the three fiscal quarters of the Borrower then
ended by (ii) 0.75.
"LEVEL I STATUS" means the S&P Rating is at least BBB+ or higher OR the
Moody's Rating is at least Baa1 or higher.
"LEVEL II STATUS" means Level I Status does not exist, but the S&P Rating
is at least BBB or higher OR the Moody's Rating is at least Baa2 or higher.
"LEVEL III STATUS" means neither Level I Status nor Level II Status exists,
but the S&P Rating is at least BBB- or higher OR the Moody's Rating is at least
Baa3 or higher.
"LEVEL IV STATUS" means none of Level I Status, Level II Status, and
Level III Status exist, but the S&P Rating is at least BB+ OR the Moody's Rating
is at least Ba1 or higher.
"LEVEL V STATUS" means none of Level I Status, Level II Status, Level III
Status, and Level IV Status exist.
"LIBOR" is defined in Section 1.3(b) hereof.
"LIEN" means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, including, but not limited to,
the security interest or lien arising from a mortgage, encumbrance, pledge,
conditional sale, security agreement or trust receipt, or a lease, consignment
or bailment for security purposes. The term "LIEN" shall also include
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purposes of this definition, a Person shall be
deemed to be the owner of any Property which it has acquired or holds subject to
a conditional sale agreement, Capitalized Lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
for security purposes, and such retention of title shall constitute a "LIEN."
However, the term "LIEN" shall not include the sole act of selling accounts
receivable, whether with or without recourse, in a securitization or similar
financing transaction.
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"LOAN" means and includes Committed Loans, Swing Loans and Bid Loans, and
each of them singly, and the term "TYPE" of Loan refers to its status as a
Committed Loan, Swing Loan or Bid Loan or, if a Committed Loan, to its status as
a Base Rate Loan or Eurodollar Loan or, if a Bid Loan, to its status as a Stated
Rate Bid Loan or Eurodollar Bid Loan.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Applications, the
Letters of Credit, and each Subsidiary Guarantee Agreement delivered to the
Administrative Agent pursuant to Sections 8.1 or 9.1 hereof, as applicable.
"LONG-TERM DEBT" shall mean all Total Funded Debt having a final maturity
of one or more than one year from the date of origin thereof (or which is
renewable or extendible at the option of the obligor for a period or periods
more than one year from the date of origin), including all payments in respect
thereof that are required to be made within one year from the date of any
determination of Long-Term Debt.
"MATERIAL PLAN" is defined in Section 10.1(f) hereof.
"MERGER" means the merger of NF Acquisition with and into Super Food, with
Super Food being the corporation surviving such merger on the terms and
conditions set forth in the Merger Agreement.
"MERGER AGREEMENT" means that certain Agreement and Plan of Merger, dated
as of October 8, 1996 between NF Acquisition, the Borrower and Super Food and
delivered to the Banks on or prior to the date hereof.
"MERGER CREDIT" is defined in Section 3.9 hereof.
"MOODY'S RATING" means the rating assigned by Moody's Investors Service,
Inc., to the outstanding senior unsecured non-credit enhanced long-term
indebtedness of the Borrower. Any reference in this Agreement to any specific
rating is a reference to such rating as currently defined by Moody's Investors
Service, Inc., and shall be deemed to refer to the equivalent rating if such
rating system changes.
"NF ACQUISITION" means NFC Acquisition Corporation, a Delaware corporation.
"NOTE" means and includes the Committed Loan Notes, the Swing Note and the
Bid Notes and each individually, unless the context in which such term is used
shall otherwise require.
"OFFER" is defined in Section 2.2(c) hereof.
"OFFER TO PURCHASE" shall mean the Offer to Purchase dated October 9, 1996
issued in connection with the Tender Offer and set forth in Exhibit (a)(1) to
Schedule 14D-1 to the Tender Offer Statement, such offer to be in the form of
the October 8, 1996 12:19 a.m. (Chicago time) draft thereof heretofore submitted
by the Borrower to the Agents.
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"OBLIGATIONS" means all fees payable hereunder, all obligations of the
Borrower to pay principal or interest on Loans and Reimbursement Obligations,
and all other payment obligations of the Borrower arising under or in relation
to any Loan Document.
"PARTICIPATING BANK" is defined in Section 1.2(f) hereof.
"PBGC" is defined in Section 7.9 hereof.
"PERCENTAGE" means, for each Bank, the percentage of the Commitments
represented by such Bank's Commitment or, if the Commitments have been
terminated, the percentage held by such Bank (including through participation
interests in Reimbursement Obligations) of the aggregate principal amount of all
outstanding Obligations.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
"PLAN" means, with respect to the Borrower and each Subsidiary at any time,
an employee pension benefit plan which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code and
either (i) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group of which the Borrower or such Subsidiary is a
part or (ii) is maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which a member of the Controlled Group of which the Borrower or such Subsidiary
is a part is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
"PNC BANK" is defined in the introductory paragraph hereof.
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible, whether now owned or
hereafter acquired.
"PROXY MATERIALS" shall mean all Proxy Materials, information statements or
similar materials sent or to be sent by Super Food to its stockholders in
connection with the Merger.
"REFUNDING BORROWING" is defined in Section 1.5(d) hereof.
"REIMBURSEMENT OBLIGATION" is defined in Section 1.2(e) hereof.
"REQUIRED BANKS" means, as of the date of determination thereof, Banks
holding at least 51% of the Percentages.
"SECURITY" has the same meaning as in Section 2(l) of the Securities Act of
1933, as amended.
"SEC" means the Securities and Exchange Commission.
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"SET-OFF" is defined in Section 14.7 hereof.
"SHAREHOLDER'S EQUITY" means, as of any date the same is to be determined,
the total shareholder's equity (including capital stock, additional
paid-in-capital and retained earnings after deducting treasury stock, but
excluding minority interests in Subsidiaries) which would appear on a balance
sheet of the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"SINGLE RATING STATUS" means the Level I Status, Level II Status, Level III
Status, Level IV Status or Level V Status, as the case may be, but with each of
the foregoing determined solely with respect to the S&P Rating or solely with
respect to the Moody's Rating.
"S&P RATING" means the rating assigned by Standard & Poors Ratings Services
Group, a division of The McGraw-Hill Companies, Inc., to the outstanding senior
unsecured non-credit enhanced long-term indebtedness of the Borrower. Any
reference in this Agreement to any specific rating is a reference to such rating
as currently defined by Standard & Poors Ratings Services Group, a division of
The McGraw-Hill Companies, Inc., and shall be deemed to refer to the equivalent
rating if such rating system changes.
"STATED RATE BID LOANS" is defined in Section 2.1 hereof.
"SUBSIDIARY GUARANTEE AGREEMENT" means a letter to the Administrative Agent
in the form of Exhibit I hereto executed by a Subsidiary whereby it acknowledges
it is party hereto as a Guarantor under Section 13 hereof.
The term "SUBSIDIARY" means, as to any particular parent corporation, any
corporation of which more than 50% (by number of votes) of the Voting Stock
shall be owned by such parent corporation and/or one or more corporations which
are themselves subsidiaries of such parent corporation. The term "SUBSIDIARY"
shall mean a subsidiary of the Borrower.
"SUPER FOOD" shall mean Super Food Services, Inc., a Delaware corporation.
"SUPER FOOD SHARES" shall mean the common stock, par value $1.00 per share,
of Super Food.
"SWING LINE COMMITMENT" means the commitment of Harris to make Swing Loans
in the amount set forth opposite its signature hereto under the heading "Swing
Line Commitment".
"SWING NOTE" is defined in Section 3.5(b) hereof.
"SWING LOANS" is defined in Section 1.6(a) hereof.
"SYNDICATION AGENTS" is defined in the introductory paragraph hereof and
includes any successor thereto pursuant to Section 12.8 hereof.
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"TANGIBLE NET WORTH" means, as of any time the same is to be determined,
the Shareholders' Equity less the sum of (i) the aggregate book value of all
assets which would be classified as intangible assets under GAAP, including,
without limitation, goodwill, patents, trademarks, trade names, copyrights,
franchises and deferred charges (including, without limitation, unamortized debt
discount and expense, organization costs and deferred research and development
expense) and similar assets and (ii) the write-up of assets above cost.
"TENDER CREDIT" is defined in Section 3.9 hereof.
"TENDER OFFER" means the offer to purchase for cash outstanding Super Food
shares pursuant to the Tender Offer Materials.
"TENDER OFFER MATERIALS" means the Tender Offer Statement on Schedule 14D-1
and on Schedule 13D to be filed by NF Acquisition with the SEC pursuant to
Sections 14(d)(1) and 13(e) of the Exchange Act on October 9, 1996 in the form
of the October 8, 1996 12:14 a.m. (Chicago time) draft thereof heretofore
submitted by the Borrower to the Agents, together with all exhibits thereto,
including the form of the Offer to Purchase, and any amendments or supplements
thereto.
"TENDERED SUPER FOOD SHARES" means all of the Super Food Shares tendered to
and purchased by NF Acquisition pursuant to the Tender Offer.
"TERMINATION DATE" means October 8, 2001, or such earlier date on which the
Commitments are terminated in whole pursuant to Sections 3.6, 3.7, 10.2 or 10.3
hereof.
"TOTAL ASSETS" shall mean as of the date of any determination thereof, the
total amount of all assets of the Borrower and its Subsidiaries as determined on
a consolidated basis in accordance with GAAP.
"TOTAL FUNDED DEBT" means all Debt of the Borrower and its Subsidiaries
determined without duplication on a consolidated basis.
"TRANSACTION COSTS" means the fees, costs and expenses payable by the
Borrower pursuant hereto and other fees, costs and expenses (other than the
purchase price of the Tendered Super Food Shares) payable by the Borrower or any
Subsidiary in connection with the Tender Offer, the Merger, this Agreement or
the refinancing of the Existing Debt.
"UNFUNDED VESTED LIABILITIES" means, with respect to any Plan, which is not
a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, at any time,
the amount (if any) by which the present value of all vested nonforfeitable
accrued benefits under such Plan exceeds the fair market value of all Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plan using the assumptions used in the valuation
prepared as of such date for purposes of Code Section 412, but only to the
extent
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that such excess represents a potential liability of a member of the Controlled
Group to the PBGC or such Plan under Title IV of ERISA.
"VOTING STOCK" shall mean Securities of any class or classes the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"WEIGHTED AVERAGE LIFE TO MATURITY" means for any Long-Term Debt (the
"RELEVANT DEBT") as at the time of determination thereof, the number of years
obtained by dividing the then Remaining Dollar Years of the Relevant Debt by the
then outstanding principal amount of the Relevant Debt. For purposes hereof,
the term "REMAINING DOLLAR YEARS" of the Relevant Debt means the amount obtained
by (i) multiplying the amount of each then remaining required payment or
redemption (including the repayment at final maturity), by the number of years
(calculated at the nearest one-twelfth) which will elapse between the date of
determination of the Weighted Average Life to Maturity of the Relevant Debt and
the date of that required payment and (ii) totaling all of the products obtained
in this clause (i).
"WELFARE PLAN" means a "welfare plan" as defined in Section 3(1) of ERISA.
"WHOLLY-OWNED" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) shall be owned by the Borrower
and/or one or more of its Wholly-owned Subsidiaries.
"WORKING CAPITAL CREDIT" is defined in Section 3.9 hereof.
SECTION 6.2. INTERPRETATION. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the terms defined. All
references to times of day herein shall be references to Chicago, Illinois time
unless otherwise specifically provided. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP
consistently applied, except where such principles are inconsistent with the
specific provisions of this Agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby (x) represents and warrants to each Bank as to itself
and (y) where the following representations and warranties apply to
Subsidiaries, represents and warrants to each Bank as to each of the Borrower's
Subsidiaries and (z) where the following representations and warranties apply to
Super Food and its subsidiaries, during the Acquisition Period and so long
thereafter and to the extent that Super Food and each of its subsidiaries
constitute Subsidiaries, represents and warrants as to Super Food and such
subsidiaries (it being understood and agreed that notwithstanding anything
herein to the
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contrary, prior to the Acquisition Period, the Borrower makes no representations
or warranties with respect to Super Food and its subsidiaries), as follows:
SECTION 7.1. CORPORATE ORGANIZATION AND AUTHORITY. Each of the Borrower
and Super Food is duly organized and existing in good standing under the laws of
the State of Delaware; has all necessary corporate power to carry on its present
business; and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business transacted by it or the nature
of the Property owned or leased by it makes such licensing or qualification
necessary and in which the failure to be so licensed or qualified would
materially and adversely affect its business, operations, Properties, condition
(financial or otherwise) or prospects.
SECTION 7.2. SUBSIDIARIES. Schedule 7.2 (as updated from time to time
pursuant to Sections 9.5(a)(viii) and 9.16) hereto identifies each Subsidiary,
the jurisdiction of its incorporation or organization, as the case may be, the
percentage of issued and outstanding shares of each class of its capital stock
or other equity interests owned by the Borrower and the Subsidiaries and, if
such percentage is not 100% (excluding directors' qualifying shares as required
by law), a description of each class of its authorized capital stock and other
equity interests and the number of shares of each class issued and outstanding.
Each Subsidiary of the Borrower and each subsidiary of Super Food is duly
incorporated and existing in good standing as a corporation under the laws of
the jurisdiction of its incorporation, has all necessary corporate power to
carry on its present business, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business transacted by
it or the nature of the Property owned or leased by it makes such licensing or
qualification necessary and in which the failure to be so licensed or qualified
would materially and adversely affect its business, operations, Properties,
condition (financial or otherwise) or prospects. All of the issued and
outstanding shares of capital stock of each Subsidiary of the Borrower and each
subsidiary of Super Food are validly issued and outstanding and fully paid and
nonassessable. All such shares owned by the Borrower are owned beneficially,
and of record, free of any Lien.
SECTION 7.3. CORPORATE AUTHORITY AND VALIDITY OF OBLIGATIONS. The
Borrower has full right and authority to enter into this Agreement and the other
Loan Documents to which it is a party, to make the borrowings herein provided
for, to issue its Notes in evidence thereof, to apply for the issuance of the
Letters of Credit, and to perform all of its obligations under the Loan
Documents to which it is a party. On and after commencement of the Acquisition
Period, each of NF Acquisition and Super Food has full right and authority to
consummate the Acquisition. Each Guarantor has full right and authority to
enter into its Subsidiary Guarantee Agreement and to perform all of its
obligations thereunder. Each Loan Document to which the Borrower or any
Guarantor is a party has been duly authorized, executed and delivered by the
Borrower or such Guarantor, as the case may be, and constitutes valid and
binding obligations of such Person enforceable in accordance with its terms,
subject to general principles of equity and bankruptcy, reorganization,
insolvency and similar laws of general application to enforcement of creditors'
rights. No Loan Document, nor the performance or observance by the Borrower or
any Guarantor of any of the matters or things therein provided for, contravenes
any
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provision of law or any charter or by-law provision of the Borrower or any
Guarantor or (individually or in the aggregate) any material Contractual
Obligation of or affecting the Borrower or any Guarantor or any of their
respective Properties or results in or requires the creation or imposition of
any Lien on any of the Properties or revenues of the Borrower or any Guarantor.
SECTION 7.4. FINANCIAL STATEMENTS. (a) The audit report of the Borrower
for the year ended December 30, 1995, including a consolidated balance sheet as
of December 30, 1995, and a consolidated statement of profit and loss for the
12 months ended said date, certified by Ernst & Young L.L.P., and the interim
consolidated and consolidating balance sheets of the Borrower and the
Subsidiaries as at June 15, 1996, and consolidated and consolidating statements
of profit and loss for the respective six (6) accounting periods then ended
prepared by the Borrower and heretofore furnished to the Banks, all as
heretofore presented to the Banks, fairly present the financial condition of the
Borrower and the Subsidiaries as at said dates and the results of operations for
the periods covered thereby. As of the date hereof, the Borrower and the
Subsidiaries have no known contingent liabilities which are material to the
Borrower or any Subsidiary other than as indicated on the financial statements
accompanying said audit report. As of the date hereof, the Existing NF Term
Debt does not aggregate more than the amount reflected in such interim June 15,
1996 balance sheet.
(b) The audit report of Super Food for the year ended August 26, 1995,
including a consolidated balance sheet as of August 26, 1995, and a consolidated
statement of profit and loss for the 12 months ended said date, certified by
Arthur Andersen L.L.P., and the interim consolidated and consolidating balance
sheets of Super Food and its subsidiaries as at May 4, 1996, and consolidated
and consolidating statements of profit and loss for the thirty-six (36) weeks
then ended prepared by Super Food and heretofore furnished to the Banks, all as
heretofore presented to the Banks, fairly present the financial condition of
Super Food and its subsidiaries as at said dates and the results of operations
for the periods covered thereby. As of the date hereof, Super Food and its
subsidiaries have no known contingent liabilities which are material to Super
Food or any of its subsidiaries other than as indicated on the financial
statements accompanying said audit report. As of the commencement of the
Acquisition Period, the Existing Super Food Debt does not aggregate more than
$95,000,000.
SECTION 7.5. MATERIAL ADVERSE CHANGE. Since May 4, 1996, there have been
no material adverse changes in the business, operations, Properties, condition
(financial or otherwise) or prospects of the Borrower and the Subsidiaries taken
as a whole or Super Food and its subsidiaries taken as a whole.
SECTION 7.6 NO LITIGATION; NO LABOR CONTROVERIES. (a) There is no
litigation or governmental proceeding pending, or to the knowledge of the
Borrower or any Guarantor threatened, against the Borrower or any Subsidiary, or
Super Food or any of its subsidiaries, in each case which would (individually or
in the aggregate) reasonably be expected to have a material adverse effect on
the business, operations, Properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole
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or Super Food and its subsidiaries taken as a whole or which would reasonably be
expected to prevent or unduly delay the Merger or the consummation of the Tender
Offer.
(b) There are no labor controversies pending or, to the knowledge of the
Borrower threatened, against the Borrower or any Subsidiary or Super Food or any
of its subsidiaries which could (insofar as the Borrower may reasonably foresee)
materially adversely affect the business, operations, Properties, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole or Super Food and its subsidiaries taken as a whole.
SECTION 7.7. TAXES. The Borrower and its Subsidiaries, and Super Food
and its subsidiaries, have filed all United States federal tax returns, and all
other tax returns, required to be filed and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary, except such taxes, if any, as are being contested in good faith and
for which adequate reserves have been provided. No notices of tax liens have
been filed and no claims are being asserted concerning any such taxes, which
liens or claims are material to the financial condition of the Borrower and its
Subsidiaries on a consolidated basis taken as a whole or the financial condition
of Super Food and its subsidiaries on a consolidated basis taken as a whole.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries, or Super Food and its subsidiaries, for any taxes or other
governmental charges are adequate.
SECTION 7.8. APPROVALS. No authorization, consent, license, or exemption
from, or filing or registration with, any court or governmental department,
agency or instrumentality, nor any approval or consent of the stockholders of
the Borrower or any Subsidiary or from any other Person, is necessary to the
valid execution, delivery or performance by the Borrower or any Subsidiary of
any Loan Document to which it is a party or (after commencement of the
Acquisition Period) is necessary to the consummation of the Acquisition, except
for (i) such thereof as have been obtained and are in full force and effect and
(ii) after commencement of the Acquisition Period but in no event on or after
the initial extension of Merger Credit, approval of the Merger by holders of a
majority of the outstanding Super Food Shares (or if NF Acquisition purchases
more than 90% of the outstanding Super Food Shares in the Tender Offer, the
approval of the Board of Directors of NF Acquisition pursuant to Section 253 of
the DGCL).
SECTION 7.9. ERISA. The Borrower and its ERISA Affiliates, and Super
Food and its ERISA Affiliates, are in compliance in all material respects with
ERISA and provisions of the Code pertaining to the Plans to the extent
applicable to them and have received no notice to the contrary from the Internal
Revenue Service, the Department of Labor or the Pension Benefit Guaranty
Corporation ("PBGC"). As of the most recent annual valuation date for each Plan
(other than a multiemployer plan as defined in Section 4001(a)(3) of ERISA), the
amount of Unfunded Vested Liabilities does not exceed $1,000,000. Neither the
Borrower, Super Food nor any of their respective ERISA Affiliates has (i) failed
to make a required contribution or payment of a "MULTIEMPLOYER PLAN" (as defined
in Section 4001(a)(3) of ERISA) or (ii) made a complete or partial withdrawal
under Sections 4203 or 4205 of ERISA from a multiemployer plan. Neither the
Borrower, Super
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Food nor any of their respective ERISA Affiliates maintains or contributes to
any Welfare Plan (other than a multiemployer plan as defined in Section 3(37) of
ERISA) which provides benefits to employees after termination of employment
(other than as required under Section 601 of ERISA or any comparable applicable
state law) which could result in a material obligation to pay money, except for
such plans, if any, as are listed in Exhibit J hereto.
SECTION 7.10. GOVERNMENT REGULATION. Neither the Borrower nor any
Subsidiary, and neither Super Food nor any of its subsidiaries, is an
"INVESTMENT COMPANY" nor a company "CONTROLLED" by an "INVESTMENT COMPANY
ORGANIZED OR OTHERWISE CREATED UNDER THE LAWS OF THE UNITED STATES OR OF A
STATE" within the meaning of the Investment Company Act of 1940, as amended, or
a "HOLDING COMPANY", or a "SUBSIDIARY COMPANY" of a "HOLDING COMPANY", or an
"AFFILIATE" of a "HOLDING COMPANY" or of a "SUBSIDIARY COMPANY" of a "HOLDING
COMPANY", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 7.11. MARGIN STOCK. Neither the Borrower nor any Subsidiary is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock ("MARGIN STOCK" to have the same meaning herein as in
Regulation U of the Board of Governors of the Federal Reserve System). The
Borrower will not use the proceeds of any Loan or Letter of Credit in a manner
that violates any provision of Regulation U or X of the Board of Governors of
the Federal Reserve System.
SECTION 7.12. LICENSES AND AUTHORIZATIONS; COMPLIANCE WITH LAWS. (a) The
Borrower and each of its Subsidiaries, and Super Food and each of its
subsidiaries, have all necessary material licenses, permits and governmental
authorizations to own and operate its Properties and to carry on its business as
currently conducted and contemplated.
(b) To the best of the Borrower's knowledge, the Borrower and each of its
Subsidiaries, and Super Food and each of its subsidiaries, are in compliance in
all material respects with all applicable state and federal environmental,
health and safety statutes and regulations, including, without limitation,
regulations promulgated under the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Sections 6901 ET SEQ. and, to the best knowledge of the
Borrower, have not acquired, incurred or assumed, directly or indirectly, any
material contingent liability in connection with the release of any toxic or
hazardous waste or substance into the environment. Neither the Borrower nor any
Subsidiary, and neither Super Food nor any of its subsidiaries, is the subject
of any evaluation under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Specified Amendments and
Reauthorization Act of 1986, 42 U.S.C. Sections 9601 ET SEQ ("CERCLA") which
would be reasonably expected to reflect noncompliance with such statutes and
regulations, the compliance with which would reasonably be expected to have a
material adverse effect on the business, operations, Properties, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole or Super Food and its subsidiaries taken as a whole.
SECTION 7.13. OWNERSHIP OF PROPERTY; LIENS. As of the date hereof, the
Borrower and the Subsidiaries have good and defensible title to their respective
assets as reflected on the
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consolidated interim balance sheet of the Borrower and the Subsidiaries dated as
of June 15, 1996 (except for sales by the Borrower and such Subsidiaries in the
ordinary course of their respective businesses), subject to no Liens or
encumbrances other than such thereof as are permitted by Section 9.13 hereof.
SECTION 7.14. NO BURDENSOME RESTRICTIONS; COMPLIANCE WITH AGREEMENTS. (a)
Neither the Borrower nor any Subsidiary is (i) party or subject to any law,
regulation, rule or order, or any Contractual Obligation that (individually or
in the aggregate) materially adversely affects, or (insofar as the Borrower may
reasonably foresee) may so affect, the business, operations, Property, condition
(financial or otherwise) or prospects of the Borrower and the Subsidiaries taken
as a whole or (ii) in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement to
which it is a party, which default materially adversely affects, or (insofar as
the Borrower may reasonably foresee) may so affect, the business, operations,
Property or financial or other condition of the Borrower and the Subsidiaries
taken as a whole or (on and after the date of the initial extension of Tender
Credit) Super Food and its subsidiaries taken as a whole.
(b) On and after commencement of the Tender Offer, none of the Merger, the
Tender Offer or the transactions contemplated thereby violates any material
applicable law or regulation in any material respect.
SECTION 7.15. TENDER OFFER. On and after commencement of the Tender
Offer, the Tender Offer has been made and conducted in all material respects
with all applicable provisions of law, including without limitation the
provisions of Section 14(d) and 14(e) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, and applicable state
securities laws.
SECTION 7.16. MERGER AGREEMENT. On and after commencement of the Tender
Offer, the Borrower has delivered to the Banks true, correct and complete copies
of the Merger Agreement and of all exhibits and schedules delivered to Super
Food by NF Acquisition or by Super Food to NF Acquisition pursuant to the Merger
Agreement. Each of the representations and warranties given by NF Acquisition
and Super Food in the Merger Agreement was true and correct in all material
respects as of the date of the Merger Agreement.
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SECTION 7.17. DISCLOSURE.
(a) LOAN. All information heretofore furnished by the Borrower to the
Administrative Agent or any Bank for purposes of or in connection with the Loan
Documents or any transaction contemplated thereby is, and all such information
hereafter furnished by the Borrower to the Administrative Agent or any Bank will
be, true and accurate in all material respects and not misleading on the date as
of which such information is stated or certified.
(b) ACQUISITION. On and after commencement of the Acquisition Period,
taken as a whole, the representations and warranties of the Borrower and Super
Food and their respective subsidiaries contained in the Merger Agreement, the
Tender Offer Materials, Proxy Materials and any other document, certificate or
written statement furnished to the Banks by or on behalf of any such Person for
use in connection with the Acquisition do not contain any untrue statement of a
material fact or omit to state a material fact (known to any such Person in the
case of any document not furnished by it) necessary in order to make the
statements contained herein or therein not misleading. Any reaffirmation of the
foregoing sentence is subject to any change in the facts and conditions on which
such representations and warranties are based, which changes are required,
contemplated or permitted under this Agreement; PROVIDED, HOWEVER, that in all
cases, taken as a whole, representations and warranties of any such Person
contained in the Merger Agreement, the Tender Offer Materials, the Proxy
Materials and any other document, certificate or written statement furnished to
the Banks by or on behalf of any such Person for use in connection with the
Acquisition did not contain at the time made any untrue statement of a material
fact or omit at the time made to state a material fact (known to any such Person
in the case of any document not furnished by it) necessary in order to make the
statement contained herein or therein not misleading.
(c) GENERALLY. The projections and pro forma financial information
contained in the materials referred to above in this Section are based upon good
faith estimates and assumptions believed by the Borrower to be reasonable at the
time made, it being recognized by the Banks that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results. Except as otherwise disclosed in writing to the Banks, there is no
fact known to any such Person (other than matters of a general economic nature)
which materially and adversely affects the business, operations, property,
assets or condition (financial or otherwise) of the Borrower and the
Subsidiaries taken as a whole or (on and after the date of the initial extension
of Tender Credit) Super Food and its subsidiaries, in each case which has not
been disclosed herein or in such other documents (including the Merger
Agreement), certificates and statements furnished to the Banks for use in
connection with the transactions contemplated hereby.
Section 8. Conditions Precedent.
The obligation of each Bank to make any Loan, or of the Administrative
Agent to issue, extend the expiration date (including by not giving notice of
non-renewal) of or
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increase the amount of any Letter of Credit, shall be subject to the following
conditions precedent:
SECTION 8.1. INITIAL BORROWING. Prior to the initial Credit Event:
(a) The Administrative Agent shall have received the favorable
written opinion of counsel to the Borrower, in substantially the form of
Exhibit K hereto, and otherwise in form and substance satisfactory to the
Agents and the Required Banks;
(b) The Administrative Agent shall have received (i) certified copies
of resolutions of the Board of Directors of the Borrower and NF Acquisition
authorizing the execution, delivery and performance of, and indicating the
authorized signers of, the Loan Documents to which it is a party and all
other documents relating thereto and the specimen signatures of such
signers and (ii) copies of the Articles of Incorporation and by-laws for
the Borrower and each Guarantor certified by its Secretary or other
appropriate officer, together with a certificate of good standing certified
by the appropriate governmental officer in the jurisdiction of its
incorporation;
(c) The Administrative Agent shall have received a Subsidiary
Guaranty Agreement from NF Acquisition;
(d) The Administrative Agent shall have received from the Borrower a
list of its Authorized Representatives;
(e) The proceeds of such initial Credit Events shall be used to pay
in full all Existing NF Revolver Debt and effect a cancellation of all the
Borrower's obligations thereunder; and
(f) A certificate, signed by an Authorized Representative of the
Borrower, stating that on the date hereof no Default or Event of Default
has occurred and is continuing.
SECTION 8.2. ALL CREDIT. As of the time of each Credit Event hereunder
(including the initial Credit Event):
(a) In the case of a Borrowing of Committed Loans, the Administrative
Agent shall have received for each Bank such Bank's duly executed Committed
Loan Note of the Borrower dated the date of the initial Committed Loan by
such Bank and otherwise in compliance with the provisions of Section 3.5
hereof and the notice required by Section 1.5(a) hereof (including any
deemed notice under Section 1.5(c)); in the case of a Borrowing of a Bid
Loan, the Administrative Agent shall have received for each Bank a Bid Note
duly executed by the Borrower dated the date of the initial Bid Loan and
otherwise in compliance with the provisions of Section 3.5 hereof and the
notice required by Section 2.2 hereof; in the case of a Swing Loan, the
Administrative Agent shall have received the Swing Line Note dated the date
of the initial Swing Loan and otherwise in compliance with the provisions
of Section 3.5
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hereof and the notice required by Section 1.6(d) hereof; in the case of the
issuance of any Letter of Credit, the Administrative Agent shall have
received a duly completed Application for such Letter of Credit; and, in
the case of an extension or increase in the amount of a Letter of Credit,
a written request therefor, in a form acceptable to the Administrative
Agent;
(b) Each of the representations and warranties of the Borrower set
forth in Section 7 (other than Section 7.5) hereof shall be true and
correct as of said time, except to the extent that any such representation
or warranty relates solely to an earlier date;
(c) The Borrower shall be in full compliance with all of the terms
and conditions hereof, and no Default or Event of Default shall have
occurred and be continuing or would occur as a result of making such
Borrowing;
(d) After giving effect to the Borrowing, (i) the aggregate principal
amount of all Loans (whether Committed Loans, Swing Loans or Bid Loans) and
L/C Obligations outstanding hereunder shall not exceed the Commitments,
(ii) the aggregate principal amount of Swing Loans outstanding hereunder
shall not exceed the lesser of the unused Commitments or the Swing Line
Commitment and (iii) the aggregate principal amount of all Bid Loans
outstanding hereunder shall not exceed the lesser of the unused Commitments
or the Bid Loan Limit; and
(e) Such Borrowing shall not violate any order, judgment or decree of
any court or other authority or any provision of law or regulation
applicable to any Bank (including, without limitation, Regulation U of the
Board of Governors of the Federal Reserve System) as then in effect.
Each request for a Borrowing hereunder and each request for the issuance
of, increase in the amount of, or extension of the expiration date of, a Letter
of Credit shall be deemed to be a representation and warranty by the Borrower on
the date of such Borrowing as to the facts specified in paragraphs (b), (c), and
(d) of this Section 8.2.
SECTION 8.3. ADDITIONAL CONDITIONS TO LOANS OTHER THAN REFUNDING
BORROWINGS. In addition to the conditions set forth in Sections 8.1 and 8.2
hereof, as of the time of each Borrowing other than a Refunding Borrowing, the
representations and warranties set forth in Section 7.5 hereof shall be true as
of said time (except that the date referenced therein shall be deemed a
reference to the date as of which the most recent financial statements furnished
to the Banks pursuant to Section 9.5 were prepared), and the request for such
Borrowing, as referred to in Section 8.2(a), shall be and constitute a
representation and warranty as to such matters specified in Section 7.5 hereof
(except that the date referenced therein shall be deemed a reference to the date
as of which the most recent financial statements furnished to the Banks pursuant
to Section 9.5 were prepared).
SECTION 8.4. INITIAL TENDER CREDIT. As of the time of each Credit Event
(including, if applicable, the initial Credit Event) constituting an extension
of Tender Credit:
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(a) The Administrative Agent shall have received a Subsidiary
Guaranty Agreement from NF Acquisition, together with the related
documentation (including legal opinion) required by Section 9.1 hereof;
(b) There shall have been delivered to the Banks true, correct and
complete copies of the Tender Offer Materials, which shall be in form and
substance reasonably satisfactory to the Agents and the Required Banks;
(c) Copies of all Proxy Materials (if any) shall have been delivered
to the Banks, and such Proxy Materials shall be satisfactory in form and
substance to the Agents and the Required Banks;
(d) There shall have been delivered to the Banks a true, correct and
complete copy of the Merger Agreement, which shall have been duly
authorized, executed and delivered by each party thereto and otherwise be
in form and substance reasonably satisfactory to the Agents and the
Required Banks;
(e) Each of the conditions to purchase contained in the Merger
Agreement (except for the consummation of the Tender Offer) shall have been
satisfied (and not waived) to the satisfaction of the Agents and the
Required Banks;
(f) The Tender Offer shall be consummated substantially in accordance
with the terms thereof, and the Tendered Super Food Shares which would be
purchased concurrently with the receipt of proceeds of such initial Tender
Credit shall represent, in the aggregate, more than fifty percent (50%) of
the outstanding Super Food Common Stock on a fully diluted basis, and the
Borrower shall have delivered an officers' certificate to such effect in
form and substance satisfactory to the Agents and the Required Banks;
(g) There shall have been no material changes to the Offer to
Purchase, except for a change in the Offer's price per share for the Super
Food Shares which would not reasonably be expected to require the Borrower
to need more credit for the Acquisition than is permitted hereunder;
(h) No injunction, preliminary injunction or temporary restraining
order shall exist which prohibits the extension of credit hereunder or the
consummation of the Tender Offer or the Merger, and no litigation or
similar proceedings shall exist with respect to the Tender Offer or the
Merger of the transactions described herein which, if adversely determined,
would, in the reasonable judgment of any Bank, have a material adverse
effect on the consolidated financial condition or results of operations of
the Borrower and its Subsidiaries taken as a whole or Super Food and its
subsidiaries taken as a whole or which would reasonably be expected to
prevent or unduly delay the Merger or the consummation of the Tender Offer;
(i) The Merger shall not be subject to any restrictions of Section
203 of the DGCL or any successor statute and shall not be governed by any
other statute, rule or
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regulation of Delaware or any other state restricting in any material respect
the ability of the Borrower or any of its affiliates to consummate the
Acquisition on the terms and conditions set forth herein which has not been
complied with; and
(j) The Borrower shall have provided evidence satisfactory to the
Agents and the Required Banks that the proceeds of the Tender Credit shall
have been irrevocably committed to the purchase of the Tendered Super Food
Shares and the payment of Transaction Costs related to the Tender Offer.
SECTION 8.5. INITIAL MERGER CREDIT. As of the time of each Credit Event
(including, if applicable, the initial Credit Event) constituting an extension
of Merger Credit:
(a) The Administrative Agent shall have received a Subsidiary
Guarantee Agreement from Super Food and each of its subsidiaries, together
with the related documentation (including legal opinion) required by
Section 9.1 hereof;
(b) NF Acquisition shall have merged with and into Super Food in
compliance with the Merger Agreement and all applicable laws;
(c) Copies of all Proxy Materials (if any) shall have been delivered
to the Banks, and such Proxy Materials shall be reasonably satisfactory in
form and substance to the Agents and the Required Banks;
(d) No injunction, preliminary injunction or temporary restraining
order shall exist which prohibits the extension of credit hereunder or the
consummation of the Merger, and no litigation or similar proceedings shall
exist with respect to the Merger of the transactions described herein
which, if adversely determined, would, in the reasonable judgment of any
Bank, have a material adverse effect on the consolidated financial
condition or results of operations of the Borrower and its Subsidiaries;
and
(e) The Borrower shall have provided evidence reasonably satisfactory
to the Agents and the Required Banks that the proceeds of the Merger Credit
shall have been irrevocably committed to make cash payments in respect of
the Super Food Shares converted into rights to receive cash (including as a
result of the exercise of appraisal rights) in connection with the Merger
and to pay Transaction Costs related to the Merger.
SECTION 8.6. DEBT REFINANCING CREDIT. As of the time of each Credit
Event hereunder (including, if applicable, the Initial Credit Event)
constituting an extension of Debt Refunding Credit:
(a) There shall have been delivered to the Administrative Agent a
payoff letter from each holder of the Existing Debt being repaid (or a duly
appointed trustee or agent for such holder) in which each such party agrees
to cancel all loan and other agreements governing such Existing Debt (or
that all such loan and other agreements
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shall automatically be canceled) and to return to the Borrower all
promissory notes and other evidences of such Existing Debt, in each case
upon receipt of the payoff amount stated in such letter, which payoff
letter shall otherwise be in form and substance reasonably satisfactory to
the Agents and Required Banks;
(b) The Borrower shall have provided evidence reasonably satisfactory
to the Agents and the Required Banks that the proceeds of the Debt
Refinancing Credit shall have been irrevocably committed to the repayment
of the relevant Existing Debt and to the payment of Transaction Costs
related to the repayment of the such Existing Debt; and
(c) In the case of any Super Food Debt Refinancing Credit, the
conditions precedent to availability of the Acquisition Credit shall have
been satisfied.
SECTION 9. COVENANTS.
The Borrower agrees that, so long as any Note or L/C Obligation is
outstanding hereunder or any credit is available to or in use by the Borrower
hereunder, except to the extent compliance in any case or cases is waived in
writing by the Required Banks:
SECTION 9.1 CORPORATE EXISTENCE; SUBSIDIARIES. The Borrower shall, and
shall cause each of its Subsidiaries to, preserve and maintain its corporate
existence, subject to the provisions of Section 9.15 hereof. As a condition to
establishing or acquiring any Subsidiary, unless the Required Banks otherwise
agree, the Borrower shall (i) cause such Subsidiary to execute a Subsidiary
Guarantee Agreement, (ii) cause such Subsidiary to deliver documentation
(including a legal opinion) similar to that described in Section 8.1(a) through
(c) relating to the authorization for, execution and delivery of, and validity
of such Subsidiary's obligations as a Guarantor hereunder and under the
Subsidiary Guarantee Agreement in form and substance satisfactory to the
Required Banks and (iii) deliver an updated Schedule 7.2 to reflect the new
Subsidiary. Notwithstanding the foregoing, no such Subsidiary Guarantee
Agreement or related documentation (including a legal opinion) shall be required
for any Subsidiary (other than NF Acquisition) until November 30, 1996; FURTHER
PROVIDED, HOWEVER, that a Subsidiary Guarantee Agreement and such related
documentation (including a legal opinion) must be provided for Super Food and
each of its subsidiaries no later than five (5) Business Days following the
earlier of the consummation of the Tender Offer or the initial extension of
Tender Credit.
SECTION 9.2. MAINTENANCE. The Borrower will maintain, preserve and keep
its plants, properties and equipment deemed by it necessary to the proper
conduct of its business in reasonably good repair, working order and condition
and will from time to time make all reasonably necessary repairs, renewals,
replacements, additions and betterments thereto so that at all times such
plants, properties and equipment shall be reasonably preserved and maintained,
and the Borrower will cause each of its Subsidiaries to do so in respect of
Property owned or used by it; PROVIDED, HOWEVER, that nothing in this Section
9.2 shall prevent the Borrower or a Subsidiary from discontinuing the operation
or maintenance of
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any such Properties if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its business or the business of its Subsidiary and
not disadvantageous to the Banks or the holders of the Notes.
SECTION 9.3. TAXES AND ASSESSMENTs. The Borrower shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees and governmental charges upon or against it or its
Properties, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves are provided therefor.
SECTION 9.4. INSURANCE. The Borrower shall insure and keep insured, and
shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Borrower shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including employers' and public liability
risks) with good and responsible insurance companies as and to the extent
usually insured by Persons similarly situated and conducting similar businesses.
The Borrower shall upon request furnish to the Administrative Agent and any Bank
a certificate setting forth in summary form the nature and extent of the
insurance maintained pursuant to this Section.
SECTION 9.5. FINANCIAL REPORTS. The Borrower shall, and shall cause each
Subsidiary to, maintain a standard system of accounting in accordance with GAAP
and shall furnish to the Administrative Agent, each Bank and each of their duly
authorized representatives such information respecting the business and
financial condition of the Borrower and its Subsidiaries as the Administrative
Agent or such Bank may reasonably request; and without any request, shall
furnish to the Banks:
(a) as soon as available, and in any event within sixty (60)
days after the close of each quarterly accounting period of the
Borrower, a copy of the consolidated and consolidating balance sheet
of the Borrower and its Subsidiaries as of the last day of such period
and the consolidated and consolidating statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for the
fiscal quarter and for the fiscal year-to-date period then ended, each
in reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by
the Borrower in accordance with GAAP and certified to by its President
or chief financial officer;
(b) as soon as available, and in any event within ninety (90)
days after the close of each annual accounting period of the Borrower,
a copy of the consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the last day of the period then
ended and the consolidated and consolidating statements of income,
retained earnings and cash flows of the Borrower and its Subsidiaries
for the period then ended, and accompanying notes thereto, each in
reasonable detail showing in
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comparative form the figures for the previous fiscal year, accompanied
by an unqualified opinion thereon of Ernst & Young L.L.P. or another
firm of independent public accountants of recognized national standing
(except for qualifications related to changes in accounting principles
or practices reflecting a change in GAAP and required or approved by
such firm), selected by the Borrower and satisfactory to the Required
Banks, to the effect that the financial statements have been prepared
in accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial condition of the Borrower and its Subsidiaries
as of the close of such fiscal year and the results of their
operations and cash flows for the fiscal year then ended and that an
examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted
auditing standards and, accordingly, such examination included such
tests of the accounting records and such other auditing procedures as
were considered necessary in the circumstances;
(c) promptly after receipt thereof, any additional written
reports, management letters or other detailed information contained in
writing concerning significant aspects of the Borrower's or any
Subsidiary's operations and financial affairs given to it by its
independent public accountants;
(d) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which the Borrower
sends to its shareholders, and copies of all other regular, periodic
and special reports and all registration statements which the Borrower
files with the SEC or any successor thereto, or with any national
securities exchange;
(e) as soon as available, and in any event within ninety (90)
days after to the end of each fiscal year of the Borrower, a copy of
the Borrower's consolidated and consolidating business plan for the
following fiscal year, such business plan to show the Borrower's
projected consolidated and consolidating revenues, expenses, and
balance sheet on month-by-month basis, such business plan to be in
reasonable detail prepared by the Borrower and in form reasonably
satisfactory to the Required Banks; and
(f) promptly after knowledge thereof shall have come to the
attention of any responsible officer of the Borrower, written notice
of (i) any Change of Control and (ii) any threatened or pending
litigation or governmental proceeding or labor controversy against the
Borrower or any Subsidiary which would reasonably be expected to (x)
adversely effect the financial condition, Properties, business or
operations of the Borrower or any Subsidiary or (during the
Acquisition Period) Super Food or any of its subsidiaries or (y)
prevent or unduly delay the Merger or the consummation of the Tender
Offer or (iii) the occurrence of any Default or Event of Default
hereunder.
Each of the financial statements furnished to the Banks pursuant to subsections
(a) and (b) of this Section shall be accompanied by a written certificate in the
form attached hereto as Exhibit H signed by the President or chief financial
officer of the Borrower to the effect
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that to the best of such officer's knowledge and belief no Default or Event of
Default has occurred during the period covered by such statements or, if any
such Default or Event of Default has occurred during such period, setting forth
a description of such Default or Event of Default and specifying the action, if
any, taken by the Borrower to remedy the same. Such certificate shall also set
forth the calculations supporting such statements in respect of Sections 9.7,
9.8, 9.9, 9.10 and 9.11 of this Agreement.
SECTION 9.6. INSPECTION. The Borrower shall, and shall cause each
Subsidiary to, permit the Administrative Agent, each Bank and each of their duly
authorized representatives and agents to visit and inspect any of the
Properties, corporate books and financial records of the Borrower and each
Subsidiary, to examine and make copies of the books of accounts and other
financial records of the Borrower and each Subsidiary, and to discuss the
affairs, finances and accounts of the Borrower and each Subsidiary with, and to
be advised as to the same by, its officers, employees and independent public
accountants (and by this provision the Borrower hereby authorizes such
accountants to discuss with the Administrative Agent and such Banks the finances
and affairs of the Borrower and of each Subsidiary) at such reasonable times and
reasonable intervals as the Administrative Agent or any such Bank may designate.
SECTION 9.7. CURRENT RATIO. The Borrower shall not at any time permit
the Current Ratio to be less than 1.25 to 1.0.
SECTION 9.8. TANGIBLE NET WORTH. The Borrower shall not at any time
permit Tangible Net Worth to be less than the Minimum Required Amount. For
purposes hereof, the term "MINIMUM REQUIRED AMOUNT" shall mean (a) $125,000,000
through March 22, 1997 and (b) shall increase (but never decrease) on a
cumulative basis as of March 23, 1997 and as of the last day of each fiscal
quarter of the Borrower thereafter, by an amount equal to 50% of Consolidated
Net Income for the fiscal quarter of the Borrower then ended (if positive for
such quarter).
SECTION 9.9. LEVERAGE RATIO. The Borrower shall not, as of the close of
any fiscal quarter of the Borrower set forth below, permit the Leverage Ratio to
be more than the amount set forth to the right of such quarter:
As Of Close Of Each Fiscal Quarter:
Leverage Ratio Shall
From and Including To and Including Not be More Than:
------------------ ---------------- --------------------
1st fiscal quarter of 3rd fiscal quarter of 4.00 to 1
fiscal year 1997 fiscal year 1997
4th fiscal quarter of 1st fiscal quarter of 3.75 to 1
fiscal year 1997 fiscal year 1998
2d fiscal quarter 1st fiscal quarter of 3.50 to 1
of fiscal year 1998 fiscal year 1999
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2d fiscal quarter of 1st fiscal quarter of 3.25 to 1
fiscal year 1999 2000 fiscal year
2d fiscal quarter of each fiscal quarter 3.00 to 1
fiscal year 2000 thereafter
SECTION 9.10. INTEREST COVERAGE RATIO. The Borrower shall not, as of the
close of any fiscal quarter of the Borrower set forth below, permit the Interest
Coverage Ratio to be less than the amount set forth to the right of such period:
As Of Close Of Each Fiscal Quarter:
Interest Coverage Ratio
From and Including To and Including Shall Not be Less Than:
------------------ ---------------- -----------------------
1st fiscal quarter of 3rd fiscal quarter of 1.50 to 1
fiscal year 1997 fiscal year 1997
4th fiscal quarter of 3rd fiscal quarter of 1.75 to 1
fiscal year 1997 fiscal year 1998
4th fiscal quarter 3rd fiscal quarter of 2.25 to 1
of fiscal year 1998 fiscal year 1999
4th fiscal quarter of each fiscal quarter 2.50 to 1
fiscal year 1999 thereafter
SECTION 9.11. LONG-TERM DEBT. The Borrower shall not, and shall not
permit any Subsidiary to, issue, incur, assume, create or have outstanding any
Long-Term Debt with a Weighted Average Life to Maturity of less than seven
years.
SECTION 9.12. LIMITS ON AGGREGATE INDEBTEDNESS.
(a) INTERIM LIMIT ON BORROWER. The Borrower shall not permit its Total
Funded Debt to aggregate more than $475,000,000 at any time prior to March 22,
1997.
(b) PERMANENT LIMIT ON SUBSIDIARIES. The Borrower shall not permit any
Subsidiary to issue, incur, assume, create or have outstanding any Indebtedness;
PROVIDED, HOWEVER, that the foregoing shall not restrict nor operate to prevent
Indebtedness of the Subsidiaries (excluding intercompany Indebtedness owed to
the Borrower or any other Subsidiary) aggregating not more than 12% of the Total
Assets prior to April 8, 1997 and 5% of Total Assets thereafter.
SECTION 9.13. LIENS. The Borrower shall not, nor shall it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by
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the Borrower or any Subsidiary; PROVIDED, HOWEVER, that the foregoing shall not
apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges, good faith cash deposits in connection with tenders, contracts or
leases to which the Borrower or any Subsidiary is a party or other cash
deposits required to be made in the ordinary course of business, provided
in each case that the obligation is not for borrowed money and that the
obligation secured is not overdue or, if overdue, is being contested in
good faith by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords', carriers', or
other similar Liens arising in the ordinary course of business with respect
to obligations which are not due or which are being contested in good faith
by appropriate proceedings which prevent enforcement of the matter under
contest;
(c) the pledge of assets for the purpose of securing an appeal, stay
or discharge in the course of any legal proceeding, provided that the
aggregate amount of liabilities of the Borrower and its Subsidiaries
secured by a pledge of assets permitted under this subsection, including
interest and penalties thereon, if any, shall not be in excess of
$15,000,000 at any one time outstanding;
(d) Liens on any Property existing at the time of acquisition thereof
by the Borrower or any Subsidiary and not created in contemplation of such
acquisition provided (i) such Lien is and will remain confined to the same
Property subject thereto at the time such Property is acquired and (ii)
such Lien secures only the obligations secured thereby at the time such
Property is acquired;
(e) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties which are necessary for the conduct of the activities of the
Borrower and any Subsidiary of the Borrower or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair their use in the
operation of the business of the Borrower or any Subsidiary of the
Borrower; and
(f) Liens not otherwise permitted under this Section 9.13 on Property
(other than (i) shares of capital stock in any Subsidiary and (ii) accounts
receivable, inventory and similar working capital assets) securing
Indebtedness in an aggregate principal amount not exceeding 5% of the Total
Assets.
SECTION 9.14. INVESTMENTS, ACQUISITIONS, LOANS, ADVANCES AND GUARANTIES.
The Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly, make, retain
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or have outstanding any investments (whether through purchase of stock or
obligations or otherwise) in, or loans or advances (other than for travel
advances and other similar cash advances made to employees and sales
representatives in the ordinary course of business) to, any other Person, or
acquire all or any substantial part of the assets or business of any other
Person or division thereof, or be or become liable on any Guaranty, or
subordinate any claim or demand it may have to the claim or demand of any other
Person (cumulatively, all of the foregoing, being "INVESTMENTS"); PROVIDED,
HOWEVER, that the foregoing shall not apply to nor operate to prevent:
(a) investments in direct obligations of the United States of America
or of any agency or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States of America, provided
that any such obligations shall mature within one year of the date of
issuance thereof;
(b) investments in commercial paper rated at least P-1 by Moody's
Investors Services, Inc. and at least A-1 by Standard & Poor's Corporation
maturing within 270 days of the date of issuance thereof;
(c) investments in certificates of deposit issued by any United
States commercial bank having capital and surplus of not less than
$100,000,000 which have a maturity of one year or less or in banker's
acceptances endorsed by any Bank or other such commercial bank and maturing
within six months of the date of acceptance;
(d) investments in repurchase obligations with a term of not more
than seven (7) days for underlying securities of the types described in
subsection (a) above entered into with any bank meeting the qualifications
specified in subsection (c) above, provided all such agreements require
physical delivery of the securities securing such repurchase agreement,
except those delivered through the Federal Reserve Book Entry System;
(e) investments in money market funds that invest solely, and which
are restricted by their respective charters to invest solely, in
investments of the type described in the immediately preceding subsections
(a), (b), (c) and (d) above;
(f) ownership of stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to
the Borrower or any Subsidiary;
(g) endorsement of items for deposit or collection of commercial
paper received in the ordinary course of business;
(h) acquisitions of all or substantially all of the assets or
business of any other Person engaged in the same or similar business as the
Borrower, or of a division of a Person engaged in such a business, or of
all or substantially all the Voting Stock of a Person, so long as (i) no
Default or Event of Default exists or would exist after giving effect to
such acquisition, (ii) the Board of Directors or other governing body of
such
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Person whose Property or Voting Stock is being so acquired has approved the
terms of such acquisition, (iii) the Borrower can demonstrate that on a PRO
FORMA basis after giving effect to such acquisition it will continue to
comply through the term of this Agreement with all the terms and conditions
of the Loan Documents and (iv) the Borrower has provided to the Banks such
financial and other information regarding the Person whose Property or
Voting Stock is being so acquired, including historical financial
statements, and a description of such Person, as the Administrative Agent
or the Required Banks have reasonably requested;
(i) Investments in Subsidiaries, and Investments by the Subsidiaries
in the Borrower, provided in each case that Investments in Foreign
Subsidiaries at no time aggregate more than $25,000,000;
(j) loans and advances to customers of the Borrower and its
Subsidiaries for use by such customers in the ordinary course of their
respective businesses provided that (i) except for such loans and advances
are outstanding to Super Food and its subsidiaries on the first date they
become Subsidiaries hereunder, all such loans and advances have been made
in accordance with the Borrower's loan policy as in effect as of the date
hereof and (ii) the aggregate principal amount outstanding on such loans
does not exceed the Maximum Permitted Amount (the "MAXIMUM PERMITTED
AMOUNT" to mean $125,000,000 through January 3, 1998 and shall increase by
$10,000,000 as of January 4, 1998 and by an additional $10,000,000 as of
the first day of each fiscal year of the Borrower thereafter);
(k) the Letters of Credit;
(l) the Subsidiary Guarantee Agreements; and
(m) investments, loans, advances and Guarantees not otherwise
permitted by this Section aggregating not more than $100,000,000 at any one
time outstanding.
In determining the amount of investments, acquisitions, loans, advances and
Guarantees permitted under this Section, investments and acquisitions shall
always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and Guarantees shall be taken at
the amount of obligations guaranteed thereby.
Notwithstanding anything herein to the contrary, unless and until a
Subsidiary Guarantee Agreement from a given Subsidiary and the related
documentation (including opinion of counsel) to be required by Section 9.1
hereof is furnished to the Agent, no Investments shall be made in such
Subsidiary after the date hereof by the Borrower or any other Subsidiary except
in the ordinary course of business to provide such Subsidiary ordinary and
necessary working capital.
SECTION 9.15. MERGERS, CONSOLIDATIONS AND SALES. The Borrower shall not,
nor shall it permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease
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or otherwise dispose of all or any substantial part of its Property, including
any disposition of Property as part of a sale and leaseback transaction, or in
any event sell or discount (with or without recourse) any of its notes or
accounts receivable; PROVIDED, HOWEVER, that this Section shall not apply to nor
prohibit:
(a) the Merger;
(b) any merger or consolidation so long as the Borrower is the
surviving corporation and, at the time of such merger or consolidation and
immediately after giving effect thereto, no Default or Event of Default
shall occur or be continuing;
(c) any merger or consolidation of a Subsidiary with or into the
Borrower (so long as the Borrower is the surviving entity) or any other
Subsidiary (so long as a Wholly-owned Subsidiary is the surviving entity)
so long as, at the time of such merger or consolidation or immediately
after giving effect thereto, no Default or Event of Default shall occur or
be continuing;
(d) the sale, lease, transfer or other disposition by any Subsidiary
of all or any portion of its assets to the Borrower or any other
Subsidiary;
(e) the sale of accounts receivable by the Borrower and its
Subsidiaries in the ordinary course of business to Persons other than
Affiliates provided that such sale is part of a securitization or similar
financing transaction and the aggregate face amount of such accounts
receivables sold and outstanding at any one time does not exceed
$75,000,000;
(f) the sale by the Borrower or any Subsidiary of (i) assets no
longer used or useful in the conduct of their respective businesses or (ii)
inventory in the ordinary course of their respective businesses; and
(g) sales, transfers, leases or other dispositions of Property not
otherwise permitted by this Section provided the aggregate amount thereof
during any calendar year does not exceed 15% of Total Assets as of the
first day of such year and further provided that if the same aggregate more
than 5% of Total Assets as of such day, an amount of the proceeds thereof
in excess of such 5% level are used to purchase assets used or to be used
in the ordinary course of the business of the Borrower and its
Subsidiaries.
SECTION 9.16. MAINTENANCE OF SUBSIDIARIES. The Borrower shall not assign,
sell or transfer, or permit any Subsidiary to issue, assign, sell or transfer,
any shares of capital stock of a Subsidiary; PROVIDED that the foregoing shall
not operate to prevent:
(a) the transfer of shares of capital stock of any Subsidiary as
consideration to the transferor in any acquisition permitted by Section
9.14(h) hereof; and
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(b) the issuance, sale and transfer to any Person of any shares of
capital stock of a Subsidiary solely for the purpose of qualifying, and to
the extent legally necessary to qualify, such Person as a director of such
Subsidiary.
SECTION 9.17. ERISA. The Borrower shall, and shall cause each Subsidiary
to, promptly pay and discharge all obligations and liabilities arising under
ERISA of a character which if unpaid or unperformed would reasonably be expected
to result in the imposition of a Lien against any of its Properties. The
Borrower shall, and shall cause each Subsidiary to, promptly notify the
Administrative Agent and each Bank of (i) the occurrence of any reportable event
(as defined in ERISA) with respect to a Plan (other than such a reportable event
described in ERISA Section 4043(c) for which the 30-day notice requirement is
waived provided that the loss of qualification of a Plan and the failure to meet
the minimum funding standards of Section 412 of the Code or Section 302 of ERISA
shall require notification regardless of whether notice of such event is
waived), (ii) receipt of any notice from the PBGC of its intention to seek
termination of any Plan or appointment of a trustee therefor, (iii) its
intention to terminate or withdraw from any Plan, and (iv) the occurrence of any
event with respect to any Plan which would reasonably be expected to result in
the incurrence by the Borrower or any Subsidiary of any material liability, fine
or penalty, or any material increase in the contingent liability of the Borrower
or any Subsidiary with respect to any post-retirement Welfare Plan benefit
(other than such a benefit provided pursuant to a multiemployer plan).
SECTION 9.18. COMPLIANCE WITH LAWS. The Borrower shall, and shall cause
each Subsidiary to, comply in all respects with the requirements of all federal,
state and local laws, rules, regulations, ordinances and orders applicable to or
pertaining to their Properties or business operations, non-compliance with which
could have a material adverse effect on the financial condition, Properties,
business or operations of the Borrower or any Subsidiary or could result in a
Lien upon any of their Property.
SECTION 9.19. CHANGE IN THE NATURE OF BUSINESS. The Borrower shall not,
and shall not permit any Subsidiary to, engage in any business or activity if as
a result the general nature of the business of the Borrower or any Subsidiary
would be changed in any material respect from the general nature of the business
engaged in by the Borrower or such Subsidiary on the date of this Agreement.
SECTION 9.20. USE OF LOAN PROCEEDS. The Borrower will use all credit
under this Agreement solely for purposes permitted by Section 3.9 hereof.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES.
SECTION 10.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an Event of Default:
(a) (i) default in the payment when due of any principal on any Note
or any Loan evidenced thereby or any Reimbursement Obligation, whether at
the stated maturity thereof or at any other time provided in any Loan
Document; or (ii) default
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for a period of three (3) days in the payment when due of interest on any Note
or any Loan evidenced thereby or any Reimbursement Obligation or in the payment
when due of any fee or other Obligation;
(b) default by the Borrower in the observance or performance of any
covenant set forth in Section 9 hereof;
(c) default by the Borrower in the observance or performance of any
other provision hereof or of any other Loan Document not mentioned in (a)
or (b) above, which is not remedied within thirty (30) days after notice
thereof to the Borrower by the Administrative Agent;
(d) any representation or warranty made herein by the Borrower, or in
any statement or certificate furnished pursuant hereto or pursuant to any
other Loan Document by the Borrower or any Subsidiary, or in connection
with any Loan made or Letter of Credit issued hereunder, proves untrue in
any material respect as of the date of the issuance or making thereof;
(e) the Borrower or any Subsidiary shall fail within thirty (30) days
to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $15,000,000 (other than any judgment for which a
financially sound and reputable insurer has admitted liability), which is
not stayed on appeal or otherwise being appropriately contested in good
faith in a manner that stays execution thereon;
(f) the Borrower or any other member of its Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of
$1,000,000 which it shall be liable to pay to the PBGC or to a Plan under
Title IV of ERISA in each case except and to the extent such liability is
being contested in good faith and by appropriate proceedings which prevent
enforcement of the matter under contest; or notice of intent to terminate a
Plan or Plans (other than a multiemployer plan as defined in Section 3(37)
of ERISA) having aggregate Unfunded Vested Liabilities in excess of
$5,000,000 (collectively, a "MATERIAL PLAN") shall be filed under Title IV
of ERISA by the Borrower or any other member of its Controlled Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan; or a proceeding
shall be instituted by a fiduciary of any Plan against the Borrower or any
member of its Controlled Group to enforce Section 515 or 4219(c)(5) of
ERISA and such proceeding shall not have been dismissed within thirty (30)
days thereafter and such proceeding would reasonably be expected to result
in liabilities in excess of $1,000,000; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating
that any Material Plan must be terminated;
(g) (A) default shall occur in the payment when due (subject to any
applicable grace period) of any indebtedness for borrowed money aggregating
in excess of $10,000,000 which was incurred, assumed or guaranteed by the
Borrower or any Subsidiary, or (B) default or the happening of any event
shall occur under any
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indenture, agreement or other instrument under which any indebtedness for
borrowed money aggregating in excess of $10,000,000 was incurred, assumed or
guaranteed by the Borrower or any Subsidiary if the effect of such default is to
accelerate, or permit the acceleration of, the maturity of such indebtedness or
any mandatory unscheduled prepayment, purchase or funding thereof;
(h) any Subsidiary obligated on any guarantee of any Obligations
shall purport to disavow, revoke, repudiate or terminate such guarantee;
(i) the Merger shall not be consummated by April 8, 1997 or shall be
rescinded subsequent to the consummation thereof or the Merger Agreement
shall be terminated (provided this clause (i) shall have no effect unless
any Acquisition Credit shall have been extended);
(j) the Borrower or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent to,
or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of
its property, (v) institute any proceeding seeking to have entered against
it an order for relief under the United States Bankruptcy Code, as amended,
to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (vi) take any corporate action in furtherance of any matter
described in parts (i)-(v) above, or (vii) fail to contest in good faith
any appointment or proceeding described in Section 10.1(k) hereof; or
(k) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any Subsidiary or any
substantial part of any of their Property, or a proceeding described in
Section 10.1(j)(v) shall be instituted against the Borrower or any
Subsidiary, and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of sixty (60) days.
SECTION 10.2. NON-BANKRUPTCY DEFAULTS. When any Event of Default other
than those described in Sections 10.1(j) or (k) has occurred and is continuing,
the Administrative Agent shall, by notice to the Borrower, (a) if so directed by
the Required Banks, terminate the remaining Commitments and Swing Line
Commitment of the Banks hereunder on the date stated in such notice (which may
be the date thereof); and (b) if so directed by the Banks holding Notes
evidencing more than 51% of the aggregate principal amount of all Loans and
credit risk with respect to Letters of Credit then outstanding, (1) declare the
principal of and the accrued interest on all outstanding Notes to be forthwith
due and payable and thereupon all of said Notes, including both principal and
interest, and all fees, charges, commissions and other Obligations payable
hereunder, shall be and become immediately due and payable without further
demand, presentment, protest or notice of any kind, (2) demand
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that the Borrower immediately pay to the Administrative Agent, subject to
Section 10.4 below, the full amount then available for drawing under each or any
Letter of Credit, and the Borrower agrees to immediately make such payment and
acknowledges and agrees that the Banks would not have an adequate remedy at law
for failure by the Borrower to honor any such demand and that the Administrative
Agent, for the benefit of the Banks, shall have the right to require the
Borrower to specifically perform such undertaking whether or not any drawings or
other demands for payment have been made under any Letter of Credit, and (3)
enforce any and all rights and remedies available to it under the Loan Documents
or applicable law. The Administrative Agent, after giving notice to the
Borrower pursuant to Section 10.1(c) or this Section 10.2, shall also promptly
send a copy of such notice to the other Banks, but the failure to do so shall
not impair or annul the effect of such notice.
SECTION 10.3. BANKRUPTCY DEFAULTS. When any Event of Default described in
subsections (j) or (k) of Section 10.1 hereof has occurred and is continuing,
then all outstanding Notes, including both principal and interest, and all fees,
charges, commissions and other Obligations payable hereunder, shall immediately
become due and payable without presentment, demand, protest or notice of any
kind, and the obligation of the Banks to extend further credit pursuant to any
of the terms hereof shall immediately terminate and the Borrower shall
immediately pay to the Administrative Agent, subject to Section 10.4 below, the
full amount then available for drawing under all outstanding Letters of Credit,
the Borrower acknowledging that the Banks would not have an adequate remedy at
law for failure by the Borrower to honor any such demand and that the Banks, and
the Administrative Agent on their behalf, shall have the right to require the
Borrower to specifically perform such undertaking whether or not any draws or
other demands for payment have been made under any of the Letters of Credit.
SECTION 10.4. COLLATERAL FOR UNDRAWN LETTERS OF CREDIT. (a) If the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 3.7 or under Section 10.2 or 10.3
above, the Borrower shall forthwith pay the amount required to be so prepaid, to
be held by the Administrative Agent as provided in subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) above shall be held by
the Administrative Agent in a separate collateral account (such account, and the
credit balances, properties and any investments from time to time held therein,
and any substitutions for such account, any certificate of deposit or other
instrument evidencing any of the foregoing and all proceeds of and earnings on
any of the foregoing being collectively called the "ACCOUNT") as security for,
and for application by the Administrative Agent (to the extent available) to,
the reimbursement of any payment under any Letter of Credit then or thereafter
made by the Administrative Agent, and to the payment of the unpaid balance of
any Loans and all other Obligations. The Account shall be held in the name of
and subject to the exclusive dominion and control of the Administrative Agent
for the benefit of the Administrative Agent and the Banks. If and when
requested by the Borrower, the Administrative Agent shall invest funds held in
the Account from time to time in direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America with a remaining maturity of one year or less, PROVIDED that
the
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Administrative Agent is irrevocably authorized to sell investments held in the
Account when and as required to make payments out of the Account for application
to amounts due and owing from the Borrower to the Administrative Agent or Banks;
PROVIDED, HOWEVER, that if (i) the Borrower shall have made payment of all such
obligations referred to in subsection (a) above, (ii) all relevant preference or
other disgorgement periods relating to the receipt of such payments have passed,
and (iii) no Letters of Credit, Commitments, Swing Line Commitment, Loans or
other Obligations remain outstanding hereunder, then the Administrative Agent
shall repay to the Borrower any remaining amounts held in the Account.
SECTION 10.5. EXPENSES. The Borrower agrees to pay to the Administrative
Agent and each Bank, or any other holder of any Note outstanding hereunder, all
costs and expenses incurred or paid by the Administrative Agent and such Bank or
any such holder, including reasonable attorneys' fees (which may include
allocated costs of in-house counsel) and court costs, in connection with any
Default or Event of Default by the Borrower hereunder or in connection with the
enforcement of any of the terms hereof or of any of the Loan Documents.
SECTION 10.6. NOTICE OF DEFAULT. The Administrative Agent shall give
notice to the Borrower under Section 10.1(c) hereof promptly upon being
requested to do so by any Bank.
SECTION 11. CHANGE IN CIRCUMSTANCES.
SECTION 11.1. CHANGE OF LAW. Notwithstanding any other provisions of this
Agreement or any Note, if at any time after the date hereof any change in
applicable law or regulation or in the interpretation or administration thereof
makes it unlawful for any Bank to make or continue to maintain Eurodollar Loans
or Eurodollar Bid Loans or to give effect to its obligations as contemplated
hereby, such Bank shall promptly give notice thereof to the Borrower, with a
copy to the Administrative Agent, and such Bank's obligations to make or
maintain Eurodollar Loans or Eurodollar Bid Loans under this Agreement shall
terminate until it is no longer unlawful for such Bank to make or maintain such
Eurodollar Loans or Eurodollar Bid Loans. The Borrower shall prepay on demand
the outstanding principal amount of any such affected Eurodollar Loans or
Eurodollar Bid Loans, together with all interest accrued thereon and all other
amounts then due and payable to such Bank under this Agreement; PROVIDED,
HOWEVER, subject to all of the terms and conditions of this Agreement, the
Borrower may then elect to borrow the principal amount of the affected
Eurodollar Loan or Eurodollar Bid Loan from such Bank by means of a Base Rate
Loan from such Bank that shall not be made ratably by the Banks but only from
such affected Bank and payments whereon shall be made contemporaneously with
payments on the relevant Borrowing of Eurodollar Loans or Eurodollar Bid Loans.
SECTION 11.2. UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN, OR
INADEQUACY OF, LIBOR. If on or prior to the first day of any Interest Period
for any Borrowing of Eurodollar Loans or Eurodollar Bid Loans:
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(a) the Administrative Agent determines that deposits in United
States Dollars in the applicable amounts are not being offered to it in the
off-shore U.S. Dollar market for such Interest Period, or that by reason of
circumstances affecting the off-shore U.S. Dollar market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR, or
(b) any Bank shall advise the Administrative Agent that LIBOR as
determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Bank of funding its Eurodollar Loans or Loan or
Eurodollar Bid Loans or Loan, as applicable, for such Interest Period,
then the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon, until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligations of the Banks or of the relevant Bank to make such Eurodollar
Loans or Eurodollar Bid Loans shall be suspended.
SECTION 11.3. INCREASED COST AND REDUCED RETURN. (a) If on or after (x)
the date hereof, in the case of any obligation to make Committed Loans, or (y)
the date of the related Bid, in the case of any Bid Loan, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject any Bank (or its Lending Office) to any tax,
duty or other charge with respect to its Fixed Rate Loans, its Notes or its
obligation to make Fixed Rate Loans, or shall change the basis of taxation
of payments to any Bank (or its Lending Office) of the principal of or
interest on its Fixed Rate Loans or any other amounts due under this
Agreement in respect of its Fixed Rate Loans or its obligation to make
Fixed Rate Loans (except for changes in the rate of tax on the overall net
income of such Bank or its Lending Office imposed by the jurisdiction in
which such Bank's principal executive office or Lending Office is located);
or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirements (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, such as, for example, a change in official reserve requirements,
but excluding with respect to any Eurodollar Loan or Eurodollar Bid Loan,
any such requirement to the extent included in the Eurodollar Reserve
Percentage used in computing the Adjusted LIBOR for such Loan) against
assets of, deposits with or for the account of, or credit extended by, any
Bank (or its Lending Office) or shall impose on any Bank (or its Lending
Office) or on the interbank market any other condition affecting its Fixed
Rate Loans, its Notes or its obligation to make Fixed Rate Loans;
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and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then after demand by such Bank (with
a copy to the Administrative Agent), the Borrower shall promptly pay to such
Bank such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall determine that the adoption after the date hereof of
any applicable law, rule or regulation regarding capital adequacy, or any change
in any existing law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank (or any of its branches) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Bank or any Person controlling such Bank
as a consequence of such Bank's obligations hereunder or for the credit which is
the subject matter hereof to a level below that which such Bank could have
achieved but for such adoption, change or compliance (taking into consideration
the policies of such Bank or any Person controlling such Bank with respect to
liquidity and capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, within fifteen (15) days after demand by such Bank, the
Borrower shall pay to the Administrative Agent for the account of such Bank such
additional amount or amounts reasonably determined by such Bank as will
compensate such Bank for such reduction.
(c) Each Bank that determines to seek compensation under this Section 11.3
shall notify the Borrower and the Agent of the circumstances that entitle the
Bank to such compensation pursuant to this Section 11.3 and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section 11.3 and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use reasonable
averaging and attribution methods.
SECTION 11.4. LENDING OFFICES. Each Bank may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "LENDING OFFICE") for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a notice to the Borrower and
the Administrative Agent.
SECTION 11.5. DISCRETION OF BANK AS TO MANNER OF FUNDING. Notwithstanding
any other provision of this Agreement, each Bank shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Bank had actually funded and
maintained each Eurodollar Loan or Eurodollar Bid
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Loan through the purchase of deposits in the relevant market having a maturity
corresponding to such Loan's Interest Period and bearing an interest rate equal
to LIBOR for such Interest Period.
SECTION 12. THE AGENTS
SECTION 12.1. APPOINTMENT AND AUTHORIZATION. (a) Each Bank hereby
irrevocably appoints Harris Trust and Savings Bank as Administrative Agent for
the Banks under the Loan Documents and hereby authorizes the Administrative
Agent to take such action as Administrative Agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto.
(b) The Administrative Agent hereby irrevocably appoints Bank of Montreal
and PNC Bank each as a Syndication Agent for the Banks under the Loan Documents
and hereby authorizes each such Syndication Agent to take such action as a
Syndication Agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to such Syndication Agent by the terms thereof,
together with such powers as are reasonably incidental thereto.
SECTION 12.2. AGENT AND AFFILIATES. Each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any other Bank
and may exercise or refrain from exercising the same as though it were not an
Agent, and each Agent and its affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with the Borrower or any
Subsidiary or affiliate of the Borrower as if it were not an Agent under the
Loan Documents. The terms Bank and Banks as used in the Loan Documents, unless
the context otherwise clearly requires, include each Agent in its individual
capacity as a Bank.
SECTION 12.3. ACTION BY AGENT. Except for action expressly required of
any Agent hereunder, each Agent shall in all cases be fully justified in failing
or refusing to act hereunder unless such Agent shall be indemnified to its
reasonable satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. In all cases in which this Agreement does not require an Agent to take
certain actions, such Agent shall be fully justified in using its discretion in
failing to take or in taking any action hereunder. Without limiting the
generality of the foregoing, no Agent shall be required to take any action with
respect to any Event of Default, except as expressly provided in Section 10.2.
Each Agent shall be acting as an independent contractor hereunder and nothing
herein shall be deemed to impose on any Agent any fiduciary obligations to the
Banks or the Borrower.
SECTION 12.4. CONSULTATION WITH EXPERTS. Each Agent may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
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SECTION 12.5. LIABILITY OF AGENT. Neither any Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
not taken by it in connection herewith (i) with the consent or at the request of
the Required Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither any Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
this Agreement, any other Loan Document or any Credit Event or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any condition specified in
Section 8, except receipt of items required to be delivered to such Agent; or
(iv) the validity, effectiveness, genuineness, enforceability or collectability
hereof or of any other Loan Document or any other instrument or writing
furnished in connection therewith; and no Agent makes any representation of any
kind or character with respect to any such matter mentioned in this sentence.
Each Agent may execute any of its duties under any of the Loan Documents by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Banks, the Borrower or any other Person for the default or misconduct of any
such agents or attorneys-in-fact selected with reasonable care. No Agent shall
incur any liability by acting in reliance upon any notice, consent, certificate,
request or statement (whether written or oral) or other document believed by it
to be genuine or to be signed or sent by the proper party or parties. Each
Agent may treat the Banks that are named herein as the holders of the Notes and
the indebtedness contemplated herein unless and until such Agent receives notice
of the assignment of the Note and the indebtedness held by a Bank hereunder
pursuant to an assignment contemplated by Section 14.12 hereof.
SECTION 12.6. INDEMNIFICATION. Each Bank shall, ratably in accordance
with its Percentage, indemnify each Agent (to the extent not reimbursed by the
Borrower) against any cost, expenses (including reasonable counsels' fees and
disbursements), claims, demands, actions, losses, obligations, damages,
penalties, judgments, suits or liability (except such as result from such
Agent's gross negligence or willful misconduct) that such Agent may suffer or
incur in connection with this Agreement or any action taken or omitted by such
Agent hereunder.
SECTION 12.7. CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 12.8. RESIGNATION OF AGENT AND SUCCESSOR AGENT. Each Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower. Upon any such resignation of any Agent, the Required Banks shall have
the right to appoint, with the consent of the Borrower and each other Agent, a
successor Agent to serve in the same capacity as such resigning Agent. If no
successor Agent shall have been so appointed by the Required Banks, and shall
have accepted such appointment, within thirty (30) days after the
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retiring Agent's giving of notice of resignation then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any state thereof
that has a combined capital and surplus of at least $200,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent under the Loan Documents, and the retiring
Agent shall be discharged from its duties and obligations thereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Section
12 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent.
SECTION 12.9. PAYMENTS. Unless the Administrative Agent shall have been
notified by a Bank prior to the date on which such Bank is scheduled to make
payment to the Administrative Agent of the proceeds of a Loan (which notice
shall be effective upon receipt) that such Bank does not intend to make such
payment, the Administrative Agent may assume that such Bank has made such
payment when due and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to the Borrower the
proceeds of the Loan to be made by such Bank and, if any Bank has not in fact
made such payment to the Administrative Agent, such Bank shall, on demand, pay
to the Administrative Agent the amount made available to the Borrower
attributable to such Bank together with interest thereon in respect of each day
during the period commencing on the date such amount was made available to the
Borrower and ending on (but excluding) the date such Bank pays such amount to
the Administrative Agent at a rate per annum equal to the Federal Funds Rate.
If such amount is not received from such Bank by the Administrative Agent
immediately upon demand, the Borrower will, on demand, repay to the
Administrative Agent the proceeds of the Loan attributable to such Bank with
interest thereon at a rate per annum equal to the interest rate applicable to
the relevant Loan, but without such payment being considered a payment or
prepayment of a Loan, so that the Borrower will have no liability under Section
3.8 hereof with respect to such payment.
SECTION 12.10. SYNDICATION AGENTS. Nothing in this Agreement shall impose
any obligation on either of Bank of Montreal or PNC Bank in their capacity as
Syndication Agents.
SECTION 13 THE GUARANTEES.
SECTION 13.1. THE GUARANTEES. To induce the Banks to provide the credits
described herein and in consideration of benefits expected to accrue to each
Guarantor by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, each Guarantor hereby
unconditionally and irrevocably guarantees jointly and severally to the Agents
and the Banks, and each other holder of the indebtedness guaranteed hereby, the
due and punctual payment of all present and future indebtedness of the Borrower
evidenced by or arising out of the Loan Documents, including, but not limited
to, the due and punctual payment of principal of and interest on the Notes and
on the Reimbursement Obligations and the due and punctual payment of all other
obligations now or hereafter owed by the Borrower under the Loan Documents as
and when the same shall
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become due and payable, whether at stated maturity, by acceleration or
otherwise, according to the terms hereof and thereof. In case of failure by the
Borrower punctually to pay any indebtedness or other obligations guaranteed
hereby, each Guarantor hereby unconditionally agrees jointly and severally to
make such payment or to cause such payment to be made punctually as and when the
same shall become due and payable, whether at stated maturity, by acceleration
or otherwise, and as if such payment were made by the Borrower.
SECTION 13.2. GUARANTEE UNCONDITIONAL. The obligations of each Guarantor
as a guarantor under this Section 13 shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Borrower or of any other Guarantor
under this Agreement or any other Loan Document or by operation of law or
otherwise;
(b) any modification or amendment of or supplement to this Agreement
or any other Loan Document;
(c) any change in the corporate existence, structure or ownership of,
or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting, the Borrower, any other Guarantor, or any of their respective
assets, or any resulting release or discharge of any obligation of the
Borrower or of any other Guarantor contained in any Loan Document;
(d) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against any Agent, any Bank or any other
Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or demand
or any exercise of, or failure to exercise, any rights or remedies against
the Borrower, any other Guarantor or any other Person or Property;
(f) any application of any sums by whomsoever paid or howsoever
realized to any obligation of the Borrower, regardless of what obligations
of the Borrower remain unpaid;
(g) any invalidity or unenforceability relating to or against the
Borrower or any other Guarantor for any reason of this Agreement or of any
other Loan Document or any provision of applicable law or regulation
purporting to prohibit the payment by the Borrower or any other Guarantor
of the principal of or interest on any Note or any other amount payable by
it under the Loan Documents; or
(h) any other act or omission to act or delay of any kind by the
Administrative Agent, any Bank or any other Person or any other
circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the obligations of
the Guarantor under this Section 13.
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SECTION 13.3. DISCHARDGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. Each Guarantor's obligations under this Section 13 shall
remain in full force and effect until the Commitments are terminated and the
principal of and interest on the Notes and all other amounts payable by the
Borrower under this Agreement and all other Loan Documents shall have been paid
in full. If at any time any payment of the principal of or interest on any Note
or any other amount payable by the Borrower under the Loan Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Borrower or of a Guarantor, or otherwise,
each Guarantor's obligations under this Section 13 with respect to such payment
shall be reinstated at such time as though such payment had become due but had
not been made at such time.
SECTION 13.4. WAIVERS. (a) GENERAL. Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Agent, any Bank or any other Person against the Borrower, another Guarantor or
any other Person.
(b) SUBROGATION AND CONTRIBUTION. Unless and until the Obligations have
been fully paid and satisfied and the Commitments have terminated, each
Guarantor hereby agrees not to exercise or otherwise assert any claim or other
right it may now or hereafter acquire against the Borrower or any other
Guarantor that arises from the existence, payment, performance or enforcement of
such Guarantor's obligations under this Section 13 or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, or any right to participate in any
claim or remedy of any Agent, any Bank or any other holder of the indebtedness
guaranteed hereby against the Borrower or any other Guarantor whether or not
such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from the
Borrower or any other Guarantor directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other right.
SECTION 13.5. LIMIT ON RECOVERY. Notwithstanding any other provision
hereof, the right to recovery of the holders of the indebtedness guaranteed
hereby against each Guarantor under this Section 13 shall not exceed $1.00 less
than the amount which would render such Guarantor's obligations under this
Section 13 void or voidable under applicable law, including without limitation
fraudulent conveyance law.
SECTION 13.6. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by the Borrower under this Agreement or any other
Loan Document is stayed upon the insolvency, bankruptcy or reorganization of the
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement or the other Loan Documents shall nonetheless be payable jointly
and severally by the Guarantors hereunder forthwith on demand by the
Administrative Agent made at the request of the Required Banks.
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SECTION 14. MISCELLANEOUS.
SECTION 14.1. WITHHOLDING TAXES. (a) PAYMENTS FREE OF WITHHOLDING.
Except as otherwise required by law and subject to Section 14.1(b) hereof, each
payment by the Borrower under this Agreement or the other Loan Documents or in
respect of the Letters of Credit shall be made without withholding for or on
account of any present or future taxes (other than overall net income taxes on
the recipient) imposed by or within the jurisdiction in which the Borrower is
domiciled, any jurisdiction from which the Borrower makes any payment, or (in
each case) any political subdivision or taxing authority thereof or therein. If
any such withholding is so required, the Borrower shall make the withholding,
pay the amount withheld to the appropriate governmental authority before
penalties attach thereto or interest accrues thereon and forthwith pay such
additional amount as may be necessary to ensure that the net amount actually
received by each Bank and the Administrative Agent free and clear of such taxes
(including such taxes on such additional amount) is equal to the amount which
that Bank or the Administrative Agent (as the case may be) would have received
had such withholding not been made. If the Administrative Agent or any Bank
pays any amount in respect of any such taxes, penalties or interest the Borrower
shall reimburse the Administrative Agent or that Bank for that payment on demand
in the currency in which such payment was made. If the Borrower pays any such
taxes, penalties or interest, it shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Bank or Administrative Agent on
whose account such withholding was made (with a copy to the Administrative Agent
if not the recipient of the original) on or before the thirtieth day after
payment. If any Bank or the Administrative Agent determines it has received or
been granted a credit against or relief or remission for, or repayment of, any
taxes paid or payable by it because of any taxes, penalties or interest paid by
the Borrower and evidenced by such a tax receipt, such Bank or Administrative
Agent shall, to the extent it can do so without prejudice to the retention of
the amount of such credit, relief, remission or repayment, pay to the Borrower
such amount as such Bank or Administrative Agent determines is attributable to
such deduction or withholding and which will leave such Bank or Administrative
Agent (after such payment) in no better or worse position than it would have
been in if the Borrower had not been required to make such deduction or
withholding. Nothing in this Agreement shall interfere with the right of each
Bank and the Administrative Agent to arrange its tax affairs in whatever manner
it thinks fit nor oblige any Bank or the Administrative Agent to disclose any
information relating to its tax affairs or any computations in connection with
such taxes.
(b) U.S. WITHHOLDING TAX EXEMPTIONS. Each Bank that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrower and the Administrative Agent on or before the earlier of
the date the initial Borrowing is made hereunder and thirty (30) days after the
date hereof, two duly completed and signed copies of either Form 1001 (relating
to such Bank and entitling it to a complete exemption from withholding under the
Code on all amounts to be received by such Bank, including fees, pursuant to the
Loan Documents and the Loans) or Form 4224 (relating to all amounts to be
received by such Bank, including fees, pursuant to the Loan Documents and the
Loans) of the United States Internal Revenue Service. Thereafter and from time
to time, each Bank shall submit to the Borrower and the Administrative Agent
such additional duly
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completed and signed copies of one or the other of such Forms (or such successor
forms as shall be adopted from time to time by the relevant United States taxing
authorities) as may be (i) requested by the Borrower in a written notice,
directly or through the Administrative Agent, to such Bank and (ii) required
under then-current United States law or regulations to avoid or reduce United
States withholding taxes on payments in respect of all amounts to be received by
such Bank, including fees, pursuant to the Loan Documents or the Loans or the
Letters of Credit.
(c) INABILITY OF BANK TO SUBMIT FORMS. If any Bank determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Borrower or Administrative Agent any form or certificate that such Bank is
obligated to submit pursuant to subsection (b) of this Section 14.1, or that
such Bank is required to withdraw or cancel any such form or certificate
previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Bank shall promptly notify the Borrower and
Administrative Agent of such fact and the Bank shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.
SECTION 14.2. NO WAIVER OF RIGHTS. No delay or failure on the part of the
Administrative Agent or any Bank or on the part of the holder or holders of any
Note in the exercise of any power or right under any Loan Document shall operate
as a waiver thereof or as an acquiescence in any default, nor shall any single
or partial exercise thereof preclude any other or further exercise of any other
power or right. The rights and remedies hereunder of the Administrative Agent,
the Banks and the holder or holders of any Notes are cumulative to, and not
exclusive of, any rights or remedies which any of them would otherwise have.
SECTION 14.3. NON-BUSINESS DAY. If any payment of principal or interest
on any Note or any fees shall fall due on a day which is not a Business Day, (i)
interest at the rate such Note bears for the period prior to maturity shall
continue to accrue on such principal from the stated due date thereof to and
including the next succeeding Business Day and (ii) such principal, interest and
fees shall be payable on such next succeeding Business Day
SECTION 14.4. DOCUMENTARY TAXES. The Borrower agrees that it will pay any
documentary, stamp or similar taxes payable in respect to any Loan Document,
including interest and penalties, in the event any such taxes are assessed,
irrespective of when such assessment is made and whether or not any credit is
then in use or available hereunder.
SECTION 14.5. SURVIVAL OF REPRESENTATIONS. All representations and
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and the other Loan Documents, and
shall continue in full force and effect with respect to the date as of which
they were made as long as any credit is in use or available hereunder.
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SECTION 14.6. SURVIVAL OF INDEMNITIES. All indemnities and all other
provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield of the Banks with respect to the Loans, including, but not
limited to, Section 3.8, Section 11.3 and Section 14.15 hereof, shall survive
the termination of this Agreement and the other Loan Documents and the payment
of the Loans and all other Obligations hereunder.
SECTION 14.7. SHARING OF SET-OFF. Each Bank agrees with each other Bank a
party hereto that if such Bank shall receive and retain any payment, whether by
set-off or application of deposit balances or otherwise ("SET-OFF"), on any of
the Loans or Reimbursement Obligations in excess of its ratable share of
payments on all such obligations then outstanding to the Banks, then such Bank
shall purchase for cash at face value, but without recourse, ratably from each
of the other Banks such amount of the Loans or Reimbursement Obligations, or
participations therein, held by each such other Banks (or interest therein) as
shall be necessary to cause such Bank to share such excess payment ratably with
all the other Banks; PROVIDED, HOWEVER, that if any such purchase is made by any
Bank, and if such excess payment or part thereof is thereafter recovered from
such purchasing Bank, the related purchases from the other Banks shall be
rescinded ratably and the purchase price restored as to the portion of such
excess payment so recovered, but without interest. For purposes of this
Section 14.7, amounts owed to or recovered by, the Administrative Agent in
connection with Reimbursement Obligations in which Banks have been required to
fund their participation shall be treated as amounts owed to or recovered by the
Administrative Agent as a Bank hereunder.
SECTION 14.8. NOTICES. Except as otherwise specified herein, all notices
under the Loan Documents shall be in writing (including cable, telecopy, or
other electronic communication) and shall be given to a party hereunder at its
address or telecopier number set forth below or such other address or telecopier
number as such party may hereafter specify by notice to the Administrative Agent
and the Borrower, given by courier, by United States certified or registered
mail, or by other telecommunication device capable of creating a written record
of such notice and its receipt. Notices under the Loan Documents to the Banks
and the Administrative Agent shall be addressed to their respective addresses,
telecopier, or telephone numbers set forth on the signature pages hereof, and to
the Borrower and the Guarantors to:
Nash-Finch Company
7600 France Avenue South
Minneapolis, Minnesota 55440-0355
Attention: Chief Financial Officer
Telecopy: (612) 844-1060
Telephone: (612) 844-1236
Each such notice, request or other communication shall be effective (i) if
given by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section 14.8 or on the signature pages hereof and a
confirmation of receipt of such telecopy has been received by the sender,
(ii) if given by courier, when delivered, (iii) if given by mail, three Business
Days after such communication is deposited in the mail, registered with
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return receipt requested, addressed as aforesaid or (iv) if given by any other
means, when delivered at the addresses specified in this Section 14.8 or on the
signature pages hereof; PROVIDED THAT any notice given pursuant to Section 1 or
2 hereof shall be effective only upon receipt and notices described in clauses
(i), (ii) and (iv) above that are received after normal business hours will be
deemed received at the opening of business on the next Business Day.
SECTION 14.9. COUNTERPARTS. This Agreement may be executed in any number
of counterpart signature pages, and by the different parties on different
counterparts, each of which when executed shall be deemed an original but all
such counterparts taken together shall constitute one and the same instrument.
SECTION 14.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Borrower and its successors and assigns, and shall inure to the benefit
of each of the Banks and the benefit of their respective successors and assigns,
including any subsequent holder of any Note. The Borrower may not assign any of
its rights or obligations under any Loan Document without the written consent of
all of the Banks.
SECTION 14.11. PARTICIPANTS. Each Bank shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitments held by such Bank at any time and from time to time to one or
more other Persons; PROVIDED THAT (i) no such participation shall relieve any
Bank of any of its obligations under this Agreement and (ii) no such participant
shall have any direct rights under this Agreement except as provided in this
Section 14.11, and no Agent shall have any obligation or responsibility to such
participant. Any agreement pursuant to which such participation is granted
shall provide that the granting Bank shall retain the sole right and
responsibility to enforce the obligations of the Borrower and Guarantors under
this Agreement and the other Loan Documents including, without limitation, the
right to approve any amendment, modification or waiver of any provision of the
Loan Documents, except that such agreement may provide that such Bank will not
agree to any modification, amendment or waiver of the Loan Documents that would
reduce the amount of or postpone any fixed date for payment of any Obligation in
which such participant has an interest. Any party to which such a participation
has been granted shall have the benefits of Section 3.8 and Section 11.3 hereof.
The Borrower and each Guarantor authorizes each Bank to disclose to any
participant or prospective participant under this Section 14.11 any financial or
other information pertaining to the Borrower or any Guarantor.
SECTION 14.12. ASSIGNMENT AGREEMENTS. Each Bank may, at its own expense,
from time to time upon at least five Business Days' notice to the Agents, assign
to other commercial lenders part of its rights and obligations under this
Agreement (including without limitation the indebtedness evidenced by the Notes
then owned by such assigning Bank, together with an equivalent proportion of its
obligation to make loans and advances and participate in Letters of Credit
hereunder) pursuant to written agreements executed by such assigning Bank, such
assignee lender or lenders, the Borrower and the Administrative Agent, which
agreements shall specify in each instance the portion of the indebtedness
evidenced by the Notes which is to be assigned to each such assignee lender and
the portion
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of the Commitment of the assigning Bank to be assumed by it (the "ASSIGNMENT
AGREEMENTS"); provided, however, that (i) except with respect to the Swing Loans
(which must be assigned in whole), each such assignment shall be of a constant,
and not a varying, percentage of the assigning Bank's rights and obligations
under this Agreement and the assignment shall cover the same percentage of such
Bank's Commitment, Loans, Notes and interests in Letters of Credit; (ii) unless
the Administrative Agent and the Borrower otherwise consent, the aggregate
amount of the Commitment, Loans, Notes and interests in the Letters of Credit of
the assigning Bank being assigned to such assignee lender pursuant to each such
assignment (determined as of the effective date of the relevant Assignment
Agreement) shall in no event be less than $10,000,000 and shall be an integral
multiple of $5,000,000 (other than assignments between existing Banks which may
be in the amount of $1,000,000 or in such greater amount which is an integral
multiple of $1,000,000); (iii) each Bank shall maintain for its own account at
least $10,000,000 of its Commitment or assign all of its Commitment; (iv) the
Administrative Agent and (except for an assignment made during the continuance
of any Event of Default) the Borrower must each consent, which consent shall not
be unreasonably withheld, to each such assignment to (provided no such consent
is required for any assignment to (i) any Bank party hereto, whether an original
signatory of this Agreement or a party hereto by reason of an Assignment
Agreement and (ii) any Affiliate of any such Bank), and (v) the assignee lender
must pay to the Administrative Agent a processing and recordation fee of $3,000
and any out-of-pocket attorney's fees incurred by the Administrative Agent in
connection with such Assignment Agreement. Upon the execution of each
Assignment Agreement by the assigning Bank thereunder, the assignee lender
thereunder, the Borrower and the Administrative Agent and payment to such
assigning Bank by such assignee lender of the purchase price for the portion of
the indebtedness of the Borrower being acquired by it, (i) such assignee lender
shall thereupon become a "BANK" for all purposes of this Agreement with a
Commitment (and, if relevant, shall be deemed to be Harris Bank for purposes of
the Swing Loans) in the amount set forth in such Assignment Agreement and with
all the rights, powers and obligations afforded a Bank hereunder, (ii) such
assigning Bank shall have no further liability for funding the portion of its
Commitment (and, if relevant, Swing Line Commitment) assumed by such other Bank
and (iii) the address for notices to such assignee Bank shall be as specified in
the Assignment Agreement executed by it. Concurrently with the execution and
delivery of such Assignment Agreement, the Borrower shall execute and deliver
new Notes to the assignee Bank in the amount of its Commitment (and, if
relevant, Swing Line Commitment) and Bid Loans and new Notes to the assigning
Bank in the amounts of its Commitment and Bid Loans after giving effect to the
reduction occasioned by such assignment, such new Notes to constitute "NOTES"
for all purposes of this Agreement.
SECTION 14.13. AMENDMENTS. Any provision of the Loan Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by (a) the Borrower, (b) the Required Banks, and (c) if the rights or
duties of any Agent are affected thereby, such Agent; provided that:
(i) no amendment or waiver pursuant to this Section 14.13 shall
(A) increase the Commitment (or, if relevant Swing Line Commitment) of any
Bank without the consent of such Bank or (B) reduce the amount of or
postpone any fixed date for
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payment of any principal of or interest on any Loan or Reimbursement
Obligation or of any fee payable hereunder without the consent of each
Bank or (C) extend the Termination Date without the consent of each Bank;
and
(ii) no amendment or waiver pursuant to this Section 14.13 shall,
unless signed by each Bank, change any provision of Section 8, Section 10,
this Section 14.13, or the definition of Required Banks, or affect the
number of Banks required to take any action under the Loan Documents.
SECTION 14.14. HEADINGS. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
SECTION 14.15. LEGAL FEES, OTHER COSTS AND INDEMNIFICATION. The Borrower
agrees to pay all reasonable costs and expenses of the Agents in connection with
the preparation, negotiation, associated due diligence review, administration,
and syndication of the Loan Documents, including without limitation, the
reasonable fees and disbursements of Chapman and Cutler, counsel to the
Administrative Agent, and Messrs. Buchanan Ingersoll, Professional Corporation,
counsel to PNC Bank, in connection with the preparation and execution of the
Loan Documents, and any amendment, waiver or consent related hereto, whether or
not the transactions contemplated herein are consummated. The Borrower further
agrees to indemnify each Bank, each Agent, and their respective directors,
officers and employees, against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor, whether or not the indemnified Person is
a party thereto) which any of them may incur or reasonably pay arising out of or
relating to any Loan Document or any of the transactions contemplated thereby
(including without limitation the Acquisition) or the direct or indirect
application or proposed application of the proceeds of any Loan or Letter of
Credit, other than those which arise from the gross negligence or willful
misconduct of the party claiming indemnification or otherwise expressly provided
herein to be paid for by such Bank. The Borrower, upon demand by an Agent or a
Bank at any time, shall reimburse such Agent or Bank for any legal or other
expenses incurred in connection with investigating or defending against any of
the foregoing, except if the same is directly due to the gross negligence or
willful misconduct of the party to be indemnified.
SECTION 14.16. SET-OFF. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, each Bank and each subsequent holder of any
Note is hereby authorized by the Borrower and each Guarantor at any time or from
time to time, without notice to the Borrower, to the Guarantors or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts, and in whatever currency
denominated) and any other indebtedness at any time held or owing by that Bank
or that subsequent holder to or for the credit or the account of the Borrower or
any Guarantor, whether or not matured, against and on account of the obligations
and liabilities of the Borrower or any Guarantor to that Bank or that subsequent
holder under the Loan
-71-
<PAGE>
Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with the Loan Documents, irrespective of
whether or not (a) that Bank or that subsequent holder shall have made any
demand hereunder or (b) the principal of or the interest on the Loans or Notes
and other amounts due hereunder shall have become due and payable pursuant to
Section 10 and although said obligations and liabilities, or any of them, may be
contingent or unmatured.
SECTION 14.17. ENTIRE AGREEMENT. The Loan Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior or contemporaneous agreements, whether written or oral, with
respect thereto are superseded thereby, except for the letter agreement dated as
of October 4, 1996 referred to in Sections 4.3 and 4.4 hereof.
SECTION 14.18. GOVERNING LAW. This Agreement and the other Loan Documents,
and the rights and duties of the parties hereto, shall be construed and
determined in accordance with the internal laws of the State of Illinois.
SECTION 14.19. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. The
Borrower hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois State
court sitting in the City of Chicago for purposes of all legal proceedings
arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby. The Borrower irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum. THE BORROWER, THE AGENTS, AND EACH BANK
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
[SIGNATURE PAGES TO FOLLOW]
-72-
<PAGE>
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of this 8th day of October, 1996.
NASH-FINCH COMPANY
By
--------------------------------
Name:
---------------------------
Title:
--------------------------
-73-
<PAGE>
Accepted and Agreed to as of the day and year last above written.
111 West Monroe Street HARRIS TRUST AND SAVINGS BANK,
Chicago, Illinois 60690 in its individual capacity as a Bank
Attention: Agribusiness Group and as Administrative Agent
Telecopy: (312) 765-8095
Telephone: (312) 461-3796
Commitment: $30,000,000 By
--------------------------------
Name:
---------------------------
Title: Vice President
Swing Line Commitment: $25,000,000
Lending Offices:
Base Rate Loans: 111 West Monroe Street
Chicago, Illinois 60603
Eurodollar Loans: 111 West Monroe Street
Chicago, Illinois 60603
Bid Loans: 111 West Monroe Street
Chicago, Illinois 60603
-74-
<PAGE>
115 South LaSalle Street BANK OF MONTREAL,
Chicago, Illinois 60603 in its individual capacity as a Bank
Telecopy: 312-750-4314 and as Syndication Agent
Telephone: 312-750-4369
Commitment: $220,000,000 By
--------------------------------
Name:
---------------------------
Title:
--------------------------
Lending Offices:
Base Rate Loans: 115 South LaSalle Street
Chicago, Illinois 60603
Eurodollar Loans: 115 South LaSalle Street
Chicago, Illinois 60603
Bid Loans: 115 South LaSalle Street
Chicago, Illinois 60603
-75-
<PAGE>
500 West Madison Street PNC BANK, NATIONAL ASSOCIATION,
Suite 3140 in its individual capacity as a Bank
Chicago, Illinois 60661 and as Syndication Agent
Attention: Gregory T. Gaschler
Telecopy: 312-906-3420
Telephone: 312-906-3472
Commitment: $250,000,000 By
--------------------------------
Name:
---------------------------
Title:
--------------------------
Lending Offices:
Base Rate Loans: Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15222
Attention: Loan Operations
Eurodollar Loans: Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15222
Attention: Loan Operations
Bid Loans: Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15222
Attention: Loan Operations
-76-
<PAGE>
EXHIBIT A-1
COMMITTED LOAN NOTE
$______________ _____________, 1996
FOR VALUE RECEIVED, the undersigned, Nash-Finch Company, a Delaware
corporation (the "BORROWER"), promises to pay to the order of ________________
(the "BANK") on the Termination Date of the hereinafter defined Credit
Agreement, at the principal office of Harris Trust and Savings Bank in Chicago,
Illinois, in immediately available funds, the principal sum of _________ Dollars
($________) or, if less, the aggregate unpaid principal amount of all Committed
Loans made by the Bank to the Borrower under its Commitment pursuant to the
Credit Agreement and with each Committed Loan to mature and become payable on
the last day of the Interest Period applicable thereto, but in no event later
than the Termination Date, together with interest on the principal amount of
each Committed Loan from time to time outstanding hereunder at the rates, and
payable in the manner and on the dates, specified in the Credit Agreement.
The Bank shall record on its books and records or on the schedule attached
to this Note, which is a part hereof, each Committed Loan made by it pursuant to
its Commitment, together with all payments of principal and interest and the
principal balances from time to time outstanding hereon, whether the Committed
Loan is a Base Rate Loan or an Eurodollar Loan and the interest rate and
Interest Period applicable thereto, provided that prior to the transfer of this
Note all such amounts shall be recorded on the schedule attached to this Note.
The record thereof, whether shown on such books and records or on the schedule
to this Note, shall be PRIMA FACIE evidence of the same, provided, however, that
the failure of the Bank to record any of the foregoing or any error in any such
record shall not limit or otherwise affect the obligation of the Borrower to
repay all Committed Loans made to it pursuant to the Credit Agreement together
with accrued interest thereon.
This Committed Loan Note is one of the Notes referred to in the Credit
Agreement dated as of October 8, 1996, among the Borrower, Harris Trust and
Savings Bank, as Administrative Agent, and the Banks signatory thereto (the
"CREDIT AGREEMENT"), and this Note and the holder hereof are entitled to all the
benefits provided for thereby or referred to therein, to which Credit Agreement
reference is hereby made for a statement thereof. All defined terms used in
this Note, except terms otherwise defined herein, shall have the same meaning as
in the Credit Agreement. This Note shall be governed by and construed in
accordance with the internal laws of the State of Illinois without regard to
choice of law doctrine.
Prepayments may be made hereon and this Note may be declared due prior to
the expressed maturity hereof, all in the events, on the terms and in the manner
as provided for in the Credit Agreement.
<PAGE>
The Borrower hereby waives demand, presentment, protest or notice of any
kind hereunder.
NASH-FINCH COMPANY
By
--------------------------------
Name:
---------------------------
Title:
--------------------------
A1-2
<PAGE>
EXHIBIT A-2
SWING LINE NOTE
$25,000,000.00 __________, 199____
On the Termination Date, for value received, the undersigned, Nash-Finch
Company, a Delaware corporation (the "BORROWER"), promises to pay to the order
of Harris Trust and Savings Bank (the "BANK"), at the principal office of Harris
Trust and Savings Bank in Chicago, Illinois, the principal sum of (i) Twenty-
Five Million and 00/100 Dollars ($25,000,000.00), or (ii) such lesser amount as
may at the time of the maturity hereof, whether by acceleration or otherwise, be
the aggregate unpaid principal amount of all Swing Loans owing from the Borrower
to the Bank under the Swing Line Commitment provided for in the Credit Agreement
hereinafter mentioned.
This Note evidences Swing Loans made and to be made to the Borrower by the
Bank under the Swing Line Commitment provided for under that certain Credit
Agreement dated as of October 8, 1996 by and between the Borrower, Harris Trust
and Savings Bank individually and as Administrative Agent and certain lenders
which are or may from time to time become parties thereto (the "CREDIT
AGREEMENT"), and the Borrower hereby promises to pay interest at the office
specified above on each Swing Loan evidenced hereby at the rates and times
specified therefor in the Credit Agreement.
Each Swing Loan made under the Swing Line Commitment provided for in the
Credit Agreement by the Bank to the Borrower against this Note, any repayment of
principal hereon and the interest rates applicable thereto shall be endorsed by
the holder hereof on the reverse side of this Note or recorded on the books and
records of the holder hereof (provided that such entries shall be endorsed on
the reverse side hereof prior to any negotiation hereof) and the Borrower agrees
that in any action or proceeding instituted to collect or enforce collection of
this Note, the entries so endorsed on the reverse side hereof or recorded on the
books and records of the Bank shall be PRIMA FACIE evidence of the unpaid
balance of this Note and the interest rates applicable thereto.
This Note is issued by the Borrower under the terms and provisions of the
Credit Agreement, and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity as specified in the
Credit Agreement, and certain prepayments are required to be made hereon, all in
the events, on the terms and with the effects provided in the Credit Agreement.
All capitalized terms used herein without definition shall have the same meaning
herein as such terms have in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the
internal laws of the State of Illinois without regard to principles of conflict
of law.
<PAGE>
The Borrower hereby promises to pay all reasonable costs and expenses
(including attorneys' fees) suffered or incurred by the holder hereof in
collecting this Note or enforcing any rights in any collateral therefor. The
Borrower hereby waives demand, presentment, protest or notice of any kind
hereunder.
NASH-FINCH COMPANY
By
--------------------------------
Name:
---------------------------
Title:
--------------------------
A2-2
<PAGE>
EXHIBIT B
BID NOTE
_______, 1996
FOR VALUE RECEIVED, the undersigned, Nash-Finch Company, a Delaware
corporation (the "BORROWER"), promises to pay to the order of ________________
(the "BANK") on the Termination Date of the hereinafter defined Credit
Agreement, at the principal office of Harris Trust and Savings Bank in Chicago,
Illinois, in immediately available funds, the aggregate unpaid principal amount
of all Bid Loans made by the Bank to the Borrower pursuant to the Credit
Agreement and with each Bid Loan to mature and become payable on the last day of
the Interest Period applicable thereto, but in no event later than the
Termination Date, together with interest on the principal amount of each Bid
Loan from time to time outstanding hereunder at the rates, and payable in the
manner and on the dates, specified in the Credit Agreement.
The Bank shall record on its books and records or on the schedule attached
to this Note, which is a part hereof, each Bid Loan made by it pursuant to the
Credit Agreement, together with all payments of principal and interest and the
principal balances thereof from time to time outstanding hereon and the interest
rate and Interest Period applicable thereto, provided that prior to the transfer
of this Note all such amounts shall be recorded on the schedule attached to this
Note. The record thereof, whether shown on such books and records or on the
schedule to this Note, shall be PRIMA FACIE evidence of the same, provided,
however, that the failure of the Bank to record any of the foregoing or any
error in any such record shall not limit or otherwise affect the obligation of
the Borrower to repay all Bid Loans made to it pursuant to the Credit Agreement
together with accrued interest thereon.
This Bid Note is one of the Notes referred to in the Credit Agreement dated
as of October 8, 1996, among the Borrower, Harris Trust and Savings Bank as
Administrative Agent and the Banks signatory thereto (the "CREDIT AGREEMENT"),
and this Note and the holder hereof are entitled to all the benefits provided
for thereby or referred to therein, to which Credit Agreement reference is
hereby made for a statement thereof. All defined terms used in this Note,
except terms otherwise defined herein, shall have the same meaning as in the
Credit Agreement. This Note shall be governed by and construed in accordance
with the internal laws of the State of Illinois without regard to choice of law
doctrine.
At any time and from time to time, the Bank may assign or otherwise
transfer (in whole or in part) to any Person this Note or any Loan hereunder.
This Note may be declared due prior to the expressed maturity hereof on the
terms and in the manner provided for in the Credit Agreement.
<PAGE>
The Borrower hereby waives demand, presentment, protest or notice of any
kind hereunder.
NASH-FINCH COMPANY
By
--------------------------------
Name:
---------------------------
Title:
--------------------------
B-2
<PAGE>
EXHIBIT C
BID LOAN REQUEST CONFIRMATION
[Date]
Harris Trust and Savings Bank, as Administrative Agent
111 West Monroe Street
Chicago, Illinois 60690
Attention:
-----------------
Dear :
----------------
The undersigned, Nash-Finch Company (the "BORROWER") refers to the Credit
Agreement dated as of October 8, 1996 (the "CREDIT AGREEMENT"), among the
Borrower, the Banks from time to time party thereto, and Harris Trust and
Savings Bank, as Administrative Agent for the Banks. Capitalized terms used
and not defined herein have the meanings assigned to them in the Credit
Agreement. The Borrower hereby confirms that it has, on the date hereof, given
you notice pursuant to Section 2.2 of the Credit Agreement that it requests a
Bid Loan Borrowing under the Credit Agreement, and in that connection sets
forth below the terms on which such Bid Loan Borrowing is requested to be made:
(A) Type of Bid Loan
Borrowing(1)
----------------
(B) Date of Bid Loan
Borrowing(2)
----------------
(C) Aggregate Principal STATED RATE EURODOLLAR
Amount of Bid
Loan Borrowing(3)
--------------- ----------------
- -----------------------------
(1) Stated Rate or Eurocurrency.
(2) The Bid Loan Request Confirmation must be received on a Business Day by the
Agent not later than 11:30 A.M. (Chicago time) one (1) Business Day before
the proposed Borrowing Date in the case of Stated Rate Bid Loans and five
(5) Business Days before the proposed Borrowing Date in the case of
Eurodollar Bid Loans.
(3) Not less than $5,000,000 and in integral multiples of $1,000,000.
<PAGE>
(D) Maturities(4)
--------------- ----------------
--------------- ----------------
--------------- ----------------
(E) If, applicable --------------- ----------------
maximum amount --------------- ----------------
requested for each --------------- ----------------
maturity
Upon acceptance of any or all of the Bids offered by Banks in response to
this request, the Borrower shall be deemed to affirm as of such date the
representations and warranties made in the Credit Agreement.
NASH-FINCH COMPANY
By
---------------------------------
Its
-----------------------------
- ----------------------------
(4) List up to 3 maturities of 1 to 180 days in the case of Stated Rate Bid
Loans and 1, 2, 3, 4, 5 or 6 months in the case of Eurodollar Bid Loans,
but never beyond the Termination Date.
C-2
<PAGE>
EXHIBIT D
INVITATION TO BID
[Date]
[Name of Bank]
[Address of Bank]
Attention:
Reference is made to the Credit Agreement dated as of October 8, 1996 (the
"CREDIT AGREEMENT") among Nash-Finch Company (the "BORROWER"), the Banks from
time to time party thereto, and Harris Trust and Savings Bank, as
Administrative Agent for the Banks. Capitalized terms used and not defined
herein have the meanings assigned to them in the Credit Agreement. The
Borrower made a Bid Loan Request on __________, ________ pursuant to
Section 2.2 of the Credit Agreement, and in that connection you are invited to
submit a Bid by [DATE](1). Your Bid must comply with Section 2.2 of the Credit
Agreement and the terms set forth below on which the Bid Loan Request was made.
(A) Type (Stated Rate or Eurodollar)
----------------
(B) Date of Proposed Bid Loan Borrowing
----------------
STATED RATE EURODOLLAR
(C) Aggregate Principal Amount
of Bid Loan
--------------- ----------------
(D) Maturities and maximum
amount, if different from
(C), for any maturity
--------------- ----------------
Very truly yours,
HARRIS TRUST AND SAVINGS BANK, as
Administrative Agent
By
---------------------------------
Its
-----------------------------
- ------------------------------
(1) The Bid must be received by the Agent not later than 9:00 a.m. Chicago
time, on the proposed Borrowing Date for Stated Rate Bid Loans and 11:00
a.m. four Business Days prior to the proposed Borrowing Date for Eurodollar
Bid Loans.
<PAGE>
EXHIBIT E
CONFIRMATION OF BID
[Date]
Harris Trust and Savings Bank, as Administrative Agent
111 West Monroe Street
Chicago, Illinois 60690
Attention:
------------------------
The undersigned [Name of Bank], refers to the Credit Agreement dated as of
October 8, 1996 (the "CREDIT AGREEMENT") among Nash-Finch Company (the
"BORROWER"), the Banks from time to time party thereto, and Harris Trust and
Savings Bank, as Administrative Agent for the Banks. Capitalized terms used
and not defined herein have the meanings assigned to them in the Credit
Agreement. The undersigned hereby confirms that on the date hereof it has made
a Bid pursuant to Section 2.2 of the Credit Agreement, in response to the Bid
Loan Request made by the Borrower on __________, _______, and in that
connection sets forth below the terms on which such Bid is made:
Type (Stated Rate or Eurocurrency):
----------------
Date of proposed Bid Loan Borrowing: (1)
----------------
Interest Rate or spread above
Principal Amount(1) Maturity(2) or below Adjusted LIBOR(3)
Very truly yours,
[Name of Bank]
By
---------------------------------
Its
-----------------------------
- ---------------------------
(1) As specified in the related Invitation to Bid.
(1) Principal amount of bid for each maturity may not exceed the principal
amount requested by the Borrower or the maximum amount requested for that
maturity, if less. Bids must be made in an amount of $5,000,000 and in
integral multiples of $1,000,000.
(2) List each maturity of 1 to 180 days in the case of Stated Rate Bid Loans
and 1, 2, 3, 4, 5 or 6 months in the case of Eurodollar Bid Loans.
(3) Specify rate of interest per annum computed on the basis of a year of 360
days and actual days elapsed for Stated Rate Bid Loans and percentage to be
added to or subtracted from Adjusted LIBOR for Eurodollar Bid Rate Loans.
<PAGE>
EXHIBIT F
NOTICE OF ACCEPTANCE OF BID
[Date]
[Name of Bank]
[Address of Bank]
Attention:
----------------
Reference is made to the Credit Agreement dated as of October 8, 1996 (the
"CREDIT AGREEMENT") among Nash-Finch Company (the "BORROWER"), the Banks from
time to time party thereto, and Harris Trust and Savings Bank, as
Administrative Agent for the Banks. Capitalized terms used and not defined
herein have the meanings assigned to them in the Credit Agreement. The
Borrower made a Bid Loan Request on __________, ______ pursuant to Section 2.2
of the Credit Agreement, and in that connection you have submitted a Bid. Your
Bid has been accepted as set forth below.
(A) Type of Bid Loan
----------------
(B) Date of Bid Loan Borrowing
----------------
Interest Rate or
(C) Aggregate Spread above or
principal amount Principal below Adjusted
of each Bid maturity Amount Maturity LIBOR
and interest rate --------- -------- -----
----------- ---------- ----------
----------- ---------- ----------
----------- ---------- ----------
----------- ---------- ----------
Very truly yours,
HARRIS TRUST AND SAVINGS BANK,
as Administrative Agent
By
---------------------------------
Its
-----------------------------
<PAGE>
EXHIBIT G
NOTICE OF PAYMENT REQUEST
[Date]
[Name of Bank]
[Address]
Attention:
Reference is made to the Credit Agreement, dated as of October 8, 1996,
among Nash-Finch Company, the Banks named therein, and Harris Trust and Savings
Bank, as Administrative Agent (the "CREDIT AGREEMENT"). Capitalized terms used
herein and not defined herein have the meanings assigned to them in the Credit
Agreement. [The Borrower has failed to pay its Reimbursement Obligation in the
amount of $__________. Your Bank's Percentage of the unpaid Reimbursement
Obligation is $____________] or [Harris Trust and Savings Bank has been
required to return a payment by the Borrower of a Reimbursement Obligation in
the amount of $____________. Your Bank's Percentage of the returned
Reimbursement Obligations is $____________.]
Very truly yours,
HARRIS TRUST AND SAVINGS BANK
By
---------------------------------
Its
-----------------------------
<PAGE>
EXHIBIT H
COMPLIANCE CERTIFICATE
To: The Banks parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of October 8, 1996, among Nash-Finch Company (the
"BORROWER"), the banks party thereto and Harris Trust and Savings Bank as
Administrative Agent for the Banks (the "AGREEMENT"). Unless otherwise defined
herein, the terms used in this Compliance Certificate have the meanings
ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _______________________________ of the
Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting
period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or an Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrower's compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
<PAGE>
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this ______ day of ______________,
19___.
---------------------------------
Name:
----------------------------
Title:
---------------------------
H-2
<PAGE>
SCHEDULE I TO COMPLIANCE CERTIFICATE
NASH-FINCH COMPANY
Compliance Calculations for Credit Agreement
Dated as of October 9, 1996
Calculations as of ________________, 19__
A. CURRENT RATIO (SECTION 9.7 OF THE AGREEMENT)
1. Current Assets $_______________
A1
2. Current Liabilities (excluding Loans) $_______________
A2
3. Ratio of Line A1 to Line A2 _____ : 1.0
A3
4. Line A3 Ratio must be greater than: 1.25:1.0
5. Is Company in Compliance? (Circle Yes or No) Yes / No
B. TANGIBLE NET WORTH (SECTION 9.8 OF THE AGREEMENT)
1. Total Shareholder's Equity $__________ $_______________
B1
2. Sum of:
(i) Intangibles $_________
(ii) Write-up of Assets $_________ $_______________
B2
3. Line B1 minus Line B2
(Tangible Net Worth) $_______________
B3
4. Line B3 must be greater than or equal to
(the Minimum Required Amount): $_______________
5. Is Company in Compliance? (Circle Yes or No) Yes / No
C. LEVERAGE RATIO (SECTION 9.19 OF THE AGREEMENT)
1. Total Funded Debt $_______________
C1
<PAGE>
2. Consolidated Net Income for the specified fiscal $_______________
quarter or quarters of the Company most recently C2
completed (as adjusted per definition of
Leverage Ratio)
3. Interest Expense for the same period $_______________
C3
4. Federal, state and local income taxes for the $_______________
same period C4
5. Deprecation of fixed assets for the same period $_______________
C5
6. Amortization for the same period $_______________
C6
7. Add Lines C2-C6 (EBITDA) $_______________
C7
8. Ratio of Line C1 to C7 _____ : 1.0
9. Line C8 Ratio must be less than or equal to: _____ : 1.0
10. Is Company in Compliance? (Circle Yes or No) Yes / No
D. INTEREST COVERAGE RATIO (SECTION 9.10 OF THE AGREEMENT)
1. Interest Expense for the specified fiscal quarter $_______________
or quarters of the Company most recently completed D1
(as adjusted per definition of Interest
Coverage Ratio)
2. Consolidated Net Income for the same period $_______________
D2
3. Interest Expense for the same period $_______________
D3
4. Federal, state and local income taxes for $_______________
the same period D4
5. Add Lines D2-D4 (EBIT) (as adjusted per definition $_______________
of Interest Coverage Ratio) D5
6. Ratio of Line D1 to Line D5 _____ : 1.0
7. Line D6 ratio must not be less than: _____ : 1.0
2
<PAGE>
8. Is Company in Compliance? (Circle Yes or No) Yes / No
E. LONG-TERM DEBT (SECTION 9.11 OF THE AGREEMENT)
1. NF Term Refinancing Credit extended $_______________
E1
2. Amount of Commitments $_______________
E2
3. Weighted Average Life to Maturity of Long-Term $_______________
Debt issued during such period E3
4. Line E3 life must not be less than: 7 years
E4
5. Is line E3 greater than or equal to 7 years Yes/No
6. Is Company in Compliance? (Circle Yes or No) Yes/No
F. INDEBTEDNESS OF BORROWER (SECTION 9.12(a) OF THE AGREEMENT)
1. Total Funded Debt of the Borrower $_______________
F1
2. Line F1 must be less than or equal to: $ 475,000,000
F2
3. Is Company in Compliance? (Circle Yes or No) Yes/No
G. INDEBTEDNESS OF SUBSIDIARIES (SECTION 9.12(b) OF THE AGREEMENT)
1. Aggregate amount of Indebtedness of Subsidiaries $_______________
G1
2. Total Assets as defined $_______________
G2
3. Ratio of Line G1 to Line G2 $_______________
G3
4. Line G3 Ratio must be less than or equal to: ________________
G4
5. Is Company in Compliance? (Circle Yes or No) Yes / No
3
<PAGE>
EXHIBIT I
SUBSIDIARY GUARANTEE AGREEMENT
_______________, 19___
HARRIS TRUST AND SAVINGS BANK, as Administrative Agent for the Banks party
to the Credit Agreement dated as of October 8, 1996, among Nash-Finch
Company, such Banks and such Administrative Agent (the "CREDIT AGREEMENT")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [NAME OF SUBSIDIARY GUARANTOR], a [JURISDICTION OF
INCORPORATION] corporation, hereby elects to be a "GUARANTOR" for all purposes
of the Credit Agreement, effective from the date hereof. The undersigned
confirms that the representations and warranties set forth in Section 7 of the
Credit Agreement are true and correct as to the undersigned as of the date
hereof.
Without limiting the generality of the foregoing, the undersigned hereby
agrees to perform all the obligations of a Guarantor under, and to be bound in
all respects by the terms of, the Credit Agreement, including, without
limitations, Section 13 thereof, to the same extent and with the same force and
effect as if the undersigned were a direct signatory thereto.
This Agreement shall be construed in accordance with and governed by the
internal laws of the State of Illinois.
Very truly yours,
[NAME OF SUBSIDIARY GUARANTOR]
By____________________________
Name:_______________________
Title:______________________
<PAGE>
EXHIBIT J
EMPLOYEE BENEFIT PLANS
Neither the Borrower, Super Food nor any of their respective ERISA
Affiliates maintains or contributes to any Welfare Plan (other than a
multiemployer plan as defined in Section 3(37) of ERISA) which provides benefits
to employees after termination of employment (other than as required under
Section 601 of ERISA or any comparable applicable state law) which could result
in a material obligation to pay money, except for such plans listed below.
THE BORROWER AND ITS ERISA AFFILIATES:
1. Nash-Finch Company Welfare Benefit Plan.
2. Nash-Finch Company and its ERISA Affiliates from time to time on an ad hoc
basis pay severance benefits.
SUPER FOOD AND ITS ERISA AFFILIATES:
1. The Super Food Services, Inc. Employee Health Care Plan.
2. The Super Foods/Lexington Division Employee Health Care Plan.
3. Super Food and its ERISA Affiliates from time to time on an ad hoc basis
pay severance benefits.
4. The Super Food Services, Inc. Section 125 Cafeteria Plan for Non-Union
Employees.
5. The Super Food Services, Inc. Short-Term Disability Plan -- Cincinnati
Division Union Employees.
6. The Super Food Services, Inc. Health and Welfare Plan -- Cincinnati
Division Union Employees.
7. The Super Food Services, Inc. Medical/Surgical/Disability Plan for
Employees not Covered by Union Plan.
8. Kentucky Food Stores, Inc. Group Disability Plan.
9. Kentucky Food Stores, Inc. Health Care Plan.
10. The Super Food Services, Inc. Medical/Surgical/Disability Plan for Union
Employees -- Bellefontaine Division.
11. The Super Food Services, Inc. Medical/Surgical/Disability Plan for Union
Employees -- Orlando, Florida.
12. The Super Food Services, Inc. Medical/Surgical/Disability Plan for Union
Employees -- Bridgeport, Michigan.
<PAGE>
EXHIBIT K
FORM OF OPINION OF COUNSEL
October 8, 1996
Harris Trust and Savings Bank
(Individually and as Administrative Agent)
111 West Monroe Street
Chicago, Illinois 60603
and the other Banks now and from time to
time hereafter party to the Credit Agreement
(as defined below)
Re: Credit Agreement, dated as of October 8, 1996 (the "CREDIT
AGREEMENT"), among Nash-Finch Company, a Delaware corporation
(the "COMPANY"), the Banks (defined therein), Harris Trust and
Savings Bank, as Administrative Agent, and Bank of Montreal and
PNC Bank, National Association, as Syndication Agent
Gentlemen:
This opinion is being delivered to you pursuant to Section 8.1(a) of the
Credit Agreement. Capitalized terms used but not otherwise defined herein are
used herein as defined in the Credit Agreement.
We have acted as counsel for the Company and NF Acquisition Corporation, a
Delaware corporation ("NF Acquisition") in connection with the negotiation,
execution and delivery of the Credit Agreement by the Company and a Subsidiary
Guaranty Agreement by NF Acquisition.
In connection with this opinion, we have reviewed an original or a copy of
each of the following items:
(A) the Credit Agreement;
(B) the Notes; and
(C) the Subsidiary Guaranty Agreement executed by NF Acquisition.
We have also examined the originals, or copies certified, or otherwise
identified, to our satisfaction, of such other corporate records of the Company
and its Subsidiaries, and such other agreements, instruments and documents as we
have deemed necessary as a basis
<PAGE>
Harris Trust and Savings Bank
October 8, 1996
Page 2
for the opinions hereinafter expressed. In such examination, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity with the originals of all documents
submitted to us as copies.
The opinions expressed herein are qualified in their entirely as follows:
(a) No opinion is expressed with respect to laws other than those of the
States of Minnesota, the corporate law of the State of Delaware and
the laws of the United States of America. To the extent the Credit
Agreement and Notes and Subsidiary Guaranty Agreement are governed by
Illinois law, we have assumed that Illinois law is identical to
Minnesota law in all relevant respects.
(b) To the extent that the opinions given below relate to the
enforceability of the Notes and the Credit Agreement or Subsidiary
Guaranty Agreement, the opinions are subject to the effect of:
(i) applicable bankruptcy, fraudulent transfer or conveyance,
insolvency, reorganization, moratorium and other similar laws
limiting the enforceability of creditors' rights generally, as
from time to time in effect, and
(ii) equitable limitations upon the enforcement, whether by an action
for specific performance, injunctive relief or otherwise, of
remedies or obligations enforceable in a court of equity and the
discretion of courts in granting or withholding equitable relief
with respect to such enforcement.
(c) Certain rights and remedies of the Administrative Agent, the
Syndication Agents and the other Banks provided for in the Notes and
Credit Agreement and Subsidiary Guaranty Agreement may not be
available or enforceable, and certain waivers of rights by the Company
may not be effective, but, in our opinion, the unavailability or
enforceability thereof will not make the rights and remedies provided
for in the Notes and Credit Agreement and Subsidiary Guaranty
Agreement, when taken as a whole, inadequate for the practical
realization by the Administrative Agent, the Syndication Agents and
the other Banks of the benefits sought to be realized thereby.
(d) Provisions of the Notes and Credit Agreement and Subsidiary Guaranty
Agreement which permit the Administrative Agent, the Syndication Agent
or any other Bank to take action or make determinations may be subject
to a requirement that such actions be taken or such determinations be
made on a reasonable basis and in good faith.
<PAGE>
Harris Trust and Savings Bank
October 8, 1996
Page 3
(e) Insofar as the opinion expressed in paragraph 3 of Articles I and II
below relates to material agreements known to us, our investigation
and review has been limited to agreements identified and made
available to us by the Company.
(f) The term "to the best of our knowledge" as used in the opinion
expressed in paragraph 5 of Article I below, means only the personal
knowledge of the individual attorney preparing this opinion, based
solely on discussions with the chief legal officer of the Company.
As to all questions of fact (but not law), material to such opinions, we
have relied upon certificates of the Company and its officers and of public
officials and have examined the representations and warranties made by the
Company contained in the Credit Agreement and have relied upon the relevant
facts stated therein. Based on the foregoing, we are of the opinion that:
I.THE COMPANY
1. The Company is a corporation duly existing and in good standing under
the laws of the State of Delaware, and is duly qualified in each jurisdiction in
which the failure to so qualify would materially and adversely affect the
Company.
2. The Company has full power to execute, deliver and perform its
obligations under the Credit Agreement and the Notes, to borrow money and to
request the issuance of Letters of Credit.
3. The execution and delivery of the Credit Agreement and the Notes, the
borrowings and incurrence of obligations in respect of Letters of Credit issued
thereunder, and the performance by the Company of its obligations under the
Credit Agreement and Notes have been duly authorized by all necessary corporate
action, have received all necessary governmental approval, and do not and will
not contravene or conflict with any provision of law or of the charter or by-
laws of the Company or, to our knowledge, of any material agreement binding upon
the Company.
4. The Credit Agreement and the Notes have been duly executed and
delivered by the Company and are the legal, valid and binding obligations of the
Company, enforceable in accordance with their respective terms.
5. To the best of our knowledge, there are no actions, suits or
proceedings pending threatened against or affecting the Borrower or any
Subsidiary or the Properties of the Borrower or any Subsidiary before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which would read reasonably be expected to
effect a material adverse change in the business, operations, Properties or
financial or other condition of the Borrower and the Subsidiaries, taken as a
whole.
<PAGE>
Harris Trust and Savings Bank
October 8, 1996
Page 2
II.THE SUBSIDIARY GUARANTY AGREEMENT
1. NF Acquisition is a corporation duly existing and in good standing
under the laws of the State of Delaware, and is duly qualified in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on NF Acquisition.
2. NF Acquisition has full power to execute, deliver and perform its
obligations under the Subsidiary Guaranty Agreement.
3. The execution and delivery of the Subsidiary Guaranty Agreement and
the performance by NF Acquisition of its obligations thereunder have been duly
authorized by all necessary corporate action, have received all necessary
governmental approval, and do not and will not contravene or conflict with any
provision of law or of the charter or by-laws of NF Acquisition or, to our
knowledge, of any material agreement binding upon NF Acquisition.
4. The Subsidiary Guaranty Agreement has been duly executed and delivered
by NF Acquisition and is the legal, valid and binding obligation of NF
Acquisition, enforceable in accordance with its terms.
We wish to note that Richard G. Lareau, a director of the Company, is a
partner in our firm.
This opinion is furnished to the Administrative Agent for it and on behalf
of the other Banks for their sole benefit in connection with the above-
referenced transaction. This opinion is not to be relied upon by any other
Person or to be used, circulated, quoted or otherwise referenced for any other
purpose, except that (i) Assignees may rely hereon and (ii) copies of this
opinion may be shown by the Banks to their accountants, regulators and counsel
as well as to participants.
<PAGE>
EXHIBIT L
EXISTING NF REVOLVER DEBT
1. Credit Agreement, dated December 27, 1995, between the Company and
First Bank National Association, Norwest Bank Minnesota, National Association,
PNC Bank, National Association, Mitsubishi Bank, Limited Chicago Branch, and
Wachovia Bank of Georgia, N.A.
<PAGE>
EXHIBIT M
EXISTING NF TERM DEBT
Note Agreements dated March 22, 1991 between the Company and The Minnesota
Mutual Life Insurance Company, and between the Company and The Minnesota Mutual
Life Insurance Company - Separate Account F.
Note Agreements dated as of February 15, 1993 between the Company and
Principal Mutual Life Insurance Company, and between the Company and Aid
Association for Lutherans.
Note Agreement dated March 22, 1996 between the Company and The Variable
Annuity Life Insurance Company, Independent Life and Accident Insurance Company,
Northern Life Insurance Company and Northwestern National Life Insurance
Company.
Note Agreement dated August 1, 1986 between the Company and Nationwide Life
Insurance Company.
Note Agreements dated September 15, 1987 between the Company and IDS Life
Insurance Company and between the Company and IDS Life Insurance Company of New
York.
Note Agreements dated September 29, 1989 between the Company and Nationwide
Life Insurance Company, and between the Company and West Coast Life Insurance
Company.
<PAGE>
EXHIBIT N
EXISTING SUPER FOOD DEBT
1. $10,000,000 Revolving Credit Loan Agreement dated April 9, 1991
between Super Food and Society Bank, N.A.
2. $25,000,000 Note Agreement dated as of November 1, 1989 between Super
Food and Nationwide Life Insurance Company.
3. $10,000,000 Loan Agreement dated September 17, 1987 between Super Food
and PNC Bank, Ohio (then known as The Central Trust Company, N.A.) as amended by
Amendment to Loan Agreement dated April 11, 1991.
4. $10,000,000 Credit Agreement dated August 30, 1991 between Super Food
and The First National Bank of Chicago.
<PAGE>
SCHEDULE 7.2
SUBSIDIARIES OF NASH-FINCH COMPANY
A. Direct Subsidiaries of Nash-Finch Company (the voting stock of which is
owned, with respect to each subsidiary, 100 percent by Nash-Finch Company):
Subsidiary Corporation State of Incorporation
---------------------- ----------------------
Nash-DeCamp Company California
Piggly Wiggly Northland Corporation Minnesota
GTL Truck Lines, Inc. Nebraska
T.J. Morris Company Georgia
NFC Acquisition Corporation Delaware
B. Direct Subsidiaries of Nash-Finch Company (the voting stock of which is
owned, with respect to each subsidiary, 66.6 percent by Nash-Finch
Company):
Subsidiary Corporation State of Incorporation
---------------------- ----------------------
Gillette Dairy of the Black Hills, Inc. South Dakota
Nebraska Dairies, Inc. Nebraska
C. Subsidiaries of Nash-DeCamp Company (the voting stock of which is owned,
with respect to each subsidiary other than Agricola Nadco Limitada, 100
percent by Nash-DeCamp Company):
Subsidiary Corporation State/Country of Incorporation
---------------------- ------------------------------
Forrest Transportation Service, Inc. California
Agricola Nadco Limitada* Chile
*Ninety-nine percent (99%) of Agricola Nadco Limitada
is owned by Nash-DeCamp Company
<PAGE>
Exhibit J
Neither the Borrower, Super Food nor any of their respective ERISA Affiliates
maintains or contributes to any Welfare Plan (other than a multiemployer plan as
defined in Section 3(37) of ERISA) which provides benefits to employees after
termination of employment (other than as required under Section 601 of ERISA or
any comparable applicable state law) which could result in a material obligation
to pay money, except for such plans listed below.
THE BORROWER AND ITS ERISA AFFILIATES:
1. Nash-Finch Company Welfare Benefit Plan.
2. Nash-Finch Company and its ERISA Affiliates from time to time on an ad hoc
basis pay severance benefits.
SUPER FOOD AND ITS ERISA AFFILIATES:
1. The Super Food Services, Inc. Employee Health Care Plan.
2. The Super Foods/Lexington Division Employee Health Care Plan.
3. Super Food and its ERISA Affiliates from time to time on an ad hoc basis
pay severance benefits.
4. The Super Food Services, Inc. Section 125 Cafeteria Plan for Non-Union
Employees.
5. The Super Food Services, Inc. Short-Term Disability Plan -- Cincinnati
Division Union Employees.
6. The Super Food Services, Inc. Health and Welfare Plan -- Cincinnati
Division Union Employees.
7. The Super Food Services, Inc. Medical/Surgical/Disability Plan for
Employees not Covered by Union Plan.
8. Kentucky Food Stores, Inc. Group Disability Plan.
9. Kentucky Food Stores, Inc. Health Care Plan.
10. The Super Food Services, Inc. Medical/Surgical/Disability Plan for Union
Employees -- Bellefontaine Division.
11. The Super Food Services, Inc. Medical/Surgical/Disability Plan for Union
Employees -- Orlando, Florida.
12. The Super Food Services, Inc. Medical/Surgical/Disability Plan for Union
Employees -- Bridgeport, Michigan.
<PAGE>
AGREEMENT AND PLAN OF MERGER
AMONG
NASH-FINCH COMPANY
NFC ACQUISITION CORPORATION
AND
SUPER FOOD SERVICES,
INC.
Dated as of OCTOBER 8, 1996
ARTICLE 1. THE OFFER
1.1. The Offer.
1.2. Company Actions.
ARTICLE 2. THE MERGER
2.1. The Merger
2.2. Effective Time
2.3. Effects of the Merger
2.4. Certificate of Incorporation and By-Laws
2.5. Directors and Officers
2.6. Conversion of Shares
2.7. Company Stock Plans. . . . . . . . . . . . . . . . . . . . . . . 5
2.8. Closing
ARTICLE 3. DISSENTING SHARES; EXCHANGE OF SHARES
3.1. Dissenting Shares
3.2. Exchange of Shares.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF PARENT AND
ACQUISITION SUB
4.1. Organization and Qualification
4.2. Authority Relative to this Agreement
4.3. Proxy Statement
4.4. Consents and Approvals; No Violation
4.5 Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1. Disclosure Schedule
5.2. Organization and Qualification.
5.3. Capitalization
5.4. Authority Relative to this Agreement
5.5. Absence of Certain Changes
5.6. Reports
5.7. Proxy Statement
5.8. Consents and Approvals; No Violation
5.9. Absence of Undisclosed Liabilities
5.10. Litigation
5.11. Liens and Encumbrances
5.12. Contracts
5.13. Taxes
5.14. Employee Benefit Plans
5.15. Compliance with Applicable Law
5.16. Inventories
5.17. Accounts and Notes Receivable
5.18. Intellectual Property Rights
5.19. Insurance
5.20. Labor Matters
5.21. Environmental Matters
5.22. Brokerage Fees and Commissions
<PAGE>
ARTICLE 6. COVENANTS
6.1. Conduct of Business of the Company
6.2. No Solicitation
6.3. Access to Information
6.4. Reasonable Efforts
6.5. Indemnification and Insurance.
6.6. Employee Plans and Benefits and Employment Contracts.
6.7. Board Representation
6.8. Meeting of the Company's Stockholders.
6.9. Proxy Statement
6.10. Public Announcements
6.11. Merger Without Meeting of Stockholders
6.12. Current Information
6.13. Supplement to Disclosure Schedule
6.14. Section 203
6.15. Preferred Stock Purchase Rights
ARTICLE 7. CONDITIONS TO CONSUMMATION OF THE MERGER
7.1. Conditions to Each Party's Obligation to Effect the Merger
7.2. Conditions to Obligations of Parent and Acquisition Sub
Effect the Merger
ARTICLE 8. TERMINATION; AMENDMENT; WAIVER
8.1. Termination
8.2. Effect of Termination
8.3. Termination Fee; Reimbursement of Parent's Expenses.
8.4. Amendment
8.5. Extension; Waiver
ARTICLE 9. MISCELLANEOUS
9.1. Non-Survival of Representations and Warranties
9.2. Entire Agreement; Assignment
9.3. Enforcement of the Agreement
9.4. Validity
9.5. Notices
9.6. Governing Law
9.7. Descriptive Headings
9.8. Parties in Interest
9.9. Counterparts
9.10. Expenses.
9.11. Performance by Acquisition Sub
9.12. Submission to Jurisdiction.
<PAGE>
AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER (the "Agreement"),
dated as of October 8, 1996, among Nash-Finch Company, a Delaware corporation
("Parent"), NFC Acquisition Corporation, a Delaware corporation and a wholly
owned subsidiary of Parent ("Acquisition Sub"), and Super Food Services,
Inc., a Delaware corporation (the "Company").
Background
The respective Boards of Directors of Parent, Acquisition Sub and the Company
have each determined that it is advisable and in the best interests of the
stockholders of the respective corporations, on the terms and subject to the
conditions of this Agreement, (i) for a wholly owned subsidiary of Parent to
commence a cash tender offer to purchase any and all outstanding shares of
Common Stock, par value $1.00 per share, of the Company (the "Common Stock" and
such shares, the "Shares") and (ii) following the cash tender offer, to merge
Acquisition Sub with and into the Company.
Terms
In consideration of the premises and the mutual covenants herein contained and
intending to be legally bound, Parent, Acquisition Sub and the Company hereby
agree as follows:
ARTICLE 1
THE OFFER
The Offer.
Provided that this Agreement shall not have been terminated in accordance with
Section 8.1 and none of the events set forth in Annex I hereto shall have
occurred and be continuing, as promptly as practicable (but in no event later
than the fifth (5th) business day after the initial public announcement of
Acquisition Sub's intention to commence the Offer (as hereinafter defined),
Parent will cause Acquisition Sub to commence (within the meaning of Rule 14d-2
under the Securities Exchange Act
<PAGE>
of 1934, as amended (the "Exchange Act")), and Acquisition Sub will commence, an
offer to purchase for cash any and all issued and outstanding Shares at a price
of $15.50 per Share net to the seller in cash (as amended or supplemented in
accordance with this Agreement, the "Offer"). The obligation of Parent and
Acquisition Sub to consummate the Offer, to accept for payment and to pay for
any Shares tendered is subject to the conditions set forth in Annex I,
including, without limitation, that there be validly tendered and not withdrawn
by the expiration date of the Offer a number of Shares which, together with
Shares already beneficially owned by Parent and any of its wholly owned
subsidiaries, would represent at least a majority of the outstanding Shares,
calculated by taking into account the number of outstanding shares of Common
Stock on the date of consummation of the Offer plus the number of shares subject
to options to purchase shares of Common Stock outstanding as of consummation of
the Offer, whether or not such options are exercisable or fully vested (the
"Minimum Condition").
As soon as practicable on the date of commencement of the Offer, Parent and
Acquisition Sub will file with the Securities and Exchange Commission (the
"SEC"), with respect to the Offer, a Tender Offer Statement on Schedule 14D-l
(which, together with all amendments and supplements thereto and including the
exhibits thereto, is referred to herein as the "Schedule 14D-1") in accordance
with applicable federal securities laws containing the terms of the Offer and
forms of related letters of transmittal and summary advertisement (which
documents, together with any supplements or amendments thereto, are referred to
herein collectively as the "Offer Documents"). Parent will deliver copies of
the proposed forms of the Schedule 14D-l and the Offer Documents to the Company
within a reasonable time prior to the commencement of the Offer for review and
comment by the Company and its counsel. Parent agrees to provide the Company
and its counsel with any written comments that Parent, Acquisition Sub or their
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt thereof. The information provided and to
be provided by Parent, Acquisition Sub and the Company for use in the Schedule
14D-l, and the Offer Documents and any amendments or supplements thereto will
not, in the case of the Schedule 14D-l at the time filed with the SEC and in the
case of the Offer Documents when first published, sent or given to the
stockholders of the Company, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that Parent and Acquisition
Sub make no representation or warranty as to any of the information relating to
and supplied in writing by the Company specifically for inclusion in the
Schedule 14D-l or the Offer Documents and any amendments or supplements thereto
and the Company makes no representation or warranty as to any information except
that information relating to and supplied in writing by the Company specifically
for inclusion in the Schedule 14D-1 or the Offer Documents and any amendments or
supplements thereto. Parent, Acquisition Sub and the Company agree to promptly
correct any such information in the Schedule 14D-1 or the Offer Documents that
shall have become false or misleading in any material respect and each of Parent
and Acquisition Sub will take all steps necessary to cause such Schedule 14D-1
or Offer Documents as so corrected to be filed with the SEC and disseminated to
the stockholders of the Company, as and to the extent required by applicable
federal securities laws. The Company agrees that, subject to Section 6.2
hereof, the Offer Documents shall contain the unanimous recommendation of the
Board of Directors of the Company that the holders of the Shares accept the
Offer.
The Offer will initially expire twenty (20) business days after its
commencement. Neither Parent nor Acquisition Sub will, without the prior
written consent of the Company, decrease the price per Share payable in the
Offer, change the form of consideration payable in the Offer, decrease the
number of Shares sought pursuant to the Offer, change the conditions to the
Offer, impose additional conditions to the Offer, waive the Minimum Condition,
change the expiration date of the Offer, or amend any term of the Offer in any
manner adverse to holders of Shares; provided, however, that if any of the
conditions described in Annex I exists at the time of the scheduled expiration
date of the Offer, then
<PAGE>
Acquisition Sub may, in its sole discretion, giving prior notice to the Company,
extend and reextend the Offer for periods of time (not to exceed ten (10) days
in any particular instance) so that the expiration date of the Offer (as so
extended) is as soon as reasonably practicable or advisable after the date on
which the particular condition described in Annex I no longer exists (it being
understood that a period of two (2) business days is reasonable for such
purposes); provided further, that the Offer may not be so extended and
reextended beyond the earlier of: (i) five (5) business days before the date the
meeting of the stockholders of the Company to approve the Merger and this
Agreement (as provided in Section 6.8); or (ii) ninety (90) days after the date
of this Agreement. Notwithstanding the foregoing, Acquisition Sub may extend
the Offer for up to ten (10) business days in connection with any and each
increase in the consideration to be paid pursuant to the Offer. In addition,
Acquisition Sub may extend the Offer, in its sole discretion, giving prior
notice to the Company, on one or more occasions for a period or periods not to
exceed in the aggregate ten (10) business days if on the date of any such
extension less than 90% of the Shares have been validly tendered and not
properly withdrawn pursuant to the Offer. Subject to the foregoing, assuming
the prior satisfaction or waiver of the conditions to the Offer, Acquisition Sub
will accept for payment, in accordance with the terms of the Offer, Shares
tendered pursuant to the Offer as soon as permitted after the commencement
thereof.
Company Actions.
The Company hereby consents to the Offer and represents that: (i) its Board of
Directors (at a meeting duly called and held) has unanimously (A) determined
that each of the Offer and the Merger (as hereinafter defined) is fair to and in
the best interests of the stockholders of the Company, (B) approved the Offer,
the Merger and this Agreement and the transactions contemplated hereby and
thereby, (C) acknowledged that such approval constitutes approval for purposes
of Section 203(a)(l) and Section 251(b) of the General Corporation Law of the
State of Delaware (the "DGCL"), (D) resolved to recommend acceptance of the
Offer and approval of the Merger and this Agreement by the stockholders of the
Company, (E) pursuant to the terms of the Rights Agreement between the Company
and Chase Manhattan Bank, N.A. dated as of January 27, 1989, a copy of which has
been previously provided to Parent together with all amendments thereto through
the date hereof (the "Rights Agreement"), approved this Agreement, the
acquisition of Shares by Parent and Acquisition Sub pursuant to the Offer and
the Merger and determined that, after receiving advice from Lazard Frres & Co.
LLC ("Lazard Frres"), a nationally recognized investment banking firm selected
by its Board of Directors, the acquisition of Shares by Parent and Acquisition
Sub is at a price and on terms that are fair to the Company's stockholders
(taking into account all factors which the Board of Directors deems relevant
including, without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize maximum
value) and otherwise are in the best interests of the Company and its
stockholders, so that the Preferred Stock purchase rights issued pursuant to the
Rights Agreement will not become exercisable as a result of the execution of
this Agreement or the consummation of the Merger or the other transactions
provided for in this Agreement; (ii) under the Rights Agreement as amended,
neither Parent nor Acquisition Sub will be deemed to be an Acquiring Person or a
"Beneficial Owner" (as such terms are defined in the Rights Agreement ) as a
result of the execution of this Agreement or the consummation of the Offer or
the Merger or the other transactions provided for in this Agreement; and (iii)
Lazard Frres has delivered to the Company's Board of Directors its written
opinion that, as of the date of such opinion and based upon the assumptions set
forth therein and such other matters as Lazard Frres deems relevant, the $15.50
per Share in cash to be received by the Company's stockholders in the Offer and
Merger is fair to such stockholders from a financial point of view. The Company
will file with the SEC as soon as practicable after the commencement of the
Offer a Solicitation/Recommendation Statement on Schedule 14D-9 (which, together
with all amendments and supplements thereto and including the exhibits thereto,
is referred to herein as the "Schedule 14D-9") reflecting, subject to Section
6.2 hereof, the unanimous recommendation of the Board of Directors of the
Company as
<PAGE>
stated in the first sentence of this Section 1.2(a) and will disseminate the
Schedule 14D-9 as required by Rule l4d-9 promulgated under the Exchange Act.
The Schedule 14D-9 will comply in all material respects with the provisions of
all applicable federal securities laws and will not, on the date filed with the
SEC and on the date first published, sent or given to the stockholders of the
Company, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company will promptly correct any information in the
Schedule l4D-9 that shall have become false or misleading in any material
respect and will take all steps necessary to cause such Schedule 14D-9 as so
corrected to be filed with the SEC and disseminated to the stockholders of the
Company, as and to the extent required by applicable federal securities laws.
In connection with the Offer, the Company will furnish Parent with mailing
labels, security position listings and any available listing or computer file
containing the names and addresses of the record holders of the Shares as of a
recent date and will furnish Parent with such information and assistance as
Parent or its agents may reasonably request in communicating the Offer to the
record and beneficial stockholders of the Company. Subject to the requirements
of law, and except for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the Merger, Parent and
Acquisition Sub will, and will cause each of their affiliates to, hold the
information contained in any of such labels and lists in confidence, use such
information only in connection with the Offer and the Merger, and, if this
Agreement is terminated, promptly deliver to the Company all copies of such
information or extracts therefrom them in their possession or under their
control.
ARTICLE 2
THE MERGER
The Merger. Upon the terms and subject to the conditions hereof, and in
accordance with the relevant provisions of the DGCL, Acquisition Sub shall be
merged with and into the Company (the "Merger") as soon as practicable following
the satisfaction or waiver, if permissible, of the conditions set forth in
Article VII. Following the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") under the name "Super Food Services,
Inc." and will continue its existence under the laws of the State of Delaware,
and the separate corporate existence of Acquisition Sub will cease. At the
election of Parent, any wholly owned subsidiary of Parent may be substituted for
Acquisition Sub as a constituent corporation in the Merger. Notwithstanding
this Section 2.1, Parent may elect at any time prior to the fifth (5th) business
day preceding the date on which the notice of the meeting of stockholders of the
Company to consider approval of the Merger and this Agreement (the "Meeting") is
first given to the Company's stockholders (or at any time in the event a Meeting
does not occur) that instead of merging Acquisition Sub into the Company as
hereinabove provided, to merge the Company into Acquisition Sub or another
wholly owned subsidiary of Parent; provided, however, that the Company will not
be deemed to have breached any of its representations, warranties or covenants
herein solely by reason of such election. In such event the parties will
execute an appropriate amendment to this Agreement in order to reflect the
foregoing and to provide that Acquisition Sub or such other subsidiary of Parent
will be the Surviving Corporation and will continue under the name "Super Food
Services, Inc."
Effective Time. The Merger shall be consummated by filing with the Secretary of
State of the State of Delaware a certificate of merger or a certificate of
ownership and merger if permitted by the DGCL (the "Certificate of Merger") in
accordance with the DGCL (the time of such filing being the "Effective Time").
Such filing shall be made by Parent or Acquisition Sub as soon as practicable
following the satisfaction or waiver, if permissible, of the conditions set
forth in Article VII.
Effects of the Merger. The Merger shall have the effects set forth in Section
259 of the DGCL. As of the Effective Time, the Company shall be a wholly owned
subsidiary of Parent.
<PAGE>
Certificate of Incorporation and By-Laws. The Certificate of Incorporation and
the By-Laws of Acquisition Sub in effect at the Effective Time shall be the
Certificate of Incorporation and By-Laws of the Surviving Corporation until
amended in accordance with applicable law; provided that Article I of the
Certificate of Incorporation of the Surviving Corporation shall be amended as of
the Effective Time to read "The name of this corporation is Super Food Services,
Inc."
Directors and Officers. The directors and officers of Acquisition Sub
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation until their respective successors are duly elected and
qualified.
Conversion of Shares. At the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Acquisition Sub, the Company or the
holders of any of the following securities: each Share then held by the
Company as treasury stock (or held by any subsidiary of the Company) and each
issued and outstanding Share owned by Parent, Acquisition Sub or any other
subsidiary of Parent shall be canceled and retired and no payment made with
respect thereto; each then issued and outstanding Share, other than: (i)
those Shares referred to in Section 2.6(a); and (ii) Dissenting Shares (as
defined in Section 3.1), shall be converted into the right to receive an
amount of cash equal to $15.50 (or any higher price per Share paid pursuant
to the Offer) (the "Merger Consideration") payable to the holder thereof,
without interest thereon, upon the surrender of the certificate formerly
representing such Share; and each common share, par value $0.01, of
Acquisition Sub issued and outstanding immediately prior to the Effective
Time shall be converted into one fully paid and nonassessable share of common
stock, par value $0.01 per share, of the Surviving Corporation.
Company Stock Plans.
Option Plans. The Company shall have the right, at any time and during the
period prior to the consummation of the Merger, to pay to each holder of
outstanding options to purchase shares of Common Stock ("Stock Options"),
heretofore granted under the Company's 1978 Stock Option Plan or the Company's
1986 Stock Option Plan (the "Option Plans") an amount equal to the difference
between the Merger Consideration and the per Share exercise price of such Stock
Options held by such holder multiplied by the number of Shares then exercisable
pursuant to such Stock Options in exchange for the surrender and cancellation of
such Stock Options. Prior to the Effective Time, the Company may also elect to
accelerate the exercisability or vesting of such Stock Options and adopt any
amendments to its Option Plans (to the extent permitted by the Option Plans) as
shall be necessary to effectuate the foregoing. At the Effective Time, any
Stock Options which the holder thereof has not exercised in full or surrendered
for cancellation shall terminate. If any employee's employment with the Company
or any of its subsidiaries is terminated after the acceptance of Shares for
payment and payment for Shares pursuant to the Offer and prior to the Effective
Time, and if as a consequence thereof, any Stock Options granted to such
employee expire or terminate prior to the Effective Time without having been
exercised, such employee shall be entitled to the payments hereunder in respect
of such Stock Options, at the same time such amounts are paid to other holders
of Stock Options, as if such employee had continued as an employee of the
Company or its subsidiary through the Effective Time and as if such Stock
Options had been surrendered for cancellation.
Purchase Plan. Prior to the consummation of the Merger, the Company shall amend
the Company's Employee Stock Purchase Plan, as amended to the date hereof (the
"Purchase Plan"), to provide that each participant that has elected to
participate in the Purchase Plan for the current Purchase Period (as defined in
the Purchase Plan) shall be entitled to receive, in exchange for the amount in
such participant's Stock Purchase Account (as defined in the Purchase Plan) as
of the Effective Time, an amount equal to the product of (i) the amount in the
Stock Purchase Account divided by $11.10, multiplied by (ii) $15.50.
Closing. Upon the terms and subject to the conditions hereof, as soon as
practicable after consummation of the Offer, and after the vote of the
stockholders of the Company in favor of the approval of the Merger and this
Agreement has been obtained (if such approval is required under
<PAGE>
applicable law), the Company (or Parent or Acquisition Sub, if appropriate)
shall execute in the manner required by the DGCL and deliver to the Secretary of
State of the State of Delaware a duly executed Certificate of Merger, as
required by the DGCL, and the parties shall take all such other and further
actions as may be required by law to make the Merger effective. Prior to the
filing referred to in this Section 2.8, a closing (the "Closing") will be held
at the offices of Oppenheimer Wolff & Donnelly, Plaza VII, Suite 3400, 45 South
Seventh Street, Minneapolis, Minnesota 55402 (or such other place as the parties
may agree) for the purpose of confirming all of the foregoing.
ARTICLE 3
DISSENTING SHARES; EXCHANGE OF SHARES
Dissenting Shares. Notwithstanding anything in this Agreement to the contrary,
Shares that are issued and outstanding immediately prior to the Effective Time
and which are held by any holder of Common Stock who has not voted in favor of
the Merger and has properly exercised and perfected appraisal rights in
accordance with Section 262 of the DGCL (the "Dissenting Shares") shall not be
converted into the right to receive Merger Consideration but shall become the
right to receive such consideration as may be determined to be due such
Dissenting Shares pursuant to the DGCL; provided, however, that any holder of
Dissenting Shares who shall have failed to perfect or who effectively shall have
withdrawn or lost his or its rights of appraisal of such Shares under the DGCL
shall forfeit the right to appraisal of such Shares, such Shares shall no longer
be Dissenting Shares and such Shares shall thereupon be deemed to have been
converted into the right to receive, as of the Effective Time, the respective
amounts and rights set forth in Section 2.6, without interest. The Company
shall give Parent and Acquisition Sub prompt notice of any written demands for
appraisal, withdrawals of demands for appraisal and any other related
instruments received by the Company and, prior to the Effective Time, Parent
shall have the right to participate in all negotiations and proceedings with
respect to such demands. Prior to the Effective Time, the Company shall not,
except with the prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands. Notwithstanding anything to
the contrary contained in this Section, if (i) the Merger is rescinded or
abandoned or (ii) if the stockholders of the Company revoke the authority to
effect the Merger, then the right of any stockholder to be paid the fair value
of such a stockholder's Shares shall cease. The Surviving Corporation shall
comply with all of the obligations of the DGCL with respect to dissenting
stockholders.
Exchange of Shares.
Prior to the Effective Time, Parent will appoint a disbursing agent for the
Merger (the "Disbursing Agent") and enter into a disbursing agent agreement with
the Disbursing Agent, in form and substance reasonably acceptable to the
Company, and shall deposit or cause to be deposited with the Disbursing Agent in
trust for the benefit of the Company's stockholders, cash in an aggregate amount
necessary to make the payments pursuant to Section 2.6 to holders of Shares and
to make the appropriate cash payments, if any, to holders of Dissenting Shares,
assuming Dissenting Shares are entitled to the same price per Share as in effect
under the Offer (such amounts being hereinafter referred to as the "Exchange
Fund"). The Disbursing Agent shall, pursuant to irrevocable instructions, make
the payments provided for in the preceding sentence out of the Exchange Fund.
The Disbursing Agent shall invest portions of the Exchange Fund as Parent
directs, provided that such investments shall be in obligations of or guaranteed
by the United States of America, in commercial paper obligations receiving the
highest rating from either Moody's Investors Services, Inc. or Standard & Poor's
Corporation, or in certificates of deposit, bank repurchase agreements or
banker's acceptances of commercial banks with capital exceeding $100 million.
Any net profit resulting from, or interest or income produced by, such
investment shall be payable to the Surviving Corporation. The Exchange Fund
shall not be used for any other purpose, except as provided in this Agreement.
Promptly after the Effective Time, the Surviving Corporation shall cause the
Disbursing Agent to
<PAGE>
mail to each record holder, as of the Effective Time, of an outstanding
certificate or certificates (the "Certificates") which immediately prior to the
Effective Time represented Shares (other than those owned beneficially by Parent
or any subsidiary thereof), a form of letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Disbursing
Agent) and instructions for use in effecting the surrender of the Certificate or
payment therefor. Upon surrender to the Disbursing Agent of a Certificate,
together with such letter of transmittal duly executed, the holder of such
certificate shall be paid in exchange therefor cash in an amount equal to the
product of the number of Shares represented by such Certificate multiplied by
the Merger Consideration, and such Certificate shall forthwith be canceled. No
interest will be paid or accrued on the cash payable upon the surrender of the
Certificates. If payment is to be made to a person other than the person in
whose name the Certificate surrendered is registered, it shall be a condition of
payment that the Certificate so surrendered be properly endorsed or otherwise in
proper form for transfer and that the person requesting such payment pay any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of the Certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this Section
3.2, each Certificate (other than Certificates representing Shares owned by
Parent, Acquisition Sub or any other subsidiary of Parent, and Dissenting
Shares) shall represent for all purposes only the right to receive the Merger
Consideration in cash multiplied by the number of Shares evidenced by such
Certificate, without any interest thereon.
At and after the Effective Time, there shall be no transfers of Shares which
were outstanding immediately prior to the Effective Time on the stock transfer
books of either the Company or the Surviving Corporation. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
will be canceled and exchanged for cash as provided in this Article III. At the
close of business on the day of the Effective Time the stock ledger of the
Company will be closed.
Any portion of the Exchange Fund that remains unclaimed by the stockholders of
the Company for six (6) months after the Effective Time, together with any
proceeds of any investments of the Exchange Fund, shall be repaid to the
Surviving Corporation. Any stockholders of the Company who have not theretofore
complied with Section 3.1 shall thereafter look only to Parent or the Surviving
Corporation (subject only to abandoned property, escheat and other laws) for
payment of their claim for the Merger Consideration per Share, without any
interest thereon.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF PARENT AND ACQUISITION SUB
Parent and Acquisition Sub represent and warrant to the Company as follows:
Organization and Qualification. Each of Parent and Acquisition Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
to carry on its business as it is now being conducted and to own, lease and
operate its property and assets. Each of Parent and Acquisition Sub is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except where the
failure (as hereinafter defined) to be so qualified would not result in a
material adverse effect on the Parent or Acquisition Sub. The copies of the
Certificate of Incorporation and By-Laws of Parent and the Certificate of
Incorporation and By-Laws of Acquisition Sub previously delivered to the Company
are true, complete and correct as of the date hereof.
Authority Relative to this Agreement. Each of Parent and Acquisition Sub has
all requisite corporate power and authority to execute and deliver this
Agreement, to carry out their respective obligations
<PAGE>
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery by Parent and Acquisition Sub of this Agreement and the
consummation by Parent and Acquisition Sub of the transactions contemplated
hereby have been duly and validly authorized by the respective Boards of
Directors of Parent and Acquisition Sub, and the stockholder of Acquisition Sub,
and no other corporate proceedings on the part of Parent or Acquisition Sub are
necessary to authorize this Agreement, to commence the Offer and to consummate
the transactions so contemplated by this Agreement. This Agreement has been
duly and validly executed and delivered by each of Parent and Acquisition Sub
and, assuming this Agreement constitutes a valid and binding obligation of the
Company, this Agreement constitutes a valid and binding agreement of each of
Parent and Acquisition Sub, enforceable against each of Parent and Acquisition
Sub in accordance with its terms.
Proxy Statement. None of the information supplied or to be supplied by Parent,
Acquisition Sub and their respective affiliates specifically for inclusion in
the Proxy Statement (as hereinafter defined) shall, at the time the Proxy
Statement is mailed, at the time of the Meeting or at the Effective Time,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any letter to stockholders, notice of meeting, proxy statement and
form of proxy, or the information statement, as the case may be, distributed to
stockholders in connection with the Merger, or any schedule required under
applicable law to be filed with the SEC in connection therewith are collectively
referred to herein as the "Proxy Statement." If, at any time prior to the
Effective Time, any event relating to Parent or any of its affiliates, officers
or directors is discovered by Parent that should be set forth in a supplement to
the Proxy Statement, Parent will promptly inform the Company.
Consents and Approvals; No Violation. Neither the execution and delivery of
this Agreement by Parent and Acquisition Sub, nor the performance by Parent and
Acquisition Sub of their obligations hereunder, nor the consummation of the
transactions contemplated hereby will: (i) conflict with or result in any breach
of any provision of the Certificate of Incorporation or By-Laws of Parent or the
Certificate of Incorporation or By-Laws of Acquisition Sub or any other similar
governing documents of any other subsidiary of Parent; (ii) require any consent,
approval, authorization or permit of, or filing with or notification to, any
third party or any public governmental body or regulatory authority, except (A)
in connection with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "H-S-R Act"), (B) pursuant to the Exchange Act, (C) the filing of
the Certificate of Merger pursuant to the DGCL, (D) such filings and approvals
as may be required under the "blue sky", takeover or securities laws of various
states, or (E) where the failure to obtain such consent, approval, authorization
or permit, or to make such filing or notification, would not prevent or delay
consummation of the Offer or the Merger and would not otherwise prevent Parent
from performing its obligations under this Agreement; (iii) except as disclosed
in writing by Parent to the Company prior to the execution of this Agreement,
result in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
lease, mortgage, license, agreement or other instrument or obligation to which
Parent or any of its subsidiaries is a party or by which any of its subsidiaries
or any of their respective assets may be bound, except for such defaults (or
rights of termination, cancellation or acceleration) as to which requisite
waivers or consents have been obtained or which, in the aggregate, would not
result in a material adverse effect on Parent; or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Parent, any of its
subsidiaries or any of their respective assets, except for violations which
would not result in a material adverse effect on Parent.
Financing. Parent has entered into an agreement for the borrowing of funds
necessary to consummate the Offer and the Merger and the transactions
contemplated hereby, and to pay the related fees and expenses, and will make
such funds available to Acquisition Sub on or before (i) the time of acceptance
for purchase by Acquisition Sub of shares pursuant to the Offer and (ii) the
Effective Time.
<PAGE>
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company hereby represents and warrants to Parent and Acquisition Sub as
follows:
Disclosure Schedule. Simultaneously with the execution and delivery of this
Agreement, the Company has executed and delivered to Parent a Disclosure
Schedule (the "Disclosure Schedule"), which is divided into sections which
correspond to the subsections of this Article 5. Disclosures in any subsection
thereof shall not (in the absence of appropriate cross-references) constitute
disclosure for purposes of any other subsection thereof or any other section or
subsection of this Agreement. The Disclosure Schedule is accurate and complete
in all material respects in accordance with the requirements of this Article 5.
Organization and Qualification.
The Company and each subsidiary of the Company is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power to carry on its business as
it is now being conducted and to own, lease and operate its property and assets.
The Company and each subsidiary of the Company is duly qualified as a foreign
corporation to do business, and, except as is set forth in the Disclosure
Schedule, is in good standing in each jurisdiction where the character of its
properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
result in a material adverse effect on the Company. The copies of the Company's
Certificate of Incorporation and By-Laws previously delivered to Parent are
true, complete and correct as of the date hereof.
The only subsidiaries of the Company are those named in the Disclosure Schedule.
Capitalization. The authorized capital stock of the Company consists of
35,000,000 common shares, par value $1.00 per share, and 1,000,000 preferred
shares without par value, of which 100,000 shares have been designated Series A
Junior Participating Preferred Stock (the "Series A Preferred Stock"). As of
the date hereof: (i) 10,997,448 shares of Common Stock (including shares of
restricted Common Stock) were issued and outstanding; (ii) no shares of
Preferred Stock were issued or outstanding; (iii) Stock Options to purchase an
aggregate of 197,277 shares of Common Stock were outstanding under the Company's
Option Plans; (iv) up to 47,099 shares of Common Stock were subscribed for
under the Purchase Plan; and (v) no shares of Common Stock were held in
treasury. The rights to purchase shares of Series A Preferred Stock outstanding
under the Rights Agreement are evidenced by the certificates representing shares
of Common Stock and not by separate certificates. Except for the First
Amendment of the Rights Agreement entered into effective as of the date hereof,
the Rights Agreement has not been amended on or prior to the date of this
Agreement. All of the issued and outstanding Shares have been, and all shares
of Common Stock which are to be issued pursuant to the exercise of stock options
will be, when issued in accordance with the respective terms thereof, duly
authorized and validly issued and fully paid and nonassessable with no liability
attaching to the ownership thereof and not subject to preemptive or similar
rights created by statute, the Certificate of Incorporation or By-Laws of the
Company or any agreement to which the Company or any of its subsidiaries is a
party or is bound. All outstanding shares of capital stock of the subsidiaries
of the Company have been validly issued and are fully paid and nonassessable and
owned by the Company or a wholly owned subsidiary of the Company, free and clear
of all liens, charges, encumbrances, equities, claims and options of any nature.
Except as set forth in this Section 5.3 and except for shares of Common Stock
that may be issued upon exercise of the Stock Options or pursuant to the
Purchase Plan, both as disclosed above, there are not now, and at the Effective
Time there will not be, any shares of capital stock of the Company issued or
outstanding or any subscriptions, options, warrants, calls, rights, commitments
or any other agreements of any character
<PAGE>
obligating the Company or any of its subsidiaries to issue any additional Shares
or any other shares of capital stock of the Company or any other securities
convertible into or evidencing the right to subscribe for any Shares or any
other shares of capital stock of the Company or any of its subsidiaries. There
are no voting trusts or other agreements or understandings to which the Company
is a party with respect to the voting of the capital stock of the Company or any
of its subsidiaries. There are no contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is obligated to
repurchase, redeem or otherwise acquire any Shares.
Authority Relative to this Agreement. The Company has all requisite corporate
power and authority to execute and deliver this Agreement, to carry out its
obligations hereunder and to consummate the transactions contemplated hereby
(subject with respect to the Merger, if required, to approval of the Merger and
this Agreement by the holders of a majority of the votes represented by the
Shares). The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than, with respect to the Merger, the approval of this Agreement by
stockholders, if required by the DGCL, holding a majority of the votes
represented by the Shares). This Agreement has been duly and validly executed
and delivered by the Company, and, assuming this Agreement constitutes a valid
and binding obligation of each of Parent and Acquisition Sub, this Agreement
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms.
Absence of Certain Changes. Except as disclosed in the Company SEC Filings (as
hereinafter defined) or as contemplated by this Agreement or disclosed to Parent
in the Disclosure Schedule, since August 26, 1995, neither the Company nor any
of its subsidiaries has suffered any material adverse effect, and no event has
occurred which may result in a material adverse effect on the Company. Without
limiting the generality of the foregoing, except as disclosed in the Company SEC
Filings or disclosed to Parent in the Disclosure Schedule, since August 26,
1995, there has not been: (i) any declaration, setting aside or payment of any
dividend or other distribution in respect of the Shares or any redemption or
other acquisition by the Company of any Shares; (ii) any entry into any
agreement, commitment or transaction by the Company which is material to the
Company and its subsidiaries taken as a whole, except agreements, commitments or
transactions in the ordinary course of business; or (iii) any significant change
by the Company in accounting methods, principles or practices.
Reports. Since December 31, 1991, the Company has filed all reports,
registration statements and other filings with the SEC required to be filed by
it pursuant to the Securities Act of 1933, as amended (the "Securities Act"),
and the Exchange Act and has heretofore delivered to Parent true and complete
copies of all such reports, registration statements and other filings as
requested by Parent. All such reports, registration statements and other
filings (including all notes, exhibits and schedules thereto, all documents
incorporated by reference therein, and any amendments thereto), whether filed
before or after the date hereof, are sometimes collectively referred to herein
as the "Company SEC Filings." As of their respective dates of filing with the
SEC, the Company SEC Filings complied in all material respects with all of the
rules and regulations of the SEC and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Company and its
subsidiaries will file with the SEC and make available to Parent all Company SEC
Filings filed with the SEC between the date of this Agreement and the Effective
Date. As of their respective dates, such filings will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The unaudited
consolidated financial statements and unaudited interim financial statements
included in the Company SEC Filings were and, with respect to filings to be made
with the
<PAGE>
SEC after the date hereof, will be, prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes or schedules thereto) and fairly present the
consolidated financial position of the Company and its subsidiaries as of the
dates thereof and the results of its operations and changes in financial
position for the periods then ended, subject, in the case of the unaudited
interim financial statements, to normal year-end audit adjustments.
Proxy Statement. If a Proxy Statement is required for the consummation of the
Merger under applicable law, the Proxy Statement will comply in all material
respects with the Exchange Act, except that no representation is made by the
Company with respect to information supplied by Parent or any affiliate of
Parent specifically for inclusion in the Proxy Statement. None of the
information supplied by the Company specifically for inclusion in the Proxy
Statement will, at the time the Proxy Statement is mailed, at the time of the
meeting or at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the information supplied by
the Company specifically for inclusion in any other documents to be filed with
the SEC or any other regulatory agency in connection with the transactions
contemplated hereby will, at the respective time such documents are filed,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
Consents and Approvals; No Violation. Neither the execution and delivery of
this Agreement by the Company, nor the performance by the Company of the
obligations hereunder, nor the consummation of the transactions contemplated
hereby will: (i) conflict with or result in any breach of any provision of the
Certificate of Incorporation or By-Laws of the Company or any other similar
governing documents of any subsidiary of the Company; (ii) require any consent,
approval, authorization or permit of, or filing with or notification to, any
third party or any public governmental body or regulatory authority, except (A)
in connection with the H-S-R Act, (B) pursuant to the Exchange Act, (C) the
filing of the Certificate of Merger pursuant to the DGCL, (D) such consents,
approvals, orders, authorizations, registrations and declarations as may be
required under the law of any foreign country in which the Parent or any of its
subsidiaries conducts any business or owns any assets, (E) such filings and
approvals as may be required under the "blue sky", takeover or securities laws
of various states, or (F) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
prevent or delay consummation of the Offer or the Merger and would not otherwise
prevent the Company from performing its obligations under this Agreement; (iii)
except as disclosed in the Disclosure Schedule, result in a default (or give
rise to any right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, lease, mortgage, license, agreement
or other instrument or obligation to which the Company or by which the Company
or any of its assets other than its subsidiaries may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained or which, in the aggregate,
would not result in a material adverse effect on the Company; or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
the Company, any of its subsidiaries or any of their respective assets, except
for violations which would not in the aggregate result in a material adverse
effect on the Company.
Absence of Undisclosed Liabilities. There are no liabilities of the Company or
its subsidiaries of any kind whatsoever (whether absolute, accrued, contingent
or otherwise, and whether due or to become due), and the Company knows of no
valid basis for the assertion of any such liabilities, whether contingent or
absolute and whether determined or determinable, and no existing condition,
situation or set of circumstances which is reasonably likely to result in such a
liability, other than: (i) liabilities disclosed in the Company SEC Filings
filed with the SEC prior to the date hereof; (ii) liabilities disclosed in the
Disclosure Schedule; (iii) liabilities which would not, individually or in the
aggregate,
<PAGE>
have a material adverse effect on the Company; (iv) liabilities which were
incurred in the ordinary course of business and which were not required to be
disclosed in the Company's financial statements or the Company SEC Filings; and
(v) liabilities which were incurred in the ordinary course of business
subsequent to the date of the Company's financial statements.
Litigation. As of the date hereof, except as set forth in the Disclosure
Schedule, there is no action, suit, judicial or administrative proceeding,
arbitration or investigation pending or, to the knowledge of the Company,
threatened against or involving the Company or any of its subsidiaries, or any
of their properties or rights, before any court, arbitrator or administrative or
governmental body, nor is there any judgment, decree, injunction, rule or order
of any court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against the Company or any of its subsidiaries, which,
individually or in the aggregate, would have a material adverse effect on the
Company. The Company and its subsidiaries are not in violation of any term of
any judgments, decrees, injunctions or orders outstanding against them which,
individually or in the aggregate, would have a material adverse effect on the
Company.
Liens and Encumbrances. All properties and assets owned by the Company and its
subsidiaries are free and clear of all title defects, liens, pledges, claims,
security interests, restrictions, mortgages, options and encumbrances of any
kind (collectively, "Liens") except: (i) statutory Liens not yet delinquent or
the validity of which is being contested in good faith by appropriate actions;
(ii) Liens for taxes not yet delinquent or the validity of which is being
contested in good faith by appropriate actions; (iii) Liens described in the
Disclosure Schedule; and (iv) Liens which, in the aggregate, do not materially
detract from the value or impair the use of the property subject thereto, or
impair the operations of the Company or any of its subsidiaries. All of the
assets that are material to the operation of the business of the Company and its
subsidiaries are in good operating condition and repair in accordance with
industry practice (subject to normal wear and tear) and are adequate to conduct
the business of the Company and its subsidiaries as presently conducted.
Contracts. Except as set forth in the Disclosure Schedule, the Company has
heretofore furnished to Parent or made available for inspection true and correct
copies of: (i) every contract, plan, agreement or understanding to which the
Company is a party which would be required to be filed with the SEC in a filing
to which paragraph (b)(10) (but only with respect to contracts, plans,
agreements or understandings to be performed in whole or in part after the date
hereof) of Item 601 of Regulation S-K of the rules and regulations of the SEC
would be applicable, and which has not been filed with the SEC; (ii) every
employment or consulting agreement with or arrangement with or for the benefit
of any officer or employee of the Company; and (iii) every contract, agreement
or understanding to which the Company is a party which could reasonably be
expected to result in annual payments by or to the Company in excess of $100,000
or that extends for more than one year (except for the collective bargaining
agreement relating to the Company's Michigan division, which has not been
executed but which has been delivered to Parent in its current draft form, and
except for contracts entered into in the ordinary course of business consistent
with the Company's historical practices for the purchase of inventory or
supplies or for the purchase, leasing or maintenance of equipment entered into
with independent parties on an arm's-length basis). Except as set forth in the
Disclosure Schedule, neither the Company, nor, to the knowledge of the Company,
any other party thereto is in default under any material contract, plan,
agreement, understanding or arrangement made or obligation owed by or to the
Company and, to the Company's knowledge, there are no facts or circumstances
which make such a default likely to occur subsequent to the date hereof.
Taxes. Except as set forth in the Disclosure Schedule, the Company has filed or
has or will cause to be filed all federal, state, local and foreign tax returns
required to be filed by each of its subsidiaries and any member of its
consolidated, combined, unitary or similar group (each such member, a "Tax
Affiliate") the failure of which to be filed by the Company may result in a
material adverse effect on the Company, and has paid or has or will cause to be
paid, or has made or will make adequate provision or set up an adequate accrual
or reserve for the payment of, all taxes required to be paid in
<PAGE>
respect of the periods for which returns are due, has established or will
establish an adequate accrual or reserve for the payment of all taxes payable in
respect of the period subsequent to the last of said periods, required (pursuant
to generally accepted accounting principles) to be so accrued or reserved
(except in either case in an amount not material), and neither it nor any of its
Tax Affiliates has or will have any material liability for taxes in excess of
the amounts so paid or the accruals or reserves so established. Except as set
forth in the Disclosure Schedule, neither the Company nor any of its Tax
Affiliates is delinquent in the payment of any material tax in excess of the
amount reserved or provided therefor, and no material deficiencies for any tax,
assessment or governmental charge in excess of the amount reserved or provided
therefor have been threatened, claimed, proposed or assessed. Except as set
forth in the Disclosure Schedule, no waiver or extension of time to assess any
taxes has been given or requested since December 31, 1991. Except as set forth
in the Disclosure Schedule, the Company's federal and state income tax returns,
respectively, have not, since December 31, 1991, been audited or examined by the
Internal Revenue Service or comparable state agencies nor, except as set forth
in the Disclosure Schedule, has any such audit or examination been requested or
scheduled. None of the independent contractors hired by the Company should be
treated as "employees" for federal or state income or payroll tax purposes. For
the purposes of this Section 5.13, the term, "tax" or "taxes" shall include all
taxes, charges, withholdings, fees, levies, penalties, additions, interest or
other assessments imposed on the Company or any of its Tax Affiliates by any
federal, state, local, foreign or other taxing authority.
Employee Benefit Plans. Except as set forth in the Disclosure Schedule:
Neither the Company nor any other "person" within the meaning of Section
7701(a)(1) of the Code, that together with the Company is considered a single
employer pursuant to Sections 414(b), (c), (m) or (o) of the Code or Sections
3(5) or 4001(b)(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") (an "Affiliated Organization") sponsors, maintains,
contributes to, is required to contribute to or has or could have any material
liability of any nature, whether known or unknown, direct or indirect, absolute
or contingent, with respect to, any "employee pension benefit plan" ("Pension
Plan") as such term is defined in Section 3(2) of ERISA, including without
limitation, any such plan that is excluded from coverage by Section 4(b)(5) of
ERISA or is a "Multiemployer Plan" within the meaning of 4001(a)(3) of ERISA.
To the knowledge of the Company, each such Pension Plan that is a Multiemployer
Plan that is not administered by the Company has been operated in all material
respects in accordance with its terms and in compliance in all material respects
with the applicable provisions of ERISA, the Code and all other applicable law.
Each such other Pension Plan has been operated in all material respects in
accordance with its terms and in compliance in all material respects with the
applicable provisions of ERISA, the Code and all other applicable law. All
Pension Plans operated as plans that are qualified under the provisions of
Section 401(a) of the Code satisfy in form and operation all applicable
qualification requirements.
Neither the Company nor any Affiliated Organization has or could have any
liability of any nature, whether known or unknown, direct or indirect, absolute
or contingent, to any Pension Plan, the Pension Benefit Guaranty Corporation
("PBGC") or any other person, arising directly or indirectly under Title IV of
ERISA. No "reportable event," within the meaning of Section 4043 of ERISA, has
occurred with respect to any Pension Plan. Neither the Company nor any
Affiliated Organization has ceased operations at any facility or withdrawn from
any Pension Plan in a manner which could subject the Company or Affiliated
Organization to liability under Section 4062(e), 4063 or 4064 of ERISA. Neither
the Company nor any Affiliated Organization maintains, contributes to or has
participated in or agreed to participate in any Pension Plan that is a
Multiemployer Plan. Neither the Company nor any Affiliated Organization
currently has any obligation, known or unknown, direct or indirect, absolute or
contingent, to make any withdrawal liability payment to any Pension Plan which
is a Multiemployer Plan. Neither the Company nor any Affiliated Organization
has been a party to a sale of assets to which Section 4204 of ERISA applied with
respect to which it could incur any withdrawal liability (including any
contingent or secondary withdrawal liability) to any Multiemployer Plan.
<PAGE>
Neither the Company nor any Affiliated Organization has incurred, or has
experienced an event that will, within the ensuing twelve (12) months, result
in, a "complete withdrawal" or "partial withdrawal," as such terms are defined
respectively in Sections 4203 and 4205 of ERISA, with respect to a Pension Plan
which is a Multiemployer Plan, and nothing has occurred that could result in
such a complete or partial withdrawal. Neither the Company nor any Affiliated
Organization has incurred a decline in contributions to any Multiemployer Plan
such that, if the current rate of contributions continues, a 70% decline in
contributions (as defined in Section 4205 of ERISA) will occur within the next
three plan years.
Neither the Company nor any Affiliated Organization sponsors, maintains,
contributes to, is required to contribute to or has or could have any liability
of any nature, whether known or unknown, direct or indirect, absolute or
contingent, with respect to, any "employee welfare benefit plan" ("Welfare
Plan") as such term is defined in Section 3(1) of ERISA, whether insured or
otherwise, including, without limitation, any such plan that is a "Multiemployer
Plan" within the meaning of Section 3(37) of ERISA. Each such disclosed Welfare
Plan has been operated in all material respects in accordance with its terms and
in compliance in all material respects with the applicable provisions of ERISA,
the Code and all other applicable law. Benefits under each Welfare Benefit Plan
are fully insured by an insurance company unrelated to the Company. Neither the
Company nor any Affiliated Organization has established or contributed to, is
required to contribute to or has or could have any liability of any nature,
whether known or unknown, direct or indirect, absolute or contingent, with
respect to any "voluntary employees' beneficiary association" within the meaning
of Section 501(c)(9) of the Code, "welfare benefit fund" within the meaning of
Section 419 of the Code, "qualified asset account" within the meaning of Section
419 of the Code, "qualified asset account" within the meaning of Section 419A of
the Code or "multiple employer welfare arrangement" within the meaning of
Section 3(40) or ERISA. No Welfare Plan which is a Multiemployer Plan imposes
any post-withdrawal liability or contribution obligations upon the Company or
any Affiliated Organization. Neither the Company nor any Affiliated
Organization maintains, contributes to or has or could have any liability of any
nature, whether known or unknown, direct or indirect, absolute or contingent,
with respect to medical, health, life or other welfare benefits for present or
future terminated employees or their spouses or dependents other than as
required by Part 6 of Subtitle B of Title I of ERISA or any comparable state
law.
Neither the Company nor any Affiliated Organization is a party to, maintains,
contributes to, is required to contribute to or has or could have any liability
of any nature, whether known or unknown, direct or indirect, absolute or
contingent, with respect to, any bonus plan, incentive plan, stock plan or any
other current or deferred compensation (other than current salary or wages paid
in the form of cash), separation, retention, severance, paid time off or similar
agreement, arrangement or policy, or any individual employment, consulting or
personal service agreement other than a Pension or Welfare Plan ("Compensation
Plans"). Each such disclosed Compensation Plan has been operated in all
material respects in accordance with its terms and in compliance in all material
respects with the applicable provisions of all applicable law.
here are no facts or circumstances which could, directly or indirectly, subject
the Company or any Affiliated Organization to any (1) excise tax or other
liability under Chapters 43, 46 or 47 of Subtitle D of the Code, (2) penalty tax
or other liability under Chapter 68 of Subtitle F of the Code or (3) civil
penalty, damages or other liability under Section 502 of ERISA.
Full payment has been made of all amounts which the Company or any Affiliated
Organization is required, under applicable law, the terms of any Pension Plan,
Welfare Plan or Compensation Plan, or any agreement relating to any Pension Plan
or Welfare Plan or Compensation Plan, to have paid as a contribution, premium or
other remittance thereto or benefit thereunder. Each Pension Plan that is
subject to the minimum funding standards of Section 412 of the Code and Section
302 of ERISA meets those standards and has not incurred any accumulated funding
deficiency within the meaning of Section 412 or 418B of the Code and no waiver
of any minimum funding requirement under Section
<PAGE>
412 of the Code has been applied for or obtained with respect to any such
Pension Plan. The Company and each Affiliated Organization has made adequate
provisions for reserves or accruals in accordance with generally accepted
accounting principles to meet contribution, benefit or funding obligations
arising under applicable law or the terms of any Pension Plan or Welfare Plan or
Compensation Plan or related agreement. There will be no change on or before
Closing in the operation of any Pension Plan, Welfare Plan or Compensation Plan
or any documents with respect thereto which will result in an increase in the
benefit liabilities under such plans, except as may be required by law.
The Company and each Affiliated Organization has timely complied in all material
respects with all reporting and disclosure obligations with respect to the
Pension Plans, Welfare Plans and Compensation Plans imposed by the Code, ERISA
or other applicable law.
There are no pending or, to the Company's knowledge, threatened audits,
investigations, claims, suits, grievances or other proceedings, and there are no
facts that could give rise thereto, involving, directly or indirectly, any
Pension Plan, Welfare Plan, or Compensation Plan, or any rights or benefits
thereunder, other than the ordinary and usual claims for benefits by
participants, dependents or beneficiaries.
The transactions contemplated herein do not result in the acceleration of
accrual, vesting, funding or payment of any contribution or benefit under any
Pension Plan, Welfare Plan or Compensation Plan. No payments made or to be made
to any individual pursuant to any agreement with any of the Company or any
Affiliated Organization could individually or collectively (and assuming that
any contingencies or conditions occur in a manner that maximizes payment) give
rise to a "parachute payment" within the meaning of Section 280G of the Code.
No action or omission of the Company or any director, officer, employee, or
agent thereof in any way restricts, impairs or prohibits Parent or the Company
or any successor from amending, merging, or terminating any Pension Plan,
Welfare Plan or Compensation Plan in accordance with the express terms of any
such plan and applicable law.
The Disclosure Schedule lists and the Company has delivered to Parent true and
complete copies of: (i) all Pension, Welfare and Compensation Plans and related
trust agreements or other agreements or contracts evidencing any funding vehicle
with respect thereto; (ii) the three most recent annual reports on Treasury Form
5500, including all schedules and attachments thereto, with respect to any Plan
for which such a report is required; (iii) the three most recent actuarial
reports with respect to any Pension Plan that is a "defined benefit plan" within
the meaning of Section 414(j) of the Code; (iv) the form of summary plan
description, including any summary of material modifications thereto or other
modifications communicated to participants, currently in effect with respect to
each Pension Plan, Welfare Plan or Compensation Plan; and (v) the most recent
determination letter with respect to each Pension Plan intended to qualify under
Section 401(a) of the Code and the full and complete application therefor
submitted to the Internal Revenue Service.
Compliance with Applicable Law. Each of the Company and its subsidiaries holds,
and at all times has held, all licenses, franchises, permits and authorizations
necessary for the lawful conduct of its business under and pursuant to, and the
business of each of the Company and its subsidiaries is not being conducted, nor
has it ever been conducted, in violation of, any provision of any federal,
state, local or foreign statute, law, ordinance, rule, regulation, judgment,
decree, order, concession, grant, franchise, permit or license or other
governmental authorization or approval applicable to the Company or any of its
subsidiaries, except to the extent that the failure to hold any such licenses,
franchises, permits or authorization, or any such violation, did not or would
not, individually or in the aggregate have a material adverse effect on the
Company. No investigation or review, except as set forth in the Disclosure
Schedule, by any federal, state or local governmental authority with respect to
the Company or any of its subsidiaries is pending or, to the Company's knowledge
threatened, nor, to the Company's knowledge, has any federal, state or local
governmental authority indicated an intention to conduct the same.
<PAGE>
Inventories. Except as disclosed in the Disclosure Schedule, all inventories of
the Company, whether reflected in the latest balance sheet included in the
Company SEC filings (the "Latest Balance Sheet") or acquired since the date of
the Latest Balance Sheet, were purchased in the ordinary course of business,
consist of a quality and quantities useable and salable in the ordinary course
of business, subject to waste and spoilage not in excess of industry norms, and
the present quantities of all inventories of the Company are reasonable in the
present circumstances of the business of the Company as currently conducted and
as proposed to be conducted. All inventories have been carried on the books of
the Company for financial reporting purposes in accordance with the generally
accepted accounting principles applied on a consistent basis, including without
limitation, for purposes of the unaudited financial statements included in the
Company SEC filings.
Accounts and Notes Receivable. Except as disclosed in the Disclosure Schedule
or in the aging schedule dated as of September 4, 1996 (the "Aging Schedule")
provided to Parent as described below: (i) the Company has good right, title
and interest in and to all of its accounts receivable and notes receivable of
any kind or nature whatsoever, whether from trade accounts or affiliated parties
or otherwise, whether reflected in the Latest Balance Sheet or acquired or
generated since the date of the Latest Balance Sheet (except for those paid or
compromised since the date of the Latest Balance Sheet) (the "Receivables");
(ii) none of the Receivables is subject to any mortgage, pledge, lien or
security interest of any kind or nature (whether or not of record); (iii) each
of the Receivables constitutes a valid and enforceable claim arising from a bona
fide transaction in the ordinary course of business, and there are no claims,
refusals to pay or other rights of set-off against any Receivables outstanding
as of the date hereof; (iv) no account (as of the date of the Aging Schedule) or
note debtor (as of August 31, 1996) whose account or note balance exceeded
$10,000 was (as of the indicated date) delinquent in payment by more than ninety
(90) days, and there has been no material deterioration in Receivables between
the indicated dates and the date of this Agreement; (v) the Aging Schedule of
the Receivables previously furnished to Parent is complete and accurate; (vi)
the reserve for doubtful accounts set forth in the Latest Balance Sheet has been
established by the Company in accordance with generally accepted accounting
principles applied on a consistent basis; and (vii) all of the Receivables will
be collected by the Company in accordance with their respective terms, except to
the extent of the reserve for doubtful accounts set forth on the Latest Balance
Sheet.
Intellectual Property Rights. The Company owns the industrial and intellectual
property rights, including without limitation the trademarks, trade names and
service marks (collectively the "Intellectual Property Rights") described in the
Disclosure Schedule. Except as disclosed in the Disclosure Schedule, the use of
all Intellectual Property Rights necessary or required for the conduct of the
business of the Company as presently conducted and as proposed to be conducted
does not and will not infringe or violate or allegedly infringe or violate the
Intellectual Property Rights of any person or entity. Except as disclosed in
the Disclosure Schedule, the Company does not own or use any Intellectual
Property Rights pursuant to any written license agreement and has not granted
any person or entity any rights pursuant to a written license agreement or
otherwise, to use the Intellectual Property Rights or any part thereof.
Insurance. The Disclosure Schedule contains an accurate and complete list of
all policies of fire and other casualty, general liability, theft, life,
workers' compensation, health, directors and officers business interruption, and
other forms of insurance owned or held by the Company, specifying the insurer,
the policy number, the term of the coverage and, in the case of any "claims
made" coverage, the same information as to predecessor policies for the previous
five (5) years. All such policies are in full force and effect and no premiums
with respect thereto are past due. The Company has not been denied any form of
insurance coverage and no policy of insurance has been revoked or rescinded
during the past five (5) years.
Labor Matters. Except as disclosed in the Disclosure Schedule: (i) the Company
is and has been in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, including without limitation, any
<PAGE>
such laws respecting employment discrimination and occupational safety and
health requirements and has not and is not engaged in any unfair labor practice;
(ii) there is no unfair labor practice complaint against the Company pending or,
to the knowledge of the Company, threatened before the National Labor Relations
Board or any other comparable authority; (iii) there is no organized labor
strike, dispute, slowdown, or stoppage actually pending or, to the knowledge of
the Company, threatened against or directly affecting the Company; (iv) no labor
representation question exists respecting the employees of the Company and there
is not pending or, to the knowledge of the Company, threatened any activity
intended or likely to result in a labor representation vote respecting the
employees of the Company; (v) no material grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is pending and no
claims therefore exist or, to the knowledge of the Company, have been
threatened; (vi) no collective bargaining agreement is binding and in force
against the Company or currently being negotiated by the Company; (vii) the
Company has not, since December 31, 1991, experienced any significant work
stoppage or any other significant labor difficulty; (viii) the Company is not
delinquent in any material amount for payments to any persons for any wages,
salaries, commissions, bonuses or other direct or indirect compensation for any
services performed by them or amounts required to be reimbursed to such persons,
including without limitation, any amounts due under any pension plan, welfare
plan or compensation plan; (ix) upon termination of the employment of any
person, neither the Company nor the Surviving Corporation will, by reason of
anything done at or prior to or as of the Effective Time, be liable to any of
such persons for so-called "Severance Pay" or any other payments; and (x) within
the twelve (12) months prior to the date hereof, to the knowledge of the
Company, there has not been any expression of intention to the Company by any
officer or key employee to terminate his or her employment other than at normal
retirement age.
Environmental Matters. Except as set forth in the Disclosure Schedule:
Neither the Company, any subsidiary or former subsidiaries of any of the
Company, nor any previous owner, tenant, occupant or user of any property owned
or leased by or to any of the Company or by or to any subsidiary or former
subsidiary of any of the Company (the "Properties") has (i) stored, used,
generated, released or disposed of any Environmentally Regulated Materials (as
hereinafter defined) in a manner that has or may reasonably result in a material
adverse condition that may require remedial action, or (ii) transported any
Environmentally Regulated Materials to, from or across the Properties in a
manner that has or may reasonably result in a material adverse condition that
may require remedial action, nor are any Environmentally Regulated Materials
presently, stored, used, generated or otherwise located on, under, in or about
the Properties, nor have any Environmentally Regulated Materials migrated from
the Properties upon or beneath other properties, nor have any Environmentally
Regulated Materials migrated or threatened to migrate from other properties
upon, about or beneath the Properties, in each such case described above in a
manner that has or may reasonably result in a material adverse condition that
may require remedial action.
No violation or noncompliance with Environmental and Occupational Safety and
Health Laws has occurred with respect to the Properties or operations
conducted thereon that has or may result in a material adverse effect on the
Company or that has or may result in a material adverse condition that may
require remedial action; no material enforcement, investigation, cleanup,
removal, remediation or response or other governmental or regulatory actions
have been asserted or threatened with respect to operations conducted on the
Properties or the Properties themselves or against the Company or any
subsidiary, or former subsidiary of the Company with respect to or in any way
regarding the Properties pursuant to any Environmental and Occupational
Safety and Health Laws; and no material claims or settlements with respect to
the Properties or the operations thereon, or against the Company or any
subsidiary or former subsidiary of the Company with respect to the Properties
or operations conducted thereon, relating to or arising out of Environmental
and Occupational Safety and
<PAGE>
Health Laws or Environmentally Regulated Materials have been made or threatened
by any third party, including any governmental entity, agency or representative,
nor, to the knowledge of the Company, does there exist any basis for any such
claim.
The term "Environmental and Occupational Safety and Health Law" as used in this
Agreement means any common law or duty, caselaw or ruling, statute, rule,
regulation, law, ordinance or code, whether local, state, federal, international
or otherwise in effect, that (i) regulates, creates standards for or imposes
liability or standards or conduct concerning any element, compound, pollutant,
contaminant, or toxic or hazardous substance, material or waste, or any mixture
thereof, or relates in any way to emissions or releases into the environment or
ambient environmental conditions, or conduct affecting such matters or (ii) is
designed to provide safe and healthful working conditions or reduce occupational
safety and health hazards. Such laws include, but are not limited to, the
National Environmental Policy Act, 42 U.S.C. Sections 4321 et seq., the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.
Sections 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901 et seq., the Federal Water Pollution Control Act, 33 U.S.C.
Sections 1251 et seq., the Federal Clean Air Act, 42 U.S.C. Sections 7401 et
seq., the Toxic Substances Control Act), 15 U.S.C. Sections 2601 et seq., the
Emergency Planning and Community Right to Know Act, 42 U.S.C. Section 11001, the
Hazard Communication Act 29 U.S.C. Sections 651 et seq., the Occupational Safety
and Health Act, 29 U.S.C. Sections 651 et seq., the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Section 136, and any caselaw
interpretations, amendments or restatements thereof or similar enactment
thereof, as is now or at any time hereafter may be in effect, as well as their
intentional, state and local counterparts.
The term "Environmentally Regulated Materials" as used in this Agreement means
any element, compound, pollutant, contaminant, substance, material or waste, or
any mixture thereof, designated, listed, referenced, regulated or identified
pursuant to any Environmental and Occupational Safety and Health Law.
Brokerage Fees and Commissions. Except for those fees and expenses payable to
Lazard Frres, a true and complete copy of whose engagement agreement has been
provided to Parent, no person is entitled to receive from the Company or any of
its affiliates any investment banking, brokerage or finder's fee in connection
with this Agreement or the transactions contemplated hereby.
ARTICLE 6
COVENANTS
Conduct of Business of the Company. Except as contemplated by this Agreement or
to the extent that Parent shall otherwise consent in writing, during the period
from the date of this Agreement to the Effective Time, the Company and its
subsidiaries will each conduct its operations according to its ordinary and
usual course of business and consistent with past practice and the Company shall
use reasonable efforts to preserve intact in all material respects the business
organization of the Company, use reasonable efforts to keep available the
services of its current officers and key employees, and use reasonable efforts
to preserve in all material respects the good will of those having advantageous
business relationships with it and its subsidiaries. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement or to the extent that Parent shall otherwise consent in writing,
neither the Company nor any of its subsidiaries, as the case may be, shall,
without the prior written consent of Parent: (i) issue, sell or pledge, or
authorize or propose the issuance, sale or pledge of: (A) additional shares of
capital stock of any class (including the Shares), or securities convertible
into any such shares, or any rights, warrants or options to acquire any such
shares or other convertible securities, or grant or accelerate any right to
convert or exchange any securities of the Company for Shares, other than (1)
Shares issuable pursuant to the terms of outstanding options and commitments
disclosed pursuant to Section 5.3, or (2) the issuance of shares of capital
stock to the Company by a wholly owned subsidiary of the Company; or (B) any
other securities in respect of, in lieu of or in substitution for the Shares
outstanding on the date thereof; (ii)
<PAGE>
purchase or otherwise acquire, or propose to purchase or otherwise acquire, any
of its outstanding securities (including the Shares); (iii) split, combine or
reclassify any shares of its capital stock, declare, set aside or pay any
dividend or distribution on any shares of capital stock of the Company; (iv)
make any acquisition of a material amount of assets (by merger, consolidation or
acquisition of stock or assets) or securities, any disposition of a material
amount of assets or securities or any material change in its capitalization, or
enter into a material contract or release or relinquish any material contract
rights not in the ordinary course of business (except as permitted pursuant to
Section 6.2 of this Agreement); (v) intentionally incur any liability or
obligation (absolute, accrued, contingent or otherwise) other than in the
ordinary and usual course of business and either consistent with past practice
or in the reasonable business judgment of the officers of the Company (including
borrowing in the ordinary course pursuant to existing loan agreements or debt
instruments) or issue any debt securities or assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any
other individual or entity in any case in an amount material to the Company and
its subsidiaries, taken as a whole; (vi) propose or adopt any amendments to the
Certificate of Incorporation or By-Laws of the Company; (vii) make any change in
accounting methods, principles or practices; (viii) other than as contemplated
or permitted by this Agreement: (A) enter into any new employment agreements
with any officers, directors or key employees or grant any material increases in
the compensation or benefits to officers, directors and key employees other than
increases in the ordinary course of business and consistent with past practice;
(B) pay or agree to pay any pension, retirement allowance or other employee
benefit not required or permitted by any existing plan, agreement or arrangement
to any such director, officer or key employee in amounts material to the Company
and its subsidiaries, taken as a whole; (C) commit itself (other than pursuant
to any collective bargaining agreement) to any additional pension,
profit-sharing bonus, extra compensation, incentive, defined compensation, stock
purchase, stock option, stock appreciation right, group insurance, severance
pay, retirement or other employee benefit plan, agreement or arrangement, or to
any employment or consulting agreement with or for the benefit of any director,
officer or key employee, whether past or present, in amounts material to the
Company and its subsidiaries, taken as a whole; or (D) except as required by
applicable law, amend in any material respect any such plan, agreement or
arrangement; or (ix) agree in writing or otherwise to take any of the foregoing
actions or any action which would make any representation or warranty in this
Agreement untrue or incorrect.
No Solicitation. Unless this Agreement is terminated in accordance with Article
8, neither the Company, its subsidiaries, nor any of their respective officers,
directors, employees, financial advisors, counsel, representatives, agents and
affiliates will, directly or indirectly, encourage, solicit, initiate, or,
subject to the fiduciary duties of the Company's Board of Directors, officers or
stockholders as advised by outside counsel to the Company, enter into any
agreement with respect to, or participate in any way in discussions or
negotiations with, provide any confidential information to, any Third Party (as
hereinafter defined) concerning any tender offer (including a self-tender
offer), exchange offer, merger, sale of substantial assets, sale of securities
or similar transactions involving the Company or any material subsidiary or
division of the Company (each, an "Acquisition Proposal"); except that, nothing
contained in this Section 6.2 or in any other provision of this Agreement shall
prohibit the Company or its Board of Directors from: (i) taking and disclosing
to the Company's stockholders a position with respect to a tender or exchange
offer by a Third Party pursuant to Rules 14d-9 and 14e-2 promulgated under the
Exchange Act; (ii) making such disclosure to the Company's stockholders as, in
the judgment of its Board of Directors with the advice of outside counsel, is
required under applicable law; or (iii) considering and negotiating an
unsolicited Acquisition Proposal if the Board of Directors determines in good
faith, after consultation with its outside counsel, that such consideration and
negotiation would be necessary to fulfill the fiduciary duties of the Board of
Directors. For purposes of this Agreement, "Third Party" shall mean any
corporation, partnership, person, or other entity or "group" (as defined in
Section 13(d)(3) of the
<PAGE>
Exchange Act) other than Parent, Acquisition Sub or any affiliate of Parent or
Acquisition Sub and their respective directors, officers, employees,
representatives, and agents. As long as this Agreement remains in effect, the
Company may furnish confidential information regarding the Company to any Third
Party if and only if: (i) the Company's Board of Directors determines in good
faith, with the advice of outside counsel, that its fiduciary duties require
disclosure of the information; and (ii) the Company and such Third Party enter
into a confidentiality agreement with terms and provisions (including standstill
provisions) no less onerous or restrictive on the Third Party than the terms and
provisions of the Confidentiality Agreement dated February 29, 1996 between
Parent and the Company with respect to Parent. Subject to the provisions of
Section 8.1, the Company may approve, accept and recommend an Acquisition
Proposal if and only if: (i) the Board of Directors determines in good faith, in
the exercise of its fiduciary duties and after consultation with its outside
counsel and financial advisors, that the Acquisition Proposal would result in a
transaction more favorable to the Company's stockholders from a financial point
of view than the transaction contemplated by this Agreement (such Acquisition
Proposal is referred to hereinafter as an "Approved Offer"); and (ii) Parent
does not make within five (5) business days of Parent's receiving notice of such
third-party offer, an offer which the Board of Directors, after consultation
with its financial advisers, determines is superior to such third-party offer.
As used in this Section 6.2, "third-party offer" shall mean any bona fide Third
Party offer, other than an offer by Parent, Acquisition Sub or any of their
respective affiliates for a merger or other business combination involving the
Company resulting in the acquisition of more than 50% of the outstanding Shares
or to acquire in any manner more than 50% of the outstanding Shares or all or
substantially all of the assets of the Company. The Company shall promptly
notify Parent of the receipt and the terms of any offer which it may receive in
respect of an Acquisition Proposal, including the identity of the offeror. The
Company and its Board of Directors acknowledge that the agreements contained in
this Section 6.2 are derived from and based upon their opinions that the Offer
and the Merger are fair and in the best interests of the Company and its
stockholders. The Company has advised the Parent that no negotiations are
currently pending with any other party for the acquisition of the Company.
Access to Information. Between the date of this Agreement and the Effective
Time, the Company will upon reasonable notice: (i) give Parent and its
authorized representatives access during regular business hours to all of the
Company's offices, warehouses and other facilities and to all of its books and
records; (ii) permit Parent to make such inspections as it may require; and
(iii) cause its officers and those of its subsidiaries to furnish Parent with
such financial and operating data and other information with respect to the
business and properties of the Company and its subsidiaries as Parent may from
time to time request.
Reasonable Efforts. Subject to the terms and conditions herein provided, and to
the fiduciary duties of the Board of Directors of the Company under applicable
laws, each of the parties hereto agrees to use its reasonable efforts to take,
or cause to be taken, all appropriate action, and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall take all such
necessary action. Such efforts shall include, without limitation: (i) obtaining
all necessary consents, approvals or waivers from third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement; and (ii) opposing vigorously any litigation or administrative
proceeding relating to this Agreement or the transactions contemplated hereby,
including, without limitation, promptly appealing any adverse court or agency
order.
Indemnification and Insurance.
The Company and Parent will indemnify and hold harmless, and after the Effective
Time, the Surviving Corporation and Parent will indemnify and hold harmless,
each present and former employee, agent, director or officer of the Company and
the Company's subsidiaries (the
<PAGE>
"Indemnified Parties") as provided in their respective charters or by-laws or
otherwise in effect at the date hereof (to the extent consistent with applicable
law), which provisions shall survive the Merger and shall continue in full force
and effect for a period of six (6) years from the Effective Time. In the event
any claim or claims (a "Claim or Claims") are asserted or made pursuant to the
preceding sentence within such six-year period, all rights to indemnification in
respect of any such Claim or Claims shall continue until final disposition of
any and all such Claims. Without limiting the foregoing, the Company and Parent,
and after the Effective Time the Surviving Corporation and Parent, to the extent
provided in their respective charters or by-laws and to the extent permitted by
applicable law, will periodically advance expenses as incurred with respect to
the foregoing, provided that the person to whom the expenses are advanced
provides an undertaking to repay such advances if it is ultimately determined
that such person is not entitled to indemnification. Parent and the Surviving
Corporation shall cause to be maintained in effect for not less than five (5)
years from the Effective Time the current policies of the directors' and
officers' liability insurance maintained by the Company and the Company's
subsidiaries (provided that Parent and the Surviving Corporation may substitute
therefor policies of at least the same coverage containing terms and conditions
which are no less advantageous to the Indemnified Parties so long as no lapse in
coverage occurs as a result of such substitution) with respect to all matters,
including the transactions contemplated hereby, occurring prior to, and
including, the Effective Time, provided that, in the event that any Claim or
Claims are asserted or made within such five-year period, such insurance shall
be continued in respect of any such Claim or Claims until final disposition of
any and all such Claims; provided, however, that during the first year after the
Effective Time Parent and the Surviving Corporation shall purchase such coverage
in the amount of not less than $15,000,000, and during the second through the
fifth year after the Effective Time shall purchase such coverage in the amount
of not less than $10,000,000, and provided further that, in no event shall
Parent or the Surviving Corporation be required to pay annual premiums in excess
of $160,000, and if Parent and the Surviving Corporation are unable to obtain
the insurance required by this Section 6.5(a) they shall obtain as much
comparable insurance as can be obtained for an annual premium equal to such
maximum amount.
In the event of any threatened or actual claim, action, suit, proceeding or
investigation, whether civil, criminal or administrative (including, without
limitation, any such claim, action, suit, proceeding or investigation in which
any of the current or former officers, directors, employees, fiduciaries or
agents (the "Indemnitees") of the Company or any of its subsidiaries is, or is
threatened to be, made a party by reason of the fact that he is or was a
director, officer, employee, fiduciary or agent of the Company or any of its
subsidiaries, or is or was serving at the request of the Company or any of its
subsidiaries as a director, officer, employee, fiduciary or agent of another
corporation, partnership, joint venture, trust or other enterprise) arising with
respect to events occurring before or as of the Effective Time or arising out of
the transactions contemplated by this Agreement, the parties hereto agree to
cooperate and use all reasonable efforts to defend against and respond thereto.
It is understood and agreed that the Company will indemnify and hold harmless,
and after the Effective Time each of the Surviving Corporation and Parent will
indemnify and hold harmless, as and to the fullest extent provided in their
respective charters or by-laws and to the extent permitted by applicable law,
each Indemnitee against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorneys' fees), judgments, fines and amounts
paid in settlement in connection with any such claim, action, suit, proceeding
or investigation. In the event of any such claim, action, suit, proceeding or
investigation whether arising with respect to events occurring before or as of
the Effective Time or arising out of the transactions contemplated by this
Agreement: (i) the Indemnitees may retain counsel satisfactory to them, and the
Company, or the Surviving Corporation and Parent after the Effective Time, shall
pay all reasonable fees and expenses of such counsel for the Indemnitees
promptly as statements therefor are received; and (ii) the Company, or the
Surviving Corporation and Parent after the Effective Time, will use their
respective best efforts to assist in the vigorous defense of any such matter;
provided that neither the Company nor the Surviving
<PAGE>
Corporation or Parent shall be liable for any settlement effected without its
prior written consent (which consent shall not be unreasonably withheld); and
provided further that the Surviving Corporation and Parent shall have no
obligation hereunder to any Indemnitee when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final and nonappealable, that indemnification of such Indemnitee in the
manner contemplated hereby is prohibited by applicable law. The Indemnitees as
a group may retain only one law firm to represent them with respect to any such
matter unless there is, under applicable standards of professional conduct, a
conflict of any significant issue between the positions of any two or more
Indemnitees as determined in good faith by such Indemnitees.
Parent and the Surviving Corporation agree to take no action which would have
the effect of impairing the rights of indemnity, limitation of liability and
other rights currently afforded to the current or former directors, officers,
employees, fiduciaries or agents of the Company and its subsidiaries and the
Indemnitees (whether through reincorporation of the Surviving Corporation or any
of its subsidiaries in another jurisdiction providing or permitting less
favorable indemnification or limitation of liability provisions, or otherwise).
Parent agrees to guarantee all of the obligations of the Surviving Corporation
under this Section 6.5. In the event that the Surviving Corporation or Parent
or their respective successors or assigns: (i) consolidates with or merges into
another person and shall not be the continuing or surviving corporation or
entity of such consolidation or merger; or (ii) transfers all or substantially
all of its properties or assets to any person, then and in each such case,
proper provisions shall be made so that the successors and assigns of the
Surviving Corporation or Parent, as the case may be, shall assume the
obligations set forth in this Section 6.5.
Employee Plans and Benefits and Employment Contracts.
Parent and the Surviving Corporation agree that, following the Effective Time
and until the later of forty-five (45) days after the purchase of Shares
pursuant to the Offer or December 31, 1996, they will maintain for the benefit
of the officers and employees of the Company the employee benefits, including,
without limitation, cash compensation, incentive opportunities, non-cash
non-incentive benefits, retirement plans and programs and severance plans and
policies, which are in each category at least comparable in the aggregate to
those provided under the Company's plans, programs and arrangements in existence
at the Effective Time and, to the extent practicable and appropriate, the
existing Company benefit plans, programs, and arrangements will be continued for
such period. In furtherance of the foregoing, during such period, Parent and
the Surviving Corporation agree not to reduce benefits to existing retirees (or
persons who become retirees during such period) under the Company's early
retirement health care plan as disclosed to Parent. Thereafter, such officers
and employees will be entitled to participate in the employee benefit plans,
programs and arrangements maintained by Parent for its similarly situated
employees, upon the same terms and conditions that apply to such employees of
Parent (which provision is not intended to guarantee participation in any such
plan, program or arrangement in which participation is determined in the
discretion of a person or committee pursuant to such plan, program or
arrangement).
From and after the Effective Time, Parent and the Surviving Corporation agree to
honor in accordance with their lawful terms all existing employment, severance,
consulting or other compensation agreements or arrangements or benefit contracts
between the Company or any of its subsidiaries and any officer, director or
employee of the Company or any of its subsidiaries and all benefits or other
amounts earned or accrued through the Effective Time and thereafter under all
employee benefit plans of the Company and any of its subsidiaries while such
plans are maintained.
Each individual who is an employee of the Company or any of its subsidiaries at
the Effective Time will, for purposes of determining eligibility and vesting
under any employee benefit plan, practice or policy of Parent or the Surviving
Corporation, be given credit for all service prior to the Effective Time with
the Company and its subsidiaries or any predecessor employer (but only to the
extent such credit was given for purposes of the similar or corresponding plan,
practice or policy of the Company).
<PAGE>
Board Representation. Promptly upon the purchase of Shares pursuant to the
Offer and from time to time thereafter, Parent shall be entitled to designate
such number of directors, rounded up to the next whole number on the Board of
Directors of the Company as will give Parent, subject to compliance with Section
14(f) of the Exchange Act and the rules and regulations promulgated thereunder,
representation on the Board of Directors of the Company equal to the product of:
(i) the number of directors on the Board of Directors of the Company; and (ii)
the percentage that such number of votes represented by the Shares so purchased
bears to the number of votes represented by Shares outstanding. The Company
shall, upon request by Parent, promptly increase the size of the Board of
Directors of the Company or exercise its best efforts to secure the resignations
of such number of directors as is necessary to enable Parent's designees to be
elected to the Board of Directors of the Company and shall cause Parent's
designees to be so elected. At such time, the Company shall also cause persons
designated by Parent to constitute the same percentage (rounded up to the next
whole number) as is on the Company's Board of Directors of (A) each committee of
the Company's Board of Directors, (B) each board of directors (or similar body)
of each subsidiary of the Company and (C) each committee (or similar body) of
each such board. The Company shall promptly take, at its expense, all action
required pursuant to Section 14(f) and Rule l4f-l in order to fulfill its
obligations under this Section 6.7 and shall include in the Schedule l4D-9 or
otherwise timely mail to its stockholders such information with respect to the
Company and its officers and directors as is required by Section 14(f) and Rule
l4f-l in order to fulfill its obligations under this Section 6.7. Parent will
supply to the Company in writing and be solely responsible for any information
with respect to itself and its nominees, officers, directors and affiliates
required by Section 14(f) and Rule l4f-l. In the event that Parent's designees
are elected to the Board of Directors of the Company, until the Effective Time,
the Board of Directors of the Company shall have at least three (3) directors
who are directors on the date hereof (the "Independent Directors"), provided
that, in such event, if the number of Independent Directors shall be reduced
below three (3) for any reason whatsoever, any remaining Independent Directors
(or Independent Director, if there be only one remaining) shall be entitled to
designate persons to fill such vacancies who shall be deemed to be Independent
Directors for purposes of this Agreement or, if no Independent Director then
remain, the other directors shall designate three (3) persons to fill such
vacancies who shall not be designees, stockholders or affiliates of Parent or
Acquisition Sub and such persons shall be deemed to be Independent Directors for
purposes of this Agreement. Notwithstanding anything in this Agreement to the
contrary, in the event that Parent's designees are elected to the Board of
Directors, after the acceptance for payment of Shares pursuant to the Offer and
prior to the Effective Time, the affirmative vote of a majority of the
Independent Directors shall be required to (a) amend or terminate this Agreement
by the Company, (b) exercise or waive any of the Company's rights, benefits or
remedies hereunder, (c) extend the time for performance of Parent's and the
Acquisition Sub's respective obligations hereunder, (d) take any other action by
the Company's Board of Directors under or in connection with this Agreement, or
(e) approve any other action by the Company which could adversely affect the
interests of the stockholders of the Company (other than Parent, Acquisition Sub
and their affiliates) with respect to the transactions contemplated hereby.
Meeting of the Company's Stockholders.
If required by applicable law, the Company shall promptly after the consummation
of the Offer, take all action necessary in accordance with the DGCL and its
Certificate of Incorporation and By-Laws to convene the Meeting to consider and
vote on the Merger and this Agreement. At the Meeting, all of the Shares then
owned by Parent, Acquisition Sub or any other subsidiary of Parent shall be
voted to approve the Merger and this Agreement. Subject to applicable fiduciary
obligations to stockholders of the Company as advised by counsel, the Board of
Directors of the Company shall recommend that the Company's stockholders vote to
approve the Merger and this Agreement if such vote is sought (which
recommendation shall be included in the Proxy Statement), shall use all
reasonable efforts to solicit from stockholders of the Company proxies in favor
of the Merger and shall take all other
<PAGE>
action in its judgment necessary and appropriate to secure the vote of
stockholders required by the DGCL to effect the Merger.
Parent and Acquisition Sub shall not, and they shall cause their subsidiaries
not to, sell, transfer, assign, encumber or otherwise dispose of the Shares
acquired pursuant to the Offer or otherwise prior to the Meeting; provided,
however, that this Section 6.8(b) shall not apply to the sale, transfer,
assignment, encumbrance or other disposition of any or all of such Shares in
transactions involving solely Parent, Acquisition Sub and/or one or more of
their wholly owned subsidiaries.
Proxy Statement. If required under applicable law, the Company and Parent shall
prepare the Proxy Statement, file it with the SEC under the Exchange Act as
promptly as practicable after Acquisition Sub purchases Shares pursuant to the
Offer, and use all reasonable efforts to have it cleared by the SEC. As
promptly as practicable after the Proxy Statement has been cleared by the SEC,
the Company shall mail the Proxy Statement to the stockholders of the Company as
of the record date for the Meeting. The Company will use all reasonable efforts
to obtain and furnish the information required to be included by it in the Proxy
Statement and, after consultation with Parent, respond promptly to any comments
of the SEC relating to the preliminary proxy or information statement relating
to the transactions contemplated by this Agreement and to cause the definitive
proxy statement relating to the transactions contemplated by this Agreement to
be mailed to its stockholders, all at the earliest practical time. Whenever any
event occurs which should be set forth in an amendment or supplement to the
Proxy Statement or any other filing required to be made with the SEC, each party
will promptly inform the other and cooperate in filing with the SEC and/or
mailing to stockholders such amendment or supplement. The Proxy Statement, and
all amendments and supplements thereto, shall comply with applicable law and be
in form and substance satisfactory to Parent.
Public Announcements. Parent and the Company shall to the fullest extent
practicable consult with each other before issuing any press release or
otherwise making any public statement with respect to the Offer and the Merger
and shall not issue any such press release or make any such public statement
prior to such consultation, except as may be required by law or any governmental
agency if required by such agency or the rules of the National Association of
Securities Dealers, Inc. or the rules of the New York Stock Exchange.
Merger Without Meeting of Stockholders. Notwithstanding the foregoing, in the
event that Parent or Acquisition Sub shall acquire at least 90% of the
outstanding Shares, the parties hereto agree, at the request of Parent, to take
all appropriate and necessary action to cause the Merger to become effective, as
soon as practicable after the consummation of the Offer and the completion of
all activities necessary to finance the consummation of the Merger and the
transactions contemplated hereby, without a meeting of stockholders of the
Company, in accordance with Section 253 of the DGCL.
Current Information. From the date of this Agreement to the Effective Time, the
Company will cause one or more of its designated representatives to confer on a
regular and frequent basis (not less often than semi-monthly) with
representatives of Parent and to report the general status of its ongoing
operations and to deliver to Parent (not less often than monthly) unaudited
consolidated balance sheets and related consolidated statements of operations,
statements of cash flows and statements of stockholders' equity for the period
since the last such report. The Company will promptly notify Parent of any
material change in the normal course of business or in the operation of the
properties of the Company or its subsidiaries.
Supplement to Disclosure Schedule. At least five (5) business days prior to the
scheduled expiration date of the Offer, the Company shall deliver to Parent and
Acquisition Sub a supplement to the Disclosure Schedule which sets forth any
matter hereafter arising which, if existing, occurring or known at the date of
this Agreement, would have been required to be set forth or described in such
Disclosure Schedule or which is necessary to correct any information in such
Disclosure Schedule which has been rendered inaccurate. In the event that the
Offer is extended beyond the initial
<PAGE>
expiration date for the Offer, the Company shall be required to deliver an
additional supplement to the Disclosure Schedule five (5) days prior to the
extended expiration date only if such prior supplement shall be more than
fifteen (15) business days old. No supplement shall have any effect for the
purpose of determining the satisfaction of the conditions set forth on Annex I
or the compliance by the Company with the covenant set forth in Section 6.1
hereof.
Section 203. From and after the date hereof, the Company will not, except
pursuant to an Approved Offer or as otherwise provided in this Agreement,
approve any acquisition of shares of Common Stock by any person which would
result in such person becoming an interested stockholder (as such term is
defined in Section 203 of the DGCL) or otherwise be subject to Section 203 of
the DGCL.
Preferred Stock Purchase Rights. Immediately prior to the consummation of the
purchase of the Shares pursuant to the Offer, if so requested by Parent (as long
as Parent or Acquisition Sub is not in breach of any material provision of this
Agreement), the Company agrees to redeem all of the outstanding Series A
Preferred Stock purchase rights issued pursuant to the Rights Agreement in
accordance with Section 23 of the Rights Agreement. From and after the date
hereof, the Company will not: (i) take or fail to take any action which would
permit the Series A Preferred Stock purchase rights to become nonredeemable by
the Company; (ii) except as otherwise provided in this Section 6.15, redeem the
Series A Preferred Stock purchase rights; (iii) except as otherwise required to
permit the commencement or consummation of the Offer or the consummation of the
Merger, amend the Rights Agreement; or (iv) approve any transaction, offer or
agreement (other than an Approved Offer) with any party other than Parent and
Acquisition Sub pursuant to Section 11(a)(ii) of the Rights Agreement.
ARTICLE 7
CONDITIONS TO CONSUMMATION OF THE MERGER
Conditions to Each Party's Obligation to Effect the Merger. The respective
obligations of each party to effect the Merger are subject to the
satisfaction or waiver, where permissible, prior to the Effective Time, of
the following conditions: this Agreement, the Merger and the transactions
contemplated hereby shall have been approved and adopted by the requisite
vote of the stockholders of the Company, if required by applicable law in
order to consummate the Merger; provided, however, that Parent and its
subsidiaries shall vote all of its Shares in favor of the Merger; no statute,
rule, regulation, executive order, decree, injunction or other order shall
have been enacted, entered, promulgate or enforced by any court or
governmental authority which is in effect and has the effect of prohibiting,
restraining, enjoining or restricting the consummation of the Merger; and the
waiting period (and any extension thereof) applicable to the consummation of
the Merger under the H-S-R Act, if any, shall have expired or been terminated.
Conditions to Obligations of Parent and Acquisition Sub to Effect the Merger.
The obligations of Parent and Acquisition Sub to effect the Merger are further
subject to the satisfaction, on or prior to the Effective Time, of the
conditions that Parent shall have accepted for payment and paid for Shares
tendered pursuant to the Offer, provided that this condition will be deemed
satisfied if Parent fails to accept for payment and pay for Shares pursuant to
the Offer in violation of the terms thereof or of this Agreement.
ARTICLE 8
TERMINATION; AMENDMENT; WAIVER
Termination. This Agreement may be terminated and the Merger contemplated
hereby may be abandoned at any time notwithstanding approval thereof by the
stockholders of the Company, but prior to the Effective Time:
by mutual written consent duly authorized by the Boards of Directors of the
Company, Parent and Acquisition Sub;
<PAGE>
by either the Company or Parent: if (1) the Offer terminates or expires in
accordance with its terms or if Parent terminates the Offer as the result of
the occurrence of any of the conditions set forth in Annex I hereto without
Acquisition Sub having purchased any Shares pursuant to the Offer, provided,
however, that the right to terminate this Agreement pursuant to this Section
8.l(b)(i)(1) shall not be available to Parent if the failure by Parent or
Acquisition Sub to fulfill any of their respective obligations under this
Agreement or a misrepresentation or breach of warranty by Parent or
Acquisition Sub results in the occurrence of any such condition, and shall
not be available to the Company if the failure by the Company to fulfill any
of its obligations under this Agreement or a misrepresentation or breach of
warranty by Company results in the occurrence of any such condition; or (2)
Acquisition Sub shall not have purchased any Shares pursuant to the Offer on
or before December 31, 1996, provided however, that the right to terminate
this Agreement pursuant to this Section 8.1(b)(i)(2) shall not be available
to Parent if such failure to purchase any Shares is the result of a failure
by Parent or Acquisition Sub to fulfill any of their respective obligations
under this Agreement or a misrepresentation or breach of warranty by Parent
or Acquisition Sub, and shall not be available to the Company if such failure
to purchase any Shares is the result of a failure by the Company to fulfill
any of its obligations under this Agreement or a misrepresentation or breach
of warranty by Company; if the Merger shall not have been consummated on or
before six (6) months after the date hereof, unless the failure to consummate
the Merger is the result of a material breach of this Agreement by the party
seeking to terminate this Agreement; or if any court of competent
jurisdiction or any other governmental body shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining
or otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and nonappealable;
by the Company if (i) the Offer has not been timely commenced in accordance
with Section 1.1; or (ii) Parent or Acquisition Sub fails to perform in any
material respect any of their respective obligations under this Agreement and
such failure to perform has not been cured within five (5) business days
after notice thereof is given to Parent by the Company (except that no cure
period shall be provided for any failure which, by its nature, cannot be
cured); by Parent or Acquisition Sub if the Company fails to perform in any
material respect any of its obligations under this Agreement and such failure
to perform has not been cured within five (5) business days after notice
thereof is given to the Company by Parent (except that no cure period shall
be provided for any failure which, by its nature, cannot be cured); or by the
Company if the Board of Directors of the Company has approved, accepted or
recommended an Approved Offer in accordance with Section 6.2.
Effect of Termination. In the event of the termination and abandonment of this
Agreement pursuant to Section 8.1, this Agreement, except for the provisions of
Sections 8.3 and 9.10, shall forthwith become void and have no effect, without
any liability on the part of any party or its directors, officers or
stockholders. Nothing in this Section 8.2 shall relieve any party to this
Agreement of liability for willful breach of this Agreement.
Termination Fee; Reimbursement of Parent's Expenses.
If neither Acquisition Sub nor Parent is in material breach of any of its
obligations under this Agreement and, prior to acceptance of Shares for
payment pursuant to the Offer or the payment therefor, this Agreement is
terminated: by Company or Parent pursuant to Section 8.1(b)(i) if the Offer
terminates or expires in accordance with its terms as a result of the
occurrence of any of the conditions set forth in paragraph (d) or (e) or in
clause (ii) or (iii) of paragraph (g) of Annex I; or by Parent or Acquisition
Sub pursuant to Section 8.1(d); or by the Company pursuant to Section 8.1(e);
then the Company shall, whether or not any payment is made pursuant to
Section 8.3(b) below, reimburse each of Acquisition Sub and Parent (not later
than two (2) business days after submission
<PAGE>
of statements therefor) for all reasonable out-of-pocket expenses and fees,
including, without limitation, fees payable to all banks, investment banking
firms and other financial institutions, and their respective agents, for
arranging or providing the financing, and all fees of counsel, accountants,
experts, agents and consultants to Acquisition Sub or Parent incurred by Parent
or Acquisition Sub in good faith in connection with the negotiation,
preparation, execution and performance of this Agreement and the financing (all
of the foregoing being referred to collectively as the "Expenses"), subject to a
maximum reimbursement of $5,000,000.
If neither Acquisition Sub nor Parent is in material breach of any of its
obligations under this Agreement and, prior to acceptance of Shares for
payment pursuant to the Offer or the payment therefor, this Agreement is
terminated: by Company or Parent pursuant to Section 8.1(b)(i) if the Offer
terminates as a result of the occurrence of any of the conditions set forth
in paragraphs (d), (e) or (g) of Annex I; or by Parent or Acquisition Sub
pursuant to Section 8.1(d); or by the Company pursuant to Section 8.1(e);
and either prior to such termination or within twelve (12) months thereafter,
(x) any "person" (as such term is defined in Section 13(d)(3) of the Exchange
Act) (A) acquires the Company by merger or otherwise; (B) acquires more than 50%
in value of the total assets of the Company and its subsidiaries taken as a
whole; or (C) acquires beneficial ownership (as defined in Rule 13d-3
promulgated under the Exchange Act) of Securities representing, or the right to
acquire beneficial ownership of or to vote securities (or which could result in
the acquisition of beneficial ownership of or the right to vote securities)
representing, more than 50% of the outstanding voting securities of the Company
(each of the foregoing transactions being referred to as a "Third Party
Acquisition"); or (y) the Board of Directors of the Company accepts, approves or
recommends any Third Party Acquisition; or (z) the Board of Directors of the
Company shall have withdrawn or modified in any material respect its
recommendation of the Offer; then the Company shall pay Parent, in no event
later than two (2) business days after the obligation arises to make such
payment pursuant to the terms set forth above in this Section 8.3(b), a
termination fee of $6,500,000 in addition to the payment of Expenses in
accordance with paragraph (a) above, which amount shall be payable in same day
funds. If Parent becomes entitled to the termination fee without having
previously become entitled to reimbursement of Expenses in accordance with
paragraph (a) above, Parent shall thereupon become entitled to reimbursement of
Expenses in accordance with, and subject to the limitations set forth in,
paragraph (a) above.
Amendment. To the extent permitted by applicable law, this Agreement may be
amended by action taken by or on behalf of the Boards of the Company, Parent and
Acquisition Sub at any time before or after approval of this Agreement by the
stockholders of the Company but, after any such stockholder approval, no
amendment shall be made which decreases or changes the form of the Merger
Consideration or which adversely affects the rights of the Company's
stockholders hereunder without the approval of all such stockholders. This
Agreement may not be amended except by an instrument in writing signed on behalf
of all the parties.
Extension; Waiver. At any time prior to the Effective Time, the parties hereto,
by action taken by or on behalf of the respective Boards of Directors of the
Company, Parent or Acquisition Sub, may: (i) extend the time for the performance
of any of the obligations or other acts of the other parties hereto; (ii) waive
any inaccuracies in the representations and warranties contained herein by any
other applicable party or in any document, certificate or writing delivered
pursuant hereto by any other applicable party; or (iii) waive compliance with
any of the agreements or conditions contained herein. Any agreement on the part
of any party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party.
ARTICLE 9
<PAGE>
MISCELLANEOUS
Non-Survival of Representations and Warranties. None of the representations and
warranties made in this Agreement shall survive after the Effective Time. This
Section 9.1 shall not limit any covenant or agreement of the parties hereto
which by its terms contemplates performance after the Effective Time.
Entire Agreement; Assignment. This Agreement (a) constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties or any of them with respect to the subject matter hereof and
(b) shall not be assigned by operation of law or otherwise, provided that Parent
or Acquisition Sub may assign any of their rights and obligations to any wholly
owned subsidiary of Parent, but no such assignment shall relieve Parent or
Acquisition Sub of its obligations hereunder. Either Parent or any wholly owned
subsidiary of Parent may purchase Shares under the Offer.
Enforcement of the Agreement. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any federal or state court located in the
State of Delaware (as to which the parties agree to submit to jurisdiction for
the purposes of such action), this being in addition to any other remedy to
which they are entitled at law or in equity.
Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.
Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by cable, telegram, facsimile transmission with
confirmation of receipt, or telex, or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:
if to Parent or Acquisition Sub:
Nash-Finch Company
7600 France Avenue South
Edina, Minnesota 55435
Attention: Norman R. Soland
Fax: 612-844-1235
with a copy to:
Oppenheimer Wolff & Donnelly
Plaza VII, Suite 3400
45 South Seventh Street
Minneapolis, Minnesota 55402
Attention: Mark A. Kimball, Esq.
Fax: (612) 344-9376
if to the Company:
Super Food Services, Inc.
3233 Newmark Drive
Dayton, Ohio 45342
Attention: John Demos
Fax: (937) 439-7514
<PAGE>
with a copy to:
Thompson Hine & Flory P.L.L.
2000 Courthouse Plaza, N.E.
P.O. Box 8801
Dayton, Ohio 45401-8801
Attention: J. Michael Herr, Esq.
Fax: (513) 443-6637
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
Governing Law. This Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Delaware regardless of the laws that
might otherwise govern under principles of conflicts of laws applicable thereto.
Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
Parties in Interest. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement except for Section
6.5 and 6.6 (which are intended to be for the benefit of the persons entitled to
therein, and may be enforced by such persons).
Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
Expenses.
Subject to Section 8.3, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses, except that Parent and the Company will share equally all
documented out-of-pocket fees and expenses incurred in connection with the
printing and filing of the Proxy Statement.
Parent acknowledges and agrees that the Company has disclosed it is indebted for
fees and expenses (including fees and expenses of its counsel and financial
advisors) incurred by it in connection with the transactions contemplated by
this Agreement. It is understood that certain of such fees and expenses may be
paid by the Company prior to or after the execution of this Agreement, and
Parent agrees to refrain from taking any action which would interfere with the
payment of the foregoing fees and expenses by the Company.
Performance by Acquisition Sub. Parent hereby agrees to cause Acquisition Sub
to comply with its obligations hereunder and under the Offer and to cause
Acquisition Sub to consummate the Merger as contemplated herein.
Submission to Jurisdiction. The parties to this Agreement, acting for
themselves and for their respective successors and assigns, hereby irrevocably
and unconditionally consent to submit to the jurisdiction of the federal or
state courts located in the State of Delaware for any actions, suits or
proceedings arising out of or relating to this Agreement (and none of such
persons shall commence any action, suit or proceeding relating thereto except in
such courts). Such person hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement, in the federal or state courts located in the State of
Delaware.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its officers thereunto duly authorized, all at or on the day
and year first above written.
<PAGE>
NASH-FINCH COMPANY
ATTEST:
By:
Secretary President
NFC ACQUISITION CORPORATION
ATTEST:
By:
Secretary President
SUPER FOOD SERVICES, INC.
ATTEST:
By:
Secretary Chairman and
Chief Executive Officer
ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer and in addition to (and not in
limitation of) Parent's right to extend and amend the Offer (subject to the
terms of the Merger Agreement), Parent shall not be required to accept for
payment or pay for, subject to Rule 14e-l(c) of the Exchange Act, any Shares not
theretofore accepted for payment or paid for and may terminate or amend the
Offer as to such Shares if (i) the Minimum Condition shall not have been
satisfied or (ii) at any time on or after the date of commencement of the Offer
and before the acceptance of such Shares for payment or the payment therefor,
any of the following conditions exist or shall occur and remain in effect
(provided that the right to terminate or amend the Offer pursuant thereto shall
not be available to Parent if the failure by Parent or Acquisition Sub to
fulfill any of their respective obligations under the Merger Agreement results
in the occurrence of any such condition):
(a) there shall have occurred (i) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States (whether or not
mandatory), (ii) a formal declaration of war or national or international
calamity directly or indirectly involving the United States, (iii) any
limitation (whether or not mandatory) by any United States governmental
authority on the extension of credit by banks or other financial institutions
that materially affects the extension of credit by banks or other lending
institutions or (iv) in the case of any of the foregoing existing at the time of
the commencement of the Offer, a material acceleration or worsening thereof;
(b) there shall have been any action taken, or any statute, rule, regulation,
judgment, order or injunction promulgated, entered, enforced, enacted issued or
deemed applicable to the Offer or the Merger by any court, government or
governmental authority or agency, domestic or foreign which (i) prohibits
Parent's ownership or operation of all or a material portion of its or the
Company's (or any of their respective subsidiaries') business or
<PAGE>
assets, or compels Parent to dispose of or hold separate all or a material
portion of its or the Company's (or any of their respective subsidiaries')
business or assets as a result of the Offer or the Merger, (ii) prohibits, or
makes illegal the acceptance for payment or payment for Shares or the
consummation of the Offer or the Merger, or (iii) imposes material limitations
on the ability of Parent or Acquisition Sub effectively to exercise full rights
of ownership of the Shares, including, without limitation, the right to vote the
Shares purchased by Acquisition Sub on all matters properly presented to the
Company's stockholders; provided, however, that with respect to any action,
ruling or order taken or made by any court, government or governmental authority
or agency that is preliminary, until such action, ruling or order becomes final,
Parent may not terminate the Offer, but shall extend the expiration of the Offer
and shall postpone acceptance for payment or purchase of, or payment for, any
Shares pursuant to this paragraph (b); further provided, however, that in no
event shall Parent be obligated to attempt to cause any such decree, order or
injunction to be vacated or reversed or to extend the Offer beyond December 31,
1996; or
(c) the Merger Agreement shall have been terminated in accordance with its
terms; or
(d) any of the representations and warranties of the Company set forth in the
Merger Agreement were inaccurate when made or became inaccurate at any time
thereafter (other than (i) any misrepresentations that, in the aggregate, do not
have a material adverse effect on the Company or (ii) any misrepresentations
that the Company cures within five (5) business days after notice thereof is
given by Parent (except that no cure period shall be provided for a breach by
the Company which, by its nature, cannot be cured)) or the Company shall have
failed in any material respect to perform any material obligation or covenant
required by the Merger Agreement to be performed or complied with by it which
failure would have a material adverse effect on the Company; or
(e) the Board of Directors of the Company shall have withdrawn or modified in
any material respect its recommendation of the Offer; provided, however, that
this condition shall not be deemed to exist, and Acquisition Sub shall have no
right to terminate the Offer or not accept for payment or pay for Shares, if as
a result of the Company's receipt of a proposal for the acquisition of all or a
material portion of the business or assets of the Company or the Shares, the
Company withdraws, modifies or amends its approval or recommendation of the
Offer, the Merger or the Merger Agreement by reason of taking and disclosing to
the Company's shareholders a position contemplated by Rule 14e-2(a)(2) or (3)
promulgated under the Exchange Act with respect to such proposal, the Offer, the
Merger or the Merger Agreement and if within five (5) business days of taking
and disclosing to its shareholders the aforementioned position, the Company
publicly reconfirms its recommendation of the Offer, the Merger and the Merger
Agreement; or
(f) the waiting period (and any extension thereof) applicable to the
consummation of the Offer under the H-S-R Act shall not have expired or been
terminated; provided, however, that (i) until such H-S-R Act waiting periods
expire or terminate, Parent may not terminate the Offer (but shall extend the
expiration of the Offer and shall postpone acceptance for payment or purchase
of, or payment for, any Shares pursuant to this paragraph (f)); further
provided, however, that in no event shall Parent be obligated to extend the
Offer beyond December 31, 1996 and (ii) unless Parent theretofore shall have
terminated the Offer in accordance with the terms of the Merger Agreement,
Parent shall continue to seek to resolve any action or proceeding in accordance
with the provisions of the Merger Agreement; or
(g) (i) a tender or exchange offer for 20% or more of the Shares shall have
been publicly proposed to be made by another person or shall have been
publicly disclosed, (ii) a tender or exchange offer for 20% or more of the
Shares shall have been made by another person or (iii) the Parent shall have
learned that any person, entity or "group" (as that term is used in Section
13(d)(3) of the Exchange Act), shall beneficially own (as that term is used
in Section 13(d)(3) of the Exchange Act) or shall have acquired 20% or more
of the Shares, or shall have been granted any option or right, conditional or
otherwise, to acquire 20% or more of the Shares; which, in the reasonable
judgment of Parent, in any case, and regardless of the circumstances giving
rise to any such condition, makes it inadvisable to proceed with the Offer or
with such acceptance for
<PAGE>
payment, purchase of, or payment for Shares.
The foregoing condition are for the sole benefit of Parent and may be asserted
by Parent regardless of the circumstances giving rise to any such condition and
may be waived by Parent, in whole or in part, at any time and from time to time,
in the sole discretion of Parent. The failure by Parent at any time to exercise
any of the foregoing rights will not be deemed a waiver of any right and each
right will be deemed an ongoing right which may be asserted at any time and from
time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Disbursing Agent to the tendering stockholders.
<PAGE>
STOCKHOLDER AGREEMENT
THIS AGREEMENT, dated as of October 8, 1996, among NASH-FINCH COMPANY, a
Delaware corporation ("Parent"), NFC ACQUISITION CORPORATION, a Delaware
corporation and a wholly owned subsidiary of Parent ("Acquisition Sub"), and the
individuals listed on Schedule I hereto (each a "Stockholder" and, collectively,
the "Stockholders").
WHEREAS, concurrently herewith, Parent, Acquisition Sub and Super Food Services,
Inc., a Delaware corporation (the "Company"), are entering into an Agreement and
Plan of Merger (as such agreement may hereafter be amended from time to time,
the "Merger Agreement") pursuant to which Acquisition Sub will be merged with
and into the Company (the "Merger");
WHEREAS, capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Merger Agreement; and
WHEREAS, as an inducement and a condition to entering into the Merger Agreement,
Parent and Acquisition Sub have required that the Stockholders agree, and the
Stockholders have agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
Definitions. For purposes of this Agreement:
"Beneficially Own" or "Beneficial Ownership" with respect to any securities
shall mean having ownership of record or "beneficial ownership" of such
securities (as determined pursuant to Rule l3d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding, whether or
not in writing. Without duplicative counting of the same securities by the same
holder, securities Beneficially Owned by a Person shall include securities
Beneficially Owned by all other Persons with whom such Person would constitute a
"group" as within the meanings of Section 13(d) (3) of the Exchange Act.
"Company Common Stock" shall mean at any time the Common Stock, par value $1.00
per share, of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Person" shall mean an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity.
Tender of Shares.
Each Stockholder hereby agrees to validly tender (and not to withdraw) pursuant
to and in accordance with the terms of the Offer, not later than the fifth
business day after commencement of the Offer pursuant to Section 1.1(a) of the
Merger Agreement, (i) all of the shares of Company Common Stock owned of record
or Beneficially Owned by such Stockholder that such Stockholder has the power to
tender, including, without limitation, the number of shares of Company Common
Stock set forth opposite such Stockholder's name on Schedule I hereto (the
"Existing Shares"), and (ii) any shares of Company Common Stock acquired by such
Stockholder after the date hereof and prior to the termination of this Agreement
whether upon the exercise of options, warrants or rights, the conversion or
exchange of convertible or exchangeable securities, or by means of purchase,
dividend, distribution or otherwise (each Stockholder shall promptly provide
written notice to Parent upon consummation of any such acquisition from and
after the date hereof and such Shares shall together with the Existing Shares be
referred to herein as the "Shares"). Each Stockholder hereby acknowledges and
agrees that Parent's obligation to accept for payment and pay for Shares in the
Offer, including the Shares Beneficially Owned by such Stockholder, is subject
to the terms and conditions of the Offer. Anything to the contrary herein
notwithstanding if (x) the Merger Agreement is terminated, (y) the Offer is
terminated without the purchase of Shares thereunder or (z) the Minimum
Condition is not satisfied (other than by waiver) upon termination of the Offer,
the obligations of the Stockholders under this Agreement shall terminate and
within two business days
<PAGE>
thereof the Shares tendered under the Offer pursuant to this Agreement by each
Stockholder shall be returned to such Stockholder.
Through the transfer by each Stockholder of his or its Shares to Acquisition Sub
in the Offer, Acquisition Sub shall acquire good, valid and marketable title to
the Shares, free and clear of all claims, liens, charges, encumbrances,
restrictions, security interests, pledges, limitations, conditional sales
agreements, or obligations relative to the sale or transfer thereof, and not
subject to any adverse claim.
Each Stockholder hereby agrees to permit Parent, Acquisition Sub and the Company
to publish and disclose in the documents relating to the Offer and Merger
(including all documents, schedules and proxy statements filed with the
Commission) his or its identity and ownership of Company Common Stock and the
nature of his or its commitments, arrangements and understandings under this
Agreement.
Proxy; Provisions Concerning Company Common Stock. Each Stockholder, by this
Agreement, does hereby constitute and appoint Parent, or any nominee of Parent,
with full power of substitution, as his or its true and lawful attorney and
proxy, for and in his or its name, place and stead, to vote as his or its proxy
at any meeting of the holders of Company Common Stock, however called, and to
sign such Stockholder's name to any written consent of the holders of Company
Common Stock with respect to, the Shares held of record or Beneficially Owned by
such Stockholder that such Stockholder has the power to vote (including at a
minimum the Existing Shares), whether heretofore owned or hereafter acquired,
(i) in favor of the Merger, the execution and delivery by the Company of the
Merger Agreement and the approval of the terms thereof and each of the other
actions contemplated by the Merger Agreement and this Agreement and any actions
reasonably required in furtherance thereof and hereof; (ii) against any action
or agreement that would reasonably be expected to result in a breach of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement or this Agreement; and (iii) against the
following actions or agreements (other than the Merger and the transactions
contemplated by the Merger Agreement): (A) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination
involving the Company or any of its Subsidiaries; (B) a sale, lease or transfer
of a material amount of assets of the Company or its Subsidiaries, or a
reorganization, recapitalization, dissolution or liquidation of the Company or
its Subsidiaries; (C) (1) any change in a majority of the persons who constitute
the board of directors of the Company; (2) any change in the present
capitalization of the Company or any amendment of the Company's Certificate of
Incorporation or Bylaws; (3) any other material change in the Company's
corporate structure or business; or (4) any other action or agreement which, in
the case of each of the matters referred to in clauses (C)(l), (2) or (3), is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone, discourage, or adversely affect the Merger and the transactions
contemplated by this Agreement and the Merger Agreement. Each Stockholder
further agrees to cause his or its Shares to be voted in accordance with the
foregoing. Each Stockholder acknowledges receipt and review of a copy of the
Merger Agreement.
Other Covenants, Representations and Warranties. Each Stockholder hereby
represents and warrants to Parent as follows:
Ownership of Shares. Such Stockholder is the record owner of the number of
Shares set forth opposite such Stockholder's name on Schedule I hereto. On the
date hereof, the Existing Shares set forth opposite such Stockholder's name on
Schedule I hereto constitute all of the Shares owned of record by such
Stockholder. The Shares are not subject to any voting trust agreement or to
such Stockholder's knowledge other agreement restricting or otherwise relating
to the voting, dividend rights or disposition of the Shares, other than this
Agreement. Such Stockholder has sole power with respect to the matters set
forth in this Agreement with respect to all of the Existing Shares set forth
opposite such Stockholder's name on Schedule I hereto, with no limitations,
qualifications or restrictions on such rights, subject to applicable securities
laws and the terms of this Agreement.
<PAGE>
Power; Binding Agreement. Such Stockholder has the legal capacity, power and
authority to enter into and perform all of such Stockholder's obligations under
this Agreement. The execution, delivery and performance of this Agreement by
such Stockholder will not violate any other to which such Stockholder is a party
including, without limitation, any voting agreement, stockholders agreement or
voting trust. This Agreement has been duly and validly executed and delivered
by such Stockholder and constitutes a valid and binding agreement of such
Stockholder, enforceable against such Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which such Stockholder is trustee whose consent is
required for the execution and delivery of this Agreement or the consummation by
such Stockholder of the transactions contemplated hereby.
No Conflicts. (i) No filing with, and no permit, authorization, consent or
approval of, any state or federal public body or authority is necessary for the
execution of this Agreement by such Stockholder and the consummation by such
Stockholder of the transactions contemplated hereby other than filings required
under the Exchange Act and (ii) none of the execution and delivery of this
Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby or compliance by such Stockholder with any of
the provisions hereof shall result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give rise to any
third party right of termination, cancellation, modification or acceleration)
under any of the terms, conditions or provisions of any agreement to which such
Stockholder is a party or by which such Stockholder may be bound or affected.
No Encumbrances. Except as applicable in connection with the transactions
contemplated by Section 2 hereof, such Stockholder's Shares and the certificates
representing such Shares are, and at all times during the term hereof will be,
held by such Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, security interests, proxies, voting
trusts or agreements, or to such Stockholder's knowledge any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
No Finder's Fees. Except as provided in the Merger Agreement, no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial adviser's or other similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of such Stockholder.
No Solicitation. No Stockholder shall, in his capacity as such, directly or
indirectly, through any agent or representative or otherwise invite, initiate,
solicit or knowingly encourage (including by way of furnishing information), or
respond to, any inquiries or the making of any proposal by any person or entity
(other than Parent or any affiliate of Parent) that constitutes or any
reasonably be expected to lead to, an Acquisition Proposal, or otherwise
cooperate with, or assist or participate in or facilitate or encourage any
effort or attempt by any person to do or seek any of the foregoing. If any
Stockholder receives or becomes aware of any such inquiry or proposal or
Acquisition Proposal, then such Stockholder will promptly inform Parent in
writing of the existence thereof. Each Stockholder will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any of the foregoing. However,
nothing in this Section 4(f) or this Agreement shall restrict, limit or prohibit
such Stockholder from taking any actions necessary in his capacity as a Director
of the Company to satisfy his fiduciary duties as a Director under Delaware law.
Restriction on Transfer, Proxies and Non-Interference. Except as applicable
in connection with the transactions contemplated by Section 2 hereof, no
Stockholder shall, directly or indirectly: (i) except for transfers to such
Stockholder's family or trusts established for the benefit of members of such
Stockholder's family (provided that in the case of this clause (i) the
transferee of such shares agrees in writing to be bound by the terms hereof
in form satisfactory to Parent), offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to or consent to
the offer for sale, sale, transfer, tender,
<PAGE>
pledge, encumbrance, assignment or other disposition of, any or all of such
Stockholder's Shares or any interest therein; (ii) except as contemplated by
this Agreement, grant any proxies or powers of attorney, deposit any Shares
into a voting trust or enter into a voting agreement with respect to any
Shares; or (iii) take any action that would make any representation or
warranty of such Stockholder contained herein untrue or incorrect or have the
effect of preventing or disabling such Stockholder from performing such
Stockholder's obligations under this Agreement.
Waiver of Appraisal Rights. Each Stockholder hereby waives any rights of
appraisal or rights to dissent from the Merger that such Stockholder may have.
Reliance by Parent. Each Stockholder understands and acknowledges that Parent
is entering into, and causing Acquisition Sub to enter into, the Merger
Agreement in reliance upon such Stockholder's execution and delivery of this
Agreement.
Further Assurances. From time to time, at the other party's request and without
further consideration, each party hereto shall execute and deliver such
additional documents and take all such further lawful action as may be necessary
or desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement. Without limiting
the foregoing, each Stockholder agrees, upon the written request of Parent, to
use his or its best efforts to cause all certificates representing such
Stockholder's Shares to bear in a conspicuous place the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS
AGREEMENT DATED AS OF OCTOBER 8, 1996, A COPY OF WHICH IS ON FILE AT THE OFFICES
OF THE CORPORATION AND WILL BE FURNISHED BY THE CORPORATION TO THE HOLDER HEREOF
UPON WRITTEN REQUEST. SUCH STOCKHOLDERS AGREEMENT PROVIDES, AMONG OTHER THINGS,
FOR THE GRANTING OF CERTAIN PROXIES TO VOTE THE SHARES REPRESENTED HEREBY AND
FOR CERTAIN RESTRICTIONS ON THE SALE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE. BY ACCEPTANCE OF
THIS CERTIFICATE, EACH HOLDER HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF
SUCH STOCKHOLDERS AGREEMENT. THE CORPORATION RESERVES THE RIGHT TO REFUSE TO
TRANSFER THE SHARES REPRESENTED BY THIS CERTIFICATE UNLESS AND UNTIL THE
CONDITIONS TO TRANSFER SET FORTH IN SUCH STOCKHOLDERS AGREEMENT HAVE BEEN
FULFILLED.
Stop Transfer. Each Stockholder agrees with, and covenants to, Parent that such
Stockholder shall not request that the Company register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any of
such Stockholder's Shares, unless such transfer is made in compliance with this
Agreement (including the provisions of Section 2 hereof). In the event of a
stock dividend or distribution, or any change in the Company Common Stock by
reason of any stock dividend, split-up, recapitalization, combination, exchange
of shares or the like, the term "Shares" shall be deemed to refer to and include
the Shares as well as all such stock dividends and distributions and any shares
into which or for which any or all of the Shares may be changed or exchanged.
Termination. Except as otherwise provided herein, the covenants and agreements
contained herein with respect to the Shares shall terminate upon the earlier of
(i) termination of the Merger Agreement in accordance with its terms, or (ii)
December 31, 1996.
Confidentiality. The Stockholders recognize that successful consummation of the
transactions contemplated by this Agreement may be dependent upon
confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof or of the Merger Agreement, each
Stockholder hereby agrees not to disclose or discuss this Agreement with anyone
not a party to this Agreement (other than such Stockholder's counsel and
advisors, if any) without the prior written consent of Parent, except for
filings required pursuant to the Exchange Act and the rules and regulations
thereunder or as required by law, in which event such Stockholder shall give
notice of such disclosure to Parent as promptly as practicable so as to enable
Parent to seek a protective order
<PAGE>
from a court of competent jurisdiction with respect thereto.
Miscellaneous.
Entire Agreement. This Agreement, and the agreements contemplated hereby
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
Certain Events. Each Stockholder agrees that this Agreement and the obligations
hereunder shall attach to such Stockholder's Shares and shall be binding upon
any person or entity to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including, without limitation,
such Stockholder's heirs, guardians, administrators or successors.
Notwithstanding any transfer of Shares, the transferor shall remain liable for
the performance of all obligations under this Agreement of the transferor.
Assignment. This Agreement shall not be assigned by operation of law or
otherwise without the prior written consent of the other party, provided that
Parent may assign, in its sole discretion, its rights and obligations hereunder
to any direct or indirect wholly owned subsidiary of Parent, but no such
assignment shall relieve Parent of its obligations hereunder.
Amendments, Waivers, Etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated, with respect to any
one or more Stockholders, except upon the execution and delivery of a written
agreement executed by the relevant parties hereto; provided that Schedule I
hereto may be supplemented by Parent by adding the name and other relevant
information concerning any stockholder of the Company who agrees to be bound by
the terms of this Agreement without the agreement of any other party hereto, and
thereafter such added stockholder shall be treated as a "Stockholder" for all
purposes of this Agreement.
Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly received if so given) by hand delivery, telegram, telex or telecopy,
or by mail (registered or certified mail, postage prepaid, return receipt
requested) by any courier service, such as Federal Express, providing proof of
delivery. All communications hereunder shall be delivered to the respective
parties at the following addresses:
If to Stockholder: At the addresses set forth on Schedule I hereto
If to Parent: Nash-Finch Company
7600 France Avenue South
Edina, MN 55435
Attn: Norman R. Soland
copy to: Oppenheimer Wolff & Donnelly
Plaza VII, Suite 3400
45 South Seventh Street
Minneapolis, MN 55402
Attn: Mark A. Kimball
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
Severability. Whenever possible, each provision or portion of any provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or portion of any provision
in such jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid,
<PAGE>
illegal or unenforceable provision or portion of any provision had never been
contained herein.
Specific Performance. Each of the parties hereto recognizes and acknowledges
that a breach by it of any covenants or agreements contained in this Agreement
will cause the other party to sustain damages for which it would not have an
adequate remedy at law for money damages, and therefore each of the parties
hereto agrees that in the event of any such breach the aggrieved party shall be
entitled to the remedy of specific performance of such covenants and agreements
and injunctive and other equitable relief in addition to any other remedy to
which it may be entitled, at law or in equity.
Remedies Cumulative. All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
No Waiver. The failure of any party hereto to exercise any right, power or
remedy provided under this Agreement or otherwise available in respect hereof at
law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
No Third Party Beneficiaries. This Agreement is not intended to be for the
benefit of, and shall not be enforceable by, any person or entity who or which
is not a party hereto.
Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of Delaware, without giving effect to the principles
of conflicts of law thereof.
Jurisdiction. Each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any state or federal court located in the State of
Delaware in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction or venue by motion or other request
for leave from any such court and (c) agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than a state or federal court sitting in the State
of Delaware.
In any event any Stockholder is made party to any litigation as a result of such
Stockholders' execution of this Agreement (other than litigation by or in the
right of Parent or Acquisition Sub to enforce this Agreement), and such
Stockholder is not then in breach of, and has not disclosed any intention to
breach or otherwise fail to fulfill, his obligations under this Agreement, then,
upon request by such Stockholder, Parent shall indemnify such Stockholder
against the reasonable costs of defense of such litigation, such obligation to
indemnify to continue so long as such Stockholder is not in breach of, and has
not disclosed any intention to breach or otherwise fail to fulfill, his
obligations under this Agreement, In connection with such indemnification,
Parent may require that all Stockholders requesting indemnification be
represented in such litigation by a single law firm satisfactory to Parent and
such Stockholders.
Descriptive Headings. The descriptive headings used herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation 9f this Agreement.
Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, Parent, Acquisition Sub and each Stockholder have caused
this Agreement to be duly executed as of the day and year first above written.
NASH-FINCH COMPANY
By:
Its:
<PAGE>
NFC ACQUISITION CORPORATION
By:
Its:
John W. Berry
John Demos
Thomas S. Haggai
Edward H. Jennings
Robert F. Koogler
Sam Robinson
C. Elwood Shaffer
Jack Twyman
SCHEDULE I
<PAGE>
NAME AND ADDRESS NUMBER OF SHARES
John W. Berry
7880 Tipp-Elizabeth Road
New Carlisle, OH 45344 156,816
John Demos
1329 Glen Jean Court
Dayton, OH 45459 75,839
Thomas S. Haggai
2116 Guilford College Road
Jamestown, NC 27282 6,142
Edward H. Jennings
420 W. 5th Avenue
Columbus, OH 43201 200
Robert Koogler
1553 Southlawn
Fairborn, OH 45324 50,635
Sam Robinson
8134 Camargo Woods Court
Cincinnati, OH 45243 41,972
C. Elwood Shaffer
870 Meadow Lane
Xenia, OH 45385 46,713
Jack Twyman
8955 Indian Ridge Road
Cincinnati, OH 45243 199,174
<PAGE>
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement, dated as of February 29, 1996, is
made by NASH-FINCH COMPANY, ("Nash-Finch") in favor of SUPER FOOD SERVICES,
INC. (the "Company").
1. For purposes of this Agreement, the term "Confidential Information"
shall mean the non-public written information regarding the Company delivered
to Nash-Finch in connection with Nash-Finch's evaluation of a potential
acquisition of the Company.
2. Nash-Finch agrees to hold such Confidential Information in confidence
to the same extent it safeguards its own confidential information of similar
character for a period of two (2) years from the date of this Agreement.
Nash-Finch agrees that it shall not disclose any such Confidential
Information to anyone except its employees, agents, or affiliates to whom
disclosure is necessary for the purpose of evaluating such information
(collectively "Advisors"). Nash-Finch shall appropriately notify such
Advisors that the disclosure is made in confidence and shall be kept in
confidence in accordance with this Agreement.
3. Upon the request of the disclosing party, all Confidential
Information, together with any copies of same as may be authorized herein,
shall be returned to the Company or certified destroyed by Nash-Finch.
4. Nash-Finch's obligation of confidentiality contained in this Agreement
shall not apply to any information which: (a) is received from a third party
that is not known to Nash-Finch to be bound by a confidentiality agreement
with the Company; (b) prior to the date hereof or the time of disclosure to
Nash-Finch was in its possession; (c) is or hereafter becomes public
knowledge through no fault of Nash-Finch; or (d) is required to be
disclosed pursuant to any law or any governmental regulation or order.
5. Except for the obligation of confidentiality imposed herein, no
obligation of any kind is assumed or implied against either party by virtue
of this agreement, any meetings or conversations with respect to the subject
matter stated above or with respect to whatever confidential information is
exchanged. Each party further acknowledges that neither this Agreement nor any
meetings and communications of the parties relating to the same subject
matter shall (i) constitute an offer, request, or contract with the other
involving a buyer-seller relationship, joint-venture, alliance, investment
tor partnership relationship,
<PAGE>
or (ii) restrict the right of Nash-Finch to make any market entry into the
Company's market area or to compete, directly or indirectly, with the Company
so long as the confidentiality provisions of this Agreement are followed.
6. The parties expressly agree that any money, expenses or losses
expended or incurred by either parity in preparation for, or as result of
this Agreement or the parties' meetings and communications, is at such party's
sole cost and expense.
7. Without the prior consent of the other party, neither party shall
disclose to any third person (other than their Advisors) the fact that
discussions are taking place or that Confidential Information is being
shared, except as may be required by law and then only after first notifying
the other party of such required disclosure.
8. Although the Company has endeavored to include in the Confidential
Information all information known to it which it believes to be relevant for
the purpose of Nash-Finch's investigation, Nash-Finch understands that
neither the Company nor any of its representatives or advisors have made or
make any representation or warranty as to the accuracy or completeness
of the Confidential Information. Nash-Finch agrees that neither the Company
nor its representatives or advisors shall have any liability to Nash-Finch
or any of Nash-Finch's representatives or advisors resulting from the use of
the Confidential Information.
9. This Agreement constitutes the entire agreement between the Company and
Nash-Finch with respect to the subject matter of this Agreement. No provision
of this Agreement shall be deemed waived, amended or modified by either
party, unless such waiver, amendment or modification is made in writing and
signed by the party alleged to be bound thereby. This Agreement supersedes
all previous agreements between the Company and Nash-Finch related to the
subject matter hereof.
10. Nash-Finch agrees that for a period of two (2) years from the date of
this Agreement, neither it nor its affiliates (as defined in Rule 12b-2 under
the Securities and Exchange Act of 1934, as amended), will in any manner
acquire or make any proposal to acquire any securities or property of the
Company (other than property transferred in the ordinary course of the
Company's business), unless such acquisition or the making of such proposal
has been approved in advance by the Company's Board of Directors.
11. This Agreement shall be governed and construed in accordance with the
laws of the State of Delaware. This Agreement shall be binding upon Nash-Finch,
its successors and
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<PAGE>
assigns and shall inure to the benefit of and be enforceable by the Company,
its successors and assigns.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to sign this Agreement as of the date set forth below.
SUPER FOOD SERVICES, INC., NASH-FINCH COMPANY,
a Delaware corporation a Delaware corporation
By: JOHN DEMOS By: ALFRED N. FLATEN
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