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EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
DATED AS OF
DECEMBER 21, 2000
BY AND AMONG
M-FOODS HOLDINGS, INC.,
PROTEIN ACQUISITION CORP.
AND
MICHAEL FOODS, INC.
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TABLE OF CONTENTS
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ARTICLE 1 THE MERGER..............................................................................................2
1.1 The Merger......................................................................................2
1.2 Closing.........................................................................................2
1.3 Effective Date and Time.........................................................................2
1.4 Effects of the Merger...........................................................................2
1.5 Subsequent Actions..............................................................................2
1.6 Articles of Incorporation.......................................................................3
1.7 Bylaws..........................................................................................3
1.8 Officers and Directors of Surviving Corporation.................................................3
1.9 Effect on Capital Stock.........................................................................3
1.10 Options.........................................................................................4
1.11 Surrender and Payment...........................................................................4
1.12 Lost Certificates...............................................................................6
1.13 Unclaimed Merger Consideration..................................................................6
1.14 Dissenting Shares...............................................................................7
ARTICLE 2 REPRESENTATIONS AND WARRANTIES..........................................................................7
2.1 Representations and Warranties of the Company...................................................7
2.2 Representations and Warranties of Holdings and Merger Sub......................................20
ARTICLE 3 COVENANTS RELATING TO CONDUCT OF BUSINESS..............................................................23
3.1 Covenants of the Company.......................................................................23
3.2 Advice of Changes; Government Filings..........................................................25
3.3 Financing Related Cooperation..................................................................25
ARTICLE 4 ADDITIONAL AGREEMENTS..................................................................................26
4.1 Preparation of the Proxy Statement; Schedule 13E; the Company Shareholders Meeting.............26
4.2 Access to Information..........................................................................27
4.3 Approvals and Consents; Cooperation............................................................28
4.4 Acquisition Proposals..........................................................................29
4.5 Employee Benefits..............................................................................30
4.6 Fees and Expenses..............................................................................31
4.7 Indemnification; Directors' and Officers' Insurance............................................31
4.8 Public Announcements...........................................................................32
4.9 Further Assurances.............................................................................32
4.10 Disposition of Litigation......................................................................32
4.11 Delisting......................................................................................33
ARTICLE 5 CONDITIONS PRECEDENT...................................................................................33
5.1 Conditions to Each Party's Obligation to Effect the Merger.....................................33
5.2 Conditions to the Obligations of Holdings and Merger Sub to Effect the Merger..................33
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5.3 Conditions to the Obligations of the Company to Effect the Merger..............................34
ARTICLE 6 TERMINATION AND AMENDMENT..............................................................................35
6.1 Termination by Either the Company or Holdings..................................................35
6.2 Termination by Holdings........................................................................35
6.3 Termination by the Company.....................................................................36
6.4 Effect of Termination..........................................................................36
6.5 Amendment......................................................................................38
6.6 Extension; Waiver..............................................................................38
ARTICLE 7 GENERAL PROVISIONS.....................................................................................38
7.1 Non-Survival of Representations, Warranties and Agreements; No Other
Representations and Warranties.................................................................38
7.2 Notices........................................................................................38
7.3 Interpretation.................................................................................40
7.4 Counterparts...................................................................................41
7.5 Entire Agreement; No Third Party Beneficiaries; Liability......................................41
7.6 Governing Law..................................................................................41
7.7 Severability...................................................................................41
7.8 Assignment.....................................................................................41
7.9 Enforcement....................................................................................42
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CROSS REFERENCES
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Section
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Acquisition Proposal........................................................................................ 4.4(e)
Agreement..................................................................................................Preamble
Articles of Merger..............................................................................................1.3
Banc of America Bridge...................................................................................... 2.2(c)
Bank Commitment Letter...................................................................................... 2.2(c)
Bank of America............................................................................................. 2.2(c)
CERCLA................................................................................................... 2.1(n)(i)
Certificate................................................................................................. 1.9(c)
Closing.........................................................................................................1.2
Closing Date....................................................................................................1.2
Code........................................................................................................ 2.1(h)
Commitment Letters.......................................................................................... 2.2(c)
Company....................................................................................................Preamble
Company Benefit Plans.................................................................................... 2.1(l)(i)
Company Board..............................................................................................Recitals
Company Common Stock.......................................................................................Recitals
Company Disclosure Schedule.....................................................................................2.1
Company Material Contracts.................................................................................. 2.1(r)
Company Participants..................................................................................... 2.1(l)(i)
Company Representatives..................................................................................... 4.4(a)
Company SEC Reports.............................................................................................2.1
Company Shareholders Meeting................................................................................ 4.1(a)
Company Voting Debt.................................................................................... 2.1(b)(iii)
Confidentiality Agreement.......................................................................................4.2
Dissenting Shares..............................................................................................1.14
Effective Date..................................................................................................1.3
Effective Time..................................................................................................1.3
Environmental, Health, and Safety Requirements.......................................................... 2.1(n)(ii)
ERISA.................................................................................................... 2.1(l)(i)
Exchange Act............................................................................................... 1.11(c)
Executive Incentive Plan.......................................................................................1.10
Executive Performance Plan.....................................................................................1.10
Expense Payment............................................................................................. 6.4(b)
Expenses........................................................................................................4.6
Financing................................................................................................... 2.2(c)
Funds...................................................................................................... 1.11(a)
GAAP..................................................................................................... 2.1(d)(i)
Governmental Entity........................................................................................ 1.13(b)
Holdings...................................................................................................Preamble
Holdings Disclosure Schedule....................................................................................2.2
HSR Act................................................................................................ 2.1(c)(iii)
Indemnified Parties......................................................................................... 4.7(c)
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Indemnified Party........................................................................................... 4.7(c)
Intellectual Property.................................................................................... 2.1(m)(i)
Investors..................................................................................................Recitals
Leases................................................................................................... 2.1(k)(i)
Liens................................................................................................... 2.1(b)(ii)
Management Equity Agreements...............................................................................Recitals
Marathon.................................................................................................... 2.2(c)
Marathon Fund Commitment Letter............................................................................. 2.2(c)
Material Adverse Effect..................................................................................... 2.1(a)
MBCA............................................................................................................1.1
Merger.....................................................................................................Recitals
Merger Sub.................................................................................................Preamble
NASDAQ................................................................................................. 2.1(c)(iii)
Option(s)......................................................................................................1.10
Option Plans...................................................................................................1.10
Ordinary Course......................................................................................... 2.1(d)(ii)
Organizational Documents.................................................................................... 2.1(a)
Other Equity Agreements....................................................................................Recitals
Owned Real Property...................................................................................... 2.1(k)(i)
Paying Agent............................................................................................... 1.11(a)
Permits..................................................................................................... 2.1(f)
Person..................................................................................................... 1.11(c)
Price Per Share............................................................................................. 1.9(c)
Proxy Statement.......................................................................................... 2.1(e)(i)
Required Approvals..............................................................................................4.3
Schedule 13E-3.............................................................................................. 4.1(c)
SEC.............................................................................................................2.1
Securities Act......................................................................................... 2.1(c)(iii)
Share Awards............................................................................................. 2.1(b)(i)
Special Committee..........................................................................................Recitals
Special Meeting............................................................................................. 6.1(d)
Subsidiary............................................................................................... 2.1(b)(i)
Superior Proposal........................................................................................... 4.4(f)
Surviving Corporation...........................................................................................1.1
SWDA..................................................................................................... 2.1(n)(i)
Tax, Taxes, Taxable........................................................................................ 1.11(c)
Tax Returns................................................................................................. 2.1(h)
Terminating Company Breach.................................................................................. 6.2(b)
Terminating Holdings Breach................................................................................. 6.3(a)
Termination Fee............................................................................................. 6.4(c)
U.S. Bancorp Piper Jaffray.................................................................................. 2.1(o)
Vestar...................................................................................................... 2.2(c)
Vestar Commitment Letter.................................................................................... 2.2(c)
Violation............................................................................................... 2.1(c)(ii)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of December 21,
2000 (this "Agreement"), by and among M-Foods Holdings, Inc., a Delaware
corporation ("Holdings"), Protein Acquisition Corp., a Minnesota corporation and
a wholly owned subsidiary of Holdings ("Merger Sub"), and Michael Foods, Inc., a
Minnesota corporation (the "Company").
W I T N E S S E T H :
WHEREAS, Merger Sub and the Company have each determined that
it is in their respective best interests for Merger Sub to acquire the Company,
upon the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the respective boards of directors of Holdings,
Merger Sub and the Company each have approved this Agreement, the Merger and the
other transactions contemplated by this Agreement, with each share of the
Company's common stock, par value $0.01 per share (the "Company Common Stock"),
issued and outstanding immediately prior to the Effective Time being cancelled,
extinguished and converted into and becoming a right to receive a price per
share equal to the Price Per Share, subject to the terms and conditions set
forth herein;
WHEREAS, as of the date hereof, (1) certain executives of the
Company will enter into letter agreements with M-Foods Investors, LLC, a
Delaware limited liability company ("Investors"), pursuant to which such persons
agree to execute, immediately prior to the Closing, certain agreements (the
"Management Equity Agreements") which will provide for, among other things, (a)
the cancellation of a portion of their options to purchase Company Common Stock
as of the Effective Date in exchange for rights under a deferred compensation
arrangement with Holdings and (b) the purchase of membership interests in
Investors by such persons and (2) certain beneficial and record shareholders of
the Company will enter into letter agreements with Investors pursuant to which
such persons agree to execute, immediately prior to the Closing, certain
agreements (the "Other Equity Agreements") which will provide that, among other
things, such persons will exchange shares of the Company Common Stock they hold
for a price per share equal to the Price Per Share and membership interests in
Investors;
WHEREAS, as soon as may be permitted after satisfaction or
waiver of the conditions set forth herein, Merger Sub shall be merged with and
into the Company (the "Merger") in accordance with this Agreement and the
relevant provisions of the MBCA, and the surviving corporation of the Merger
shall be the Company; and
WHEREAS, the board of directors of the Company (the "Company
Board"), subsequent to the unanimous recommendation of a special committee of
the Company Board (the "Special Committee"), has determined that this Agreement
and the transactions contemplated hereby, including the Merger, are fair to and
in the best interests of the shareholders of the Company, has declared the
Merger and this Agreement to be advisable and has recommended approval of the
Merger and adoption of this Agreement by the shareholders of the Company.
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NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE 1
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, Merger Sub shall be merged with and into the
Company at the Effective Time. Following the Merger, the separate corporate
existence of Merger Sub shall cease and the Company, as a wholly owned
subsidiary of Holdings, shall continue as the surviving corporation (the
"Surviving Corporation"). The Merger will be effected pursuant to the provisions
of, and with the effect provided in, the Minnesota Business Corporation Act (the
"MBCA").
1.2 CLOSING. The closing of the Merger (the "Closing") will
take place as soon as practicable, but no later than the fourth business day,
after satisfaction or waiver (as permitted by this Agreement and applicable law)
of the conditions (excluding conditions that, by their terms, cannot be
satisfied until the Closing Date) set forth in Article 5 (the "Closing Date"),
unless another time or date is agreed to in writing by the parties hereto. The
Closing shall be held at the offices of Kirkland & Ellis, 200 East Randolph
Drive, Chicago, Illinois 60601, unless another place is agreed to in writing by
the parties hereto.
1.3 EFFECTIVE DATE AND TIME. Upon the Closing, the parties
shall file with the Secretary of State of the State of Minnesota appropriate
articles of merger or other appropriate documents (in any such case, the
"Articles of Merger") executed in accordance with the relevant provisions of the
MBCA and shall make all other filings, recordings or publications required under
the MBCA in connection with the Merger. The Merger shall become effective as of
the date and time of such filings or such other time after such filings as the
parties hereto shall agree to in the Articles of Merger (the "Effective Time").
The date on which the Effective Time shall occur is referred to as the
"Effective Date."
1.4 EFFECTS OF THE MERGER. At the Effective Time, the separate
corporate existence of Merger Sub shall cease and the Surviving Corporation
shall continue its corporate existence under the laws of the State of Minnesota.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers, immunities and
franchises of Merger Sub and the Company shall vest in the Surviving
Corporation, and all debts, liabilities, obligations and duties of Merger Sub
and the Company shall become the debts, liabilities, obligations and duties of
the Surviving Corporation.
1.5 SUBSEQUENT ACTIONS. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of either of the Company or Merger Sub acquired or
to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this
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Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of either the
Company or Merger Sub, all such deeds, bills of sale, assignments and assurances
and to take, in the name and on behalf of each of such corporations or
otherwise, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out the transactions contemplated by this Agreement.
1.6 ARTICLES OF INCORPORATION. Subject to Section 4.7(a), at
the Effective Time, the articles of incorporation of the Company (as amended and
restated in substantially the form set forth in Exhibit A hereto) shall be the
articles of incorporation of the Surviving Corporation, until thereafter amended
as provided by the MBCA and the provisions of such articles of incorporation.
1.7 BYLAWS. At the Effective Time, the bylaws of Merger Sub,
as in effect immediately prior to the Effective Time, shall become the bylaws of
the Surviving Corporation until thereafter amended as provided by the MBCA, the
provisions of the articles of incorporation of the Surviving Corporation and
such bylaws.
1.8 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION. The
officers of the Company immediately prior to the Effective Time shall be, from
and after the Effective Time, the officers of the Surviving Corporation, until
the earlier of their resignation or removal or otherwise ceasing to be an
officer. The directors of Merger Sub immediately prior to the Effective Time
shall be, from and after the Effective Time, the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
1.9 EFFECT ON CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of the Company Common Stock or any shares of capital stock of Merger Sub:
(a) Capital Stock of Merger Sub. Each share of capital stock
of Merger Sub issued and outstanding immediately prior to the Effective Time
shall be converted into and become one fully paid and nonassessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock; Merger Sub-Owned Stock.
Each share of the Company Common Stock that is issued and outstanding
immediately prior to the Effective Time and owned by Merger Sub or by the
Company or any direct or indirect wholly owned subsidiary of the Company, shall
be cancelled, extinguished and retired, and no payment of any consideration
shall be made with respect thereto.
(c) Company Common Stock. Each share of the Company Common
Stock issued and outstanding immediately prior to the Effective Time (other than
shares to be cancelled in accordance with Section 1.9(b) and any Dissenting
Shares) will, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive $30.10 in cash per share
of Company Common Stock without any interest thereon (the "Price Per Share"),
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subject to appropriate adjustment for any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange with respect
to the Company Common Stock occurring before the Effective Time. As of the
Effective Time, all such shares of the Company Common Stock shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a stock certificate which immediately prior to the
Effective Time represented any such shares of the Company Common Stock (a
"Certificate") shall cease to have any rights with respect thereto, except the
right to receive, upon the surrender of such Certificates as provided in Section
1.11, the Price Per Share in cash.
1.10 OPTIONS. Except as may be otherwise agreed in writing
between the Company and any holder of any Option (as hereinafter defined), upon
the consummation of the Merger, each option to acquire Company Common Stock
outstanding immediately prior to the Effective Time under the Company's 1994
Executive Incentive Plan, as amended (the "Executive Incentive Plan"), the
Company's 1997 Stock Incentive Plan, as amended, the Company's 1994 Executive
Performance Stock Award Plan, as amended (the "Executive Performance Plan"), the
Company's 1987 Non-Qualified Stock Option Plan, as amended and the Company's
Stock Option Plan for Non-Employee Directors, as amended (such plans referred to
herein as the "Option Plans"), whether vested or unvested (each, an "Option,"
collectively, the "Options"), shall automatically become immediately vested and
exercisable and each holder of an Option shall have the right to receive from
the Surviving Corporation a cash payment (less applicable federal, state and
local withholding taxes) in an aggregate amount equal to the difference, if any,
between the Price Per Share less the applicable exercise price per share of
Company Common Stock applicable to such Option for all Company Common Stock
subject to the Option as expressly stated in the applicable Option Plan, stock
option agreement or other agreement. Options with an exercise price equal to or
greater than the Price Per Share will be cancelled without any consideration.
The Company shall use its reasonable best efforts (including, without
limitation, giving requisite notices to holders of Options advising them of such
accelerated vesting and rights pursuant to this Section 1.10) to fully advise
holders of Options of their rights under this Agreement and the Options, to
facilitate their timely exercise of such rights and to effectuate the provisions
of this Section 1.10. From and after the Effective Time, other than as expressly
set forth in this Section 1.10, no holder of an Option shall have any other
rights in respect thereof other than to receive payment for his or her Options
as set forth in this Section 1.10, and the Company shall take all necessary
actions to terminate effective as of the Effective Time the Company's Option
Plans, stock option agreements and similar arrangements.
1.11 SURRENDER AND PAYMENT.
(a) Paying Agent. Before the Effective Time, Holdings shall
designate a bank or trust company reasonably acceptable to the Company to act as
agent for the record holders of shares of the Company Common Stock in connection
with the Merger (the "Paying Agent"). At or before the Effective Time, Holdings
will deposit, or cause Merger Sub to deposit, as applicable, in trust for the
benefit of the holders of Certificates with the Paying Agent immediately
available funds (the "Funds") in an amount necessary to make the payments for
the shares of the Company Common Stock contemplated by this Agreement on a
timely basis. The Paying Agent will be authorized, at the request of Holdings,
to invest any Funds held by it in (i) investment grade money market instruments,
(ii) direct obligations of the United States of America, (iii) obligations for
which the
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full faith and credit of the United States of America is pledged to provide for
the payment of principal and interest, (iv) commercial paper rated the highest
quality by either Moody's Investors Services, Inc. or Standard & Poor's
Corporation or (v) certificates of deposit, bank repurchase agreements or
bankers' acceptances of commercial banks with capital exceeding $10 billion, in
each case having maturities not to exceed 30 days and as designated by Holdings,
with any interest earned thereon being paid to Holdings at the earlier of (A)
payment in full of the aggregate Price Per Share to all record holders of
Company Common Stock immediately prior to the Effective Time of the Merger and
(B) 180 days after the Effective Time; provided that no loss on investments made
pursuant to this Section 1.11(a) shall relieve Holdings of its obligations to
pay the Price Per Share to all record holders of Company Common Stock as
provided in Article 1 of this Agreement.
(b) Surrender of Certificates. Promptly (and in any event not
later than five (5) business days) after the Effective Time, Holdings and the
Surviving Corporation will cause the Paying Agent to mail and/or make available
to each record holder of Certificates that immediately prior to the Effective
Time represented shares of the Company Common Stock (other than holders of
Certificates representing Dissenting Shares or representing shares covered by
Section 1.9(b)), a notice and letter of transmittal and instructions in standard
form for use in effecting the surrender of all Certificates held by such record
holder.
(c) Payment Procedures. Upon surrender to the Paying Agent of
a Certificate, together with such letter of transmittal duly executed and
completed, the Paying Agent shall pay to the holder of such Certificate the
aggregate Price Per Share attributable to the number of shares of the Company
Common Stock represented by such Certificate, and such Certificate will then be
cancelled. Until surrendered in accordance with the provisions of this Section
1.11, each Certificate (other than Certificates representing Dissenting Shares
and Certificates representing shares covered by Section 1.9(b)) will represent
for all purposes only the right to receive the aggregate Price Per Share
relating thereto. No interest shall accrue or be paid in respect of cash payable
upon the surrender of Certificates. After the Effective Time, holders of
Certificates shall cease to have any rights as shareholders of the Company,
except as provided herein or under applicable state corporation law. If any
payment of cash in respect of cancelled shares of the Company Common Stock is to
be paid to a Person other than the registered holder of the shares represented
by the Certificate or Certificates surrendered in exchange therefor, it shall be
a condition to such payment that the Certificate or Certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Paying Agent any transfer or
other Taxes required as a result of such payment to a Person other than the
registered holder of such shares or establish to the satisfaction of the Paying
Agent that such Tax has been paid or is not payable. Any consideration otherwise
payable pursuant to this Agreement shall be subject to all applicable federal,
state and local Tax withholding requirements. For purposes of this Agreement,
"Tax" (including, with correlative meaning, the terms "Taxes" and "Taxable")
means all federal, state, local and foreign income, profits, franchise, gross
receipts, environmental, customs duty, capital stock, severance, stamp, payroll,
sales, transfer, employment, unemployment disability, use, property,
withholding, excise, production, value added, occupancy and other taxes, duties
or assessments of any nature whatsoever, together with all interest, penalties,
fines and additions to tax imposed with respect to such amounts and any interest
in respect of such penalties and additions to tax. For purposes of this
Agreement, "Person" means an individual, corporation, partnership, limited
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liability company association, trust, unincorporated organization, entity or
group (as defined in the Securities and Exchange Act of 1934, as amended (the
"Exchange Act")).
(d) No Transfer. After the Effective Time, there will be no
transfers of shares of the Company Common Stock recorded on the stock transfer
books of the Surviving Corporation. If, after the Effective Time, Certificates
are presented to the Paying Agent or the Surviving Corporation for any reason
they will be cancelled and exchanged for the Price Per Share as provided in
Section 1.13(a) below.
1.12 LOST CERTIFICATES. If any Certificate has been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such Person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent shall issue in exchange for such lost, stolen or destroyed
Certificate the Price Per Share due to such Person as provided in Section
1.13(a) of this Agreement.
1.13 UNCLAIMED MERGER CONSIDERATION.
(a) Transfer to Surviving Corporation. Any portion of the
Funds made available to the Paying Agent pursuant to Section 1.11(a) that remain
unclaimed by holders of Certificates that immediately prior to the Effective
Time represented shares of Company Common Stock for 180 days after the Effective
Time will be transferred to the Surviving Corporation upon demand. Any holder of
Certificates who has not theretofore complied with this Article 1 will
thereafter look only to the Surviving Corporation for payment of the Price Per
Share in accordance with this Agreement upon surrender of such Certificates.
(b) No Escheat of Remaining Funds. None of Holdings, Merger
Sub, the Company or the Paying Agent will be liable to any Person in respect of
any cash delivered from the Funds to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificates have
not been surrendered before seven years after the Effective Time (or immediately
before such earlier date on which any payment pursuant to this Section 1.13
would otherwise escheat to or become the property of any Governmental Entity),
the aggregate Price Per Share payable in respect to such Certificates will,
unless otherwise provided by applicable law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any Person
previously entitled thereto. For purposes of this Agreement, "Governmental
Entity" means any supranational, foreign, national, state, municipal or local
government, any instrumentality, subdivision, court, administrative agency or
commission or other authority thereof, or any quasi-governmental or private body
exercising any regulatory, taxing or other governmental or quasi-governmental
authority.
(c) Merger Consideration. Any portion of the Funds made
available to the Paying Agent pursuant to Section 1.11(a) to pay the Price Per
Share for shares of the Company Common Stock issued and outstanding immediately
prior to the Effective Time for which appraisal rights have been perfected shall
be returned to Holdings, upon demand.
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1.14 DISSENTING SHARES. Notwithstanding Section 1.9 hereof,
shares of the Company Common Stock issued and outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the Merger
or consented thereto in writing and who has properly demanded and perfected such
holder's right to dissent from the Merger and to be paid the fair value of such
shares in accordance with Sections 302A.471 and 302A.473 of the MBCA (and who
has neither effectively withdrawn nor lost his right to dissent) ("Dissenting
Shares"), shall not be converted into a right to receive cash pursuant to
Section 1.9, and the holder thereof shall be entitled to only such rights as are
granted by the MBCA. If after the Effective Time such holder fails to perfect or
withdraws or otherwise loses his right to dissent, such shares of Company Common
Stock shall be treated as if they had been converted as of the Effective Time
into the right to receive cash as provided in Section 1.9, without interest
thereon. The Company shall give Holdings reasonably prompt notice of any demands
for payment received by the Company under Sections 302A.471 and 302A.473 of the
MBCA, and Holdings shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of Holdings, make any payment with respect to, or settle
or offer to settle, any such demands.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
set forth in the Company Disclosure Schedule delivered by the Company to
Holdings at or prior to the execution and delivery of this Agreement (the
"Company Disclosure Schedule") (the Company Disclosure Schedule is arranged by
sections corresponding to the lettered and numbered sections contained in this
Section 2.1 and the disclosure in any one section of the Company Disclosure
Schedule shall qualify only that particular section of this Section 2.1 unless a
cross-reference is made to another lettered or numbered section to which such
disclosure also qualifies or the context of such disclosure makes it reasonably
clear, if read in the context of such other lettered or numbered section, that
such disclosure affects or modifies such other lettered or numbered section) or
any reports, schedules, forms, statements and other documents required to be
filed by the Company with the Securities and Exchange Commission (the "SEC")
since December 31, 1997 through the date of this Agreement, including all
exhibits thereto (the "Company SEC Reports"), the Company represents and
warrants to Holdings and Merger Sub:
(a) Organization, Standing and Power. Each of the Company and
each of its Subsidiaries (i) has been duly organized and is validly existing and
in good standing under the laws of its jurisdiction of organization, (ii) is
duly qualified and in good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification necessary, (iii) has all requisite corporate power and
authority to own or lease and operate its properties and assets, and to carry on
its business as now conducted and (iv) has obtained all licenses, permits,
franchises and other governmental authorizations necessary to the ownership or
operation of its properties or the conduct of its business as now conducted,
except, in the cases of clauses (i) (with respect to Subsidiaries only), (ii),
(iii) and (iv), as would not reasonably be expected to have a Material Adverse
Effect on the Company. For purposes of this Agreement, "Material Adverse Effect"
means, with respect to any entity, any adverse change, circumstance or
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<PAGE> 13
effect that, individually or aggregated with other changes, circumstances and
effects, is materially adverse to the business, operations, cash flows, assets,
liabilities, condition (financial or otherwise), or results of operations of
such entity and its Subsidiaries taken as a whole. True and complete copies of
the Organizational Documents, as amended and currently in force, and all
corporate minute books and records of the Company and each of its Subsidiaries
have been furnished by the Company to Holdings for inspection to the extent
requested by Holdings. For purposes of this Agreement, "Organizational
Documents" means, with respect to any entity, the certificate of incorporation,
bylaws and/or other similar governing documents of such entity.
(b) Capital Structure.
(i) The authorized capital stock of the Company
consists solely of (A) 40,000,000 shares of the Company Common Stock,
of which 18,289,484 shares are outstanding as of December 20, 2000, and
(B) 10,000,000 shares of undesignated shares, of which no shares are
outstanding. All issued and outstanding shares of the Company Common
Stock are duly authorized, validly issued, fully paid and
nonassessable, and were not issued in violation of any preemptive
rights. No Subsidiary of the Company owns any capital stock of the
Company. There are no outstanding options, warrants or other rights
(including preemptive rights) to acquire capital stock of the Company
other than Options representing in the aggregate the right to purchase
1,814,915 shares (all of which have a per share exercise price that is
less than the Price Per Share) of the Company Common Stock under the
Option Plans and share awards outstanding under the Executive Incentive
Plan and Executive Performance Plan (the "Share Awards"). Section
2.1(b)(i) of the Company Disclosure Schedule identifies, as of the date
indicated thereon, the holder of each outstanding Option, the number of
shares of Company Common Stock issuable upon exercise of each Option
and the exercise price and expiration date thereof. Section 2.1(b)(i)
of the Company Disclosure Schedule also identifies as of the date
indicated thereon, the number of shares of Company Common Stock subject
to the Share Awards and the recipients thereof. For purposes of this
Agreement, "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or
unincorporated, (i) of which such party or any other Subsidiary of such
party is a general partner (excluding partnerships, the general
partnership interests of which held by such party or any Subsidiary of
such party do not have a majority of the voting and economic interests
in such partnership) or (ii) at least a majority of the securities or
other interests of which having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one
or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries.
(ii) All of the issued and outstanding shares of
capital stock of the Company's Subsidiaries are duly authorized,
validly issued, fully paid and nonassessable and are owned directly or
indirectly by the Company free and clear of any liens, claims,
encumbrances, restrictions, preemptive rights or any other claims of
any third party ("Liens"). Except for the capital stock of its
Subsidiaries, the Company does not own, directly or indirectly, any
capital stock or other ownership interest in any Person.
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<PAGE> 14
(iii) No bonds, debentures, notes or other
indebtedness of the Company having, or convertible into other
securities having, the right to vote on any matters on which
shareholders may vote ("Company Voting Debt") are issued or
outstanding.
(iv) Except for the Options and the Share Awards,
there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the
Company or any of its Subsidiaries is a party or by which any of them
is bound obligating the Company or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of the Company or
any of its Subsidiaries or obligating the Company or any of its
Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. There are no outstanding obligations of the Company or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or its Subsidiaries. There is no
voting trust or other agreement or understanding to which the Company
or any of its Subsidiaries is a party or is bound, or, to the knowledge
of the Company, to which any shareholder of such entity is a party or
is bound, with respect to the voting of the capital stock or other
voting securities of the Company or any of its Subsidiaries, other than
agreements contemplated by this Agreement. The Company has the ability
to effect any action requiring the approval of the shareholders of any
of its Subsidiaries and to designate all of the members of the board of
directors of each of its Subsidiaries.
(c) Authority; No Conflicts.
(i) The Company has all requisite corporate power and
corporate authority to execute and deliver this Agreement and, subject
to the adoption of this Agreement by the requisite vote of the holders
of the Company Common Stock, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the
Company, subject in the case of the consummation of the Merger to any
required adoption of this Agreement by the holders of the Company
Common Stock. Subject to the adoption of this Agreement by the
requisite vote of the holders of the Company Common Stock, this
Agreement has been duly executed and delivered by the Company and
(assuming the due authorization and valid execution and delivery of
this Agreement by Holdings and Merger Sub) constitutes a valid and
binding agreement of the Company, enforceable against it in accordance
with its terms.
(ii) The execution and delivery of this Agreement by
the Company does not or will not, as the case may be, and the
consummation by the Company of the transactions contemplated hereby
will not, conflict with, or result in any violation of, or constitute a
default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, amendment, cancellation or
acceleration of any material obligation or the loss of a material
benefit under, or the creation of a Lien on any assets pursuant to (any
such conflict, violation, default, right of termination, amendment,
cancellation or acceleration, loss or creation, a "Violation"): (A) any
provision of the Organizational Documents of the Company or any of its
Subsidiaries or (B) except for such Violations as
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<PAGE> 15
would not reasonably be expected to have a Material Adverse Effect on
the Company or impair the ability of the Company to perform its
material obligations under this Agreement or delay in any material
respect or prevent the consummation of the Merger, and subject to
obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in Section
2.1(c)(iii) below, any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise or license binding upon or
held by the Company or any Subsidiary or any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company,
its Subsidiaries or their respective properties or assets.
(iii) No material consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to the Company or
any of its Subsidiaries in connection with the execution and delivery
of this Agreement by the Company or the consummation by the Company of
the transactions contemplated hereby, except for those required under
or in relation to (A) the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), (B) state securities or "blue sky"
laws, (C) the Securities Act of 1933, as amended (the "Securities
Act"), (D) the Exchange Act, (E) the MBCA with respect to the filing
and recordation of appropriate articles of merger or other documents,
(F) rules and regulations of the NASDAQ National Market ("NASDAQ") and
(G) any applicable federal and state laws governing the transfer of
food processing and distribution facilities subject to licensing or
permit requirements, inspection agreements, and similar facility-wide
approvals (including, but not limited to, the Egg Products Inspection
Act and the Minnesota Consolidated Food Licensing Law).
(d) Reports and Financial Statements.
(i) The Company has filed all required Company SEC
Reports. None of the Company's Subsidiaries is required to file any
form, report or other document with the SEC. None of the Company SEC
Reports, as of their respective dates (and, if amended or superseded by
a filing prior to the date of this Agreement, then on the date of such
filing), contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading. Each of the financial statements
(including the related notes) included in the Company SEC Reports
presents fairly, in all material respects, the consolidated financial
position and consolidated results of operations and cash flows of the
Company and its Subsidiaries as of the respective dates or for the
respective periods set forth therein, all in conformity with generally
accepted accounting principles ("GAAP") consistently applied during the
periods involved except as otherwise noted therein, and subject, in the
case of the unaudited interim financial statements, to normal year-end
adjustments and exceptions permitted by Form 10-Q under the Exchange
Act. Since December 31, 1999, there has been no material change in the
Company's accounting methods or principles except as described in the
notes to the consolidated financial statements of the Company contained
in the Company SEC Reports. All of such Company SEC Reports, as of
their respective dates (and as of the date of any amendment to the
respective Company SEC Report), complied as to form in all material
respects with the
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<PAGE> 16
applicable requirements of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder.
(ii) Except as set forth in the consolidated balance
sheets (and notes thereto) of the Company and its consolidated
Subsidiaries included in the Company SEC Reports, and except for
liabilities or obligations incurred in the Ordinary Course or in
connection with the transactions contemplated by this Agreement since
September 30, 2000, neither the Company nor any of its Subsidiaries has
incurred any liabilities or obligations of any nature which would
reasonably be expected to have a Material Adverse Effect on the
Company. For purposes of this Agreement, "Ordinary Course" means, with
respect to any entity, any actions taken in the regular and ordinary
course of that entity's business, consistent in all material respects
with past practices.
(e) Information Supplied.
(i) None of the information supplied or to be
supplied by the Company in writing specifically for inclusion or
incorporation by reference in (A) the proxy or information statement
related to the meeting of the Company's shareholders to be held in
connection with the Merger and the transactions contemplated by this
Agreement (the "Proxy Statement") or (B) the Schedule 13E-3 will, (1)
at the respective times such documents are filed, and, with respect to
the Proxy Statement when first published, sent or given to the
shareholders of the Company, contain an untrue statement of material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading or (2) in the
case of the Proxy Statement or any amendment thereof or supplement
thereto, at the time of the Company Shareholders Meeting and at the
Effective Time, contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the
circumstances under which they are made, not misleading or necessary to
correct any statement in any earlier communication with respect to any
solicitation of proxies for the Company Shareholders Meeting which
shall have become false or misleading. The Proxy Statement when filed
will comply as to form in all material respects with the applicable
requirements of the Exchange Act and the Securities Act and the rules
and regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this
Section 2.1(e), no representation or warranty is made by the Company
with respect to (A) statements made or incorporated by reference in the
Proxy Statement and the Schedule 13E-3 based on information supplied by
Holdings or Merger Sub for inclusion or incorporation by reference
therein or (B) any forward-looking information which may have been
supplied by the Company and incorporated into the Proxy Statement or
the Schedule 13E-3.
(f) Compliance with Applicable Laws; Regulatory Matters. The
Company and its Subsidiaries hold all permits, licenses, certificates,
franchises, registrations, variances, exemptions, orders and approvals of all
Governmental Entities ("Permits") which are necessary to each of them to own,
lease and operate its properties or to carry on its business as now being
conducted, except for such failures to have received such Permits as would not
reasonably be
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<PAGE> 17
expected to have a Material Adverse Effect on the Company. The Company and its
Subsidiaries and the Owned Real Property and the Leases are in compliance with
the terms of such Permits, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect on the Company. The
businesses of the Company and its Subsidiaries are not being and have not been
conducted in violation of any law, ordinance, regulation, judgment, decree,
injunction, rule or order of any Governmental Entity, except for violations
which would not reasonably be expected to have a Material Adverse Effect on the
Company. No investigation by any Governmental Entity with respect to the Company
or any of its Subsidiaries is pending or, to the knowledge of the Company,
threatened, other than investigations which would not reasonably be expected to
have a Material Adverse Effect on the Company.
(g) Litigation. There is no litigation, arbitration,
grievance, claim, suit, action, investigation or proceeding pending or, to the
knowledge of the Company, threatened, against or affecting the Company or any of
its Subsidiaries or any of their respective assets which would reasonably be
expected to have a Material Adverse Effect on the Company. There is no judgment,
award, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any of its Subsidiaries which
would reasonably be expected to have a Material Adverse Effect on the Company.
(h) Taxes. (i) The Company and each of its Subsidiaries have
duly and timely filed (taking into account any extension of time within which to
file) all material Tax Returns required to be filed by any of them, and all such
filed Tax Returns are complete and accurate in all material respects, (ii) the
Company and each of its Subsidiaries have paid all Taxes that are required to be
paid in respect to the periods covered by such returns whether or not shown on
such filed Tax Returns or that the Company or any of its Subsidiaries are
obligated to withhold from amounts owing to any shareholder, employee, creditor
or third party, except with respect to matters contested in good faith and for
which adequate reserves have been established in accordance with GAAP as
reflected in the most recent consolidated balance sheet or for such amounts that
would not reasonably be expected to have a Material Adverse Effect on the
Company, (iii) there are no pending or, to the knowledge of the Company,
threatened audits, examinations, investigations or other proceedings in respect
of Taxes or Tax matters relating to the Company or any of its Subsidiaries
which, if determined adversely to the Company or any of its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect on the Company, (iv)
there are no deficiencies or claims for any Taxes that have been proposed,
asserted or assessed against the Company or any of its Subsidiaries which, if
such deficiencies or claims were finally resolved against the Company or any of
such Subsidiaries, would reasonably be expected to have a Material Adverse
Effect on the Company, (v) there are no material Liens for Taxes upon the assets
of the Company or any of its Subsidiaries, other than Liens for current Taxes
not yet due and payable and Liens for Taxes that are being contested in good
faith by appropriate proceedings and (vi) none of the Company or its
Subsidiaries has made an election under Section 341(f) of the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder
(the "Code"). Neither the Company nor any of its Subsidiaries has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the past five years. Neither the Company nor any of its
Subsidiaries is a party to, bound by or has any obligation under, any Tax
sharing agreement or similar contract or arrangement or any agreement that
obligates it to make any payment computed by reference to the Taxes, taxable
income or taxable losses of any other Person (other than contracts
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<PAGE> 18
or arrangements entered into with employees, consultants or independent
contractors or in connection with purchase or sale agreements or sale
leasebacks, which contracts and arrangements would not reasonably be expected to
have a Material Adverse Effect on the Company). The Company and its Subsidiaries
(A) are not, and have not been, a member of an affiliated group filing a
consolidated federal income Tax Return other than a group the common parent of
which is the Company and (B) have no liability for Taxes of any Person under
Treasury Regulation 1.1502-6(a) (or any similar provision of state, local or
foreign law), or as a transferee or successor, by contract or otherwise. No
claim has ever been made by a taxing authority in a jurisdiction where the
Company or any of its Subsidiaries does not file Tax Returns that such Person is
or may be subject to taxation by such jurisdiction which, if determined
adversely to the Company or such Subsidiary, would reasonably be expected to
have a Material Adverse Effect on the Company. None of the Company or its
Subsidiaries has consented to extend the time, or is the beneficiary of any
extension of time, in which any Tax may be assessed or collected by any taxing
authority. None of the Company or its Subsidiaries will be required to include
any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Closing Date as a
result of any (i) change in method of accounting for a taxable period ending on
or prior to the Closing Date under Code ss. 481(c) (or any corresponding or
similar provision of state, local or foreign income Tax law), (ii) "closing
agreement" as described in Code ss. 7121 (or any corresponding or similar
provision of state, local or foreign income Tax law), (iii) deferred
intercompany gain or any excess loss account described in Treasury Regulations
under Code ss. 1502 (or any corresponding or similar provision of state, local
or foreign income Tax law) or (iv) installment sale made prior to the Closing
Date. For purposes of this Agreement, "Tax Return" means all returns and reports
(including elections, claims, declarations, disclosures, schedules, estimates,
computations and information returns) required to be supplied to a Tax authority
in any jurisdiction relating to Taxes, including any amendments thereof.
(i) Absence of Certain Changes or Events. Since September 30,
2000 other than in connection with or arising out of this Agreement and the
transactions contemplated hereby, the Company and its Subsidiaries have
conducted their respective businesses in the Ordinary Course and there has not
been (i) any condition, event or occurrence which has had or would reasonably be
expected to have a Material Adverse Effect on the Company or (ii) any action
which, if it had been taken after the date hereof, would have required Holdings'
consent under Section 3.1.
(j) Vote Required. The affirmative vote of the holders of a
majority of the voting power of all shares of the Company Common Stock entitled
to vote is the only vote of the holders of any class or series of the capital
stock of the Company necessary to approve this Agreement and the transactions
contemplated hereby.
(k) Real Property.
(i) Section 2.1(k)(i) of the Company Disclosure
Schedule sets forth the street address of each parcel of real property
owned by the Company or one of its Subsidiaries, the "Owned Real
Property"). The Company and its Subsidiaries have good and marketable
fee simple title to the Owned Real Property, free and clear of all
Liens, except where such impairment to title would not reasonably be
expected to have a Material Adverse Effect on the Company. Section
2.1(k)(i) of the Company Disclosure Schedule sets forth a
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<PAGE> 19
true and complete list of all leases, subleases, licenses and other
agreements (true and correct copies of which have been delivered to
Holdings) pursuant to which the Company and its Subsidiaries occupy and
use any real property (the "Leases"). The Leases are in full force and
effect in all material respects, free and clear of all Liens, except
for such exceptions as would not reasonably be expected to have a
Material Adverse Effect on the Company. To the best knowledge of the
Company, no parties to the Leases are in material breach or default of
such leases.
(ii) Neither the Company nor any of its Subsidiaries
is obligated under or bound by any agreement, option, right of first
refusal, purchase contract, or other contractual right to sell, lease
or dispose of any Owned Real Property or any portions thereof or
interests therein which property, portions and interests, individually
or in the aggregate, are material to the conduct of the business of the
Company or its Subsidiaries as currently conducted. Neither the Company
nor any of its Subsidiaries or any affiliates of any of the foregoing
has an ownership, financial or other interest in the landlord under any
of the Leases which exceeds a 50% ownership, financial or other
interest in such landlord. The Owned Real Property and the Leases
comprise all of the real property used in the Company's and its
Subsidiaries' business.
(l) Employee Benefit Plans; Labor Matters.
(i) Section 2.1(l)(i) of the Company Disclosure
Schedule contains a true and complete list of each written material (a)
employee benefit plan, policy and program (including, without
limitation, each "employee benefit plan," within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and each "multiemployer plan" within the meaning of Section
3(37) of ERISA) sponsored, maintained or contributed to by the Company
or any of its Subsidiaries for the benefit of employees, directors,
consultants or independent contractors and (b) benefit arrangement and
contract between the Company or its Subsidiaries and any current or
former employees (which have or have had an annual base salary of more
than $100,000), directors, consultants and independent contractors,
under which any such current or former employee, director, consultant
or independent contractor of the Company or any of its Subsidiaries
(the "Company Participants") has any present or future right to
material benefits (collectively, the "Company Benefit Plans").
(ii) (a) Each of the Company Benefit Plans has been
established, operated and administered in compliance with applicable
law, including but not limited to ERISA and the Code, except where such
noncompliance would not reasonably be expected to have a Material
Adverse Effect on the Company, (b) each of the Company Benefit Plans
intended to be "qualified" within the meaning of Section 401(a) of the
Code has received a favorable determination letter from the Internal
Revenue Service to such effect and the Company knows of no event that
would cause the disqualification of any such Company Benefit Plan, (c)
no Company Benefit Plan provides welfare or insurance benefits (whether
or not insured) to Company Participants or their dependents or
beneficiaries beyond the Company Participant's termination of
employment or termination of service of non-employees with the Company
or any of its Subsidiaries, which benefits would reasonably be expected
to have
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<PAGE> 20
a Material Adverse Effect on the Company, other than coverage mandated
by applicable law or benefits the full cost of which is borne by the
Company Participant (or his or her dependent or beneficiary), (d)
neither the Company nor any Subsidiary nor any other entity, that
together with the Company or any Subsidiary is treated as a single
employer under Section 414 of the Code, maintains, contributes to, or
has any material liability with respect to a "multiemployer plan," as
such term is defined in Section 3(37) or 4001 of ERISA, nor does such
entity have any pension benefit plan subject to Section 412 of the Code
or Title IV of ERISA, (e) neither the Company nor any of its
Subsidiaries have engaged in a transaction with respect to any Company
Benefit Plan which to the Company's knowledge subjects such entity to
either a civil penalty assessed pursuant to Sections 502(i) or 502(e)
of ERISA or a Tax imposed pursuant to Section 4975 or 4976 of the Code,
in each case which penalty or Tax would reasonably be expected to have
a Material Adverse Effect on the Company, (f) to the knowledge of the
Company, there are no pending or threatened claims (other than routine
claims for benefits) by, on behalf of or against any of the Company
Benefit Plans or any trusts related thereto, which would reasonably be
expected to have a Material Adverse Effect on the Company, (g) no event
has occurred and no condition exists that to the Company's knowledge
would subject the Company or any of its Subsidiaries to any Tax, fine,
lien, penalty or other liability (other than liabilities incurred in
the ordinary course of the plan's operations that are reflected in the
Company's financial statements) with respect to any Company Benefit
Plan imposed by ERISA or the Code, which would reasonably be expected
to have a Material Adverse Effect on the Company and (h) all material
contributions or other material amounts payable by the Company or any
of its Subsidiaries as of the Effective Time with respect to any
Company Benefit Plan in respect of current or prior plan years which
are required to be reflected in the Company's financial statements in
accordance with GAAP have been, in all material respects, paid or
accrued in accordance with GAAP.
(iii) Except as provided pursuant to this Agreement,
neither the execution, delivery or performance of this Agreement by the
Company nor the consummation by the Company of the transactions
contemplated hereby shall (a) result in any payment becoming due to any
Company Participant, (b) increase any benefits otherwise payable under
any Company Benefit Plan, (c) result in any acceleration of the time of
payment or vesting of any benefits under any Company Benefit Plan or
(d) violate the provisions of any agreement between a Company
Participant and the Company or any of its Subsidiaries, except in each
case where such payment, increase, acceleration or violation would not
reasonably be expected to have a Material Adverse Effect on the
Company.
(iv) (a) Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining or other labor
union contract and no collective bargaining agreement is being
negotiated by the Company or any of its Subsidiaries, (b) there is no
pending or to the knowledge of the Company, threatened labor dispute,
strike, work stoppage, lockout or other labor controversy involving the
Company or any of its Subsidiaries which may interfere with the
respective business activities of the Company or any of its
Subsidiaries, except where such dispute, strike or work stoppage would
not reasonably be expected to have a Material Adverse Effect on the
Company nor has the Company or any of its Subsidiaries experienced any
such labor controversy within the past three years, (c) there is no
pending
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<PAGE> 21
or, to the knowledge of the Company, threatened action, complaint,
arbitration, proceeding or investigation against the Company or any of
its Subsidiaries by or before (or that could be brought before) any
court, governmental agency, administrative agency, board, commission or
arbitrator brought by or on behalf of any prospective, current or
former employee, labor organization or other representative of
employees of the Company or any of its Subsidiaries which would
reasonably be expected to have a Material Adverse Effect on the Company
(d) the Company and its Subsidiaries are in compliance with all
applicable laws, agreements, and policies relating to employment,
employment practices and terms and conditions of employment except
where such noncompliance would not reasonably be expected to have a
Material Adverse Effect on the Company and (e) neither the Company nor
any of its Subsidiaries has closed any plant or facility, effectuated
any layoffs of employees or implemented any early retirement,
separation or window program within the past year, nor has the Company
or any of its Subsidiaries planned or announced any such action or
program for the future.
(m) Intellectual Property.
(i) The Company or one of its Subsidiaries owns, or
has the right to use, pursuant to written license agreements set forth
on Section 2.1(m) of the Company Disclosure Schedule, free and clear of
all liens, security interests or other encumbrances, all trademarks,
tradenames, service marks, Internet domain names, trade dress, patents,
patent applications or other applications for registration of
intellectual property, copyrights, technology, software, know-how,
trade secrets and processes used by the Company or any of its
Subsidiaries in their respective businesses as presently conducted or
necessary therefor (the "Intellectual Property"), except for those the
failure to own or have such legal right to use as would not reasonably
be expected to have a Material Adverse Effect on the Company.
(ii) No claim has been asserted and is pending by any
Person challenging the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, except for
such matters as would not reasonably be expected to have a Material
Adverse Effect on the Company.
(iii) The conduct of the Company's and its
Subsidiaries' businesses does not infringe on the intellectual property
or other rights of any Person, except for such claims and infringements
that would not reasonably be expected to have a Material Adverse Effect
on the Company.
(iv) To the Company's knowledge, no third party has
infringed any of the Intellectual Property, except for such
infringements as would not reasonably be expected to have a Material
Adverse Effect on the Company.
(v) Except to the extent that it would not reasonably
be expected to have a Material Adverse Effect on the Company, the
owners of any Intellectual Property licensed to the Company have taken
all reasonably necessary and desirable actions to maintain and protect
such Intellectual Property.
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<PAGE> 22
(n) Environmental, Health, and Safety Matters.
(i) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, each of the Company and its Subsidiaries
has complied and is in compliance with all Environmental, Health, and Safety
Requirements, including, without limitation, all permits, licenses and other
authorizations that are required pursuant to Environmental, Health, and Safety
Requirements for the occupation of its facilities and the operation of its
business. Except as would not reasonably be expected to have a Material Adverse
Effect on the Company, none of the Company or its Subsidiaries has received any
notice, report or other information regarding any actual or alleged violation of
Environmental, Health, and Safety Requirements, or any liabilities or potential
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise),
including any investigatory, remedial or corrective obligations, relating to any
of them or its facilities arising under Environmental, Health, and Safety
Requirements. Except as would not reasonably be expected to have a Material
Adverse Effect on the Company, none of the Company, its Subsidiaries, or their
respective predecessors has treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, or released any substance,
including without limitation any hazardous substance, or owned or operated any
property or facility (and no such property or facility is contaminated by any
such substance) in a manner that has given rise to liabilities or could
reasonably be expected to give rise to liabilities, including any liability for
response costs, corrective action costs, personal injury, property damage,
natural resource damages or attorney fees, pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Solid Waste Disposal Act, as amended ("SWDA"), or any other
Environmental, Health, and Safety Requirements, except for such obligations as
would not reasonably be expected to have a Material Adverse Effect on the
Company. Neither this Agreement nor the consummation of the transaction that is
the subject of this Agreement will result in any obligations for site
investigation or cleanup, or notification to or consent of government agencies
or third parties, pursuant to any of the so-called "transaction-triggered" or
"responsible property transfer" Environmental, Health, and Safety Requirements.
Except as would not reasonably be expected to have a Material Adverse Effect,
neither the Company nor any of its Subsidiaries has assumed, undertaken, or
otherwise become subject to, any liability, including without limitation any
obligation for corrective or remedial action, of any other person or entity
relating to Environmental, Health, and Safety Requirements. Except as would not
reasonably be expected to have a Material Adverse Effect on the Company, no
facts, events or conditions relating to the past or present facilities,
properties or operations of the Company, its Subsidiaries, or any of their
respective predecessors will prevent, hinder or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to any investigatory,
remedial or corrective obligations pursuant to Environmental, Health, and Safety
Requirements, or give rise to any other liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) pursuant to Environmental, Health, and
Safety Requirements, including without limitation any relating to onsite or
offsite releases or threatened releases of hazardous materials, substances or
wastes, personal injury, property damage or natural resources damage.
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(ii) The Company has provided to Holdings and the
Merger Sub, copies of all material environmental reports, audits,
assessments, and investigations, and any other material environmental
documents, related to the past or present facilities, properties or
operations of the Company, its Subsidiaries, or any of their respective
predecessors, to the extent the forgoing are in the possession,
custody, or control of the Company or any of its Subsidiaries.
For purposes of this Agreement, "Environmental, Health, and Safety Requirements"
shall mean all federal, state, local and foreign statutes, regulations,
ordinances and other provisions having the force or effect of law, all judicial
and administrative orders and determinations, all contractual obligations and
all common law concerning public health and safety, worker health and safety,
and pollution or protection of the environment, including without limitation all
those relating to food or to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, release, threatened release, control, or cleanup
of any hazardous materials, substances or wastes, chemical substances or
mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation,
each as amended.
(o) Brokers or Finders. Except for the engagement of
Merrill Lynch & Co. and U.S. Bancorp Piper Jaffray Inc. ("U.S. Bancorp Piper
Jaffray"), no agent, broker, investment banker, financial advisor or other
firm or Person is or will be entitled to any broker's or finder's fee or any
other similar commission or fee in connection with any of the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company.
(p) Insurance. Section 2.1(p) of the Company Disclosure
Schedule contains a list of all material insurance policies which are owned by
the Company and any of its Subsidiaries and which name the Company or any of its
Subsidiaries as an insured, including without limitation self-insurance programs
and those which pertain to the Company's assets, employees or operations. All
such insurance policies are in full force and effect and the Company has not
received notice of cancellation of any such insurance policies other than those
policies the absence or cancellation of which would not reasonably be expected
to have a Material Adverse Effect on the Company.
(q) Affiliate Transactions. There are no contracts,
commitments, agreements, arrangements or other transactions between the Company
or any of its Subsidiaries, on the one hand, and any (i) present officer or
director of the Company or any of its Subsidiaries or any of their immediate
family members (including their spouses) or (ii) affiliate of any such officer,
director, family member or beneficial owner, on the other hand, required to be
disclosed pursuant to Item 404 of Regulation S-K of the SEC.
(r) Material Contracts. Section 2.1(r) of the Company
Disclosure Schedule sets forth a list of all of the Company Material Contracts
as of the date of this Agreement and, prior to the date hereof, the Company has
made available to Holdings true copies of each Company Material Contract and
summaries of all oral Company Material Contracts. For purposes of this
Agreement, the term "Company Material Contracts" shall mean: (i) all contracts
required to be disclosed pursuant to Items 401 or 601 of Regulation S-K of the
SEC as an exhibit to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999 or any Company SEC Report filed
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thereafter, in each case under the rules and regulations of the SEC, (ii) all
contracts for the future purchase of materials, supplies, merchandise or
equipment providing for remaining payments in excess of $3 million in the
aggregate, (iii) all contracts for the sale or lease of any of the assets of the
Company or its Subsidiaries, other than sales of inventory in the Ordinary
Course, providing for payments in excess of $3 million in the aggregate, (iv)
all mortgages, pledges, conditional sales contracts, security agreements,
factoring agreements or other similar agreements with respect to any assets of
the Company providing for payments in excess of $1 million in the aggregate, (v)
all consulting agreements providing for payments thereunder in excess of
$250,000 in the aggregate, (vi) all non-competition or similar agreements which
restrict or may hereafter restrict in any material respect the geographic or
operational scope of the business of the Company or any of its affiliates or the
ability of the Company or any of its affiliates to enter into new lines of
business, (vii) all agreements or indentures relating to borrowed money or other
indebtedness or the mortgaging, pledging or otherwise placing a Lien on any
material asset or material group of assets of the Company or its Subsidiaries,
(viii) all contracts under which the Company has advanced or loaned any other
Person in the aggregate exceeding $250,000, (ix) all sales, distribution or
franchise agreements the termination of which would have a Material Adverse
Effect on the Company, (x) all warranty agreements and (xi) all agreements by
which the Company or its Subsidiaries guarantee, endorse or otherwise becomes or
is contingently liable for the debt, obligation or other liability of any other
Person or guarantees the payment of dividends or other distribution upon the
shares of any other Person. All such written Company Material Contracts are
valid, binding and enforceable in accordance with their respective terms
(assuming the other parties thereto are bound) and are in full force and effect,
except to the extent they have previously expired in accordance with their
terms, or, except where such invalidity or unenforceability would not reasonably
be expected to have a Material Adverse Effect on the Company. No payment
default, breach or violation by the Company or its Subsidiaries or to the
Company's knowledge, by any other party thereto exists under such Company
Material Contracts, except for defaults, breaches or violations which would not
reasonably be expected to have a Material Adverse Effect on the Company.
(s) State Takeover Statutes. The Company Board and a special
committee thereof satisfying the requirements of Section 673 Subd. 1(d)(1) of
the MBCA has approved the execution of this Agreement and authorized and
approved the Merger prior to the execution by the Company of this Agreement in
accordance with the Section 673 of the MBCA, so that such Section will not apply
to this Agreement or the transactions contemplated hereby (including the
Merger). The Company Board has taken all such action required to be taken by it
to provide that this Agreement and the transactions contemplated hereby shall be
exempt from the requirements of any "moratorium," "control share," "fair price"
or other anti-takeover laws or regulations of any state (including without
limitation Section 671 of the MBCA).
(t) Financial Advisory Opinion. U.S. Bancorp Piper Jaffray
has delivered to the Company Board its written opinion, subject to the
qualifications and limitations stated therein, to the effect that the
consideration to be received by the holders of the Company Common Stock pursuant
to the Merger is fair to the holders of the Company Common Stock (other than any
holders of Company Common Stock who will be shareholders of the Surviving
Corporation or hold interests in Investors or Holdings after consummation of the
Merger) from a financial point of view.
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(u) Compliance with Applicable Food Laws. The Company and
its Subsidiaries have produced and distributed and are producing and
distributing food products that are in compliance with the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 321 et seq.), the Federal Egg Products Inspection
Act (21 U.S.C. 1031 et seq.), the Minnesota Food Law (Minnesota Statutes,
Ch. 31), all other applicable federal and state laws governing the production
of food, and all applicable regulations and administrative interpretations
promulgated under any such laws, except for such failures to be in compliance
as would not reasonably be expected to have a Material Adverse Effect on the
Company.
2.2 REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND MERGER
SUB. Except as set forth in the Holdings Disclosure Schedule delivered by
Holdings to the Company at or prior to the execution and delivery of this
Agreement (the "Holdings Disclosure Schedule"), Holdings and Merger Sub each
represent and warrant to the Company that:
(a) Organization, Standing and Power. Each of Holdings and
Merger Sub has been duly organized and is validly existing and in good standing
under the laws of its jurisdiction of organization. Each of Holdings and Merger
Sub is duly qualified and in good standing to do business in each jurisdiction
in which the nature of its business or the ownership or leasing of its
properties makes such qualification necessary, except as would not reasonably be
expected to have a Material Adverse Effect on Holdings and Merger Sub. True and
complete copies of the Organizational Documents of the Holdings and Merger Sub
have been furnished by Holdings to the Company for inspection to the extent
requested by the Company.
(b) Authority; No Conflicts.
(i) Each of Holdings and Merger Sub has all requisite
power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action
on the part of Holdings and Merger Sub. This Agreement has been duly
executed and delivered by Holdings and Merger Sub and (assuming the due
authorization and valid execution and delivery of this Agreement by the
Company) constitutes a valid and binding agreement of Holdings and
Merger Sub, enforceable against them in accordance with its terms.
(ii) The execution and delivery of this Agreement by
Holdings and Merger Sub does not or will not, as the case may be, and
the consummation by Holdings and Merger Sub of the transactions
contemplated hereby will not, result in any Violation of: (A) any
provision of the Organizational Documents of Holdings and Merger Sub or
(B) except for such Violations as would not reasonably be expected to
have a Material Adverse Effect on Holdings and Merger Sub or impair the
ability of Holdings or Merger Sub to perform their material obligations
under this Agreement or delay in any material respect or prevent the
consummation of the Merger, and subject to obtaining or making the
consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph (iii) below, any loan
or credit agreement, note, mortgage, bond, indenture, lease, benefit
plan or other agreement, obligation, instrument, permit, concession,
franchise or license binding
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upon or held by Holdings or Merger Sub or any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Holdings or
Merger Sub or their respective properties or assets.
(iii) No material consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Holdings or
Merger Sub in connection with the execution and delivery of this
Agreement by Holdings or Merger Sub or the consummation by Holdings or
Merger Sub of the transactions contemplated hereby, except for (A) the
consents, approvals, orders, authorizations, registrations,
declarations and filings required under or in relation to Section
2.1(c)(iii) and (B) such consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to make or
obtain would not reasonably be expected to have a Material Adverse
Effect on Holdings and Merger Sub or impair or delay the ability of
Holdings or Merger Sub to consummate the transactions contemplated
hereby.
(iv) Each of Holdings and Merger Sub holds all Permits
which are material to the operation of their respective businesses,
taken as a whole.
(c) Financing Commitments. An executed commitment letter from
Bank of America, N.A. ("Bank of America"), Banc of America Bridge LLC ("Banc of
America Bridge") and Banc of America Securities LLC dated as of December 20,
2000 (the "Bank Commitment Letter"), is included in Section 2.2(c) of the
Holdings Disclosure Schedule. Pursuant to the Bank Commitment Letter and subject
to the terms and conditions contained therein, (i) Bank of America has committed
to provide senior debt financing to Merger Sub in the amount of $470,000,000,
consisting of a $370,000,000 term loan and a $100,000,000 revolving credit
facility and Banc of America Bridge has committed to purchase unsecured senior
subordinated debt securities of the Company in the aggregate amount of
$200,000,000. The Company has also received a copy of a commitment letter, a
true and correct copy of which is included in Section 2.2(b) of the Holdings
Disclosure Schedule (the "Vestar Commitment Letter"), dated December 20, 2000
from Vestar Capital Partners IV, L.P. ("Vestar") pursuant to which Vestar has
committed, subject to the terms and conditions contained therein, to purchase
equity securities of Investors for an aggregate purchase price of $133,900,405.
The Company has also received a copy of a commitment letter, a true and correct
copy of which is included in Section 2.2(c) of the Holdings Disclosure Schedule
(the "Marathon Fund Commitment Letter" and, together with the Bank Commitment
Letter and the Vestar Commitment Letter, the "Commitment Letters" and the
financing to be provided thereunder, the "Financing"), dated December 20, 2000
from Marathon Fund Limited Partnership IV ("Marathon") pursuant to which
Marathon has committed, subject to the terms and conditions contained therein,
to purchase equity securities of Investors for an aggregate purchase price of
$35,000,000. The obligations to fund the commitments under the Commitment
Letters are not subject to any condition other than set forth in the Commitment
Letters. Holdings and Merger Sub have no actual knowledge of any fact or
occurrence existing on the date of this Agreement which in their good faith
judgment would reasonably be expected to (i) make the material assumptions or
statements set forth in the Bank Commitment Letter inaccurate, (ii) cause the
Bank Commitment Letter to be ineffective or (iii) preclude in any material
respect the satisfaction of the conditions set forth in the Bank Commitment
Letter. As of the date hereof, the Commitment Letters are in full force and
effect and have not been amended in any material respect. To the knowledge of
Holdings
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and Merger Sub, assuming all of the representations and warranties o the Company
set forth herein are true, the funds contemplated to be received pursuant to the
Commitment Letters together with the roll over contributions to be made as set
forth in the Management Equity Agreements and the Other Equity Agreements will
be sufficient to consummate the Merger and to pay all related fees and expenses.
The financing and other fees that are due and payable under the Commitment
Letters have been paid in full. Holdings and Merger Sub believe that, upon
consummation of the transactions contemplated by this Agreement, including the
Financing, (i) the Surviving Corporation will not be insolvent, (ii) the
Surviving Corporation will not be left with unreasonably small capital, (iii)
the Surviving Corporation will not have incurred debts beyond its ability to pay
such debts as they mature and (iv) the capital of the Surviving Corporation will
not be impaired.
(d) Information Supplied.
(i) The Schedule 13E-3 and any amendments or
supplements thereto, will, when filed, comply as to form in all
material respects with the applicable requirements of the Exchange Act
and the rules and regulations thereunder.
(ii) None of the information supplied or to be
supplied by Holdings or Merger Sub in writing specifically for
inclusion or incorporation by reference in the Proxy Statement, the
Schedule 13E-3 and any other documents to be filed with the SEC in
connection with the transactions contemplated hereby, including any
amendment or supplement to such documents, will, at the respective
times such documents are filed, and, with respect to the Proxy
Statement, when first published, sent or given to shareholders of the
Company, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the
circumstances under which they are made, not misleading or, in the case
of the Proxy Statement or any amendment thereof or supplement thereto,
at the time of the Company Shareholders Meeting, and at the Effective
Time, contain any untrue statement of a material fact, or omit to state
any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances
under which they are made, not misleading or necessary to correct any
statement in any earlier communication with respect to any solicitation
of proxies for the Company Shareholders Meeting which shall have become
misleading.
(iii) Notwithstanding the foregoing provisions of this
Section 2.2(d), no representation or warranty is made by Holdings or
Merger Sub with respect to statements made or incorporated by reference
in the Schedule 13E-3 based on information supplied by the Company for
inclusion or incorporation by reference therein.
(e) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Holdings or Merger Sub, other than Vestar Capital Partners and
Goldner Hawn Johnson & Morrison Incorporated.
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(f) Ownership of Company Capital Stock. As of the date of this
Agreement, neither Holdings nor, to the best of its knowledge, any of its
affiliates or associates (as such terms are defined under the Exchange Act) (i)
beneficially owns, directly or indirectly or (ii) is party to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of, in case of either clause (i) or (ii), shares of the capital stock
of the Company. Holdings has provided the Company with true and correct copies
of the form of Management Equity Agreements and the form of Other Equity
Agreements and related letter agreements, which are included in Section 2.2(f)
of the Holdings Disclosure Schedule.
(g) Other Information Regarding Holdings and Merger Sub. Each
of Holdings and Merger Sub is a newly organized corporation, each formed solely
for the purpose of engaging in the transactions contemplated hereby. Prior to
the date hereof, neither Holdings nor Merger Sub has engaged in any business
activities or conducted any operations other than in connection with the
transactions contemplated hereby. Merger Sub is a wholly owned Subsidiary of
Holdings, and, as of the date hereof, Holdings does not own, directly or
indirectly, any capital stock or other ownership interest in any Person other
than Merger Sub.
ARTICLE 3
COVENANTS RELATING TO CONDUCT OF BUSINESS
3.1 COVENANTS OF THE COMPANY. During the period from the date
of this Agreement and continuing until the Effective Time (except as expressly
contemplated or permitted by this Agreement, as set forth in Section 3.1 of the
Company Disclosure Schedule or to the extent that Holdings shall otherwise
consent in writing):
(a) Ordinary Course. The Company and its Subsidiaries shall
carry on their respective businesses in the Ordinary Course and shall use all
reasonable efforts to preserve intact their present business organizations and
their relationships with customers, suppliers and others having business
dealings with them.
(b) Dividends; Changes in Share Capital. The Company shall
not, and shall not permit any of its Subsidiaries to, and shall not propose to,
(i) declare or pay any dividends on or make other distributions in respect of
any of its capital stock, except dividends by the Company or its Subsidiaries in
the Ordinary Course, (ii) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for, shares of its capital stock or (iii)
repurchase, redeem or otherwise acquire any shares of its capital stock or any
securities convertible into or exercisable for any shares of its capital stock.
(c) Issuance of Securities. The Company shall not, and shall
cause its Subsidiaries not to, issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any shares of its capital stock of any class,
any Company Voting Debt or any securities convertible into or exercisable for,
or any rights, warrants or options to acquire, any such shares or Company Voting
Debt, or enter into any agreement with respect to any of the foregoing, other
than (i) the issuance of shares of the Company Common Stock (A) upon the
exercise of Options issued in the Ordinary Course prior to the date hereof in
accordance with the terms of the Option Plans as in effect
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on the date of this Agreement or (B) under the Share Awards outstanding on the
date of this Agreement and (ii) the issuance of Share Awards in an amount not to
exceed that number of shares of Company Common Stock equal to $1,025,000 divided
by the market price of Company Common Stock as determined in accordance with the
terms of the Executive Performance Plan and the Executive Incentive Plan.
(d) Organizational Documents. Except to the extent required to
comply with their respective obligations hereunder, by law or by the rules and
regulations of the NASDAQ, the Company and its Subsidiaries shall not amend or
propose to amend their respective Organizational Documents.
(e) Indebtedness and Other Matters. The Company shall not, and
shall not permit any of its Subsidiaries to, (i) other than incurrence of
indebtedness under existing working capital facilities in the ordinary course of
business consistent with past practices, incur any indebtedness for borrowed
money or guarantee, assume, endorse or otherwise become responsible for any such
indebtedness or issue or sell any debt securities or warrants or rights to
acquire any debt securities of the Company or its Subsidiaries or of other
Persons, other than indebtedness of the Company or its Subsidiaries to the
Company or its Subsidiaries, (ii) make any loans or advances other than by the
Company or its Subsidiaries to or in the Company or its Subsidiaries or other
than to customers for the purchase of products from the Company in the ordinary
course of business consistent with past practices, (iii) make any capital
contributions to, or investments in, any other Person, other than by the Company
or its domestic Subsidiaries to or in the Company or its domestic Subsidiaries,
(iv) other than the payment, discharge or satisfaction of claims, liabilities
and obligations in the ordinary course of business consistent with past
practices not in excess of amounts duly accrued or accruable therefor, pay,
discharge or satisfy any claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), (v) make capital expenditures
in excess of $32,000,000 prior to the Closing Date or enter into binding
contracts to make capital expenditures in excess of $46 million during the 2001
fiscal year, (vi) issue, deliver, sell, lease, sell and leaseback, pledge,
dispose of or encumber material properties or material assets of the Company or
any of its Subsidiaries other than inventory in the Ordinary Course, except
Liens for Taxes not currently due, (vii) (A) make or change any Tax election or
method of accounting with respect to Taxes, (B) file any amended Tax Return or
(C) settle or compromise any examination or proceeding with respect to any
material Tax liability, (viii) settle or compromise any litigation (whether or
not commenced prior to the date of this Agreement), other than settlements
involving amounts payable by the Company and its Subsidiaries that are not in
excess of $500,000 in the aggregate over amounts fully recoverable from insurers
of the Company and its Subsidiaries, (ix) enter into any new or amended contract
or agreement with any labor unions representing employees of the Company or any
Subsidiary, (x) enter into or amend, modify, renew or terminate any material
agreement or material transaction, including, without limitation, any material
transaction involving any merger, consolidation, joint venture, license
agreement, partial or complete liquidation or dissolution, reorganization,
recapitalization, restructuring, or a purchase, sale, lease or other acquisition
or disposition of any assets or capital stock, (xi) knowingly undertake any
action or fail to take any action that will result in a breach of the
representations and warranties set forth in Section 2.1 as if made on and as of
the Closing Date or (xii) agree, or commit to agree, to take any action not
permitted to be taken pursuant to this Section 3.1(e).
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(f) Benefit Plans. The Company shall not, and shall not permit
any of its Subsidiaries to, (i) establish, adopt, enter into, or amend any
Company Benefit Plan, or any plan, agreement, program, policy, trust, fund or
other arrangement that would be a Company Benefit Plan if it were in existence
as of the date of this Agreement, except as required by law, (ii) increase the
compensation payable or to become payable to (A) any of its directors or
officers, except to the extent required under agreements existing as of the date
of this Agreement or as consistent with the Company's 2001 operating budget
previously provided to Holdings; provided that such increases shall not exceed,
in the aggregate, 5% of current levels, or (B) except in the Ordinary Course
consistent with the Company's 2001 operating budget, other employees or (iii)
take any action with respect to the grant, modification or amendment of any
severance or termination pay, or stay, bonus or other incentive arrangement
(other than pursuant to benefit plans and policies in effect on the date of this
Agreement).
3.2 ADVICE OF CHANGES; GOVERNMENT FILINGS. Each of the Company
and Holdings shall (a) confer on a regular and frequent basis with the other,
(b) report (to the extent permitted by law, regulation and any applicable
confidentiality agreement) to the other on operational matters and (c) promptly
advise the other orally and in writing of (i) any representation or warranty
made by it contained in this Agreement becoming untrue or inaccurate in any
respect such that the conditions set forth in Section 5.2(a) or 5.3(a) would not
be satisfied, (ii) the failure by it (A) to comply with or satisfy in any
respect any covenant, condition or agreement required to be complied with or
satisfied by it under this Agreement that is qualified as to materiality or (B)
to comply with or satisfy in any material respect any covenant, condition or
agreement required to be complied with or satisfied by it under this Agreement
that is not so qualified as to materiality or (iii) any change, event or
circumstance that has had a Material Adverse Effect on such party or materially
and adversely affects its ability to consummate the transactions contemplated
hereby in a timely manner; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties
or the conditions to the obligations of the parties under this Agreement. The
Company and Holdings and Merger Sub shall file all reports required to be filed
by each of them with the SEC (and all other Governmental Entities) between the
date of this Agreement and the Effective Time and shall (to the extent permitted
by law or regulation or any applicable confidentiality agreement) deliver to the
other party copies of all such reports promptly after the same are filed.
Subject to applicable laws relating to the exchange of information, each of the
Company and Holdings shall have the right to review in advance, and to the
extent practicable each will consult with the other, with respect to all the
information relating to the other party and each of their respective
Subsidiaries, which appears in any filings, announcements or publications made
with, or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable. Each of the Company and Holdings
agrees that, to the extent practicable, it will consult with the other party
with respect to the obtaining of all Permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and each
further agrees to keep the other apprized of the status of matters relating to
completion of the transactions contemplated hereby.
3.3 FINANCING RELATED COOPERATION. The Company agrees to
provide, and will cause its Subsidiaries and its and their respective officers,
employees and advisors to provide, all
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cooperation reasonably necessary in connection with the arrangement of any
financing to be consummated contemporaneously with or at or after the expiration
of the Effective Time in respect of the transactions contemplated by this
Agreement, including participation in meetings, due diligence sessions, road
shows, the preparation of offering memoranda, private placement memoranda,
prospectuses and similar documents, the execution and delivery of any commitment
letters, underwriting or placement agreements, pledge and security documents,
other definitive financing documents, or other requested certificates or
documents, including a certificate of the chief financial officer of the Company
with respect to solvency matters, comfort letters of accountants and legal
opinions as may be reasonably requested by Holdings and taking such other
actions as are reasonably required to be taken by the Company in the Commitment
Letters, provided that Holdings and Merger Sub shall use reasonable efforts not
to materially interfere with the duties of such officers, employees and advisors
such that the Company's business and results of operations would be materially
adversely affected thereby. In addition, in conjunction with the obtaining of
any such financing, the Company agrees, at the reasonable request of Holdings,
to call for prepayment or redemption, or to prepay, redeem and/or renegotiate,
as the case may be, any then existing indebtedness of the Company and its
Subsidiaries; provided that no call for redemption or prepayment shall be
irrevocably made until contemporaneously with or after the Effective Time.
Holdings and Merger Sub shall use their commercially reasonable best efforts to
cause the Financing to be fulfilled in accordance with the terms of the
Commitment Letters.
ARTICLE 4
ADDITIONAL AGREEMENTS
4.1 PREPARATION OF THE PROXY STATEMENT; SCHEDULE 13E; THE
COMPANY SHAREHOLDERS MEETING.
(a) Company Shareholders Meeting. The Company shall, acting
through the Company's Board, as soon as practicable following execution of this
Agreement and in accordance with this Agreement, duly call, give notice of,
convene and hold a special meeting of its shareholders (the "Company
Shareholders Meeting") for the purpose of considering and taking action upon the
approval of the Merger and the adoption of this Agreement, and the Company
shall, through the Company Board, recommend to its shareholders that they adopt
this Agreement; provided, however, that the Company Board may withdraw, modify
or change such recommendation in accordance with the terms of Section 4.4 of
this Agreement. Holdings and Merger Sub shall vote or cause to be voted all the
shares of the Company Common Stock owned of record or beneficially by Holdings
or any of its Subsidiaries in favor of this Agreement and the transactions
contemplated by this Agreement.
(b) Proxy Statement. As soon as practicable following the
execution of this Agreement, the Company shall prepare and file with the SEC the
Proxy Statement with respect to the Company Shareholders Meeting, and use its
reasonable good faith efforts to have a Proxy Statement cleared by the SEC and
mailed to the Company's shareholders. Holdings and Merger Sub and the Company
shall cooperate with each other in the preparation of the Proxy Statement. The
Proxy Statement (i) shall contain (A) subject to the fiduciary duties of the
Company Board, statements of the Company Board that it has (x) determined that
this Agreement and the transactions contemplated hereby, including the Merger,
are fair to and in the best interests of the shareholders
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of the Company, (y) declared the Merger and this Agreement to be advisable and
(z) recommended unanimously that the shareholders of the Company vote in favor
of the approval of the Merger and the adoption of this Agreement and (B) the
written opinion of U.S. Bancorp Piper Jaffray and (ii) shall comply as to form
and content in all material respects with the applicable provisions of the
federal securities laws. Holdings and its counsel shall be given an opportunity
to review and comment upon the Proxy Statement and any amendment or supplement
thereto prior to the filing thereof with the SEC, and the Company shall consider
any such comments in good faith. The Company agrees to provide to Holdings and
its counsel any comments which the Company or its counsel may receive from the
staff of the SEC with respect to the Proxy Statement promptly after receipt
thereof. Holdings and Merger Sub will promptly supply to the Company in writing,
for inclusion in the Proxy Statement, all information concerning Holdings and
Merger Sub required by law, rule or regulation to be included in the Proxy
Statement. The Company, Holdings and Merger Sub agree to promptly correct any
information provided by any of them for use in the Proxy Statement which shall
have become false or misleading in any respect, and the Company further agrees
to take all steps reasonably necessary to cause such Proxy Statement as so
corrected to be filed with the SEC and disseminated to the Company's
shareholders, in each case as and to the extent required by the applicable
provisions of the federal securities laws. The Company agrees to use its
reasonable best efforts, after consultation with the other parties hereto, and
each of Holdings and Merger Sub agree to use its reasonable best efforts to
promptly provide the Company with any information necessary to respond promptly
to any comments made by the Commission with respect to the Proxy Statement and
any preliminary version thereto or amendment thereof, filed by it, and each of
the Company, Holdings and Merger Sub shall use reasonable efforts to cause the
Proxy Statement to be mailed to the Company's shareholders at the earliest
practicable time.
(c) Schedule 13E. Concurrently with the filing of the Proxy
Statement, Holdings and Merger Sub and their respective affiliates (to the
extent required by law) shall prepare and file with the SEC, together with the
Company, a Rule 13E-3 Transaction Statement on Schedule 13E-3 (together with all
supplements and amendments thereto, the "Schedule 13E-3") with respect to the
transactions contemplated by this Agreement. The Company shall promptly furnish
to Holdings all information concerning the Company as may reasonably be
requested in connection with the preparation of the Schedule 13E-3. The Company
shall promptly supplement, update and correct any information provided by it for
use in the Schedule 13E-3 if and to the extent that it is or shall have become
incomplete, false or misleading. In any such event, Holdings and the Company
shall take all steps necessary to cause the Schedule 13E-3 as so supplemented,
updated or corrected to be filed with the SEC and to be disseminated to the
holders of Company Common Stock, in each case, as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be given
an opportunity to review and comment on the Schedule 13E-3 and each supplement,
amendment or response to comments with respect thereto prior to its being filed
with or delivered to the SEC and Holdings shall consider any such comments in
good faith. Holdings agrees to provide the Company and its counsel with any
comments that Holdings or its counsel may receive from the staff of the SEC
promptly after receipt thereof.
4.2 ACCESS TO INFORMATION. Upon reasonable notice, each of the
Company and Holdings shall (and shall cause their respective Subsidiaries, to)
afford to the officers, employees, accountants, counsel, financial advisors and
other representatives of the other party reasonable access during normal
business hours, during the period prior to the Effective Time, to all its
properties,
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books, contracts, commitments and records and its officers, employees and
representatives and, during such period, each of the Company and Holdings shall
(and shall cause its Subsidiaries, to) furnish promptly to the other party (a) a
copy of each report, schedule, registration statement and other document filed,
published, announced or received by it during such period pursuant to the
requirements of federal or state securities laws, as applicable (other than
reports or documents which such party is not permitted to disclose under
applicable law) and (b) consistent with its legal obligations, all other
information concerning its business, properties and personnel as the other party
may reasonably request. Such information shall be held in confidence to the
extent required by, and in accordance with, the provisions of the letter dated
September 9, 1999, between the Company and Vestar (the "Confidentiality
Agreement"), which Confidentiality Agreement shall remain in full force and
effect.
4.3 APPROVALS AND CONSENTS; COOPERATION. Each of the Company,
Holdings and Merger Sub shall cooperate with each other and use (and shall cause
their respective Subsidiaries to use) its reasonable best efforts to take or
cause to be taken all actions, and do or cause to be done all things, necessary,
proper or advisable on their part under this Agreement and applicable laws to
consummate and make effective the Merger and the other transactions contemplated
by this Agreement as soon as practicable, including without limitation (i)
preparing and filing as promptly as practicable all documentation to effect all
necessary applications, notices, petitions, filings, Tax ruling requests and
other documents and to obtain as promptly as practicable all consents, waivers,
licenses, orders, registrations, approvals, Permits, Tax rulings and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the Merger or any of the other
transactions contemplated by this Agreement (including, but not limited to,
those approvals, consents, orders, registrations, declarations and filings
required under Section 2.1(c)(iii)) (collectively, the "Required Approvals") and
(ii) taking all reasonable steps as may be necessary to obtain all such Required
Approvals. Without limiting the generality of the foregoing, each of the Company
and Holdings and Merger Sub agree to make all necessary filings in connection
with the Required Approvals as promptly as practicable after the date of this
Agreement, and to use its reasonable best efforts to furnish or cause to be
furnished, as promptly as practicable, all information and documents requested
with respect to such Required Approvals, and shall otherwise cooperate with any
applicable Governmental Entity in order to obtain any Required Regulatory
Approvals in as expeditious a manner as possible. Each of the Company, Holdings
and Merger Sub shall use its reasonable best efforts to resolve such objections,
if any, as any Governmental Entity may assert with respect to this Agreement and
the transactions contemplated hereby in connection with the Required Approvals.
In the event that a suit is instituted by a Person or Governmental Entity
challenging this Agreement and the transactions contemplated hereby as violative
of applicable antitrust or competition laws, each of the Company and Holdings
shall use its reasonable best efforts to resist or resolve such suit. The
Company and Holdings each shall, upon request by the other, furnish the other
with all information concerning itself, its Subsidiaries, affiliates, directors,
officers and shareholders and such other matters as may reasonably be necessary
or advisable in connection with the Proxy Statement, the Schedule 13E-3 or any
other statement, filing, Tax ruling request, notice or application made by or on
behalf of the Company, Holdings or any of their respective Subsidiaries to any
third party and/or any Governmental Entity in connection with the Merger or the
other transactions contemplated by this Agreement.
4.4 ACQUISITION PROPOSALS.
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(a) Neither the Company nor any of its Subsidiaries shall
(whether directly or indirectly through advisors, agents or other
intermediaries), nor shall the Company or any of its Subsidiaries authorize or
permit any of its or their officers, directors, agents, representatives or
advisors (the "Company Representatives") to (a) solicit, initiate, knowingly
encourage (including by way of furnishing non-public information) or take any
action knowingly to facilitate the submission of any inquiries, proposals or
offers (whether or not in writing) from any Person (other than Holdings and its
affiliates), other than the transactions contemplated by this Agreement, that
constitute, or are reasonably expected to lead to, an Acquisition Proposal (as
defined below), or (b) enter into or participate in any discussions or
negotiations regarding an Acquisition Proposal; provided, however, that, at any
time during the period following the execution of this Agreement and prior to
the Effective Time, if the Company receives a proposal or offer that was not
solicited by the Company or a Company Representative, and that the Company Board
determines in good faith (after consultation with its outside legal counsel and
financial advisors) is a Superior Proposal (as defined below but ignoring, for
purposes of this Section 4.4(a) only, clause (i) of the definition of Superior
Proposal), and subject to compliance with Section 4.4(b), the Company Board may,
or may authorize any committee thereof or any Company Representatives to, (x)
furnish information with respect to the Company and its Subsidiaries to the
Person making such proposal or offer pursuant to a confidentiality agreement on
terms not less favorable to the Company than the Confidentiality Agreement and
(y) participate in discussions or negotiations regarding such proposal or offer.
(b) The Company shall notify Holdings promptly (and in any
case prior to providing any information or access referred to below) after
receipt by the Company (or any Company Representative) of any Acquisition
Proposal or any inquiry regarding the making of an Acquisition Proposal or any
request for non-public information in connection with an Acquisition Proposal or
for access to the properties, books or records of the Company or any of its
Subsidiaries by any Person that informs the Company that it is considering
making, or has made, an Acquisition Proposal. Such notice shall be made orally
and in writing and shall indicate in reasonable detail the identity of the
offeror and the terms and conditions of such proposal, inquiry or contact. The
Company shall continue to keep Holdings informed, on a reasonably current basis,
of the status of any such discussions or negotiations and the terms being
discussed or negotiated.
(c) Neither the Company nor the Company Board nor any
committee thereof shall withdraw or modify, or propose to withdraw or modify, in
any manner adverse to Holdings, the approval or recommendation of this Agreement
or the Merger, or propose publicly to approve or recommend an Acquisition
Proposal, unless the withdrawal or modification of such approval or
recommendation or such approval or recommendation is, in the good faith judgment
of the Company Board or such committee thereof (after consultation with its
outside legal counsel), necessary to comply with its fiduciary obligations to
the Company's shareholders under applicable law. Nothing contained in this
Agreement shall prohibit the Company nor the Company Board nor any committee
thereof from taking and disclosing to its shareholders a position contemplated
by Rule 14e-2 and Rule 14d-9 promulgated under the Exchange Act or from making
any disclosure to the Company's shareholders if, in the good faith judgment of
the Company Board or such committee thereof (after consultation with its outside
legal counsel) the failure to make such disclosure would be inconsistent with
its fiduciary duties to the Company's shareholders or other obligations under
applicable law.
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Notwithstanding anything to the contrary contained in this Section 4.4 or
elsewhere in this Agreement, prior to the Effective Time, the Company may, in
connection with a possible Acquisition Proposal, refer any third party to this
Section 4.4 and to Section 6.2, and make a copy of this Section 4.4 and Section
6.2 available to such third party.
(d) The Company will immediately cease and cause its
advisors, agents and other intermediaries to cease any and all existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing, and shall use its reasonable best efforts
to cause any such parties in possession of confidential information about the
Company that was furnished by or on behalf of the Company to return or destroy
all such information in the possession of any such party or in the possession of
any agent or advisor of any such party. The Company agrees not to release any
third party from or waive any provisions of confidentiality in any
confidentiality agreement to which the Company is a party.
(e) "Acquisition Proposal" means any inquiry, proposal or
offer for (i) an acquisition or purchase of 10 percent or more of the
consolidated assets of the Company and its Subsidiaries or of 10 percent or more
of any class of equity securities of the Company or any of its Subsidiaries,
(ii) any tender offer (including a self tender offer) or exchange offer that if
consummated would result in any Person beneficially owning 10 percent or more of
any class of equity securities of the Company or any of its Subsidiaries or
(iii) any merger, consolidation, business combination, sale of substantially all
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its Subsidiaries whose assets, individually or
in the aggregate, constitute 10 percent or more of the consolidated assets of
the Company.
(f) "Superior Proposal" means a proposal with respect to any
of the transactions described in the definition of Acquisition Proposal (with
all of the percentages included in the definition of such term replaced with
"all or substantially all" for purposes of this definition) with respect to
which the Company Board shall have concluded in good faith, after consultation
with its outside legal counsel and financial advisor, (i) is reasonably likely
to be completed, taking into account all legal, financial, regulatory and other
aspects of the Acquisition Proposal, including the status of the financing
therefor and the Person making the proposal and (ii) would, if consummated,
result in a transaction more favorable to the Company's shareholders from a
financial point of view than the transactions contemplated by this Agreement.
4.5 EMPLOYEE BENEFITS.
(a) For a period of one year immediately following the
Effective Time, the Surviving Corporation shall maintain in effect employee
benefit plans and arrangements with overall employee benefits which are
substantially comparable, in the aggregate, to the benefits provided by the
Company Benefit Plans as of the date hereof (not taking into account the value
of any benefits under any such plans which are equity-based).
(b) For purposes of determining eligibility to participate
or vesting where length of service is relevant under any employee benefit plan
or arrangement of the Surviving Corporation or any of their respective
Subsidiaries, employees of the Company and its Subsidiaries as of the Effective
Time shall receive service credit for service with the Company and its
Subsidiaries to the
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same extent such service credit was granted under the Company Benefit Plans,
subject to offsets for previously accrued benefits and no duplication of
benefits.
(c) Upon the consummation of the Merger, each Share Award
outstanding immediately prior to the Effective Time shall automatically become
immediately vested and each holder of a Share Award shall have the right to
receive from the Surviving Corporation a cash payment (less applicable federal,
state and local withholding taxes) in an aggregate amount equal to the Price Per
Share for each share of Company Common Stock subject to such Share Award.
4.6 FEES AND EXPENSES. Whether or not the Merger is
consummated, all Expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
Expenses, except (a) if the Merger is consummated, the Surviving Corporation
shall pay, or cause to be paid, all expenses of Holdings and Merger Sub incurred
in connection with the transactions contemplated by this Agreement and (b) as
set forth in Section 6.4(b). For purposes of this Agreement, "Expenses" includes
all out-of-pocket expenses (including all fees and expenses of counsel,
accountants, investment bankers, financing sources and their counsel, experts
and consultants to a party hereto and its affiliates) incurred by a party or on
its behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby, including the preparation, printing, filing and mailing of
the Proxy Statement and the Schedule 13E-3 and the solicitation of shareholder
approvals and all other matters related to the transactions contemplated hereby.
4.7 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) Continuation of Organizational Documents Obligations.
The Company shall and, from and after the Effective Time until the sixth
anniversary of the Effective Time, the Surviving Corporation shall maintain the
right to indemnification and exculpation of officers and directors provided for
in the Organizational Documents of the Company as in effect on the date hereof,
with respect to indemnification and exculpation for acts and omissions occurring
prior to the Effective Time, including, without limitation, the transactions
contemplated by this Agreement.
(b) Continuation of Directors' and Officers' Insurance.
Until the sixth anniversary of the Effective Time, the Surviving Corporation
shall maintain officers' and directors' liability insurance covering the Persons
who are presently covered by the Company's officers' and directors' liability
insurance policies (copies of which have heretofore been delivered to Holdings)
with respect to actions and omissions occurring prior to the Effective Time, by
obtaining tail coverage of such existing insurance policies on terms which are
not less favorable than the terms of such current insurance in effect for the
Company on the date hereof and providing coverage only with respect to matters
occurring prior to the Effective Time, to the extent that such tail coverage can
be maintained at an annual cost to the Surviving Corporation of not greater than
200% of the annual premium for the Company's current insurance policies and, if
such tail coverage cannot be so maintained at such cost, providing as much of
such insurance as can be so maintained at a cost equal to 200% of the annual
premium for the Company's current insurance policies.
(c) Indemnification. The Company shall and, from and after
the Effective Time, the Surviving Corporation shall, to the fullest extent
permitted under applicable law and to the extent
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such Person would have been indemnified under the articles of incorporation and
bylaws of the Company or any Company Subsidiary as such documents were in effect
on the date of this Agreement, indemnify and hold harmless each present and
former director and officer of the Company or any Company Subsidiary (each an
"Indemnified Party" and collectively, the "Indemnified Parties") against any
costs or expenses, together with such person's heirs, executors or
administrators (including by advancing attorney's fees and expenses in advance
of the final disposition of any claim, action, suit, proceeding or investigation
to the fullest extent permitted by and subject to the conditions of law),
judgments, fines, losses, claims, damages, liabilities and amounts paid in
settlement in connection with any pending, threatened or completed claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to any action or
omission based upon or arising from his or her capacity as an officer or
director of the Company or any Company Subsidiary occurring prior to the
Effective Time (including, without limitation, any claim, action, suit,
proceeding or investigation arising out of or pertaining to the transactions
contemplated by this Agreement).
(d) Survival. This Section 4.7 shall survive the closing of
the transactions contemplated hereby, is intended to benefit the Company, Merger
Sub and the Surviving Corporation and each of the Indemnified Parties (each of
whom shall be entitled to enforce this Section 4.7 against the Company, Merger
Sub and the Surviving Corporation, as the case may be), and shall be binding on
all successors and assigns of the Surviving Corporation.
(e) Merger, Assignment, etc. If the Surviving Corporation or
any of its successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation assume the obligations set forth in this Section 4.7.
4.8 PUBLIC ANNOUNCEMENTS. Neither party hereto shall make
any press release or public announcement with respect to this Agreement, the
Merger or the transactions contemplated hereby without the prior written consent
of the other party hereto (which consent shall not be unreasonably withheld);
provided, however, that each party hereto may make any disclosure or
announcement which such party, after consultation with its legal counsel,
determines that it is obligated to make pursuant to applicable law or regulation
of any national securities exchange or in order to discharge its fiduciary
duties, in which case, the party desiring to make the disclosure shall consult
with the other party hereto prior to making such disclosure or announcement.
4.9 FURTHER ASSURANCES. In case at any time after the
Effective Time any further action is reasonably necessary to carry out the
purposes of this Agreement or the transactions contemplated by this Agreement,
the proper officers of the Company, Holdings and the Surviving Corporation shall
take any such reasonably necessary action.
4.10 DISPOSITION OF LITIGATION. In connection with any
litigation which may be brought against the Company or its directors relating to
the transactions contemplated hereby, the Company shall keep Holdings, and any
counsel which Holdings may retain at its own expense, informed of the status of
such litigation and will provide Holdings' counsel the right to participate
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in the defense of such litigation to the extent Holdings is not otherwise a
party thereto, and the Company shall not enter into any settlement or compromise
of any such stockholder litigation without Holdings' prior written consent,
which consent shall not be unreasonably withheld or delayed.
4.11 DELISTING. Each of the parties agrees to cooperate with
each other in taking, or causing to be taken, all actions necessary to delist
the Company Common Stock from NASDAQ and to terminate registration under the
Exchange Act, provided that such delisting and termination shall not be
effective until after the Effective Time of the Merger.
ARTICLE 5
CONDITIONS PRECEDENT
5.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of Holdings, Merger Sub and the Company to
effect the Merger are subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a) Shareholder Approval. The Company shall have
obtained all approvals of holders of shares of the capital stock of the Company
required under the MBCA to approve this Agreement and the transactions
contemplated hereby;
(b) HSR Act. Any waiting period applicable to the Merger
under the HSR Act (including any extension thereof) shall have been terminated
or shall have expired; and
(c) No Injunctions or Restraints, Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
a United States federal or state court of competent jurisdiction shall be in
effect and have the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
5.2 CONDITIONS TO THE OBLIGATIONS OF HOLDINGS AND MERGER SUB
TO EFFECT THE MERGER. The respective obligations of Holdings and Merger Sub to
effect the Merger are subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement (other than those
representations and warranties that address matters as of particular dates)
shall be true and correct as of the Closing Date and any representation and
warranty of the Company set forth in this Agreement that addresses matters as of
a particular date shall be true and correct as of the date referred to therein;
it being understood that (i) any inaccuracies in such representations and
warranties shall be disregarded if the circumstances giving rise to such
inaccuracies (considered collectively) do not constitute a Material Adverse
Effect on the Company and (ii) for purposes of determining whether such
representations and warranties are true and correct, all "Material Adverse
Effect" qualifications and any other materiality qualifications in such
representations and warranties shall be disregarded;
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(b) Performance. The Company shall have performed all
obligations and complied in all material respects with all agreements or
covenants to be performed or complied with by it under this Agreement;
(c) Prohibitions to Merger. There shall not be pending any
action or proceeding by a United States federal or state Governmental Entity of
competent jurisdiction nor shall a statute, rule or regulation have been
promulgated or enacted by a United States federal or state Governmental Entity
of competent jurisdiction after the date of this Agreement which would have the
effect of (i) restraining or prohibiting the consummation of the Merger, (ii)
prohibiting or restricting the ownership or operation by Holdings (or any of its
affiliates or Subsidiaries) of a material portion of the business or assets of
the Company and its Subsidiaries taken as a whole, or compelling Holdings (or
any of its affiliates or Subsidiaries) to dispose of or hold separate a material
portion of the business or assets of the Company and its Subsidiaries taken as a
whole, (iii) imposing material limitations on the ability of Holdings (or any of
its affiliates or Subsidiaries) effectively to acquire or to hold or to exercise
full rights of ownership of the shares of the Company Common Stock, including,
without limitation, the right to vote such shares purchased by Holdings (or any
of its affiliates or Subsidiaries) on all matters properly presented to the
shareholders of the Company, (iv) imposing any material limitations on the
ability of Holdings (or any of its affiliates or Subsidiaries) effectively to
control in any material respect the business and operations of the Company or
(v) obtaining material damages from Holdings or any of its affiliates in
connection with the making or consummation of the Merger and there shall not be
in effect any injunction, order, decree, judgment or ruling issued by a United
States federal or state court of competent jurisdiction having any effect set
forth in clauses (i) through (v) above;
(d) Financing. Merger Sub shall have received the proceeds
of the financing contemplated by the Commitment Letters on the terms and
conditions set forth therein and with other material terms satisfactory to
Holdings, in the amounts necessary to consummate the Merger and pay all related
fees and expenses; or
(e) No Material Adverse Effect. There shall not have
occurred any event or circumstance that has had or would be reasonably likely to
have a Material Adverse Effect on the Company since the date of the Agreement.
5.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO EFFECT
THE MERGER. The obligations of the Company to effect the Merger are subject to
the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of Holdings and Merger Sub set forth in this Agreement (other than
those representations and warranties that address matters as of particular
dates) shall be true and correct as of the Closing Date and any representation
and warranty of Holdings and Merger Sub set forth in this Agreement that
addresses matters as of a particular date shall be true and correct as of the
date referred to therein; it being understood that (i) any inaccuracies in such
representations and warranties shall be disregarded if the circumstances giving
rise to such inaccuracies (considered collectively) do not constitute a Material
Adverse Effect on Holdings and Merger Sub, taken as a whole and (ii) for
purposes of determining whether such representations and warranties are true and
correct, all "Material Adverse Effect"
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qualifications and any other materiality qualifications in such representations
and warranties shall be disregarded; and
(b) Performance. Holdings and Merger Sub shall have
performed all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by them under this
Agreement.
ARTICLE 6
TERMINATION AND AMENDMENT
6.1 TERMINATION BY EITHER THE COMPANY OR HOLDINGS. This
Agreement may be terminated at any time prior to the Effective Time by either
the Company or Holdings, whether before or after adoption of this Agreement by
the Company's shareholders:
(a) by the mutual written consent of Holdings and the
Company, by action of their respective boards of directors;
(b) if any United States federal or state Governmental
Entity shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other action
shall have become final and nonappealable; provided, however, that the party
seeking to terminate this Agreement shall have used its commercially reasonably
efforts to remove or lift such order, decree, ruling or other action;
(c) if the Merger has not been consummated by May 31, 2001,
provided that the party seeking to exercise such right is not then in breach in
any material respect of any of its obligations under this Agreement; and
(d) if, at a duly held shareholders meeting of the Company
or any adjournment thereof at which this Agreement and the Merger are voted upon
(the "Special Meeting"), the requisite shareholder adoption and approval shall
not have been obtained.
6.2 TERMINATION BY HOLDINGS. This Agreement may also be
terminated by Holdings at any time prior to the Effective Time:
(a) if the Company or the Company Board shall have (i)
withdrawn, modified or amended in any respect adverse to Holdings or Merger Sub
any of its recommendations described in Section 4.1(a) hereof, (ii) approved,
recommended or entered into an agreement with respect to, or consummated, any
Acquisition Proposal from a Person other than Holdings or any of its affiliates,
(iii) in response to the commencement of any tender offer or exchange offer for
outstanding shares of Company Common Stock, not recommended rejection of such
tender offer or exchange offer within ten (10) business days of commencement of
such tender offer or exchange offer, or (iv) resolved to do any of the foregoing
or publicly announced its intention to do any of the foregoing; or
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(b) (i) if (A) any covenant or agreement of the Company
contained in this Agreement shall be materially breached, (B) any of the
Company's representations and warranties contained in this Agreement shall have
been inaccurate as of the date of this Agreement such that the condition set
forth in Section 5.2(a) would not be satisfied (assuming that the phrase "date
of this Agreement" is substituted for the phrase "Closing Date" contained in
Section 5.2(a)), or (C) any of the Company's representations and warranties
contained in this Agreement shall have become inaccurate after the date of this
Agreement such that the condition set forth in Section 5.2(a) would not be
satisfied (each, a "Terminating Company Breach"); and (ii) such Terminating
Company Breach shall not have been cured by the Company within twenty (20) days
of receipt of written notice of such Terminating Company Breach.
6.3 TERMINATION BY THE COMPANY. This Agreement may also
be terminated by the Company at any time prior to the Effective Time:
(a) (i) if (A) any covenant or agreement of the Holdings or
Merger Sub contained in this Agreement shall be materially breached, (B) any of
the representations and warranties of Holdings or Merger Sub contained in this
Agreement shall have been inaccurate as of the date of this Agreement such that
the condition set forth in Section 5.3(a) would not be satisfied (assuming that
the phrase "date of this Agreement" is substituted for the phrase "Closing Date"
contained in Section 5.3(a)), or (C) any of the representations and warranties
of Holdings or Merger Sub contained in this Agreement shall have become
inaccurate after the date of this Agreement such that the condition set forth in
Section 5.3(a) would not be satisfied (each, a "Terminating Holdings Breach");
and (ii) such Terminating Holdings Breach shall not have been cured by Holdings
or Merger Sub within twenty (20) days of receipt of written notice of such
Terminating Holdings Breach; or
(b) if the Company Board approves a Superior Proposal;
provided, however, that (A) the Company shall have complied with the terms of
Section 4.4 and (B) this Agreement may not be terminated pursuant to this
Section 6.3(b) unless (x) concurrently with such termination, the Company pays
to Holdings the Termination Fee (as hereinafter defined) less any Expense
Payment (as hereinafter defined) previously paid and (y) the Company shall have
provided Holdings with at least five business days' advance notice of such
termination and Holdings does not make, within four (4) business days of receipt
of the Company's notification of its intention to terminate this Agreement, an
offer that the Company Board determines, in good faith after consultation with
its outside legal counsel and financial advisors, is at least as favorable to
the shareholders of the Company as such Superior Proposal.
6.4 EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement by either
the Company or Holdings as provided in this Article 6, this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of Holdings, Merger Sub or the Company or their respective officers, directors,
shareholders, affiliates, representatives, agents, employees or advisors,
except, with respect to Holdings, Merger Sub and the Company, (i) with respect
to Section 4.6, this Section 6.4, Article 7 and the last sentence of Section 4.2
and (ii) with respect to any liabilities or damages incurred or suffered by a
party as a result of the willful breach by the other party or parties of this
Agreement.
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(b) The Company shall (provided that neither Holdings nor
the Merger Sub is then in material breach of its obligations under this
Agreement) (i) upon the termination of this Agreement pursuant to Section
6.1(d), promptly, but in no event later than two business days following written
notice thereof, pay to Holdings and Merger Sub $5 million for its out-of-pocket
expenses and fees (including fees payable to banks, investment banking firms and
other financial institutions, and their respective agents and counsel, and fees
of counsel, accountants, financial printers, advisors, experts and consultants
to Holdings and its affiliates) or (ii) upon the termination of this Agreement
pursuant to Section 6.2(b), promptly, but in no event later than two business
days following written notice thereof, together with reasonable supporting
documentation, reimburse Holdings and Merger Sub in an amount up to $2,500,000
for its out-of-pocket expenses and fees (including fees payable to banks,
investment banking firms and other financial institutions, and their respective
agents and counsel, and fees of counsel, accountants, financial printers,
advisors, experts and consultants to Holdings and its affiliates) (either of the
payments in clauses (i) or (ii) being referred to herein as the "Expense
Payment"). It is understood that in the event that Holdings is paid a
Termination Fee, to the extent not previously paid, the Expense Payment shall
not be paid.
(c) In the event that this Agreement is terminated by
Holdings pursuant to Section 6.2(a) or by the Company pursuant to Section
6.3(b), the Company shall pay to Holdings, by wire transfer of immediately
available funds to an account designated by Holdings on the next business day
following such termination (or, in the case of a termination by the Company
pursuant to Section 6.3(b), by wire transfer of immediately available funds to
an account designated by Holdings, concurrently with the effectiveness of such
termination), an amount equal to $20 million (the "Termination Fee"), less any
Expense Payment previously paid.
(d) If all of the following events have occurred:
(i) (A) this Agreement is terminated pursuant to
Section 6.1(c) (other than on account of a failure of the conditions
set forth in Sections 5.1(a), 5.1(c), 5.2(c), 5.2(d), 5.3(a) or
5.3(b)), Section 6.1(d) or Section 6.2(b) and (B) an Acquisition
Proposal is publicly disclosed or publicly proposed to the Company or
its shareholders at any time on or after the date of this Agreement but
(x) in the case of a termination pursuant to Section 6.1(c) or Section
6.2(b), prior to such termination, or (y) in the case of a termination
pursuant to Section 6.1(d), prior to or at the time of the Special
Meeting; and
(ii) thereafter, within 12 months of the date of such
termination, the Company enters into a definitive agreement with
respect to, or consummates, the Acquisition Proposal referred to in
clause (i), or any proposal with respect to any of the transactions
described in clause (i), (ii) or (iii) of the definition of Acquisition
Proposal (with all of the percentages included in the definition of
such term raised to 50% for purposes of this definition); then, the
Company shall pay to Holdings, concurrently with the earlier of the
execution of such definitive agreement or the consummation of such
Acquisition Proposal, an amount equal to the Termination Fee (less any
Expense Payment previously paid).
(e) The Company acknowledges that the agreements contained
in Sections 6.4(b), (c) and (d) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Holdings and
Merger Sub would not enter into this Agreement.
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6.5 AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective boards of directors,
at any time before or after adoption of this Agreement by the Company's
shareholders, but, after any such adoption, no amendment shall be made which by
law or in accordance with the rules of the NASDAQ requires further approval by
such shareholders without such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
6.6 EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
boards of directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
No delay on the part of any party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party hereto of any right, power or privilege hereunder operate
as a waiver of any other right, power or privilege hereunder, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. Unless otherwise provided, the rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
which the parties hereto may otherwise have at law or in equity. The failure of
any party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
ARTICLE 7
GENERAL PROVISIONS
7.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS; NO OTHER REPRESENTATIONS AND WARRANTIES. None of the
representations, warranties, covenants and other agreements in this Agreement or
in any instrument delivered pursuant to this Agreement, including any rights
arising out of any breach of such representations, warranties, covenants and
other agreements, shall survive the Effective Time, except for those covenants
and agreements contained herein and therein that by their terms apply or are to
be performed in whole or in part after the Effective Time and/or the provisions
of this Article 7. Each party hereto agrees that, except for the representations
and warranties contained in this Agreement, none of the Company, Holdings or
Merger Sub makes any other representations or warranties, and each hereby
disclaims any other representations and warranties made by itself or any of its
officers, directors, employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement,
the documents and the instruments referred to herein, or the transactions
contemplated hereby or thereby, notwithstanding the delivery or disclosure to
the other party or the other party's representatives of any documentation or
other information with respect to any one or more of the foregoing.
7.2 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of delivery
if delivered personally, (b) on the first
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business day following the date of dispatch if delivered by a nationally
recognized next-day courier service, (c) on the third business day following the
date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid or (d) if sent by facsimile transmission, with a copy
mailed on the same day in the manner provided in (a) or (b) above, when
transmitted and receipt is confirmed by telephone. All notices hereunder shall
be delivered as set forth below, or pursuant to such other instructions as may
be designated in writing by the party to receive such notice:
if to Holdings or Merger Sub:
c/o Vestar Capital Partners IV, L.P.
1225 Seventeenth Street
Suite 1660
Denver, CO 80202
Attention: James P. Kelley
Facsimile: (303) 292-6639
and
c/o Goldner Hawn Johnson & Morrison Incorporated
5250 Wells Fargo Center
Minneapolis, MN 55402-4123
Attention: John L. Morrison
Michael T. Sweeney
Facsimile: (612) 338-2860
with copies to:
Vestar Capital Partners IV, L.P.
245 Park Avenue
41st Floor
New York, NY 10167
Attention: General Counsel
Facsimile: (212) 808-4922
and
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Stephen L. Ritchie
Facsimile: (312) 861-2118
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<PAGE> 45
and
Faegre & Benson
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-3901
Attention: Bruce M. Engler
Facsimile: (612) 336-3026
if to the Company:
Michael Foods, Inc.
324 Signal Bank Building
5353 Wayzata Boulevard
Minneapolis, MN 55416
Attention: President
Facsimile: (952) 546-3711
with copies to:
Kaplan, Strangis & Kaplan, P.A.
90 S. Seventh Street
Suite 5500
Minneapolis, MN 55402
Attention: James C. Melville
Facsimile: (612) 375-1143
7.3 INTERPRETATION. When a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise indicated.
The table of contents, cross references and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statue or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the content requires otherwise. It is understood
and agreed that neither the specifications of any dollar amount in this
Agreement nor the inclusion of any specific item in the Schedules or Exhibits is
intended to imply that such amounts or higher or lower amounts, or the items so
included or other items, are or are not material, and neither party shall use
the fact of setting of such amounts or the fact of the inclusion of such item in
the Schedules or Exhibits in any dispute or controversy between the parties as
to whether any obligation, item or matter is or is not material for purposes
hereof.
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7.4 COUNTERPARTS. This Agreement may be executed in two or
more counterparts (including by means of telecopied signature pages), all of
which shall be considered one and the same agreement and shall become effective
when two or more counterparts have been signed by each of the parties and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.
7.5 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES;
LIABILITY.
(a) This Agreement (including the Schedules and Exhibits)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than the Confidentiality Agreement, which shall
survive the execution and delivery of this Agreement.
(b) This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement, other
than Section 4.7 (which is intended to be for the benefit of the Persons covered
thereby and may be enforced by such Persons).
(c) No affiliate, officer, director or shareholder of any
party hereto shall have any liability hereunder.
7.6 GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Minnesota, without regard
to the laws that might be applicable under conflicts of laws principles.
7.7 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible. Any provision of this Agreement
held invalid or unenforceable only in part, degree or certain jurisdictions will
remain in full force and effect to the extent not held invalid or unenforceable.
To the extent permitted by applicable law, each party waives any provision of
law which renders any provision of this Agreement invalid, illegal or
unenforceable in any respect.
7.8 ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other parties, and any attempt to make
any such assignment without such consent shall be null and void. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
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7.9 ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
* * * * *
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IN WITNESS WHEREOF, the Company and Merger Sub have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of date first written above.
M-FOODS HOLDINGS, INC., a Delaware corporation
By: /s/ James P. Kelley
------------------------------------------
Name: James P. Kelley
Title: President
PROTEIN ACQUISITION CORP., a Minnesota corporation
By: /s/ James P. Kelley
------------------------------------------
Name: James P. Kelley
Title: President
MICHAEL FOODS, INC., a Minnesota corporation
By: /s/ Gregg A. Ostrander
------------------------------------------
Name: Gregg A. Ostrander
Title: Chairman, President and
Chief Executive Officer
