SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
WLR FOODS, INC.
(Name of Issuer)
COMMON STOCK
NO PAR VALUE
(Title of Class of Securities)
929286 10 2
(CUSIP NUMBER)
Cuddy International Corporation
465 Richmond Street
Suite 600
London, Ontario
N6A 5PA Canada
Attn: Brian A. Cram
Tel No.: (519) 679-3971
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 9, 1994
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this statement because of Rule 13d-1
(b)(3) or (4), check the following box.
Check the following box if a fee is being paid with the
statement.
<PAGE>
CUSIP No. 929286 10 2
13D
1 NAME OF REPORTING CUDDY FARMS, INC.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
North Carolina
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
0WNED BY 8 SHARED VOTING POWER
EACH 6 shares
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
10 SHARED DISPOSITIVE POWER
6 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6 shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES* X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
less than 1%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 929286 10 2
13D
1 NAME OF REPORTING CUDDY INTERNATIONAL CORPORATION
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ontario
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
0WNED BY 8 SHARED VOTING POWER
EACH 7 shares
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
10 SHARED DISPOSITIVE POWER
7 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7 shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES* X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
less than 1%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 929286 10 2
13D
1 NAME OF REPORTING A.M. CUDDY
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Canadian
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
0WNED BY 8 SHARED VOTING POWER
EACH 7 shares
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
10 SHARED DISPOSITIVE POWER
7 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7 shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES* X
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
less than 1%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
This Amendment No. 1 to Schedule 13D is filed to include certain
exhibits unintentionally omitted from the EDGAR filing of
Schedule 13D on August 9, 1994.
Item 7. Material to Be Filed as Exhibits.
Exhibit B: Asset Purchase Agreement, dated
July 27, 1994, by and among Cuddy
Farms, Inc., Cuddy International
Corporation, WLR Foods, Inc. and
Wampler-Longacre, Inc. (including
the form of the Non-Competition and
Name Use Agreement and the form of
the Voting Trust Agreement).
Exhibit C: Indemnification Agreement and
Release, dated July 27, 1994, by
and between WLR Foods, Inc. and
Cuddy Farms, Inc.
Exhibit D: Indemnification Agreement and
Release, dated July 27, 1994, by
and among Cuddy Farms, Inc., Cuddy
International Corporation and WLR
Foods, Inc.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best knowledge and
belief of the undersigned, the undersigned certifies that the
information set forth in this statement is true, complete and
correct.
Date: August 15, 1994
CUDDY FARMS, INC.
By: /s/ A.M. Cuddy
A.M. Cuddy, Chairman
CUDDY INTERNATIONAL CORPORATION
By: /s/ A.M. Cuddy
A.M. Cuddy, Chairman
A.M. CUDDY
/s/ A.M. Cuddy
A.M. Cuddy
Exhibit B
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT
among
CUDDY FARMS, INC.,
CUDDY INTERNATIONAL CORPORATION,
WLR FOODS, INC.,
and
WAMPLER-LONGACRE, INC.
TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 1
1. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . .
. . 1
1.1. Assets to be Transferred . . . . . . . . . . . . . .
. . 1
1.2. Excluded Assets . . . . . . . . . . . . . . . . . . .
. . 4
1.3. Non-Competition and Name Use Agreement . . . . . . .
. . 4
2. PURCHASE PRICE AND PAYMENT . . . . . . . . . . . . . . . .
. . 5
2.1. Purchase Price . . . . . . . . . . . . . . . . . . .
. . 5
2.2. Payment . . . . . . . . . . . . . . . . . . . . . . .
. . 7
2.3. Allocation . . . . . . . . . . . . . . . . . . . . .
. . 8
3. ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . .
. . 9
3.1. Liabilities Assumed by Wampler-Longacre . . . . . . .
. . 9
3.2. Excluded Liabilities . . . . . . . . . . . . . . . .
. . 9
3.3. Employees . . . . . . . . . . . . . . . . . . . . . .
. . 10
4. CLOSING AND CLOSING DATE . . . . . . . . . . . . . . . . .
. . 10
5. CONDITIONS TO WAMPLER'S DUTY TO CLOSE . . . . . . . . . . .
. . 10
5.1. Certificate as to Representations and Warranties . .
. . 10
5.2. Certificate as to Corporate Authority . . . . . . . .
. . 11
5.3. Closing Documents . . . . . . . . . . . . . . . . . .
. . 11
5.4. Business Records . . . . . . . . . . . . . . . . . .
. . 13
5.5. Non-Competition and Name Use Agreement . . . . . . .
. . 13
5.6. Trademark Assignments . . . . . . . . . . . . . . . .
. . 13
5.7. License of Patents . . . . . . . . . . . . . . . . .
. . 13
5.8. Opinion of Counsel . . . . . . . . . . . . . . . . .
. . 13
5.9. Environmental Audit . . . . . . . . . . . . . . . . .
. . 12
5.10. Bulk Sales . . . . . . . . . . . . . . . . . . . . .
. . 12
<PAGE>
6. CONDITIONS TO CUDDY'S DUTY TO CLOSE . . . . . . . . . . . .
. . 14
6.1. Representations and Warranties True . . . . . . . . .
. . 14
6.2. Certificate as to Corporate Authority . . . . . . . .
. . 14
6.3. Opinion of Counsel to Wampler-Longacre and WLR Foods
. . 14
6.4. Assumption of Liabilities . . . . . . . . . . . . . .
. . 15
6.5. Purchase Price . . . . . . . . . . . . . . . . . . .
. . 15
7. CONDITIONS TO CUDDY'S AND WAMPLER'S DUTY TO CLOSE . . . . .
. . 15
7.1 Ancillary Agreements . . . . . . . . . . . . . . . .
. . 15
7.2. Anti-Trust Laws Compliance . . . . . . . . . . . . .
. . 15
7.3. Consents . . . . . . . . . . . . . . . . . . . . . .
. . 15
7.4. Litigation . . . . . . . . . . . . . . . . . . . . .
. . 15
8. COVENANTS PRIOR TO CLOSING DATE . . . . . . . . . . . . . .
. . 16
8.1. Access . . . . . . . . . . . . . . . . . . . . . . .
. . 16
8.2. Operation of the Business . . . . . . . . . . . . . .
. . 16
8.3. Grower Contracts . . . . . . . . . . . . . . . . . .
. . 17
8.4. Cuddy/Modern Storage . . . . . . . . . . . . . . . .
. . 17
8.5. Publicity . . . . . . . . . . . . . . . . . . . . . .
. . 17
8.6. Cooperation and Disclosures . . . . . . . . . . . . .
. . 17
8.7. Acquisition Proposals . . . . . . . . . . . . . . . .
. . 18
8.8. Good Faith . . . . . . . . . . . . . . . . . . . . .
. . 18
9. REPRESENTATIONS AND WARRANTIES OF CUDDY . . . . . . . . . .
. . 19
9.1. Organization, Power and Authority . . . . . . . . . .
. . 19
9.2. Due Authority, No Breach . . . . . . . . . . . . . .
. . 19
9.3. Liabilities . . . . . . . . . . . . . . . . . . . . .
. . 20
9.4. Ownership of Assets . . . . . . . . . . . . . . . . .
. . 20
9.5. Accounts and Notes Receivable . . . . . . . . . . . .
. . 21
9.6. Inventory . . . . . . . . . . . . . . . . . . . . . .
. . 21
9.7. Litigation . . . . . . . . . . . . . . . . . . . . .
. . 21
9.8. Trademarks . . . . . . . . . . . . . . . . . . . . .
. . 21
9.9. Licenses; Permits . . . . . . . . . . . . . . . . . .
. . 22
9.10. Compliance with Environmental and Other Laws . . . .
. . 22
9.11. Labor . . . . . . . . . . . . . . . . . . . . . . . .
. . 23
9.12. Bonuses and Vacation Policies . . . . . . . . . . . .
. . 24
9.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . .
. . 24
9.14. Leases . . . . . . . . . . . . . . . . . . . . . . .
. . 25
9.15 Financial Statements . . . . . . . . . . . . . . . .
. . 25
9.16. Transactions with Affiliates . . . . . . . . . . . .
. . 26
9.17. Insurance . . . . . . . . . . . . . . . . . . . . . .
. . 26
-ii-
<PAGE>
10. REPRESENTATIONS AND WARRANTIES OF CUDDY INTERNATIONAL . . .
. . 26
10.1 Organization, Power and Authority . . . . . . . . . .
. . 26
10.2 Due Authority, No Breach . . . . . . . . . . . . . .
. . 27
11. REPRESENTATIONS AND WARRANTIES OF WAMPLER-LONGACRE . . . .
. . 27
11.1. Organization, Power and Authority . . . . . . . . . .
. . 27
11.2. Due Authority; No Breach . . . . . . . . . . . . . .
. . 27
12. REPRESENTATIONS AND WARRANTIES OF WLR FOODS . . . . . . . .
. . 28
12.1. Organization, Power and Authority . . . . . . . . . .
. . 28
12.2. Due Authority, No Breach . . . . . . . . . . . . . .
. . 28
12.3. Reports . . . . . . . . . . . . . . . . . . . . . . .
. . 29
12.4. Liabilities . . . . . . . . . . . . . . . . . . . . .
. . 29
12.5. Litigation . . . . . . . . . . . . . . . . . . . . .
. . 29
12.6 WLR Stock . . . . . . . . . . . . . . . . . . . . . .
. . 30
13. STOCK RESTRICTIONS . . . . . . . . . . . . . . . . . . . .
. . 30
13.1. NonRegistration . . . . . . . . . . . . . . . . . . .
. . 30
13.2. Investment Intent . . . . . . . . . . . . . . . . . .
. . 31
13.3. Registration Rights . . . . . . . . . . . . . . . . .
. . 31
13.4. Voting Trust . . . . . . . . . . . . . . . . . . . .
. . 33
14. COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 31
14.1. Environmental Site Assessment . . . . . . . . . . . .
. . 32
14.2. Tax Prorations . . . . . . . . . . . . . . . . . . .
. . 32
14.3. Sales Tax . . . . . . . . . . . . . . . . . . . . . .
. . 32
14.4. Recordation and Title Costs . . . . . . . . . . . . .
. . 32
14.5. Other . . . . . . . . . . . . . . . . . . . . . . . .
. . 32
15. POST CLOSING ACTIONS . . . . . . . . . . . . . . . . . . .
. . 32
15.1. Additional Instruments . . . . . . . . . . . . . . .
. . 32
15.2. Charlotte Processing Facility . . . . . . . . . . . .
. . 32
15.3. Cuddy/Modern Storage . . . . . . . . . . . . . . . .
. . 33
15.4. WLR Foods' Board of Directors . . . . . . . . . . . .
. . 33
15.5. Access to Records . . . . . . . . . . . . . . . . . .
. . 33
15.6. Customer Introductions . . . . . . . . . . . . . . .
. . 33
15.7. Second Closing Date . . . . . . . . . . . . . . . . .
. . 33
16. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . .
. . 33
16.1. By Cuddy and Cuddy International . . . . . . . . . .
. . 33
16.2. By Wampler-Longacre and WLR Foods . . . . . . . . . .
. . 35
-iii-
<PAGE>
17. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . .
. . 36
17.1. Termination . . . . . . . . . . . . . . . . . . . . .
. . 36
17.2. Survival . . . . . . . . . . . . . . . . . . . . . .
. . 36
18. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . .
. . 37
18.1 Notices . . . . . . . . . . . . . . . . . . . . . . .
. . 37
18.2 Entire Agreement . . . . . . . . . . . . . . . . . .
. . 38
18.3. Waivers and Amendment . . . . . . . . . . . . . . . .
. . 38
18.4. Governing Law; Venue . . . . . . . . . . . . . . . .
. . 39
18.5. Binding Effect; No Assignment . . . . . . . . . . . .
. . 39
18.6. Counterparts . . . . . . . . . . . . . . . . . . . .
. . 39
18.7. Specific Performance . . . . . . . . . . . . . . . .
. . 39
18.8. Severability of Provisions . . . . . . . . . . . . .
. . 40
18.9. Captions . . . . . . . . . . . . . . . . . . . . . .
. . 40
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . .
. . 41
-iv-
<PAGE>
EXHIBIT INDEX
1.1(a) Processing Facility
1.1(b) Further Processing Facility
1.1(c) Feed Mill
1.1(d) Turkey Farms
1.1(e) Scheduled Assets
1.3 Non-Competition and Name Transfer Agreement
2.1(c) Cuddy's Capital Expenditures
3.1 Assumed Liabilities
5.3(a) Real Estate Title Exceptions
5.8(a) Opinion of Counsel to Cuddy
5.8(b) Opinion of Counsel to Cuddy International
6.3 Opinion of Counsel to Wampler-Longacre and WLR
Foods
7.3 Third Party Consents
9.5 Notes Receivable
9.8 Trademarks
9.10(a) Regulatory Investigations or Audits
9.10(c) Off-site Treatment, Storage and Disposal
Locations
9.16 Transactions with Affiliates
13.3 Registration Rights Agreement
13.4 Voting Trust Agreement
-v-
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into this
27th day
of July, 1994, by and among CUDDY FARMS, INC., a North Carolina
corporation
(Cuddy), CUDDY INTERNATIONAL CORPORATION, a corporation
incorporated under
the laws of Ontario and controlling shareholder of Cuddy (Cuddy
International), WLR FOODS, INC., a Virginia corporation (WLR
Foods), and
WAMPLER-LONGACRE, INC., a Virginia corporation and wholly-owned
subsidiary
of WLR Foods (Wampler-Longacre) ("WLR Foods" and
"Wampler-Longacre"
collectively sometimes referred to herein as "Wampler").
RECITALS
A. Cuddy operates two divisions. The farm division is a
major
supplier of turkey eggs and poults with facilities in North
Carolina, South
Carolina, Iowa, Missouri, Ohio, Virginia and Minnesota (the Poult
Business). The food division is an integrated turkey processor
with three
turkey processing facilities, a feed mill, grow-out operations,
and an
interest in a cold storage distribution center, all located in
North
Carolina (the Business).
B. Cuddy desires to sell, and Wampler desires to
purchase,
substantially all of the assets related to the Business, and
certain
additional assets more particularly described herein.
<PAGE>
NOW, THEREFORE, in consideration of the premises and the
mutual
covenants and agreements contained herein, the parties represent
and agree
as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1. Assets to be Transferred. Upon the terms and
subject to
the conditions of this Agreement, on the Closing Date provided
for in
Section 4, Cuddy shall sell, transfer and convey to Wampler all
of the
following assets (Assets):
(a) All those certain tracts or parcels of
land, with
improvements thereon, which comprise Cuddy's processing facility
in
Marshville, North Carolina, which real estate is more
particularly
described on Exhibit 1.1(a) (Processing Facility) attached
hereto.
(b) All those certain tracts or parcels of
land, with
improvements thereon, which comprise Cuddy's further processing
facility,
including its research and development facility, in Monroe, North
Carolina,
which real estate is more particularly described on Exhibit
1.1(b) (Further
Processing Facility) attached hereto.
(c) All those certain tracts or parcels of
land, with
improvements thereon, which comprise Cuddy's feed mill in Union
County,
North Carolina, which real estate is more particularly described
on Exhibit
1.1(c) (Feed Mill) attached hereto.
(d) All those certain tracts or parcels of
land, with
improvements thereon, which comprise Cuddy's three turkey
grow-out farms in
<PAGE>
Union County, North Carolina, which real estate is more
particularly
described on Exhibit 1.1(d) (Turkey Farms) attached hereto. The
real
estate described by these subsections (a), (b), (c) and (d) of
this Section
1.1, and the improvements located thereon, shall hereinafter
collectively
be referred to as "Real Estate." The Real Estate, together with
the
Charlotte Facility (defined below) shall be referred to as
"Facilities."
(e) All machinery, fixtures, equipment,
including all
poultry processing equipment and all computer and data processing
equipment, tools, spare parts, cleaning and other supplies,
furniture,
rolling stock and other tangible personal property of the
Business located
in or used for the benefit of the Facilities or that section of
Cuddy's
corporate headquarters to be leased by Wampler-Longacre according
to a
lease agreement described in Section 7.2 hereof, and including
without
limitation those assets listed on the schedules attached hereto
as Exhibit
1.1(e) (Scheduled Assets).
(f) All inventories held by the Business for
resale,
including without limitation, live poultry and poultry products
(whether
dressed, packaged, processed, frozen or otherwise), and all
inventories
used in the Business including without limitation, all grain,
feed and
medication, supplies and all packaging inventory existing as of
the Closing
Date (the Inventory).
(g) All uncollected accounts receivable and
notes
receivable of the Business, including without limitation, grower
advances
and receivables, as of the Closing Date.
<PAGE>
(h) All right, title and interest of Cuddy in
and to
all prepaid rentals and other prepaid expenses related to the
Facilities
made by Cuddy in the ordinary and usual course of business as of
the
Closing Date.
(i) All right, title and interest of Cuddy in
and to
all customer lists, customer account records, personnel files and
other
business records of the Business (Business Records).
(j) All trademarks, tradenames and other
intangible
property used in connection with the Business, exclusive of the
name or
mark "Cuddy" as registered in the U.S. Patent and Trademark
Office alone or
in combination with other names or marks (such name or mark being
the
subject of the NonCompetition and Name Use Agreement described in
Section
1.3 hereof).
(k) All right, title and interest of Cuddy in
and to
all franchises, leases, contracts, including all grower
contracts, except
those identified on Exhibit 9.16, and the sublease of the further
processing facility in Charlotte, North Carolina (the Charlotte
Facility),
and obligations assumed by Wampler pursuant to Section 3.1.
(l) All right, title and interest of Cuddy in
and to
all certificates of occupancy and other transferable licenses,
permits and
authorizations of regulatory authorities or private parties
relating to the
construction, use, operation or enjoyment of the Assets.
(m) All claims of Cuddy against third parties
relating
to the Assets.
<PAGE>
(n) All policies of insurance for the benefit
of any of
the Assets to the extent such policies are assignable and pro
rata to the
extent they cover the Assets and other assets.
(o) All unfilled orders for the sale of any
inventory
and by-products.
(p) An exclusive license to use, in the
continental
United States, all patents issued to and owned by Cuddy for use
in the
Business for the duration of the term for which such patents were
issued.
(q) All right, title and interest in
"Cuddy/Modern
Storage," a North Carolina general partnership (the Cold Storage
Facility).
(r) Cuddy's post office box and address at:
P. O. Box
668, Marshville, North Carolina, 28103.
1.2 Excluded Assets. Cuddy is retaining its Poult
Business.
Cuddy corporate headquarters are located in Marshville, North
Carolina, and
Cuddy is retaining ownership of the commercial building and its
contents,
other than those items specifically listed on Exhibit 1.1(e).
All hedging
contracts and related balances of Cuddy are excluded from this
transaction.
1.3. NonCompetition and Name Use Agreement. On the
Closing
Date, Cuddy and Cuddy International will enter in to, and Cuddy
will cause
A.M.C Family Holdings, Ltd. and Messr. A.M. Cuddy, Cuddy's
shareholders, to
enter into a Non-Competition and Name Use Agreement with
Wampler-Longacre
in substantially the same form as Exhibit 1.3 (Non-Competition
and Name Use
Agreement) attached
<PAGE>
hereto. Cuddy will use all reasonable efforts to cause D. Bruce
Cuddy to
enter into a substantially similar but separate NonCompetition
and Name Use
Agreement.
2. PURCHASE PRICE AND PAYMENT.
2.1. Purchase Price.
(a) The purchase price for the Assets shall
be
Seventy-Three Million Three Hundred Thousand Dollars
($73,300,000.00)
subject to the Post-Closing Adjustments as defined in Section
2.1(c) below.
(b) Within 30 days following the Closing
Date, auditors
KPMG Peat Marwick shall prepare and deliver to Cuddy and Wampler
an audited
schedule of working capital of the Business as of the
commencement of
business on the Closing Date (Closing Date Working Capital)
according to
generally accepted accounting principles, consistently applied;
provided,
however, that the following items shall be excluded from the
determination
of working capital:
(i) Cash accounts, except those cash
accounts set
up to fund specific liabilities assumed by Wampler;
(ii) Any accounts related to hedging
activities;
(iii) Prepaid insurance accounts where
the
insurance policy will not be transferred to Wampler;
(iv) Short-term borrowing, current
installments of
long-term borrowing, and related accrued interest;
(v) officer receivables;
<PAGE>
(vi) deposits held by Cuddy, payments
paid by
Cuddy on account of non-competition obligations, and the interest
in the
Cuddy/Modern Storage partnership (which are to be conveyed in the
transaction as other assets); and, provided further that;
(vii) repairs and maintenance, exclusive
of truck
parts, shall not be adjusted from the value of $185,000 as set
forth in the
statement of working capital reflected on a May 31, 1994 balance
sheet
which was internally prepared by Cuddy and previously delivered
to Wampler
(May Balance Sheet);
(viii) the inventory write-up, if any,
attributable to feed costs in finished products resulting from
adjusting
standard costing methods utilized in the May Balance Sheet to
generally
accepted accounting principles for the Closing Date Working
Capital shall
not exceed $300,000.
(c) The purchase price set forth in Section
2.1(a)
above shall be adjusted according to the following post-closing
determinations (Post-Closing Adjustments):
(i) The purchase price shall be
increased by the
excess of Closing Date Working Capital over $40,400,000, or
decreased by
the excess of $40,400,000 over the Closing Date Working Capital;
and
(ii) The purchase price shall be
increased by the
excess of the amount of expenditures, as determined by KPMG Peat
Marwick,
related to Cuddy's capital expenditure program set forth on
Exhibit 2.1(c)
and
<PAGE>
reflected in construction in progress of the Further Processing
Facility as
of the Closing Date over $467,725 (Cap Ex Audit).
(d) During the ten (10) days following Cuddy's
receipt of the
Closing Date Working Capital and Cap Ex Audit as required by
Section 2.1(b)
and (c) hereof, Cuddy's auditors, Potter & Company, shall be
permitted to
review the Closing Date Working Capital and Cap Ex Audit and
working papers
of KPMG Peat Marwick related thereto. If any matter is in
dispute and
cannot be resolved in such ten (10)-day period, both accounting
firms
shall, within an additional five (5)-day period following
expiration of
Potter & Company's ten (10)-day review period, submit the
question or
questions in dispute to Price Waterhouse which shall resolve the
dispute
within ten (10) days after the questions are referred to them and
whose
decisions shall be final and binding on all parties hereto.
One business day after the earlier of Cuddy and
Wampler
agreeing on the Post Closing Adjustments or the final decision of
Price
Waterhouse, the payments described in Section 2.2(c) below shall
occur (the
Second Closing Date).
2.2. Payment.
(a) On the Closing Date, Wampler-Longacre
shall pay to
or for the benefit of Cuddy, by certified or bank cashier's check
or other
current funds acceptable to Cuddy, the sum of Forty-Two Million
Five
Hundred Thousand Dollars ($42,500,000); and
(b) On the Closing Date, subject to the
restrictions
described in Section Section 13 hereof, WLR Foods shall issue to
the
independent corporate
<PAGE>
trustee of the Voting Trust Agreement described in Section 13.4
hereof (the
Trustee), for the benefit of Cuddy that number of shares of WLR
Foods
common stock, rounded to the nearest whole number, which is
determined by
dividing the sum of Thirty Million Eight Hundred Thousand Dollars
($30,800,000) by the weighted average closing price of WLR Foods
common
stock as quoted by NASDAQ's National Market System for the ten
(10)
consecutive WLR Foods common stock trading days ending at the
close of
market two business days prior to the Closing Date; provided,
however, that
if such average is below $24.00 per share, $24.00 shall be the
divisor and
if such average is above $28.00 per share, $28.00 shall be the
divisor
(Stock Value), less 100,000 shares.
(c) On the Second Closing Date, (i) if the purchase
price,
after making the Post-Closing Adjustments, exceeds $73,300,000,
WLR Foods
shall issue to the Trustee on behalf of Cuddy 100,000 shares of
WLR Foods
common stock plus that additional number of shares of WLR Foods
common
stock, rounded to the nearest whole number, which is determined
by dividing
the sum of the Post-Closing Adjustments by the Stock Value; (ii)
if the
purchase price, after making the Post-Closing Adjustments, is
equal to
$73,300,000, WLR Foods shall issue to the Trustee on behalf of
Cuddy
100,000 shares of WLR Foods common stock; or (iii) if the
purchase price,
after making the Post-Closing Adjustments is less than
$73,300,000, WLR
Foods shall issue to Cuddy 100,000 shares reduced by that number
of shares
of WLR Foods common stock, rounded to the nearest whole number,
which is
determined by dividing the sum of the Post-Closing Adjustments by
the Stock
Value;
<PAGE>
provided, however, that if the Post-Closing Adjustments exceed
the Stock
Value of 100,000 shares of WLR Foods common stock, Cuddy shall
pay to WLR
Foods a sum equal to such excess amount, in cash. Any stock
issuances
shall be subject to the restrictions set forth in Section 13.
2.3. Allocation. Cuddy and Wampler agree to
allocate a
portion of the purchase price described in Section 2.1 under
Class III
assets in accordance with Internal Revenue Code Section 1060 on
the
Forms 8594 filed by both parties with the Internal Revenue
Service as
required by law. The allocation to those assets is listed below:
Land $3,060,000
Land Improvements 900,000
Buildings and Related Components 12,450,000
Equipment 15,790,000
Accounts receivable, the covenant not to compete, and
any other
Class III assets not listed above will be determined as of the
Closing Date
and will be included on the Forms 8594.
3. ASSUMPTION OF LIABILITIES.
3.1 Liabilities Assumed by Wampler-Longacre. As
further
consideration for the transfer of Assets by Cuddy to
Wampler-Longacre,
Wampler-Longacre agrees, upon the terms and subject to the
conditions set
forth herein, to assume all ordinary and customary accounts
payables of the
Business as of the Closing Date specifically excluding checks
presented but
unpaid, and all accruals and
<PAGE>
obligations arising under the contracts (including all the grower
contracts) leases and other agreements listed on Exhibit 3.1
(Assumed
Liabilities).
3.2. Excluded Liabilities. Other than obligations
or
liabilities related to the Business which accrue after the
Closing Date,
Wampler-Longacre does not assume, nor does it agree to pay, any
debts,
liabilities, or obligations not referred to in Section 3.1,
including any
federal, state, or local income taxes or payroll taxes (except to
the
extent included in Closing Date Working Capital) of Cuddy,
whether for the
period ending as of the Closing Date or any prior period, or any
other
taxes of any kind or nature for such periods. Cuddy shall remain
liable
for any defaults or acts or any claims occurring or made prior to
the
Closing Date in connection with the Business, regardless of
whether any
suits, proceedings or claims with respect thereto arise before or
after the
Closing Date. Wampler-Longacre shall not assume or be liable for
any tax
liability of Cuddy in respect of any profit derived from the sale
provided
for in this Agreement. Further, Wampler-Longacre shall not
assume any
liability for products shipped prior to the Closing Date, nor for
any
leases, contracts, or any other agreements not listed in Schedule
3.1
hereto, other than such contracts, agreements, orders and other
transactions incurred or entered into by Cuddy after the date
hereof in the
ordinary course of the Business prior to the Closing Date. It is
expressly agreed that Wampler-Longacre assumes no obligation to
continue
any employee welfare or benefit plan currently maintained by
Cuddy.
3.3 Employees. On the Closing Date,
Wampler-Longacre will
offer continued employment to all Cuddy employees then employed
in the
Business with
<PAGE>
salary and benefits, taken as a whole and where administratively
practicable, comparable to what Cuddy provided prior to the
Closing Date,
except as to any key executive benefit arrangements. Cuddy will
have no
ongoing obligation for employees who accept the Wampler-Longacre
offer, and
Wampler-Longacre shall have no ongoing obligation to retain
employees for
any specific term.
4. CLOSING AND CLOSING DATE. The closing of the
transactions
anticipated by this Agreement shall take place within three
business days
after Hart-Scott-Rodino clearance is obtained at the offices of
Wharton,
Aldhizer & Weaver, as the parties may mutually agree in writing
(Closing
Date). TIME IS OF THE ESSENCE TO THE CLOSING OF THIS
TRANSACTION.
5. CONDITIONS TO WAMPLER'S DUTY TO CLOSE. The
obligations of
Wampler to consummate the transactions contemplated by this
Agreement are
subject to the fulfillment, on or before the Closing Date, of the
covenants
and conditions set forth in Sections 7 and 8 herein and the
following
conditions and the receipt of the following documents (subject to
the right
of Wampler to waive any such requirement):
5.1. Certificate as to Representations and
Warranties. All of
the representations and warranties of Cuddy and Cuddy
International
contained in this Agreement or in any certificate, document or
instrument
delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true and correct in all material
respects on
and as of the Closing Date, and Cuddy and Cuddy
<PAGE>
International shall deliver to Wampler certificates signed by a
senior
officer to such effect.
5.2. Certificate as to Corporate Authority. A copy
of the
appropriate board resolutions of Cuddy and Cuddy International
authorizing
the execution and performance of this Agreement and all necessary
documents
to consummate this Agreement as certified by a senior officer
shall be
delivered at closing.
5.3. Closing Documents. The following documents
shall be
delivered at Closing:
(a) Deeds conveying title to the Real Estate
with
General Warranty and otherwise in accordance with the form of
warranty deed
customarily used for conveyance of North Carolina real property,
but
subject to easements, covenants and restrictions of record to the
extent
the same lawfully affect the Real Estate to Wampler-Longacre.
Wampler's
obligation to close shall be conditioned upon Cuddy's being able
to convey
marketable title to the Real Estate, subject only to the title
exceptions
listed in Exhibit 5.3(a), and such other matters as do not
materially
adversely affect marketability of title. In the event an
examination of
title or survey of the Real Estate reveals objections to title
not
described above, Wampler shall give Cuddy prompt notice thereof.
Upon
receipt of notice of objection, Cuddy shall have the right (but
not the
obligation) to attempt to cure the defect, and shall thereby be
entitled to
a reasonable extension of the Closing Date during which to
attempt to cure
the defect, but not more than 30 days. If the defect is not
cured,
Wampler-Longacre shall, within ten (10) days following the
expiration of
the 30-day
<PAGE>
period or earlier notice from Cuddy regarding the defect, as the
case may
be, either (i) waive the defect and promptly proceed to closing
under this
Agreement without reduction in the purchase price set forth in
Section 2.1,
or (ii) terminate this Agreement by written notice to Cuddy. To
the extent
an owner's policy of title insurance can be obtained by Wampler
from
Lawyers Title Insurance Corporation, without exception to such
objections,
Wampler-Longacre waives any such objection and agrees to look
solely to
such policy for the title insurance with respect to that
objection.
(b) Bills of sale as to the Assets containing
the
following two representations: (i) all Inventory is of a quality
and
quantity which are saleable and usable in the ordinary course of
the
Business other than ordinary spoilage, and other than obsolete
packaging
material, and (ii) all of the machinery, equipment and vehicles
taken as a
whole are in working order and suitable for their intended
purposes within
the Business. The portion of the total purchase price
represented by WLR
Foods common stock shall be in exchange for Cuddy's transfer of
that amount
of inventory and, if necessary, an appropriate amount of accounts
receivable, reflected in a bill of sale from Cuddy to WLR Foods.
The
balance of the Assets conveyed pursuant to a bill of sale shall
be conveyed
by a bill of sale from Cuddy to Wampler-Longacre.
(c) Motor vehicles certificates of title,
duly endorsed
to Wampler-Longacre, for all titled rolling stock of the
Business.
<PAGE>
(d) An assignment or assignments of Assumed
Liabilities
to Wampler-Longacre.
(e) Satisfactory evidence of the consent of
any third
party whose consent must be obtained to transfer the Assets and
assign the
Assumed Liabilities, specifically including the required written
consent of
ConAgra to the assignment of Cuddy's existing sublease related to
the
Charlotte Facility and, subject to Section 8.4, the consent of
Cuddy's
partner in Cuddy/Modern Storage.
5.4. Business Records. The Business Records shall
be
delivered to Wampler-Longacre.
5.5. Non-Competition and Name Use Agreement.
Executed copies
of the Non-Competition and Name Use Agreement described in
Section 1.3
shall be delivered to Wampler.
5.6. Trademark Assignments. An assignment of all
trademarks,
tradenames and other intangible property used in connection with
the
Business as described in Section 1.1(j).
5.7. License of Patents. An exclusive license of
all patents
issued to and owned by Cuddy as set forth in Section 1.1(p).
5.8. Opinion of Counsel. An opinion of Griffin,
Caldwell,
Helder & Lee, counsel for Cuddy and an opinion of Blake, Cassels
& Graydon,
counsel for Cuddy International, both dated as of the Closing
Date,
substantially as set forth in Exhibit 5.8(a) and 5.8(b)
respectively.
<PAGE>
5.9. Environmental Audit. Receipt of a copy of the
existing
environmental site assessments, if any, as to the Real Estate,
and the Cold
Storage Facility within the possession or control of Cuddy.
Receipt of an
environmental site assessment as to the Charlotte Facility or any
other
Real Estate. If any environmental audit reveals any matters
requiring
corrective action, the parties hereto shall discuss and agree as
to any
corrective action recommended by such report and the allocation
of the cost
and responsibility therefor.
5.10. Bulk Sales. Wampler hereby waives compliance
by Cuddy
with the provisions of any so-called bulk transfer laws in
connection with
the sale of the Assets, and Cuddy and Cuddy International hereby
agree to
indemnify and hold harmless Wampler against any and all
liabilities which
may be asserted against Wampler as a result of such
non-compliance.
6. CONDITIONS TO CUDDY'S DUTY TO CLOSE. The obligations
of Cuddy
to consummate the transactions contemplated by this Agreement are
subject
to the fulfillment, on or before the Closing Date, of the
conditions set
forth in Sections 7 and 8 and the following conditions and the
receipt of
the following documents (subject to the right of Cuddy to waive
any such
condition):
6.1. Representations and Warranties True. All the
representations and warranties of Wampler-Longacre and WLR Foods
contained
in this Agreement or in any certificate, document or instrument
delivered
pursuant hereto or in connection with the transactions
contemplated hereby
shall be true and correct in all material respects on and as of
the Closing
Date, and Wampler-Longacre and WLR Foods shall
<PAGE>
deliver to Cuddy a certificate signed by their respective
secretaries or
assistant secretaries to such effect.
6.2. Certificate as to Corporate Authority. A copy
of the
appropriate board resolutions of Wampler-Longacre and WLR Foods
authorizing
the execution and performance of this Agreement, including the
reservation
of 200,000 shares of WLR Foods common stock for possible
distribution to
Cuddy pursuant to Section 2.2(c), and all necessary documents to
consummate
this Agreement as certified by their respective secretaries or
assistant
secretaries shall be delivered at Closing Date.
6.3. Opinion of Counsel to Wampler-Longacre and WLR
Foods. An
opinion of Wharton, Aldhizer & Weaver, counsel for
Wampler-Longacre and WLR
Foods, dated as of the Closing Date, substantially as set forth
in
Exhibit 6.3.
6.4. Assumption of Liabilities. Written
acknowledgement of
assumption as to any Assumed Liabilities shall be delivered on
the Closing
Date in a form reasonably suitable to Cuddy's counsel.
6.5. Purchase Price. The consideration set forth in
Section
2(a) and (b) shall be delivered at the Closing Date.
7. CONDITIONS TO CUDDY'S AND WAMPLER'S DUTY TO CLOSE.
The
obligations of Cuddy or Wampler to consummate the transactions
contemplated
by this Agreement are subject to the fulfillment, on or before
the Closing
Date, of the following conditions and the receipt of the
following
documents (subject to the right of any party to waive any such
condition on
its own behalf):
<PAGE>
7.1. Ancillary Agreements. Cuddy and
Wampler-Longacre shall
enter into an office lease and computer operations agreement, a
poult
supply agreement, a feed supply agreement and a breeder hen
processing
agreement within 7 days of the date hereof effective as of the
Closing Date
on terms acceptable to them.
7.2. Anti-Trust Laws Compliance. Cuddy and Wampler
shall have
duly complied with all provisions of the Hart-Scott-Rodino
Anti-trust
Improvements Act of 1976 applicable hereto.
7.3. Consents. Cuddy shall have obtained all
necessary third
party consents and approvals as set forth on Exhibit 7.3.
7.4. Litigation. No United States or state court or
other
entity of competent jurisdiction shall have enacted, issued,
promulgated,
enforced or entered any statute, rule, regulation, judgment,
decree,
injunction or other order (whether temporary, preliminary or
permanent)
which is in effect and prohibits consummation of the transactions
contemplated by this Agreement.
8. COVENANTS PRIOR TO CLOSING DATE.
8.1 Access. Until the Closing Date, Cuddy shall
give the
authorized representatives of Wampler access, during normal
business hours
and upon reasonable notice, to all of the records and properties
of Cuddy
relating to the Assets. Cuddy will furnish the representatives
of Wampler
during such period with all information as such representatives
may
reasonably request and cooperate with such representatives in
connection
with such review and examination.
<PAGE>
8.2. Operation of the Business. Cuddy agrees that
from the
date hereof until the Closing Date, except as otherwise provided
below, it
will operate the Business substantially as presently operated and
only in
the ordinary course, and, consistent with such operation, it will
(i)
maintain its assets and properties in good repair, order and
condition,
reasonable wear and tear accepted; (ii) maintain in full force
and effect
all patents, trademarks, patent and trademark applications,
copyrights,
franchises, licenses, permits, easements and rights and other
authorizations currently in effect; (iii) use all reasonable
efforts to
maintain in full force and effect the insurance policies and
binders
currently in effect, including, without limitation, those listed
on Exhibit
9.17 or to obtain equivalent policies and binders with insurers
approved in
writing by Wampler; (iv) use all reasonable efforts to keep
available the
services of its present officers, employees and agents and to
maintain its
relations and goodwill with its suppliers, customers,
distributors, and any
others having business relations with Cuddy; (v) promptly advise
Wampler in
writing of the commencement of any claim, action, suit or
proceeding,
arbitration or investigation when the amount claimed is $50,000
or more in
the aggregate or the occurrence of any development of a nature
that is or
may reasonably be expected to be materially adverse to the
operations,
properties, assets or prospects of the Business; (vi) not propose
or take
any action which would make any representation or warranty in
Section 9
hereof untrue; (vii) maintain salaries, bonuses and other
compensation
levels as of the date hereof; and (viii) maintain computation
methods for
<PAGE>
payment to growers consistent with those methods used as of the
date hereof
and not pay any discretionary bonuses.
8.3. Grower Contracts. Prior to the Closing Date,
the grower
contracts listed on Exhibit 9.16 shall have been restated into
standard
grower contracts substantially similar to the grower contracts
presently in
use by Cuddy for non-related parties.
8.4. Cuddy/Modern Storage. Cuddy shall use all
reasonable
efforts and work with Wampler-Longacre to obtain Modern Storage
Company's
agreement to (i) accept Wampler-Longacre as a partner in
Cuddy/Modern
Storage, a North Carolina general partnership, and (ii) continue
the
partnership despite the transfer of Cuddy's partnership interest
to
Wampler-Longacre.
8.5. Publicity. Cuddy and Wampler shall consult
with and
obtain approval from each other prior to making any filings with
any
regulatory authority; provided, however, that WLR Foods shall be
permitted
to make all required disclosures regarding this Agreement,
including
details as to price and terms. Cuddy shall consult with and
obtain
approval from Wampler prior to issuing any press releases or
otherwise
making public statements with respect to the transactions
contemplated
hereby.
8.6. Cooperation and Disclosures. (a) Each party
shall use
all reasonable efforts (i) to prepare and promptly file all
necessary
documentation, to effect all necessary applications, notices,
petitions,
filings and other documents, and to take, or cause to be taken,
all actions
necessary to comply promptly with all legal
<PAGE>
requirements which may be imposed on such party with respect to
this
Agreement and (ii) to obtain (and to cooperate with the other
party to
obtain) as promptly as practicable any consent, authorization,
order or
approval of, or any exemption by, any regulatory authority and
any private
third party which is required to be obtained or made by such
party in
connection with this Agreement.
(b) Cuddy shall use all reasonable efforts to
obtain
necessary consents and approvals and shall permit Wampler's
advisors to
work directly to obtain such consents.
(c) Each party shall have the right to review
in
advance all the information relating to the other parties which
appears in
any filing made with, or written materials submitted to, any
regulatory
authority in connection with the transactions contemplated by
this
Agreement. In exercising the foregoing right, each of the
parties shall
act reasonably and as promptly as practicable. Each party agrees
that it
will consult with the other party with respect to the obtaining
of all
permits, consents, approvals and authorizations of all third
parties and
regulatory authorities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will
keep the
other parties apprised of the status of matters relating to
completion of
the transactions contemplated herein. The parties agree that
all
proprietary information will be maintained as such except as
otherwise
permitted by this Agreement.
8.7. Acquisition Proposals. Cuddy agrees that
neither it nor
any of its related entities shall directly, through any officer,
director,
agent, employee or
<PAGE>
representative, initiate or solicit or respond to, on or after
the date
hereof, and up to and including the Closing Date or the date of
termination
of this Agreement in accordance with the terms hereof (as the
case may be),
any inquiries or the submission of any proposals or offers from
any person
relating to any merger, consolidation or similar business
combination
involving the Business.
8.8 Good Faith. The parties agree to act in good
faith and
use all reasonable efforts to execute the ancillary agreements
referred to
in Section 7.1 previously agreed to as soon as final versions are
available
and to satisfy all other conditions of this agreement within
their
respective power.
9. REPRESENTATIONS AND WARRANTIES OF CUDDY. Cuddy
hereby
represents and warrants to Wampler as follows:
9.1. Organization, Power and Authority. Cuddy is a
corporation duly organized and existing in good standing under
the laws of
North Carolina with all necessary corporate power and authority
to carry on
its business as now being conducted and to own, lease and operate
the
Assets.
9.2. Due Authority; No Breach. The execution and
delivery by
Cuddy of this Agreement and the performance by Cuddy of the
transactions
contemplated hereby have been duly authorized by all necessary
corporate
action of Cuddy. This Agreement is a valid and binding
obligation of
Cuddy, and each instrument contemplated by this Agreement, when
executed
and delivered by Cuddy in accordance with the provisions hereof,
will be a
valid and binding obligation of Cuddy, in each case enforceable
against
Cuddy in accordance with its terms (except
<PAGE>
as such enforceability may be limited by applicable creditors'
rights law).
Neither the execution and delivery of this Agreement nor the
consummation
of the transactions contemplated hereby will (a) conflict with or
result in
any violation of any provision of the Certificate of
Incorporation or
Bylaws of Cuddy, (b) except as disclosed on any exhibit to this
Agreement,
constitute a default (or an event which, with notice or lapse of
time or
both, would constitute a default) in the terms, conditions or
provisions of
any material obligation (or obligations which in the aggregate
would be
material) to which Cuddy is a party or by which Cuddy or the
Assets are
bound; (c) violate any judgment, order or award of any court,
administrative agency or governmental body against or binding
upon Cuddy or
the Assets, or (d) constitute a violation by Cuddy of any law or
regulation
of any jurisdiction as it relates to Cuddy or the Assets.
9.3. Liabilities. Except for the Assumed
Liabilities, Cuddy
has no accrued or absolute liabilities, debts or obligations, and
to the
best of its knowledge, no contingent liabilities, debts or
obligations,
which will, subsequent to the Closing Date in any manner
materially
adversely affect any of the Assets or the Business. Cuddy has no
knowledge
of any material breach or default, or claimed or alleged breach
or default
by Cuddy, or any other party under any term or provision of any
of the
Assumed Liabilities, and to the knowledge of Cuddy, no event has
occurred
which, with the passage of time or the giving of notice or both,
would
constitute a breach or default by Cuddy or any other party
thereunder.
9.4. Ownership of Assets. The Assets as described
in Section
1.1 and the Exhibits thereto are complete and accurate
descriptions and
listings of all
<PAGE>
material assets used to conduct the Business, as conducted by
Cuddy, which
is being sold to Wampler. Except as set forth on Exhibit 9.4 or
any other
exhibit to this Agreement, Cuddy is the owner of the Assets and
has good
and marketable title to all such Assets, free and clear of any
lien, charge
or other encumbrance, except for: (a) statutory liens for
current taxes or
assessments not yet due or delinquent, (b) mechanics', carriers',
workers',
repairers' and other similar liens arising or incurred in the
ordinary
course of business relating to obligations as to which there is
no default
on the part of Cuddy, none of which are of character, amount or
extent
which materially detract from the value, or interfere with
respect to the
properties subject thereto, or otherwise impair operations of the
Business
and (c) such other liens, imperfections of title, charges,
easements,
restrictions, encumbrances and other matters of similar nature
which do not
relate to borrowed money and do not materially interfere with the
operation
of the Business.
9.5. Accounts and Notes Receivable. All accounts
and notes
receivable reflected on the May Balance Sheet, and all accounts
and notes
receivable of Cuddy arising subsequent to October 30, 1993, have
arisen
only in the ordinary course of business for goods sold and
delivered or
services performed. Exhibit 9.5 is a complete listing of all
notes
receivable as of the May Balance Sheet. The reserves for bad
debts
reflected on the May Balance Sheet are in accordance with
generally
accepted accounting principles.
9.6. Inventory. All inventory reflected on the May
Balance
Sheet, a complete copy of which has been provided to Wampler by
Cuddy, and
all inventory
<PAGE>
acquired by Cuddy subsequent to October 30, 1993 is reported in a
manner
consistent with past practice.
9.7. Litigation. There is no pending (or, to
Cuddy's
knowledge, threatened) judicial, administrative or arbitral
action, suit or
proceeding against Cuddy which, if adversely determined, could
reasonably
be expected to have a material adverse affect on the Assets or
the Business
or result in any material adverse change in the Assumed
Liabilities or
which questions the validity of this Agreement or any action
taken or to be
taken in connection herewith. Cuddy is not subject to any
material order
or injunction of any court or governmental agency or body
involving the
Business or the Assets. Cuddy is not conducting or carrying on
business or
affairs in violation of any federal, state, or local law or
regulation, or
court or administrative order, which violation could reasonably
be expected
to affect, materially and adversely, the Business or the Assets.
9.8. Trademarks. Exhibit 9.8 contains an accurate
and
complete list of Cuddy's trademarks, trade names, service marks
and brand
names included in the Assets or the operation of the Business
except those
containing the "Cuddy" name. Except as disclosed on Exhibit 9.8,
each
trademark, trade name, service mark, or brand name included in
the Assets
is owned solely by Cuddy or an affiliated corporation free and
clear of all
liens and restrictions (other than restrictions applicable
generally to
trademarks, trade names, service marks or brand names) and is not
currently
being challenged in any way, and to the knowledge of Cuddy, the
use
<PAGE>
by Cuddy thereof as presently utilized does not infringe upon or
conflict
with the rights of any person.
9.9. Licenses; Permits. Cuddy has all material
governmental
license, permits, authorizations, and approvals and has made all
material
filings and registrations which are necessary in order to enable
Cuddy to
conduct the Business in all material respects.
9.10. Compliance with Environmental and Other Laws.
(a) Except as set forth in Exhibit 9.10(a) or
as
disclosed in the assessment reports to be delivered under Section
5.7,
Cuddy is in material compliance with all federal, state or local
law,
regulation, ordinance or code concerning environmental matters,
or
concerning health and consumer or employment safety matters,
including
without limitation, applicable regulations, ordinances, permits,
standards
and agreements, the failure to comply with which would affect,
materially
and adversely, the Business or the Assets. A list of all
regulatory
investigations or audits pertaining to the Business, including
any tax
audits, since January 1, 1991, is set forth in Exhibit 9.10(a).
(b) Cuddy, to the best of its knowledge, has
not
discharged, disposed, released, placed, or dumped onto or under
the
Facilities (or into the air or water on or surrounding such
premises) any
"hazardous substances" or "toxic substances" as those terms are
defined in
the Comprehensive Environmental Response, Compensation and
Liability Act of
1980, as amended, 42 U.S.C. Section 9601, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901,
<PAGE>
et seq., any amendments to the aforementioned laws heretofore
enacted, and
in the regulations adopted pursuant to such laws which were in
effect on
the date of this Agreement.
(c) Exhibit 9.10(c) contains a complete and
accurate
list of all off-site treatment, storage, and disposal locations,
including
without limitation, landfills, surface impoundments, waste piles,
recycling
facilities, incinerators, and regeneration plants, which have
been used by
Cuddy for the management of solid wastes and any "hazardous
substances" or
"toxic substances" as those terms are defined in the
Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as amended,
42 U.S.C. Section 9601, et seq., the Resource Conservation and
Recovery
Act, 42 U.S.C. Section 6901, et seq., any amendments to the
aforementioned
laws heretofore enacted, and in the regulations adopted pursuant
to such
laws which are in effect on the date of this Agreement, and Cuddy
has not
received any written notice from any governmental agency or
private or
public entity that it is responsible or potentially responsible
for
response costs with respect to a release or threat of a release
of any
"hazardous substances" or "toxic substances" as those terms are
defined in
the Comprehensive Environmental Response, Compensation and
Liability Act of
1980, as amended, 42 U.S.C. Section 9601, et seq., the Resource
Conservation Recovery Act, 42 U.S.C. Section 6901, et seq., any
amendments
to the aforementioned laws heretofore enacted, and in the
regulations
adopted pursuant to such laws which were in effect on the date of
this
Agreement.
9.11. Labor.
<PAGE>
(a) With respect to employees of Cuddy:
(i) Cuddy is and has been in compliance
in all
material respects with all applicable laws governing employment
and
employment practices, terms and conditions of employment and
wages and
hours, including without limitation any such laws respecting
employment
discrimination and occupational safety and health requirements,
and Cuddy
has not engaged in any unfair labor practices;
(ii) there is no litigation, arbitration
proceeding, governmental investigation, citation or action of any
kind
pending or, to the knowledge of Cuddy, proposed or threatened
against Cuddy
relating to employment, employment practices, terms and
conditions of
employment or wages and hours.
(b) Cuddy has no collective bargaining
relationship or
duty to bargain with any labor union or organization, and Cuddy
has not
recognized any labor union or organization as the collective
bargaining
representative of any of its employees.
9.12. Bonuses and Vacation Policies. The list of all
compensations, bonus arrangements, labor or employment contracts
and any
accrued vacation or sick leave benefits and all other fringe
benefits
presently being furnished to Cuddy employees related to the
Business,
including any profit sharing plans, hospitalization, group life
insurance
and reimbursable expenses presently furnished by Cuddy to such
employees,
previously provided to Wampler by Cuddy is a true, complete and
accurate
representation of such matters.
<PAGE>
9.13. Taxes. All tax returns and reports of Cuddy
relating to
the Business required by law to be filed have been duly filed and
all
taxes, assessments, fees and other governmental charges upon
Cuddy which
are due have been paid, other than those which are presently
payable
without penalty or interest, or the failure to comply with which
would not
affect, materially and adversely, the Business or the Assets.
9.14. Leases. Included in Exhibit 3.1 is a list of
all leases
with respect to the Assets which will be assumed by
Wampler-Longacre, and
Cuddy has furnished to Wampler-Longacre complete and correct
copies of all
such leases (including all amendments thereto). All such leases
are valid,
binding and in full force and effect against Cuddy and, to the
best of
Cuddy's knowledge, valid, binding and in full force and effect
against the
respective lessors and have not been materially amended or
modified except
as disclosed. Cuddy is not in default, and no notice of alleged
default
has been received by Cuddy, under any such leases. To Cuddy's
knowledge,
no lessor is in default or alleged to be in default under any
such leases.
To the best of Cuddy' knowledge, there exists no condition or
event which,
after notice or lapse of time or both, would constitute a
material default
by Cuddy.
9.15. Financial Statements. Cuddy has delivered to
Wampler-
Longacre: (i) its audited balance sheets as at October 30, 1993
and
October 31, 1992, and the related audited statements of income,
changes in
shareholders' equity and cash flow, together with the report
thereon of
Potter & Company, independent certified public accountants; and
(ii) the
May Balance Sheet and the related unaudited
<PAGE>
statement of income for the period then ended. The audited
financial
statements and notes fairly present the financial condition and
results of
operations of the Cuddy as at the respective dates thereof and
for the
periods therein referenced, all in accordance with generally
accepted
accounting principles; the financial statements referred to in
this section
reflect the consistent application of such accounting principles
throughout
the periods involved, except as disclosed in the notes to such
financial
statements.
Since October 30, 1993, Cuddy has conducted its
business
in the ordinary course of business and there has not been (i) any
change in
Cuddy of which its management has knowledge which is reasonably
likely to
result in a material adverse effect on Cuddy; (ii) any material
transactions such as a transfer of assets to related parties, a
contract
cancellation, an asset sale or transfer or a loss other than in
the
ordinary course of business; (iii) any development (exclusive of
general
economic factors affecting business in general) or threatened
development
of a nature that is or may be materially adverse to the
operations, assets,
properties or property of the Business; or (iv) any change by
Cuddy in
accounting principles, practices or methods (except as required
by changes
in generally accepted accounting principles as concurred to by
Cuddy's
independent auditors).
9.16. Transactions with Affiliates. No director,
officer or
shareholder of Cuddy, or any member of such person's family, owns
or has an
ownership interest in any business, corporate or otherwise, which
is a
party to, or in any property which is the subject of, business
arrangements
or relations of any kind with the Business,
<PAGE>
other than by ownership of less than two percent of the stock of
a
publicly-held corporation and except as disclosed on Exhibit
9.16.
9.17. Insurance. The copies of policies, insurance
certificates, and binders previously provided to Wampler by Cuddy
accurately identifies all fire, liability, product liability,
vehicular,
title and other insurance held by or on behalf of Cuddy relating
to the
Business.
10. REPRESENTATIONS OF CUDDY INTERNATIONAL. Cuddy
International
hereby represents and warrants to Wampler as follows:
10.1. Organization, Power and Authority. Cuddy
International
is a corporation duly organized and existing in good standing
under the
laws of the Ontario. Cuddy International has all necessary
corporate power
and authority to enter into and be bound by the terms and
conditions of
this Agreement.
10.2. Due Authority; No Breach. The execution and
delivery by
Cuddy International under this Agreement, and the performance by
Cuddy
International of its obligations contemplated hereby, have been
duly
authorized by all necessary corporate action. Neither the
execution and
delivery of this Agreement nor the consummation of the
transactions
contemplated hereby will conflict with or result in any violation
of the
articles of incorporation or Bylaws of Cuddy International or
constitute a
default in the terms, conditions or provisions of any material
obligation
to which Cuddy International is a party or by which Cuddy
International is
bound, violate any judgment, order or award of any court,
administrative
agency or governmental body against or binding upon Cuddy
International or
constitute a
<PAGE>
violation by Cuddy International of any law or regulation of any
jurisdiction as it relates to Cuddy International.
11. REPRESENTATIONS AND WARRANTIES OF WAMPLER-LONGACRE.
Wampler-
Longacre hereby represents and warrants to Cuddy as follows:
11.1. Organization, Power and Authority.
Wampler-Longacre is a
corporation duly organized and existing in good standing under
the laws of
the Commonwealth of Virginia. Wampler-Longacre has all necessary
corporate
power and authority to enter into and be bound by the terms and
conditions
of this Agreement.
11.2. Due Authority; No Breach. The execution and
delivery by
Wampler-Longacre of this Agreement, and the performance by
Wampler-Longacre
of the transactions contemplated hereby, have been duly
authorized by all
necessary corporate action. This Agreement is a valid and
binding
obligation of Wampler-Longacre, and each instrument contemplated
by this
Agreement, when executed and delivered by Wampler-Longacre in
accordance
with the provisions hereof, will be a valid and binding
obligation of
Wampler-Longacre, in each case enforceable against
Wampler-Longacre in
accordance with its terms (except as such enforceability may be
limited by
applicable creditors' rights laws). Neither the execution and
delivery of
this Agreement nor the consummation of the transactions
contemplated hereby
will conflict with or result in any violation of the Certificate
of
Incorporation or Bylaws of Wampler-Longacre or constitute a
default in the
terms, conditions or provisions of
<PAGE>
any material obligation to which Wampler-Longacre is a party or
by which
Wampler-Longacre is bound, violate any judgment, order or award
of any
court, administrative agency or governmental body against or
binding upon
Wampler-Longacre or constitute a violation by Wampler-Longacre of
any law
or regulation of any jurisdiction as it relates to
Wampler-Longacre.
12. REPRESENTATIONS AND WARRANTIES OF WLR FOODS. WLR
Foods hereby
represents and warrants to Cuddy as follows:
12.1. Organization, Power and Authority. WLR Foods
is a
corporation duly organized and existing in good standing under
the laws of
the Commonwealth of Virginia. WLR Foods has all necessary
corporate power
and authority to enter into and be bound by the terms and
conditions of
this Agreement.
12.2. Due Authority; No Breach. The execution and
delivery by
WLR Foods under this Agreement, and the performance by WLR Foods
of the
transactions contemplated hereby, have been duly authorized by
all
necessary corporate action. Neither the execution and delivery
of this
Agreement nor the consummation of the transactions contemplated
hereby will
conflict with or result in any violation of the Certificate of
Incorporation or Bylaws of WLR Foods or constitute a default in
the terms,
conditions or provisions of any material obligation to which WLR
Foods is a
party or by which WLR Foods is bound, violate any judgment, order
or award
of any court, administrative agency or governmental body against
or binding
upon WLR Foods or constitute a violation by WLR Foods of any law
or
regulation of any jurisdiction as it relates to WLR Foods.
<PAGE>
12.3. Reports. WLR Foods has previously delivered to
Cuddy a
true and complete copy of its Annual Report on Form 10-K for the
fiscal
year ended July 3, 1993, Quarterly Reports on Form 10-Q for each
quarter
ending after July 3, 1993, and each communication sent by WLR
Foods to its
shareholders generally since such date. None of such documents
or
information contains an untrue statement of a material fact or
omits a
material fact necessary in order to make the statements made
therein, in
light of the circumstances under which they were made, not
misleading.
Until the Closing, WLR Foods will deliver to Cuddy copies of any
Annual
Reports on Form 10-K. or Quarterly Reports on Form 10-Q filed,
all
communications sent by WLR Foods to its shareholders generally,
and all
press releases and other public statements relating to the
transactions
contemplated by this Agreement between the date hereof and the
Closing
Date.
12.4. Liabilities. WLR Foods has no accrued or
absolute
liabilities, debts or obligations, and to the best of its
knowledge, no
contingent liabilities, debts or obligations, which will,
subsequent to the
Closing Date in any manner materially adversely affect its
business. WLR
Foods has no knowledge of any breach or default, or claimed or
alleged
breach or default by WLR Foods under any material agreement to
which it is
a party, and to the knowledge of WLR Foods, no event has occurred
which,
with the passage of time or the giving of notice or both, would
constitute
a breach or default by WLR Foods.
12.5. Litigation. Except for pending or threatened
litigation
related to WLR Foods' efforts to resist a takeover attempt by
Tyson Foods,
Inc., which
<PAGE>
litigation has been disclosed to Cuddy, there is no pending (or,
to the
best of WLR Foods' knowledge, threatened) judicial,
administrative or
arbitral action, suit or proceeding against WLR Foods which, if
adversely
determined, could reasonably be expected to have a material
adverse affect
on WLR Foods' business or which questions the validity of this
Agreement or
any action taken or to be taken in connection herewith. WLR Foods
is not
subject to any material order or injunction of any court or
governmental
agency or body involving the its business. WLR Foods is not
conducting or
carrying on business or affairs in violation of any federal,
state, or
local law or regulation, or court or administrative order, which
violation
could reasonably be expected to affect, materially and adversely,
its
business.
12.6. WLR Stock. The WLR Foods' stock to be issued
on behalf
of Cuddy as part of the purchase price has been duly authorized
and, when
issued in accordance with the terms of this Agreement, will be
validly
issued, fully paid and non-assessable in compliance with all
applicable
securities and corporate legislation.
13. STOCK RESTRICTIONS.
13.1. NonRegistration. Cuddy acknowledges that the
WLR Foods
common stock to be issued to it pursuant to Section 2 will not be
registered under the Securities Act of 1933 or the securities
laws of any
state, but will be issued pursuant to exemptions from the
registration
provisions of the Securities Act of 1933 and applicable state
securities
laws. Accordingly, the certificates representing such stock will
bear the
following restrictive legend:
<PAGE>
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR
THE SECURITIES LAWS OF ANY STATE AND HAVE BEEN ISSUED
PURSUANT TO EXEMPTION FROM FEDERAL AND STATE
REGISTRATION
LAWS. THESE SHARES MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE LAWS,
PURSUANT TO AN EXEMPTION THEREFROM IN ACCORDANCE WITH
THE
PROVISIONS OF RULE 144.
13.2. Investment Intent. Cuddy acknowledges that the
WLR Foods
common stock to be issued to it under Section 2 is being acquired
solely
for its own account, as principal, for investment and not for the
interest
of any other entity and not with a view to, or in connection
with, any
resale or distribution of such stock.
13.3. Registration Rights. On the Closing Date, WLR
Foods and
Cuddy will enter into a Registration Rights Agreement in
substantially the
same form as Exhibit 13.3 (Registration Rights Agreement)
attached hereto.
13.4. Voting Trust. On the Closing Date, WLR Foods
and Cuddy
will enter into a Voting Trust Agreement in substantially the
same form as
Exhibit 13.4 (Voting Trust Agreement) attached hereto. Because
the Voting
Trust Agreement restricts the voting of the shares of WLR Foods
common
stock issued pursuant to Section 2 hereof and the transfer of
voting trust
certificates representing such stock, in addition to the
restrictive legend
set forth in Section 13.1 hereof, the certificates of such stock
will bear
the following restrictive legend:
<PAGE>
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT
TO A VOTING TRUST AGREEMENT PREPARED IN ACCORDANCE
WITH
VIRGINIA CODE SECTION 13.1-670, A COPY OF WHICH IS ON
FILE AT
THE OFFICES OF THE CORPORATION.
14. COSTS. Cuddy, Wampler-Longacre and WLR Foods shall
each bear
their own direct and indirect expenses incurred in connection
with the
negotiation (including any brokerage fees) and preparation of
this
Agreement and the consummation and performance of the
transactions
contemplated by. However, the following specific allocation of
costs are
hereby agreed to:
14.1. Environmental Site Assessment. The cost of
obtaining
environmental site assessments after the date hereof shall be for
the
account of Wampler-Longacre.
14.2. Tax Prorations. All utilities, personal
property taxes,
gross receipts or business license taxes and real estate taxes
relating to
the Business shall be prorated as of the Closing Date.
14.3. Sales Tax. Cuddy shall be solely responsible
for and
shall undertake to discharge all state and local sales and use
taxes with
respect to the transfer of the Assets pursuant to this Agreement;
provided,
however, that Wampler-Longacre shall pay all motor vehicle
transfer taxes
(but not sales taxes) with respect to the transfer of the Assets.
14.4. Recordation and Title Costs. Cuddy shall pay
the
grantor's cost of preparing and recording the deeds including the
cost of
revenue stamps for
<PAGE>
recordation of the deeds to the Real Estate and Wampler-Longacre
shall pay
for the cost of title insurance.
14.5. Other. Wampler-Longacre shall be responsible
for payment
of the application fee for the Hart-Scott-Rodino filing.
15. POST CLOSING ACTIONS.
15.1. Additional Instruments. As soon as practicable
after
Closing, the parties hereto shall cooperate in exchanging any
instruments
that both parties may need after the closing to complete required
transactions.
15.2. Charlotte Processing Facility. Cuddy shall use
all
reasonable efforts, if requested by Wampler-Longacre, to assist
Wampler-
Longacre in obtaining (i) an extension of the existing Sublease
for ConAgra
of the Charlotte Facility or (ii) a new lease from the owner of
the
Charlotte Facility.
15.3. Cuddy/Modern Storage. If not accomplished
prior to the
Closing Date, Cuddy shall continue to use all reasonable efforts
and work
with Wampler-Longacre to obtain Modern Storage Company's
agreement to (i)
accept Wampler-Longacre as a partner in Cuddy/Modern Storage, a
North
Carolina general partnership and (ii) continue the partnership
despite
Cuddy's sale of its partnership interest to Wampler-Longacre.
15.4. WLR Foods' Board of Directors. WLR Foods shall
appoint a
Cuddy representative, agreeable to all parties, to the Board of
WLR Foods,
which director shall serve until the next annual meeting of
shareholders
and shall be
<PAGE>
recommended by the Board for election by such shareholders at the
annual
meeting along with the Class A slate directors.
15.5. Access to Records. Upon reasonable request,
Wampler
shall provide Cuddy with copies or access to any and all Business
Records.
15.6. Customer Introductions. Cuddy management shall
introduce
Wampler representatives to customers of the Business as
reasonably
requested by Wampler.
15.7 Second Closing Date. On the Second Closing
Date the
payments described in Section 2.2(c) shall occur, and WLR Foods
shall
deliver an opinion of counsel substantially similar to Exhibit
6.3, subject
only to the conditions described in Section 7.4.
16. INDEMNIFICATION. For a period ending on the second
anniversary
of the Closing Date, the parties hereto indemnify each other as
follows:
16.1. By Cuddy and Cuddy International.
(a) Cuddy and Cuddy International hereby
agree to
indemnify, defend and hold Wampler and their affiliates and such
entities'
officers, directors, agents, employees and advisors harmless
from and
against any and all claims, losses, damages or expenses
(including, but not
limited to, reasonable attorney fees) which Wampler incurs by
reason of, or
in relation to, (i) the inaccuracy of any representation or
warranty made
by Cuddy or Cuddy International herein or the omission of any
such
representation or warranty of any statement of fact necessary to
make such
representation or warranty not misleading; (ii) any failure by
Cuddy or
<PAGE>
Cuddy International to perform any obligation or duty required to
be
performed by it under any provision of this Agreement, including
without
limitation Section 5.8; and (iii) any and all liabilities and
obligations
of Cuddy not specifically assumed by Wampler-Longacre pursuant to
this
Agreement (the Losses). For purposes of this Section only,
Losses shall
include losses described in this paragraph which would not be
deemed
material as that term is used in many of the representations,
covenants and
warranties contained herein. Cuddy and Cuddy International shall
have no
liability under this Section 15.1 unless and until the aggregate
of all
Losses exceeds Two Hundred Fifty Thousand Dollars ($250,000) (the
Minimum
Amount) in which event Cuddy shall be liable only for Losses in
excess of
the Minimum Amount.
(b) Wampler-Longacre or WLR Foods shall give
Cuddy and
Cuddy International prompt notice (within 60 days) of any claim
by any
third party which claim relates to a matter subject to
indemnification
hereunder by Cuddy and Cuddy International, and Cuddy and Cuddy
International shall have the opportunity to settle such claim and
to
control the defense thereof in any suit, action or proceeding
arising
therefrom. Cuddy and Cuddy International may employ counsel at
their
expense in connection with any such settlement or defense and
shall permit
Wampler-Longacre or WLR Foods to participate in any such defense
at
Wampler-Longacre's or WLR Foods' own expense. Should Cuddy or
Cuddy
International fail to undertake such defense or fail diligently
to
prosecute the same, Wampler-Longacre or WLR Foods may undertake
and assume
control of such defense, at Cuddy's and Cuddy International's
expense.
<PAGE>
16.2. By Wampler-Longacre and WLR Foods.
(a) Wampler-Longacre and WLR Foods, jointly
and
severally, hereby agree to indemnify, defend and hold Cuddy and
its
affiliates and such entities' officers, directors, agents,
employees and
advisors harmless from and against any and all claims, losses,
damages or
expenses (including, but not limited to, reasonable attorney
fees) which
Cuddy incur by reason of, or in relation to, (i) the inaccuracy
of any
representation or warranty made by Wampler-Longacre or WLR Foods
herein or
the omission of any representation or warranty of any statement
of fact
necessary to make such representation or warranty not misleading;
(ii) any
failure by Wampler-Longacre or WLR Foods to perform any
obligation or duty
required to be performed by it under any provision of this
Agreement; and
(iii) any of the Assumed Liabilities.
(b) Cuddy shall give Wampler-Longacre and WLR
Foods
prompt notice (within 60 days) of any claim by any third party
which claim
relates to a matter subject to indemnification hereunder by
Wampler-
Longacre and WLR Foods, and Wampler-Longacre and WLR Foods shall
have the
opportunity to settle such claim and to control the defense
thereof in any
suit, action or proceeding arising therefrom. Wampler-Longacre
and WLR
Foods may employ counsel at their expense in connection with any
such
settlement or defense and shall permit Cuddy to participate in
any such
defense at Cuddy's own expense. Should Wampler-Longacre and WLR
Foods fail
to undertake such defense or fail diligently to prosecute the
<PAGE>
same, Cuddy may undertake and assume control of such defense, at
Wampler-
Longacre's and WLR Foods' expense.
17. TERMINATION.
17.1. Termination. Anything herein or elsewhere to
the
contrary notwithstanding, except for the provision set forth in
Sections 14
and 17.3 of this Agreement, this Agreement may be terminated and
the
transactions contemplated hereby abandoned at any time prior to
the Closing
Date:
(a) By mutual consent of the respective
boards of
directors of Cuddy, Cuddy International, Wampler-Longacre and WLR
Foods;
(b) By Cuddy, if any of the conditions set
forth in
Sections 6 or 7 shall have become incapable of fulfillment and
shall not
have been waived by Cuddy;
(c) By Wampler-Longacre, if any of the
conditions set
forth in Sections 5 or 7 shall have become incapable of
fulfillment and
shall not have been waived by Wampler-Longacre; or
(d) By any party if the Closing has not
occurred by
November 1, 1994; provided, however, that no party may terminate
this
Agreement pursuant to this subsection (d) if such party's actions
or
failure to act has caused the nonoccurrence of the Closing.
17.2. Survival. Except as otherwise specifically
provided
herein, all representations, warranties, covenants and agreements
contained
in this Agreement by any party shall survive until two (2) years
after the
Closing Date (the Survival Date)
<PAGE>
at which time they shall lapse. Notwithstanding the provisions
of the
preceding sentence, any representation or warranty in respect of
which
indemnification may be sought under this Agreement shall survive
the
Survival Date if written notice, given in good faith, of the
specific
breach thereof is given to the indemnifying party prior to the
Survival
Date, whether or not liability has actually been sustained. No
representation or warranty shall survive the Closing to the
extent such
representation or warranty shall have been breached at or before
the
Closing Date if the party to which the representation or warranty
was made
shall have actual knowledge, as demonstrated by a preponderance
of the
evidence, of such breach or of all the facts and circumstances
relating
thereto on or before the Closing Date.
17.3. Return of Records. If the Agreement is
terminated other
than under Paragraph 17.1(c) as a result of a failure of a
condition set
out in Section 5 only, Wampler shall promptly return to Cuddy all
documents
and records of Cuddy and copies thereof in Wampler's possession
and destroy
all working papers and records relating to Cuddy which Wampler
has prepared
in contemplation of this Agreement and the transactions referred
to herein.
Wampler shall not thereafter use any confidential or proprietary
information relating to Cuddy and not in the public domain.
18. MISCELLANEOUS.
18.1. Notices. Any notice or other communication
required or
permitted hereunder shall be in writing and shall be telecopied
or
delivered against receipt to the party to whom it is to be given
at the
following address (or such other
<PAGE>
address as the party shall have furnished in writing in
accordance with the
provisions of this Section):
(a) If to Cuddy or Cuddy International, at:
Cuddy International Corporation
465 Richmond Street, Suite 600
London, Ontario Canada N6A 5P4
Attn: Peter A. W. Green
Fax No.: (519) 679-9355
with a copy to:
Blake, Cassels & Graydon
Suite 2800, P. O. Box 25
Commerce Court West
Toronto, Canada M5L 1A9
Attn: J. Rob Collins
Fax No.: (416) 863-2174
(b) If to Wampler-Longacre or WLR Foods, at:
WLR Foods, Inc.
P.O. Box 7000
Broadway, VA 22815
Attn: James L. Keeler
Fax No.: (703) 896-0498
with a copy to:
Wharton, Aldhizer & Weaver
100 S. Mason Street
Harrisonburg, Virginia 22801
Attn: John W. Flora, Esquire
Fax No.: (703) 434-5502
Any notice or other communication given by telecopy shall be
deemed given
on the first business day of the recipient after the date of the
telecopy,
except for a notice changing a party's address which shall be
deemed given
at the time of receipt thereof.
<PAGE>
Inadvertent failure to deliver a copy to counsel as contemplated
above
shall not invalidate giving of a notice.
18.2. Entire Agreement. This Agreement (including
the exhibits
annexed hereto or referred to herein) and the collateral
agreements
executed in connection with the consummation of the transactions
contemplated hereby contain the entire agreement between the
parties with
respect to the transfer of the Assets to Wampler-Longacre and the
assumption by Wampler-Longacre of the Assumed Liabilities and
supersedes
all prior agreements, written or oral, with respect thereto.
18.3. Waivers and Amendment. This Agreement may be
amended and
the terms hereof may be waived only by a written instrument
signed by the
parties or, in the case of a waiver, by the party waiving
compliance. No
delay on the part of either party in exercising any right, power
or
privilege hereunder shall operate as a waiver thereof, nor shall
any waiver
on the part of either party of any such right, power or
privilege, or any
single or partial exercise of any such right, power or privilege,
preclude
any further exercise thereof or the exercise of any other such
right, power
or privilege.
18.4. Governing Law, Venue. This Agreement shall be
governed
and construed in accordance with the laws of the Commonwealth of
Virginia
applicable to agreements made and to be performed entirely within
the
Commonwealth. The Circuit Court of the County of Rockingham,
Virginia or
the United States District Court for the Western District of
Virginia,
Harrisonburg Division, as appropriate, shall have exclusive
jurisdiction
and venue over any claims or cause of action
<PAGE>
concerning this Agreement, except that any claim asserted against
Cuddy
International shall be pursued only in Ontario, Canada courts.
18.5. Binding Effect; No Assignment. This Agreement
shall be
binding upon and inure to the benefit of the parties and their
respective
successors and legal representatives. This Agreement is not
assignable
without the prior written consent of the non-assigning party.
18.6. Counterparts. This Agreement may be executed
by the
parties hereto in separate counterparts, each of which when so
executed and
delivered shall be an original, but all such counterparts shall
together
constitute one and the same instrument. Each counterpart may
consist of a
number of copies hereof each signed by less than all, but
together signed
by all, of the parties hereto.
18.7. Specific Performance. The parties hereto agree
that
irreparable damage would occur in the event any of the provisions
of this
Agreement were not performed in accordance with the terms hereof
and that
the parties shall be entitled to specific performance of the
terms hereof,
in addition to any other remedy at law or equity.
18.8. Severability of Provisions. If any provision
or any
portion of any provision of this Agreement or the application of
any such
provision or any portion thereof to any person or circumstance,
shall be
held invalid or unenforceable, the remaining portion of such
provision and
the remaining provisions or portion of such provisions as is held
invalid
or unenforceable to persons or circumstances, other
<PAGE>
than those as to which it is held invalid or unenforceable, shall
not be
affected thereby.
18.9. Captions. All section titles or captions
contained in
this Agreement or in any exhibit annexed hereto or referred to
herein, and
the table of contents to this Agreement, are for convenience
only, shall
not be deemed a part of this Agreement and shall not affect the
meaning or
interpretation of this Agreement. All references herein to
Sections shall
be deemed references to such parts of this Agreement, unless the
context
shall otherwise require.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK.]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Asset
Purchase
Agreement to be executed by their respective officers hereunto
duly
authorized as of the day and year first above written.
CUDDY FARMS, INC., a North
Carolina
corporation
By:________________________________________
Its__________________
CUDDY INTERNATIONAL CORPORATION,
an
Ontario corporation
By:_________________________________________
Its __________________
WAMPLER-LONGACRE, INC., a
Virginia
corporation
By:________________________________________
Its President
WLR FOODS, INC., a Virginia
corporation
By_________________________________________
Its President
17606
<PAGE>
Exhibit 1.3
NON-COMPETITION AND NAME USE AGREEMENT
THIS NONCOMPETITION AND NAME USE AGREEMENT is made and
entered into
this [Closing Date], by and among WAMPLER-LONGACRE, INC., a
Virginia
corporation (Wampler-Longacre) and CUDDY FARMS, INC., a North
Carolina
corporation (Cuddy), CUDDY INTERNATIONAL CORPORATION, a
corporation
incorporated under the laws of Ontario, A.M.C. Family Holdings,
Ltd., a
corporation incorporated under the laws of Ontario, and A.M.
Cuddy
(collectively "Cuddy Group").
RECITALS
A. Cuddy has heretofore operated two divisions. The
farm division
is a major supplier of turkey eggs and poults with facilities in
North
Carolina, South Carolina, Iowa, Missouri, Ohio, Virginia and
Minnesota (the
Poult Business). The food division is an integrated turkey
processor with
three turkey processing facilities, a feedmill, growout
operations, and an
interest in a cold storage distribution center, all located in
North
Carolina (the Business).
B. Wampler-Longacre has today purchased substantially
all of the
Business.
C. Wampler-Longacre desires to pay Cuddy, on behalf of
the Cuddy
Group, a certain sum to protect itself and its affiliates from
competition
and control contests by the
<PAGE>
Cuddy Group and for certain rights, described herein, to the use
of the
"Cuddy" name.
NOW, THEREFORE, in consideration of the premises and the
mutual
covenants and agreements contained herein, and for other good and
valuable
consideration the receipt and sufficiency thereof is hereby
acknowledged,
the parties represent and agree as follows:
1. Covenant Not To Compete. The Cuddy Group
jointly and
severally agrees that it will not engage in, directly or
indirectly, either
themselves or for any other person, partnership, corporation,
company or
entity, or participate (as defined below) in any enterprise
involved in the
businesses of poultry production for processing, further
processing or
marketing of processed poultry products (specifically excluded is
poultry
production of eggs and poults and the marketing of such products)
(the
Protected Business), in the geographical area in the continental
United
States in which Wampler-Longacre or its affiliates currently
conducts its
business, including without limitation, Virginia, West Virginia,
North
Carolina and Pennsylvania, for a period of four (4) years from
the date
hereof. As used herein, the term "participate" means lending
one's name
to, acting as consultant or advisor to, or acquiring any direct
or indirect
interest in any enterprise, whether as stockholder, partner,
officer,
director, employee or otherwise (other than by ownership of
<PAGE>
less than two percent of the stock of a publicly-held corporation
and
ownership in WLR Foods, Inc.). The Cuddy Group agrees that this
covenant
is reasonable in its scope, geographical area and duration.
However, Cuddy
International Corporation and its affiliates will continue to be
permitted
to provide poultry products for distribution in the United
States, but only
to McDonalds, Delta Daily Foods and for distribution under three
private
labels, namely President Choice Products, Master Choice Products
and
Sensational Brand Products.
2. Covenant of No Contest. The Cuddy Group agrees that
during the
period that common stock of WLR Foods, Inc. acquired today by
Cuddy in
exchange for the Business is subject to voting and transfer
restrictions as
set forth in Section 13.4 of the Asset Purchase Agreement dated
the date
hereof, the Cuddy Group, jointly and severally, agrees none of
them, nor
any of their affiliates will, directly or indirectly, without in
each
instance the prior written consent of WLR Foods, Inc., parent
corporation
of Wampler-Longacre, expressed in a resolution duly adopted by
the Board of
Directors of WLR Foods, Inc.: (a) solicit any proxies, under
any
circumstances, for any matter whatsoever with respect to any
class of
capital stock or other securities of WLR Foods, Inc. which is
then entitled
to vote in the election of directors or on any other matter
(Voting
Securities), or become a "participant" in any "election
<PAGE>
contest" relating to the election of directors of WLR Foods Inc.
(as such
terms are used in Rule 14a-11 of Regulations 14A under the
Securities
Exchange Act of 1934, as amended, or to seek to advise or
influence any
person with respect to the voting of any Voting Securities of WLR
Foods,
Inc. on any matter whatsoever; (b) act together with any other
person for
the purpose of acquiring, holding, voting or disposing of any
Voting
Securities of WLR Foods, Inc. or any options or other rights to
acquire any
such securities; (c) purchase or otherwise acquire, or offer,
propose or
agree to purchase or otherwise acquire, or advise, encourage or
assist in
the acquisition of, any Voting Securities of WLR Foods, Inc. or
options or
rights to acquire any such securities; or (d) act alone or
together with
any person to acquire, or propose a business combination with,
WLR Foods,
Inc.
3. Use of "Cuddy" Name. Cuddy hereby grants
Wampler-Longacre a
five (5) year exclusive right and license to use the name or mark
"Cuddy,"
alone or in combination with other names or marks, within the
continental
United States in connection solely with the Protected Business.
This five
(5)-year term shall terminate on the fifth anniversary of this
Agreement
but shall thereafter be renewable upon such terms and conditions
as
Wampler-Longacre and Cuddy may mutually agree. In addition,
Cuddy agrees
to allow Wampler-Longacre to license perpetually, or acquire a
trademark
for
<PAGE>
"Masterpiece" and "Heritage" in the continental United States.
4. Cuddy Group Rights. Except as set out in Paragraph
3, the
Cuddy Group shall retain all rights to the "Cuddy" name.
5. Other Users. Cuddy warrants and represents that it
has
authorized no other person or entity to use the name "Cuddy" or
any similar
name alone or in conjunction with any other word or symbol for
any purpose
in the continental United States and that, to its knowledge, no
other
person or entity is using in the continental United States,
without
authorization, the name "Cuddy" or any similar name for any
purpose other
than the corporate name Cuddy Farms, Inc. as used in conjunction
with the
Poult Business.
6. Payment. In consideration hereof Wampler-Longacre
shall pay
Cuddy, by certified or bank cashier's check or other current
funds
acceptable to Cuddy, the sum of Five Hundred Thousand Dollars
($500,000)
payable upon execution hereof. The amount of payment, if any, to
be made
to D. Bruce Cuddy pursuant to a substantially similar, but
separate,
agreement shall reduce this sum.
7. Remedies. The parties acknowledge that a breach of
this
Agreement by any party will result in substantial and irreparable
injury to
the other party. If any of the provisions herein are violated,
in whole or
in part, Wampler-Longacre shall be entitled, upon application to
any
<PAGE>
court of proper jurisdiction as herein agreed, to restrain and
enjoin the
Cuddy Group, or any one of them, from such violation, and to
recover cash
and reasonable attorneys' fees in connection with such action,
without
prejudice to any other remedies Wampler-Longacre may have at law
or in
equity.
8. Reformation and Severability. In the event that any
provision
herein should ever be deemed to exceed the time, geographic,
occupational
or use limitations permitted by law, the parties agree that such
provisions
shall be and are reformed to the maximum time, geographic,
occupation and
use limitations permitted by applicable law. Such determination
shall not
affect the remaining provisions of this Agreement, all of which
shall
remain in full force and effect.
9. Binding Agreement. All of the terms and provisions
of this
Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, each of the parties hereto and their respective
legal
representatives, successors and assigns.
10. Governing Law, Venue. This Agreement shall be
governed and
construed in accordance with the laws of the Commonwealth of
Virginia
applicable to agreements made and to be performed entirely within
the
Commonwealth. The Circuit Court of the County of Rockingham,
Virginia or
the United States District Court for the Western District of
<PAGE>
Virginia, Harrisonburg Division, as appropriate, shall have
exclusive
jurisdiction and venue over any claims or causes of action
concerning this
Agreement, except that any claim asserted against Cuddy
International
Corporation, A.M.C. Family Holdings, Ltd. and A.M. Cuddy shall be
pursued
only in Ontario, Canada courts.
11. Waiver. A waiver by any party of a breach of any
provision of
this Agreement shall not operate as, nor be construed as, a
waiver of any
subsequent breach thereof.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of
the date first above written.
WAMPLER-LONGACRE, INC.
(SEAL)
By:__________________________________
Its:___________________________________
Attest: _______________________________
CUDDY FARMS, INC.
By:___________________________________
Its:___________________________________
CUDDY INTERNATIONAL
CORPORATION
By:____________________________________
Its:___________________________________
<PAGE>
A.M.C. FAMILY HOLDINGS,
LTD.
By:____________________________________
Its:___________________________________
______________________________________
A. M. CUDDY
STATE OF VIRGINIA
CITY/COUNTY OF _____________________________, to-wit:
The foregoing instrument was acknowledged before me in the
jurisdiction aforesaid this _____ day of _____________________,
1994, by
____________________________, ________________ of
Wampler-Longacre, Inc.
My commission expires: _______________.
______________________________________
Notary
Public
STATE OF VIRGINIA
CITY/COUNTY OF _____________________________, to-wit:
The foregoing instrument was acknowledged before me in the
jurisdiction aforesaid this _____ day of _____________________,
1994, by
<PAGE>
____________________________, ________________ of Cuddy Farms,
Inc.
My commission expires: _________________.
______________________________________
Notary
Public
JWF/mc/17939
<PAGE>
EXHIBIT 13.4
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT, dated [Closing Date], is made
by and
among WLR FOODS, INC., a Virginia corporation (WLR Foods), CUDDY
FARMS,
INC., a North Carolina corporation, its successors and assigns
(Cuddy), and
[Independent Corporate Trustee], Trustee, and its successors
(Trustee) who
agree as follows.
RECITALS:
A. As of the date hereof ____ shares of WLR Foods common
stock (the Shares) have been issued to the Trustee hereunder, on
behalf of
Cuddy in consideration for the transfer of certain assets
pursuant to the
terms of an Asset Purchase Agreement between Cuddy, WLR Foods and
others
dated July 27, 1994. The parties anticipate that additional
shares of WLR
Foods common stock may be issued to the Trustee, on behalf of
Cuddy,
following certain post-closing adjustments which, when issued,
shall also
be considered "Shares" hereunder.
B. A condition precedent to WLR Foods' obligation to
issue the
Shares was Cuddy's execution of this Agreement in order for the
Cuddy
acquisition not to compromise the continuity and stability of WLR
Foods'
long term business strategy and policies as effectively confirmed
by a
recent vote of shareholders of WLR Foods and as implemented and
managed by
WLR Foods' Board of Directors and management.
<PAGE>
C. The Trustee has consented to act under this Agreement
for the
purposes hereunder.
NOW, THEREFORE, in consideration of the premises and other
good and
valuable consideration, receipt of which is hereby acknowledged,
the
parties agree as follows:
1. Transfer of Stock to Trustee. Concurrently with the
closing of
the above-referenced Asset Purchase Agreement, the Shares were
issued to
Trustee, on behalf of Cuddy, who shall hold the Shares subject to
the terms
of this Agreement and shall issue and deliver to Cuddy voting
trust
certificates for the Shares.
2. Voting Trust Certificates. The voting trust
certificate shall
be in substantially the same form as set forth on Exhibit A
attached
hereto.
3. Transfer of Certificates. Unless otherwise agreed to
in
writing by WLR Foods, the voting trust certificates are not
transferable
except that (a) the holder thereof may pledge, mortgage or
otherwise
encumber the certificates and (b) the holder thereof may transfer
the
certificates to Cuddy International Corporation or a wholly-owned
subsidiary of Cuddy International Corporation; provided, however,
that the
person or persons in whose favor such certificates are
transferred shall be
bound by all of the provisions of this Agreement as though that
person were
the holder and shall exercise the rights of the voting trust
certificates
only in accordance with this Agreement. In the event of any
<PAGE>
permitted transfer, the certificates shall be transferable at the
Trustee's
principal office in [place] (and at such other office as the
Trustee may
designate by an instrument signed by it and sent by telecopy to
the
registered holders of voting trust certificates), on the books of
the
Trustee, by the registered owner thereof, either in person or by
attorney
thereto duly authorized, upon surrender thereof, according to the
rules
established for that purpose by the Trustee.
4. Term of Agreement. This Agreement shall terminate
upon the
earlier of:
(a) The fourth anniversary hereof.
(b) The date on which a business acquisition by WLR
Foods
occurs in which (i) in excess of five percent (5%) of its then
outstanding
shares of common stock is issued without voting and transfer
restrictions
similar to those set forth herein, and (ii) Cuddy's stock
ownership in WLR
Foods after such business acquisition is less than five percent
(5%) of the
total outstanding shares of common stock of WLR Foods.
(c) The date on which a "Change of Control" occurs
in WLR
Foods. For the purpose of this Agreement, a "Change in Control"
shall mean
the acquisition by any individual, entity or group (within the
meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as
amended (the "Exchange Act")) of beneficial ownership (within the
meaning
of Rule 13d-3 promulgated under the Exchange Act) of
<PAGE>
more than thirty percent (30%) of either the then outstanding
shares of
common stock of WLR Foods or the combined voting power of the
then
outstanding voting securities of WLR Foods entitled to vote
generally in
the election of directors.
5. Termination Procedure.
(a) Immediately upon the termination of this
Agreement as
provided in Section 4 above, the voting trust certificates shall
cease to
have any effect, and their holders shall have no further rights
under this
Voting Trust Agreement other than to receive certificates for
shares of the
WLR Foods' stock or other property distributable under the terms
hereof and
upon the surrender of such voting trust certificates.
(b) Immediately upon surrender of the voting trust
certificates at the Trustee's offices, the Trustee shall deliver
to the
registered holders of all voting trust certificates certificates
for the
number of shares of the WLR Foods' common stock represented
thereby.
(c) If any voting trust certificate has not been
surrendered
within thirty (30) days after the termination of this Agreement,
the
Trustee may deposit with WLR Foods stock certificates
representing the
number of shares of common stock represented by such voting trust
certificates then outstanding, with authority in writing to WLR
Foods to
deliver such stock certificates in exchange for voting trust
certificates
representing a like number of shares of the
<PAGE>
<PAGE> 5
capital stock of WLR Foods. Upon such deposit, all further
liability of
the Trustee for the delivery of such stock certificates and the
delivery or
payment of dividends upon surrender of the voting trust
certificates shall
cease, and the Trustee shall not be required to take any further
action
hereunder.
6. Dividends.
(a) Prior to the termination of this Agreement, the
holder of
each voting trust certificate shall be entitled to receive
payments equal
to the cash dividends, if any, received by the Trustee upon a
like number
and class of shares of WLR Foods' common stock as is called for
by each
voting trust certificate. If any dividend in respect of the
stock
deposited with the Trustee is paid, in whole or in part, in WLR
Foods'
common stock, the Trustee shall hold, subject to the terms of
this
Agreement, the certificates for stock which are received by it on
account
of such dividend. In the event of a dividend payable in cash or
stock at
the shareholder's election, the Trustee shall make such election
upon the
direction of the registered holder of the voting trust
certificate, or, in
the absence of such election, shall elect a cash dividend
payment. The
holder of each voting trust certificate representing stock on
which such
stock dividend has been paid shall be entitled to receive a
voting trust
certificate issued under this Agreement for the number of shares
and class
of stock received as such
<PAGE>
<PAGE> 6
dividend with respect to the shares represented by such voting
trust
certificate. Holders entitled to receive the dividends described
above
shall be those registered as such on the Trustee's transfer books
at the
close of business on the day fixed by WLR Foods for the taking of
a record
to determine those holders of its stock entitled to receive such
dividends.
(b) If any dividend in respect of the stock
deposited with
the Trustee is paid other than in cash or in common stock, then
the Trustee
shall distribute the same among the holders of voting trust
certificates
registered as such on the Trustee's transfer books at the close
of business
on the day fixed by WLR Foods for the taking of a record to
determine those
holders of its stock entitled to receive such dividends.
(c) In lieu of receiving cash dividends upon the
common stock
of WLR Foods and paying the same to the holders of voting trust
certificates pursuant to the provisions of this Agreement, the
Trustee may
instruct WLR Foods in writing to pay such dividends to the
holders of the
voting trust certificates. Upon receipt of such written
instructions, WLR
Foods shall pay such dividends directly to the holders of the
voting trust
certificates. Upon such instructions being given by the Trustee,
all
liability of the Trustee with respect to such dividends shall
cease. The
Trustee may at any time revoke such instructions and by written
notice
<PAGE>
<PAGE> 7
to WLR Foods direct it to make dividend payments to the Trustee.
7. Rights of Trustee.
(a) Until the actual delivery to the holders of
voting trust
certificates issued hereunder of stock certificates in exchange
therefor,
and until the surrender of the voting trust certificates for
cancellation,
the Trustee shall have the right, subject to the provisions
hereof,
including, without limitation, paragraph (b) below, to exercise,
in person
or by his nominees or proxies, all stockholder voting rights and
powers in
respect of all stock deposited hereunder, and to take part in or
consent to
any corporate or stockholder action of any kind whatsoever. The
right to
vote shall include the right to vote for the election of
directors, and in
favor of or against any resolution or proposed action of any
character
whatsoever, which may be presented at any meeting or require the
consent of
the WLR Foods' stockholders. Without limiting such general
right, it is
understood that such action or proceeding may include, upon terms
satisfactory to the Trustee or to his nominees or proxies thereto
appointed
by him, mortgaging, creating a security interest in, and pledging
of all or
any part of the WLR Foods' property, the lease or sale of all or
any part
of its property, for cash, securities, or other property, and the
dissolution of WLR Foods, or its consolidation, merger,
reorganization, or
recapitalization.
<PAGE>
<PAGE> 8
(b) In voting the stock held by him hereunder
either in
person or by his nominees or proxies, the Trustee shall vote in
accordance
with the recommendation of the WLR Foods' Board of Directors as
it exists
at the time of the vote of WLR Foods' shareholders, or if there
is no such
recommendation, as directed by the registered voting trust
certificate
holder.
8. Trustees.
(a) The Trustee (and any successor Trustee) may at
any time
resign by mailing to the registered holders of voting trust
certificates a
written resignation, to take effect ten (10) days thereafter or
upon its
prior acceptance. In the event of resignation, a successor
Trustee shall
be mutually acceptable to, and designated by, WLR Foods and
Cuddy, and, in
the absence of an agreement between the parties, designated by an
independent third party selected by them. No person or entity
shall be
named as successor Trustee who is restricted from voting WLR
Foods common
stock by any other law, agreement or regulatory or judicial
order.
(b) The rights, powers, and privileges of the
Trustee named
hereunder shall be possessed by the successor Trustees, with the
same
effect as though such successors had originally been parties to
this
Agreement. The word "Trustee," as used in this Agreement, means
the
Trustee or any successor Trustees acting hereunder, and shall
include both
the single and the plural number.
9. Compensation and Reimbursement of
<PAGE>
<PAGE> 9
Trustee. The Trustee shall serve for an annual fee of
$____________ which
shall be paid by WLR Foods. The Trustee shall have the right to
incur and
pay such reasonable expenses and charges, to employ and pay such
agents,
attorneys, and counsel as it may deem necessary and proper to
effectuate
this Agreement. All such expenses or charges incurred by and due
to the
Trustee shall be reimbursed by WLR Foods.
10. Indemnification. WLR Foods shall indemnify and hold
harmless
each of Cuddy and the Trustee and their respective officers,
directors,
employees, shareholders, partners, agents, legal counsel and
accountants
(each an "Indemnitee" and together the "Indemnitees") to the
fullest extent
permitted by applicable law in effect on the date hereof or as
such laws
may from time to time be amended from and against any and all
losses,
claims, damages, liabilities and expenses (including attorneys'
fees and
expenses and any and all expenses whatsoever incurred in
investigating,
preparing or defending any action, suit, investigation or
proceeding), and
amounts paid in settlement (together, "Losses") incurred by an
Indemnitee
if such Indemnitee is a party or is threatened to be made a party
to any
threatened, pending or completed action, suit, investigation or
proceeding,
whether civil, criminal, administrative or investigation in
nature, arising
from, caused by or in connection with the negotiation, execution,
delivery
and performance of this
<PAGE>
<PAGE> 10
Agreement (including any other agreements entered into in
connection
herewith), other than as a result of the breach by the Indemnitee
of any
terms of this Agreement or such agreements.
11. Notice.
(a) Unless otherwise specifically provided herein,
any notice
to or communication with the holders of the voting trust
certificates
hereunder shall be deemed to be sufficiently given or made if
telecopied or
delivered against receipt to the party to whom it is to be given
at the
following address (or such other address as the party shall have
furnished
in writing in accordance with this Section):
(i) If to Cuddy or Cuddy International Corporation,
at
Cuddy International Corporation
465 Richmond Street, Suite 600
London, Ontario Canada N6A 5P4
Attn: President
Fax No.: (519) 679-9355
(ii) If to WLR Foods, at
WLR Foods, Inc.
P.O. Box 7000
Broadway, VA 22815
Attn: James L. Keeler
Fax No.: (703) 896-0498
(iii) If to the Trustee, at
___________________________
___________________________
___________________________
<PAGE>
<PAGE> 11
(b) All distributions of cash, securities, or other
property
hereunder by the Trustee to the holders of voting trust
certificates shall be
made, in the Trustee's discretion, by overnight delivery to the
addresses
set forth above.
12. Modifications and Non-Waiver. This Agreement may be
modified
only by a written instrument executed Cuddy, WLR Foods and the
Trustee;
provided, however, that the Trustee's consent shall not be
necessary to
modifications except as they expressly relate to its fees,
indemnification
and right to resign. No delay or failure by a party to exercise
any right
under this Agreement, and no partial or single exercise of that
right,
shall constitute a waiver of that or any other right, unless
otherwise
expressly provided herein.
13. Headings. Headings in this Agreement are for
convenience only
and shall not be used to interpret or construe its provisions.
14. Governing Law; Venue. This Agreement shall be
governed and
construed in accordance with the laws of the Commonwealth of
Virginia
applicable to agreements made and to be performed entirely within
the
Commonwealth. The Circuit Court of the County of Rockingham,
Virginia or
the United States District Court for the Western District of
Virginia,
Harrisonburg Division, as appropriate, shall have exclusive
jurisdiction
and venue over any claims or causes of action concerning this
Agreement.
<PAGE>
<PAGE> 12
15. Counterparts. This Agreement may be executed in two
or more
counterparts, each of which shall be deemed an original but all
of which
together shall constitute one and the same instrument.
16. Binding Effect. The provisions of this Agreement
shall be
binding upon and inure to the benefit of each of the parties and
their
respective legal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Voting Trust
Agreement to
be executed by their respective officers hereunto duly authorized
as of the
day and year first above written.
CUDDY FARMS, INC., a North
Carolina
corporation
By:__________________________________
Its President
WLR FOODS, INC., a Virginia
corporation
By:__________________________________
Its President
[INDEPENDENT CORPORATE
TRUSTEE]
By:__________________________________
Its ________________
17919
<PAGE>
<PAGE> 13
Exhibit A
No. __________________
Shares_____________________
WLR Foods, Inc.
a Virginia corporation
Voting Trust Certificate for Common Stock
This certifies that Cuddy Farms, Inc., or registered assigns, is
entitled
to all benefits arising from the deposit with the Trustee under
the Voting
Trust Agreement hereinafter mentioned of certificates for
_________ shares
of WLR Foods, Inc., a Virginia corporation (WLR Foods), as
provided in such
Voting Trust Agreement and subject to the terms thereof. The
registered
holder hereof, or assigns, is entitled to receive payment equal
to the
amount of cash dividends, if any, received by the Trustee upon
the number
of shares of common stock of WLR Foods in respect of which this
certificate
is issued. Dividends received by the Trustee in WLR Foods'
common stock
shall be payable in voting trust certificates, in form similar
hereto.
Until the Trustee has delivered the stock held under such Voting
Trust
Agreement to the holders of the trust certificates, or to WLR
Foods, as
specified in such Voting Trust Agreement, the Trustee shall
possess and be
entitled to exercise all rights and powers of an absolute owner
of such
stock, including the right to vote thereon for every purpose
according to
and as restricted by the terms of the Voting Trust Agreement, and
to
execute consents in respect thereof for every purpose, it being
expressly
stipulated that no voting right passes to the owner hereof, or
assigns,
under this certificate or any agreement, expressed or implied.
This certificate is issued, received, and held under, and the
rights of the
owner hereof are subject to, the terms of a Voting Trust
Agreement dated
[Closing Date] by and between WLR Foods, Cuddy Farms, Inc., its
successors
and assigns, and _________________, Trustee and its successors, a
copy of
which is on file with WLR Foods, Inc. The holder of this
certificate, by
acceptance hereof, assents and is bound to all the provisions of
the Voting
Trust Agreement.
In the event that the Trustee receives any dividend or
distribution other
than in cash or WLR Foods' common stock, the Trustee shall
distribute the
same to the registered holders of voting trust certificates
pursuant to the
provisions of the Voting Trust Agreement.
<PAGE>
<PAGE> 14
The Voting Trust Agreement shall continue in full force and
effect until
the earlier of [four years from Closing Date], a change of
control, and
certain other events, as provided in the Voting Trust Agreement.
Stock
certificates for the number of shares of common stock then
represented by
this certificate, or the net proceeds in cash or property of such
shares,
shall be due and deliverable hereunder upon the termination of
such Voting
Trust Agreement as provided therein.
Except as provided in the Voting Trust Agreement, this
certificate is not
transferable except that the holder hereof may pledge, mortgage
or
otherwise encumber the certificates; provided, however, that the
person or
persons in whose favor such certificates are pledged, mortgaged,
or
otherwise encumbered, shall, except as WLR Foods and they may
otherwise
agree, be bound by all of the provisions of the Voting Trust
Agreement as
though they were the holder and shall exercise the rights of this
certificate only in accordance therewith. In the event of any
transfer by
virtue of a pledge, mortgage or encumbrance, the certificates
shall be
transferable at the Trustee's principal office (set forth in the
Voting
Trust Agreement) on the books of the Trustee, by the registered
owner
thereof, either in person or by attorney thereto duly authorized,
upon
surrender thereof, according to the rules established for that
purpose by
the Trustee.
This certificate shall not be valid for any purpose until duly
signed by
the Trustee.
The word "Trustee" as used in this certificate means the Trustee
or the
successor trustee acting under such Voting Trust Agreement.
In witness whereof the Trustee has signed this certificate on
____________________, 1994.
_____________________________________
Trustee
(Form of Assignment):
For value received ________________________ hereby assigns the
within
certificate, and all rights and interests represented thereby, to
______________________ and appoints __________________ attorney
to transfer
this certificate on the books of the Trustee mentioned therein,
with full
power of substitution.
<PAGE>
<PAGE> 15
Dated: ____________________
__________________________________
________________________________(SEAL)
Witness
THIS VOTING TRUST CERTIFICATE MAY NOT BE TRANSFERRED
WITHOUT THE EXPRESS WRITTEN CONSENT OF WLR FOODS, INC.
<PAGE>
EXHIBIT C
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT AND RELEASE
This INDEMNIFICATION AGREEMENT AND RELEASE is made
and entered
into this 27th day of July, 1994 ("Agreement"), by and between
WLR FOODS,
INC., a Virginia corporation (including its successors, the
"Company"), and
CUDDY FARMS, INC., a North Carolina corporation ("Cuddy"):
WHEREAS, the Company desires to purchase certain of
the assets
of Cuddy pursuant to a Asset Purchase Agreement, to be dated as
of July 27,
1994, between the Company and Cuddy (the "Purchase Agreement");
and
WHEREAS, the Company is the subject of a hostile
takeover
attempt by Tyson Foods, Inc. (the "Takeover") and in connection
therewith
certain litigation between the Company and Tyson Foods, Inc. is
pending in
the United States District Court for the Western District of
Virginia,
Harrisonburg Division (Civil Action No. 94-0012(H)); and
WHEREAS, Cuddy is concerned that it might incur
significant
costs and expenses if it were made a party to the above mentioned
litigation or other litigation which has been or may subsequently
be
brought if Cuddy were to enter into the Purchase Agreement; and
WHEREAS, the Company, recognizing Cuddy's legitimate
business
concerns and possible exposure, desires to indemnify Cuddy to the
fullest
extent permitted by law as set forth herein;
<PAGE>
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and
the
covenants contained herein, the Company and Cuddy do hereby
covenant and
agree as follows:
Section 1. Indemnification. The Company shall
indemnify and
hold harmless each of Cuddy, Cuddy Foods, Inc., Cuddy
International
Incorporated, and their respective officers, directors,
employees,
shareholders, partners, agents, legal counsel and accountants
(each an
"Indemnitee" and together the "Indemnitees") to the fullest
extent
permitted by applicable law in effect on the date hereof or as
such laws
may from time to time be amended from and against any and all
losses,
claims, damages, liabilities and expenses (including attorneys'
fees and
expenses and any and all expenses whatsoever incurred in
investigating,
preparing or defending any action, suit, investigation or
proceeding), and
amounts paid in settlement (together, "Losses") incurred by an
Indemnitee
if such Indemnitee is made a party or is threatened to be made a
party to
any threatened, pending or completed action, suit, investigation
or
proceeding, whether civil, criminal, administrative or
investigative in
nature, brought or to be brought in connection with the Takeover
or any
action commenced by any bidder which commences its bid on or
prior to June
30, 1995 (including the bidder in the Takeover) for control of
the Company
arising from, caused by or in connection with the negotiation,
execution,
delivery and performance of the Purchase Agreement (including any
other
agreements entered into in connection therewith), other
<PAGE>
than as a result of the breach by Cuddy of any of the terms of
the Purchase
Agreement (or any other agreement entered into by Cuddy in
connection
therewith).
Section 2. Indemnification for Costs, Charges and
Expenses of
Successful Party. Notwithstanding the other provisions of this
Agreement
and in addition to the rights to indemnification set forth in
Section 1
hereof, to the extent that any Indemnitee has served as a witness
on behalf
of the Company or has been successful on the merits or otherwise
(including, without limitation, obtaining the dismissal of an
action
without prejudice), in defense of any action, suit, investigation
or
proceeding referred to in Section 1 hereof, or in defense of any
claim,
issue or matter therein, such Indemnitee shall be indemnified
against all
Losses incurred by such Indemnitee or on behalf of such
Indemnitee in
connection therewith.
Section 3. Partial Indemnification. In addition to
the rights
to indemnification set forth in Sections 1 and 2 hereof, if any
Indemnitee
is only partially successful in the defense, investigation,
settlement or
appeal of any action, suit, investigation or proceeding described
in
Section 1 or 2 hereof, and as a result is not entitled under
Section 1 or 2
hereof to indemnification by the Company for all Losses incurred
by such
Indemnitee, the Company shall nevertheless indemnify the
Indemnitee, as a
matter of right pursuant to Section 2 hereof, to the extent that
the
Indemnitee has been partially successful.
<PAGE>
Section 4. Presumptions and Effect of Certain
Proceedings.
The Secretary of the Company shall, promptly upon receipt of an
Indemnitee's request for indemnification, advise in writing the
Board of
Directors of the Company that the Indemnitee has made such
request for
indemnification. Upon making such request for indemnification,
the
Indemnitee shall be presumed to be entitled to indemnification
hereunder
and the Company shall have the burden of proof in the making of
any
determination contrary to such presumption. The termination of
any action,
suit, investigation or proceeding described in Section 1 or 2
hereof by
judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, adversely
affect the
rights of the Indemnitee to indemnification.
Section 5. Advancement of Expenses and Costs. All
expenses
and costs incurred by each Indemnitee as to which such Indemnitee
may seek
indemnification or contribution hereunder (including attorneys'
fees,
retainers and advances of disbursements required of the
Indemnitee and any
and all expenses whatsoever incurred in investigating, preparing
or
defending any action, suit, investigation or proceeding) shall be
paid by
the Company in advance of the final disposition of any action,
suit,
investigation or proceeding at the request of the Indemnitee
within 10 days
after the receipt by the Company of a statement or statements
from the
Indemnitee requesting such reimbursement from time to time. The
Indemnitee's entitlement to such expenses and costs shall include
those
incurred in connection with any
<PAGE>
proceeding by the Indemnitee seeking the enforcement of such
Indemnitee's
rights under this Agreement. Such statement or statements shall
reasonably
evidence the expenses and costs incurred by the Indemnitee in
connection
therewith. An Indemnitee may be required by the Company to
provide an
undertaking by or on behalf of the Indemnitee to repay such
amount on
condition that it is ultimately determined by a court (as
provided in
Section 16) that the Indemnitee is not entitled to be indemnified
against
such expenses and costs by the Company as provided by this
Agreement or
otherwise.
Section 6. Remedies of Indemnitee in Cases of
Failure to
Indemnify or to Advance Expenses. In the event that the Company
fails to
indemnify the Indemnitee hereunder, or if expenses and costs are
not timely
advanced pursuant to Section 5, the Indemnitee shall be entitled
to a final
adjudication in a court (as provided in Section 16) of the
Indemnitee's
entitlement to such indemnification or advance. The Company
shall not
oppose the Indemnitee's right to seek any such adjudication or
any other
claim. Such judicial proceeding or arbitration shall be made de
novo and
the Indemnitee shall not be prejudiced by reason of a
determination (if so
made) by the Company that the Indemnitee is not entitled to
indemnification
or advancement of costs and expenses, or that the Company has
failed to
indemnify the Indemnitee or to so advance costs and expenses.
The Company
further agrees to stipulate in any such court that the Company is
bound by
all the provisions of this Agreement and is precluded
<PAGE>
from making any assertion to the contrary. If the court shall
determine
that the Indemnitee is entitled to any indemnification hereunder,
the
Company shall pay all expenses (including attorneys' fees and
costs) and
costs actually incurred by the Indemnitee in connection with such
adjudication (including, but not limited to, any appellate
proceedings).
Section 7. Other Rights to Indemnification. The
indemnification and advancement of costs and expenses (including
attorneys'
fees and costs) provided by this Agreement shall not be deemed
exclusive of
any other rights to which any Indemnitee may now or in the future
be
entitled under any provision of the Certificate of Incorporation
or By-laws
of the Company, agreement, vote of stockholders or disinterested
directors,
provision of law, or otherwise.
Section 8. Contribution. (a) In the event any
Indemnitee is
not entitled to the indemnification provided for in this
Agreement in
respect of any Losses solely as a result of the Indemnitee's
conduct, then
the Company, in lieu of indemnifying such Indemnitee, shall
contribute to
the amount paid or payable by such Indemnitee as a result of such
Losses as
between the Company on the one hand and each Indemnitee on the
other, in
such proportion as is appropriate to reflect the relative fault
of the
Company and of such Indemnitee in connection with the actions or
inactions,
statements or omissions giving rise to such Losses as well as any
other
relevant equitable considerations. The relative fault of the
Company on
the one hand and of such
<PAGE>
Indemnitee on the other shall be determined by reference to,
among other
things, whether any untrue statement of a material fact or the
omission or
alleged omission to state a material fact on which any of such
Losses are
based relates to information supplied by such party, and the
parties'
relative intent, knowledge, access to information and obligation
to correct
or prevent such statement or omission.
(b) The Company and the Indemnitees agree that it
would not
be just and equitable if contribution pursuant to this Section 8
were
determined by pro-rata allocation or by any other method of
allocation
which does not take account of the equitable considerations
referred to in
the immediately preceding subparagraph. No person guilty of
fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities
Act) shall be entitled to contribution from any person who was
not guilty
of such fraudulent misrepresentation.
Section 9. Procedure. The Indemnitee shall give the
Company
prompt notice of any claim made on the Indemnitee which relates
to a matter
subject to indemnification under this Agreement. The failure of
any
Indemnitee to provide such notice shall not relieve the Company
from
liability pursuant to this Agreement, except to the extent such
failure had
a material adverse effect on the ability to defend such matter.
The
Company shall have the right to settle such claim (subject to the
consent
of the Indemnitee if the proposed settlement involves any action
or
inaction by the Indemnitee, which consent will not be
<PAGE>
unreasonably withheld) and to control the response thereto or the
defense
thereof in any suit, action or proceeding arising therefrom. The
Company
shall advise the Indemnitee within 10 days of receipt of notice
of any
claim whether it elects to settle such claim, or control the
response
thereto or defense thereof. If the Company does not timely
advise the
Indemnitee as provided above, the Indemnitee shall be entitled to
settle
such claim, or control the response thereto or defense thereof at
the cost
and expense of the Company as herein provided. After
consultation with the
Indemnitee, the Company shall employ competent counsel at the
Company's
expense in connection with any such settlement or defense, and
the
Indemnitee shall be entitled to participate in such defense. The
Indemnitee shall cooperate with all reasonable requests of the
Company or
counsel retained by the Company with respect to any such
settlement or
defense, and the Company shall keep the Indemnitee informed of
the progress
of any such settlement or defense and obtain the consent of the
Indemnitee
as contemplated herein.
Section 10. Attorneys' Fees and Other Expenses To
Enforce
Agreement. In the event that an Indemnitee is subject to or
intervenes in
any proceeding in which the validity or enforceability of this
Agreement is
at issue or seeks an adjudication to enforce such Indemnitee's
rights
under, or to recover damages for breach of, this Agreement, the
Indemnitee,
if such Indemnitee substantially prevails in such action, shall
be entitled
to recover from the Company and shall be indemnified by
<PAGE>
the Company against, any actual expenses for attorneys' fees and
disbursements reasonably incurred by such Indemnitee in
connection with
such action.
Section 11. Release by Company. The Company hereby
fully and
unconditionally releases and discharges all claims and causes of
action
which it or its successors, or assigns ever had, now have, or
hereafter may
have against the Indemnitees, in each case, past, present, or as
they may
exist at any time after the date of this Agreement, and each
person, if
any, who controls, controlled, or will control any of them within
the
meaning of Section 15 of the Securities Act of 1933, as amended,
or Section
20(a) of the Securities Exchange Act of 1934, as amended, except
claims and
causes of action arising out of, based upon, or in connection
with a breach
by Cuddy of the terms of the Purchase Agreement (or any other
agreement
entered into in connection therewith).
Section 12. Term of Agreement. The term of this
Agreement
shall expire upon the final termination of all actions, suits,
proceedings
or investigations with respect to or relating in any way to the
Takeover or
any action commenced by any bidder which commences its bid on or
prior to
June 30, 1995 (including the bidder in the Takeover) for control
of the
Company. This Agreement shall be binding upon the Company and
its
successors and assigns and shall inure to the benefit of the
Indemnitees
and their respective successors, assigns, spouses, heirs,
devises,
<PAGE>
executors, administrators and other legal representatives, as the
case may
be.
Section 13. Severability. If any provision or
provisions of
this Agreement shall be held to be invalid, illegal or
unenforceable for
any reason whatsoever: (a) the validity, legality and
enforceability of the
remaining provisions of this Agreement (including, without
limitation, all
portions of any paragraphs of this Agreement containing any such
provision
held to be invalid, illegal or unenforceable, that are not
themselves
invalid, illegal or unenforceable) shall not in any way be
affected or
impaired thereby; and (b) to the fullest extent possible, the
provisions of
this Agreement (including, without limitation, all portions of
any
paragraph of this Agreement containing any such provision held to
be
invalid, illegal or unenforceable, that are not themselves
invalid, illegal
or unenforceable) shall be construed so as to give effect to the
intent
manifested by the provision held invalid, illegal or
unenforceable.
Section 14. Notices. All notices and other
communications
provided for or contemplated by this agreement shall be delivered
by hand
or sent by certified mail, return receipt requested, addressed as
follows:
If to the Company: WLR Foods, Inc.
P.O. Box 7000
Broadway, Virginia
Attn: James L. Keeler
<PAGE>
If to an Indemnitee: c/o Cuddy International
Corporation
465 Richmond Street
Suite 600
London, Ontario
Canada N6A SP4
Attn: Peter A. W.
Green
or to such other address as the addressee may specify by written
notice
pursuant to this Section 14. Notices or communications sent by
mail shall
be deemed to have been given on the date of mailing. In the
event of any
Indemnitee's death or incapacity, any notice or communication
from the
Company may, at the Company's option, be addressed either to the
Indemnitee
at his or her last address specified pursuant to this Section 14
or to the
Indemnitee's estate, executors, administrators, heirs, or legal
representative.
Section 15. Counterparts; Governing Law. This
Agreement may
be executed in any number of counterparts, each of which shall be
deemed an
original, but all of which together shall constitute one and the
same
instrument. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia without
giving
effect to the conflict of laws.
Section 16. Jurisdiction, Venue and Service of
Process. The
parties hereby irrevocably consent to the exclusive jurisdiction
and venue
of the courts of the Province of Ontario in connection with any
action or
proceeding arising out of or relating to this Agreement, any
document or
instrument delivered pursuant to or in connection with this
Agreement, or a
breach of
<PAGE>
this Agreement or any such document or instrument. In any such
action or
proceeding, the parties waive personal service of any summons,
complaint,
or other process and agrees that service thereof may be made in
accordance
with Section 14. Within 30 days after such service, or such
other time as
may be mutually agreed upon in writing by the attorneys for the
parties to
such action or proceeding, the party so served shall appear or
answer such
summons, complaint, or other process. Should the party so served
fail to
appear or answer within such 30-day period or such extended
period, as the
case may be, the party so served shall be deemed in default and
judgment
may be entered by the plaintiff in such action against the party
so served
for the amount as demanded in any summons, complaint, or other
process so
served. The parties covenant and agree that they will not
commence or
maintain any such action or proceeding in any jurisdiction or
forum other
than the courts of the Province of Ontario.
Section 17. Modifications, Waivers. This Agreement
sets forth
the entire understanding of the parties with respect to the
subject matter
hereof, supersedes all existing agreements between them
concerning such
subject matter, and may be modified only by a written instrument
executed
by the Company and Cuddy. Any waiver by any party of a breach of
any
provision of this Agreement shall not operate as or be construed
to be a
waiver of any other breach of such provision or of any breach of
any other
provision of this Agreement. The failure of a party to insist
upon strict
adherence to any term of this Agreement on one or
<PAGE>
more occasions shall not be considered a waiver or deprive that
party of
the right thereafter to insist upon strict adherence to that term
or any
other term of this Agreement. Any waiver must be in writing.
Section 18. Headings. The headings in this
Agreement are
solely for convenience of reference and shall be given no effect
in the
construction of interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed
this
Agreement on the day and year first above written.
WLR FOODS, INC.
By:
Name:
Title:
CUDDY FARMS, INC.
By:
Name:
Title:
<PAGE>
EXHIBIT D
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT AND RELEASE
THIS INDEMNIFICATION AGREEMENT AND RELEASE is made and
entered into
this 27th day of July, 1994 ("Agreement"), by and among CUDDY
FARMS, INC.,
a North Carolina corporation ("Cuddy") and CUDDY INTERNATIONAL
CORPORATION,
an Ontario corporation and controlling shareholder of Cuddy
Farms, Inc.
("CIC") (together, including their successors, the "Company"),
and WLR
FOODS, INC., a Virginia corporation ("WLR"):
WHEREAS, WLR desires to purchase certain of the assets of
Cuddy
pursuant to an Asset Purchase Agreement, to be dated as of July
27, 1994,
between the Company and WLR and Wampler-Longacre, Inc. (the
"Purchase
Agreement"); and
WHEREAS, there is a possibility that the Company may be the
subject
of complaints by stockholders and former employees in connection
with
certain actions taken by the senior management of the Company
with respect
to management and employment issues and litigation with respect
thereto
could ensue (the "Cuddy Litigation"); and
WHEREAS, the WLR is concerned that it might incur
significant costs
and expenses in connection with any Cuddy Litigation or other
litigation
related to the subject matter of the Cuddy Litigation; and
WHEREAS, the Company, recognizing WLR's legitimate business
concerns
and possible exposure, desires to
<PAGE>
indemnify WLR to the fullest extent permitted by law as set forth
herein;
NOW, THEREFORE, in consideration of the premises and the
covenants
contained herein, the Company and WLR do hereby covenant and
agree as
follows:
Section 1. Indemnification. The Company shall indemnify
and hold
harmless each of WLR Foods, Inc., Wampler-Longacre, Inc., and
their
respective officers, directors, employees, shareholders,
partners, agents,
legal counsel and accountants (each an "Indemnitee" and together
the
"Indemnitees") to the fullest extent permitted by applicable law
in affect
on the date hereof or as such laws may from time to time be
amended from
and against any and all losses, claims, damages, liabilities and
expenses
(including attorneys' fees and expenses and any and all expenses
whatsoever
incurred in investigating, preparing or defending any action,
suit,
investigation or proceeding), and amounts paid in settlement
(together,
"Losses") incurred by an Indemnitee if such Indemnitee is made a
party or
is threatened to be made a party to any threatened, pending or
completed
action, suit, investigation or proceeding, whether civil,
criminal,
administrative or investigative in nature, brought or to be
brought in
connection with the Cuddy Litigation and arising from, caused by
or in
connection with the negotiation, execution, delivery and
performance of the
Purchase Agreement (including any other agreements entered
<PAGE>
into in connection therewith), other than as a result of the
breach by WLR
of any of the terms of the Purchase Agreement (or any other
agreement
entered into by WLR in connection therewith).
Section 2. Indemnification for Costs, Charges and Expenses
of
Successful Party. Notwithstanding the other provisions of this
Agreement
and in addition to the rights to indemnification set forth in
Section 1
hereof, to the extent that any Indemnitee has served as a witness
on behalf
of the Company or has been successful on the merits or otherwise
(including, without limitation, obtaining the dismissal of an
action
without prejudice), in defense of any action, suit, investigation
or
proceeding referred to in Section 1 hereof, or in defense of any
claim,
issue or matter therein, such Indemnitee shall be indemnified
against all
Losses incurred by such Indemnitee or on behalf of such
Indemnitee in
connection therewith.
Section 3. Partial Indemnification. In addition to the
rights to
indemnification set forth in Sections 1 and 2 hereof, if any
Indemnitee is
only partially successful in the defense, investigation,
settlement or
appeal of any action, suit, investigation or proceeding described
in
Section 1 or 2 hereof, and as a result is not entitled under
Section 1 or 2
hereof to indemnification by the Company for all Losses incurred
by such
Indemnitee, the Company shall nevertheless indemnify the
Indemnitee, as a
matter of right
<PAGE>
pursuant to Section 2 hereof, to the extent that the Indemnitee
has been
partially successful.
Section 4. Presumptions and Effect of Certain Proceedings.
The
Secretary of the Company shall, promptly upon receipt of an
Indemnitee's
request for indemnification, advise in writing the Board of
Directors of
the Company that the Indemnitee has made such request for
indemnification.
Upon making such request for indemnification, the Indemnitee
shall be
presumed to be entitled to indemnification hereunder and the
Company shall
have the burden of proof in the making of any determination
contrary to
such presumption. The termination of any action, suit,
investigation or
proceeding described in Section 1 or 2 hereof by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or
its
equivalent, shall not, of itself, adversely affect the rights of
the
Indemnitee to indemnification.
Section 5. Advancement of Expenses and Costs. All
expenses and
costs incurred by each Indemnitee as to which such Indemnitee may
seek
indemnification or contribution hereunder (including attorneys'
fees,
retainers and advances of disbursements required of the
Indemnitee and any
and all expenses whatsoever incurred in investigating, preparing
or
defending any action, suit, investigation or proceeding) shall be
paid by
the Company in advance of this final disposition of any action,
suit,
investigation or proceeding
<PAGE>
at the request of the Indemnitee within 10 days after the receipt
by the
Company of a statement or statements from the Indemnitee
requesting such
reimbursement from time to time. The Indemnitee's entitlement to
such
expenses and costs shall include those incurred in connection
with any
proceeding by the Indemnitee seeking the enforcement of such
Indemnitee's
rights under this Agreement. Such statement or statements shall
reasonably
evidence the expenses and costs incurred by the Indemnitee in
connection
therewith. An Indemnitee may be required by the Company to
provide an
undertaking by or on behalf of the Indemnitee to repay such
amount on
condition that it is ultimately determined by a court (as
provided in
Section 16) that the Indemnitee is not entitled to be indemnified
against
such expenses and costs by the Company as provided by this
Agreement or
otherwise.
Section 6. Remedies of Indemnitee in Cases of Failure to
Indemnify
or to Advance Expenses. In the event that the Company fails to
indemnify
the Indemnitee hereunder, or if expenses and costs are not timely
advanced
pursuant to Section 5, the Indemnitee shall be entitled to a
final
adjudication in a court (as provided in Section 16) of the
Indemnitee's
entitlement to such indemnification or advance. The Company
shall not
oppose the Indemnitee's right to seek any such adjudication or
any other
claim. Such judicial proceeding or arbitration shall be made de
novo and
the Indemnitee shall not be prejudiced by reason of a
<PAGE>
determination (if so made) by the Company that the Indemnitee is
not
entitled to indemnification or advancement of costs and expenses,
or that
the Company has failed to indemnify the Indemnitee or to so
advance costs
and expenses. The Company further agrees to stipulate in any
such court
that the Company is bound by all the provisions of this Agreement
and is
precluded from making any assertion to the contrary. If the
court shall
determine that the Indemnitee is entitled to any indemnification
hereunder,
the Company shall pay all expenses (including attorneys' fees and
costs)
and costs actually incurred by the Indemnitee in connection with
such
adjudication (including, but not limited to, any appellate
proceedings).
Section 7. Other Rights to Indemnification. The
indemnification and
advancement of costs and expenses (including attorneys' fees and
costs)
provided by this Agreement shall not be deemed exclusive of any
other
rights to which any Indemnitee may now or in the future be
entitled under
any provision of the charter documents or By-laws of Cuddy or
CIC,
agreement, vote of stockholders or disinterested directors,
provision of
law, or otherwise.
Section 8. Contribution. (a) In the event any Indemnitee
is not
entitled to the indemnification provided for in this Agreement in
respect
of any Losses solely as a result of the Indemnitee's conduct,
then the
Company, in lieu of indemnifying such Indemnitee, shall
contribute to
<PAGE>
the amount paid or payable by such Indemnitee as a result of such
Losses as
between the Company on the one hand and each Indemnitee on the
other, in
such proportion as is appropriate to reflect the relative fault
of the
Company and of such Indemnitee in connection with the actions or
inactions,
statements or omissions giving rise to such Losses as well as any
other
relevant equitable considerations. The relative fault of the
Company on
the one hand and of such Indemnitee on the other shall be
determined by
reference to, among other things, whether any untrue statement of
a
material fact or the omission or alleged omission to state a
material fact
on which any of such Losses are based relates to information
supplied by
such party, and the parties' relative intent, knowledge, access
to
information and obligation to correct or prevent such statement
or
omission.
(b) The Company and the Indemnitees agree that it would
not be just
and equitable if contribution pursuant to this Section 8 were
determined by
pro-rata allocation or by any other method of allocation which
does not
take account of the equitable considerations referred to in the
immediately
preceding subparagraph. No person guilty of fraudulent
misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be
entitled to contribution from any person who was not guilty of
such
fraudulent misrepresentation.
<PAGE>
Section 9. Procedure. The Indemnitee shall give the
Company prompt
notice of any claim made on the Indemnitee which relates to a
matter
subject to indemnification under this Agreement. The failure of
any
Indemnitee to provide such notice shall not relieve the Company
from
liability pursuant to this Agreement, except to the extent such
failure had
a material adverse effect on the ability to defend such matter.
The
Company shall have the right to settle such claim (subject to the
consent
of the Indemnitee if the proposed settlement involves any action
or
inaction by the Indemnitee, which consent will not be
unreasonably
withheld) and to control the response thereto or the defense
thereof in any
suit, action or proceeding arising therefrom. The Company shall
advise the
Indemnitee within 10 days of receipt of notice of any claim
whether it
elects to settle such claim, or control the response thereto or
defense
thereof. If the Company does not timely advise the Indemnitee as
provided
above, the Indemnitee shall be entitled to settle such claim, or
control
the response thereto or defense thereof at the cost and expense
of the
Company as herein provided. After consultation with the
Indemnitee, the
Company shall employ competent counsel at the Company's expense
in
connection with any such settlement or defense, and the
Indemnitee shall be
entitled to participate in such defense. The Indemnitee shall
cooperate
with all reasonable requests of the Company or counsel
<PAGE>
retained by the Company with respect to any such settlement or
defense, and
the Company shall keep the Indemnitee informed of the progress of
any such
settlement or defense and obtain the consent of the Indemnitee as
contemplated herein.
Section 10. Attorneys' Fees and Other Expenses To Enforce
Agreement.
In the event that an Indemnitee is subject to or intervenes in
any
proceeding in which the validity or enforceability of this
Agreement is at
issue or seeks an adjudication to enforce such Indemnitee's
rights under,
or to recover damages for breach of, this Agreement, the
Indemnitee, if
such Indemnitee substantially prevails in such action, shall be
entitled to
recover from the Company and shall be indemnified by the Company
against,
any actual expenses for attorneys' fees and disbursements
reasonably
incurred by such Indemnitee in connection with such action.
Section 11. Release by Company. The Company hereby fully
and
unconditionally releases and discharges all claims and causes of
action
which it or its successors, or assigns ever had, now have, or
hereafter may
have against the Indemnitees, in each case, past, present, or as
they may
exist at any time after the date of this Agreement, and each
person, if
any, who controls, controlled, or will control any of them within
the
meaning of Section 15 of the Securities Act of 1933, as amended,
or Section
20(a) of the Securities Exchange Act of 1934, as amended, except
claims
<PAGE>
and causes of action arising out of, based upon, or in connection
with a
breach by WLR of the terms of the Purchase Agreement (or any
other
agreement entered into in connection therewith).
Section 12. Term of Agreement. The term of this Agreement
shall
expire upon the final termination of all actions, suits,
proceedings or
investigations brought or to be brought with respect to or
relating in any
way to the Cuddy Litigation. This Agreement shall be binding
upon the
Company and its successors and assigns and shall inure to the
benefit of
the Indemnitees and their respective successors, assigns,
spouses, heirs,
devises, executors, administrators and other legal
representatives, as the
case may be.
Section 13. Severability. If any provision or provisions
of this
Agreement shall be held to be invalid, illegal or unenforceable
for any
reason whatsoever: (a) the validity, legality and enforceability
of the
remaining provisions of this Agreement (including, without
limitation, all
portions of any paragraphs of this Agreement containing any such
provision
held to be invalid, illegal or unenforceable, that are not
themselves
invalid, illegal or unenforceable) shall not in any way be
affected or
impaired thereby; and (b) to the fullest extent possible, the
provisions of
this Agreement (including, without limitation, all portions of
any
paragraph of this Agreement containing
<PAGE>
any such provision held to be invalid, illegal or unenforceable,
that are
not themselves invalid, illegal or unenforceable) shall be
construed so as
to give effect to the intent manifested by the provision held
invalid,
illegal or unenforceable.
Section 14. Notices. All notices and other communications
provided
for or contemplated by this Agreement shall be delivered by hand
or sent by
certified mail, return receipt requested, addressed as follows:
If to an Indemnitee: c/o WLR Foods, Inc.
P.O. Box 7000
Broadway, Virginia 22815
Attn: James L. Keeler
If to the Company: c/o Cuddy International
Corporation
465 Richmond Street
Suite 600
London, Ontario
Canada N6A 5P4
Attn: Peter A. W. Green
or to such other address as the addressee may specify by written
notice
pursuant to this Section 14. Notices or communications sent by
mail shall
be deemed to have been given to the date of mailing. In the
event of any
Indemnitee's death or incapacity, any notice or communication
from the
Company may, at the Company's option, be addressed either to the
Indemnitee
at his or her last address specified pursuant to this Section 14
or to the
Indemnitee's estate, executors, administrators, heirs, or legal
representative.
<PAGE>
Section 15. Counterparts; Governing Law. This Agreement
may be
executed in any number of counterparts, each of which shall be
deemed an
original, but all of which together shall constitute one and the
same
instrument. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina without
giving
effect to the conflict of laws.
Section 16. Jurisdiction, Venue and Service of Process.
The parties
hereby irrevocably consent to the exclusive jurisdiction and
venue of the
federal or state courts in Harrisonburg, Virginia in connection
with any
action or proceeding arising out of or relating to this
Agreement, any
document or instrument delivered pursuant to or in connection
with this
Agreement, or a breach of this Agreement or any such document or
instrument. In any such action or proceeding, the parties waive
personal
service of any summons, complaint, or other process and agrees
that service
thereof may be made in accordance with Section 14. Within 30
days after
such service, or such other time as may be mutually agreed upon
in writing
by the attorneys for the parties to such action or proceeding,
the party so
served shall appear or answer such summons, complaint, or other
process.
Should the party so served fail to appear or answer within such
30-day
period or such extended period, as the case may be, the party so
served
shall be deemed in default and judgment may be entered by the
plaintiff in
such action against the party so served for the amount as
<PAGE>
demanded in any summons, complaint, or other process so served.
The
parties covenant and agree that they will not commence or
maintain any such
action or proceeding in any jurisdiction or forum other than the
federal or
state courts in Harrisonburg, Virginia.
Section 17. Modifications, Waivers. This Agreement sets
forth the
entire understanding of the parties with respect to the subject
matter
hereof, supersedes all existing agreements between them
concerning such
subject matter, and may be modified only by a written instrument
executed
by the Company and WLR. Any waiver by any party of a breach of
any
provision of this Agreement shall not operate as or be construed
to be a
waiver of any other breach of such provision or of any breach of
any other
provision of this Agreement. The failure of a party to insist
upon strict
adherence to any term of this Agreement on one or more occasions
shall not
be considered a waiver or deprive that party of the right
thereafter to
insist upon strict adherence to that term or any other term of
this
Agreement. Any waiver must be in writing.
Section 18. Headings. The headings in this Agreement are
solely for
convenience of reference and shall be given no effect in the
construction
of interpretation of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement
on the day and year first above written.
WLR FOODS, INC.
By:
__________________________________
Name:
Title:
CUDDY FARMS, INC.
By:
___________________________________
Name:
Title:
CUDDY INTERNATIONAL
CORPORATION
By:____________________________________
Name:
Title:
