1
Exhibit 10.9
AMENDED AND RESTATED
INVESTORS AGREEMENT
dated as of
July 11, 1997
among
DLJ MERCHANT BANKING PARTNERS, L.P.,
DLJ INTERNATIONAL PARTNERS, C.V.,
DLJ OFFSHORE PARTNERS, C.V.,
DLJ MERCHANT BANKING FUNDING, INC.,
DLJ CAPITAL CORPORATION,
SPROUT GROWTH II, L.P.,
SPROUT CEO FUND, L.P.,
DLJ MERCHANT BANKING PARTNERS II, L.P.,
DLJ MERCHANT BANKING PARTNERS XX-X, X.X.,
XXX XXXXXXXX XXXXXXXX XX, X.X.,
XXX DIVERSIFIED PARTNERS, L.P.,
DLJ DIVERSIFIED PARTNERS-A, L.P.,
DLJMB FUNDING II, INC.,
DLJ FIRST ESC LLC,
DLJ EAB PARTNERS, L.P.,
DLJ MILLENNIUM PARTNERS, L.P.,
UK INVESTMENT PLAN 1997 PARTNERS,
NEBCO XXXXX HOLDING COMPANY,
NEBCO XXXXX DISTRIBUTORS, INC.,
XXXXXXX INDUSTRIES, INC.,
XXXXXXX INCORPORATED
and
ORKLA ASA
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions....................................................2
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.1. Composition of the Boards of Directors.........................9
SECTION 2.2. Removal........................................................9
SECTION 2.3. Vacancies......................................................9
SECTION 2.4. Actions Requiring Consent of the DLJ Directors................10
SECTION 2.5. Termination of Rights and Obligations.........................12
SECTION 2.6. Action by the Board...........................................13
SECTION 2.7. Articles of Incorporation and Bylaws..........................13
ARTICLE 3
RESTRICTIONS ON TRANSFER
SECTION 3.1. General.......................................................13
SECTION 3.2. Legend on Securities..........................................15
SECTION 3.3. Permitted Transferees.........................................15
SECTION 3.4. Certain Optional Redemptions..................................16
ARTICLE 4
RIGHT OF FIRST OFFER; RIGHT TO PARTICIPATE IN A TRANSFER; PREEMPTIVE
RIGHTS; IMPROPER TRANSFER
SECTION 4.1. Right of First Offer..........................................16
SECTION 4.2. Right to Participate in a Transfer............................18
SECTION 4.3. Preemptive Rights.............................................20
SECTION 4.4. Improper Transfer.............................................21
SECTION 4.5. Certain Provisions Relating to Orkla With Respect
to Sections 4.2 and 4.3.....................................21
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.1. Demand Registration...........................................22
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SECTION 5.2. Incidental Registration, Rules 144 and 144A...................24
SECTION 5.3. Holdback Agreements...........................................26
SECTION 5.4. Registration Procedures.......................................26
SECTION 5.5. Indemnification by the Issuer.................................29
SECTION 5.6. Indemnification by Participating Holders......................30
SECTION 5.7. Conduct of Indemnification Proceedings........................30
SECTION 5.8. Contribution..................................................31
SECTION 5.9. Participation in Public Offering..............................32
SECTION 5.10. Other Indemnification.........................................32
ARTICLE 6
RIGHT TO REQUIRE REPURCHASE; XXXXXXX CALL
SECTION 6.1. Right to Require Repurchase...................................33
SECTION 6.2. Method of Exercising Repurchase Right.........................33
SECTION 6.3. Xxxxxxx Call..................................................33
ARTICLE 7
CERTAIN COVENANTS AND AGREEMENTS
SECTION 7.1. Confidentiality...............................................34
SECTION 7.2. Indirect Action; No Inconsistent Agreements...................35
SECTION 7.3. Certain Matters Relating to Orkla Warrants....................35
SECTION 7.4. Dilution of Initial Warrants; Consent to Issuance of Notes....36
ARTICLE 8
MISCELLANEOUS
SECTION 8.1. Entire Agreement..............................................37
SECTION 8.2. Binding Effect; Benefit.......................................37
SECTION 8.3. Assignability.................................................37
SECTION 8.4. Amendment; Waiver; Termination................................37
SECTION 8.5. Notices.......................................................38
SECTION 8.6. Headings......................................................39
SECTION 8.7. Counterparts..................................................39
SECTION 8.8. Applicable Law................................................39
SECTION 8.9. Specific Enforcement..........................................40
SECTION 8.10. Consent to Jurisdiction.......................................40
SECTION 8.11. Orkla/Xxxxxxx Letter Agreement................................40
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AMENDED AND RESTATED
INVESTORS AGREEMENT
AMENDED AND RESTATED AGREEMENT dated as of July 11, 1997 among DLJ Merchant
Banking Partners, L.P., a Delaware limited partnership ("DLJMB"), DLJ
International Partners, C.V., a Netherlands Antilles limited partnership, DLJ
Offshore Partners, C.V., a Netherlands Antilles limited partnership, DLJ
Merchant Banking Funding, Inc., a Delaware corporation, DLJ Capital Corporation,
a Delaware corporation, Sprout Growth II, L.P., a Delaware limited partnership,
Sprout CEO Fund, L.P., a Delaware limited partnership, DLJ First ESC LLC, a
Delaware limited liability company (each of DLJ First ESC LLC, exccept in
connection with such limited liability company's acquisition or holding of
Senior Preferred Stock (as defined below), Junior Preferred Stock (as defined
below), in which case such limited liability company shall be referred to as a
New DLJ Entity (as defined below), and the other foregoing entities, an "INITIAL
DLJ ENTITY" and, collectively, the "INITIAL DLJ ENTITIES"), DLJ Merchant Banking
Partners II, L.P., a Delaware limited partnership, DLJ Merchant Banking Partners
II-A, L.P., a Delaware limited partnership, DLJ Offshore Partners II, C.V., a
Netherlands Antilles limited partnership, DLJ Diversified Partners, L.P., a
Delaware limited partnership, DLJ Diversified Partners-A, L.P., a Delaware
limited partnership, DLJMB Funding II, Inc., a Delaware corporation, DLJ EAB
Partners, L.P., a Delaware limited partnership, DLJ Millennium Partners, L.P., a
Delaware limited partnership, UK Investment Plan 1997 Partners, a Delaware
partnership (each of the foregoing, excluding the Initial DLJ Entities, but
including DLJ First ESC LLC in its capacity as described above a "NEW DLJ
ENTITY" and collectively, the "NEW DLJ ENTITIES" and each of the foregoing,
together with each of the Initial DLJ Entities, a "DLJ ENTITY", and
collectively, the "DLJ ENTITIES"), Nebco Xxxxx Distributors, Inc. (formerly XXX
Holdings, Inc.), a Delaware corporation ("XXX"), Orkla ASA, a Norwegian
corporation ("ORKLA"), Xxxxxxx Industries, Inc., a Delaware corporation
("XXXXXXX") (XXX, Orkla and Xxxxxxx are referred to as the "OTHER INVESTORS"
and, together with the DLJ Entities and Xxxxxxx, Incorporated,, the
"INVESTORS"), Nebco Xxxxx Holding Company, a Delaware corporation (the "ISSUER")
and Xxxxxxx Incorporated, a Delaware corporation,
W I T N E S S E T H:
WHEREAS, pursuant to the Securities Purchase and Exchange Agreement dated
as of the date hereof (the "SECURITIES PURCHASE AGREEMENT") among the DLJ
Entities, Xxxxxxx and the Issuer, the New DLJ Entities, concurrently with the
execution of this Agreement, are acquiring securities of the Issuer;
WHEREAS, the Initial DLJ Entities, the Other Investors, the Issuer and
Xxxxxxx, Incorporated entered into an Investors Agreement dated January 25,
1996; and
WHEREAS, the parties hereto desire to amend and restate such Investors
Agreement to govern certain of their rights, duties and obligations after
consummation of the transactions contemplated by the Securities Purchase
Agreement;
The parties hereto agree as follows:
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ARTICLE 1.
DEFINITIONS
SECTION 1.1. Definitions. (a) The following terms, as used herein, have the
following meanings:
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person.
For the purpose of this definition, the term "CONTROL" (including, with
correlative meanings, the terms "CONTROLLING", "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities, by
contract or otherwise, provided that no securityholder of the Issuer shall be
deemed an Affiliate of any other securityholder solely by reason of any
investment in the Issuer.
"AFFILIATED EMPLOYEE BENEFIT TRUST" means any trust that is a successor to
the assets held by a trust established under an employee benefit plan subject to
ERISA or any other trust established directly or indirectly under such plan or
any other such plan having the same sponsor.
"AMERISERVE" means AmeriServe Food Distribution, Inc., a Nebraska
corporation.
"AMERISERVE SHARES" means the shares of common stock, par value $10.00 per
share, of AmeriServe and any other equity securities of AmeriServe.
"BOARD" or "BOARD OF DIRECTORS" means the board of directors of the Issuer.
"BONA FIDE INITIAL PUBLIC OFFERING" means an Initial Public Offering in
which the Issuer receives at least $100,000,000 of net proceeds.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.
"BYLAWS" means the Bylaws of the Issuer as in effect as of the Closing
Date.
"CHARTER" means the Restated Certificate of Incorporation of the Issuer, as
amended and in effect as of the Closing Date.
"CLOSING DATE" means July 11, 1997.
"COMMON STOCK" means the Class A and Class B Common Stock, par value $.01
per share, of the Issuer.
"COMPETITOR" means any Person which is in the food service distribution and
related services businesses and which competes substantially and directly with
the business of the Issuer or any of its Subsidiaries.
"CONTROL" shall have the meaning set forth in the definition of
"AFFILIATE".
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"DLJ AFFILIATE" shall have the meaning set forth in the definition of
"PERMITTED TRANSFEREE".
"DLJ ASSOCIATE" shall have the meaning set forth in the definition of
"PERMITTED TRANSFEREE".
"DLJ ENTITY" and "DLJ ENTITIES" shall have the respective meanings set
forth in the first paragraph hereof, subject to Section 1.1(b).
"DLJ PARTNER" shall have the meaning set forth in the definition of
"PERMITTED TRANSFEREE".
"DLJ WARRANTS" means the warrants exercisable to purchase Common Stock
issued to the DLJ Entities pursuant to the Securities Purchase Agreement.
"DLJ WARRANT SHARES" means the shares of Common Stock issuable by the
Issuer upon the exercise of the DLJ Warrants.
"DLJMB" shall have the meaning set forth in the first paragraph hereof.
"DLJMB II" shall mean DLJ Merchant Banking II, Inc., a Delaware
corporation.
"EQUITY SECURITIES" means Common Stock, securities convertible into or
exchangeable for Common Stock and options, warrants or other rights to acquire
Common Stock.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FULLY DILUTED" means, with respect to Common Stock and without
duplication, all outstanding shares and all shares issuable in respect of
securities convertible into or exchangeable for Common Stock, stock appreciation
rights or options, warrants and other irrevocable rights to purchase or
subscribe for Common Stock or securities convertible into or exchangeable for
Common Stock, and any Person shall be deemed to own such number of Fully Diluted
shares of Common Stock as such Person has the right to acquire from any other
Person (including the Issuer).
"XXXXXXX" shall have the meaning set forth in the first paragraph hereof.
"INDENTURE" means that certain Indenture dated as of the Closing Date by
and between the Issuer and State Street Bank and Trust Company of Connecticut as
trustee, as amended from time to time, relating to the Notes.
"INITIAL DLJ ENTITIES" and "INITIAL DLJ ENTITY" shall have the respective
meanings set forth in the first paragraph hereof.
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"INITIAL DLJ WARRANTS" means the warrants exercisable to purchase Common
Stock issued to the Initial DLJ Entities pursuant to the Initial Securities
Purchase Agreement.
"INITIAL PUBLIC OFFERING" means the initial sale after the date hereof of
Common Stock pursuant to an effective registration statement under the
Securities Act (other than a registration statement on Form S-8 or any successor
form).
"INITIAL REGISTRATION DATE" means (a) with respect to the Initial Warrants,
the earlier of (i) the date of the successful completion of an Initial Public
Offering and (ii) January 25, 2001, and (b) with respect to all other
Registerable Securities, the one-year anniversary of the Closing Date.
"INITIAL SECURITIES PURCHASE AGREEMENT" means the Securities Purchase
Agreement dated January 25, 1996 by and among the Initial DLJ Entities, the
Other Investors and the Issuer.
"INITIAL WARRANTS" means the warrants exercisable to purchase Common Stock
issued to the Initial DLJ Entities pursuant to the Initial Securities Purchase
Agreement and any warrants exercisable for Common Stock issued to Orkla in
replacement of the Orkla Warrants.
"INITIAL WARRANT SHARES" means the shares of Common Stock issuable by the
Issuer upon the exercise of the Initial Warrants and any shares of Common Stock
issued to Orkla in respect of the Orkla Warrants or Warrants.
"INVESTORS" shall have the meaning set forth in the first paragraph hereof.
"IPO PRICE" means the per share offering price to the public of Common
Stock issued pursuant to the Initial Public Offering at the time of the Initial
Public Offering.
"ISSUER" shall have the meaning set forth in the first paragraph hereof.
"JUNIOR PREFERRED STOCK" means the Issuer's 15% Junior Exchangeable
Preferred Stock due 2009.
"NASD" shall have the meaning set forth in the definition of "REGISTRATION
EXPENSES".
"NEW DLJ ENTITIES" and "NEW DLJ ENTITY" shall have the respective meanings
set forth in the first paragraph hereof.
"XXX" shall have the meaning set forth in the first paragraph hereof.
"NOTES" means the Issuer's 12-3/8% Senior Discount Notes issued pursuant to
the Indenture.
"ORKLA" shall have the meaning set forth in the first paragraph hereof.
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"ORKLA WARRANTS" means the warrants exercisable for common stock $0.01 par
value per share of XXX representing, at the time of their original issuance, a
6.40% (subject to adjustment) indirect interest in the Issuer.
"ORKLA WARRANT SHARES" means the shares of XXX common stock issuable upon
the exercise of the Orkla Warrants.
"OTHER INVESTORS" shall have the meaning set forth in the first paragraph
hereof, subject to Section 1.1(c).
"PERCENTAGE OWNERSHIP" means, with respect to any Investor or any group of
Investors at any time, (i) the number of shares of Fully Diluted Common Stock
that such Investor or group of Investors owns at such time, divided by (ii) the
total number of shares of Fully Diluted Common Stock at such time; provided that
for purposes of any such calculation the Initial DLJ Entities and New DLJ
Entities shall each be considered a separate group of Investors.
"PERMITTED TRANSFEREE" means:
(i) in the case of any DLJ Entity, (A) any other DLJ Entity, (B) any
general or limited partner of any such entity (a "DLJ PARTNER"), and any
corporation, partnership, Affiliated Employee Benefit Trust or other entity
which is an Affiliate of any DLJ Partner (collectively, the "DLJ
AFFILIATES"), (C) any managing director, general partner, director, limited
partner, officer or employee of such DLJ Entity or a DLJ Affiliate, or the
heirs, executors, administrators, testamentary trustees, legatees or
beneficiaries of any of the foregoing Persons referred to in this clause
(C) (collectively, "DLJ ASSOCIATES"), (D) any trust, the beneficiaries of
which, or any corporation, limited liability company or partnership, the
stockholders, members or general or limited partners of which, include only
such XXX Xxxxxx, XXX Xxxxxxxxxx, XXX Associates, their spouses or their
lineal descendants and (E) a voting trustee for one or more DLJ Entities,
DLJ Affiliates or DLJ Associates under the terms of a voting trust; and
(ii) in the case of any Other Investor, (A) the Issuer, (B) any
Subsidiary of such Other Investor, (C) any Affiliate of such Other Investor
or (D) any director, officer or employee of such Other Investor or any
Affiliate of such Other Investor.
"PERSON" means an individual, corporation, partnership, association, trust
or other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof.
"PRE-EXISTING XXXXXXX LOAN" means the loan from the Issuer to Xxxxxxx
existing as of the date hereof in the amount of $2.6 million.
"PREFERRED STOCK" means at any time, all shares of each class or series of
preferred stock of the Issuer outstanding at such time, other than the Senior
Preferred Stock and the Junior Preferred Stock.
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"PRINCIPAL COMMITTEE" shall mean any of the executive, audit, compensation
or similar committees of the Board of Directors.
"REGISTERABLE SECURITIES" means (A) with respect to the DLJ Entities and
their successors and permitted assigns, the Senior Preferred Stock, the Junior
Preferred Stock, Warrants, the Warrant Shares and any shares of Common Stock
which are acquired by any of the DLJ Entities and (B) with respect to Orkla and
its successors and permitted assigns, any shares of Common Stock which are
acquired by Orkla in accordance with this Agreement, in each case until (i) a
registration statement covering such securities has been declared effective by
the SEC and such securities have been disposed of pursuant to such effective
registration statement, (ii) such Securities are sold under circumstances in
which all of the applicable conditions of Rule 144 (or any similar provisions
then in force) under the Securities Act are met or such shares may be sold
pursuant to Rule 144(k) or (iii) such securities are otherwise transferred, the
Issuer has delivered a new certificate or other evidence of ownership for such
securities not bearing the legend required pursuant to this Agreement and such
securities may be resold without subsequent registration under the Securities
Act.
"REGISTRATION EXPENSES" means (i) all registration and filing fees, (ii)
fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Issuer (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
(v) reasonable fees and disbursements of counsel for the Issuer and customary
fees and expenses for independent certified public accountants retained by the
Issuer (including expenses relating to any comfort letters or costs associated
with the delivery by independent certified public accountants of a comfort
letter or comfort letters requested pursuant to Section 5.4(h) hereof), (vi) the
reasonable fees and expenses of any special experts retained by the Issuer in
connection with such registration, (vii) reasonable fees and expenses of one
counsel for the Investors participating in the offering, selected by the DLJ
Entities, (viii) fees and expenses in connection with any review of underwriting
arrangements by the National Association of Securities Dealers, Inc. (the
"NASD") including fees and expenses of any "QUALIFIED INDEPENDENT UNDERWRITER",
and (ix) fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, excluding underwriting fees, discounts or commissions..
"RULE 144 OR RULE 144A" means Rule 144 and Rule 144A, respectively, (or any
successor provisions) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Common Stock, the Preferred Stock, the Senior
Preferred Stock, the Junior Preferred Stock, the Warrants and any other
securities of the Issuer.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES PURCHASE AGREEMENT" shall have the meaning set forth in the
recitals hereto.
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"SENIOR PREFERRED STOCK" means the Issuer's 13-1/2% Senior Exchangeable
Preferred Stock due 2009.
"SHARES" means all shares of Common Stock and any other voting securities
of the Issuer held by the Investors.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"THIRD PARTY" means a prospective purchaser of Shares in an arm's-length
transaction from an Investor where such purchaser is not a Permitted Transferee
of such Investor.
"TRANSACTION DOCUMENTS" means this Agreement, the Initial Securities
Purchase Agreement, the Securities Purchase Agreement, the Certificate of
Designations of the Senior Preferred Stock, the Certificate of Designations of
the Junior Preferred Stock and the Warrants..
"UNDERWRITTEN PUBLIC OFFERING" means an underwritten public offering of
Registrable Securities of the Issuer pursuant to an effective registration
statement under the Securities Act.
"WARRANTS" means the DLJ Warrants and the Initial Warrants.
"WARRANT SHARES" means the DLJ Warrant Shares and the Initial Warrant
Shares.
(a) The term "INITIAL DLJ ENTITIES", or "NEW DLJ ENTITIES", as the case may
be, to the extent such entities shall have transferred any of their Securities
to "PERMITTED TRANSFEREES", shall mean the Initial DLJ Entities or the New DLJ
Entities, as the case may be, and the Permitted Transferees of the Initial DLJ
Entities or the New DLJ Entities, as the case may be, taken together, and any
right or action that may be taken at the election of the Initial DLJ Entities or
the New DLJ Entities, as the case may be, may be taken at the election of the
Initial DLJ Entities or the New DLJ Entities, as the case may be, and such
Permitted Transferees, as the case may be.
(b) With respect to each Other Investor the term "OTHER INVESTOR", to the
extent such Other Investor shall have transferred any of its Securities to
"PERMITTED TRANSFEREES", shall mean such Other Investor and the Permitted
Transferees of such Other Investor, as the case may be, and any right or action
that may be taken at the election of such Other Investor may be taken at the
election of such Other Investor and the Permitted Transferees of such Other
Investor, as the case may be.
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(c) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
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AmeriServe Board 2.1(b)
Cause 2.2
Confidential Information 7.1(b)
Demand Registration 5.1(a)
Disposition Date 2.5
DLJ Director 2.1
Xxxxxxx Restriction Termination Date 3.1(c)
Holders 5.1(a)(ii)
Incidental Registration 5.2(a)
Indemnified Party 5.7
Indemnifying Party 5.7
Inspectors 5.4(g)
Investor 7.3
Maintenance Securities 4.3(a)
Maximum Offering Size 5.1 (d)
Number of Shares 4.2(a)
Preemptive Rights 4.3(a)
Private Transaction 3.1(a)
Records 5.4(g)
Representatives 7.1(b)
Restriction Termination Date 3.1(a)
Section 4.1 Offer 4.1(a)
Section 4.1 Offer Notice 4.1(a)
Section 4.1 Offer Price 4.1(a)
Section 4.2 Agreement 4.2(a)
Section 4.2 Notice 4.2
Section 4.2 Notice Period 4.2(a)
Section 4.2 Pro Rata Portion 4.2(a)
Section 4.2 Sale 4.2(a)
Section 4.2 Sale Price 4.2(a)
Section 4.2 Seller 4.2(a)
Section 4.2/4.3 Entities 4.2(a)
Selling Entities 6.1
Selling Party 4.1(a)
Selling Investor 5.1(a)
transfer 3.1(a)
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ARTICLE 2.
CORPORATE GOVERNANCE
SECTION 2.1. Composition of the Boards of Directors. (a) Subject
to Section 2.5, the Board shall initially consist of not less than five members
and not more than ten members, of whom one (the "DLJMB DIRECTOR") shall be
designated by DLJMB, one (the "DLJMB II DIRECTOR") shall be designated by DLJMB
II, and the remainder of whom shall be designated by Xxxxxxx. Each Investor
entitled to vote for the election of directors to the Board agrees that it will
vote its Shares or execute consents, as the case may be, and take all other
necessary action (including causing the Issuer to call a special meeting of
shareholders) in order to ensure that the composition of the Board is as set
forth in this Section 2.1.
(a) The composition of the board of directors (the "AMERISERVE
BOARD") of AmeriServe shall be identical to that of the Board, and the
provisions applicable to members of the Board set forth in this Agreement shall
apply, mutatis mutandis, to members of the AmeriServe Board.
SECTION 2.2. Removal. (a) Each Investor agrees that if, at any
time, it is then entitled to vote for the removal of directors of the Issuer, it
will not vote any of its Shares in favor of the removal of any director who
shall have been designated pursuant to Section 2.1 unless such removal shall be
for Cause (as defined below) or the Person entitled to designate such director
shall have consented to such removal in writing.
(a) Removal for "CAUSE" shall mean removal of a director because
of such director's (i) willful and continued failure to perform substantially
his duties with the Issuer in such director's established position, (ii) willful
conduct which is significantly injurious to the Issuer monetarily or otherwise,
(iii) abuse of any illegal drug or other controlled substance or habitual
intoxication, (iv) conviction for, or guilty plea to, a crime involving moral
turpitude or (v) conviction for, or guilty plea to, a felony. Subject to Section
2.3, nothing contained in this Section 2.2 shall affect the right of any
Investor to designate a member of the Board pursuant to Section 2.1.
SECTION 2.3. Vacancies. (a) If, as a result of the death,
disability, retirement, resignation, removal (with or without Cause) or
otherwise there shall exist or occur any vacancy on the Board, then the Person
entitled under Section 2.1 to designate or nominate such director whose death,
disability, retirement, resignation or removal resulted in such vacancy, may,
subject to the provisions of Sections 2.1 and 2.5, designate another individual
to fill such capacity and serve as a director of the Issuer. Each Investor
agrees that if such Investor is then entitled to vote for the election of such
designee as a director of the Issuer, it will vote its Shares, or execute a
written consent, as the case may be, in order to ensure that the designee be
elected to the Board.
(b) The Board shall create compensation and audit committees
within 180 days from the date hereof, as well as such other committees as it may
determine. Each party hereto agrees that the DLJMB Director or the DLJMB II
Director shall be a member on each Principal Committee.
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SECTION 2.4. Actions Requiring Consent of the DLJ Directors. Until the
earlier of such time as (a) the Issuer has completed a Bona Fide Initial Public
Offering and all the Senior Preferred Stock and the Junior Preferred Stock owned
by the DLJ Entities have either been redeemed by the Issuer or transferred to
Persons other than the DLJ Entities or (b) the DLJ Entities and their Permitted
Transferees shall own, or have the right to acquire, in the aggregate less than
fifty percent (50%) of the total shares of Common Stock (with, for purposes
hereof, any DLJ Warrants and any Initial DLJ Warrants being counted on an
as-exercised basis as Common Stock) initially acquired by the DLJ Entities from
the Issuer pursuant to the Initial Securities Purchase Agreement and pursuant to
the Securities Purchase Agreement (the percentage set forth above shall be
subject to appropriate downward adjustment in the event of an acquisition of
securities by Xxxxxxx pursuant to Section 6.3 hereof or the operation of either
of the special adjustments described in Section 8 of the Initial Warrants or in
Section 8 of the DLJ Warrants), the Issuer shall not (and each Other Investor
shall not permit the Issuer to), and the Issuer shall not permit any of its
Subsidiaries to, take or commit to take any of the following actions without the
affirmative approval of (x) a majority of the Board of Directors and (y) the
DLJMB Director and the DLJMB II Director:
(i) issue, sell, dividend, exchange, cancel, retire or otherwise
dispose of any shares of its capital stock or any warrants, options or
other rights to purchase, substitute for or acquire shares of capital stock
or securities convertible into or exchangeable for any shares of capital
stock of the Issuer, AmeriServe or any other Subsidiary of the Issuer or
amend, alter or otherwise change the capital structure of the Issuer,
AmeriServe or any other Subsidiary of the Issuer, except for shares of
Common Stock issued pursuant to the Warrants or shares of capital stock
issued to officers or employees of the Issuer, AmeriServe or any other
Subsidiary of the Issuer in accordance with stock option or other employee
benefit plans of the Issuer or AmeriServe, provided the amount of shares
issuable under such stock option or employee benefit plans is not in excess
of 7.5% of the outstanding shares of the Issuer on a fully diluted basis or
as contemplated by the AmeriServe Documents (as defined in the Securities
Purchase Agreement) and transactions not resulting in a wholly-owned
Subsidiary of either the Issuer or another Subsidiary of the Issuer ceasing
to be such;
(ii) incur, assume, guarantee, refinance, renew, or alter the material
terms of indebtedness for borrowed money of the Issuer involving a
principal amount in excess of $5,000,000;
(iii) amend or alter any key business strategy;
(iv) enter into or amend any contract, agreement or obligation
involving an amount in excess of $2,000,000 and which entry or amendment is
not in the ordinary course of business;
(v) enter into any line of business other than the food service
distribution and related services businesses;
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(vi) enter into any contract or agreement or otherwise transact, or
permit any of its Subsidiaries to enter into any contract or agreement or
otherwise transact, with any Other Investor or Affiliate of the Issuer or
any of its Subsidiaries, where the transaction in question involves an
amount in excess of $100,000, other than (A) transactions pursuant to and
in accordance with any agreement or arrangement in effect as of the date
hereof (and identified on Schedule 3.23 to the Securities Purchase
Agreement), (B) any transaction between or among any wholly-owned
subsidiary of the Issuer which is wholly owned by the Issuer at the time of
such transaction, (C) the purchase by the Issuer of Xxxxxxx'x interest in
Xxxxxxx Warehouse Properties for $1.5 million in cash, (D) loans and
advances from AmeriServe to Xxxxxxx (to the extent permitted by the terms
of the Notes and the Credit Agreement (as defined in the Securities
Purchase Agreement)) not to exceed $5 million in aggregate, and (E) loans
and advances to be made only on the Closing Date from the Issuer to Xxxxxxx
not to exceed $2.4 million in the aggregate (excluding the Pre-Existing
Xxxxxxx Loan); provided that, subject to clause (1) below, any such loan or
advance made pursuant to this Clause (E) (excluding the Pre-Existing
Xxxxxxx Loan) shall be required by its terms to be repaid in full not later
than the fourth anniversary of the Closing Date and to have an annual
interest rate of 8% on all outstanding principal and interest; and provided
further that no dividend or other distribution on Common Stock may be made
without the consent of DLJMB and DLJMB II until the principal and interest
of any such loan or advance (together with that of the Pre-Existing Xxxxxxx
Loan) is paid in full; and provided further that, for so long as any amount
of principal or interest of any loan or advance made pursuant to this
Clause (E) or Clause (D) of this Section 2.4 (including the Pre-Existing
Xxxxxxx Loan) is outstanding, (1) Xxxxxxx shall repay on any demand made by
the Issuer all or any portion of any such loan or advance (including the
Pre-Existing Xxxxxxx Loan) in order that the proceeds thereon may be used
to pay any third-party expenses of the Issuer as such expenses become due,
(2) the Issuer shall make any such demand promptly and in advance of the
payment of the relevant third-party expense in order that it shall have
sufficient proceeds from the repayment by Xxxxxxx as a result of such
demand to pay such third-party expense promptly, and (3) the Issuer shall,
upon receipt of such repayment as a result of such demand, promptly pay all
third-party expense to which such demand related;
(vii) effect or enter into any contract or agreement providing for the
acquisition or disposition of assets (by merger, stock purchase or
otherwise), in one transaction or a series of related transactions, having
a fair market value in excess of $30,000,000, other than the acquisition of
the PFS Business and the PFS Canadian Business (as defined in the Asset
Purchase Agreement dated May 23, 1997, as amended, between PepsiCo, Inc.
and the Issuer), which shall not require such approval;
(viii) (A) dissolve or liquidate, or adopt any plan of dissolution or
liquidation, (B) consent to or commence any suit, proceeding or other
action or file a petition or consent to a petition (1) under any existing
or future law of any jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding up,
liquidation, dissolution,
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composition or other relief with respect to it or (2) seeking appointment
of a receiver, liquidator, assignee, trustee, custodian or other similar
official for it or all or any substantial part of its assets, (C) make any
assignment for the benefit of creditors, (D) admit in writing its inability
to pay its debts generally as they become due, or (E) voluntarily dissolve
itself;
(ix) alter, repeal, amend or adopt any provision of the articles or
certificate of incorporation, by-laws or other constituent documents of the
Issuer or any of its Subsidiaries or increase the number of directors
constituting the full Board or the full AmeriServe Board above 10 members;
provided, however, that the DLJ Entities hereby consent, in connection with
an Initial Public Offering, to an amendment to the Issuer's certificate of
incorporation and to its bylaws in which shares of Common Stock (including
shares of Common Stock obtainable through the exercise of Warrants) held by
all holders, including, without limitation, the DLJ Entities, XXX and
Orkla, immediately prior to the Initial Public Offering, become, on a
pro-rata basis, shares of Common Stock with a higher number of votes per
share than all other shares of Common Stock (including, without limitation,
all shares issued in connection with the Initial Public Offering) or
pursuant to which a new class of low-voting common stock is created and
sold in such Initial Public Offering; or
(x) enter into any contract or agreement providing for the merger of
the Issuer, AmeriServe or any other Subsidiary of the Issuer, other than
(i) a merger between any of the Issuer, AmeriServe or any other
wholly-owned Subsidiary of the Issuer or (ii) in connection with any
acquisition permitted by clause (vii) above.
SECTION 2.5. Termination of Rights and Obligations. The right of DLJMB, on
the one hand, or DLJMB II, on the other hand, to designate one member of the
Board pursuant to this Article 2 shall terminate at such date as the Initial DLJ
Entities and their Permitted Transferees, or the New DLJ Entities and their
Permitted Transferees, as the case may be, in the aggregate own and have the
right to acquire less than twenty percent (20%) of the total shares of Common
Stock (with, for purposes hereof, any Warrants being counted on an as-exercised
basis as Common Stock) initially acquired by the Initial DLJ Entities from the
Issuer pursuant to the Initial Securities Purchase Agreement, on the one hand,
or by the New DLJ Entities from the Issuer pursuant to the Securities Purchase
Agreement, on the other hand (each such date, but only as to the group of
investors whose ownership level declines beneath the 20% level referred to
above, the "DISPOSITION DATE"). The percentage set forth above shall be subject
to appropriate downward adjustment in the event of an acquisition of Securities
by Xxxxxxx pursuant to Section 6.3 hereof or the operation of either of the
special adjustments described in Section 8 of the Initial Warranty or in Section
8 of the DLJ Warrants. The occurrence of a Disposition Date with respect to
either of DLJMB or DLJMB II shall not affect the right of the other to designate
a member of the Board as described above. Subject to the foregoing, the
obligations imposed on Other Investors to give effect to the right of DLJMB, on
the one hand, and DLJMB II, on the other hand, to designate a director set forth
in Section 2.1 shall terminate on the relevant Disposition Date, if any, with
respect to DLJMB or DLJMB II, as the case may be.
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SECTION 2.6. Action by the Board. A quorum of the Board and of each
Principal Committee shall consist of a majority of the directors, or a majority
of the members of such Principal Committee, as the case may be, including the
DLJMB Director and the DLJMB II Director, or such of them as may serve on such
Principal Committee, as the case may be, provided that neither the DLJMB
Director nor the DLJMB II Director shall be required to constitute a quorum of
the Board or of any Principal Committee ( but without derogation of the
requirement set forth herein as to actions requiring the consent of the DLJMB
Director and the DLJMB II Director, which shall in any event require such
consent) if the DLJMB Director and/or the DLJMB II Director, as the case may be,
shall have been provided with at least 20 days' notice of a proposed meeting by
certified mail, and shall have been unavailable at the proposed time of such
meeting or at any other reasonably convenient time not more than 10 days
following such proposed time. Subject to Section 2.4, all actions of the Board
shall require the affirmative vote of at least a majority of the directors at a
duly convened meeting of the Board at which a quorum is present or the unanimous
written consent of the Board; provided that, in the event there is a vacancy on
the Board in the DLJMB Director position or the DLJMB II Director position and
an individual has been nominated to fill such vacancy, the first order of
business shall be to fill such vacancy and provided, further, that the DLJ
Entities agree that the DLJMB Director and the DLJMB II Director shall use
reasonable efforts to be present (either personally or otherwise) for each duly
called meeting of the Board. DLJMB agrees to nominate promptly a replacement
DLJMB Director in the event of a vacancy in such position, and DLJMB II agrees
to nominate promptly a replacement DLJMB II Director in the event of a vacancy
in such position.
SECTION 2.7. Articles of Incorporation and Bylaws. (a) The Charter and
Bylaws are attached hereto as Exhibits A and B.
(b) Each Investor shall vote all of its Shares, if any, and shall take all
other actions necessary, to ensure that the Charter and Bylaws facilitate and do
not at any time conflict with any provision of this Agreement.
(c) All Preferred Stock outstanding immediately prior to the Closing Date
(other than that portion of the $2.35 million initial face amount of 8% Senior
Convertible Preferred Stock of the Issuer which remains outstanding at such
time) and all Junior Preferred Stock purchased by Xxxxxxx from the DLJ Entities
pursuant to and in accordance with Section 6.3 that, upon the occurrence of an
Initial Public Offering, would otherwise be outstanding or treasury shares will,
upon the Initial Public Offering, convert to Common Stock at the IPO Price.
ARTICLE 3.
RESTRICTIONS ON TRANSFER
SECTION 3.1. General. (a) Until the date of the completion of an Initial
Public Offering (the "RESTRICTION TERMINATION DATE"), neither any Initial DLJ
Entity nor Orkla may, directly or indirectly, sell, assign, transfer, grant a
participation in, pledge or otherwise dispose of ("TRANSFER") any Initial
Warrants or Initial Warrant Shares (or solicit any offers to buy or otherwise
acquire, or to take a pledge of, any of its Initial Warrants or Initial Warrant
Shares)
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except (i) transfers permitted by Section 3.3, (ii) transfers in a bona fide
Underwritten Public Offering upon exercise of registration rights pursuant to
Article 5, (iii) transfers pursuant to Rule 144 or Rule 144A (or any successor
provisions under the Securities Act) and (iv) subject to Section 4.1, transfers
to any other Person in any Private Transaction (as defined below); provided that
no Securities may be transferred pursuant to clause (iv) to any Person unless
such Person shall have agreed in writing to be bound by the terms of this
Agreement applicable to such Investor; and provided further that no Securities
may be transferred to a Competitor. As used herein, "PRIVATE TRANSACTION" means
any transfer not covered by clause (i), (ii) or (iii) above. Until the date of
the Restriction Termination Date, Orkla may not, directly or indirectly,
transfer any Orkla Warrants or Orkla Warrant Shares (or solicit any offers to
buy or otherwise acquire, or to take a pledge of, any of its Orkla Warrants or
Orkla Warrant Shares) except subject to Section 4.1, transfers permitted by
Section 3.3 and transfers to any Person in any Private Transaction provided that
no Orkla Warrants or Orkla Warrant Shares may be transferred pursuant to this
sentence to any Person unless such Person shall have agreed in writing to be
bound by the terms of this Agreement applicable to such Investor; and provided
further that no Orkla Warrants or Orkla Warrant Shares may be transferred to a
Competitor.
(b) At any time and from time to time, any DLJ Entity may, subject to
applicable securities laws, transfer freely without restriction, or solicit any
offers to buy or otherwise acquire or to take a pledge of, any or all of its
Senior Preferred Stock, Junior Preferred Stock and DLJ Warrants. The Issuer
shall use its reasonable efforts to assist any DLJ Entity and Orkla in any sale
of Securities permitted hereunder, including pursuant to a registration (or Rule
144/144A transaction) of such Securities pursuant to Article 5 hereof.
(c) Prior to the repayment in full of the Senior Preferred Stock and the
Junior Preferred Stock (the "XXXXXXX RESTRICTION TERMINATION DATE"), Xxxxxxx and
XXX and their Permitted Transferees may not transfer any Securities (or solicit
any offers to buy or otherwise acquire, or to take a pledge of, any of such
Securities), except transfers permitted by Section 3.3; provided that from and
after the Xxxxxxx Restriction Termination Date, Xxxxxxx and XXX and their
respective Permitted Transferees may, subject to Sections 4.2, 4.4 and 5.2,
transfer Securities, provided, however, that XXX and Xxxxxxx and their
respective Permitted Transferees may not (and Xxxxxxx and XXX may not
indirectly) transfer any shares of Preferred Stock, other than pursuant to
Section 3.3, until the earlier of (i) the Disposition Date and (ii) the
successful completion of an Initial Public Offering.
(d) No Investor may transfer any Securities at any time except in
compliance with applicable federal or state securities laws.
(e) Until the Xxxxxxx Restriction Termination Date, Xxxxxxx Incorporated
and Orkla shall continue to own, directly or through their controlled Affiliates
who are or become bound by this Agreement, in the aggregate at least 51% of the
outstanding voting securities, on a fully diluted basis, of Xxxxxxx. Prior to
the Xxxxxxx Restriction Termination Date, XXX shall not, and Xxxxxxx and Orkla
shall not, and shall not permit XXX to, without the prior consent of the DLJMB
Director and the DLJMB II Director, transfer, issue or cause or permit to be
transferred any equity securities of XXX (including any securities convertible
into or exchangeable for
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equity securities of XXX) to any Person other than an Investor and Permitted
Transferees of an Investor who become parties to this Agreement and bound by the
terms hereof. From and after the Xxxxxxx Restriction Termination Date, XXX,
Xxxxxxx, Orkla and their respective Permitted Transferees may transfer equity
securities of XXX, provided that any such transfer shall be structured in such a
manner that the DLJ Entities shall be entitled to exercise fully rights
substantially equivalent to the rights that would have been available under
Sections 4.2 and 5.2 had the transfer in question been of Securities of the
Issuer and in a manner and on a basis consistent with the economic and other
terms in such Sections, it being understood and agreed by the parties hereto
that the rights and benefits under this Agreement and the Securities owned by
the DLJ Entities shall in no event be impaired or diminished as a result of any
such actions. It is also agreed that the activities of XXX shall be limited to
owning and holding the equity securities of the Issuer, and that XXX will not
incur material debt or other material liabilities without the prior consent of
DLJMB, DLJMB II and Orkla, whose consent shall not be unreasonably withheld.
SECTION 3.2. Legend on Securities. (a) In addition to any other legend that
may be required, each certificate for Securities that is issued to any Investor
shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND
MAY NOT BE OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH.
THIS SECURITY IS ALSO SUBJECT TO AND HAS THE BENEFIT OF AN
AMENDED AND RESTATED INVESTORS AGREEMENT DATED AS OF JULY
11, 1997, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM
NEBCO XXXXX HOLDING COMPANY."
(a) If any Registerable Securities cease to be Registerable Securities, the
Issuer shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such securities without the first sentence
of the legend required by Section 3.2(a) endorsed thereon. If any Securities
cease to be subject to the restrictions on transfer set forth in this Agreement,
the Issuer shall, upon the written request of the holder thereof, issue to such
holder a new certificate evidencing such Securities without the second sentence
of the legend required by Section 3.2(a) endorsed thereon.
SECTION 3.3. Permitted Transferees. Notwithstanding anything in this
Agreement to the contrary, any Investor may at any time transfer any or all of
its Securities (and in the case of Orkla, Orkla Warrants or Orkla Warrant
Shares) to one or more of its Permitted Transferees without the consent of the
Board or any other Investor or group of Investors and without compliance with
Section 4.1 or 4.2 so long as (a) such Permitted Transferee shall have agreed in
writing to be bound by the terms of this Agreement and (b) the transfer to such
Permitted Transferee is not in violation of applicable federal or state
securities laws.
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SECTION 3.4. Certain Optional Redemptions. Notwithstanding anything to the
contrary contained in the Certificates of Designations of the Senior Preferred
Stock and the Junior Preferred Stock, during the period from July 11, 1998 to
July 11, 2000, if the Issuer, at its option, redeems any of the outstanding
shares of Senior Preferred Stock and/or Junior Preferred Stock in accordance
with the provisions of Section 5(a) of the respective Certificate of
Designations of the Senior Preferred Stock and the Junior Preferred Stock, as
the case may be, the New DLJ Entities agree that the aggregate redemption price
for the shares of such securities held by the New DLJ Entities shall be 102% of
the Liquidation Value (as defined in the respective Certificates of Designations
of the Senior Preferred Stock and the Junior Preferred Stock, as the case may
be) in cash plus accrued and unpaid cash dividends on such shares to the date
fixed for redemption, without interest.
ARTICLE 4
RIGHT OF FIRST OFFER; RIGHT TO PARTICIPATE IN A TRANSFER; PREEMPTIVE
RIGHTS; IMPROPER TRANSFER
SECTION 4.1. Right of First Offer. (a) If any DLJ Entity or Orkla desires
to transfer any or all of its Initial Warrants and/or Initial Warrant Shares or
the Orkla Warrants and/or Orkla Warrant Shares to a Third Party in a Private
Transaction that is otherwise permitted under this Agreement (including, without
limitation, Section 3.1 hereof) (a "SECTION 4.1 SALE") such DLJ Entity or Orkla,
as the case may be (the "SELLING PARTY"), shall provide the Issuer and Xxxxxxx
written notice (a "SECTION 4.1 OFFER NOTICE") that such Selling Party desires to
effect such a transfer. The Section 4.1 Offer Notice shall identify the number
of Initial Warrants and/or Initial Warrant Shares or Orkla Warrants and/or Orkla
Warrant Shares (the "OFFERED SECURITIES") proposed to be transferred, the
consideration at which a sale is proposed to be made (the "SECTION 4.1 SALE
PRICE") and all other material terms and conditions of the Section 4.1 Sale.
(b) The giving of a Section 4.1 Offer Notice to the Issuer and Xxxxxxx by
any Selling Party shall constitute an offer (the "SECTION 4.1 OFFER") by such
Selling Party to sell to the Issuer, Xxxxxxx, the DLJ Entities and/or Orkla (or
their respective designees, each of whom must be a Person who would be a
Permitted Transferee of such Investor), for cash (or, subject to Section 4.1(f),
non-cash consideration), in whole and not in part, on the terms set forth in the
Section 4.1 Offer Notice, such Selling Party's Offered Securities subject to the
Section 4.1 Sale at the Section 4.1 Sale Price. Priority with respect to the
acceptance of the Section 4.1 Offer shall be in the following order: (i)
Xxxxxxx, (ii) the Issuer, and (iii) the DLJ Entities or Orkla, whichever is not
the Selling Party. Such offer shall be irrevocable for sixty (60) days after
receipt of such Section 4.1 Offer Notice by the Issuer, Xxxxxxx and the DLJ
Entities and/or Orkla, as the case may be. During such 60-day period, subject to
the priority right of exercise as set forth above, Xxxxxxx and/or the Issuer
and/or the DLJ Entities and/or Orkla, as the case may be, shall have the right
to accept such offer in whole but not in part (as provided above). The Section
4.1 Offer may be accepted by giving a written irrevocable notice of acceptance
(which acceptance may condition consummation of the purchase on receipt of any
necessary governmental approvals) to such Selling Party prior to the expiration
of such 60-day offer period.
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(c) The closing of the acquisition by the Issuer and/or Xxxxxxx and/or the
DLJ Entities or Orkla, as the case may be, of the Offered Securities upon the
terms and at the price set forth in the Section 4.1 Offer Notice shall occur
within a 30-day period following acceptance of the Section 4.1 Offer; provided
that if the purchase and sale of such Offered Securities is subject to the
expiration of any applicable statutory waiting period, the time period during
which such purchase and sale may be consummated shall be extended until the
expiration of 14 days after such waiting period shall have expired; provided
further that such time period shall not exceed 60 days from the date of
acceptance under Section 4.1(b) without the written consent of the Selling
Party. If such purchase and sale are not consummated by the Issuer and/or
Xxxxxxx and/or the DLJ Entities or Orkla, as the case may be, within such time
period, such Section 4.1 Offer shall be deemed to be rejected.
(d) Upon the rejection or deemed rejection of the Section 4.1 Offer by the
Issuer, Xxxxxxx and the DLJ Entities or Orkla, as the case may be, the failure
to obtain any required consent for the purchase of the Offered Securities
subject thereto within 60 days following an acceptance of a Section 4.1 Offer,
there shall commence a 90-day period during which the Selling Party shall have
the right to effect a transfer of any or all of the Offered Securities subject
to the Section 4.1 Offer at a price not less than 95% of the Section 4.1 Sale
Price; provided that (i) such Third Party shall have agreed in writing to be
bound by the terms of this Agreement and (ii) the transfer to such Third Party
is not in violation of applicable federal or state securities laws.
Notwithstanding the foregoing, if the purchase and sale of such Offered
Securities is subject to any prior regulatory approval, the time period during
which such transfer may be consummated shall be extended until the expiration of
14 days after all such approvals shall have been received but in no event shall
such time period exceed 150 days (from the commencement of the 90-day period
referred to above) without the consent of the Issuer. If such Selling Party does
not consummate the sale of such Offered Securities subject to the Section 4.1
Offer in accordance with the time limitations set forth above, such Selling
Party may not sell any such Offered Securities without repeating the procedures
set forth in this Section 4.1.
(e) Notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 4.1 will not be applicable to transfers made pursuant
to and in compliance with Section 3.3 or Article 5.
(f) A Selling Party may transfer Offered Securities in accordance with the
foregoing provisions of this Section 4.1 for consideration other than cash only
if such Selling Party has first obtained and delivered to the Issuer and Xxxxxxx
an opinion of a mutually agreed upon investment banking firm of national
standing indicating that the fair market value of the non-cash consideration
that such Selling Party proposes to accept as consideration for such Offered
Securities together with any cash consideration, is at least equal to 95% of the
price referred to in the first sentence of paragraph (d) above.
(g) Each of the DLJ Entities and Orkla agrees that it will not, directly or
indirectly, effect a transfer subject to Section 4.1(a)-4.1(f), except in
compliance therewith and that any such purported transfer not in compliance with
Section 4.1(a)-4.1(f) shall be void. Each of the DLJ Entities, Orkla, the Issuer
and XXX agree that (i) no transfer prohibited by this Section 4.1(g)
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will be recorded on the books of the Issuer or XXX, and (ii) no transferee in
any such prohibited transfer shall be accorded any rights as a securityholder of
the Issuer or XXX.
SECTION 4.2. Right to Participate in a Transfer. (a) If at any time, or
from time to time, prior to the consummation of an Initial Public Offering,
consistent with the limitations set forth in Section 3.1, XXX or Xxxxxxx,
Permitted Transferees thereof, or a combination of such Persons (each a "SECTION
4.2 SELLER") propose to transfer, in one or more related transactions, an
aggregate of five percent (5%) or more of the then outstanding shares of Common
Stock to a Third Party other than a Permitted Transferee (excluding any
Permitted Transferee of Orkla and any DLJ Entity) and other than pursuant to an
Initial Public Offering (a "SECTION 4.2 SALE"), the Section 4.2 Seller shall
provide written notice (the "SECTION 4.2 NOTICE") of such proposed Section 4.2
Sale to the DLJ Entities and Orkla (the "SECTION 4.2/4.3 ENTITIES") and a copy
of the agreement pursuant to which such shares of Common Stock are proposed to
be transferred (the "SECTION 4.2 AGREEMENT"). The Section 4.2 Notice shall
identify the number of shares of Common Stock subject to the Section 4.2 Sale
(the "NUMBER OF SHARES"), the per share consideration for which a sale is
proposed to be made (the "SECTION 4.2 SALE PRICE"), the total number of shares
of Common Stock held by the Section 4.2 Seller and its Permitted Transferees and
all other material terms and conditions of the proposed Section 4.2 Sale. Each
Section 4.2/4.3 Entity shall have the right and option, exercisable as set forth
below, to participate in the Section 4.2 Sale; provided that if the aggregate
number of Warrants and/or Warrant Shares (the "PARTICIPATING SECURITIES") and
shares of Common Stock that the Section 4.2/4.3 Entities and the Section 4.2
Seller, respectively, propose to sell exceeds the number of shares that such
Third Party is willing to purchase on the proposed terms and conditions, then
each Section 4.2/4.3 Entity shall have the right to participate for up to the
number of Participating Securities as constitutes its Section 4.2 Pro Rata
Portion of the aggregate number of shares of Common Stock to be sold and the
amount of shares of Common Stock to be sold by the Section 4.2 Seller in the
Section 4.2 Sale shall be reduced to the extent the Section 4.2/4.3 Entities
elect to participate. "SECTION 4.2 PRO RATA PORTION" means, with respect to each
Section 4.2/4.3 Entity, at the time of the Section 4.2 Notice, the number of
shares of Common Stock such Section 4.2/4.3 Entity owns and pursuant to the
Warrants has the irrevocable right to acquire multiplied by a fraction, the
numerator of which is the number of shares of Common Stock to be sold by the
Section 4.2 Seller and its Permitted Transferees and the denominator of which is
the total number of shares of Common Stock (including any unissued shares of
Common Stock issuable pursuant to stock options, warrants and other rights to
acquire shares of Common Stock and pursuant to convertible or exchangeable
securities issued in accordance with Section 2.4) held by the Section 4.2 Seller
and its Permitted Transferees; provided that each Section 4.2/4.3 Entity that is
a holder of Warrants may, in lieu of exercising Warrants, transfer Warrants for
some or all of that number of shares of Common Stock as would otherwise have
constituted its Section 4.2 Pro Rata Portion. Each Section 4.2/4.3 Entity that
desires to exercise such option shall provide the Section 4.2 Seller with
written irrevocable notice, specifying the number of Participating Securities to
be included in such Section 4.2 Sale, within fifteen (15) Business Days after
the date the Section 4.2 Notice is given (the "SECTION 4.2 NOTICE PERIOD"). Each
accepting Section 4.2/4.3 Entity shall deliver to the Section 4.2 Seller the
certificate or certificates representing the Participating Securities of such
Section 4.2/4.3 Entity, together with a limited power-of-attorney authorizing
the Section 4.2 Seller to transfer such Participating Securities pursuant to the
terms
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of the Section 4.2 Agreement. Delivery of such certificate or certificates
representing the Participating Securities to be transferred and the limited
power-of-attorney authorizing the Section 4.2 Seller to transfer such
Participating Securities shall constitute an irrevocable acceptance of the
Section 4.2 Sale by the Section 4.2/4.3 Entity. Each Section 4.2/4.3 Entity may
assign its rights under this Section 4.2 to any other Section 4.2/4.3 Entity.
The Section 4.2 Seller shall provide to each Section 4.2/4.3 Entity a copy
of any amendment or modification of the Section 4.2 Agreement in connection with
the Section 4.2 Sale. Notwithstanding anything in this Section 4.2 to the
contrary, any material modification or amendment to the Section 4.2 Agreement
after execution thereof by an electing Section 4.2/4.3 Entity including, without
limitation, any decrease in the Section 4.2 Sale Price, any change in the form
of consideration or any amendment which would reasonably be expected to increase
the potential liability of the electing Section 4.2/4.3 Entity, shall not be
binding upon the Section 4.2/4.3 Entity unless the electing Section 4.2/4.3
Entity consents to such amendment or modification.
(b) The consideration per share of Common Stock to be paid to the Section
4.2 Seller and each Section 4.2/4.3 Entity participating in the Section 4.2 Sale
shall be the Section 4.2 Sale Price. The price per Warrant shall be the Section
4.2 Sale Price minus the applicable exercise price.
(c) Promptly after the consummation of the transfer by the Section 4.2/4.3
Entities and the Section 4.2 Seller pursuant to the Section 4.2 Sale, the
Section 4.2 Seller shall notify such Section 4.2/4.3 Entities thereof, shall
remit to each of such Section 4.2/4.3 Entities the total consideration for the
Participating Securities of such Section 4.2/4.3 Entity transferred pursuant
thereto as computed pursuant to Section 4.2(b) and shall furnish such other
evidence of the completion and time of completion of such transfer and the terms
thereof as may be reasonably requested by such Section 4.2/4.3 Entities. If the
Section 4.2 Seller does not complete the transfer of all the shares of Common
Stock and the Participating Securities, the Section 4.2 Seller shall return to
the Section 4.2/4.3 Entities the limited power-of-attorney (and all copies
thereof) together with all certificates representing the Participating
Securities which such Section 4.2/4.3 Entities delivered for transfer pursuant
to this Section 4.2, and all the restrictions on transfer contained in this
Agreement with respect to Warrants and Warrant Shares owned by the Section
4.2/4.3 Entities shall again be in effect.
(d) If at the termination of the Section 4.2 Notice Period any Section
4.2/4.3 Entity shall not have elected to participate in the Section 4.2 Sale,
such Section 4.2/4.3 Entity will be deemed to have waived any of and all of its
rights under this Section 4.2 with respect to the transfer of its Shares
pursuant to such Section 4.2 Sale. In any such case, the Section 4.2 Seller
shall have 90 days following such termination of the Section 4.2 Notice Period
in which to transfer the applicable Shares at a price not higher than 105% of
that contained in the Section 4.2 Notice and on terms not substantially more
favorable to the Section 4.2 Seller than were contained in the Section 4.2
Notice. Promptly after any transfer pursuant to this Section 4.2(d), the Section
4.2 Seller shall notify the Section 4.2/4.3 Entities of the consummation thereof
and shall furnish such evidence of the completion thereof (including time of
completion) of such
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transfer and of the terms thereof as the Section 4.2/4.3 Entities may request.
If the Section 4.2(d) Seller does not complete the transfer of the applicable
Shares within the 90-day period specified in this Section 4.2(d), such Section
4.2 Seller may not transfer such shares of Common Stock without repeating the
procedures in this Section 4.2.
SECTION 4.3. Preemptive Rights. (a) Except as provided below, the Issuer
shall not issue, sell or transfer any Equity Securities or allow any of its
Subsidiaries to issue, sell or transfer any Equity Securities (except for any
issuance to any other Subsidiary or pursuant to any employee benefit plan or
stock option plan approved, to the extent required, pursuant to Section 2.4(i))
unless the provisions of this Section 4.3 shall have been fully complied with by
the Issuer or such Subsidiary, as applicable. Prior to any proposed issuance,
sale or transfer, the Issuer shall notify each Section 4.2/4.3 Entity in writing
(the "ISSUANCE NOTICE") of the amount and class of Equity Securities proposed to
be issued, sold or transferred, the proposed price and the other terms of such
proposed issuance, sale or transfer. During the period of 20 days following the
date of such notice (the "SUBSCRIPTION PERIOD"), each Section 4.2/4.3 Entity
shall have the right to deliver to the Issuer an irrevocable notice (which
notice may condition the purchase on the receipt of necessary approvals) (a
"SUBSCRIPTION NOTICE") electing to purchase, at the proposed issuance price and
on the same terms as the proposed issuance up to an amount of Common Stock or
other securities (the "MAINTENANCE SECURITIES") as is necessary for such Section
4.2/4.3 Entity to maintain its Percentage Ownership as it existed immediately
prior to such proposed issuance (the "PREEMPTIVE RIGHTS").
(b) Any Section 4.2/4.3 Entity which does not deliver to the Issuer the
Subscription Notice within 20 days after such Section 4.2/4.3 Entity's receipt
of the Issuance Notice shall be deemed to have waived its right to purchase all
or any part of its Maintenance Securities (including, if the Maintenance
Securities include convertible securities, options, or other rights to acquire
other securities, such other securities). In any such case, the Issuer shall
have 90 days following such deemed waiver in which to issue, sell or transfer
the applicable Equity Securities at a price not higher and on terms not
substantially more favorable than that contained in the Issuance Notice.
Promptly after any issuance, sale or transfer pursuant to this Section 4.3(b),
the Issuer shall notify the Section 4.2/4.3 Entities of the consummation thereof
and shall furnish such evidence of the completion thereof (including time of
completion) of such transfer. If the Issuer does not complete the issuance, sale
or transfer of the applicable Equity Securities within the 90-day period
specified in this Section 4.3(b), the Issuer may not issue, sell or transfer
such Equity Securities without repeating the procedures in this Section 4.3(b).
(c) If the proposed issuance of the Equity Securities is consummated, each
Section 4.2/4.3 Entity delivering a Subscription Notice shall purchase from the
Issuer or such Subsidiary, and the Issuer or such Subsidiary shall be required
to issue and sell to each such Section 4.2/4.3 Entity, such Equity Securities on
such terms and at the price set forth in the Subscription Notice. The closing of
such sale shall occur, subject to receipt of necessary approvals, on the second
business day following the latest of (i) the day of consummation of the issuance
of such Equity Securities to persons other than the Section 4.2/4.3 Entities
(which may not be earlier than the date set forth in clause (ii) below), (ii)
the day that is at least 15 days after the expiration of the Subscription Period
and (iii) the 10th day after receipt by such Section 4.2/4.3 Entity or Entities
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of any and all necessary approvals, at the principal office of the Issuer, or at
such other time and place as the Issuer or such Subsidiary and the Section
4.2/4.3 Entities exercising their Preemptive Rights shall mutually agree upon.
(d) The Preemptive Rights set forth above shall not apply to (i) the
issuance of Warrant Shares, (ii) the issuance of shares of Common Stock issuable
upon exercise of any option, warrant, convertible security or other rights to
purchase, exchange other securities for, or subscribe for Common Stock, (iii)
securities issued pursuant to any stock split, stock dividend or other similar
stock recapitalization or (iv) shares of any class of common stock issued
pursuant to any public offering, provided that the action referred to in clause
(ii), (iii) or (iv), as the case may be, shall have been approved in accordance
with Section 2.4. The Issuer or its Subsidiary, as the case may be, shall not be
under any obligation to consummate any proposed issuance of Equity Securities,
regardless of whether it shall have delivered an Issuance Notice pursuant to
this Section 4.3. Notwithstanding anything contained herein to the contrary, the
Preemptive Rights set forth above shall be in addition to any rights arising out
of the anti-dilution provisions set forth in any Warrant for the holder thereof.
SECTION 4.4. Improper Transfer. Any attempt to transfer any Securities not
in compliance with this Agreement shall be null and void and neither the Issuer
nor any transfer agent shall give any effect in the Issuer's records to such
attempted transfer.
SECTION 4.5. Certain Provisions Relating to Orkla With Respect to Sections
4.2 and 4.3. All of the rights of Orkla, and all of the obligations of any other
party hereto, pursuant to Sections 4.2 and 4.3 shall be governed by the
following provisions:
(a) with respect to any measurement of the number of, or rights with
respect to, Initial Warrants, Initial Warrant Shares, or shares of Common
Stock owned by Orkla for purposes of Section 4.2 or 4.3, any Orkla Warrants
and Orkla Warrant Shares shall be taken into account on the basis of the
indirect Percentage Ownership in the Issuer represented by such Orkla
Warrants and Orkla Warrant Shares; and
(b) with respect to any shares of Common Stock transferable or
issuable to Orkla pursuant to Section 4.2 or 4.3, XXX and the Issuer shall
have the option, exercisable at their sole election, to issue to Orkla
(including in lieu of any shares of Common Stock transferable to Orkla,
which otherwise transferable shares will instead be transferred to XXX)
such number of shares of XXX Common Stock as represent an equal indirect
Percentage Ownership in the Issuer as the shares of Common Stock so
transferable or issuable to Orkla pursuant to Section 4.2 or 4.3, would
have represented a direct Percentage Ownership in the Issuer, it being
understood and agreed by the parties hereto that the rights and benefits
under this Agreement and the Securities owned by the DLJ Entities shall in
no event be impaired or diminished as a result of any such participation
by, or adjustment with respect to, Orkla pursuant to this Section 4.5, as
compared with the circumstances that would have been in effect had Orkla
held its indirect interest in the Issuer directly rather than indirectly.
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ARTICLE 5.
REGISTRATION RIGHTS
SECTION 5.1. Demand Registration. (a) Commencing on the applicable Initial
Registration Date, the DLJ Entities may make a written request (any such
requesting Person, a "SELLING INVESTOR") that the Issuer effect the registration
under the Securities Act of all or a portion of such Selling Investor's
applicable Registerable Securities, and specifying the intended method of
disposition thereof. The Issuer will promptly give written notice of such
requested registration (a "DEMAND REGISTRATION") at least thirty (30) days prior
to the anticipated filing date of the registration statement relating to such
Demand Registration to the other Investors and thereupon will use its best
efforts to effect, as soon as practicable, the registration under the Securities
Act of:
(i) the Registerable Securities which the Issuer has been so requested
to register by the Selling Investor, then held by the Selling Investor;
(ii) subject to Section 5.2, all other Securities of the same type as
the Registerable Securities sought to be registered by the Selling Investor
which any other Investor entitled to request the Issuer to effect an
Incidental Registration (as such term is defined in Section 5.2) pursuant
to Section 5.2 (all such Investors, together with the Selling Investors,
the "HOLDERS") has requested the Issuer to register by written request
received by the Issuer within fifteen (15) days after the receipt by such
other Investors of such written notice given by the Issuer; and
(iii) shares of Common Stock desired to be registered by the Issuer as
approved pursuant to Section 2.4 hereof,
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registerable Securities so to be
registered; provided that, subject to Section 5.1(c) hereof, the Issuer shall
not be obligated to effect, pursuant to this Section 5.1(a), (A) more than one
Demand Registration during any six-month period, (B) more than four Demand
Registrations in connection with the registration of the Senior Preferred Stock
(which registration may also relate to Warrants to be offered in connection with
such Senior Preferred Stock), (C) more than four Demand Registrations in
connection with the registration of the Junior Preferred Stock (which
registration may also relate to Warrants to be offered in connection with such
Junior Preferred Stock), (D) more than four Demand Registrations in connection
with the registration of the Warrants (which registration may also relate to the
Senior Preferred Stock and/or the Junior Preferred Stock to be offered in
connection with such Warrants), and (E) more than two Demand Registrations in
connection with the registration of any other Registerable Securities. If
Warrants are sold in connection with a registered or Rule 144A sale of the
Senior Preferred Stock or the Junior Preferred Stock, the Issuer shall (not
earlier than the time the Issuer registers the Senior Preferred Stock or the
Junior Preferred Stock (or exchange securities in the case of a Rule 144A
offering)) file a shelf registration statement relating to all the Common Stock
underlying such Warrants; provided that any holder of
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Warrants seeking to offer, purchase or sell any of the Common Stock underlying
such Warrants will first notify the Issuer and allow the Issuer to prepare an
appropriate prospectus supplement to be used in such transaction, and that the
Issuer's obligation to prepare such a prospectus supplement (and accordingly the
ability of the holder to effect such offer, purchase or sale) will be subject to
customary deferral provisions; and provided further that in no event shall the
Issuer be entitled to postpone or suspend the preparation and filing of such
prospectus supplement for a period exceeding ninety (90) days. The Issuer shall
not be obligated to effect a Demand Registration with respect to shares of
Common Stock unless the Common Stock requested to be included in such Demand
Registration has, in the reasonable judgment of the Board of Directors exercised
in good faith, a fair market value of at least (1) $25,000,000 if such Demand
Registration would constitute an Initial Public Offering; provided that if the
estimated proceeds from the sale of all the Common Stock to be sold by the
Selling Investor is less than such amount and the DLJ Entities and Orkla have
requested the Issuer to register all of the Registerable Securities owned by
them consisting of Warrants and/or Warrant Shares and/or Common Stock, then the
Selling Investor may require the Issuer to issue, or an Other Investor to sell,
a sufficient number of shares of Common Stock in connection with the Initial
Public Offering to result in aggregate proceeds of at least $25,000,000 or (2)
in all other cases, $15,000,000.
Promptly after the expiration of the 15-day period referred to in Section
5.1(a)(ii) hereof, the Issuer will notify all the Holders to be included in the
Demand Registration of the other Holders and the number of shares of
Registerable Securities requested to be included therein. The Selling Investors
requesting a registration under this Section 5.1(a)(ii) may, at any time prior
to the effective date of the registration statement relating to such
registration, revoke such request, without liability to any of the other
Holders, by providing a written notice to the Issuer revoking such request, in
which case such request, so revoked, shall be treated as a Demand Registration
unless the Selling Investors who requested such registration pay the
Registration Expenses or the Selling Investors requesting registration shall
have on three prior occasions revoked registration requests.
(b) The Issuer will, subject to Section 5.1(a), pay all Registration
Expenses in connection with each Demand Registration.
(c) A registration requested pursuant to this Section 5.1 shall not be
deemed to have been effected, subject to Section 5.1(a), unless the registration
statement relating thereto (i) has become effective under the Securities Act and
(ii) has remained effective for a period of at least 270 days (or such shorter
period in which all Registerable Securities of the Holders included in such
registration have actually been sold thereunder); provided that if after any
registration statement requested pursuant to this Section 5.1 becomes effective
and (i) such registration statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or other governmental agency
or court and (ii) less than 85% of the Registerable Securities included in such
registration statement has been sold thereunder, such registration statement
shall be at the sole expense of the Issuer and shall not be considered a Demand
Registration.
(d) Limitations on Filings. Notwithstanding the foregoing provisions of
this Section 5.1, the Issuer shall be entitled to postpone or suspend (but not
for a period exceeding ninety (90
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days) the filing or effectiveness of the registration statement otherwise
required to be prepared and filed by it if the Issuer determines, in its
reasonable judgment, that such registration and offering or continued
effectiveness would interfere with or require premature public disclosure of any
financing, acquisition, disposition, corporate reorganization or other
transaction involving the Issuer or any of its Subsidiaries. Once the
registration statement required to be filed pursuant to this Section 5.1 has
been declared effective, any period during which the Issuer fails to keep such
registration statement effective and usable for resale of Registerable
Securities as required shall be referred to as a "DEMAND REGISTRATION SUSPENSION
PERIOD". A Demand Registration Suspension Period shall commence on and include
the date that the Issuer gives written notice to each Holder participating in
the registration of its determination that such registration statement is no
longer effective or usable for resale of Registerable Securities to and
including the date when the use of the prospectus included in such registration
statement may be resumed for the disposition of Registerable Securities. In the
event of any Demand Registration Suspension Period, the time period during which
the Issuer is obligated to keep any such registration statement effective and
usable under Section 5.1(c) or Section 5.4(a) shall be extended by the number of
days of such Demand Registration Suspension Period.
(e) If a Demand Registration involves an Underwritten Public Offering and
the managing underwriter shall advise the Issuer and the Selling Investor that,
in its view, the amount or type of Registerable Securities exceeds the largest
number of such types of Registerable Securities which can be sold without having
an adverse effect on such offering, including the price at which such
Registerable Securities can be sold (the "MAXIMUM OFFERING SIZE"), the Issuer
will include in such registration, in the priority listed below, up to the
Maximum Offering Size:
(i) first, all Registerable Securities requested to be registered by
the Selling Investors and any other DLJ Entity and Orkla, if applicable
(allocated, if necessary for the offering not to exceed the Maximum
Offering Size, pro rata among the Selling Investors, any other DLJ Entity
and Orkla, if applicable, on the basis of the relative amount of each type
of Registerable Securities requested to be included in such registration);
(ii) second, all Registerable Securities of the same type as the
Selling Investor has requested be registered, requested to be registered by
any Holder, other than the Selling Investor, the DLJ Entities and Orkla, if
applicable (allocated, if necessary for the offering not to exceed the
Maximum Offering Size, pro rata among such Holders on the basis of the
relative number of shares of Registerable Securities so requested to be
included in such registration); and
(iii) third, if the Registerable Securities requested to be registered
constitute Common Stock, any Common Stock proposed to be registered by the
Issuer.
SECTION 5.2. Incidental Registration, Rules 144 and 144A. (a) If the Issuer
proposes to register any Common Stock, Senior Preferred Stock, Junior Preferred
Stock or Preferred Stock under the Securities Act (other than a registration (i)
on Form S-8 or S-4 or any successor or similar forms, (ii) relating to Common
Stock issuable upon exercise of employee stock options or
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in connection with any employee benefit, dividend reinvestment or similar plan
of the Issuer or (iii) in connection with a direct or indirect merger,
acquisition or other similar transaction) whether or not for sale for its own
account, it will each such time, subject to the provisions of Section 5.2(b)
hereof, give prompt written notice at least thirty (30) days prior to the
anticipated filing date of the registration statement relating to such
registration to each DLJ Entity and Orkla, which notice shall set forth the
rights of such DLJ Entity and Orkla under this Section 5.2 and shall offer all
DLJ Entities and Orkla the opportunity to include in such registration statement
such Registerable Securities as each such DLJ Entity and Orkla may request (an
"INCIDENTAL REGISTRATION"). Upon the written request of any such DLJ Entity or
Orkla made within 15 days after the receipt of notice from the Issuer (which
request shall specify the number and type of Registerable Securities intended to
be disposed of by such DLJ Entity or Orkla), the Issuer will use its best
efforts to effect the registration under the Securities Act of all Registerable
Securities which the Issuer has been so requested to register by such DLJ
Entities and/or Orkla, to the extent requisite to permit the disposition of the
Registerable Securities so to be registered; provided that (A) if such
registration involves an Underwritten Public Offering, all such DLJ Entities and
Orkla requesting to be included in the Issuer's registration must sell their
Registerable Securities to the underwriters selected as provided in Section
5.4(f) on the same terms and conditions as apply to the Issuer and the Selling
Investors and (B) if, at any time after giving written notice of its intention
to register any securities pursuant to this Section 5.2(a) and prior to the
effective date of the registration statement filed in connection with such
registration, the Issuer shall determine for any reason not to register or to
delay registration of such securities, the Issuer shall give written notice to
all such DLJ Entities and Orkla and, thereupon, (1) in the case of a
determination not to register, the Issuer shall be relieved of its obligation to
register any Registerable Securities in connection with such registration and
(2) in the case of a determination to delay such registration, the Issuer shall
be permitted to delay registration of any Registrable Securities requested to be
included in such Incidental Registration Statement for the same period as the
delay in registering such other securities (without prejudice, however, to the
rights of any DLJ Entity or Orkla under Section 5.1 hereof). No registration
effected under this Section 5.2 shall relieve the Issuer of its obligations to
effect a Demand Registration to the extent required by Section 5.1 hereof. The
Issuer will pay all Registration Expenses in connection with each registration
of Registerable Securities requested pursuant to this Section 5.2.
(b) If a registration pursuant to this Section 5.2 involves an Underwritten
Public Offering (other than in the case of an Underwritten Public Offering
requested by any DLJ Entity in a Demand Registration, in which case the
provisions with respect to priority of inclusion in such offering set forth in
Section 5.1(d) shall apply) and the managing underwriter advises the Issuer
that, in its view, the amount or type of securities which the Issuer and such
Holders intend to include in such registration exceeds the Maximum Offering
Size, the Issuer will include in such registration, in the following priority,
up to the Maximum Offering Size:
(i) first, so much of the securities proposed to be registered by the
Issuer as would not cause the offering to exceed the Maximum Offering Size;
and
(ii) second, all Registerable Securities requested to be included in
such registration by any other Holders pursuant to Section 5.2 (allocated,
if necessary for the
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offering not to exceed the Maximum Offering Size, pro rata among such
entities on the basis of the relative amount of each type of Registerable
Securities so requested to be included in such registration).
SECTION 5.3. Holdback Agreements. If any registration of Registerable
Securities shall be in connection with an Underwritten Public Offering, each
Investor agrees not to effect any public sale or distribution, including any
sale pursuant to Rule 144, or any successor provision, under the Securities Act,
of any Registerable Securities, and not to effect any such public sale or
distribution of any other Common Stock of the Issuer or of any security
convertible into or exchangeable or exercisable for any Common Stock of the
Issuer (in each case, other than as part of such Underwritten Public Offering)
during the 14 days prior to the effective date of such registration statement
(except as part of such registration) or during the period after such effective
date that such managing underwriter and the Issuer shall agree (but not to
exceed 180 days).
SECTION 5.4. Registration Procedures. Whenever any of the DLJ Entities
requests that any Registerable Securities be registered pursuant to Section 5.1
or 5.2 hereof, the Issuer will, subject to the provisions of such Sections, use
its best efforts to effect the registration of such Registerable Securities in
accordance with the intended method of disposition thereof as quickly as
reasonably practicable, and in connection with any such request:
(a) The Issuer will as quickly as reasonably practicable prepare and file
with the SEC a registration statement on any form for which the Issuer then
qualifies or which counsel for the Issuer shall deem appropriate and which form
shall be available for the sale of the Registerable Securities to be registered
thereunder in accordance with the intended method of distribution thereof, and
use its best efforts to cause such filed registration statement to become
effective.
(b) The Issuer will, if requested, prior to filing a registration statement
or prospectus or any amendment or supplement thereto, furnish to each Holder
which is participating in a registration and each underwriter, if any, of the
Registerable Securities covered by such registration statement copies of such
registration statement as proposed to be filed, and thereafter the Issuer will
furnish to each such Holder and underwriter, if any, such number of copies of
such registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus and all amendments and supplements thereto) and such
other documents as such Holder or underwriter may reasonably request in order to
facilitate the disposition of the Registerable Securities owned by such Holder
which are covered by such registration statement.
(c) After the filing of the registration statement, the Issuer will (i)
cause the related prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, (ii) comply with the provisions of the Securities Act with
respect to the disposition of all Registerable Securities covered by such
registration statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such
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prospectus and (iii) promptly notify each Holder holding Registerable Securities
covered by such registration statement of any stop order issued or threatened by
the SEC and will take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered.
(d) The Issuer will use its best efforts to (i) register or qualify the
Registerable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions in the United States as any
Holder holding such Registerable Securities reasonably (in light of such
Holder's intended plan of distribution) requests, (ii) cause such Registerable
Securities to be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and operations of
the Issuer and (iii) do any and all other acts and things that may be reasonably
necessary or advisable to enable such Holder to consummate the disposition of
the Registerable Securities owned by such Holder; provided that the Issuer will
not be required to (A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this paragraph (d),
(B) subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction.
(e) The Issuer will promptly notify each Holder holding such Registerable
Securities covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
occurrence of an event requiring the preparation of a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registerable Securities, such prospectus will not contain an 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 promptly prepare
and make available to each such Holder and file with the SEC any such supplement
or amendment.
(f) In any Demand Registration, DLJMB will have the right to select an
underwriter or underwriters in connection with any public offering, which may
include any Affiliate of any DLJ Entity. In any other case, the Issuer may,
subject to its other contractual obligations, select in its sole discretion,
such underwriter or underwriters as it may deem appropriate, which may include
any Affiliate of any DLJ Entity. The Issuer will enter into customary agreements
(including an underwriting agreement in customary form) and take such other
actions as are reasonably necessary in order to expedite or facilitate the
disposition of such Registration Securities, including but not limited to the
engagement of a qualified independent underwriter in connection with the
qualification of the underwriting arrangements with the NASD, maintaining a
current market-making prospectus and conducting customary road show
presentations.
(g) The Issuer will make available for inspection by any Holder and any
underwriter participating in any disposition pursuant to a registration
statement being filed by the Issuer pursuant to this Section 5.4 and any
attorney, accountant or other professional retained by any such Holder or
underwriter (collectively, the "INSPECTORS"), all financial and other records,
pertinent corporate documents and properties of the Issuer (collectively, the
"RECORDS") as shall be reasonably requested by any such Person, and cause the
Issuer's officers, directors and employees to supply all information reasonably
requested by any Inspectors in connection with such registration statement
provided that prior to the release or disclosure of any such Records,
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the Inspectors enter into a confidentiality agreement in form and substance
reasonably satisfactory to the Issuer.
(h) The Issuer will obtain and furnish to each such Holder and to each such
underwriter, if any, a signed counterpart, addressed to such underwriter, of (i)
an opinion or opinions of counsel to the Issuer and (ii) a comfort letter or
comfort letters from the Issuer's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as Holder of a majority of the
aggregate amount of Registerable Securities or the managing underwriter therefor
reasonably requests.
(i) The Issuer will otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and the relevant state blue sky
commissions, and make available to its securityholders, as soon as reasonably
practicable, an earnings statement covering a period of twelve (12) months,
beginning within three (3) months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act.
The Issuer may require each such Holder to promptly furnish in writing to
the Issuer such information regarding the distribution of the Registerable
Securities as the Issuer may from time to time reasonably request and such other
information as may be legally required in connection with such registration.
Each such 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(e) hereof, such
Holder will forthwith discontinue disposition of Registerable Securities
pursuant to the registration statement covering such Registerable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5.4(e) hereof, and, if so directed by the
Issuer, such Holder will deliver to the Issuer all copies, other than any
permanent file copies then in such Holder's possession, of the most recent
prospectus covering such Registerable Securities at the time of receipt of such
notice.
(j) (i) If the Issuer shall have filed a registration statement pursuant to
Section 12 of the Exchange Act or a registration statement pursuant to the
Securities Act, then for so long as it is subject to the periodic reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Issuer will file
the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder and will take
such further action as any holder of Registerable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registerable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (A) Rule 144 as such Rule
may be amended from time to time, or (B) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any holder of Registerable
Securities, the Issuer will deliver to such holder a written statement as to
whether it has complied with such requirements.
(ii) If any DLJ Entity holding Registerable Securities desires to
transfer any such securities pursuant to Rule 144A and in accordance with
the terms of this Agreement, the
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Issuer will promptly, upon request by any one or more such DLJ Entities,
use its best efforts to facilitate the consummation of such Rule 144A
transaction by the DLJ Entities and Orkla if it so requests, in accordance
with the requirements of such Rule and with such request and shall take all
necessary or appropriate actions in connection therewith, including but not
limited to (A) preparing of an offering memorandum with respect to such
transaction containing information customarily included in connection with
Rule 144A transactions of the type contemplated by the request, (B) taking
the actions, to the extent requested by such DLJ Entity or Entities,
referred to in Section 5.4(d), 5.4(g) and 5.4(h) and (C) conducting "ROAD
SHOW" presentations as reasonably requested by such DLJ Entity or Entities,
provided that the Issuer shall not be obligated to take the foregoing
actions on more than two occasions. The Issuer shall pay all expenses in
connection with any Rule 144A transaction pursuant hereto.
(iii) The Issuer represents and warrants that the Registerable
Securities are not, and are not of the same class as any other securities,
listed on a national securities exchange registered under Section 6.1 of
the Exchange Act or quoted in an automated inter-dealer quotation system.
For so long as any Registerable Securities are restricted securities within
the meaning of Rule 144(a)(3) under the Securities Act, the Issuer
covenants and agrees that it shall, during any period in which it is not
subject to Section 13 or 15(d) of the Exchange Act, make available to any
DLJ Entity and Orkla holding of Registerable Securities in connection with
the sale of such holder Registerable Securities and any prospective
purchaser of Registerable Securities from such, in each case upon request,
the information specified in, and meeting the requirements of, Rule
144A(d)(4).
SECTION 5.5. Indemnification by the Issuer. The Issuer agrees to indemnify
and hold harmless each Holder holding Registerable Securities covered by a
registration statement, its officers, directors and agents, and each Person, if
any, who controls such Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to the Registerable Securities (as amended or supplemented
if the Issuer shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission so made in reliance upon and in conformity
with information furnished in writing to the Issuer by such Holder or on such
Holder's behalf expressly for use therein; provided that with respect to any
untrue statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, or in any prospectus, as the case may be, the indemnity
agreement contained in this paragraph shall not apply to the extent that any
such loss, claim, damage, liability or expense results from the fact that a
current copy of the prospectus (or, in the case of a prospectus, the prospectus
as amended or supplemented) was not sent or given to the Person asserting any
such loss, claim, damage, liability or expense at or prior to the written
confirmation of the sale of the Registerable Securities concerned to such Person
if the Issuer had provided such prospectus and it was the responsibility of such
Holder to provide such Person with a
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current copy of the prospectus (or such amended or supplemented prospectus, as
the case may be) and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The Issuer also agrees
to indemnify any underwriters of the Registerable Securities, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Holder provided in this Section
5.5.
SECTION 5.6. Indemnification by Participating Holders. (a) Subject to
Section 5.6(b), each Holder holding Registerable Securities included in any
registration statement agrees, severally but not jointly, to indemnify and hold
harmless the Issuer, its officers, directors and agents and each Person, if any,
who controls the Issuer within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Issuer to such Holder, but only (i) with respect to
untrue statements or omissions, or alleged untrue statements or omissions in a
registration statement (or any amendment thereto) or any prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
information furnished in writing by such Holder or on such Holder's behalf
expressly for use in any registration statement or prospectus relating to the
Registerable Securities, or any amendment or supplement thereto, or any
preliminary prospectus or (ii) to the extent that any loss, claim, damage,
liability or expense results from the fact that a current copy of the prospectus
(or, in the case of a prospectus, the prospectus as amended or supplemented) was
not sent or given to the Person asserting any such loss, claim, damage,
liability or expense at or prior to the written confirmation of the sale of the
Registerable Securities concerned to such Person if it is determined that it was
the responsibility of such Holder to provide such Person with a current copy of
the prospectus (or such amended or supplemented prospectus, as the case may be)
and such current copy of the prospectus (or such amended or supplemented
prospectus, as the case may be) would have cured the defect giving rise to such
loss, claim, damage, liability or expense. Subject to Section 5.6(b), each such
Holder also agrees to indemnify and hold harmless underwriters of the
Registerable Securities, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Issuer provided in this Section 5.6. As a condition to
including Registerable Securities in any registration statement filed in
accordance with Article 5 hereof, the Issuer may require that it shall have
received an undertaking reasonably satisfactory to it from any underwriter to
indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.
(b) No Holder shall be liable under Section 5.6(a) for any damage
thereunder in excess of the net proceeds realized by such Holder in the sale of
the Registerable Securities of such Holder.
SECTION 5.7. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to this Article 5,
such Person (an "INDEMNIFIED PARTY") shall promptly notify the Person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Party, and shall
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assume the payment of all fees and expenses; provided that the failure of any
Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent that the
Indemnifying Party is prejudiced by such failure to notify. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any and all losses, claims, damages, liabilities and expenses or
liability (to the extent stated above) by reason of such settlement or judgment.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such proceeding.
SECTION 5.8. Contribution. If the indemnification provided for in this
Article 5 is held by a court of competent jurisdiction to be unavailable to the
Indemnified Parties in respect of any losses, claims, damages or liabilities
referred to herein, then each such Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (i)
as between the Issuer and the Holders holding Registerable Securities covered by
a registration statement on the one hand and the underwriters on the other, in
such proportion as is appropriate to reflect the relative benefits received by
the Issuer and such Holders on the one hand and the underwriters on the other,
from the offering of the Registerable Securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits but also the relative fault of the Issuer and such
Holders on the one hand and of such underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and (ii) as
between the Issuer on the one hand and each such Holder on the other, in such
proportion as is appropriate to reflect the relative fault of the Issuer and of
each such Holder in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by the
Issuer and such Holders on the one hand and such underwriters on the other shall
be deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Issuer and such Holders bear to the total underwriting discounts
and commissions received by such underwriters, in each case as set forth in the
table on the cover page of the prospectus. The
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relative fault of the Issuer and such Holders on the one hand and of such
underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuer and such Holders or by such underwriters. The relative
fault of the Issuer on the one hand and of each such Holder on the other shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Issuer and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 5.8 were determined by pro rata allocation
(even if the underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages or liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5.9, no underwriter shall be required to contribute
any amount in excess of the amount by which the underwriting discount applicable
to Registerable Securities purchased by such underwriter in such offering
exceeds the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no Holder shall be required to contribute any amount in
excess of the amount by which the net proceeds realized on the sale of the
Registerable Securities of such Holder exceeds the amount of any damages which
such Holder has otherwise been required to pay by reason 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. Each Holder's obligation to
contribute pursuant to this Section 5.8 is several in the proportion that the
proceeds of the offering received by such Holder bears to the total proceeds of
the offering received by all such Holders and not joint.
SECTION 5.9. Participation in Public Offering. No Person may participate in
any Underwritten Public Offering hereunder unless such Person (a) agrees to sell
such Person's 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 reasonably required under the terms
of such underwriting arrangements and the provisions of this Agreement in
respect of registration rights.
SECTION 5.10. Other Indemnification. Indemnification similar to that
specified herein (with appropriate modifications) shall be given by the Issuer
and each Investor participating therein with respect to any required
registration or other qualification of securities under any federal or state law
or regulation or governmental authority other than the Securities Act.
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ARTICLE 6.
RIGHT TO REQUIRE REPURCHASE; XXXXXXX CALL
SECTION 6.1. Right to Require Repurchase. At any time after July 11, 2004,
the DLJ Entities and their Permitted Transferees shall have the right (the
"REPURCHASE RIGHT") in their sole discretion, to require the Issuer to
repurchase, and the Issuer shall repurchase, all of the Senior Preferred Stock
and/or the Junior Preferred Stock owned by such DLJ Entities and their Permitted
Transferees (the "SELLING ENTITIES") at a price equal to 100% of the accreted
value thereof, together with accrued and unpaid cash interest or dividends to
the date of repurchase (the "REPURCHASE PRICE").
SECTION 6.2. Method of Exercising Repurchase Right. (a) To exercise the
Repurchase Right, the Selling Entities shall deliver to the Issuer (i) written
notice of the Selling Entities' exercise of such right, which notice shall set
forth the name of the Selling Entities, the principal amount of the Senior
Preferred Stock and the Junior Preferred Stock, as the case may be, to be
repurchased, and a statement that an election to exercise the Repurchase Right
is being made thereby and (ii) the Senior Preferred Stock and the Junior
Preferred Stock, as the case may be, or, if applicable, certificates evidencing
such Senior Preferred Stock and Junior Preferred Stock, as the case may be, with
respect to which the repurchase right is being exercised, duly endorsed for
transfer to the Issuer.
(b) In the event a repurchase right shall be exercised in accordance with
the terms hereof, the Issuer shall (i) repurchase all Senior Preferred Stock and
Junior Preferred Stock, as the case may be, tendered pursuant to this Section
6.2 and (ii) pay the Repurchase Price to the Selling Entities.
(c) Promptly after consummation of such repurchase, the paying agent shall
mail to each Selling Entity of such Senior Preferred Stock and Junior Preferred
Stock, as the case may be, an amount equal to the purchase price for, plus any
accrued and unpaid interest or dividends on, such Senior Preferred Stock and
Junior Preferred Stock, as the case may be.
SECTION 6.3. Xxxxxxx Call. Xxxxxxx Incorporated shall have the right, at
any time prior to the expiration of 180 days after the Closing Date, to require
the New DLJ Entities to sell to it 55% of the outstanding Junior Preferred Stock
held by the New DLJ Entities, together with Warrants conferring the right to
acquire 851.84 shares of the Common Stock (or such greater or lesser number of
shares of Common Stock as may be applicable in accordance with the provisions of
Section 8 of the DLJ Warrants) for cash in an amount, at the date of such sale,
equal to the sum of (x) the liquidation preference of such Junior Preferred
Stock to be sold on such date plus (y) an amount sufficient to cause the sum of
(x) and (y) to equal a value that yields an Internal Rate of Return (calculated
on a basis substantially consistent with the definition of such term in the DLJ
Warrants) with respect to the Junior Preferred Stock and Warrants so sold equal
to 25%; provided that Xxxxxxx'x right to require the DLJ Entities to sell such
Securities shall be conditioned upon Xxxxxxx delivering to the DLJ Entities a
binding written commitment to purchase such Securities prior to the expiration
of 90 days after the Closing Date. Xxxxxxx
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may assign all or a portion its right under this Section 6.3 to Orkla or to any
wholly-owned Subsidiary of Xxxxxxx. In any such event, Orkla or such Subsidiary
will be subject, with respect to the Junior Preferred Stock and Warrants so
acquired, to the same restrictions on transfer as are applicable to Xxxxxxx in
Section 3.1 mutatis mutandis.
ARTICLE 7.
CERTAIN COVENANTS AND AGREEMENTS
SECTION 7.1. Confidentiality. (a) Each Investor hereby agrees that
Confidential Information (as defined below) furnished and to be furnished to it
was and will be made available in connection with such Investor's investment in
the Issuer. Each Investor agrees that it will not use the Confidential
Information in any way to the competitive disadvantage of the Issuer. Each
Investor further acknowledges and agrees that it will not disclose any
Confidential Information to any Person; provided that Confidential Information
may be disclosed (i) to such Investor's Representatives (as defined below) in
the normal course of the performance of their duties as long as such Investor
Representatives are advised of the confidential nature of such information and
agree to be bound by the provisions hereof, (ii) to the extent required by
applicable law, rule or regulation (including complying with any oral or written
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process to which a Holder is subject)
provided, that in the event that such Investor is so required to disclose any
Confidential Information, such Investor will give the Issuer prompt notice of
such request so that the Issuer may seek an appropriate protective order and if
such Investor is nonetheless so compelled to disclose Confidential Information,
such Investor may disclose such information without liability hereunder, (iii)
to any Person to whom such Investor is contemplating a transfer of its
Securities (provided that such transfer would not be in violation of the
provisions of this Agreement and as long as such potential transferee is advised
of the confidential nature of such information and agrees to be bound by a
confidentiality agreement in form and substance satisfactory to the Issuer and
consistent with the provisions hereof) or (iv) if the prior written consent of
the Board shall have been obtained. Nothing contained herein shall prevent the
use of Confidential Information in connection with the assertion or defense of
any claim by or against the Issuer or any Investor.
(b) "CONFIDENTIAL INFORMATION" means any information concerning the Issuer,
its financial condition, business, operations or prospects (in each case
including the Issuer's Subsidiaries and Affiliates) in the possession of or to
be furnished to any Investor in its capacity as a shareholder or potential
shareholder of the Issuer or by virtue of its present or former right to
designate a director of the Issuer; provided that the term "CONFIDENTIAL
INFORMATION" does not include information which (i) becomes generally available
to the public other than as a result of a disclosure by an Investor or its
partners, directors, officers, employees, agents, counsel, investment advisers
or representatives (all such persons being collectively referred to as
"REPRESENTATIVES") in violation of any of the Transaction Documents, (ii) is or
was available to such Investor on a nonconfidential basis prior to its
disclosure to such Investor or its Representatives by the Issuer, or (iii) was
or becomes available to such Investor on a
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nonconfidential basis from a source other than the Issuer, provided that such
source is or was (at the time of receipt of the relevant information) not, to
the best of such Investor's knowledge, bound by a confidentiality agreement with
(or other confidentiality obligation to) the Issuer or another Person.
SECTION 7.2. Indirect Action; No Inconsistent Agreements. (a) Each party
hereto agrees not to take, or cause or permit to be taken indirectly, any action
which if taken, caused or permitted to be taken by such Person directly would
constitute a violation of this Agreement. None of the Issuer, Xxxxxxx, Xxxxxxx
Incorporated or XXX is presently a party to or will hereafter enter into any
agreement which is inconsistent with the rights granted to the DLJ Entities and
Orkla by this Agreement or any other agreement relating to the Securities to
which the DLJ Entities and/or Orkla are parties or which otherwise conflicts
with the provisions hereof or thereof, or will in the future grant or cause to
be granted to any holder or prospective holder of any Securities, any rights
relating thereto, including, for example, registration rights, which are, in the
aggregate, made available on more favorable terms (including, without
limitation, terms which are more favorable than those set forth in Article 5) to
such holder than those granted to the DLJ Entities and Orkla hereunder and
thereunder, unless the DLJ Entities and Orkla are given all of the benefits of
such favorable terms and consent thereto.
(b) The Issuer agrees to, consistent with other legal obligations and good
business practice, use its good faith efforts to conduct its business and that
of its Subsidiaries in a manner, and to take such other actions as are necessary
or appropriate, to fulfill its obligations under the Certificate of Designation
of the Senior Preferred Stock and the Certificate of Designation of the Junior
Preferred Stock to pay the dividends, principal and liquidation preference on
the Senior Preferred and the Junior Preferred Stock, as the case may be, when
due, in each case, to the extent consistent with the Indenture and the Credit
Agreement (as defined in the Securities Purchase Agreement).
SECTION 7.3. Certain Matters Relating to Orkla Warrants. (a) Xxxxxxx agrees
that if there shall, directly or indirectly, be a public offering of stock of,
or any sale of, all or substantially all of the assets, merger or other
reorganization or business combination of, the Issuer (in accordance with the
provisions of Section 2.4, if applicable), it will give reasonable notice
thereof to Orkla and, if so requested by Orkla, take such actions as may be
necessary to allow Orkla to participate in any such transaction on a basis
consistent with its underlying economic interest in the Issuer represented by
the Orkla Warrants and Orkla Warrant Shares, and in any event on a no less
favorable basis than had it held such underlying economic interest directly and
on a pro rata basis with the equivalent economic interests of the DLJ Entities.
The parties hereto agree to cooperate to the extent necessary to achieve such
desired result consistent with the intention reflected in this Section 7.3 to
provide economic benefits to Orkla on a basis consistent with its underlying
economic interest in the Issuer (including the common stock owned by Orkla in
XXX and received by Orkla in connection with the formation of XXX and the Issuer
in exchange for Orkla's pre-existing interest in AmeriServe) and on a pro rata
basis, with respect to the Orkla Warrants and Orkla Warrant Shares, with the
equivalent interests of the DLJ Entities, it being understood and agreed by the
parties hereto that the rights and benefits under this Agreement and the
Securities owned by the DLJ Entities shall in no event be impaired or
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diminished as a result of any such action pursuant to this Section 7.3, as
compared with the circumstances that would have been in effect had Orkla held
its interest in the Issuer directly rather than indirectly.
(b) The parties hereto agree that, in the event there shall, in accordance
with the terms of the Initial DLJ Warrants, be any adjustment (other than under
Section 8.1 of the Initial DLJ Warrants) in the number of shares of Common Stock
purchasable upon exercise of any of the Initial DLJ Warrants or any other
adjustment thereunder which in any such case results from an action or event
that does not give rise to a corresponding benefit to holders of Common Stock of
the Issuer, 640 of the shares of Common Stock held by XXX (as such number of
shares may be adjusted from time to time in respect of any subdivision, split or
combination of the outstanding shares of Common Stock, any capital
reorganization or any reclassification of the capital stock of the Issuer, or
otherwise, including without duplication by operation of this paragraph, and
including any such shares held by any successor in interest to XXX) shall be
subject to appropriate adjustment and shall be entitled to appropriate rights as
if such shares were represented by warrants of like tenor to the Initial DLJ
Warrants in such a manner as is consistent with the intent of the parties
hereto, but in no event will such adjustment or entitlement be duplicative of
any benefit previously received by such shares of Common Stock. The shares of
Common Stock to benefit from this paragraph will be designated by XXX at the
Closing and will bear an appropriate legend referring to this paragraph to
evidence such fact.
(c) In any case where this Agreement refers to the Other Investors not
permitting any action to be taken, it is understood and agreed that Orkla's
obligations, to the extent it does not control an Other Investor, shall be
limited to acting in good faith to not cause any impermissible action by such
Other Investor and not failing to act when it is capable of taking action.
(d) No repurchase of Securities shall be effected by the Issuer or any
Affiliate thereof unless the DLJ Entities and Orkla shall have been afforded an
opportunity to participate on a pro rata basis.
SECTION 7.4. Dilution of Initial Warrants; Consent to Issuance of Notes.
Each of the Initial DLJ Entities and Orkla agrees and confirms that the Initial
Warrants and Orkla Warrants, as adjusted or modified prior to the date hereof,
will not be subject to adjustment as a result of the Transactions, as such term
is defined in the Securities Purchase Agreement, and, accordingly, will be
subject to dilution as a result of the issuance of DLJ Warrants in connection
with the Transactions, as such term is defined in the Securities Purchase
Agreement. Each of the Initial DLJ Entities and Orkla hereby acknowledge that
the 12.5% Senior Secured Notes of the Issuer issued on January 25, 1996 permit
the issuance of the additional notes and preferred stock of the Issuer and
hereby consent to the issuance of the Notes, the Senior Preferred Stock, the
Junior Preferred Stock and the DLJ Warrants.
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ARTICLE 8.
MISCELLANEOUS
SECTION 8.1. Entire Agreement. The Transaction Documents constitute the
entire agreement between the parties with respect to the subject matter of the
Transaction Documents and supersede all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter of
this Agreement and the other Transaction Documents.
SECTION 8.2. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
successors, legal representatives and permitted assigns. Nothing in this
Agreement, expressed or implied, shall confer on any Person other than the
parties hereto, and their respective heirs, successors, legal representatives
and permitted assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
SECTION 8.3. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Issuer or any Investor, except in connection with a transfer
of securities of the Issuer pursuant to the terms hereof; provided that any
Person acquiring Securities who is required by the terms of this Agreement to
become a party hereto shall execute and deliver to the Issuer an agreement to be
bound by this Agreement and shall thenceforth be an "INVESTOR" for purposes of
this Agreement, having such rights and obligations as are consistent with those
rights and obligations applicable to the transfer of such Securities, except as
otherwise provided in this Agreement. Any Investor who ceases to beneficially
own (and no longer have the right to acquire) any securities of the Issuer shall
cease to be bound by the terms hereof (other than Sections 5.6, 5.7, 5.8, 7.1
and 7.2).
SECTION 8.4. Amendment; Waiver; Termination. (a) No provision of this
Agreement may be waived except by an instrument in writing executed by the party
against whom the waiver is to be effective. No provision of this Agreement may
be amended or otherwise modified except by an instrument in writing executed by
the Issuer with the approval of the Board and the DLJ Entities (together with
their Permitted Transferees), on the one hand, and Xxxxxxx (together with its
Permitted Transferees), on the other hand, so long as to either such group it
holds an equity interest of at least 10% (not giving effect to reductions in
ownership caused other than by a transfer or disposition of such equity
interest) of its investment in the Issuer immediately following the Closing
Date. The percentage set forth above shall be subject to appropriate downward
adjustment in the event of an acquisition of securities by Xxxxxxx pursuant to
Section 6.3 hereof or the operation of either of the special adjustments
described in Section 8 of the Initial Warrants or in Section 8 of the DLJ
Warrants.
(b) In addition, any amendment, modification or termination of any
provision of this Agreement that would adversely affect a DLJ Entity or Orkla
may be effected only with the consent of such DLJ Entity or Orkla, respectively.
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SECTION 8.5. Notices. All notices and other communications given or made
pursuant hereto or pursuant to any other agreement among the parties, unless
otherwise specified, shall be in writing and shall be deemed to have been duly
given or made if sent by fax (with confirmation in writing), delivered
personally or sent by registered or certified mail (postage prepaid, return
receipt requested) to the parties at the fax number or address set forth below
or at such other addresses as shall be furnished by the parties by like notice,
and such notice or communication shall be deemed to have been given or made upon
receipt:
if to the DLJ Entities, to: DLJ Merchant Banking Funding, Inc.
DLJ Merchant Banking Partners, L.P.
DLJ Capital Corporation
Sprout Growth II, L.P.
Sprout CEO Fund, X.X.
XXX Xxxxxxxx Xxxxxxx Xxxxxxxx XX, X.X.
XXX Merchant Banking Partners II-A, L.P.
DLJ Diversified Partners, L.P.
DLJ Diversified Partners-A, L.P.
DLJMB Funding II, Inc.
DLJ FIRST ESC LLC
DLJ EAB Partners, L.P.
DLJ Millennium Partners, L.P.
UK Investment Plan 1997 Partners
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
and to: DLJ International Partners, C.V.
DLJ Offshore Partners, X.X.
XXX Xxxxxxxx Xxxxxxxx XX, X.X.
x/x XXX Offshore Management N.V.
00 Xxxx X. Xxxxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxx
Xxxxxxxxxxx Antilles
Attention: Xxxxxxxx Xxxxxx
MeesPierson Trust (Curacao) N.V.
with a copy to: Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Fax: (000) 000-0000
if to the Issuer, Xxxxxxx or XXX: Nebco Xxxxx Holding Company
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c/x Xxxxxxx Industries, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxx Xxxxxx
Fax: (000) 000-0000
with a copy to: Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Fax: (000) 000-0000
if to Orkla, to: Orkla ASA
X.X. 000 Xxxxxx
Xxxxxxxxx xxxx 0
X-0000 Xxxx
Xxxxxx
Attention: Xxx Xxxxx Xxxx
Fax: 000-00-00-000-000
with a copy to: Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
Any Person who becomes an Investor shall provide its address and fax number
to the Issuer, which shall promptly provide such information to each other
Investor.
SECTION 8.6. Headings. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
SECTION 8.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
SECTION 8.8. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the conflicts of law rules of such state.
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SECTION 8.9. Specific Enforcement. Each party hereto acknowledges that the
remedies at law of the other parties for a breach or threatened breach of this
Agreement would be inadequate and, in recognition of this fact, any party to
this Agreement, without posting any bond, and in addition to all other remedies
which may be available, shall be entitled to obtain equitable relief in the form
of specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available.
SECTION 8.10. Consent to Jurisdiction. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of the
parties hereby consents to the non-exclusive jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient form. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 8.5 shall be deemed
effective service of process on such party.
SECTION 8.11. Orkla/Xxxxxxx Letter Agreement. The parties acknowledge that
Orkla and Xxxxxxx have entered into a letter agreement dated January 25, 1996,
relating to certain obligations of Xxxxxxx with respect to Orkla's investment
referred to herein and certain related transactions.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
DLJ MERCHANT BANKING PARTNERS, L.P.
BY DLJ MERCHANT BANKING, INC., Managing
General Partner
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Attorney-in-fact
DLJ INTERNATIONAL PARTNERS, C.V.
BY DLJ MERCHANT BANKING, INC., Advisory
General Partner
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Attorney-in-fact
DLJ OFFSHORE PARTNERS, C.V.
BY DLJ MERCHANT BANKING, INC., Advisory
General Partner
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Attorney-in-fact
DLJ MERCHANT BANKING FUNDING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Xxxxxxxxx
-00-
00
XXX XXXXXXX XXXXXXXXXXX
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Secretary and Treasurer
SPROUT GROWTH II, L.P.
BY DLJ CAPITAL CORPORATION,
General Partner
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Secretary and Treasurer
SPROUT CEO FUND, L.P.
BY DLJ CAPITAL CORPORATION,
General Partner
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Secretary and Treasurer
DLJ MERCHANT BANKING PARTNERS II, L.P.
BY DLJ MERCHANT BANKING II, INC., Managing
General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
DLJ MERCHANT BANKING PARTNERS II-A, L.P.
BY DLJ MERCHANT BANKING II, INC., Managing
General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
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Name: Xxxxx X. Xxxxxx
Title: Managing Director
DLJ OFFSHORE PARTNERS, II C.V.
BY DLJ MERCHANT BANKING II, INC., Advisory
General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
DLJ DIVERSIFIED PARTNERS, L.P.
BY DLJ DIVERSIFIED PARTNERS, INC., Managing
General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
DLJ DIVERSIFIED PARTNERS-A, L.P.
BY DLJ DIVERSIFIED PARTNERS, INC., Managing
General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
DLJMB FUNDING II, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ FIRST ESC LLC
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BY DLJ LBO PLANS MANAGEMENT
CORPORATION, Manager
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ EAB PARTNERS, L.P.
BY DLJ LBO PLANS MANAGEMENT
CORPORATION, General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Attorney-in-fact
DLJ MILLENNIUM PARTNERS, L.P.
BY DLJ MERCHANT BANKING II, INC.,
Managing General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Attorney-in-fact
UK INVESTMENT PLAN 1997 PARTNERS
XXXXXXXXX, LUFKIN & XXXXXXXX, INC., General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Attorney-in-fact
NEBCO XXXXX HOLDING COMPANY
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Treasurer
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48
NEBCO XXXXX DISTRIBUTORS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Assistant Treasurer
XXXXXXX INDUSTRIES, INC.
By: /s/ A. Petter 0stberg
--------------------------------------------------
Name: A. Petter 0stberg
Title: Chief Financial Officer and Treasurer
ORKLA ASA
By: /s/ Xxx Xxxxx Xxxx
--------------------------------------------------
Name: Xxx Xxxxx Xxxx
Title: Managing Director
XXXXXXX INCORPORATED
By: /s/ A. Petter 0stberg
--------------------------------------------------
Name: A. Petter 0stberg
Title: Chief Financial Officers and Assistant
Secretary
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