Exhibit 99.7
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EXECUTION COPY
SECURITYHOLDERS AGREEMENT
Among
AGRILINK HOLDINGS LLC
AND
THE OTHER PARTIES HERETO
August 19, 2002
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Exhibit 99.7
Table of Contents
Page
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ARTICLE I REPRESENTATIONS AND WARRANTIES OF THE PARTIES...........................................................1
1.1 Representations and Warranties of the Company...................................................1
1.2 Representations and Warranties of the Securityholders...........................................2
ARTICLE II VOTING AGREEMENTS......................................................................................2
2.1 Election of Management Committee Members and Directors..........................................2
2.2 Other Voting Matters............................................................................4
2.3 Proxy...........................................................................................4
ARTICLE III TRANSFERS OF SECURITIES...............................................................................4
3.1 Restrictions on Transfer of Securities..........................................................4
3.2 Restrictions on Transfers of Vestar Securities..................................................5
3.3 Securities Act Compliance.......................................................................7
3.4 Certain Transferees Bound by Agreement..........................................................7
3.5 Class C and D Units.............................................................................7
3.6 Transfers in Violation of Agreement.............................................................8
ARTICLE IV TAKE-ALONG RIGHTS ON APPROVED SALE.....................................................................8
4.1 Take-Along Rights...............................................................................8
4.2 Holdings Preferred Stock........................................................................9
ARTICLE V REGISTRATION RIGHTS....................................................................................10
5.1 Demand Registrations...........................................................................10
5.2 Incidental Registration........................................................................12
5.3 Holdback Agreements............................................................................14
5.4 Registration Procedures........................................................................15
5.5 Shelf Registration.............................................................................18
5.6 Registration Expenses..........................................................................18
5.7 Indemnification; Contribution..................................................................18
5.8 Rule 144.......................................................................................21
5.9 Underwritten Registrations.....................................................................21
5.10 Company Public Offering........................................................................22
ARTICLE VI PRE-EMPTIVE RIGHTS....................................................................................22
6.1 Issuance of New Securities to Affiliates.......................................................22
6.2 Issuance of New Securities.....................................................................23
ARTICLE VII AMENDMENT AND TERMINATION............................................................................24
7.1 Amendment and Waiver...........................................................................24
7.2 Termination of Certain Provisions..............................................................24
7.3 Termination of Agreement.......................................................................24
7.4 Termination as to a Party......................................................................24
7.5 Issuers........................................................................................25
ARTICLE VIII MISCELLANEOUS.......................................................................................25
8.1 Certain Defined Terms..........................................................................25
8.2 Legends........................................................................................31
8.3 Severability...................................................................................32
8.4 Entire Agreement...............................................................................32
8.5 Successors and Assigns.........................................................................32
8.6 Counterparts...................................................................................33
8.7 Remedies.......................................................................................33
8.8 Notices........................................................................................33
8.9 Governing Law..................................................................................34
8.10 Descriptive Headings...........................................................................34
8.11 Waiver of Jury Trial...........................................................................34
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Exhibit 99.7
SECURITYHOLDERS AGREEMENT
THIS SECURITYHOLDERS AGREEMENT (this "Agreement") is entered
into as of August 19, 2002 among (i) Agrilink Holdings LLC, a Delaware limited
liability company (the "Company"), (ii) Vestar/Agrilink Holdings LLC, a Delaware
limited liability company, Vestar/Agrilink Associates Holdings LLC, a Delaware
limited liability company, Vestar/Agrilink Associates II Holdings LLC, a
Delaware limited liability company, Xxxxxxxx Street Partners V, an Illinois
general partnership, and any other entity or investment fund managed or
controlled by Vestar Capital Partners, a general partnership, that at any time
acquires Securities and executes a counterpart of this Agreement or otherwise
agrees to be bound by this Agreement (collectively, "Vestar"), (iii) Pro-Fac
Cooperative, Inc., a New York corporation ("Pro-Fac"), (iv) the initial parties
to this Agreement who are identified as Employees on the signature pages hereto
(each, an "Employee," and, collectively, the "Employees"), and (v) each other
holder of Securities who hereafter executes a separate agreement to be bound by
the terms hereof (which holder (unless such holder is an employee of the Company
or its Affiliates in which case such holder, after executing a separate
agreement to be bound by the terms hereof, shall be treated as a holder of
Employee Securities hereunder) shall be treated similar to a holder of Pro-Fac
Securities, except that such holder shall not be entitled to demand registration
rights) (Vestar, Pro-Fac, the Employees and each other Person that is or may
become a party to this Agreement as contemplated hereby are sometimes referred
to herein collectively as the "Securityholders" and individually as a
"Securityholder"). Certain capitalized terms used herein are defined in Section
8.1.
The parties hereto agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
1.1 Representations and Warranties of the Company. The Company
hereby represents and warrants to the Securityholders that as of the date of
this Agreement:
(a) it is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, it has
full power and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby, and the execution, delivery and
performance by it of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary limited liability
company action;
(b) this Agreement has been duly and validly executed and
delivered by the Company and constitutes a legal and binding obligation of the
Company, enforceable against the Company in accordance with its terms; and
(c) the execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby will not, with or without the giving of notice or lapse of
time, or both (i) violate any provision of law, statute, rule or regulation to
which the Company is subject, (ii) violate any order, judgment or decree
applicable to the Company or (iii) conflict with, or result in a breach or
default under, any
term or condition of the Company's organizational documents or any agreement or
instrument to which the Company is a party or by which it is bound.
1.2 Representations and Warranties of the Securityholders.
Each Securityholder (as to himself or itself only) represents and warrants to
the Company and the other Securityholders that, as of the time such
Securityholder becomes a party to this Agreement:
(a) this Agreement (or the separate joinder agreement executed
by such Securityholder) has been duly and validly executed and delivered by such
Securityholder, and this Agreement constitutes a legal and binding obligation of
such Securityholder, enforceable against such Securityholder in accordance with
its terms; and
(b) the execution, delivery and performance by such
Securityholder of this Agreement (or any joinder to this Agreement, if
applicable) and the consummation by such Securityholder of the transactions
contemplated hereby (and thereby, if applicable) will not, with or without the
giving of notice or lapse of time, or both, (i) violate any provision of law,
statute, rule or regulation to which such Securityholder is subject, (ii)
violate any order, judgment or decree applicable to such Securityholder or (iii)
conflict with, or result in a breach or default under, any term or condition of
any agreement or other instrument to which such Securityholder is a party or by
which such Securityholder is bound.
ARTICLE II
VOTING AGREEMENTS
2.1 Election of Management Committee Members and Directors.
(a) Each Person, other than the Company, that is a party to
this Agreement hereby agrees that such Person will vote, or cause to be voted,
all voting securities of the Company over which such Person has the power to
vote or direct the voting, and will take all other necessary or desirable action
within such Person's control, and the Company will take all necessary and
desirable actions within its control, to cause the authorized number of members
or directors for each of the respective management committees or boards of
directors of the Company, Holdings and Agrilink to be established at nine
directors and of each other Subsidiary of the Company at such number of
directors as the management committee of the Company shall from time to time
determine, and to elect or cause to be elected to the respective management
committees or boards of directors of the Company, Holdings and Agrilink and
cause to be continued in office, the following individuals (and, in the case of
each other Subsidiary of the Company, such individuals as the management
committee of the Company shall from time to time determine):
(i) five (5) members/directors designated by the
Vestar Majority Holders (the "Vestar Directors");
(ii) two (2) members/directors designated by the
Pro-Fac Majority Holders (the "Pro-Fac Directors");
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(iii) one (1) member/director, who shall be the chief
executive officer of Agrilink (the "Management Director"), and, for so
long as Xxxxxx X. Xxxxxx is the Management Director, who shall serve as
the chairman of the board of directors of Agrilink; and
(iv) one (1) member/director designated by the Vestar
Majority Holders; provided, that such member/director is neither a
member, or former member, of the Company's or its Subsidiaries'
management or an employee or officer or former employee or officer of
the Company or its Subsidiaries nor a principal or former principal of
Vestar (the "Independent Director").
(b) If at any time either the Vestar Majority Holders or the
Pro-Fac Majority Holders, as the case may be, shall notify the other parties to
this Agreement of their desire to remove, with or without cause, any individual
from a Company or Subsidiary membership/directorship for which such Person or
Persons have designation rights pursuant to paragraph (a) above, all such
parties so notified will vote, or cause to be voted, all voting securities of
the Company and its Subsidiaries over which they have the power to vote or
direct the voting, and shall take all such other actions promptly as shall be
necessary or desirable to cause the removal of such member/director. If the
Management Director ceases to be employed by the Company or its Subsidiaries,
such Management Director shall be removed promptly after such time from each
board and management committee.
(c) If at any time any Vestar Director, any Pro-Fac Director
or the Independent Director ceases to serve on the management committee or board
of directors of the Company or any Subsidiary of the Company (whether due to
resignation, removal or otherwise), the Securityholders entitled to designate
the Vestar Directors, the Pro-Fac Directors or the Independent Director as
appropriate, shall be entitled to designate a successor member/director to fill
the vacancy created thereby on the terms and subject to the conditions of
paragraph (a) above, and if the Management Director is removed pursuant to
paragraph (b) above, then the new chief executive officer of Agrilink shall be
designated to fill the vacancy created thereby or, if the position of chief
executive officer shall be vacant, the chief operating officer or other most
senior executive officer shall be designated to fill such vacancy. Each Person
that is a party hereto agrees to vote, or cause to be voted, all voting
securities of the Company and its Subsidiaries over which such Person has the
power to vote or direct the voting, and shall take all such other actions as
shall be necessary or desirable to cause the designated successor to be elected
to fill such vacancy.
(d) Nothing in this Agreement shall be construed to impair any
rights that the unitholders or stockholders of the Company or any Subsidiary of
the Company may have to remove any director for cause under applicable law, the
LLC Agreement of the Company or the organizational documents of such Subsidiary,
as the case may be. No such removal of an individual designated pursuant to this
Section 2.1 for cause shall affect any of the Securityholders' rights to
designate a different individual pursuant to this Section 2.1 to fill the
position from which such individual was removed.
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(e) Subject to Section 7.2, the provisions of this Section 2.1
shall remain in effect with respect to the voting of the securities of any
Person that has consummated an initial Public Offering of its securities.
2.2 Other Voting Matters. Each party to this Agreement hereby
agrees that such party will vote, or cause to be voted, all voting securities of
the Company and its Subsidiaries over which such party has the power to vote or
direct the voting, either in person or by proxy, whether at a securityholders
meeting, or by written consent, in the manner in which Vestar directs in
connection with the approval of any amendment or amendments to the LLC
Agreement, the merger, unit exchange, combination or consolidation of the
Company with any other Person or Persons, the sale, lease or exchange of all or
substantially all of the property and assets of the Company and its Subsidiaries
on a consolidated basis, and the reorganization, recapitalization, liquidation,
dissolution or winding-up of the Company; provided however that any such action
(a) shall not be inconsistent with the terms of this Agreement or the LLC
Agreement and (b) shall not have a material adverse effect on any Securityholder
in its capacity as such, if such effect would be borne disproportionately by
such Securityholder relative to other Securityholders holding Securities of the
same class.
2.3 Proxy. In order to effectuate the provisions of Sections
2.1, 2.2 and 4.1, each holder of Employee Securities hereby grants to Xxxxxx X.
Xxxxxx, or if Xxxxxx X. Xxxxxx shall cease to be the chief executive officer of
Agrilink, to his successor in such position with Agrilink, or if the chief
executive officer of Agrilink shall be unable to exercise this proxy due to
illness or absence or if the position of chief executive officer of Agrilink
shall be vacant, to the chief operating officer or other most senior executive
officer of Agrilink, a proxy to vote at any annual or special meeting of
Securityholders, or to take any action by written consent in lieu of such
meeting with respect to, or to otherwise take action in respect of, all of the
Securities owned or held of record by such holder in connection with the matters
set forth in Sections 2.1, 2.2 and 4.1 in accordance with the provisions of
Sections 2.1, 2.2 and 4.1. EACH OF THE PROXIES GRANTED HEREBY IS IRREVOCABLE AND
IS COUPLED WITH AN INTEREST. To effectuate the provisions of this Section 2.3,
the secretary of each of the Company and each Subsidiary of the Company, or if
there be no secretary such other officer or employee of the Company or such
Subsidiary as the management committee or board of directors of the Company or
such Subsidiary may appoint to fulfill the duties of the Secretary, shall not
record any vote or consent or other action contrary to the terms of this Section
2.3.
ARTICLE III
TRANSFERS OF SECURITIES
3.1 Restrictions on Transfer of Securities. Without the
consent of the Vestar Majority Holders (which consent may be given or withheld
in their sole and absolute discretion), no holder of Pro-Fac Securities or
Employee Securities may Transfer any Pro-Fac Securities or Employee Securities,
as the case may be, except in an Exempt Transfer or as otherwise provided by
this Agreement.
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3.2 Restrictions on Transfers of Vestar Securities.
(a) Tag-Along Rights. Prior to making any Transfer of Vestar
Securities (other than a Transfer described in Section 3.2(b)) any holder of
Vestar Securities proposing to make such a Transfer (for purposes of this
Section 3.2, a "Selling Holder") shall give at least 30 days prior written
notice to each holder of Pro-Fac Securities and Employee Securities (for
purposes of this Section 3.2, each an "Other Holder") and the Company, which
notice (for purposes of this Section 3.2, the "Sale Notice") shall identify the
type and amount of Vestar Securities to be sold (for purposes of this Section
3.2, the "Offered Securities"), describe in reasonable detail the terms and
conditions of such proposed Transfer and identify each prospective Transferee.
Any of the Other Holders may, within 15 days of the receipt of the Sale Notice,
give written notice (each, a "Tag-Along Notice") to the Selling Holder that such
Other Holder wishes to participate in such proposed Transfer upon the terms and
conditions set forth in the Sale Notice, which Tag-Along Notice shall specify
the Pro-Fac Securities or Employee Securities such Other Holder desires to
include in such proposed Transfer; provided, that (1) each Other Holder shall be
required, as a condition to being permitted to sell Pro-Fac Securities or
Employee Securities pursuant to this Section 3.2(a) in connection with a
Transfer of Offered Securities, to elect to sell Pro-Fac Securities or Employee
Securities of the same type and class and in the same relative proportions
(which proportions shall be determined on a unit for unit or, as the case may
be, share for share basis and on the basis of aggregate liquidation value with
respect to Preferred Units or Preferred Stock) as the Securities which comprise
the Offered Securities (it being understood that, for purposes of this Section
3.2(a) only, Class A Units and Class B Units shall be considered the same type
and class of Unit and Section 3.5 shall apply), (2) no Employee Security that is
subject to vesting shall be entitled to be sold pursuant to this Section 3.2(a)
unless such Employee Security has fully vested and (3) to exercise its tag-along
rights hereunder, each Other Holder must agree to make to the Transferee the
same representations, warranties, covenants, indemnities and agreements as the
Selling Holder agrees to make in connection with the Transfer of the Offered
Securities (except that in the case of representations and warranties pertaining
specifically to, or covenants made specifically by, the Selling Holder, the
Other Holders shall make comparable representations and warranties pertaining
specifically to (and, as applicable, covenants by) themselves). Each
Securityholder will bear (x) its or his own costs of any sale of Securities
pursuant to this Section 3.2(a) and (y) its or his pro-rata share (based upon
the relative amount of Securities sold) of any of the other costs of any sale of
Securities pursuant to this Section 3.2(a) to the extent such costs are incurred
for the benefit of all Securityholders and are not otherwise paid by the
Transferee.
If none of the Other Holders gives the Selling Holder a
Tag-Along Notice prior to the expiration of the 15-day period for giving
Tag-Along notices with respect to the Transfer proposed in the Sale Notice, then
(notwithstanding the first sentence of this Section 3.2(a)) the Selling Holder
may Transfer such Offered Securities to any Person on the terms and conditions
set forth in the Sale Notice at any time within 180 days after expiration of the
15-day period for giving Tag-Along Notices with respect to such Transfer. Any
such Offered Securities not Transferred by the Selling Holder during such
180-day period will again be subject to the provisions of this Section 3.2(a)
upon subsequent Transfer. If one or more Other Holders give the Selling Holder a
timely Tag-Along Notice, then the Selling Holder shall use all reasonable
efforts to obtain the agreement of the prospective Transferee(s) to the
participation of the Other
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Holders in any contemplated Transfer, on the same terms and conditions as are
applicable to the Offered Securities. If the prospective Transferee(s) is
unwilling or unable to acquire all of the Offered Securities and all of the
Pro-Fac Securities and Employee Securities specified in a timely Tag-Along
Notice upon such terms, then the Selling Holder may elect either to cancel such
proposed Transfer or to allocate the maximum number of each class of Securities
that the prospective Transferees are willing to purchase (the "Allocable
Shares") among the Selling Holder and the Other Holders giving timely Tag-Along
Notices as follows (it being understood that the prospective Transferees shall
be required to purchase Securities of the same class on the same terms and
conditions taking into account the provisions of clause (1) of the first
paragraph of this Section 3.2(a), and to consummate such Transfer on those terms
and conditions):
(i) each participating Securityholder (including the
Selling Holder) shall be entitled to sell a number of shares of each
class of Securities (taking into account the provisions of clause (1)
of the first paragraph of this Section 3.2(a)) (not to exceed, for any
Other Holder, the number of shares of such class of Securities
identified in such Other Holder's Tag-Along Notice) equal to the
product of (A) the number of Allocable Shares of such class of
Securities and (B) a fraction, the numerator of which is such
Securityholder's Ownership Percentage of such class of Securities and
the denominator of which is the aggregate Ownership Percentage for all
participating Securityholders of such class of Securities; and
(ii) if after allocating the Allocable Shares of any
class of Securities to such Securityholders in accordance with clause
(i) above, there are any Allocable Shares of such class that remain
unallocated, then they shall be allocated (in one or more successive
allocations on the basis of the allocation method specified in clause
(i) above) among the Selling Holder and each such Other Holder that has
elected in its Tag-Along Notice to sell a greater number of shares of
such class of Securities than previously has been allocated to it
pursuant to clause (i) and this clause (ii) (all of whom (but no
others) shall, for purposes of clause (i) above, be deemed to be the
participating Securityholders) until all such Allocable Shares have
been allocated in accordance with this clause (ii).
(b) Excluded Transfers. The rights and restrictions contained
in Section 3.2(a) shall not apply with respect to any of the following Transfers
of Securities:
(i) any Transfer of Vestar Securities in a Public
Sale;
(ii) any Transfer of Vestar Securities to and among
the partners, securityholders and employees of Vestar and the partners,
securityholders and employees of such securityholders and partners
(subject to compliance with Sections 3.3 and 3.4);
(iii) any Transfer of Vestar Securities in accordance
with Section 4.1;
(iv) any Transfer of Vestar Securities incidental to
the exercise, conversion or exchange of such securities in accordance
with their terms, any combination of shares (including any reverse
stock split) or any recapitalization,
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reorganization or reclassification of, or any merger or consolidation
involving, the Company;
(v) any Transfer of Vestar Securities to employees or
directors of, or consultants to, any of the Company and its
Subsidiaries; and
(vi) any Transfer constituting an Exempt Individual
Transfer.
(c) Excluded Securities. No Securities that have been
transferred by the Selling Holder or an Other Holder in a Transfer pursuant to
the provisions of Section 3.2(a) ("Excluded Securities") shall be subject again
to the restrictions set forth in Section 3.2(a), nor shall any Securityholder
holding Excluded Securities be entitled to exercise any rights as an Other
Holder under Section 3.2(a) with respect to such Excluded Securities, and no
Excluded Securities held by a Selling Holder or any Other Holder shall be
counted in determining the respective participation rights of such Holders in a
Transfer subject to Section 3.2(a).
3.3 Securities Act Compliance. No Securities may be
transferred by a Securityholder (other than pursuant to an effective
registration statement under the Securities Act) unless such Securityholder
first delivers to the Company an opinion of counsel, which opinion and counsel
shall be reasonably satisfactory to the Company, to the effect that such
Transfer is not required to be registered under the Securities Act.
3.4 Certain Transferees Bound by Agreement. Subject to
compliance with the other provisions of this Article III, any Securityholder may
Transfer any Securities held by such Securityholder in accordance with
applicable law; provided, that if the Transfer is not made pursuant to a Public
Sale or a transaction the consummation of which will cause the termination of
this Agreement pursuant to Article VII, then the Transferor of such Security
shall first deliver to the Company a written agreement of the proposed
Transferee (excluding a Transferee that is a limited partner of Vestar) to
become a Securityholder and to be bound by the terms of this Agreement (unless
such proposed Transferee is already a Securityholder). All Pro-Fac Securities
and Employee Securities will continue to be Pro-Fac Securities and Employee
Securities in the hands of any Transferee (other than the Company, Vestar or any
Transferee in a Public Sale); provided, that Pro-Fac Securities and Employee
Securities Transferred pursuant to an exercise of tag-along rights as an Other
Holder under Section 3.2(a) shall not be subject to the provisions of Section
3.1 in the hands of the Transferee or any subsequent Transferee. All Vestar
Securities will continue to be Vestar Securities in the hands of any Transferee
(other than the Company, Pro-Fac, the Employees or a Transferee in a Public
Sale).
3.5 Class C and D Units. Upon the occurrence of any event
which gives rise to a holder of Employee Securities' ability or requirement to
transfer (including by operation of law or pursuant to Section 3.2(a) or Section
4.1, provided that in no event may unvested Units be transferred) Securities to
a third party in exchange for consideration pursuant to this Agreement, if
Securities to be transferred by any Securityholder include Class A Units and/or
Class B Units, then, at the election of any such holder of Employee Securities,
the Company shall take all actions necessary to convert Class C Units and/or
Class D Units into Class B Units (or other
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appropriate type of security), in the manner provided in the LLC Agreement, to
permit such holder of Employee Securities to participate in the Transfer to such
third party.
3.6 Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Securities in violation of any provision of this
Agreement shall be void, and the Company shall not record such Transfer on its
books or treat any purported transferee of such Securities as the owner of such
Securities for any purpose.
ARTICLE IV
TAKE-ALONG RIGHTS ON APPROVED SALE
4.1 Take-Along Rights.
(a) If Vestar elects to consummate, or to cause the Company to
consummate, a transaction constituting a Sale of the Company, Vestar shall
notify the Company and the other Securityholders in writing of that election,
the other Securityholders will consent to and raise no objections to the
proposed transaction, and the Securityholders and the Company will take all
other actions reasonably necessary or desirable to cause the consummation of
such Sale of the Company on the terms proposed by Vestar. Without limiting the
foregoing, (i) if the proposed Sale of the Company is structured as a sale of
assets or a merger or consolidation, or otherwise requires equityholder
approval, the Securityholders and the Company will vote or cause to be voted all
Securities that they hold or with respect to which such Securityholder has the
power to direct the voting and which are entitled to vote on such transaction in
favor of such transaction and will waive any appraisal rights which they may
have in connection therewith and (ii) if the proposed Sale of the Company is
structured as or involves a sale or redemption of Securities, the
Securityholders will agree to sell their pro-rata share of the Securities being
sold in such Sale of the Company on the terms and conditions approved by Vestar,
and the Securityholders will execute any merger, asset purchase, security
purchase, recapitalization or other sale agreement approved by Vestar in
connection with such Sale of the Company.
(b) The obligations of the Securityholders with respect to the
Sale of the Company are subject to the satisfaction of the following conditions:
(i) upon the consummation of the Sale of the Company, all of the holders of a
particular class or series of Securities shall receive the same form and amount
of consideration per share, unit or amount of Securities, or if any holders of a
particular class or series of Securities are given an option as to the form and
amount of consideration to be received, all holders of such class or series will
be given the same option (it being understood that, for purposes of this Section
4.1(b) only, Class A Units, Class B Units and Class C Units shall be considered
the same type and class of Unit); (ii) the Company's compliance with Section
3.5, if applicable; and (iii) all holders of rights, without regard to time
vesting or exercise restrictions, to acquire a particular class or series of
Securities will be given an opportunity to either (A) exercise such rights prior
to the consummation of the Sale of the Company and participate in such sale as
holders of such Securities or (B) upon the consummation of the Sale of the
Company, receive in exchange for such rights consideration equal to the amount
determined by multiplying (1) the same amount of consideration per share, unit
or amount of Securities received by the holders of such type and class of
Securities in connection with the Sale of the Company less the exercise price
per share, unit or amount of such
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rights to acquire such Securities by (2) the number of shares, units or
aggregate amount of Securities represented by such rights.
(c) Each Securityholder will bear its or his pro-rata share
(based upon the relative amount of Securities sold) of the costs of any sale of
Securities pursuant to a Sale of the Company to the extent such costs are
incurred for the benefit of all Securityholders and are not otherwise paid by
the Company or the acquiring party. Costs incurred by or on behalf of a
Securityholder for its or his sole benefit will not be considered costs of the
transaction hereunder. In the event that any transaction that Vestar elects to
consummate or cause to be consummated pursuant to this Section 4.1 is not
consummated for any reason, the Company will reimburse Vestar for all actual and
reasonable expenses paid or incurred by Vestar in connection therewith and will
reimburse each other Securityholder for any expenses it previously paid pursuant
to the first sentence of this Section 4.1(c).
(d) Notwithstanding any provision in this Agreement to the
contrary, Vestar Capital Partners shall be entitled to be paid customary and
reasonable fees by the Company for any investment banking services provided by
it in connection with a Sale of the Company.
(e) In the event of a sale or exchange by the Securityholders
of all or substantially all of the Securities held by the Securityholders
(whether by sale, merger, recapitalization, reorganization, consolidation,
combination or otherwise), each Securityholder shall receive in exchange for the
Securities held by such Securityholder the same portion of the aggregate
consideration from such sale or exchange that such Securityholder would have
received if such aggregate consideration had been distributed by the Company in
complete liquidation pursuant to the rights and preferences set forth in the LLC
Agreement as in effect immediately prior to such sale or exchange. Each
Securityholder shall take all necessary or desirable actions in connection with
the distribution of the aggregate consideration from such sale or exchange as
requested by the Company.
(f) Notwithstanding anything contained herein to the contrary,
upon the consummation of the Sale of the Company, the Securityholders shall not
receive any of the proceeds from such Sale of the Company unless and until
Agrilink's payment obligations to Pro-Fac contained in that certain letter
agreement dated as of August 19, 2002 by and between Agrilink and Pro-Fac have
been satisfied pursuant to the terms of such letter agreement.
4.2 Holdings Preferred Stock.
(a) If, after the Company has distributed the Preferred Stock
of Holdings to holders of Units, the holders of Vestar Securities (the "Electing
Holders") elect to Transfer to any other Person or group of related Persons on
an arm's-length basis all of the shares of Preferred Stock of Holdings held by
them, then the Electing Holders shall have the right to require each other
Securityholder to Transfer all of the shares of Preferred Stock of Holdings held
by it. The Electing Holders shall deliver to each such other Securityholder
written notice of the proposed Transfer at least 10 days prior to the
consummation of the Transfer, which notice shall describe in reasonable detail
the terms and conditions of such proposed Transfer and identify each prospective
Transferee. Each such other Securityholder will agree to sell its shares of
Preferred
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Stock of Holdings and will otherwise consent to and raise no objections to the
proposed Transfer, and the Securityholders will take all other actions
reasonably necessary or desirable to cause the consummation of such Transfer on
the terms and conditions proposed by the Electing Holders, and each
Securityholder shall execute any security purchase or other sale agreement
approved by the Electing Holders in connection with such Transfer.
(b) The obligations of the Securityholders with respect to the
Transfer of the shares of Preferred Stock of Holdings are subject to all
Securityholders receiving the same form and amount of consideration per share of
Preferred Stock of Holdings, or if any Securityholder is given an option as to
the form and amount of consideration to be received, all Securityholders will be
given the same option.
(c) Each Securityholder will bear its or his pro-rata share
(based upon the relative number of shares sold) of the costs of the Transfer to
the extent such costs are incurred for the benefit of all Securityholders and
are not otherwise paid by the Company or the acquiring party. Costs incurred by
or on behalf of a Securityholder for its or his sole benefit will not be
considered costs of the transaction hereunder.
ARTICLE V
REGISTRATION RIGHTS
5.1 Demand Registrations.
(a) Requests for Registration. Subject to the provisions of
this Article V, the holders of a majority of Vestar Securities that constitute
Registrable Securities shall have the right (the "Vestar Demand Right") and the
holders of a majority of Pro-Fac Securities that constitute Registrable
Securities shall have the right (the "Pro-Fac Demand Right"), in each case, to
request registration under the Securities Act of all or any portion of the
Registrable Securities held by such Securityholders (in each case, referred to
herein as the "Requesting Holders") by delivering a written notice to the
principal business office of the Issuer, which notice identifies the Requesting
Holders and specifies the number of Registrable Securities to be included in
such registration (the "Registration Request"). Subject to the restrictions set
forth in Section 5.1(d), the Issuer will give prompt written notice of such
Registration Request (the "Registration Notice") to all other holders of
Registrable Securities and will thereupon use its commercially reasonable
efforts to effect the registration (a "Demand Registration") under the
Securities Act on any form available to the Issuer of:
(i) the Registrable Securities requested to be
registered by the Requesting Holders;
(ii) all other Registrable Securities of the same
type and class which the Issuer has received a written request to
register within 30 days after the Registration Notice is given and any
securities of the Issuer proposed to be included in such registration
by the Issuer for its own account; and
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(iii) any securities of the Issuer proposed to be
included in such registration by the holders of registration rights
granted other than pursuant to this Agreement ("Other Registration
Rights").
(b) Preservation of Demand Registration. A registration
undertaken by the Issuer at the request of the Requesting Holder will not count
as a Demand Registration:
(i) if, pursuant to the Vestar Demand Right or the
Pro-Fac Demand Right, the Requesting Holders fail to register and sell
at least 75% of the Registrable Securities requested to be included in
such registration by them, unless such failure results from any act of,
or failure to act by, any of the Requesting Holders (provided, that if
the Requesting Holders withdraw their Registration Request prior to the
time the registration statement therefor is declared effective because
the price payable for securities included in such offering is not
acceptable to the Requesting Holders, such Registration Request shall
not count as a Demand Registration); or
(ii) if the Requesting Holders withdraw a
Registration Request (A) upon the determination of the management
committee or, as the case may be, board of directors of the Issuer to
postpone the filing or effectiveness of a Registration Statement
pursuant to Section 5.1(d) or (B) within 10 days of receiving notice
from the Issuer of its intent to exercise its Priority Right in
connection with such registration.
(c) Priority on Demand Registration. If the sole or managing
underwriter of a Demand Registration advises the Issuer in writing that in its
opinion the number of Registrable Securities and other securities requested to
be included exceeds the number of Registrable Securities and other securities
which can be sold in such offering without adversely affecting the distribution
of the securities being offered, the price that will be paid in such offering or
the marketability thereof, the Issuer will include in such registration the
greatest number of (i) Registrable Securities proposed to be registered by the
holders thereof, (ii) securities having Other Registration Rights that are pari
passu with the demand rights granted in respect of Registrable Securities
hereunder proposed to be registered by the holders thereof and (iii) securities
proposed to be registered by the Issuer for its own account which in the opinion
of such underwriters can be sold in such offering without adversely affecting
the distribution of the securities being offered, the price that will be paid in
such offering or the marketability thereof, ratably among the holders of
Registrable Securities, the holders of such Other Registration Rights and the
Issuer, based (A) as between the Issuer and such holders requesting
registration, on the respective amounts of securities requested to be registered
and (B) as among the holders requesting registration, on the respective amounts
of Registrable Securities (whether requested to be registered pursuant to
Section 5.1 or Section 5.2) and securities subject to such Other Registration
Rights, as the case may be, held by each such holder; provided, that the Issuer
and the Company shall have the right (the "Priority Right") to receive priority
over all holders of Registrable Securities in any Demand Registration to be
effected under this Section 5.1 with respect to securities that the Company or
the Issuer proposes to include in such registration for its own account by
giving written notice of its election to exercise such Priority Right to the
holders of Registrable Securities requesting registration thereof.
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(d) Restrictions on Demand Registrations. Except as otherwise
provided in this Section 5.1(d), the Issuer shall be obligated to effect four
"long form" and unlimited "short form" Demand Registrations pursuant to a Vestar
Demand Right. The Issuer shall not be obligated to effect a Pro-Fac Demand Right
until after the first anniversary of the Issuer's first Public Offering.
Thereafter, the Issuer shall be obligated to effect two Pro-Fac Demand Rights.
Any "long form" Demand Registration requested must be for a shelf registration
pursuant to Section 5.5 or a firmly underwritten public offering or a block sale
of Registrable Securities with an expected value of at least $15 million. If
such Demand Registration is for a firmly underwritten public offering, then it
must be managed by an underwriter or underwriters of recognized national
standing selected by the Requesting Holders and reasonably acceptable to the
Issuer. The Issuer shall not be obligated to effect a Demand Registration if
after a request is made, the Issuer has determined in good faith that the filing
of a registration request would require disclosure of material information which
the Issuer has a bona fide business purpose for preserving as confidential. In
such event, the Issuer shall not be obligated to effect the registration until
the earlier of (A) the date upon which such material information is disclosed to
the public or is no longer material or (B) 120 days after the Issuer first makes
such good faith determination.
(e) "Short Form" Registration on Forms S-2 and S-3. Following
its first Public Offering, the Issuer shall use its commercially reasonable best
efforts to qualify for registration on Forms S-2 or S-3 or any comparable or
successor form or forms. After the Issuer has qualified for the use of Forms S-2
or S-3 or any comparable or successor form of forms, the applicable
Securityholders specified in Section 5.1(a) shall have the right to request that
a Demand Registration be on Form S-2 or S-3 or any comparable or successor form
or forms; provided, that the Issuer shall not be obligated to effect a short
form registration under this Section 5.1(e) if the fair market value of the
shares to be registered is less than $5 million; provided further, that the
Issuer shall not be obligated to effect more than four (4) registrations on Form
S-2 or S-3 or any comparable or successor form or forms during any 12-month
period.
(f) Stock Splits. In connection with any Demand Registration
pursuant to this Section 5.1, each party to this Agreement will vote, or cause
to be voted, all securities of the Issuer over which it has the power to vote or
direct the voting to effect any stock split which, in the opinion of the sole or
managing underwriter, is necessary to facilitate the effectiveness of such
Demand Registration.
(g) Other Registration Rights. Except as provided in this
Agreement, the Issuer shall not grant to any Persons the right to request the
Issuer to register any equity securities of the Issuer, or any securities
convertible or exchangeable into or exercisable for such securities, without the
prior written consent of the holders of at least a majority of the Vestar
Securities.
5.2 Incidental Registration.
(a) Requests for Incidental Registration. At any time the
Issuer proposes to register any shares of Common Stock under the Securities Act
(other than registrations on such form(s) solely for registration of Common
Stock in connection with any employee benefit plan
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or dividend reinvestment plan or a merger or consolidation), including
registrations pursuant to Section 5.1(a), whether or not for sale for its own
account, the Issuer will give written notice to each holder of Registrable
Securities at least 30 days prior to the initial filing of such Registration
Statement with the SEC of its intent to file such registration statement and of
such holder's rights under this Section 5.2. Upon the written request of any
holder of Registrable Securities made within 20 days after any such notice is
given (which request shall specify the Registrable Securities intended to be
disposed of by such holder), the Issuer will use its commercially reasonable
efforts to effect the registration (an "Incidental Registration") under the
Securities Act of all Registrable Securities which the Issuer has been so
requested to register by the holders thereof; provided, that if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the Registration Statement filed in connection
with such Incidental Registration (each an "Incidental Registration Statement"),
the Issuer shall determine for any reason not to register or to delay
registration of such securities, the Issuer may, at its election, give written
notice of such determination to each holder of Registrable Securities and,
thereupon, (a) in the case of a determination not to register, the Issuer shall
be relieved of its obligation to register any Registrable Securities under this
Section 5.2 in connection with such registration (but not from its obligation to
pay the expenses incurred in connection therewith) and (b) in the case of a
determination to delay registration, the Issuer shall be permitted to delay
registering any Registrable Securities under this Section 5.2 during the period
that the registration of such other securities is delayed.
(b) Priority on Incidental Registration. If the sole or
managing underwriter of a registration advises the Issuer in writing that in its
opinion the number of Registrable Securities and other securities requested to
be included exceeds the number of Registrable Securities and other securities
which can be sold in such offering without adversely affecting the distribution
of the securities being offered, the price that will be paid in such offering or
the marketability thereof, the Issuer will include in such registration the
Registrable Securities and other securities of the Issuer in the following order
of priority:
(i) first, the greatest number of securities of the
Issuer proposed to be included in such registration by the Issuer for
its own account by the Company and by holders of Other Registration
Rights that have priority over the incidental registration rights
granted to holders of Registrable Securities under this Agreement,
which in the opinion of such underwriters can be so sold; and
(ii) second, after all securities that the Issuer
proposes to register for its own account, the Company or for the
accounts of holders of Other Registration Rights that have priority
over the incidental registration rights under this Agreement have been
included, the greatest amount of Registrable Securities and securities
having Other Registration Rights that are pari passu with Registrable
Securities, in each case requested to be registered by the holders
thereof which in the opinion of such underwriters can be sold in such
offering without adversely affecting the distribution of the securities
being offered, the price that will be paid in such offering or the
marketability thereof, ratably among the holders of Registrable
Securities (whether requested to be registered pursuant to Section 5.1
or Section 5.2) and securities subject to such Other Registration
Rights
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based on the respective amounts of Registrable Securities and
securities subject to such Other Registration Rights held by each such
holder.
(c) Upon delivering a request under this Section 5.2, a
Securityholder (excluding Vestar and its Affiliates, but including any other
Permitted Transferee of any thereof) will, if requested by the Issuer, execute
and deliver a custody agreement and power of attorney in form and substance
reasonably satisfactory to the Issuer and one of the Vestar Directors with
respect to such Securityholder's Securities to be registered pursuant to this
Section 5.2 (a "Custody Agreement and Power of Attorney"). The Custody Agreement
and Power of Attorney will provide, among other things, that the Securityholder
will deliver to and deposit in custody with the custodian and attorney-in-fact
named therein (who shall be reasonably satisfactory to one of the Vestar
Directors) a certificate or certificates representing such Securities (duly
endorsed in blank by the registered owner or owners thereof or accompanied by
duly executed stock powers in blank) and irrevocably appoint said custodian and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on such Securityholder's behalf with respect to
the matters specified therein. Such Securityholder also agrees to execute such
other agreements as the Issuer may reasonably request to further evidence the
provisions of this Section 5.2.
5.3 Holdback Agreements.
(a) Each holder of Registrable Securities agrees that if
requested in connection with an underwritten offering made pursuant to a
Registration Statement for which such Securityholder has registration rights
pursuant to this Article V by the managing underwriter or underwriters of such
underwritten offering, such holder will not effect any Public Sale or
distribution of any of the securities being registered or any securities
convertible or exchangeable or exercisable for such securities (except as part
of such underwritten offering), during the period beginning 10 days prior to,
and ending 180 days after, the closing date of each underwritten offering made
pursuant to such Registration Statement (or for such shorter period as to which
the managing underwriter or underwriters may agree; provided, that such shorter
period applies equally to all holders of Registrable Securities).
(b) The Issuer agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 7 days prior to and
during the 180-day period beginning on the effective date of any underwritten
Demand Registration (or for such shorter period as to which the managing
underwriter or underwriters may agree), except as part of such Demand
Registration or in connection with any employee benefit or similar plan, any
dividend reinvestment plan, or a business acquisition or combination and (ii) to
use all reasonable efforts to cause each holder of at least 1% (on a
fully-diluted basis) of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, which are or may be
purchased from the Issuer at any time after the date of this Agreement (other
than in a registered offering) to agree not to effect any sale or distribution
of any such securities during such period (except as part of such underwritten
offering, if otherwise permitted).
14
5.4 Registration Procedures. In connection with the
registration of any Registrable Securities, the Issuer shall effect such
registrations to permit the sale of such Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Issuer shall as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on a form available for the sale of the Registrable
Securities by the holders thereof in accordance with the intended method of
distribution thereof, and use its commercially reasonable efforts to cause each
such Registration Statement to become effective.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for a period ending on
the earlier of (i) 90 days from the effective date and (ii) such time as all of
such securities have been disposed of in accordance with the intended method of
disposition thereof, cause the related prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act, and
comply with the provisions of the Securities Act, the Exchange Act and the rules
and regulations of the SEC promulgated thereunder applicable to it with respect
to the disposition of all securities covered by such Registration Statement as
so amended or in such prospectus as so supplemented.
(c) Notify the selling holders of Registrable Securities
promptly (but in any event within 2 business days), and confirm such notice in
writing, (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of the
issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, (iii) if at any time when a prospectus is required by
the Securities Act to be delivered in connection with sales of Registrable
Securities the Issuer becomes aware that the representations and warranties of
the Issuer contained in any agreement (including any underwriting agreement)
contemplated by Section 5.4(h) below cease to be true and correct in all
material respects, (iv) of the receipt by the Issuer of any notification with
respect to the suspension of the qualification or exemption from qualification
of a Registration Statement or any of the Registrable Securities for offer or
sale in any jurisdiction, (v) if the Issuer becomes aware of the happening of
any event that makes any statement made in such Registration Statement or
related prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in such Registration Statement, prospectus or documents so that,
in the case of such Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the prospectus, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(d) Use its commercially reasonable efforts to prevent the
issuance of any order suspending the effectiveness of a Registration Statement
or of any order preventing or
15
suspending the use of a prospectus or suspending the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, and, if any such order is issued, to obtain the withdrawal of any
such order at the earliest possible moment.
(e) Deliver to each selling holder of Registrable Securities
and the underwriters, if any, without charge, as many copies of the prospectus
or prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request, and the Issuer hereby
consents to the use of such prospectus and each amendment or supplement thereto
by each of the selling holders of Registrable Securities and the underwriters or
agents, if any, in connection with the offering and sale of the Registrable
Securities covered by such prospectus and any amendment or supplement thereto.
(f) Prior to any public offering of Registrable Securities, to
use its commercially reasonable efforts to register or qualify, and cooperate
with the selling holders of Registrable Securities, the underwriters, if any,
the sales agents and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or "blue sky" laws of such jurisdictions within the United States as
any selling holder or the managing underwriters reasonably request in writing;
provided, that the Issuer will not be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified or (ii) take any
action that would subject it to general service of process in any such
jurisdiction where it is not then so subject.
(g) Upon the occurrence of any event contemplated by Section
5.4(c)(v) above, as promptly as practicable prepare a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(h) Enter into an underwriting agreement in form, scope and
substance as is customary in underwritten offerings and take all such other
actions as are reasonably requested by the managing or sole underwriter in order
to expedite or facilitate the registration or the disposition of such
Registrable Securities, and in such connection, (i) make such representations
and warranties to the underwriters, with respect to the business of the Issuer
and its subsidiaries, and the Registration Statement, prospectus and documents,
if any, incorporated or deemed to be incorporated by reference therein, in each
case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and when
requested, (ii) obtain opinions of counsel to the Issuer and updates thereof
(which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters), addressed to the underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by underwriters,
(iii) obtain "cold comfort" letters and updates thereof from the independent
certified public accountants of the Issuer (and, if necessary, any other
independent
16
certified public accountants of any Subsidiary of the Issuer or of any business
acquired by the Issuer for which financial statements and financial data are, or
are required to be, included in the Registration Statement), addressed to each
of the underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no less
favorable to the holders of Registrable Securities than those set forth in
Section 5.7 hereof (or such other provisions and procedures acceptable to
holders of a majority of the Registrable Securities covered by such Registration
Statement and the managing underwriters or agents) with respect to all parties
to be indemnified pursuant to said Section. The above shall be done at each
closing under such underwriting agreement, or as and to the extent required
thereunder.
(i) Comply with all applicable rules and regulations of the
SEC and make generally available to its Securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to underwriters
in a firm commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Issuer after the effectiveness of a Registration
Statement, which statements shall cover said 12-month periods.
(j) Use its commercially reasonable efforts to cause all such
Registrable Securities covered by such registration statement to be listed on
the principal securities exchange on which Common Stock is then listed (if any),
if the listing of such Registrable Securities is then permitted under the rules
of such exchange, or if no Common Stock is then so listed, use its commercially
reasonable efforts to, either (as the Issuer may elect) (x) cause all such
Registrable Securities to be listed on a national securities exchange or (y)
secure designation of all such Registrable Securities as a NASDAQ "national
market system security" within the meaning of Rule 11Aa2-1 or, failing that, to
secure NASDAQ authorization for such shares and, without limiting the generality
of the foregoing, to arrange for at least two market makers to register as such
with respect to such shares with the National Association of Securities Dealers,
Inc. ("NASD").
The Issuer may require each holder of Registrable Securities as to which any
registration is being effected to furnish to the Issuer such information
regarding such holder and the distribution of such Registrable Securities as the
Issuer may, from time to time, reasonably request in writing; provided, that
such information shall be used only in connection with such registration. The
Issuer may exclude from such registration the Registrable Securities of any
holder who unreasonably fails to furnish such information promptly after
receiving such request. Each holder agrees that, upon receipt of any notice from
the Issuer of the happening of any event of the kind described in Section
5.4(c)(ii), 5.4(c)(iv) or 5.4(c)(v), such holder will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement or prospectus until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by this Section 5.4, or until it
is advised in writing by the Issuer that the use of the
17
applicable prospectus may be resumed, and has received copies of any amendments
or supplements thereto.
5.5 Shelf Registration. Subject to the provisions set forth in
Section 5.4, if the holders of a majority of Vestar Securities that constitute
Registrable Securities so specify in the Registration Notice that they desire
the Issuer to undertake a shelf registration of some or all of such Registrable
Securities, then the Issuer shall file with the SEC a registration statement
under the Securities Act on the appropriate form pursuant to Rule 415 under the
Securities Act (the "Required Registration"). The Issuer shall use its best
efforts to cause the Required Registration to be declared effective under the
Securities Act as soon as practical after filing, and once effective, the Issuer
shall cause such Required Registration to remain effective for a period ending
on the earlier of (i) the second anniversary of the effectiveness thereof, (ii)
the date on which all Registrable Securities have been sold pursuant to the
Required Registration and (iii) the date as of which there are no longer any
Registrable Securities in existence.
5.6 Registration Expenses. All fees and expenses incident to
the performance of or compliance with this Agreement by the Issuer shall be
borne by the Issuer, whether or not any Registration Statement is filed or
becomes effective, including, without limitation, (i) all registration and
filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or "blue sky"
laws), (ii) reasonable messenger, telephone and delivery expenses, (iii) fees
and disbursements of counsel for the Issuer, (iv) fees and disbursements of all
independent certified public accountants referred to in Section 5.4(h), (v)
underwriters' fees and expenses (excluding discounts, commissions, or fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Registrable Securities), (vi)
Securities Act liability insurance, if the Issuer so desires such insurance,
(vii) internal expenses of the Issuer, (viii) the expense of any annual audit,
(ix) the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange and (x) the fees and
expenses of any Person, including special experts, retained by the Issuer. In
connection with any Demand Registration or Incidental Registration hereunder,
the Issuer shall reimburse the holders of the Registrable Securities being
registered in such registration for the reasonable fees and disbursements of not
more than one counsel (together with appropriate local counsel) chosen by the
Requesting Holders, and other reasonable out-of-pocket expenses of the holders
of Registrable Securities incurred in connection with the registration of the
Registrable Securities.
5.7 Indemnification; Contribution.
(a) Indemnification by the Issuer. The Issuer shall, without
limitation as to time, indemnify and hold harmless, to the full extent permitted
by law, each holder of Registrable Securities, the officers, directors, agents
and employees of each of them, each Person who controls each such holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act), the officers, directors, agents and employees of each such controlling
person and any financial or investment adviser (each, an "Indemnified Party"),
to the fullest extent lawful, from and against any and all losses, claims,
damages, liabilities, actions or proceedings (whether commenced or threatened)
reasonable costs (including, without limitation,
18
reasonable costs of preparation and reasonable attorneys' fees) and reasonable
expenses (including reasonable expenses of investigation) (collectively,
"Losses"), as incurred, arising out of or based upon (i) any untrue or alleged
untrue statement of a material fact contained in any Registration Statement,
prospectus or form of prospectus or in any amendment or supplements thereto or
in any preliminary prospectus, or arising out of or based upon any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, except to the extent that the
same arise out of or are based upon information furnished in writing to the
Issuer by such Indemnified Party or the related holder of Registrable Securities
expressly for use therein or (ii) any violation by the Issuer of any federal,
state or common law rule or regulation applicable to the Issuer and relating to
action required of or inaction by the Issuer in connection with any such
registration; provided, that the Issuer shall not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable Securities
or any other Person, if any, who controls such underwriters within the meaning
of the Securities Act to the extent that any such Losses arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if (i) such Person failed to
send or deliver a copy of the prospectus with or prior to the delivery of
written confirmation of the sale by such Person to the Person asserting the
claim from which such Losses arise, (ii) the prospectus would have corrected
such untrue statement or alleged untrue statement or such omission or alleged
omission, and (iii) the Issuer has complied with its obligations under Section
5.4(c). Each indemnity and reimbursement of costs and expenses shall remain in
full force and effect regardless of any investigation made by or on behalf of
such Indemnified Party.
(b) Indemnification by Holders. In connection with any
Registration Statement in which a holder of Registrable Securities is
participating, such holder, or an authorized officer of such holder, shall
furnish to the Issuer in writing such information as the Issuer reasonably
requests for use in connection with any Registration Statement or prospectus and
agrees, severally and not jointly, to indemnify, to the full extent permitted by
law, the Issuer, its directors, officers, agents and employees, each Person who
controls the Issuer (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling persons, from and against all Losses arising out
of or based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, prospectus, or form of prospectus, or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue or alleged
untrue statement is contained in, or such omission or alleged omission is
required to be contained in, any information so furnished in writing by such
holder to the Issuer expressly for use in such Registration Statement or
prospectus and that such statement or omission was relied upon by the Issuer in
preparation of such Registration Statement, prospectus or form of prospectus;
provided, that such holder of Registrable Securities shall not be liable in any
such case to the extent that the holder has furnished in writing to the Issuer
within a reasonable period of time prior to the filing of any such Registration
Statement or prospectus or amendment or supplement thereto information expressly
for use in such Registration Statement or prospectus or any amendment or
supplement thereto which corrected or made not misleading, information
previously furnished to the Issuer, and the Issuer failed to include such
information therein. In no event shall the liability of any selling holder of
Registrable Securities hereunder be greater in
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amount than the dollar amount of the proceeds (net of payment of all expenses)
received by such holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such
indemnified party.
(c) Conduct of Indemnification Proceedings. If any Person
shall be entitled to indemnity hereunder (an "indemnified party"), such
indemnified party shall give prompt notice to the party or parties from which
such indemnity is sought (the "indemnifying parties") of the commencement of any
action, suit, proceeding or investigation or written threat thereof (a
"Proceeding") with respect to which such indemnified party seeks indemnification
or contribution pursuant hereto; provided, that the failure to so notify the
indemnifying parties shall not relieve the indemnifying parties from any
obligation or liability except to the extent that the indemnifying parties have
been prejudiced by such failure. The indemnifying parties shall have the right,
exercisable by giving written notice to an indemnified party promptly after the
receipt of written notice from such indemnified party of such Proceeding, to
assume, at the indemnifying parties' expense, the defense of any such
Proceeding, with counsel reasonably satisfactory to such indemnified party;
provided, that an indemnified party or parties (if more than one such
indemnified party is named in any Proceeding) shall have the right to employ
separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless: (i) the indemnifying parties agree to
pay such fees and expenses; (ii) the indemnifying parties fail promptly to
assume the defense of such Proceeding or fail to employ counsel reasonably
satisfactory to such indemnified party or parties; or (iii) the named parties to
any such Proceeding (including any impleaded parties) include both such
indemnified party or parties and the indemnifying parties or an affiliate of the
indemnifying parties or such indemnified parties, and there may be one or more
defenses available to such indemnified party or parties that are different from
or additional to those available to the indemnifying parties, in which case, if
such indemnified party or parties notifies the indemnifying parties in writing
that it elects to employ separate counsel at the expense of the indemnifying
parties, the indemnifying parties shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the indemnifying parties, it
being understood, however, that, unless there exists a conflict among
indemnified parties, the indemnifying parties shall not, in connection with any
one such Proceeding or separate but substantially similar or related Proceedings
in the same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for such
indemnified party or parties. Whether or not such defense is assumed by the
indemnifying parties, such indemnifying parties or indemnified party or parties
will not be subject to any liability for any settlement made without its or
their consent (but such consent will not be unreasonably withheld). The
indemnifying parties shall not consent to entry of any judgment or enter into
any settlement which (i) provides for other than monetary damages without the
consent of the indemnified party or parties (which consent shall not be
unreasonably withheld or delayed) or (ii) does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
or parties of a release, in form and substance satisfactory to the indemnified
party or parties, from all liability in respect of such Proceeding for which
such indemnified party would be entitled to indemnification hereunder.
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(d) Contribution. If the indemnification provided for in this
Section 5.7 is unavailable to an indemnified party or is insufficient to hold
such indemnified party harmless for any Losses in respect of which this Section
5.7 would otherwise apply by its terms, then each applicable indemnifying party,
in lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the amount paid or payable by such indemnified party
as a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying party, on the one hand,
and indemnified party, on the other hand, shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been taken by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent any such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include any legal or other fees or expenses
incurred by such party in connection with any Proceeding, to the extent such
party would have been indemnified for such expenses if the indemnification
provided for in Section 5.7(a) or 5.7(b) was available to such party. The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5.7(d) were determined by pro-rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in this Section 5.7(d). Notwithstanding the
provisions of this Section 5.7(d), an indemnifying party that is a selling
holder of Registrable Securities shall not be required to contribute any amount
in excess of the amount by which the net proceeds received by such indemnifying
party exceeds the amount of any damages that such indemnifying party has
otherwise been required to pay by reasons of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
5.8 Rule 144. At all times after the Issuer effects its first
Public Offering, the Issuer shall file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder, and will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144. Upon the request of any holder of Registrable Securities,
the Issuer shall deliver to such holder a written statement as to whether it has
complied with such requirements.
5.9 Underwritten Registrations. No holder of Registrable
Securities may participate in any underwritten registration hereunder unless
such holder (a) agrees to sell such holder's Registrable Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
21
5.10 Company Public Offering. The Company shall not consummate
a Public Offering of its securities.
ARTICLE VI
PRE-EMPTIVE RIGHTS
6.1 Issuance of New Securities to Affiliates.
(a) If at any time after the date of this Agreement the
Company or any of its Subsidiaries proposes to issue or sell any Units,
Preferred Units, Preferred Stock, Common Stock, or Common Stock Equivalents of
the Company or such Subsidiary (collectively, "New Securities"), in each case to
Vestar or any Affiliate of Vestar (provided that, for the purposes of this
Section 6.1, neither the Company nor its Subsidiaries shall be deemed an
Affiliate of Vestar), the Company shall, and in the case of a proposed issuance
of securities of a Subsidiary, the Company will cause such Subsidiary to, first
offer to sell to the holders of Pro-Fac Securities and Employee Securities a
portion of each type of such New Securities:
(i) in the event such New Securities are Common Units
or Common Stock, equal to the quotient determined by dividing (x) the
number of Fully-Diluted Common Units held or beneficially owned by such
holder of Pro-Fac Securities or Employee Securities, by (y) the total
number of Fully-Diluted Common Units outstanding immediately prior to
such issuance or sale; and
(ii) in the event such New Securities are not Common
Units or Common Stock, equal to the quotient determined by dividing (x)
the Capital Contributions to the Company of such holder of Pro-Fac
Securities or Employee Securities, by (y) the aggregate Capital
Contributions to the Company.
The holders of Pro-Fac Securities and Employee Securities shall be entitled to
purchase all or any portion of their respective portions (as determined in (i)
or (ii) above, as the case may be) of such New Securities at the most favorable
price and on the most favorable terms as such New Securities are to be offered
to Vestar or any Affiliate of Vestar. No Employee Security that is subject to
vesting shall be counted for purposes of making the calculation described above
in either (x) or (y) of (i) above unless such Employee Security has fully
vested.
(b) In order to exercise its purchase rights hereunder, each
holder of Pro-Fac Securities and Employee Securities must, within 30 days after
receipt of written notice from the Company describing in reasonable detail the
New Securities being offered, the purchase price thereof, the payment terms and
the percentage of the New Securities available to such holder pursuant to
Section 6.1(a), deliver a written notice to the Company describing its election
to exercise its purchase rights hereunder.
(c) Upon the expiration of the offering periods described
above, the Company (or any such Subsidiary) shall be entitled to sell such New
Securities which the holders of Pro-Fac Securities and Employee Securities have
not elected to purchase during the 180 days following such expiration on terms
and conditions no more favorable to the purchasers thereof
22
than those offered to the holders of Pro-Fac Securities and Employee Securities.
Any New Securities to be sold by the Company or any of its Subsidiaries to
Vestar or any Affiliate of Vestar after such 180-day period must be reoffered to
the holders of Pro-Fac Securities and Employee Securities pursuant to the terms
of this Section 6.1.
(d) The provisions of this Section 6.1 will not apply to the
following issuances of New Securities:
(i) any New Securities issued upon the conversion or
exercise of any Common Stock Equivalents not issued in violation of
this Section 6.1;
(ii) any issuance of New Securities incident to the
exercise, conversion or exchange of any securities of the Company or
any of its Subsidiaries that were not issued in violation of this
Section 6.1, a subdivision of shares (including any stock dividend or
stock split), any combination of shares (including any reverse stock
split) or any recapitalization, reorganization or reclassification of
the Company or any of its Subsidiaries; or
(iii) any New Securities issued to a seller in
connection with the acquisition by the Company or any of its
Subsidiaries of another Person that is not an Affiliate of Vestar
(whether by acquisition of stock or by merger or consolidation, or the
acquisition of all or substantially all of such Person's assets).
(e) Nothing in this Section 6.1 shall be deemed to prevent
Vestar or any Affiliate of Vestar from purchasing for cash any New Securities
without first complying with the provisions of this Section 6.1; provided, that
in connection with such purchase, (a) the Company's (or applicable Subsidiary's)
management committee or board of directors has determined in good faith (1) that
the Company (or applicable Subsidiary) needs an immediate cash investment, (2)
that no alternative financing on terms no less favorable to the Company (or
applicable Subsidiary) in the aggregate than such purchase is available which is
of a type that could be obtained without having to comply with this Section 6.1
and (3) that the delay caused by compliance with the provisions of this Section
6.1 in connection with such investment would be reasonably likely to cause
severe and immediate harm to the Company (or applicable Subsidiary), (b) the
Company (or applicable Subsidiary) gives prompt notice to the holders of Pro-Fac
Securities and Employee Securities of the Purchasing Holder's investment, which
notice shall describe in reasonable detail the New Securities being purchased by
the Person making such purchase (for purposes of this Section 6.1, the
"Purchasing Holder") and the purchase price thereof and (c) the Purchasing
Holder and the Company (or applicable Subsidiary) take all steps necessary to
enable the holders of Pro-Fac Securities and Employee Securities to effectively
exercise their respective rights under this Section 6.1 with respect to their
purchase of a pro-rata share of the New Securities issued to the Purchasing
Holder after such purchase by the Purchasing Holder on the terms specified in
Section 6.1(a).
6.2 Issuance of New Securities.
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If at any time after the date of this Agreement the Company or
any of its Subsidiaries proposes to issue or sell any New Securities, the
Company shall, and in the case of a proposed issuance of securities of a
Subsidiary, the Company will cause such Subsidiary to, first offer to sell to
the holders of Vestar Securities such New Securities. The holders of Vestar
Securities shall be entitled to purchase all or any portion of such New
Securities. The provisions of Section 6.1 shall apply if Vestar elects to
purchase any of such New Securities.
ARTICLE VII
AMENDMENT AND TERMINATION
7.1 Amendment and Waiver. Except as otherwise provided herein,
no modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Securityholders unless such modification,
amendment or waiver is approved in writing by each of the Company, the Vestar
Majority Holders, the Pro-Fac Majority Holders and the Employee Majority
Holders; provided that the Vestar Majority Holders may modify or amend this
Agreement without the consent of any other Securityholder or the Company, and
such modification or amendment shall be binding upon all of the parties hereto
if (i) it is set forth in a document duly executed by the Vestar Majority
Holders and (ii) if either (x) it could not reasonably be expected to have a
material adverse effect on any Securityholder, in its capacity as such, that
would be borne disproportionately by such Securityholder relative to other
Securityholders holding Securities of the same class, provided that Class A
Units, Class B Units, Class C Units and Class D Units shall all be deemed the
same class for the purposes of this Section 7.1 (unless such Securityholder
consents in writing thereto) or (y) it does not adversely affect any
Securityholder or the Company in any material respect and it is in connection
with a change that cures any ambiguity or corrects or supplements any provision
of this Agreement. The failure of any party to enforce any of the provisions of
this Agreement shall in no way be construed as a waiver of such provisions and
shall not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
7.2 Termination of Certain Provisions. The provisions of
Article II shall terminate with respect to an Issuer upon the consummation of
the first Public Offering of such Issuer, if, and only to the extent, required
by the managing underwriter of such Public Offering. The provisions of Article
VI shall terminate with respect to an Issuer upon the consummation of the first
Public Offering of such Issuer.
7.3 Termination of Agreement. This Agreement will terminate in
respect of all Securityholders (a) with the written consent of the Company, the
Vestar Majority Holders, the Pro-Fac Majority Holders and the Employee Majority
Holders, (b) upon the dissolution, liquidation or winding-up of the Company, or
(c) upon the consummation of a Sale of the Company (except with respect to the
rights to Incidental Registration under Article V, which shall survive). The
termination of this Agreement will not affect any indemnification or
contribution obligations under Section 5.7, which shall survive such
termination.
7.4 Termination as to a Party. Any Person who ceases to hold
any Securities shall cease to be a Securityholder and shall have no further
rights or obligations under this
24
Agreement (except with respect to any indemnification and contribution
obligations under Section 5.7, which shall survive).
7.5 Issuers. Prior to distributing to the holders of Units all
or substantially all of the securities of any direct or indirect Subsidiary of
the Company, the Company shall cause such Subsidiary to execute and deliver a
Stockholders Agreement complying with this Section 7.5 (the "Stockholders
Agreement"), and each Person, other than the Company, that is a party to this
Agreement shall execute and deliver the Stockholders Agreement. The Stockholders
Agreement shall be substantially identical to this Agreement, including the
provisions that are applicable to an Issuer hereunder, except that it shall be
revised so that such Issuer replaces the Company hereunder with respect to
provisions that are applicable to the Company hereunder, and such other
revisions shall be made as are necessary or desirable to reflect the fact that
the Issuer is a corporation rather than a limited liability company. In
addition, if the Issuer has consummated its first Public Offering, then any
provision of this Agreement that, pursuant to the terms of this Agreement,
terminates upon a first Public Offering shall be excluded from the Stockholders
Agreement, and, in any event, Section 5.10 and this Section 7.5 shall not be
included in the Stockholders Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:
"Affiliate" of any particular Person means any other Person
Controlling, Controlled by or under common Control with such particular Person
or, in the case of a natural Person, any other member of such Person's Family
Group.
"Agreement" has the meaning set forth in the preamble.
"Agrilink" means Agrilink Foods, Inc., a New York corporation,
and any successor thereto.
"Allocable Shares" has the meaning set forth in Section
3.2(a).
"Call Option" means the call option described in Section 5.1
of the Management Unit Subscription Agreements.
"Capital Contribution" has the meaning set forth in the LLC
Agreement.
"Class A Units" has the meaning set forth in the LLC
Agreement.
"Class B Units" has the meaning set forth in the LLC
Agreement.
"Class C Units" has the meaning set forth in the LLC
Agreement.
"Class D Units" has the meaning set forth in the LLC
Agreement.
25
"Common Stock" means, collectively, the common stock of any
Subsidiary of the Company or of an Issuer, and any other class or series of
authorized capital stock of such Subsidiary or Issuer which is not limited to a
fixed sum or percentage of par or stated value in respect to the rights of the
holders thereof to participate in dividends or in the distribution of assets
upon any liquidation, dissolution or winding up of such Subsidiary or Issuer.
"Common Stock Equivalents" means (without duplication with any
Units, Common Stock or other Common Stock Equivalents) rights, warrants,
options, convertible securities, or exchangeable securities or indebtedness, or
other rights, exercisable for or convertible or exchangeable into, directly or
indirectly, Units, Common Stock or securities exercisable for or convertible or
exchangeable into Units or Common Stock, as the case may be, whether at the time
of issuance or upon the passage of time or the occurrence of some future event.
"Common Units" means the Class A Units, Class B Units, Class C
Units and Class D Units.
"Company" has the meaning set forth in the preamble.
"Control" (including, with correlative meaning, all
conjugations thereof) means with respect to any Person, the ability of another
Person to control or direct the actions or policies of such first Person,
whether by ownership of voting securities, by contract or otherwise.
"Custody Agreement and Power of Attorney" has the meaning
given to such term in Section 5.2(c).
"Demand Registration" has the meaning given to such term in
Section 5.1(a).
"Employee(s)" has the meaning given to such term in the
preamble.
"Employee Majority Holders" means the Person or Persons having
beneficial ownership of a majority of the securities constituting Employee
Securities.
"Employee Securities" means (a) the Units acquired by the
Employees on or after the date of this Agreement under the Management Unit
Subscription Agreements, (b) any Units, Common Stock (including, for the purpose
of this definition, any common stock of any other company distributed by the
Company), Common Stock Equivalents or Preferred Stock hereafter acquired by any
holder of Employee Securities and (c) any securities of the Company (or any
other such company) issued with respect to the securities referred to in clauses
(a) or (b) above by way of a payment-in-kind, stock dividend or stock split or
in connection with a combination of shares, exchange, conversion,
recapitalization, merger, consolidation or other reorganization.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Excluded Securities" has the meaning set forth in Section
3.2(c).
26
"Exempt Transfer" means a Transfer of Pro-Fac Securities or
Employee Securities (a) pursuant to an exercise of tag-along rights as an Other
Holder under Section 3.2, (b) pursuant to a Sale of the Company under Section
4.1 or other transaction approved under Section 2.2, (c) in the case of Employee
Securities, to the Company pursuant to a Call Option under a Management Unit
Subscription Agreement, (d) pursuant to a Public Sale (including pursuant to the
provisions of Article V hereof), (e) upon the death of the holder pursuant to
the applicable laws of descent and distribution, (f) solely to or among such
Person's Family Group, (g) incidental to the exercise, conversion or exchange of
such securities in accordance with their terms, any combination of shares
(including any reverse stock split) or any recapitalization, reorganization or
reclassification of, or any merger or consolidation involving, the Company, (h)
in the case of the Pro-Fac Securities, the pledge of such securities pursuant to
the Pledge Agreement dated as of the date hereof between Pro-Fac and Agrilink,
or (i) to Vestar.
"Exempt Individual Transfer" means a Transfer of Vestar
Securities held by a natural person (a) upon the death of the holder pursuant to
the applicable laws of descent and distribution, (b) solely to or among such
Person's Family Group or (c) incidental to the exercise, conversion or exchange
of such securities in accordance with their terms, any combination of shares
(including any reverse stock split) or any recapitalization, reorganization or
reclassification of, or any merger or consolidation involving, the Company.
"Family Group" means, with respect to any individual, such
individual's spouse and descendants (whether natural or adopted) and any trust,
partnership, limited liability company or similar vehicle established and
maintained solely for the benefit of (or the sole members or partners of which
are) such individual, such individual's spouse and/or such individual's
descendants.
"Fully-Diluted Common Units" means, as of any date of
determination, (i) with respect to the Company, the number of Common Units
outstanding or, following the conversion of the Company into a corporation or
the Company being merged into, or otherwise succeeded by, a corporation, the
number of shares of its Common Stock outstanding, plus (without duplication) all
Common Units or shares of its Common Stock, as the case may be, issuable,
whether at such time or upon the passage of time or the occurrence of future
events, upon the exercise, conversion or exchange of all then-outstanding Common
Stock Equivalents.
"Holdings" means Agrilink Holdings Inc., a Delaware
corporation.
"Incidental Registration" has the meaning given such term in
Section 5.2(a).
"Incidental Registration Statement" has the meaning given to
such term in Section 5.2(a).
"Indemnified Party" has the meaning given to such term in
Section 5.7(a).
"Independent Director" has the meaning given such term in
Section 2.1(a)(i).
"Issuer" means any direct or indirect Subsidiary of the
Company, any of the capital stock of which the Company distributes to the
holders of Units.
27
"LLC Agreement" means the Amended and Restated Limited
Liability Company Agreement of the Company, as amended and in effect from time
to time.
"Losses" has the meaning given such term in Section 5.7(a).
"Management Director" has the meaning given to such term in
Section 2.1(a)(iii).
"Management Unit Subscription Agreements" mean the management
unit subscription agreements between the Company and the respective Employees.
"NASD" has the meaning given such term in Section 5.4(j).
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"New Securities" has the meaning given to such term in Section
6.1(a).
"Offered Securities" has the meaning given to such term in
Section 3.2(a).
"Other Holder" has the meaning given such term in Section
3.2(a).
"Other Registration Rights" has the meaning given such term in
Section 5.1(a)(iii).
"Ownership Percentage" means, for each Securityholder and with
respect to a type and class of Security, the percentage obtained by dividing the
number of units or shares of such Security held by such Securityholder
(including all Common Stock Equivalents convertible or exchangeable into such
Security) by the total number of units or shares of such Security (other than
Excluded Securities but including all Common Stock Equivalents convertible or
exchangeable into such Security) outstanding. For purposes of this definition,
Class A Units, Class B Units and Class C Units shall be deemed to be one class
of Security.
"Person" means an individual, a partnership, a joint venture,
a corporation, an association, a joint stock company, a limited liability
company, a trust, an unincorporated organization or a government or any
department or agency or political subdivision thereof.
"Preferred Stock" means collectively, the classes or series of
authorized capital stock of any Subsidiary of the Company or of an Issuer that
is limited to a fixed sum or percentage of par value or stated value in respect
of the rights of the holders thereof to participate in dividends and in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of such Subsidiary or Issuer.
"Preferred Units" has the meaning set forth in the LLC
Agreement.
"Priority Right" has the meaning given such term in Section
5.1(c)(i).
"Proceeding" has the meaning given such term in Section
5.7(c).
28
"Pro-Fac" has the meaning given such term in the preamble.
"Pro-Fac Demand Right" has the meaning given such term in
Section 5.1(a).
"Pro-Fac Director" has the meaning given such term in Section
2.1(a)(ii).
"Pro-Fac Majority Holders" means the Person or Persons holding
a majority of the securities constituting Pro-Fac Securities.
"Pro-Fac Securities" means (a) the Units issued to Pro-Fac by
the Company on or prior to the date hereof in return for Pro-Fac's contribution
to the Company of all of the capital stock of Agrilink, (b) Units, Common Stock
(including, for the purpose of this definition, any common stock of any other
company distributed by the Company), Common Stock Equivalents or Preferred Stock
hereafter acquired by Pro-Fac and (c) any securities of the Company (or any
other such company) issued with respect to the securities referred to in clauses
(a) or (b) above by way of a payment-in-kind, stock dividend or stock split or
in connection with a combination of shares, exchange, conversion,
recapitalization, merger, consolidation or other reorganization.
"Public Offering" means a sale of Common Stock to the public
in an offering pursuant to an effective registration statement filed with the
SEC pursuant to the Securities Act, as then in effect, provided, that a Public
Offering shall not include an offering made in connection with a business
acquisition or combination or an employee benefit plan.
"Public Sale" means a sale of Securities pursuant to a Public
Offering or a Rule 144 Sale.
"Purchasing Holder" has the meaning given such term in Section
6.1(e).
"Registrable Securities" means any Securities of an Issuer
that the Company distributes in respect of Units and any Securities of such
Issuer held by the Company after such Issuer's first Public Offering. As to any
particular Registrable Securities, such securities will cease to be Registrable
Securities when they have been (i) Transferred in a Public Sale, (ii) unless
Vestar otherwise elects, have been distributed to the limited partners of Vestar
or (iii) otherwise Transferred and new certificates not bearing the legend set
forth in Section 8.2(b) hereof shall have been delivered by the Issuer and
subsequent disposition of such securities shall not require registration or
qualification of such securities under the Securities Act or such state
securities or blue sky laws then in force. For purposes of this Agreement, a
Person will be deemed to be a holder of Registrable Securities whenever such
Person has the right to acquire such Registrable Securities (upon conversion or
exercise in connection with a Transfer of securities or otherwise), whether or
not such acquisition has actually been effected.
"Registration Expenses" means all amounts payable by the
Issuer pursuant to Section 5.6.
"Registration Notice" has the meaning given such term in
Section 5.1(a).
"Registration Request" has the meaning given such term in
Section 5.1(a).
29
"Registration Statement" means any registration statement of
the Issuer under which any of the Registrable Securities are included therein
pursuant to the provisions of this Agreement, including the prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"Requesting Holder" has the meaning given such term in Section
5.1(a).
"Rule 144" means Rule 144 adopted under the Securities Act (or
any successor rule or regulation).
"Rule 144 Sale" means a sale of Securities to the public
through a broker, dealer or market-maker pursuant to the provisions of Rule 144
(other than Rule 144(k) prior to a Public Offering) adopted under the Securities
Act (or any successor rule or regulation).
"Sale of the Company" means the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), with any other Person or group of related Persons on an
arm's-length basis, pursuant to which such Person or group of related Persons
(a) acquire (whether by merger, stock purchase, recapitalization,
reorganization, redemption, issuance of capital stock or otherwise) more than
50% of the Fully-Diluted Common Units or (b) acquire assets constituting all or
substantially all of the assets of the Company and its Subsidiaries on a
consolidated basis; provided, that in no event shall a Sale of the Company be
deemed to include any transaction effected for the purpose of (i) changing,
directly or indirectly, the form of organization or the organizational structure
of the Company or any of its Subsidiaries or (ii) contributing stock to entities
controlled by the Company.
"Sale Notice" has the meaning given such term in Section
3.2(a).
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, the Vestar Securities, the
Pro-Fac Securities and the Employee Securities.
"Securityholder(s)" has the meaning given such term in the
preamble.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Selling Holder" has the meaning given such term in Section
3.2(a).
"Stockholders Agreement" has the meaning given such term in
Section 7.5.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other
30
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interests thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof.
"Tag-Along Notice" has the meaning given such term in Section
3.2(a).
"Transfer" means (in either the noun or the verb form,
including with respect to the verb form, all conjugations thereof within their
correlative meanings) with respect to any security, the gift, sale, assignment,
transfer, pledge, hypothecation or other disposition (whether for or without
consideration, whether directly or indirectly, and whether voluntary,
involuntary or by operation of law) of such security or any interest therein.
"Units" means the Company's Preferred Units, Class A Units,
Class B Units, Class C Units and Class D Units, and any other class of unit that
the Company issues after the date of this Agreement.
"Vestar" has the meaning given such term in the preamble.
"Vestar Demand Right" has the meaning given such term in
Section 5.1(a).
"Vestar Directors" has the meaning given such term in Section
2.1(a)(i).
"Vestar Majority Holders" means the Person or Persons holding
a majority of the securities constituting Vestar Securities (other than
Preferred Units and Preferred Stock).
"Vestar Securities" means (a) the Units issued to Vestar on
the date hereof, (b) Units, Common Stock (including, for the purpose of this
definition, any common stock of any other company distributed by the Company),
Common Stock Equivalents or Preferred Stock hereafter acquired by Vestar and (c)
any securities of the Company (or any other such company) issued with respect to
the securities referred to in clauses (a) or (b) above by way of a
payment-in-kind, stock dividend or stock split or in connection with a
combination of shares, exchange, conversion, recapitalization, merger,
consolidation or other reorganization.
8.2 Legends.
(a) Securityholders Agreement. Each certificate or instrument
evidencing Securities and each certificate or instrument issued in exchange for
or upon the Transfer of any such Securities (if such securities remain subject
to this Agreement after such Transfer) shall be stamped or otherwise imprinted
with a legend (as appropriately completed under the circumstances) in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE CONSTITUTE
["VESTAR SECURITIES"], ["PRO-FAC SECURITIES"], ["EMPLOYEE
SECURITIES"] UNDER A CERTAIN SECURITYHOLDERS AGREEMENT DATED
AS OF AUGUST 19, 2002 AMONG THE ISSUER OF SUCH SECURITIES
(THE "COMPANY") AND CERTAIN OF THE COMPANY'S
31
SECURITYHOLDERS AND, AS SUCH, ARE SUBJECT TO CERTAIN VOTING
PROVISIONS, PURCHASE RIGHTS AND RESTRICTIONS ON TRANSFER SET
FORTH IN THE SECURITYHOLDERS AGREEMENT. A COPY OF SUCH
SECURITYHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY
THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
(b) Restricted Securities. Each instrument or certificate
evidencing Securities and each instrument or certificate issued in exchange or
upon the Transfer of any Securities shall be stamped or otherwise imprinted with
a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED OR SOLD UNLESS IT HAS BEEN REGISTERED UNDER THE
SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE (AND, IN SUCH CASE, AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY SHALL HAVE BEEN
DELIVERED TO THE COMPANY TO THE EFFECT THAT SUCH OFFER OR
SALE IS NOT REQUIRED TO BE REGISTERED UNDER THE SECURITIES
ACT)."
(c) Removal of Legends. Whenever in the opinion of the Company
and counsel reasonably satisfactory to the Company (which opinion shall be
delivered to the Company in writing) the restrictions described in any legend
set forth above cease to be applicable to any Securities, the holder thereof
shall be entitled to receive from the Company, without expense to the holder, a
new instrument or certificate not bearing a legend stating such restriction.
8.3 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
8.4 Entire Agreement. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
8.5 Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and the Securityholders and any
subsequent holders of Securities and the respective successors and assigns of
each of them, so long as they hold Securities.
32
8.6 Counterparts. This Agreement may be executed in separate
counterparts (including by means of telecopied signature pages) each of which
shall be an original and all of which taken together shall constitute one and
the same agreement.
8.7 Remedies. The Company and the Securityholders shall be
entitled to enforce their rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement (including
costs of enforcement) and to exercise all other rights existing in their favor.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the
Company or any Securityholder may in its or his sole discretion apply to any
court of law or equity of competent jurisdiction for specific performance or
injunctive relief (without posting a bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.
8.8 Notices. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or mailed first class
mail (postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated on the Company's records, or at such address
or to the attention of such other person as the recipient party has specified by
prior written notice to the sending party. Notices will be deemed to have been
given hereunder when sent by facsimile (receipt confirmed), delivered
personally, five days after deposit in the U.S. mail and one day after deposit
with a reputable overnight courier service. The Company's address is:
Agrilink Holdings LLC
c/o Vestar Capital Partners IV, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with copies (which shall not constitute notice to the Company)
to:
Vestar Capital Partners IV, L.P.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx and General Counsel
Facsimile: (000) 000-0000
33
and
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
8.9 Governing Law. The Delaware Limited Liability Company Act
(and, following the conversion of the Company into a corporation or the Company
being merged into, or otherwise succeeded by, a corporation, the relevant state
corporation law) shall govern all questions arising under this Agreement
concerning the relative rights of the Company and its equityholders. All other
questions concerning the construction, validity and interpretation of this
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Delaware applicable to contracts made and to be performed
in the State of Delaware, without giving effect to any choice of law or conflict
of law rules or provisions (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware. The parties hereto hereby irrevocably and
unconditionally submit to the exclusive jurisdiction of any State or Federal
court sitting in Wilmington, Delaware over any suit, action or proceeding
arising out of or relating to this Agreement. The parties hereby agree that
service of any process, summons, notice or document by U.S. registered mail
addressed to any such party shall be effective service of process for any
action, suit or proceeding brought against a party in any such court. The
parties hereto hereby irrevocably and unconditionally waive any objection to the
laying of venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. The parties hereto agree that a final
judgment in any such suit, action or proceeding brought in any such court shall
be conclusive and binding upon any party and may be enforced in any other courts
to whose jurisdiction any party is or may be subject, by suit upon such
judgment.
8.10 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
8.11 Waiver of Jury Trial. Each of the parties hereto waives
any right it may have to trial by jury in respect of any litigation based on,
arising out of, under or in connection with this Agreement or any course of
conduct, course of dealing, verbal or written statement or action of any party
hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOLLOW]
34
IN WITNESS WHEREOF, the parties hereto have executed this
Securityholders Agreement on the day and year first above written.
AGRILINK HOLDINGS LLC
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
VESTAR/AGRILINK HOLDINGS LLC
By: Vestar Capital Partners IV, L.P.,
its Managing Member
By: Vestar Associates IV, L.P.,
its General Partner
By: Vestar Associates Corporation IV,
its General Partner
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
PRO-FAC COOPERATIVE, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Chief Financial
Officer
[SIGNATURE PAGES CONTINUE BELOW]
[Signature Page of Securityholders Agreement]
VESTAR/AGRILINK ASSOCIATES HOLDINGS LLC
By: Vestar Associates IV, L.P.,
its Manager
By: Vestar Associates Corporation IV,
its General Partner
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
VESTAR/AGRILINK ASSOCIATES II HOLDINGS LLC
By: Vestar Associates IV, L.P.,
its Manager
By: Vestar Associates Corporation IV,
its General Partner
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
XXXXXXXX STREET PARTNERS V
By: /s/ Xxxxxxxxx Xxxxx
---------------------------
Name: Xxxxxxxxx Xxxxx
Title: Managing Director
[Signature Page of Securityholders Agreement]
