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M-FOODS INVESTORS, LLC
December 21, 2000
ASTA Enterprises Limited Partnership
c/o Burton Ross
Ross, Rosenblatt Ltd.
4100 Piper Jaffray Tower
222 S. 9/th/ Street
Minneapolis, MN 55402
1. Pursuant to the terms of the Agreement and Plan of Merger dated
as of the date hereof (as amended from time to time, the "Merger Agreement")
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among M-Foods Holdings, Inc., a Delaware corporation ("Holdings"), Protein
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Acquisition Corp., a Minnesota corporation and a wholly owned subsidiary of
Holdings ("Merger Sub"), and Michael Foods, Inc., a Minnesota corporation (the
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"Company"), Merger Sub will be merged with and into the Company (the "Merger").
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Terms not otherwise defined in this letter agreement shall have the meanings set
forth in the Merger Agreement.
2. You hereby acknowledge that you are the record and beneficial
owner of the number of shares of the Company's Common Stock, par value $0.01 per
share (the "Common Stock") set forth opposite your name on Schedule I attached
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hereto (your owned shares of Common Stock (as such owned shares may be adjusted
by any stock dividend, stock split, recapitalization, combination or other
similar transaction) are referred to herein as the "Owned Shares" and, your
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Owned Shares together with any other shares of capital stock of the Company
acquired or otherwise obtained by you after the date hereof for any reason are
referred to herein as the "Subject Shares"). The Owned Shares and the number of
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shares of Common Stock issuable upon exercise of the Options in the amounts set
forth in this Section 2 constitute all of the shares of capital stock of the
Company either owned by you or for which you have right to obtain upon exercise
of any options or convertible securities as of the date hereof. You hereby
agree to promptly notify M-Foods Investors, LLC, a Delaware limited liability
company ("Investors"), of the number of any additional shares of (or rights to
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acquire additional shares of) the Company's capital stock acquired or otherwise
obtained in any manner by you, if any, after the date hereof.
3. By executing this letter agreement, you hereby agree that:
(a) at any meeting (whether annual or special and whether or not
an adjourned or postponed meeting) of the holders of capital stock of the
Company, however called, or in connection with any written consent of the
holders of capital stock of the Company solicited by the Company Board, you
will appear at the meeting or otherwise cause the Subject Shares to be
counted as present at such meeting for purposes of establishing a quorum
and vote or consent (or cause to be voted or consented) such Subject Shares
(i) in favor of the Merger Agreement and transactions contemplated thereby
(including the
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Merger), (ii) against any merger, consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution,
liquidation or winding up of or by the Company or any other Acquisition
Proposal (other than the Merger Agreement and transactions contemplated
thereby (including the Merger)) and (iii) against any amendment of the
Company's articles of incorporation or bylaws, or other proposal or
transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, delay, prevent or nullify the Merger Agreement or transactions
contemplated thereby (including the Merger);
(b) you will not, except as contemplated by the terms of this
Agreement or the Merger Agreement, (i) sell, transfer (with or without
consideration), pledge or otherwise encumber, assign or otherwise dispose
of, or enter into any contract, agreement, option or other arrangement or
understanding with respect to the sale, transfer (with or without
consideration), pledge, assignment or other disposition of, the Subject
Shares to any person other than Investors or its designee, (ii) enter into
any voting arrangement, whether by proxy, voting agreement, voting trust,
power-of-attorney or otherwise, with respect to the Subject Shares or (iii)
take any other action that would in any way restrict, limit, hinder or
interfere with the performance by you of your obligations hereunder or the
transactions contemplated hereby, or in any way restrict, limit, hinder or
interfere with consummation of the transactions contemplated by the Merger
Agreement (including the Merger); and
(c) you hereby grant an irrevocable proxy during the term of
this letter agreement to Investors, and hereby constitute and appoint
Investors as your attorney-in-fact and proxy, with full power of
substitution, for and in your name, place and stead, to vote (by written
consent or otherwise) the Subject Shares which you are entitled to vote at
any meeting of shareholders of the Company (whether annual or special and
whether or not an adjourned or postponed meeting), on the matters and in
the manner specified herein. THIS PROXY IS IRREVOCABLE AND COUPLED WITH AN
INTEREST. You hereby revoke all previous proxies granted with respect to
the Subject Shares, and no subsequent proxy shall be given (and if given or
executed, shall not be effective) by you with respect thereto. All
authority herein conferred or agreed to be conferred shall survive your
death or incapacity.
4. You hereby represent and warrant to Investors that:
(a) you are competent to and have sufficient capacity to execute
and deliver this letter agreement and to perform your obligations hereunder
and this letter agreement has been duly executed and delivered by you;
(b) assuming the due execution and delivery of this letter
agreement by Investors, this letter agreement constitutes your valid and
binding obligation, enforceable against you in accordance with its terms;
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(c) the execution, delivery and performance of this letter
agreement by you will not (i) conflict with or violate any law, rule,
regulation, ordinance, writ, injunction, judgment or decree applicable to
you or by which any of your assets may be bound or affected or (ii) result
in any breach of any terms or conditions of, or constitute a default under,
any contract, agreement or instrument to which you are a party or by which
you are bound;
(d) the Owned Shares and the certificates representing the Owned
Shares are now, and at all times during the term hereof will be, held by
you, or by a nominee or custodian for your benefit, and you have good and
marketable title to the Owned Shares free and clear of all liens, except
for any such liens arising hereunder; and
(e) you understand and acknowledge that Merger Sub is entering
into the Merger Agreement in reliance upon your execution and delivery of
this letter agreement.
5. You further agree that in connection with the consummation of the
transactions contemplated by the Merger Agreement (including the Merger), you
will execute and deliver to Investors and its subsidiaries that are party
thereto (and Investors shall, and shall cause its subsidiaries that are party
thereto to, execute and deliver to you) a Stock Purchase Agreement,
substantially in the form attached hereto as Exhibit 1 (the "Stock Purchase
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Agreement").
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6. You hereby waive any rights of appraisal or any dissenter's
rights with respect to the Merger that you may have under applicable law.
7. At the request of Investors, you agree that the following legend
may be stamped, printed or typed on your certificates evidencing the Subject
Shares:
"THE VOTING, SALE, ASSIGNMENT, TRANSFER, GIFT, PLEDGE,
HYPOTHECATION, ENCUMBRANCE OR DISPOSITION OF THE SHARES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO A VOTING
AGREEMENT DATED AS OF DECEMBER 21, 2000, BY AND BETWEEN M-
FOODS INVESTORS, LLC AND THE RECORD OWNER HEREOF, COPIES OF
WHICH ARE ON FILE AT THE OFFICES OF MICHAEL FOODS, INC."
8. You hereby represent that you have carefully reviewed this
agreement and the Exhibits hereto, including, without limitation, Section 3 of
the Stock Purchase Agreement. You also represent and warrant that you have been
given the opportunity to examine all documents and to ask questions of, and to
receive answers from, Investors and its representatives concerning Investors and
its subsidiaries, the transactions contemplated by the Merger Agreement
(including the Merger) and this letter agreement and the Exhibits hereto and to
obtain any additional information that you deem necessary, and all information
which you have provided to Investors and its representatives concerning you and
your financial position is complete and correct as of the date hereof.
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9. You agree after the date hereof to cooperate with Investors in
taking action reasonably necessary to consummate the transactions contemplated
by this letter agreement and the Exhibits hereto, including the execution and
delivery of ancillary agreements reasonably necessary to effectuate the
aforesaid transactions, and to consent to modifications to the Exhibits hereto
that do not adversely affect you.
10. The provisions of this letter agreement shall be binding upon and
accrue to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
11. This letter agreement may be amended only by a written instrument
signed by the parties hereto. No waiver by any party hereto of any of the
provisions hereof shall be effective unless set forth in a writing executed by
the party so waiving.
12. This letter agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.
13. Any suit, action or proceeding with respect to this letter
agreement, or any judgment entered by any court in respect of any thereof, shall
be brought in any court of competent jurisdiction in the State of Delaware, and
the parties hereto hereby submit to the exclusive jurisdiction of such courts
for the purpose of any such suit, action, proceeding or judgment. The parties
hereto hereby irrevocably waive (i) any objections which any of them may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this letter agreement brought in any court of
competent jurisdiction in the State of Delaware, (ii) any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum and (iii) any right to a jury trial.
14. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.
(a) If to Investors:
M-Foods Investors, LLC
c/o Vestar Capital Partners IV, L.P.
1225 Seventeenth Street
Suite 1660
Denver, CO 80202
Attention: James P. Kelley
Facsimile: (303) 292-6639
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and
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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:
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Vestar Capital Partners IV, L.P.
245 Park Avenue
41/st/ Floor
New York, NY 10167
Attention: General Counsel
Facsimile: (212) 808-4922
and
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Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Stephen L. Ritchie
Facsimile: (312) 861-2200
and
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Faegre & Benson
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-3901
Attention: Bruce M. Engler
Facsimile: (612) 336-3026
(b) If to you, to the address shown beneath your name on the
signature page attached hereto with copies to:
Ross Rosenblatt Ltd.
4100 Piper Jaffray Tower
222 South Ninth Street
Minneapolis, MN 55402
Attention: Burton Ross
Facsimile: (612) 338-1131
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15. This letter agreement and the Exhibits hereto contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This letter agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
16. This letter agreement may be executed in separate counterparts
(including by means of telecopied signature pages), and by different parties on
separate counterparts each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
17. You acknowledge and agree that a violation of any of the terms of
this letter agreement will cause Investors and its subsidiaries irreparable
injury for which adequate remedy at law is not available. Accordingly, it is
agreed that Investors shall be entitled to an injunction, restraining order or
other equitable relief to prevent breaches of the provisions of this letter
agreement and to enforce specifically the terms and provisions hereof in any
court of competent jurisdiction in the United States or any state thereof, in
addition to any other remedy to which it may be entitled at law or equity.
18. Your rights and remedies and the rights and remedies of Investors
and its subsidiaries under this letter agreement shall be cumulative and not
exclusive of any rights or remedies which any of them would otherwise have
hereunder or at law or in equity or by statute, and no failure or delay by any
party in exercising any right or remedy shall impair any such right or remedy or
operate as a waiver of such right or remedy, nor shall any single or partial
exercise of any power or right preclude such party's other or further exercise
or the exercise of any other power or right. The waiver by any party hereto of a
breach of any provision of this letter agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach and no failure by
either party to exercise any right or privilege hereunder shall be deemed a
waiver of such party's rights or privileges hereunder or shall be deemed a
waiver of such party's rights to exercise the same at any subsequent time or
times hereunder.
19. This letter agreement shall terminate, and be of no further force
or effect, automatically without any further action on the part of any parties
hereto, upon the earlier to occur of (i) a termination of the Merger Agreement
in accordance with its terms for any reason, and (ii) July 31, 2001. Nothing
herein shall relieve any party from liability for any breach of this letter
agreement occurring prior to such termination.
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Very truly yours,
M-FOODS INVESTORS, LLC
By: /s/ Jack M. Feder
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Name: Jack M. Feder
Title: Secretary
Agreed and accepted as of the
date first written above:
ASTA Enterprises Limited Partnership
By: /s/ Jeffrey J. Michael
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Managing General Partner
ASTA Enterprises L.P.
c/o Burton Ross
Ross, Rosenblatt Ltd.
4100 Piper Jaffray Tower
222 S. 9/th/ Street
Minneapolis, MN 55402
[Signature Page to Letter Agreement # 2 - ASTA Enterprises Limited Partnership]
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SCHEDULE I
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<TABLE>
<CAPTION>
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SHAREHOLDER # OF SHARES OF
COMMON STOCK
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<S> <C>
ASTA Enterprises Limited Partnership 136,867
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Jeffrey J. Michael 5,560
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Deanne L. Michael 1,405
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Jeffrey J. Michael Custodian 730
Lauren E. Michael UTMA
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Janette M. He 1,798
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Lei He 1,405
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Jannette M. He Custodian 730
Sophia He UTMA
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Janette M. He Custodian 730
Iris He UTMA
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Jennifer L. Redlin 1,798
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Tim Redlin 1,405
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Jennifer L. Redlin Custodian 730
Justine Redlin UTMA
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Jennifer L. Redlin Custodian 730
Erin Redlin UTMA
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Roxanne C. Miller 1,798
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Neal Miller 1,405
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Roxanne C. Miller Custodian 730
Ian Miller UTMA
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Roxanne C. Miller Custodian 730
Colin Miller UTMA
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Roxanne Miller Custodian 730
Quinlin Miller UTMA
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Rosemary G. Bouvier Revocable Trust 1,798
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Gregory S. Bouvier Revocable Trust 1,405
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Rosemary G. Bouvier Custodian 730
Emily Bouvier UTMA
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Rosemary G. Bouvier Custodian 730
Alexander Bouvier UTMA
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Gregory S. Bouvier and Rosemary M. Bouvier JT 2,250
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Jennifer Redlin and Tim Redlin JT 1,125
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</TABLE>
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EXHIBIT 1
