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EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
DATED AS OF
May 14, 1999
AMONG
UNITED FOODS, INC.,
PICTSWEET LLC,
AND
UF ACQUISITION CORP.
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TABLE OF CONTENTS
ARTICLE 1--THE MERGER..............................................................................................1
Section 1.1 Company Actions..............................................................................1
Section 1.2 The Merger...................................................................................1
Section 1.3 Effective Time...............................................................................2
Section 1.4 Closing......................................................................................2
Section 1.5 Directors and Officers of Surviving Corporation..............................................2
Section 1.6 Certificate of Incorporation.................................................................2
Section 1.7 Bylaws.......................................................................................2
ARTICLE 2--CONVERSION OF SECURITIES................................................................................2
Section 2.1 Conversion of Capital Stock..................................................................2
(a) Purchaser Common Stock......................................................................2
(b) No Effect on Parent-Owned Stock.............................................................3
(c) Cancellation of Treasury Stock..............................................................3
(d) Conversion of Shares and Dissenting Shares..................................................3
Section 2.2 Surrender of Certificates....................................................................3
(a) Paying Agent................................................................................3
(b) Surrender Procedures........................................................................3
(c) Transfer Books; No Further Ownership Rights in the Shares...................................4
(d) Termination of Fund; No Liability...........................................................4
(e) Lost, Stolen or Destroyed Certificates......................................................4
Section 2.3 Dissenting Shares............................................................................5
Section 2.4. Withholding Taxes............................................................................5
ARTICLE 3--REPRESENTATIONS AND WARRANTIES OF COMPANY...............................................................5
Section 3.1 Corporate Existence and Power................................................................5
Section 3.2 Corporate Authorization......................................................................6
Section 3.3 Governmental Authorization...................................................................6
Section 3.4 Non-Contravention............................................................................6
Section 3.5 Capitalization...............................................................................6
Section 3.6 Company Subsidiaries and Other Equity Interests..............................................7
Section 3.7 Disclosure Documents.........................................................................7
ARTICLE 4--REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER..................................................8
Section 4.1 Corporate Existence and Power................................................................8
Section 4.2 Capitalization...............................................................................8
Section 4.3 Corporate Authorization......................................................................8
Section 4.4 Governmental Authorization...................................................................8
Section 4.5 Non-Contravention............................................................................8
Section 4.6 Disclosure Documents.........................................................................9
Section 4.7 Finders' and Bankers' Fees...................................................................9
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Section 4.8 Solvency Matters.............................................................................9
Section 4.9 Litigation....................................................................................9
Section 4.10 Other Agreements............................................................................9
Section 4.11 No Resale...................................................................................9
ARTICLE 5--COVENANTS..............................................................................................10
Section 5.1 Interim Operations of Company...............................................................10
Section 5.2 Access to Information.......................................................................12
Section 5.3 Other Potential Bidders.....................................................................12
Section 5.4 Notices of Certain Events...................................................................12
Section 5.5 Voting of Shares............................................................................12
Section 5.6 Director and Officer Liability..............................................................13
Section 5.7 Best Efforts................................................................................13
Section 5.8 Certain Filings.............................................................................13
Section 5.9 Public Announcements........................................................................13
Section 5.10 Financing..................................................................................13
Section 5.11 Stockholders' Meeting......................................................................14
Section 5.12 Further Assurances.........................................................................15
Section 5.13 Resignations of Directors..................................................................15
ARTICLE 6--CONDITIONS TO THE MERGER...............................................................................15
Section 6.1 Conditions to the Obligations of Each Party.................................................15
Section 6.2 Additional Conditions to the Obligations of Parent and Purchaser............................16
Section 6.3 Additional Conditions to the Obligations of Company.........................................17
ARTICLE 7--TERMINATION............................................................................................18
Section 7.1 Termination.................................................................................18
Section 7.2 Effect of Termination.......................................................................19
ARTICLE 8 -- MISCELLANEOUS........................................................................................19
Section 8.1 Definitions.................................................................................19
"Affiliate".....................................................................................19
"Agreement".....................................................................................19
"Business Combinations Act".....................................................................19
"Certificate of Merger".........................................................................19
"Class A Common Stock"..........................................................................19
"Class B Common Stock"..........................................................................19
"Code"..........................................................................................19
"Company Common Stock"..........................................................................19
"DGCL"..........................................................................................19
"Exchange Act"..................................................................................20
"Expenses"......................................................................................20
"GAAP"..........................................................................................20
"Governmental Authority"........................................................................20
"Law"...........................................................................................20
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"Lien"..........................................................................................20
"Material Adverse Effect".......................................................................20
"Order".........................................................................................20
"Permitted Financing Terms".....................................................................20
"Person"........................................................................................20
"Preferred Stock"...............................................................................20
"Purchaser Common Stock"........................................................................21
"SEC"...........................................................................................21
"Special Committee".............................................................................21
"Surviving Corporation".........................................................................21
"Xxx Xxxxxxxxxx Family".........................................................................21
"Xxxxxxxxxx Group"..............................................................................21
Section 8.2 Notices.....................................................................................22
Section 8.3 Survival of Representations and Warranties..................................................23
Section 8.4 Enforcement of Agreement....................................................................23
Section 8.5 Amendments; Written Waivers...............................................................23
Section 8.6 Expenses....................................................................................24
Section 8.7 Successors and Assigns......................................................................24
Section 8.8 Governing Law...............................................................................24
Section 8.9 Severability................................................................................24
Section 8.10 Captions...................................................................................24
Section 8.11 Interpretations............................................................................24
Section 8.12 Counterparts; Effectiveness................................................................25
Section 8.13 Gender and Number..........................................................................25
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of May
14, 1999, by and among UNITED FOODS, INC., a Delaware corporation ("Company"),
PICTSWEET LLC, a Delaware limited liability company ("Parent"), and UF
ACQUISITION CORP., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser").
RECITALS:
A. The Board of Directors of the Company has approved and deemed it fair,
advisable and in the best interests of the Company's Stockholders other than the
Xxx Xxxxxxxxxx Family, Parent, Purchaser or any of their affiliates (the "Public
Stockholders") to adopt and approve this Agreement and the transactions
contemplated hereby, including the Merger (collectively, the "Transactions").
B. The Board of Directors of the Company has determined to recommend the
Agreement and the Transactions for approval and adoption by Company's
stockholders ("Stockholders") at a duly called meeting of the Stockholders.
C. The Board of Directors of Purchaser, and the Board of Directors of Parent,
have approved, and deem it fair, advisable and in the best interests of their
respective stockholders and members, to consummate the acquisition of Company by
Parent upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, the parties hereto agree as
follows:
ARTICLE 1--THE MERGER
Section 1.1 Company Actions. The recommendation referred to in Recital
B may be withdrawn, modified or amended by the Board of Directors of Company if
the Board deems such withdrawal, modification or amendment necessary in light of
its fiduciary duties to Stockholders after consultation with counsel and the
Special Committee and its counsel.
Section 1.2 The Merger. Subject to the terms and conditions of this
Agreement, and in accordance with the DGCL, at the Effective Time, (a) Purchaser
shall be merged with and into Company (the "Merger") and the separate corporate
existence of Purchaser shall thereupon cease; and (b) Company shall be the
surviving corporation in the Merger (the "Surviving Corporation") and shall
continue to be governed by the laws of the State of Delaware. The Merger shall
have the effects specified in the DGCL and as provided herein. Without limiting
the foregoing, and subject thereto, at the Effective Time, all of the property,
rights, privileges, powers and franchises of Company and Purchaser shall vest in
Surviving Corporation, and all debts, liabilities, and duties of Company and
Purchaser shall become debts, liabilities and duties of Surviving Corporation.
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Section 1.3 Effective Time. Subject to the terms and conditions of this
Agreement, as soon as practicable after satisfaction or waiver of the conditions
set forth in Article 6, Parent, Purchaser and Company will cause a Certificate
of Merger to be executed and filed on the Closing Date (or on such other date as
Parent and Company may agree) with the Secretary of State of Delaware as
provided in the DGCL. The Merger shall become effective at the time when the
Certificate of Merger is duly filed with the Secretary of State of Delaware, or
such later time as is agreed upon by the parties and specified in the
Certificate of Merger (such time, the "Effective Time").
Section 1.4 Closing. The closing of the Merger (the "Closing") shall
take place at 10:00 a.m. on a date to be specified by the parties, which shall
be no later than the fifth business day after satisfaction or waiver of all of
the conditions set forth in Article 6 hereof (the "Closing Date"), at the
corporate offices of Company, unless another date or place is agreed to in
writing by the parties hereto.
Section 1.5 Directors and Officers of Surviving Corporation. The
directors and the officers of Company at the Effective Time shall, from and
after the Effective Time, be the directors and officers, respectively, of
Surviving Corporation, until their successors shall have been duly elected or
appointed or qualified or until their earlier death, resignation (including that
provided herein), or removal in accordance with applicable law, the Certificate
of Incorporation and the Bylaws of Company.
Section 1.6 Certificate of Incorporation. The Certificate of
Incorporation of Company in effect at the Effective Time shall be the
Certificate of Incorporation of Surviving Corporation, until amended, in
accordance with applicable law.
Section 1.7 Bylaws. The Bylaws of Company in effect at the Effective
Time shall be the Bylaws of Surviving Corporation, until amended, in accordance
with applicable law.
ARTICLE 2--CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. At and as of the Effective
Time, by virtue of the Merger and without any action on the part of the holders
of any shares of Company Common Stock (including shares of Class A Common Stock
and Class B Common Stock, and shares of the Company's Class A Common Stock
issuable as a result of any conversion of Class B Common Stock into Class A
Common Stock, the "Shares") or holders of any shares of Purchaser Common Stock:
(a) Purchaser Common Stock. Each issued and outstanding share of
Purchaser Common Stock (including all Shares that are owned by Parent
("Parent-Owned Shares")) shall be converted into and become one fully
paid and non-assessable share of Class B Common Stock of Surviving
Corporation.
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(b) No Effect on Parent-Owned Stock. All Parent-Owned Shares shall
continue to remain issued and outstanding and shall not be converted
into the right to receive the Merger Consideration.
(c) Cancellation of Treasury Stock. All Shares that are owned by the
Company as treasury stock immediately prior to the Effective Time
("Treasury Shares") shall be canceled and retired and shall cease to
exist and no consideration shall be delivered in exchange therefor.
(d) Conversion of Shares and Dissenting Shares. Each issued and
outstanding Share (other than Parent-Owned Shares, the Treasury Shares,
and the Dissenting Shares) shall be converted into the right to receive
$3.50 in cash, payable by Surviving Corporation to the holder thereof,
without interest (the "Merger Consideration"), upon surrender of the
Certificate formerly representing such Share in the manner provided in
Section 2.2. Subject to and in accordance with Section 2.3, each issued
and outstanding Dissenting Share shall be converted into the right to
receive payment of the fair value of such Dissenting Share as
determined in accordance with the DGCL, from Surviving Corporation to
the holder thereof. From and after the Effective Time, all of such
Shares and Dissenting Shares shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist in all
respects, and each holder of a Certificate formerly representing any
such Share or Dissenting Share shall cease to have any rights with
respect thereto, except for the rights to receive the foregoing
payments.
Section 2.2 Surrender of Certificates.
(a) Paying Agent. At or prior to the Effective Time, Parent shall
designate a bank reasonably acceptable to Company to act as agent for
the holders of the Shares in connection with the Merger (the "Paying
Agent"), and Parent shall, or Parent shall cause Surviving Corporation
to, make available to the Paying Agent funds sufficient in the
aggregate for the Paying Agent to make full payment of the Merger
Consideration to the holders of the Shares entitled to payment of the
Merger Consideration pursuant to Section 2.1(d). Such funds shall be
invested by the Paying Agent as directed by Parent or Surviving
Corporation, and interest thereon shall be paid to Surviving
Corporation.
(b) Surrender Procedures. As used herein, the term "Certificate" means
a stock certificate which immediately prior to the Effective Time
represented outstanding Shares. As soon as reasonably practicable after
the Effective Time, the Paying Agent shall mail to each holder of
record of a Certificate formerly representing Shares that were
converted pursuant to Section 2.1(d) into the right to receive the
Merger Consideration: (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
Paying Agent and shall be in such form and have such other provisions
as Parent and Company may reasonably specify), and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
payment of the Merger Consideration. Upon surrender of a Certificate
for cancellation to the Paying
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Agent, together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange
therefor the Merger Consideration for each Share formerly represented
by such Certificate and the Certificate so surrendered shall forthwith
be canceled. No interest will be paid or accrued to the holder of the
Certificate with respect to the cash payable upon the surrender of the
Certificate. If payment of the Merger Consideration is to be made to a
Person other than the Person in whose name the surrendered Certificate
is registered, it shall be a condition of payment that the Certificate
so surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and that the Person requesting such payment
shall have paid any transfer and other taxes required by reason of the
payment of the Merger Consideration to a Person other than the
registered holder of the Certificate surrendered or shall have
established to the satisfaction of Surviving Corporation that such tax
either has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at
any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this
Section 2.2. The right of any Stockholder to receive the Merger
Consideration shall be subject to Section 2.4.
(c) Transfer Books; No Further Ownership Rights in the Shares. At the
Effective Time, the stock transfer books of Company shall be closed and
thereafter there shall be no further registration of transfers of the
Shares on the records of Company (except for those owned by Parent or
Purchaser). From and after the Effective Time, the holders of
Certificates evidencing ownership of the Shares (other than
Parent-Owned Shares) outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such Shares, except
as otherwise provided for herein or by applicable Law.
(d) Termination of Fund; No Liability. At any time following twelve
months after the Effective Time, Surviving Corporation shall be
entitled to require the Paying Agent to deliver to it any funds
(including any interest received with respect thereto) which had been
made available to the Paying Agent and which have not been disbursed to
holders of Certificates, and thereafter such holders shall be entitled
to look to Surviving Corporation (subject to abandoned property,
escheat or other similar Laws) only as general creditors thereof, with
respect to the Merger Consideration payable upon due surrender of their
Certificates, without any interest thereon. Notwithstanding the
foregoing, neither Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Certificate for Merger Consideration
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Law. Subject to such Laws (i.e., the
Surviving Corporation shall be obligated to pay the Merger
consideration for particular Shares only once), even after the delivery
by the Paying Agent to the Surviving Corporation of any funds not
previously disbursed to Stockholders, the Surviving Corporation shall
continue to be obligated to pay the Merger Consideration to any
Stockholder surrendering a Share certificate, and the certificate shall
then be canceled.
(e) Lost, Stolen or Destroyed Certificates. In the event any
Certificate for Shares (other than Dissenting Shares and Parent-Owned
Shares) shall have been lost, stolen or destroyed, upon
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the making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed (in form and substance
satisfactory to Parent) and, if required by Parent, the posting by such
Person of a bond (in form, substance and amount satisfactory to Parent)
as indemnity against any claim that may be made against it with respect
to such Certificate, the Paying Agent will issue in exchange for such
lost, stolen or destroyed Certificate the Merger Consideration pursuant
to Section 2.2(b).
Section 2.3 Dissenting Shares. Notwithstanding any other provision of
this Agreement to the contrary, Shares held by a holder who has not voted such
Shares in favor of the Merger and with respect to which appraisal rights shall
have been exercised and perfected in accordance with Section 262 of the DGCL and
as of the Effective Time not withdrawn ("Dissenting Shares"), shall be converted
at and as of the Effective Time into the right to receive payment from Surviving
Corporation of the fair value of such Shares as determined in accordance with
Section 262 of the DGCL, unless and until the holder of such Shares withdraws
his demand for such appraisal or becomes ineligible for such appraisal (through
failure to perfect or otherwise), in which case, such right to receive payment
shall then be converted, as of the Effective Time, into the right to receive
payment from Surviving Corporation of the Merger Consideration for such Shares,
without interest. Any Dissenting Stockholder who has withdrawn his demand for
appraisal shall be treated in the same manner as a non-dissenting Stockholder
and have the same rights under Section 2.2 of this Agreement. Company shall give
Parent (i) prompt notice of any demands for appraisal of Shares received by
Company and (ii) the opportunity to participate in and direct all negotiations
and proceedings with respect to any such demands. Company shall not, without the
prior written consent of Parent, voluntarily make any payment with respect to,
settle or offer to settle, any such demands.
Section 2.4. Withholding Taxes. Surviving Corporation shall be entitled
to deduct and withhold from the consideration otherwise payable to a holder of
Shares pursuant to the Merger, such amounts as are required to be withheld under
the Code, or any applicable Laws or Orders. To the extent that amounts are so
withheld by Surviving Corporation, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the Shares
in respect of which such deduction and withholding was made by Surviving
Corporation.
ARTICLE 3--REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent and Purchaser that:
Section 3.1 Corporate Existence and Power. Company is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
state of its incorporation, and has the requisite corporate power and authority
necessary to own, operate and lease its properties and assets, and to carry on
its business as now being conducted. Company is duly qualified as a foreign
entity to do business, and is in good standing, in each jurisdiction where the
character of its properties owned, operated or leased, or the nature of its
activities, makes such qualification necessary except for any such failure
which, taken together with any other such failures, would not reasonably be
expected to have a Material Adverse Effect. A correct and complete copy of the
Certificate of
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Incorporation and the Bylaws of Company, each as amended through the date
hereof, have been made available by Company to Parent.
Section 3.2 Corporate Authorization. The execution, delivery and
performance by Company of this Agreement and the consummation by Company of the
Transactions: (i) are within Company's corporate powers, and (ii) except for the
Required Stockholder Approval, have been deemed advisable and have been duly
authorized by all necessary corporate action on behalf of Company. This
Agreement and the Transactions have been duly approved by the Board of Directors
of Company, and at least three-quarters of such Board consisted of continuing
directors (as defined in the Certificate of Incorporation of Company), and
accordingly the provisions of Article FOURTEENTH, Section A of the Certificate
of Incorporation of the Company are not applicable to this Agreement or the
Transactions. Company is not governed by, and this Agreement and the
Transactions are not subject to, the restrictions on business combinations set
forth in the Business Combinations Act. This Agreement constitutes a legal,
valid and binding obligation of Company, enforceable against it in accordance
with its terms, subject to the effect of bankruptcy, insolvency, reorganization
and other similar laws relating to creditors' rights generally and to general
principles of equity.
Section 3.3 Governmental Authorization. The execution, delivery and
performance by Company of this Agreement and the consummation of the
Transactions by Company require no action by or in respect of, or filing with,
any Governmental Authority other than (i) the filing of Certificate of Merger in
accordance with the DGCL, and (ii) compliance with applicable requirements of
the Exchange Act and of applicable state securities laws.
Section 3.4 Non-Contravention. The execution, delivery and performance
by Company of this Agreement and the consummation by Company of the Transactions
do not and will not (i) contravene or conflict with the Certificate of
Incorporation or Bylaws of Company, and (ii) assuming compliance with the
matters referred to in Section 3.3 and procurement of the Required Stockholder
Approval, contravene or conflict with or constitute a violation of any provision
of any Law or Order binding upon or applicable to Company or its respective
properties or assets, and (iii) except as set forth in EXHIBIT 3.4, do not
constitute a breach, violation or default of or under, or give rise to a right
to terminate or accelerate, or require a consent under, or create any lien,
encumbrance or restriction upon any assets or properties of Company pursuant to,
any document, instrument, certificate, agreement, or other arrangement, to which
Company is a party, or by which any of its respective properties or assets are
bound, which would reasonably be expected to have a Material Adverse Effect.
Section 3.5 Capitalization. The authorized capital stock of Company
consists of 18,000,000 authorized Shares of Company Common Stock (of which
12,000,000 are Class A Common Stock and 6,000,000 are Class B Common Stock), and
10,000,000 authorized shares of Preferred Stock. With respect to Company, (a)
2,617,243 Shares of Class A Common Stock were issued and outstanding as of May
4, 1999, (b) 4,192,686 Shares of Class B Common Stock were issued and
outstanding as of May 4, 1999, (c) no Shares of Company Common Stock are held in
the treasury of Company, (d)
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no Shares of Company Common Stock are reserved for future issuance pursuant to
any stock options, stock incentive, or other stock arrangements or plans , (e)
no shares of Preferred Stock are issued and outstanding, (f) no shares of
Preferred Stock are held in the treasury of Company, and (g) no shares of
Preferred Stock are reserved for future issuance pursuant to any stock options,
stock incentive, or other stock arrangements or plans. All outstanding Shares of
Company Common Stock are duly authorized, validly issued, fully paid and
nonassessable. There are no bonds, debentures, notes or other indebtedness
having general voting rights (or convertible into securities having such rights)
("Voting Debt") of Company outstanding. Except as set forth above in this
Section (and except for any Shares of Class B Common Stock which may have been
converted since May 4, 1999 into to an equal number of Shares of Class A Common
Stock in accordance with the Certificate of Incorporation of the Company), there
are (i) no shares of capital stock or other voting securities of Company
authorized, issued or outstanding, (ii) no existing options, warrants, calls,
preemptive rights, subscriptions or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
Company, or obligating Company to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or other
equity interest in, Company or securities convertible into or exchangeable for
such shares or equity interests, or obligating Company to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment, and (iii) no outstanding contractual obligations of
Company to repurchase, redeem or otherwise acquire any Shares, or the capital
stock of Company, or to provide funds to make any investment (in the form of a
loan, capital contribution or otherwise) in any other Person.
Section 3.6 Company Subsidiaries and Other Equity Interests. Company
does not own any material equity interest in any corporation or other Person.
Section 3.7 Disclosure Documents.
(a) Each document required to be filed by Company with the SEC in
connection with the Transactions contemplated by this Agreement (the
"Company Disclosure Documents"), including, without limitation the
Proxy Statement, will, when filed, comply as to form in all material
respects with the applicable requirements of the Exchange Act.
(b) At the time the Proxy Statement or any amendment or supplement
thereto is first mailed to Stockholders, at the time such Stockholders
vote on adoption of this Agreement, and at the Effective Time, the
Proxy Statement, as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not
misleading. At the time of the filing of any Company Disclosure
Document other than the Proxy Statement and at the time of any
distribution thereof, such Company Disclosure Document will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
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(c) The representations and warranties contained in this Section 3.7
will not apply to statements or omissions included in any Company
Disclosure Documents (including, without limitation, the Proxy
Statement) based upon information furnished to Company by Parent or
Purchaser specifically for use therein.
ARTICLE 4--REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser, jointly and severally, represent and warrant to
Company that:
Section 4.1 Corporate Existence and Power. Parent is a limited
liability company, and Purchaser is a corporation, and each is duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and each has all limited liability company or corporate powers and all
governmental licenses, authorizations, consents and approvals required to
consummate the transactions contemplated by this Agreement. Since the date of
its formation or incorporation, neither Parent nor Purchaser has engaged in any
activities other than in connection with or as contemplated by this Agreement.
Section 4.2 Capitalization. The authorized capital stock of Purchaser
consists of 10,000 shares of common stock, par value $1.00 per share, of which
one hundred (100) shares are outstanding as of the Effective Time and are owned,
beneficially and of record, by Parent. All of the issued and outstanding shares
of capital stock of Purchaser are validly issued, fully paid, non-assessable and
free of preemptive rights and all liens. All of the members' interests in Parent
are owned by the Xxx Xxxxxxxxxx Family.
Section 4.3 Corporate Authorization. The execution, delivery and
performance by Parent and Purchaser of this Agreement and the consummation by
Parent and Purchaser of the Transactions contemplated hereby are within the
respective corporate (or limited liability company) powers of Parent and
Purchaser, and have been duly authorized respectively by all necessary corporate
(or limited liability company) action. This Agreement constitutes a legal, valid
and binding agreement of Parent and Purchaser, enforceable against each of them
in accordance with its terms.
Section 4.4 Governmental Authorization. The execution, delivery and
performance by Parent and Purchaser of this Agreement and the consummation by
Parent and Purchaser of the Transactions contemplated by this Agreement require
no action by or in respect of, or filing with, any Governmental Authority other
than (i) the filing of Certificate of Merger in accordance with the DGCL, and
(ii) compliance with any applicable requirements of the Exchange Act.
Section 4.5 Non-Contravention. The execution, delivery and performance
by Parent and Purchaser of this Agreement and the consummation by Parent and
Purchaser of the Transactions contemplated hereby do not and will not (i)
contravene or conflict with the respective certificates of formation,
certificates of incorporation, bylaws, operating agreements, or other
organizational documents of Parent or Purchaser, (ii) assuming compliance with
the matters referred to in Section 4.3, contravene or conflict with or
constitute a violation of any provision of any Law or Order binding
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upon or applicable to Parent or Purchaser or any of their respective properties
or assets, and (iii) do not constitute a breach, violation or default of or
under, or give rise to a right to terminate or accelerate, or require a consent
under, or create any lien, encumbrance or restriction upon any of the respective
assets or properties of Parent or Purchaser pursuant to, any document,
instrument, certificate, agreement, or other arrangement, to which Parent or
Purchaser is a party, or by which any of their respective properties or assets
are bound.
Section 4.6 Disclosure Documents. The information with respect to
Parent, Purchaser and their Affiliates that is filed with the SEC or is
furnished to Company for use in any Company Disclosure Document will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading (i) in the case of the
Proxy Statement at the time the Proxy Statement or any amendment or supplement
thereto is first mailed to Stockholders, at the time Stockholders vote on
adoption of this Agreement and at the Effective Time, and (ii) in the case of
any Company Disclosure Document other than the Proxy Statement, at the time of
the filing thereof and at the time of any distribution thereof.
Section 4.7 Finders' and Bankers' Fees. There is no investment banker,
broker, finder or other intermediary which has been retained by or is authorized
to act on behalf of Parent or Purchaser or their affiliates who might be
entitled to any fee or commission from Parent and/or Purchaser or their
affiliates in connection with the Transactions or the financing thereof.
Section 4.8 Solvency Matters. Upon consummation of the Transactions,
(i) the fair value of Surviving Corporation's assets will exceed Surviving
Corporation's stated liabilities and identified contingent liabilities, (ii)
Surviving Corporation will be able to pay its debts as they become absolute and
become due in the usual course of business, and (iii) the capital remaining in
Surviving Corporation after consummation of the Transactions will not be
unreasonably small for the business in which Surviving Corporation is engaged
and is proposed to be engaged following consummation of the Transactions.
Section 4.9 Litigation. Except as set forth on EXHIBIT 4.9, there are
no claims, actions, suits, proceedings or investigations pending or threatened,
against Parent or Purchaser or their affiliates, before any Governmental
Authority, that seek to prevent or delay the performance of this Agreement or
the Transaction.
Section 4.10 Other Agreements. Neither Parent nor Purchaser nor any of
their affiliates has any agreement or understanding with any other Stockholder
of Company regarding the payment of any consideration of any kind to or for the
benefit of any Stockholder in connection with the Transactions, except pursuant
to the terms of this Agreement.
Section 4.11 No Resale. Parent, Purchaser and their Affiliates are
acquiring the Shares without any intent to resell the Shares or to sell all or
substantially all of the assets of Surviving Corporation, and neither Parent,
Purchaser nor any Affiliate of Parent or Purchaser, has received an
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offer to purchase any or all of the Shares or all or substantially all of the
assets of Surviving Corporation. The members of the Xxx Xxxxxxxxxx Family will
not sell their Shares to a third party prior to, or tender their Shares in, the
Transactions; rather, all of the Shares held by the Xxx Xxxxxxxxxx Family will
be transferred to and held by Parent as of the Effective Date.
ARTICLE 5--COVENANTS
Section 5.1 Interim Operations of Company. From the date hereof until
the Effective Time, except as agreed to in writing by Parent, Company shall
conduct its business in the ordinary course consistent with past practice and
shall use all commercially reasonable efforts to preserve intact its business
organizations and relationships with third parties and to keep available the
services of its present officers and employees. Without limiting the generality
of the foregoing, from the date hereof until the Effective Time, without the
prior written consent of Parent:
(a) Company shall not, directly or indirectly: (i) issue, sell,
transfer or pledge or agree to sell, transfer or pledge any treasury
stock of Company or any capital stock or equity interests in any Person
owned by it; (ii) amend its Certificate of Incorporation or Bylaws or
similar organizational documents; or (iii) split, combine or reclassify
(except for the issuance of Class A Shares upon conversion of Class B
Shares in accordance with the Certificate of Incorporation) the
outstanding Shares or Preferred Stock;
(b) Company shall not: (i) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property with respect to
its capital stock; (ii) issue, sell, pledge, dispose of or encumber any
additional shares of, or securities convertible into or exchangeable
for, or options, warrants, calls, commitments or rights of any kind to
acquire any shares of, capital stock of any class of Company (except
for issuance of Class A Shares resulting from conversions of Class B
Shares into Class A Shares in accordance with the Certificate of
Incorporation); (iii) transfer, lease, license, sell, mortgage, pledge,
dispose of, or encumber any assets other than in the ordinary and usual
course of business and consistent with past practice; (iv) except for
the Financing pursuant to the Permitted Financing Terms, incur or
modify any indebtedness or other liability, other than in the ordinary
and usual course of business and consistent with past practice; or (v)
redeem, purchase or otherwise acquire directly or indirectly any of its
capital stock;
(c) Company shall not, other than in the ordinary course of business:
(i) grant any increase in the compensation payable or to become payable
by Company to any of its executive officers; or (ii) adopt any new, or
amend or otherwise increase, or accelerate the payment or vesting of
the amounts payable or to become payable under, any existing bonus,
incentive compensation, deferred compensation, severance, profit
sharing, stock option, stock purchase, insurance, pension, retirement
or other employee benefit plan, agreement or arrangement; or (iii)
enter into any employment or severance agreement with or, except in
accordance with the existing written policies of Company, grant any
severance or termination pay to any officer, director or employee of
Company;
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(d) Company shall not permit any insurance policy naming it as a
beneficiary or a loss payable payee to be canceled or terminated
without notice to Parent, except in the ordinary course of business and
consistent with past practice;
(e) Company shall not enter into any contract or transaction relating
to the purchase of assets other than in the ordinary course of business
and consistent with prior practice;
(f) Company shall not, other than in the ordinary course of business:
(i) change any of the accounting methods used by it unless required by
GAAP; (ii) make any material tax election; (iii) change any material
tax election already made; (iv) adopt any material tax accounting
method; (v) change any material tax accounting method unless required
by GAAP; or (vi) enter into any closing agreement, settle any tax claim
or assessment or consent to any tax claim or assessment or any waiver
of the statute of limitations for any such claim or assessment;
(g) except for the Financing pursuant to the Permitted Financing Terms
and other than in the ordinary course of business, Company shall not:
(i) incur or assume any long-term debt; (ii) except in the ordinary
course of business and consistent with past practice, incur or assume
any short-term indebtedness; (iii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently
or otherwise) for the obligations of any other Person; (iv) make any
loans, advances or capital contributions to, or investment in, any
other Person (other than customary loans or advances to employees in
accordance with past practice); or (v) enter into any material
commitment or transaction (including, but not limited to, any
borrowing, capital expenditure or purchase, sale or lease of assets);
(h) Company shall not: (i) settle or compromise any material claim,
lawsuit, liability or obligation; or (ii) pay, discharge or satisfy any
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge
or satisfaction of any such claims, liabilities or obligation, (x) to
the extent reflected or reserved against in, or contemplated by, the
consolidated financial statements (or the notes thereto) of Company on
a consolidated basis, (y) incurred in the ordinary course of business
and consistent with past practice or (z) which are legally required to
be paid, discharged or satisfied;
(i) Company shall not take, or agree to commit to take, any action that
would make any representation or warranty of Company contained herein
inaccurate in any respect at, or as of any time prior to, the Effective
Time; and
(j) Company shall not enter into an agreement, contract, commitment or
arrangement to do any of the foregoing, or to authorize, recommend,
propose or announce an intention to do any of the foregoing.
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Section 5.2 Access to Information. From the date hereof until the
Effective Time, Company will give Parent and Purchaser, and their respective
counsel, financial advisors, prospective lenders, auditors and other authorized
representatives (pursuant to appropriate confidentiality agreements) full access
to the offices, properties, books and records of Company, will furnish to Parent
and Purchaser and their respective counsel, financial advisors, prospective
lenders, auditors and other authorized representatives such financial and
operating data and other information as such Persons may reasonably request and
will instruct Company's employees, counsel, financial advisors and auditors to
cooperate with Parent and Purchaser in their investigation of the business of
Company.
Section 5.3 Other Potential Bidders. Company shall, directly or
indirectly, furnish information and access, in each case in response to
unsolicited requests therefor, received prior to or after the date of this
Agreement, to the same extent permitted by Section 5.2 hereof, to any Person
pursuant to appropriate confidentiality agreements, and may participate in
discussions and negotiate with any such Person concerning any merger, sale of
assets, sale of shares of capital stock or similar transaction involving Company
or any division of Company (any such transaction being referred to herein as a
"Competing Transaction"), only if the Special Committee determines, after
consultation with counsel and its independent financial advisor, that such
action is necessary in light of the fiduciary duties of the Board of Directors
to the Public Stockholders. In the event a potential Competing Transaction
exists, Company shall direct its officers and other appropriate personnel to
cooperate with and be reasonably available to consult with any such Person.
Except as set forth above, Company shall not solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any Person
(other than Parent or Purchaser) concerning any merger, sale of assets, sale of
shares of capital stock or similar transaction involving Company.
Section 5.4 Notices of Certain Events. Each party shall promptly notify
the other parties of:
(a) any notice or other communication received by such party from any
Person alleging that the consent of such Person is or may be required
in connection with the Transactions;
(b) any occurrence or non-occurrence of any event that would cause any
representation or warranty of such party contained in this Agreement to
be untrue or inaccurate in any material respect at or prior to the
Effective Time;
(c) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; and
(d) any notice or other communication from any Governmental Authority
in connection with the Transactions; provided, however, that the
delivery of any notice pursuant to this Section 5.4 shall not limit or
otherwise affect the remedies available hereunder to the party
receiving such notice.
Section 5.5 Voting of Shares. In any vote of Stockholders with respect
to this Agreement and
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the Transactions, Parent and Purchaser shall vote or cause to be voted all of
the shares of Company Common Stock beneficially owned by each such party in
favor of the approval and adoption of this Agreement and the Transactions.
Section 5.6 Director and Officer Liability. For six (6) years, or for
the period provided for in the applicable statute of limitations, whichever is
longer, from and after the Effective Time, Parent will or will cause Surviving
Corporation to indemnify and hold harmless the present and former officers and
directors of Company ("Indemnified Persons") in respect of acts or omissions
occurring at or prior to the Effective Time to the fullest extent provided under
the DGCL or under Company's Certificate of Incorporation and Bylaws in effect on
the date hereof. Notwithstanding any provision herein to the contrary, the
covenants contained in this Section 5.6 shall survive the Effective Time and the
consummation of the Transactions, are intended to benefit the Indemnified
Persons, and shall be binding on all successors and assigns of Parent and
Surviving Corporation.
Section 5.7 Best Efforts. Subject to the terms and conditions of this
Agreement, each party will use its reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws to consummate the Transactions
contemplated by this Agreement.
Section 5.8 Certain Filings. Company, Parent and Purchaser shall
cooperate with each other (a) in connection with the preparation of Company
Disclosure Documents, (b) in determining whether any action by or in respect of,
or filing with, any Governmental Authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the transactions
contemplated by this Agreement, and (c) in seeking any such actions, consents,
approvals or waivers or making any such filings, furnishing information required
in connection therewith or with Company Disclosure Documents and seeking timely
to obtain any such actions, consents, approvals or waivers.
Section 5.9 Public Announcements. Parent and Company will consult with
each other before issuing any press release or making any public statement with
respect to this Agreement or the Transactions and, except as may be required by
applicable Law or any listing agreement with any national securities exchange,
will not issue any such press release or make any such public statement prior to
such consultation.
Section 5.10 Financing
(a) Parent shall use its best efforts to obtain all financing that is
necessary or desirable both to consummate the Transactions and to fund
the working capital needs of Surviving Corporation after the Closing
(the "Financing"), on terms and conditions substantially in accordance
with the Permitted Financing Terms.
(b) Company shall use its reasonable best efforts to provide assistance
to Parent and Purchaser in obtaining the Financing in accordance with
the Permitted Financing Terms.
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(c) Parent and Purchaser shall deliver to the Special Committee and
Company within fifteen (15) days of the date of this Agreement copies
of a written commitment for the Financing on terms substantially in
accordance with the Permitted Financing Terms.
(d) The funds provided by the written commitment(s) delivered by Parent
and Purchaser pursuant to subparagraph (c) above will be sufficient to
complete the Transactions contemplated hereby. Parent and Purchaser
shall use their best efforts to close the financing reflected in any
such written commitment(s). Any material change in the commitment(s) so
delivered or any new commitment(s) delivered must be approved by the
Special Committee, Company and Parent, which approval will not be
unreasonably withheld by any party.
Section 5.11 Stockholders' Meeting. In accordance with applicable Law:
(a) Company shall duly call, give notice of, convene and hold a special
meeting of Stockholders (the "Special Meeting") as soon as reasonably
practicable for the purpose of considering and voting upon the approval
and adoption of this Agreement and the Transactions, and comply with
all legal requirements applicable to such meeting, in order to procure
the Required Stockholder Approval;
(b) Company shall in connection with such meeting, promptly prepare and
file (in consultation with Parent) with the SEC a preliminary proxy or
information statement, and a Schedule 13E-3 Transaction Statement
required pursuant to Section 13(e) of the Exchange Act (a "Schedule
13E-3"), relating to the Transactions and this Agreement and use its
reasonable best efforts (x) to obtain and furnish the information
required to be included by the SEC in such preliminary proxy statement
and Schedule 13E-3 and, after consultation with Parent, the Special
Committee, and their respective counsel, to respond promptly to any
comments made by the SEC with respect to the preliminary proxy or
Schedule 13E-3 and cause a definitive proxy or information statement,
including any amendment or supplement thereto (the "Proxy Statement")
to be mailed to Stockholders, provided that no material amendment or
supplement to either the Proxy Statement or Schedule 13E-3 will be made
by Company without consultation with Parent, the Special Committee, and
their respective counsel, and (y) to obtain the necessary approvals of
the Transactions and this Agreement by Stockholders;
(c) Company shall include in the Proxy Statement the recommendation of
the Board of Directors of Company that Stockholders vote in favor of
the approval and the adoption of this Agreement and the transactions;
and
(d) Parent, Purchaser and the members of the Xxx Xxxxxxxxxx Family
shall, in connection with such meeting, promptly prepare and file (in
consultation with Company) with the SEC a Schedule 13E-3 relating to
the Transactions and this Agreement and use its reasonable best efforts
(x) to obtain and furnish the information required to be included by
the SEC in such Schedule 13E-3 and, after consultation with Company,
the Special Committee, and their
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respective counsel, to respond promptly to any comments made by the SEC
with respect to the Schedule 13E-3, provided that no material amendment
or supplement to the Schedule 13E-3 will be made by Parent or Purchaser
without consultation with Company, the Special Committee, and their
respective counsel, and (y) to obtain the necessary approvals of the
Transactions and this Agreement by the Xxx Xxxxxxxxxx Family.
Section 5.12 Further Assurances. At and after the Effective Time, the
officers and directors of Surviving Corporation will be authorized to execute
and deliver, in the name and on behalf of Company or Purchaser, any deeds, bills
of sale, assignments or assurances and to take and do, in the name and on behalf
of Company or Purchaser, any other actions and things they may deem desirable to
vest, perfect or confirm of record or otherwise in Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of Company acquired or to be acquired by Surviving Corporation as a
result of, or in connection with, the Merger.
Section 5.13 Resignations of Directors. Each director of Company
personally agrees to promptly execute and deliver to Parent, at Parent's
request, his resignation as a director of Surviving Corporation as provided
herein.
ARTICLE 6--CONDITIONS TO THE MERGER
Section 6.1 Conditions to the Obligations of Each Party. The
obligations of Company, Parent and Purchaser to consummate the Merger are
subject to the satisfaction at or prior to the Effective Time of the following
conditions, any or all of which may be waived, in whole or in part, by each of
the parties intended to benefit therefrom, to the extent permitted by applicable
Law:
(a) this Agreement and the Transactions shall have been approved and
adopted at the Special Meeting by (i) a majority of all votes of the
outstanding Shares of Company Common Stock entitled to vote thereon,
such votes determined in accordance with Article FOURTH, Section C(2)
of the Certificate of Incorporation of Company and Section 251(c) of
the DGCL, and (ii) a majority of all Shares of Company Common Stock
entitled to vote thereon which are actually voted either "for" or
"against" such approval and adoption (in item (ii), (x) excluding from
such computation all Shares held by any of the Xxx Xxxxxxxxxx Family or
Parent and (y) counting each Share actually voted as one full vote,
regardless of class) (the foregoing two approvals being collectively
referred to herein as the "Required Stockholder Approval");
(b) there are no claims, actions, suits, proceedings or investigations
pending or threatened, against Company, Parent or Purchaser, before any
Governmental Authority, that seek to prevent or delay the performance
of this Agreement or the Transactions, or that would result in a
Material Adverse Effect, and no Governmental Authority shall have
enacted, issued, promulgated, enforced or entered any Law or Order
(whether temporary, preliminary or permanent) which is in effect and
which has the effect of making the Transactions illegal or otherwise
prohibiting consummation of the Transactions;
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(c) all actions by or in respect of, or filings with, any Governmental
Authority required to permit the consummation of the Transactions shall
have been made or obtained;
(d) at the time of mailing of the Proxy Statement, X.X. Xxxxxxxx & Co.
(i) shall have delivered and reaffirmed in writing (to the Special
Committee and the Board of Directors of Company, with a copy to Parent)
its opinion, originally dated as of January 20, 1999, to the effect
that the consideration to be received by the Public Stockholders
pursuant to the Merger is fair to such Stockholders from a financial
point of view, and (ii) shall not have withdrawn such opinion;
(e) Parent or Purchaser shall have received and caused the Financing to
be closed in accordance with the Permitted Financing Terms, and the
proceeds of the Financing shall have been made available for the
consummation of the Transactions;
(f) Parent shall have received all documents it may reasonably request
relating to the existence of Company and the authority of Company to
enter into this Agreement, all in form and substance reasonably
satisfactory to Parent; and
(g) Parent and Company shall have received or be satisfied that each of
them will receive all consents, amendments and approvals contemplated
by Sections 3.3 and 3.4, and any other consents of third parties
necessary in connection with the consummation of the Merger, if failure
to obtain any such consent would have a Material Adverse Effect or
violate any Law or Order).
Section 6.2 Additional Conditions to the Obligations of Parent and
Purchaser. The obligations of Parent and Purchaser to consummate the Merger are
also subject to the satisfaction, at or prior to the time of obtaining the
Required Stockholder Approval (after which time the following conditions shall
not be conditions to the obligations of Parent and Purchaser), of the following
further conditions, any or all of which may be waived, in whole or in part, by
each of the parties intended to benefit therefrom, to the extent permitted by
applicable Law:
(a) the number of Shares as to which Company has received demand for
appraisal pursuant to Section 262(d)(1) of the DGCL shall not equal or
exceed 250,000 Shares;
(b) Company shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to
such time, the representations and warranties of Company contained in
this Agreement and in any certificate delivered by Company pursuant
hereto shall be true and correct in all material respects, at and as of
such time as if made at and as of such time, except that those
representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date, and
Parent shall have received a certificate signed by an executive officer
of Company (who may be the principal financial officer) to the effect
of all of the foregoing matters in this subsection (b) and by the
principal financial officer of Company to the effect of the matters in
the exception clause of this subsection (b);
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(c) no Material Adverse Effect shall have occurred or shall be pending;
(d) no reasonable basis (including, but not limited to, information
from a customer(s) or information available from public or reliable
industry sources) exists for Company, Purchaser or Parent to believe
that any significant customer(s) for products sold by either division
of Company, representing individually ten percent (10%) or more (or
representing one of the top three customers [measured by gross sales of
that division during the fiscal year ending February 28, 1999 ("fiscal
1999")]), or in the aggregate representing twenty-five percent (25%) or
more, of the gross sales of that division during fiscal 1999, will
reduce its annual purchases from Company after consummation of the
Transactions to a level less than eighty percent (80%) of the amount it
purchased from Company during fiscal 1999 (provided, however, that such
reasonable basis must be materially different from the state of facts
known to Parent and Purchaser at the date of execution of this
Agreement;
(e) Parent shall have received a certificate signed by an executive
officer of Company, certifying the foregoing items (a) and (c);
(f) all of the directors of Company shall have delivered to Parent in
writing their resignations as directors of Surviving Corporation, in
form attached hereto as EXHIBIT 6.2(F), with such resignations to
become effective immediately at 12:01 A.M. of the day next after the
Closing Date of the Merger;
(g) all actions to be taken by Company in connection with consummation
of the Transactions, and all certificates, instruments, and other
documents required to effectuate the Transactions, shall be reasonably
satisfactory in form and substance to Parent and Purchaser; and
(h) The fees to be paid X.X. Xxxxxxxx & Co. by Company shall not exceed
$185,000.00 plus (i) out-of-pocket expenses and (ii) legal fees not to
exceed $10,000.00, for its services rendered to the Special Committee.
Section 6.3 Additional Conditions to the Obligations of Company. The
obligations of Company to consummate the Merger are also subject to the
satisfaction at or prior to the Effective Time of the following further
conditions, any or all of which may be waived, in whole or in part, by Company
to the extent permitted by applicable Law:
(a) Parent and Purchaser shall have performed in all material respects
all of their respective obligations hereunder required to be performed
by them at or prior to the Effective Time, the representations and
warranties of Parent and Purchaser contained in this Agreement and in
any certificate delivered by Parent or Purchaser pursuant hereto shall
be true and correct in all material respects at and as of the Effective
Time as if made at and as of such time, except
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that those representations and warranties which address matters only as
of a particular date shall remain true and correct as of such date, and
Company shall have received a certificate signed by the President or
any Vice President of each of Parent and Purchaser to the foregoing
effect;
(b) Company shall have received all documents it may reasonably request
relating to the existence of Parent or Purchaser and the authority of
Parent or Purchaser to enter into this Agreement, all in form and
substance reasonably satisfactory to Company; and
(c) all actions to be taken by Parent or Purchaser in connection with
consummation of the Transactions, and all certificates, instruments,
and other documents required to effectuate the Transactions, shall be
satisfactory in form and substance to Company.
ARTICLE 7--TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the
Transactions may be abandoned at any time prior to the Effective Time
(notwithstanding any adoption and approval of this Agreement by Stockholders):
(a) by mutual written consent of Company and Parent;
(b) by either Parent or Company, if the Merger has not been consummated
by September 30, 1999; provided, however, that the right to terminate
this Agreement under this Section 7.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of the Effective Time to
occur on or before such date;
(c) by either Parent or Company, if there shall be any Law that makes
consummation of the Transactions illegal or otherwise prohibited or if
any Order enjoining Parent or Company from consummating the
Transactions is entered and such Order shall become final and
nonappealable;
(d) by either Parent or Company if this Agreement and the Transactions
shall fail to be approved and adopted by the Required Stockholder
Approval at the Special Meeting called for such purpose, as set forth
in Section 6.1(a) above;
(e) by either Parent or Company, if, consistent with the terms of this
Agreement, the Board of Directors of Company withdraws, modifies or
changes its recommendation of this Agreement or the Transactions in a
manner adverse to Parent or Purchaser or shall have resolved to do any
of the foregoing or the Board of Directors of Company shall have
recommended to Stockholders of Company any Competing Transaction or
resolved to do so; or
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(f) by Company, if Parent and Purchaser have not delivered to Company
within fifteen (15) days of the date of this Agreement copies of a
written commitment(s) from a lending institution(s) (which institution
the Company determines to be acceptable to it), pursuant to which
Financing will be received on terms substantially in accordance with
the Permitted Financing Terms.
Section 7.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 7.1, this Agreement shall become void and of no effect with
no liability on the part of any party hereto, except that the agreements
contained in Section 8.6 shall survive the termination hereof; provided,
however, that, except as specifically provided herein, nothing herein shall
relieve any party hereto of liability for any breach of this Agreement.
ARTICLE 8 -- MISCELLANEOUS
Section 8.1 Definitions. As used herein, the following terms have the
following respective meanings (such meanings to be equally applicable to both
the singular and plural forms of the terms defined):
"Affiliate" means, with respect to a Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such given Person.
"Agreement" means this Agreement and Plan of Merger, as the same may be
supplemented, modified or amended from time to time.
"Business Combinations Act" means Section 203 of the DGCL, as amended.
"Certificate of Merger" means a certificate of merger with respect to
the Merger, in compliance with the DGCL.
"Class A Common Stock" means the Class A common stock, $1.00 par value
per share, of Company.
"Class B Common Stock" means the Class B common stock, $1.00 par value
per share, of Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Common Stock" means the common stock, $1.00 par value per
share, of Company, including both Class A Common Stock and Class B
Common Stock.
"DGCL" means the Delaware General Corporation Law, as amended.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Expenses" means all reasonable out-of-pocket expenses (including,
without limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants and commitment fees and
other financing fees and expenses) incurred by Parent, Purchaser or
Company or on behalf of any such party in connection with or related to
the authorization, preparation, negotiation, execution and performance
of this Agreement, the preparation, printing, filing and mailing of the
Proxy Statement and Schedule 13E-3, the solicitation of the shareholder
approvals and all other matters related to the consummation of the
transactions contemplated hereby.
"GAAP" means United States generally accepted accounting principles
consistently applied.
"Governmental Authority" means any federal, state, county, local,
foreign or other governmental or public agency, instrumentality,
commission, authority, board or body, and any court, arbitrator,
mediator or tribunal.
"Law" means any code, law, ordinance, regulation, rule or statute of
any Governmental Authority.
"Lien" means any security interest, lien, mortgage, deed to secure
debt, deed of trust, pledge, charge, conditional sale or other title
retention agreement, or other encumbrance of any kind.
"Material Adverse Effect" means any matter that would reasonably be
expected to affect materially and adversely the business, condition
(financial or otherwise), prospects, or results of operations of
Company considered as a whole (excluding, however, any matter that is
the result of any action of any member of the Xxx Xxxxxxxxxx Family
which could reasonably be construed as intended to provide a basis for
termination of the Transactions or of this Agreement).
"Order" means any administrative decision or award, decree, injunction,
judgment, order, quasi-judicial decision or award, ruling, or writ of
any federal, state, local or foreign or other court, arbitrator,
mediator, tribunal, administrative agency or other Governmental
Authority.
"Permitted Financing Terms" means the obtaining of Financing by Company
upon the general terms and conditions set forth in EXHIBIT 8.1 hereto.
"Person" means an individual, a corporation, a partnership, an
association, a trust, a limited liability company or any other entity
or organization, including a government or political subdivision or any
agency or instrumentality thereof.
"Preferred Stock" means the preferred stock, $1.00 par value per share,
of Company.
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"Purchaser Common Stock" means the common stock, $1.00 par value per
share, of Purchaser.
"SEC" means the Securities and Exchange Commission.
"Special Committee" means the committee of the Board of Directors
appointed on September 16, 1998 and comprised entirely of directors who
are neither members of management of Company nor affiliated with the
Xxxxxxxxxx Group, Parent or Purchaser or any Affiliate thereof.
"Surviving Corporation" means Company as surviving corporation
resulting from the Merger.
"Xxx Xxxxxxxxxx Family" means Xxxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxxxxxx,
Xxxxx X. Xxxxxxx, Xxxxx X. Northern and Xxxxx X. Xxxxxxxxxx.
"Xxxxxxxxxx Group" means Xxxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxxxxxx, Xxxxx
X. Xxxxxxx, Xxxxx X. Northern, Xxxxx X. Xxxxxxxxxx, Xxxxx X. Xxxxx and
Xxxxxx X. Xxxxxxxxxx.
The following terms are defined in the following Sections of this Agreement:
TERM SECTION
---- -------
"Certificate" 2.2(b)
"Closing" 1.4
"Closing Date" 1.4
"Company" Opening Paragraph
"Company Disclosure Documents" 3.7
"Competing Transaction" 5.3
"Dissenting Shares" 2.3
"Effective Time" 1.3
"Financing" 5.10(a)
"Merger" 1.2
"Merger Consideration" 2.1(d)
"Parent" Opening Paragraph
"Parent-Owned Shares" 2.1(a)
"Paying Agent" 2.2(a)
"Proxy Statement" 5.11(b)
"Purchaser" Opening Paragraph
"Public Stockholders" Recitals
"Required Stockholder Approval" 6.1(a)
"Schedule 13E-3" 5.11(b)
"Shares" 2.1
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"Stockholders" Recitals
"Special Meeting" 5.11(a)
"Surviving Corporation" 1.2
"Transactions" Recitals
"Voting Debt" 3.5
Section 8.2 Notices. Unless otherwise specifically provided herein, all
notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given (a) when delivered personally to the recipient, (b)
when sent to the recipient by telecopy (receipt electronically confirmed by
sender's telecopy machine) if during normal business hours of the recipient,
otherwise on the next business day, (c) one business day after the date when
sent to the recipient by reputable express courier service (charges prepaid), or
(d) seven business days after the date when mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications shall be sent to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
If to Company:
United Foods, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxxx, Xxxxxxxxx 00000-0000
Attn: X.X. Xxxxx, President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy (which shall not constitute notice) to:
Bass, Xxxxx & Xxxx PLC
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxx, III
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Parent or Purchaser:
Pictsweet LLC
Xxx Xxxxxxxxx Xxxxx
Xxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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With a copy (which shall not constitute notice) to:
Xxx X. Xxxxxxx
Waring Xxx, PLC
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Section 8.3 Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate delivered
pursuant hereto shall not survive the Effective Time or the termination of this
Agreement; provided, however, (i) that nothing in this Section 8.3 shall relieve
any party from any liability for any breach of any representation, warranty or
agreement in this Agreement occurring prior to termination, (ii) the agreements
contained in Article 2, in Section 5.6, and in this Section 8.3 hereof shall
survive the Effective Time indefinitely, and (iii) the agreements set forth in
Section 8.6 hereof shall survive termination indefinitely.
Section 8.4 Enforcement of Agreement. Until the Effective Time, the
Special Committee shall continue in existence and shall have the right to cause
Company to take any action necessary or appropriate to enforce the rights of
Company and the obligations of Parent and Purchaser under this Agreement.
Section 8.5 Amendments; Written Waivers.
(a) Any provision of this Agreement may be amended or waived prior to
the Effective Time if, and only if, such amendment or waiver is in
writing and signed by all parties hereto, or in the case of a waiver,
by the party against whom the waiver is to be effective; provided that
any such amendment and any such waiver by Company shall have been
approved by the Board of Directors of Company, acting on the
recommendation of the Special Committee; and provided, further, that
after obtaining the adoption and approval of this Agreement by the
Required Stockholder Approval, no such amendment or waiver shall,
without further approval in the form of the Required Stockholder
Approval, alter or change (i) the amount or kind of consideration to be
received in exchange for any shares of capital stock of Company or (ii)
any of the terms or conditions of this Agreement if such alteration or
change would adversely affect the Public Stockholders.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
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Section 8.6 Expenses. All reasonable Expenses incurred by all parties
in connection with this Agreement and the consummation of the Transactions shall
be paid by Company if the Merger is consummated. If the Merger is not
consummated, Company shall likewise pay all reasonable Expenses incurred by all
parties in connection with this Agreement or the Transactions; provided,
however, that Company may refuse to pay any expenses incurred by Parent or
Purchaser if the failure to consummate the Merger arose from (i) a breach of the
terms hereof by either Parent or Purchaser, (ii) a failure to obtain the
Required Stockholder Approval or (iii) the number of Dissenting Shares equals or
exceeds 250,000 Shares.
Section 8.7 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto except that Parent may transfer
or assign, in whole or from time to time in part, to one or more of its
Affiliates, its rights under this Agreement, but any such transfer or assignment
will not relieve Parent of its obligations under this Agreement or prejudice the
rights of Stockholders to receive the Merger Consideration for Shares properly
surrendered in accordance with Section 2.2. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement, and their respective successors and assigns.
Section 8.8 Governing Law. Regardless of the place or places where this
Agreement may be executed, delivered or consummated, this Agreement shall be
governed by and construed in accordance with the Laws of the State of Delaware,
without regard to any applicable conflicts of Laws.
Section 8.9 Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
Section 8.10 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
Section 8.11 Interpretations. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against any
party, whether under any rule of construction or otherwise. No party to this
Agreement shall be considered the draftsman. The parties acknowledge and agree
that this Agreement has been reviewed, negotiated and accepted by all parties
and their attorneys, as well as the Special Committee and its counsel, and shall
be construed and interpreted according to the ordinary meaning of the words used
so as fairly to accomplish the purposes and intentions of all parties hereto.
References to Sections herein shall mean Sections of this Agreement unless
otherwise indicated.
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Section 8.12 Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures were upon the same instrument. This Agreement shall
become effective when each party hereto shall have received counterparts hereof
signed by all of the other parties hereto.
Section 8.13 Gender and Number. As herein, words of any gender shall
include all other genders, and words in the singular shall include the plural,
and vice versa, unless the context otherwise requires.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf as of the day and year first above written.
UNITED FOODS, INC.
By: /s/ X.X. Xxxxx
---------------------------------------
Name: X.X. Xxxxx
Title: President
PICTSWEET LLC
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President
UF ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President
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EXHIBIT 3.4
Conflicts
1. Loan Agreement dated April 7, 1993, as amended, with First American
National Bank.
2. Loan Agreement dated January 7, 1997 with Metropolitan Life Insurance
Company.
3. Consolidation, Renewal and Restatement of Deed of Trust and Security
Agreement dated January 30, 1997 with Northwestern National Life
Insurance Company.
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EXHIBIT 4.9
Litigation Pending or Threatened
None, except the following:
1. Xxxxx Xxxxxx vs. United Foods, Inc., Xxxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxx,
Xx., Xxxxx X. Northern, Xxxxx X. Xxxxx, Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxxxxx,
Xxxx X. Xxxxxxxxx, XX, Xxxx x. Xxxxxx, X.X. Xxxxx and Xx. Xxxxxx X. Xxxxx.
Chancery Court of the State of Delaware (Newcastle County) (C.A. 17006 NC) filed
March 8, 1999 as a Class Action Complaint.
2. Xxxxxx X. Xxxxxxx vs. Xxxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxxxxxx, X.X. Xxxxx,
Xxxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxxxxx, XX, Xxxxx X. Xxxxx, Xxxxx X. Xxxxxxx,
Xxxxx X. Northern, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx, Xx., Xxxx X. Xxxxxx, and
United Foods, Inc. Chancery Court of the State of Delaware (Newcastle County)
(C.A. 17137 NC) filed May 3, 1999 as a Class Action Complaint.
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EXHIBIT 6.2(f)
Resignation of Directors
_________ ___, 1999
United Foods, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxxxx
Re: Agreement and Plan of Merger, made as of May 14, 1999 (together
with any amendments or supplements thereto, the "Merger Agreement"), by
and among UNITED FOODS, INC., a Delaware corporation ("Company"),
PICTSWEET LLC, a Delaware limited liability company ("Parent"), and UF
ACQUISITION CORP., a Delaware corporation and a wholly owned subsidiary
of Parent ("Purchaser").
Dear Sirs:
Pursuant to the Merger Agreement, the undersigned persons (the
"Directors") do each hereby irrevocably resign their positions as directors of
the Company, effective immediately at 12:01 A.M. of the day next after the
Closing Date (as defined in the Merger Agreement).
This instrument may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which shall be deemed to be one
and the same instrument. It shall not be necessary that any single counterpart
bear the signature of all parties hereto. This instrument shall be separately
enforceable against each Director when he signs this instrument, and it shall
not be necessary for such enforcement that all Directors shall have signed it.
Facsimile signatures hereon shall be deemed to be as fully enforceable as
original signatures hereon.
Sincerely,
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
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EXHIBIT 8.1
Permitted Financing Terms
-------------------------
BORROWER: United Foods, Inc. ("United Foods" or "Borrower")
LENDER: Unknown ("Lender(s)")
FACILITY: $35,000,000 Revolving Line of Credit (Outstanding
tied to a borrowing base: 85% of eligible accounts
receivable, 60% of eligible inventory.)
MATURITY: 3 years with the ability to extend the maturity by
one year beginning one year from closing.
COLLATERAL: Facility is secured by a perfected first priority
interest in all of Borrower's accounts receivable
and inventory (excluding the accounts receivable
and inventory associated with Pictsweet Mushroom
Farms.)
INTEREST RATES: Lender's Index Rate minus .5%.
LIBOR + 1.50%.
FEES:
Commitment Fee: Payable quarterly in arrears, 0.125% per annum
charged on the average unused portion of the
Revolving Line of Credit. Standby Letters of
Credit will count as "usage".
STANDBY LETTERS OF CREDIT:
Terms and Fees: All new Standby Letters of Credit (i) will be
issued by the Lender as the Issuing Bank, (ii)
will have Maturities equal to the lesser of either
364 days or the minimum maturity required by the
beneficiary, provided that all new Standby Letter
of Credits mature prior to the Maturity of the
Revolving Credit Facility, and (iii) will bear a
fee equal to 1.25%.
CONDITIONS PRECEDENT: As customary for facilities of this nature,
including but not limited to:
- No material adverse change in Borrower's
prospects or financial condition at any
time prior to closing.
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- Receipt of documentation listing all
material assets belonging to Borrower,
and describing all liens and all material
litigation.
- Receipt of satisfactory opinion from
Borrower's counsel.
- Receipt of documents certifying that
Borrower has the appropriate insurance
coverage and appropriate government
authorizations (permits, licenses, etc.),
and is in compliance with all government
laws and regulations, including those
specifically relating to environmental
issues and to ERISA.
- Receipt of corporate resolutions and
incumbency certificates for Borrowers,
and certifications as to the accuracy of
all representations and warranties and
absence of any event of default or
situation which, with the passage of
time, could constitute an event of
default.
- Completion of satisfactory loan
documentation and approval by the
Lender's credit approval authorities as
to the final structure of the transaction
which has been approved by United Food,
Inc.'s Board of Directors.
REPRESENTATIONS AND
WARRANTIES: As customary for facilities of this nature,
including but not limited to affirmations
concerning corporate existence, corporate and
governmental authorization, financial information,
compliance with laws, including environmental,
compliance with ERISA, no material litigation,
payment of taxes, full disclosure, ownership and
maintenance of assets, including permits,
licenses, patents and trademarks, validity of loan
documents, and no liens except as acceptable to
the Lenders and except those required in the
ordinary course of business.
COVENANTS: As customary for facilities of this nature,
including but not limited to requirements
concerning:
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Affirmative Covenants:
- Maintenance of corporate existence,
government authorization (licenses,
permits, etc.), business conduct,
property and insurance.
- Payment of taxes and compliance with
laws.
- Maintenance of warehouse agreements and
collateral, right of inspection.
- Notice of defaults, adverse changes.
- Notice of covenant compliance immediately
preceding and immediately following any
acquisition.
Financial Reporting:
- Annual audited consolidated and
reconciled consolidating balance sheets
and income statements and statements of
cash flows for Borrower due within 90
days of fiscal year-end complete with
confirming letter from accountant and
officer's compliance certificate.
- Monthly consolidated financial statements
for Borrower due within 20 days of each
month end.
- Borrowing Base Certificate due within 15
days of month end.
- Quarterly Certificate of Compliance with
all financial covenants, due within 45
days of quarter end.
- Annual forecast to include balance sheet,
income statement and statement of cash
flows, due within 90 days of fiscal
year-end.
Negative Covenants:
- Prohibitions on any change in business.
- Prohibitions against any change in the
charter documents or in fiscal year-end.
- Limitations on mergers, investments,
consolidations, transactions with
affiliates, and the sale of assets or
collateral.
Financial Covenants:
- Working Capital Floor: Minimum
$25,000,000 Calculation:
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Calculated annually, Current Assets minus
Current Liabilities
- Tangible Net Worth: Minimum $27,500,000
Calculation:
Calculated quarterly, Tangible Net
Worth at Closing plus 50% of Net
Income or 50% of a Net Loss. Under
no circumstances should TNW fall
below $27,500,000.
- Debt to Equity Ratio: Maximum 3.5:1.0.
Calculation:
Calculated annually, Total
Liabilities divided by Tangible
Net Worth.
EVENTS OF DEFAULT: As customary for facilities of this nature,
including but not limited to requirements
concerning:
- Nonpayment of any principal or interest
when due.
- Nonpayment of any other obligations owed
to the Lenders within 10 days of the due
date.
- Default by Borrower under any other
agreements for funded debt with a
principal amount in excess of $500,000.
- Misleading, false or incomplete
representations or warranties.
- Breach or failure to observe or perform
any covenant or undertaking contained in
the credit agreement, subject to 30 day
cure period.
- Any judgment in excess of $500,000
against Borrower not cured, waived or
dismissed within 30 days.
- Any bankruptcy filing or other insolvency
proceeding of Borrower.
- Occurrence of any liability, or
reasonable threat of such liability,
under any employee benefit plan which may
have a material adverse effect on
Borrower.
EXPENSES: Borrower will pay all reasonable fees and expenses
of the Lender and its counsel associated with the
negotiation and documentation.
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