EQUITY INVESTMENT AGREEMENT
THIS EQUITY INVESTMENT AGREEMENT (this "Agreement") is
entered into as of this 13th day of May, 1997 by and among
Acadia Partners, L.P. ("Acadia"), Xxxx, Wheat Advisory
Partners Incorporation ("HWAP"), Keystone, Inc.
("Keystone"), (Acadia, HWAP and Keystone are referred herein
individually as a "Participating Purchaser" and collectively
as the "Participating Purchasers") and Specialty Foods
Acquisition Corporation ("SFAC").
W I T N E S S E T H
WHEREAS, reference is hereby made to each of (i) that
certain August Purchase Agreement dated as of August 12,
1996 by and among Specialty Foods Corporation ("SFC"),
Stella Foods, Inc. ("Stella") and Acadia, as amended by that
certain First Amendment thereto dated December 27, 1996,
(ii) that certain August Purchase Agreement dated as of
August 12, 1996 by and among SFC, Stella and Keystone, as
amended by that certain First Amendment thereto dated
December 27, 1996, and (iii) that certain August Purchase
Agreement dated as of August 12, 1996 by among SFC, Stella
and HWAP, as amended by that certain First Amendment thereto
dated December 27, 1996 (such agreements, as so amended, are
collectively referred to as the "Purchase Agreements").
Defined terms used in this Agreement but not defined herein
shall have the meanings ascribed to such terms in the
respective Purchase Agreements;
WHEREAS, in connection with the First Amendments to the
Purchase Agreements, the Purchasers have informed SFAC that,
subject to the approval of the SFAC Board of Directors, each
of them desires to replace the amount of the Purchased
Receivable due and owing to them under the Purchase
Agreements with equity of SFAC in the form of Units (as
defined in Section 1(b)) to be issued by SFAC;
WHEREAS, certain other stockholders of SFAC have
preemptive rights under certain Stockholder Agreements with
respect to the purchase of newly issued Units;
WHEREAS, the parties desire that the consideration to
be paid for such newly issued Units be the transfer to SFAC
of the Purchased Receivable; and
WHEREAS, the parties have determined that it is
necessary to set forth a procedure whereby other
stockholders of SFAC who elect to exercise their preemptive
rights can acquire portions of the Purchased Receivable from
such Participating Purchasers in order to pay for newly
issued Units.
NOW THEREFORE, in consideration of the foregoing and
other good and valuable consideration, the parties hereto
hereby agree as follows:
1. Exercise of Option; Terms of Units.
(a) On any date mutually agreed to by the parties
to this Agreement occurring after the date on which this
Agreement has been approved by the Board of Directors of
SFAC and before June 30, 1997 (the "Replacement Closing
Date"), each Participating Purchaser hereby agrees to
replace the respective amount of the Purchased Receivable
owed to such Participating Purchaser as of the Replacement
Closing Date with Units issued by SFAC at the Exercise Price
(as defined) in accordance with the terms and provisions of
this Agreement. Each Participating Purchaser shall receive
that number of Units determined by dividing the amount of
the Purchased Receivable owed to such Participating
Purchaser on the Replacement Closing Date by the Exercise
Price (as defined in Section 4) per Unit. In consideration
for the Units to be issued to each such Participating
Purchaser, such Participating Purchaser shall assign to SFAC
all of its rights in the Purchased Receivable owing to it on
the Replacement Closing Date.
(b) Each unit issued by SFAC in connection with
the replacement of the Insurance Receivable (each, a "Unit")
shall be comprised of one share of Preferred Stock of SFAC
("Preferred Stock") and a warrant (each, a "Warrant") to
purchase 395.1 shares of common stock of SFAC. The shares
of Preferred Stock shall have the rights, privileges and
preferences set forth in the Restated Certificate of
Incorporation attached as Exhibit A to this Agreement and
the Warrants shall have the rights, privileges and
preferences set forth in the form of Warrant Agreement
attached as Exhibit B hereto.
2. Notification with Respect to Preemptive Rights.
(a) Promptly after determination by the parties
of the Replacement Closing Date, SFAC will notify each
Stockholder (as defined in that certain Stockholders
Agreement effective as of August 16, 1993 among certain
Stockholders of SFAC) (such document being referred to
herein as the "Principal Stockholders' Agreement") that he,
she or it has a right to purchase a certain number of Units
on a preemptive basis, and inform each Stockholder of the
procedures by which such purchase will take place. Each
Stockholder will be sent an election form in the form of the
Preemptive Election Form attached hereto as Schedule 1
inviting such Stockholder to make an election with respect
to the exercise of his, her or its preemptive rights. The
date on which such Forms are mailed to the Stockholders is
referred to herein as the "Notification Date".
(b) As set forth on the Preemptive Election Form,
each Stockholder will have the option of electing to (i)
purchase its pro-rata number of Units of SFAC based on the
formula set forth in Section 2.3 of the Principal
Stockholders' Agreement (a copy of which Section is set
forth as Schedule 2 to this Agreement); or (ii) not purchase
any Units. If a Stockholder has not returned a completed
Preemptive Election Form within ten (10) business days of
the day after the Notification Date it will be conclusively
and irrevocably deemed that such Stockholder elected not to
purchase any Units. Notwithstanding anything herein to the
contrary, each Participating Purchaser shall automatically
and irrevocably be obligated to replace with Units that
portion of the Insurance Receivable owned by it which is not
purchased by another Stockholder in accordance with the
provisions of this Agreement; provided, however,
notwithstanding anything herein to the contrary, a
Participating Purchaser shall not be obligated hereunder to
purchase any Units except as a result of its replacement of
the Purchased Receivable owned by it. In calculating the
number of Units for all purposes under this Agreement,
fractions shall round to the nearest whole number and .500
shall be rounded upwards.
(c) Promptly after the expiration of such tenth
(10th) business day, SFAC will inform all Participating
Purchasers and all Stockholders who returned a completed
Preemptive Election Form with option (i) (each such
Stockholder referred to herein as a "Purchasing
Stockholder") of the following: (1) the number of Units that
he, she or it is obligated to purchase on the Replacement
Closing Date; (2) the amount of the Purchased Receivable
that he, she or it is required to convey to SFAC, and (3),
in the case of a Purchasing Stockholder, the portion of such
Purchased Receivable that he, she or it is required to
purchase from each of the Participating Purchasers on the
Repurchase Closing Date immediately prior to the Repurchase
Closing (as hereinafter defined) and the cash purchase price
therefore. It is expressly agreed among the parties hereto
that each Purchasing Stockholder will purchase Purchased
Receivables from each Participating Purchaser on a
proportional basis based on the percentage of the amount of
the Purchased Receivable held by each Participating
Purchaser over the aggregate amount of the Purchased
Receivables held by all Participating Purchasers.
3. Closing of Purchase and Sale of the Units.
(a) On the Replacement Closing Date, each
Purchasing Stockholder will deliver funds to each
Participating Purchaser by wire transfer in an amount
required to purchase from such Participating Purchaser that
portion of such Participating Purchaser's Purchased
Receivable that such Purchasing Stockholder is required to
purchase from such Participating Purchaser, and each such
Participating Purchaser shall convey to each such Purchasing
Stockholder, on a non-recourse basis, all of its right,
title and interest in and to such portion of the Purchased
Receivable by means of delivery of a General Assignment and
Xxxx of Sale in form and substance substantially equivalent
to the General Assignment and Xxxx of Sale attached hereto
as Exhibit C.
(b) Immediately thereafter, each Participating
Purchaser and each Purchasing Stockholder will convey to
SFAC, on a non-recourse basis, all of his, her or its right,
title and interest in and to the Purchased Receivable held
by each such entity, by means of delivery of a General
Assignment and Xxxx of Sale in form and substance
substantially equivalent to the General Assignment and Xxxx
of Sale attached hereto as Exhibit C, together with any
additional documentation that SFAC may reasonably request.
(c) Upon receipt of such deliveries from a
Participating Purchaser or a Purchasing Stockholder in
connection with his, her or its purchase of Units of SFAC,
SFAC will cause its transfer agent to issue a certificate to
each such Participating Purchaser and each such Purchasing
Stockholder evidencing the fact that the appropriate number
of shares of Preferred Stock and Warrants have been
registered in the name of such entity.
4. Conversion Price/Value of Purchased Receivable.
For purposes of this Agreement, (i) the conversion price for
the Units shall be $1,000.00 per Unit (the "Exercise
Price"), and (ii) all Purchased Receivables shall be valued
at face value without any discounts, reductions or other
allowances.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the date first written
above.
SPECIALTY FOODS ACQUISITION
CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxx
Title: President & CEO
SPECIALTY FOODS CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxx
Title: President & CEO
STELLA FOODS, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxx
Title: President & CEO
ACADIA PARTNERS, L.P.
By: /s/ X. Xxxxxx Xxxxxxxx
Name: X. Xxxxxx Xxxxxxxx
Title: General Partner
XXXX WHEAT ADVISORY PARTNERS
INCORPORATED
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Chairman & CEO
KEYSTONE, INC.
By: /s/ X. Xxxxxx Xxxxxxxx
Name: X. Xxxxxx Xxxxxxxx
Title: Vice President & CFO
Schedule 1
PREEMPTIVE ELECTION FORM
Name:________________________
Address:______________________
______________________
______________________
Tele No._______________________
Fax No. _______________________
THIS PREEMPTIVE ELECTION FORM MUST BE COMPLETED AND RETURNED
TO SFAC BY 5:00 PM (NEW YORK TIME) ON MAY 30, 1997 OR YOUR
PREEMPTIVE RIGHTS WITH RESPECT TO THIS UNIT OFFERING SHALL
BE DEEMED TO BE NULL AND VOID.
In connection with the issuance by SFAC of 19,500 Units
(consisting of one share of Preferred Stock and a warrant to
purchase 395.1 shares of SFAC Common Stock), the undersigned
hereby irrevocably elects the following option: [PLACE A
CHECK XXXX ON THE LINE NEXT TO THE OPTION SELECTED]
1.______ The undersigned elects to purchase his, her
or its pro-rata number of Units based on the
formula set forth in Section 2.3 of the
Principal Stockholders' Agreement (a number
equal to the product of (i) the total number
of Units being offered multiplied by (ii) a
fraction, the numerator of which is the
number of shares of SFAC Common Stock owned
by such Stockholder and the denominator of
which is the total number of outstanding
shares of SFAC Common Stock);
2.______ The undersigned elects not to purchase any
Units of SFAC.
If the undersigned elects to purchase Units, the undersigned
acknowledges and agrees that (1) the consideration to be
paid to SFAC for such Units will consist solely of
receivables which Acadia Partners, L.P., Xxxx Wheat Advisory
Partners Incorporated and Keystone, Inc. have previously
purchased from Specialty Foods Corporation and Stella Foods,
Inc., which represent amounts due from insurance companies
as a result of claims in connection with the fire at
Xxxxxx'x Xxxx facility; (2) he, she or it will purchase a
face amount of purchased receivables from each of such
parties on a proportional basis as required to fund such
party's purchase of Units; and (3) that he, she or it will
follow the closing procedures for these transactions as
outlined in the documentation which accompanied this
Election Form or as reasonably determined hereafter by SFAC
and the Executive Committee of the Board of Directors of
SFAC.
THIS PREEMPTIVE ELECTION FORM MUST BE COMPLETED AND RETURNED
TO SFAC BY 5:00 PM (NEW YORK TIME) ON MAY 30, 1997 OR YOUR
PREEMPTIVE RIGHTS WITH RESPECT TO THIS UNIT OFFERING SHALL
BE DEEMED TO BE NULL AND VOID.
Dated: May __, 1997
_____________________________________
Signature of Stockholder
RETURN THIS FORM BY MAIL TO:
SPECIALTY FOODS ACQUISITION CORPORATION
c/o STELLA FOODS, INC.
00 XXX-XXXXX XXXXXXXXXXXXX
XXXXXX XXXXXX, XXXXX 000
XXXXXXXXXXXX, XX 00000
ATTN: GENERAL COUNSEL
OR BY FAX TO:
847/000-0000
EXHIBIT A
TO THE
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
of
SPECIALTY FOODS ACQUISITION CORPORATION
1. Name. The name of the corporation is
Specialty Foods Acquisition Corporation (the "Corporation").
2. Address; Registered Office and Agent. The
address of the Corporation's registered office is The
Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxx xx
Xxxxxxxxxx, Xxxxxx of New Castle, State of Delaware; and its
registered agent at such address is The Corporation Trust
Company.
3. Purposes. The purpose of the Corporation is
to engage in, carry on and conduct any lawful act or
activity for which corporations may be organized under the
Delaware General Corporation Law.
4. Number of Shares. The total number of shares
of all classes of stock that the Corporation shall have
authority to issue is One Hundred Million Nineteen Thousand
Five Hundred (100,019,500) shares, consisting of (a) One
Hundred Million (100,000,000) shares of common stock of the
par value of One Cent ($.01) per share (the "Common Stock")
and (b) Nineteen Thousand Five Hundred (19,500) shares of
preferred stock of the par value of One Thousand Dollars
($1,000.00) per share (the "Preferred Stock").
The designation, relative rights, preferences and
limitations of the shares of each class are as follows:
4.1 Common Stock
4.1.1 Each share of Common Stock
shall have one vote, and, except as otherwise provided in
respect of the Series A Preferred Stock and any other class
or series of stock now or hereafter provided for, the
exclusive voting power for all purposes shall be vested in
the holders of the Common Stock.
4.1.2 Subject to the provisions of
law and any preferences of the Series A Preferred Stock and
any other class or series of stock now or hereafter provided
for, each outstanding share of Common Stock shall be
entitled to receive such dividends and other distributions
in cash, property or shares of stock of the Corporation as
may be declared thereon by the Board of Directors from time
to time out of assets of the Corporation legally available
therefor.
4.1.3 In the event of any
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Common
Stock shall be entitled, after payment or provision for
payment of the debts and other liabilities of the
Corporation and the amount to which the holders of the
Series A Preferred Stock and any other class or series of
stock now or hereafter provided for having a preference on
distributions in the liquidation, dissolution or winding up
of the Corporation shall be entitled, together with any
other class or series of stock now or hereafter provided for
not having a preference on distributions in the liquidation,
dissolution or winding up of the Corporation, to share
ratably in the remaining assets of the Corporation.
4.2 Series A Preferred Stock
4.2.1 Designation and Number of
Shares.
There shall be hereby
established a series of Preferred Stock designated as
"Series A Preferred Stock" (the "Series A Preferred"),
to consist of 19,500 shares, par value $1,000.00 per
share.
Capitalized terms used herein
and not otherwise defined shall have the meanings set
forth in Article 4.3 below.
4.2.2 Rank. The Series A Preferred
shall, with respect to dividend distributions and
distributions of assets and rights upon the liquidation,
winding up and dissolution of the Corporation, rank senior
to (a) all classes of common stock of the Corporation
(including, without limitation, the Common Stock), and
(b) each other class or series of Capital Stock of the
Corporation hereafter created which expressly provides that
it ranks junior to the Series A Preferred with respect to
dividend distributions and distributions of assets and
rights upon the liquidation, winding up and dissolution of
the Corporation (such Capital Stock, together with the
Common Stock, the "Junior Stock").
4.2.3 Dividends.
(a) Beginning on the date of
issuance of the Series A Preferred, the holders of the
outstanding shares of Series A Preferred shall be
entitled to receive, when, as and if declared by the
Board of Directors, out of funds legally available
therefor, dividends payable in cash on each share of
Series A Preferred at an annual rate equal to 16.0%.
All dividends with respect to any share of Series A
Preferred shall begin to accrue on a daily basis and be
cumulative, whether or not earned or declared, from the
date of issuance of such share and shall be payable
semi-annually in arrears on each Dividend Payment Date,
commencing on the first Dividend Payment Date after the
date of issuance of such share. Each dividend
distribution on the shares of Series A Preferred shall
be payable to holders of record as they appear on the
stock books of the Corporation on such record dates,
not less than 10 nor more than 60 days preceding the
related Dividend Payment Date, as shall be fixed by the
Board of Directors.
(b) All dividends paid with
respect to shares of Series A Preferred pursuant to
Section 4.2.3(a) shall be paid pro rata and in like
manner to all of the holders entitled thereto.
Dividends payable on the
shares of Series A Preferred for any period less than a
year shall be computed on the basis of a 365 or 366-day
year and the actual number of days elapsed in the
period for which payable.
Nothing herein contained shall
in any way or under any circumstances be construed or
deemed to require the Board of Directors to declare, or
the Corporation to pay or set apart for payment, any
dividends on shares of the Series A Preferred at any
time.
Dividends in connection with
any redemption pursuant to Section 4.2.6 may be
declared and paid at any time, without reference to any
regular Dividend Payment Date, to holders of record on
such date, not less than 10 nor more than 60 days prior
to the payment thereof, as may be fixed by the Board of
Directors.
Notwithstanding the foregoing
provisions of this Section 4.2.3, if (1) the
Corporation is not solvent or would be rendered
insolvent thereby, (2) such payment would impair the
Corporation's capital or (3) at such time any law or
the terms and provisions of any agreement of the
Corporation or any of its subsidiaries at such time
(whether currently in existence or entered into
subsequent to the date hereof), including any agreement
relating to the indebtedness of the Corporation or any
of its subsidiaries at such time, specifically prohibit
such declaration, payment or setting apart for payment
or provide that such declaration, payment or setting
apart for payment would constitute a violation or
breach thereof or a default (whether immediately or
with notice or lapse of time or both) thereunder,
subject to the next sentence of this Section 4.2.3(f),
the Corporation shall not declare, pay or set apart for
payment any dividend on any shares of Series A
Preferred or Junior Stock or make any payment on
account of, or set apart for payment money for a
sinking or other similar fund for, the purchase,
redemption or other retirement of, any shares of
Series A Preferred or Junior Stock or any warrants,
rights, calls or options exercisable for or convertible
into any shares of Series A Preferred or Junior Stock,
or make any distribution in respect thereof, either
directly or indirectly, whether in cash, obligations or
shares of the Corporation or other property. The fore
going provisions shall not prohibit either of the
following: the payment of dividends or other
distributions on shares of Series A Preferred in the
form of additional shares of Series A Preferred; or
the payment of dividends or other distributions on
shares of Junior Stock in the form of additional shares
of Junior Stock.
4.2.4 Liquidation.
(a) In the event of any voluntary
or involuntary liquidation, winding up or dissolution
of the Corporation, the holders of shares of Series A
Preferred then outstanding shall be entitled to be paid
for each share held, out of the assets of the
Corporation legally available for distribution to its
stockholders, an amount in cash equal to the
Liquidation Value per share, plus an amount in cash
equal to all accumulated and unpaid dividends thereon
to the date of such liquidation, winding up or
dissolution, before any payment shall be made or any
assets distributed to the holders of any shares of
Junior Stock. Except as provided in the preceding
sentence, holders of the Series A Preferred shall not
be entitled to any distribution in the event of any
liquidation, winding up or dissolution of the Corpora
tion.
(b) If, upon any liquidation,
winding up or dissolution of the Corporation, the
assets of the Corporation legally available for
distribution to the holders of the Series A Preferred
shall be insufficient to permit payment in full to such
holders of the sums which such holders are entitled to
receive in such case, then all of the assets available
for distribution to the holders of the Series A
Preferred shall be distributed among and paid to the
holders of Series A Preferred ratably in proportion to
the respective amounts that would be payable to such
holders if such assets were sufficient to permit
payment in full.
(c) For the purposes of this
Section 4, neither the voluntary sale, conveyance,
exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or
substantially all or part of the property or assets of
the Corporation nor the consolidation or merger of the
Corporation with one or more other corporations shall
be deemed to be a liquidation, winding up or
dissolution, voluntary or involuntary, of the
Corporation.
4.2.5 Limitation on Redemption. The
Series A Preferred shall not be redeemable, in whole or in
part, prior to and including August 16, 2006.
4.2.6 Redemption.
(a) At any time after August 16,
2006, the Corporation, at its option, may redeem at any
time, in whole or in part, in the manner provided in
Section 4.2.6(c), from any source of funds legally
available therefor, any or all of the shares of Series
A Preferred, at a redemption price equal to the
Liquidation Value of the Series A Preferred, together
with an amount in cash equal to all accumulated and
unpaid dividends thereon (the "Redemption Price"), to
the date fixed by the Corporation for redemption
thereof (the "Redemption Date"); provided, that the
Corporation may not redeem any or all of the shares of
Series A Preferred if at such time the terms and
provisions of any agreement of either the Corporation
or any of its subsidiaries at such time (whether
currently in existence or entered into subsequent to
the date hereof), including any agreement relating to
the indebtedness of the Corporation or any of its
subsidiaries at such time, provide that such redemption
would cause or constitute a violation or breach thereof
or a default (whether immediately or with notice or
lapse of time or both) thereunder. In the event of a
redemption pursuant to this Section 4.2.6(a) of only a
portion of the then outstanding shares of the Series A
Preferred, the Corporation shall effect such redemption
pro rata according to the number of shares held by each
holder of the Series A Preferred.
(b) At any time after August 16,
2006, each holder of the outstanding shares of Series A
Preferred shall be entitled, at its option, to require
the Corporation to redeem, in whole but not in part, in
the manner provided in Section 4.2.6(c), from any
source of funds legally available therefor, all of the
shares of Series A Preferred held by such holder at the
Redemption Price to the Redemption Date (the "Put
Right"), which Redemption Date shall be no later than
90 days after a holder of the outstanding shares of
Series A Preferred has provided the Corporation with
notice of its intent to exercise the Put Right. The
rights of each holder of shares of the Series A
Preferred to require the Corporation to redeem shares
of the Series A Preferred shall be limited by this
Section 4.2.6(b). Holders of shares of Series A
Preferred shall not have the right to require the
Corporation to redeem shares of the Series A Preferred
to the extent that such redemption (i) would constitute
or cause a breach or violation of or a default (whether
immediately or with notice or lapse of time or both)
under any agreement of either the Corporation or of any
of its subsidiaries at such time (whether currently in
existence or entered into subsequent to the date
hereof), including any agreement relating to the
indebtedness of the Corporation or any of its
subsidiaries at such time, or (ii) would violate any
law applicable to the Corporation. If the Corporation
can redeem some but not all of the shares of Series A
Preferred that holders have requested the Corporation
to redeem (the "Put Securities"), the Corporation shall
redeem as many Put Securities as can be redeemed
without causing such breach, default or violation;
provided, that in the event of a redemption of only a
portion of the then outstanding shares of the Series A
Preferred pursuant to Put Rights exercised by more than
one holder of the shares of Series A Preferred, the
Corporation shall effect such redemption pro rata
according to the number of shares held by each such
holder. Thereafter, at the time it becomes possible
for the Corporation to redeem all (but not less than
all) remaining Put Securities without causing such
breach, default or violation, the Corporation shall
promptly redeem all such remaining Put Securities.
(c) At least 30 days and not more
than 60 days before an Redemption Date, the Corporation
shall mail a notice of redemption (the "Redemption
Notice") by first class mail, postage prepaid, to the
holders of record of shares so to be redeemed at each
such holder's address as it appears on the stock
register of the Corporation; provided, that no failure
to give such notice nor any defect therein shall affect
the validity of the procedures for the redemption of
any shares of Series A Preferred to be redeemed except
as to the holder or holders to whom the Corporation has
failed to give said notice or except as to the holder
or holders whose notice was defective. The Redemption
Notice shall state:
(1) that the Corporation is
exercising its option to redeem the Series A
Preferred or responding to the exercise by the
holder of shares of Series A Preferred of its
option to cause such redemption;
(2) the Redemption Price;
(3) whether all or less than
all of the then outstanding shares of the Series A
Preferred are to be redeemed and the total number
of shares of the Series A Preferred being
redeemed;
(4) the number of shares of
Series A Preferred held by such holder that the
Corporation intends to redeem;
(5) the Redemption Date;
(6) that the holder is to
surrender to the Corporation, at the place or
places where certificates for shares of Series A
Preferred are to be surrendered for redemption as
provided in the Redemption Notice, in the manner
and at the Redemption Price designated, such
holder's certificate or certificates representing
the shares of Series A Preferred to be redeemed;
and
(7) that dividends on the
shares of the Series A Preferred to be redeemed
shall cease to accrue on such Redemption Date
unless the Corporation defaults in making payment
of the Redemption Price for the shares called for
redemption.
(d) Each holder of shares of
Series A Preferred called for redemption shall
surrender the certificate or certificates representing
such shares of Series A Preferred to the Corporation,
duly endorsed, in the manner and at the place
designated in the Redemption Notice, and on the
Redemption Date the full Redemption Price for such
shares shall be payable in cash to the Person whose
name appears on such certificate or certificates as the
owner thereof, and each surrendered certificate shall
be canceled and retired. In the event that less than
all of the shares represented by any such certificate
are redeemed, a new certificate shall be issued by the
Corporation, at its expense, representing the
unredeemed shares.
(e) Unless the Corporation
defaults in the payment of the Redemption Price,
dividends on the shares of Series A Preferred called
for redemption shall cease to accrue on the Redemption
Date, and the holders of such redeemed shares shall
cease to have any further rights as stockholders of the
Corporation on the Redemption Date, other than the
right to receive the Redemption Price. If there is any
such default in payment, then such dividends shall
continue to accrue and the holders of such shares shall
continue to have all rights as stockholders of the
Corporation (in each case as though no such redemption
or attempted redemption had been made).
4.2.7 Voting Rights. The holders of
shares of Series A Preferred, except as otherwise required
under Delaware law, shall not be entitled or permitted to
vote on any matter required or permitted to be voted upon by
the stockholders of the Corporation.
4.2.8 Reissuance of Series A
Preferred. Shares of Series A Preferred that have been
redeemed or otherwise acquired by the Corporation shall be
retired and canceled and shall resume the status of
authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and
reissued as part of any series of Preferred Stock; provided,
that any issuance of such shares as Series A Preferred must
be in compliance with the terms of this Article 4.2.
4.2.9 Business Day. If any payment
or redemption shall be required by the terms hereof to be
made on a day that is not a Business Day, such payment or
redemption shall be made on the immediately succeeding
Business Day.
4.3 Definitions
As used in this Article 4, the following
terms shall have the following meanings (with terms defined
in the singular having comparable meanings when used in the
plural and vice versa), unless the context otherwise
requires:
"Business Day" means any day except a
Saturday, a Sunday, or any day on which banking institutions
in New York, New York are required or authorized by law or
other governmental action to be closed.
"Capital Stock" means, with respect to any
Person, any and all shares, interests, participations,
rights in, or other equivalents (however designated and
whether voting or non-voting) of, such Person's capital
stock and any and all rights, warrants or options
exchangeable for or convertible into such capital stock (but
excluding any debt security that is exchangeable for or
convertible into such capital stock).
"Dividend Payment Date" means March 31 and
September 30 of each year.
"Exchange Act" means the Securities Exchange
Act of 1934, as amended.
"Liquidation Value" means, with respect to a
share of Series A Preferred, the sum of $1,000.
"Person" means any individual, corporation,
limited liability company, partnership, firm, joint venture,
association, joint-stock company, trust, estate,
unincorporated organization, governmental or regulatory body
or other entity.
5. Election of Directors. Members of the Board
of Directors may be elected either by written ballot or by
voice vote.
6. Limitation of Liability. No Director of the
Corporation shall be personally liable to the Corporation or
its stockholders for monetary damages for breach of
fiduciary duty as a Director, except for liability (a) for
any breach of the Director's duty of loyalty to the
Corporation or its stockholders, (b) for acts or omissions
not in good faith or which involve intentional misconduct or
a knowing violation of law, (c) under Section 174 of the
Delaware General Corporation Law or (d) for any transaction
from which the Director derived any improper personal
benefits.
Any repeal or modification of the foregoing para
graph by the stockholders of the Corporation shall not
adversely affect any right or protection of a Director of
the Corporation existing at the time of such repeal or
modification.
7. Indemnification.
7.1 To the extent not prohibited by law, the
Corporation shall indemnify any person who is or was made,
or threatened to be made, a party to any threatened, pending
or completed action, suit or proceeding (a "Proceeding"),
whether civil, criminal, administrative or investigative,
including, without limitation, an action by or in the right
of the Corporation to procure a judgment in its favor, by
reason of the fact that such person, or a person of whom
such person is the legal representative, is or was a
Director or officer of the Corporation, or is or was serving
in any capacity at the request of the Corporation for any
other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise (an "Other
Entity"), against judgments, fines, penalties, excise taxes,
amounts paid in settlement and costs, charges and expenses
(including attorneys' fees and disbursements). Persons who
are not Directors or officers of the Corporation may be
similarly indemnified in respect of service to the
Corporation or to an Other Entity at the request of the
Corporation to the extent the Board at any time specifies
that such persons are entitled to the benefits of this
Section 7.
7.2 The Corporation shall, from time to
time, reimburse or advance to any Director or officer or
other person entitled to indemnification hereunder the funds
necessary for payment of expenses, including attorneys' fees
and disbursements, incurred in connection with any Proceed
ing, in advance of the final disposition of such Proceeding;
provided, however, that, if required by the Delaware General
Corporation Law, such expenses incurred by or on behalf of
any Director or officer or other person may be paid in
advance of the final disposition of a Proceeding only upon
receipt by the Corporation of an undertaking, by or on
behalf of such Director or officer (or other person
indemnified hereunder), to repay any such amount so advanced
if it shall ultimately be determined by final judicial
decision from which there is no further right of appeal that
such Director, officer or other person is not entitled to be
indemnified for such expenses.
7.3 The rights to indemnification and xxxx
bursement or advancement of expenses provided by, or granted
pursuant to, this Section 7 shall not be deemed exclusive of
any other rights to which a person seeking indemnification
or reimbursement or advancement of expenses may have or here
after be entitled under any statute, this Certificate of
Incorporation, the By-laws of the Corporation (the "By-
laws"), any agreement, any vote of stockholders or
disinterested Directors or otherwise, both as to action in
his or her official capacity and as to action in another
capacity while holding such office.
7.4 The rights to indemnification and xxxx
bursement or advancement of expenses provided by, or granted
pursuant to, this Section 7 shall continue as to a person
who has ceased to be a Director or officer (or other person
indemnified hereunder) and shall inure to the benefit of the
executors, administrators, legatees and distributees of such
person.
7.5 The Corporation shall have power to
purchase and maintain insurance on behalf of any person who
is or was a Director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of an
Other Entity, against any liability asserted against such
person and incurred by such person in any such capacity, or
arising out of such person's status as such, whether or not
the Corporation would have the power to indemnify such
person against such liability under the provisions of this
Section 7, the By-laws or under Section 145 of the Delaware
General Corporation Law or any other provision of law.
7.6 The provisions of this Section 7 shall
be a contract between the Corporation, on the one hand, and
each Director and officer who serves in such capacity at any
time while this Section 7 is in effect and any other person
indemnified hereunder, on the other hand, pursuant to which
the Corporation and each such Director, officer, or other
person intend to be legally bound. No repeal or
modification of this Section 7 shall affect any rights or
obligations with respect to any state of facts then or
theretofore existing or thereafter arising or any proceeding
theretofore or thereafter brought or threatened based in
whole or in part upon any such state of facts.
7.7 The rights to indemnification and xxxx
bursement or advancement of expenses provided by, or granted
pursuant to, this Section 7 shall be enforceable by any
person entitled to such indemnification or reimbursement or
advancement of expenses in any court of competent jurisdic
tion. The burden of proving that such indemnification or
reimbursement or advancement of expenses is not appropriate
shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, its
independent legal counsel and its stockholders) to have made
a determination prior to the commencement of such action
that such indemnification or reimbursement or advancement of
expenses is proper in the circumstances nor an actual
determination by the Corporation (including its Board of
Directors, its independent legal counsel and its
stockholders) that such person is not entitled to such
indemnification or reimbursement or advancement of expenses
shall constitute a defense to the action or create a
presumption that such person is not so entitled. Such a
person shall also be indemnified for any expenses incurred
in connection with successfully establishing his or her
right to such indemnification or reimbursement or
advancement of expenses, in whole or in part, in any such
proceeding.
7.8 Any Director or officer of the Corpora
tion serving in any capacity (a) another corporation of
which a majority of the shares entitled to vote in the
election of its directors is held, directly or indirectly,
by the Corporation or (b) any employee benefit plan of the
Corporation or any corporation referred to in clause (a)
shall be deemed to be doing so at the request of the
Corporation.
7.9 Any person entitled to be indemnified or
to reimbursement or advancement of expenses as a matter of
right pursuant to this Section 7 may elect to have the right
to indemnification or reimbursement or advancement of
expenses interpreted on the basis of the applicable law in
effect at the time of the occurrence of the event or events
giving rise to the applicable Proceeding, to the extent
permitted by law, or on the basis of the applicable law in
effect at the time such indemnification or reimbursement or
advancement of expenses is sought. Such election shall be
made, by a notice in writing to the Corporation, at the time
indemnification or reimbursement or advancement of expenses
is sought; provided, however, that if no such notice is
given, the right to indemnification or reimbursement or
advancement of expenses shall be determined by the law in
effect at the time indemnification or reimbursement or
advancement of expenses is sought.
8. Adoption, Amendment and/or Repeal of By-Laws.
The Board of Directors may from time to time (after adoption
by the undersigned of the original By-laws) make, alter or
repeal the By-laws by a vote of two-thirds of the entire
Board of Directors that would be in office if no vacancy
existed, whether or not present at a meeting; provided,
however, that any By-laws made, amended or repealed by the
Board of Directors may be amended or repealed, and any By-
laws may be made, by the stockholders of the Corporation by
vote of a majority of the holders of shares of stock of the
Corporation entitled to vote in the election of Directors of
the Corporation.
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SPECIALTY FOODS ACQUISITION CORPORATION
(a Delaware corporation)
Specialty Foods Acquisition Corporation, a
corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), hereby certifies as
follows:
1. The name of the Corporation is Specialty
Foods Acquisition Corporation. The original Certificate of
Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on June 7, 1993.
The original Certificate of Incorporation was amended by an
amendment filed with the Office of the Secretary of State of
the State of Delaware on August 11, 1993 and by a
certificate of correction filed with such Secretary on
September 13, 1993.
2. The Corporation's Certificate of
Incorporation is hereby amended and restated in its entirety
by the Amended and Restated Certificate of Incorporation of
Specialty Foods Acquisition Corporation attached hereto as
Exhibit A and incorporated herein by this reference (Exhibit
A and this Certificate are collectively referred to as the
"Restated Certificate").
3. The Certificate of Incorporation of the
Corporation is hereby amended to effect amendments or
changes authorized by the Delaware General Corporation Law
as follows: (a) to increase the aggregate number of shares
which the Corporation shall have authority to issue, and (b)
to establish a class of preferred stock, par value $1,000.00
per share (the "Preferred Stock"), having 19,500 shares
authorized, with the Board of Directors having the authority
to establish and designate series of the Preferred Stock and
to fix the number of shares and the relative voting,
dividend, liquidation and other rights, preferences and
limitation of each such series of Preferred Stock.
4. To accomplish the foregoing amendments, the
following provisions of the Corporation's Certificate of
Incorporation have been amended:
(a) Articles ONE, TWO and THREE, relating to
the name of the Corporation, its registered office and
agent and its purpose, respectively, hereby remain the
same.
(b) Article FOUR, relating to the aggregate
number of shares of capital stock that the Corporation is
authorized to issue, the par value thereof, and the
classes into which such shares are divided, is hereby
amended to read as set forth in Article FOUR of the
Certificate of Incorporation of the Corporation as
hereinafter restated.
(c) Old Article FIVE, relating to the
original incorporator of the Corporation, is hereby
deleted.
(d) Old Article SIX, relating to election of
directors, is hereby renumbered Article FIVE.
(e) Old Article SEVEN, relating to the
limitation of directors' liability to the Corporation and
its shareholders, is hereby renumbered Article SIX.
(f) Old Article EIGHT, relating to
indemnification of directors and officers and certain
other persons, is hereby renumbered Article SEVEN.
(g) Old Article NINE, relating to adoption,
amendment or repeal of by-laws by the directors, is
hereby renumbered as Article EIGHT.
5. The Restated Certificate was duly approved
pursuant to resolutions set forth in unanimous written
consent, dated as of May __, 1995, of the Board of Directors
of the Corporation in accordance with Section 141(f) of the
General Corporation Law.
6. That in lieu of a meeting and vote of
stockholders, the stockholders of the Corporation have given
unanimous written consent to the said amendments in
accordance with the provisions of Section 228 of the General
Corporation Law.
7. That the aforesaid amendments were duly
adopted in accordance with the applicable provisions of
Sections 242 and 245 of the General Corporation Law.
IN WITNESS WHEREOF, the Corporation has authorized
the undersigned to execute this Amended and Restated
Certificate of Incorporation and caused the corporate seal
of the Corporation to be hereunto affixed this ______ day of
May, 1997.
SPECIALTY FOODS ACQUISITION
CORPORATION
By:_______________________________________
Name: Xxxxxxxx X. Xxxxxxxx
Title: President
[Corporate Seal]
ATTEST:
By:________________________________
Name: Xxxxxx X. Xxxxx
Title: Secretary
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of __________, 1997
(the "Agreement") by and between SPECIALTY FOODS ACQUISITION
CORPORATION, a Delaware corporation (the "Company"), and the
purchasers party hereto (each, a "Holder" and, collectively,
the "Holders").
WHEREAS, the Company proposes to issue and deliver
its warrant certificates ("Warrant Certificates") evidencing
warrants (the "Warrants") each to purchase 395.1 newly
issued shares of common stock, par value $0.01 per share, of
the Company ("Common Stock") in connection with the sale by
the Company to the Holders of units comprised of one share
of Preferred Stock, $1,000.00 par value, of the Company in
the aggregate principal amount of up to $19,500,000 and one
Warrant pursuant to the Equity Investment Agreement (the
"Equity Investment Agreement") dated the date hereof between
the Company and the Holders.
NOW THEREFORE, in consideration of the foregoing
and for the purpose of defining the terms and provisions of
the Warrants and the respective rights and obligations
thereunder of the Company and the Holders, the Company and
each Holder agree as follows:
1. Certain Definitions. The following terms, as
used in this Agreement, have the following meanings:
(a) "Account Manager" means, each Holder, if
any, duly authorized to act as attorney-in-fact on
behalf of any Person in purchasing, in the name of and
using funds provided by such Person, units under the
Equity Investment Agreement.
(b) "Affiliate" means, with respect to any
specified Person, any other Person controlling,
controlled by or under common control with such
specified Person. For purpose of this definition, the
term "control," when used with respect to any Person,
shall include the power to exercise discretion over the
investments of such Person, and the terms "controlling"
and "controlled" have corresponding meanings.
(c) "Common Stock" has the meaning set forth
in the preamble.
(d) "Exercise Period" means the period
beginning on the date hereof and ending on the tenth
anniversary of the date hereof.
(e) "Exercise Price" means $0.021332 per
share of Common Stock, as such price may be adjusted
pursuant to Section 4 hereof.
(f) "Expiration Date" for the Warrants means
the last day of the Exercise Period.
(g) "Fair Market Value" of a share of Common
Stock as of a particular date (the "Determination
Date") shall mean:
(i) If the Common Stock is listed or
admitted for trading on a national securities exchange,
then the Fair Market Value shall be the average of the
last 30 "daily sales prices" of the Common Stock on the
principal national securities exchange on which the
Common Stock is listed or admitted for trading on the
last 30 Business Days prior to the Determination Date,
or if not listed or traded on any such exchange, then
the Fair Market Value shall be the average of the last
30 "daily sales prices" of the Common Stock on the
Nasdaq National Market on the last 30 Business Days
prior to the Determination Date. The "daily sales
price" shall be the closing price of the Common Stock
at the end of each day; or
(ii) If the Common Stock is not so listed or
admitted to unlisted trading privileges or if no such
sale is made on at least 25 of such days, then the Fair
Market Value shall be as reasonably determined in good
faith by the Company's Board of Directors or a duly
appointed committee of the Board of Directors (which
determination shall be reasonably described in the
written notice delivered to the Holder together with
the Common Stock certificates).
(h) "Holder" has the meaning set forth in
the preamble.
(i) "Person" means any individual,
corporation, limited liability company, partnership,
limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision
thereof.
(j) "Securities" has the meaning set forth
in Section 4(a)(4)(ii).
(k) "Securities Act" means the Securities
Act of 1933, as amended from time to time, and any
successor statute.
(l) "Warrants" has the meaning set forth in
the preamble.
(m) "Warrant Certificates" means the
certificates evidencing the Warrants.
(n) "Warrant Shares" means the shares of
Common Stock purchasable by the Holder upon the
exercise of the Warrants.
2. Issue of Warrants. The Warrant Certificates
shall be in registered form only and substantially in the
form attached hereto as Exhibit A, shall be dated the date
on which signed by an authorized signatory of the Company
and may have such legends and endorsements typed, stamped or
printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement.
Warrant Certificates evidencing 19,500 Warrants may be
executed by any authorized officer of the Company. Warrant
Certificates evidencing an aggregate 19,500 Warrants shall
be delivered in the name of the Holders in the amounts
listed opposite the name of such Holder in Exhibit B
attached hereto to the Holders at the Closing (as defined in
the Equity Investment Agreement).
3. Exercise Price; Exercise of Warrants.
(a) Exercise Price. Each Warrant shall
entitle the Holder, subject to the provisions of this
Agreement, to purchase the number of shares of Common
Stock determined at the time of exercise thereof in
accordance with Section 3(b)(1) and Section 4 below, at
a purchase price per share equal to the Exercise Price.
(b) Exercise of Warrants Generally.
(1) Exercise During Exercise
Period. The aggregate number of Warrants that may be
exercised at any time during the Exercise Period shall be
equal to the number of Warrants held by the Holder as of the
date hereof minus the aggregate number of Warrants that have
been exercised by such Holder prior to such time. All
Warrants not exercised during the Exercise Period shall
expire on the Expiration Date.
(2) Liquidation Event. If the
Company is liquidated in accordance with the provisions of
its Certificate of Incorporation, then the Warrants shall be
deemed to have been exercised.
(3) Method of Exercise; Payment of
Exercise Price. In order to exercise any or all of the
Warrants represented by a Warrant Certificate, the Holder
must surrender the Warrant Certificate to the Company for
exercise, with the reverse side of the Warrant Certificate
duly executed, together with any required payment in full of
the Exercise Price for each Warrant Share to which the
Holder is entitled, any such payment of the Exercise Price
to be made by check or wire transfer to an account
designated by the Company. If the Holder elects to exercise
only a portion of the Warrants represented by the Warrant
Certificate or Certificates registered in its name, then the
remaining portion of such Warrants shall be returned to the
Holder in the form of a new Warrant Certificate. Upon
surrender of a Warrant Certificate and the payment of the
Exercise Price in conformity with the foregoing provisions,
the Company shall promptly issue to the Holder share
certificates representing Warrant Shares to which the Holder
is entitled, registered in the name of the Holder or the
name or names of such Affiliates of the Holder as may be
directed in writing by the Holder, and shall deliver such
share certificates to the Person or Persons entitled to
receive the same. The Company shall issue such share
certificates within five business days after the payment of
the Exercise Price of the Warrants by the Holder, but such
shares shall be deemed issued and outstanding on the date
the Warrant is exercised and the Exercise Price is paid to
the Company.
4. Certain Adjustments.
(a) The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Exercise
Price shall be subject to adjustment as follows:
(1) Stock Dividends. If at any time
after the date of the issuance of the Warrants (i) the
Company shall pay a stock dividend payable in shares of
Common Stock or (ii) the number of shares of Common Stock
shall have been increased by a subdivision or split-up of
shares of Common Stock, then, on the date of the payment of
such dividend or immediately after the effective date of
subdivision or split up, as the case may be, the number of
shares to be delivered upon exercise of each Warrant will be
increased so that the holder of such Warrant will be
entitled to receive the number of shares of Common Stock
that such Holder would have owned immediately following such
action had such Warrant been exercised immediately prior
thereto, and the Exercise Price will be adjusted as provided
below in paragraph (7).
(2) Combination of Stock. If the num
ber of shares of Common Stock outstanding at any time after
the date of the issuance of the Warrants shall have been
decreased by a combination of the outstanding shares of Com
mon Stock, then, immediately after the effective date of
such combination, the number of shares of Common Stock to be
delivered upon exercise of each Warrant will be decreased so
that the Holder thereafter will be entitled to receive the
number of shares of Common Stock that such Holder would have
owned immediately following such action had such Warrant
been exercised immediately prior thereto, and the Exercise
Price will be adjusted as provided below in paragraph (7).
(3) Reorganization, etc. If any capi
tal reorganization of the Company, or any reclassification
of the Common Stock, or any consolidation of the Company
with or merger of the Company with or into any other person
or any sale, lease or other transfer of all or substantially
all of the assets of the Company to any other person, shall
be effected in such a way that the holders of Common Stock
shall be entitled to receive stock, other securities or
assets (whether such stock, other securities or assets are
issued or distributed by the Company or another person) with
respect to or in exchange for Common Stock, then, upon
exercise of each Warrant the Holder shall have the right to
receive the kind and amount of stock, other securities or
assets receivable upon such reorganization,
reclassification, consolidation, merger or sale, lease or
other transfer by a holder of the number of shares of Common
Stock that such Holder would have been entitled to receive
upon exercise of such Warrant had such Warrant been
exercised immediately before such reorganization, reclassifi
cation, consolidation, merger or sale, lease or other
transfer, subject to adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided
for in this Section 4(a).
(4) Stock and
Rights Offering at Less than Fair
Market Value.
(i) If at any time after the date
of issuance of the Warrants, the Company shall issue to
all holders of its Common Stock or sell or fix a record
date for the issuance to all holders of its Common
Stock of (A) Common Stock or (B) rights, options or
warrants entitling the holders thereof to subscribe for
or purchase Common Stock (or securities convertible or
exchangeable into or exercisable for Common Stock), in
any such case, at a price per share (or having a
conversion, exchange or exercise price per share) that
is less than Fair Market Value (as defined in Sec
tion 1(f) hereof) on the date of such issuance or such
record date then, immediately after the date of such
issuance or sale or on such record date, the number of
shares of Common Stock to be delivered upon exercise of
each Warrant shall be increased so that the Holder
thereafter will be entitled to receive the number of
shares of Common Stock determined by multiplying the
number of shares of Common Stock such Holder would have
been entitled to receive immediately before the date of
such issuance or sale or such record date by a
fraction, the denominator of which will be the number
of shares of Common Stock outstanding on such date plus
the number of shares of Common Stock that the aggregate
offering price of the total number of shares so offered
for subscription or purchase (or the aggregate initial
conversion price, exchange price or exercise price of
the convertible securities or exchangeable securities
or rights, options or warrants, as the case may be, so
offered) would purchase at such Fair Market Value, and
the numerator of which will be the number of shares of
Common Stock outstanding on such date plus the number
of additional shares of Common Stock offered for
subscription or purchase (or into which the convertible
or exchangeable securities or rights, options or
warrants so offered are initially convertible or
exchangeable or exercisable, as the case may be), and
the Exercise Price shall be adjusted as provided below
in paragraph (7).
(ii) If the Company shall, at any
time after the date of issuance of the Warrants distri
bute to all holders of its Common Stock any shares of
capital stock of the Company (other than Common Stock)
or evidences of its indebtedness or assets (excluding
cash dividends or distributions paid from retained
earnings of the Company) or rights or warrants to sub
scribe for or purchase any of its securities (excluding
those referred to in paragraph (4)(i) above) (any of
the foregoing being hereinafter in this para
graph (4)(ii) called the "Securities"), then in each
such case, unless the Company elects to reserve shares
or other units of such Securities for distribution to
the Holder upon exercise of the Warrants of such Holder
so that, in addition to the shares of the Common Stock
to which such Holder is entitled, such Holder will
receive upon such exercise the amount and kind of such
Securities that such Holder would have received if the
Holder had, immediately prior to the record date for
the distribution of the Securities, exercised such
Warrant, then the number of shares of Common Stock to
be delivered to such Holder upon exercise of such
Warrant shall be increased so that the Holder
thereafter shall be entitled to receive the number of
shares of Common Stock determined by multiplying the
number of shares such Holder would have been entitled
to receive immediately before such record date, had the
Holder exercised the Warrant immediately prior thereto
by a fraction, the denominator of which shall be the
Fair Market Value per share of Common Stock on such
record date minus the then fair market value (as
reasonably determined by the Board of Directors of the
Company), of the portion of the capital stock or assets
or evidences of indebtedness so distributed or of such
rights or warrants applicable to one share of Common
Stock and the numerator of which shall be the Fair
Market Value per share of the Common Stock, and the
Exercise Price shall be adjusted as provided below in
paragraph (7).
(5) Fractional Shares. No fractional
shares of Common Stock or scrip shall be issued to any
Holder in connection with the exercise of the Warrants.
Instead of any fractional shares of Common Stock that would
otherwise be issuable to such Holder, the Company will pay
to such Holder a cash adjustment in respect of such
fractional interest in an amount equal to that fractional
interest of the then current Fair Market Value per share of
Common Stock.
(6) Carryover. Notwithstanding any
other provision of this Section 4(a), no adjustment shall be
made to the number of shares of Common Stock to be delivered
to the Holder (or to the Exercise Price) if such adjustment
represents less than 1% of the number of shares to be so
delivered, but any lesser adjustment shall be carried
forward and shall be made at the time and together with the
next subsequent adjustment that together with any adjust
ments so carried forward shall amount to 1% or more of the
number of shares to be so delivered.
(7) Exercise Price Adjustment.
Whenever the number of Warrant Shares purchasable upon the
exercise of the Warrant is adjusted as provided pursuant to
this Section 4(a), the Exercise Price payable upon the
exercise of this Warrant shall be adjusted by multiplying
such Exercise Price immediately prior to such adjustment by
a fraction, of which the numerator shall be the number of
Warrant Shares purchasable upon the exercise of the Warrant
immediately prior to such adjustment, and of which the
denominator shall be the number of Warrant Shares
purchasable immediately thereafter; provided, however, that
the Exercise Price for each Warrant Share shall in no event
be less than the par value of such Warrant Share.
(b) No Adjustments for Incentive
Compensation; Arm's Length Transactions.
Notwithstanding any other provision hereof, it is
expressly understood that the Warrants shall not be
adjusted with respect to (a) securities or rights that
may be issued to any of the Company's executive
officers or employees pursuant to any employee benefit
plan, bonus plan or employment arrangement to the
extent that such securities or rights, together with
all such other securities or rights previously issued
to employees pursuant to any such plan or arrangement,
represent [15]% or less of the common equity securities
of the Company on a fully diluted basis or (b) the
issuance of any Warrant Shares.
(c) No Adjustment for Dividends.
Except as provided in Section 4(a), no adjustment in
respect of any dividends shall be made during the term
of the Warrants or upon the exercise of the Warrants.
Notwithstanding any other provision hereof, no
adjustments shall be made on Warrant Shares issuable on
the exercise of the Warrants for any cash dividends
paid or payable to holders of record of Common Stock
prior to the date as of which the Holder shall be
deemed to be the record holder of such Warrant Shares.
(d) Notice of Adjustment. Whenever the
number of Warrant Shares or the Exercise Price of such
Warrant Shares is adjusted, as herein provided, the
Company shall promptly mail by first class, postage
prepaid, to the Holder, notice of such adjustment or
adjustments and a certificate of a firm of independent
public accountants of recognized national standing
selected by the Board of Directors of the Company (who
shall be appointed at the Company's expense and who may
be the independent public accountants regularly
employed by the Company) setting forth the number of
Warrant Shares and the Exercise Price of such Warrant
Shares after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment
was made.
5. Loss or Mutilation. Upon receipt by the
Company of evidence satisfactory to it of the ownership of
and the loss, theft, destruction or mutilation of any War
rant Certificate and of indemnity satisfactory to it, and
(in the case of mutilation) upon surrender and cancellation
thereof, then, in the absence of notice to the Company that
the Warrants represented thereby have been acquired by a
bona fide purchaser, the Company shall deliver to the
Holder, in exchange for or in lieu of the lost, stolen,
destroyed or mutilated Warrant Certificate, a new Warrant
Certificate of the same tenor and for a like aggregate
number of Warrants. Upon the issuance of any new Warrant
Certificate under this Section 5, the Company may require
the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto
and other expenses in connection herewith. Every new War
rant Certificate executed and delivered pursuant to this
Section 5 in lieu of any lost, stolen or destroyed Warrant
Certificate shall constitute a contractual obligation of the
Company, whether or not the allegedly lost, stolen or
destroyed Warrant Certificate shall be at any time enforce
able by anyone, and shall be entitled to the benefit of this
Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder.
The provisions of this Section 5 are exclusive and shall
preclude (to the extent lawful) all other rights or remedies
with respect to the replacement of mutilated, lost, stolen,
or destroyed Warrant Certificates.
6. Reservation and Authorization of Common
Stock. The Company shall, at all times until the Warrants
have been exercised or have expired, reserve and keep avail
able for issue upon the exercise of Warrants such number of
its authorized but unissued shares of Common Stock as is
sufficient for the purpose of permitting the exercise in
full of all outstanding Warrants.
7. Limitations on Transfer; Warrant Transfer
Books. Each Holder shall be permitted to sell, transfer,
pledge, assign, hypothecate or otherwise dispose of
(collectively "transfer") any Warrant Certificate (and the
rights relating thereto under this Agreement) to any Person;
provided that
(i) such transfer is made pursuant to a
registration statement under the Securities Act (it
being acknowledged that the Company shall not be
obligated to assist in any manner in any such
registration) or pursuant to an exemption from the
registration requirements of the Securities Act;
(ii) if such transfer is being made pursuant to an
exemption from such registration requirements and if
requested by the Company, counsel for such Holder
(which counsel may be internal counsel) furnishes to
the Company an opinion to the effect that such transfer
is being made pursuant such an exemption;
(iii) the applicable transferee (or, in
the case of an Account Manager, the managed account on
behalf of which the Account Manager is acting) is an
"accredited investor" as defined in Regulation D
promulgated under the Securities Act;
(iv) such transferee represents to the Company in
writing that it is acquiring such Warrant Certificate
solely for its own account (or in the case of Account
Managers, on behalf of managed accounts) and not as
nominee or agent for any other Person (other than for
such managed accounts, if applicable) and not with a
view to, or for offer or sale in connection with, any
distribution thereof (within the meaning of the
Securities Act) that would be in violation of the
securities laws of the United States of America or any
state thereof, without prejudice, however, to its right
at all times to sell or otherwise dispose of all or any
part of said Warrant Certificate pursuant to a
registration statement under the Securities Act or
pursuant to an exemption from the registration
requirements of the Securities Act, and subject,
nevertheless, to the disposition of its property being
at all times within its control;
(v) such transfer is made in accordance with the
terms and provisions of any other agreements of the
Company or any of its subsidiaries at such time
(whether currently in existence or entered into
subsequent to the date hereof), including any agreement
relating to the indebtedness of the Company or any of
its subsidiaries at such time; and
(vi) any law or the terms and provisions of any
agreement of the Company or any of its subsidiaries at
such time (whether currently in existence or entered
into subsequent to the date hereof), including any
agreement relating to indebtedness of the Company or
any of its subsidiaries at such time, do not
specifically prohibit such transfer or provide that
such transfer would constitute a violation or breach
thereof or a default (whether immediately or with
notice or lapse of time or both) thereunder.
The Company shall pay the reasonable fees and disbursements
of counsel for any Holder who is requested to deliver an
opinion under this Section 7.
The Company shall cause to be kept at the
principal executive office of the Company a register (the
"Warrant Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide
the registration of Warrant Certificates and transfers or
exchanges of Warrant Certificates as herein provided.
At the option of each Holder, Warrant Certificates
may be exchanged at such office upon payment of the charges
hereinafter provided. Whenever any Warrant Certificates are
so surrendered for exchange, the Company shall execute and
deliver the new Warrant Certificates that such Holder is
entitled to receive and the surrendered Warrant Certificates
shall be cancelled and disposed of by the Company. Upon any
registration of transfer, a new Warrant Certificate shall be
issued and delivered with all reasonable dispatch to the
transferee(s) and the transferee(s) shall be deemed to have
become the Holder(s) of record of such Warrant Certificates
and the surrendered Warrant Certificates shall be cancelled
and disposed of by the Company. The Company shall promptly
register the exchange or transfer of any outstanding Warrant
Certificates in the Warrant Register. All new Warrant
Certificates issued upon any registration of transfer or
exchange of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations,
and entitled to the same benefits under this Agreement, as
the Warrant Certificates surrendered for such registration
of transfer or exchange.
Every Warrant Certificate surrendered for registra
tion of transfer or exchange shall (if so required by the
Company) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company
duly executed by the Holder or Holders thereof or by the
duly appointed legal representative thereof or by a duly
authorized attorney. No service charge shall be made for
any registration of transfer or exchange of Warrant
Certificates. The Company may require payment of a sum
sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of
transfer of Warrant Certificates.
8. No Voting or Dividend Rights. Prior to the
exercise of the Warrants, each Holder, as a Holder of
Warrant Certificates, shall not be entitled to any rights of
a shareholder of the Company, including, without limitation,
the right to vote, to receive dividends or other distribu
tions or to exercise any preemptive right, but each Holder
of Warrant Certificates shall receive all notices sent to
shareholders of the Company, including any notice of
meetings of shareholders, and shall have the right to attend
or observe such meetings.
9. Notices. Any notice, demand or delivery
authorized by this Agreement shall be in writing and shall
be sufficiently given or made upon receipt thereof, if made
by personal delivery or facsimile transmission (with
confirmed receipt thereof), or four business days after
mailed, if sent by first-class mail, postage prepaid,
addressed to each Holder or the Company, as the case may be,
at their respective addresses below, or such other address
as shall have been furnished to the party giving or making
such notice, demand or delivery:
(a) If to the Company, to it at:
Specialty Foods Acquisition Corporation
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to the Holders, at the
addresses listed
on Exhibit B attached hereto.
10. Notices of Certain Corporate Action. So long
as the Warrants have not been exercised in full, in the
event of
(a) any taking by the Company of a record of
the holders of any class of securities for the purpose
of determining the holders thereof who are entitled to
receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other
securities or property, or to receive any other right,
(b) any capital reorganization of the
Company, any reclassification or recapitalization of
the capital stock of the Company or any consolidation
or merger involving the Company and any other party or
any transfer of all or substantially all the assets of
the Company to any other party, or
(c) any voluntary or involuntary dis
solution, liquidation or winding-up of the Company, the
Company will mail to each Holder a notice specifying
(i) the date or expected date on which any such record
is to be taken for the purpose of such dividend, distri
bution or right and the amount and character of any
such dividend, distribution or right and (ii) the date
or expected date on which any such reorganization,
reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation or winding-
up is to take place and the time, if any such time is
to be fixed, as of which the holders of record of
Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other
securities) for the securities or other property
deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice
shall be delivered at least 10 days prior to the date
therein specified, in the case of any date referred to
in the foregoing subdivisions (i) and (ii).
11. Applicable Law. THIS AGREEMENT AND EACH
WARRANT CERTIFICATE ISSUED HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF. THE COMPANY AND EACH HOLDER HEREBY
SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PUR
POSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
THE COMPANY AND EACH HOLDER IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
12. Successors and Assigns. The provisions of
this Agreement shall inure to benefit of and be binding upon
the respective successors and permitted assigns of the
parties. Each Holder may not assign any of its rights here
under separate from a transfer of the Warrants in accordance
with Section 7 hereof. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement.
13. Counterparts. This Agreement may be
executed by one or more the parties to this Agreement on any
number of separate counterparts, each of which shall be
deemed an original, but all of which together shall
constitute one and the same instrument.
14. Captions and Headings. The captions and
headings used in this Agreement are used for convenience
only and are not to be considered in construing or inter
preting this Agreement.
15. Amendments and Waivers. Any term of this
Agreement may be amended and the observance of any term of
this Agreement may be waived (either generally or in a
particular instance and either retroactively or
prospectively), only with the written consent of the Company
and the [Holders]. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each
Holder, each future Holder of the Warrants, and the Company.
16. Severability. If one or more provisions of
this Agreement are held to be unenforceable under applicable
law, such provisions shall be excluded from this Agreement
and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in
accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year
first above written.
SPECIALTY FOODS ACQUISITION
CORPORATION
By____________________________
Name:
Title:
[PURCHASER]
By________________________
Name:
Title:
[PURCHASER]
By________________________
Name:
Title:
EXHIBIT A
FORM OF WARRANT CERTIFICATE
THIS WARRANT CERTIFICATE AND THE WARRANTS
REPRESENTED HEREBY ARE TRANSFERABLE ONLY
IN ACCORDANCE WITH THE PROVISIONS SET FORTH IN
THE WARRANT AGREEMENT REFERRED TO BELOW.
WARRANTS TO PURCHASE COMMON STOCK
OF SPECIALTY FOODS ACQUISITION CORPORATION
No.___ ____ Warrants
This certifies that __________________________, is
the owner of the number of Warrants set forth above, each of
which represents the right to purchase from SPECIALTY FOODS
ACQUISITION CORPORATION, a Delaware corporation (the
"Company"), the number of shares of Common Stock, par value
$0.01 per share, of the Company ("Common Stock") determined
in accordance with the Warrant Agreement referred to below
at the purchase price set forth in the Warrant Agreement
(the "Exercise Price"), upon surrender hereof at the office
of the Company at 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, XX 00000 with the Exercise Subscription Form on
the reverse hereof duly executed and with payment in full
(by bank check or wire transfer to an account designated by
the Company) of the purchase price for the shares as to
which the Warrant(s) represented by this Warrant Certificate
are exercised, all subject to the terms and conditions
hereof and of the Warrant Agreement referred to below. The
Warrants will expire on the Expiration Date.
This Warrant Certificate is issued under and in
accordance with a Warrant Agreement dated as of __________,
1997 (the "Warrant Agreement") between the Company and the
purchasers party thereto, and is subject to the terms and
provisions contained therein, to all of which terms and
provisions the Holder of this Warrant Certificate consents
by acceptance hereof. The Warrant Agreement is hereby
incorporated herein by reference and made a part hereof.
Reference is hereby made to the Warrant Agreement for a full
description of the rights, limitations of rights, obliga
tions, duties and immunities thereunder of the Company and
the Holders of the Warrants. Capitalized defined terms used
herein have the same meanings as in the Warrant Agreement.
Copies of the Warrant Agreement are on file at the office of
the Company and may be obtained by writing to the Company at
the following address or such other address as shall have
been furnished to the Holder of this Warrant Certificate:
00 Xxx-Xxxxx Xxxxxxxxxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx, Esq.
The number of shares of the Common Stock of the Company
purchasable upon the exercise of each Warrant and the price
per share are set forth in the Warrant Agreement.
All shares of Common Stock issuable by the Company
upon the exercise of Warrants and the payment of the Exer
cise Price therefor shall be validly issued, fully paid and
nonassessable. The Company shall not be required, however,
to pay any tax, withholding or other charge imposed in
connection with the issuance of any shares of Common Stock
upon the exercise of Warrants, and, in such case, the Compa
ny shall not be required to issue or deliver any stock
certificate until such tax, withholding or other charge has
been paid or it has been established to the Company's satis
faction that no tax, withholding or other charge is due.
This Warrant Certificate and all rights hereunder are trans
ferable, subject to the terms of the Warrant Agreement, by
the registered Holder hereof, in whole or in part, upon
surrender of this Warrant Certificate duly endorsed, or
accompanied by a written instrument of transfer in form
satisfactory to the Company duly executed by the registered
Holder or by the duly appointed legal representative thereof
or by a duly authorized attorney and upon payment of any
necessary transfer tax or other governmental charge imposed
upon such transfer. Upon any partial transfer, the Company
will issue and deliver to such Holder a new Warrant
Certificate or Certificates with respect to any portion not
so transferred.
This Warrant Certificate shall be void and all
rights represented hereby shall cease on the Expiration
Date.
Dated:___________, 19__
SPECIALTY FOODS ACQUISITION
CORPORATION
By___________________________
Name:
Title:
FORM OF REVERSE OF WARRANT CERTIFICATE
EXERCISE SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To: Specialty Foods Acquisition Corporation
The undersigned irrevocably exercises ____________ of the
Warrants evidenced by this Warrant Certificate for the
purchase of shares of Common Stock, par value $0.01 per
share, of Specialty Foods Acquisition Corporation and has
arranged to make payment of $___________ (such payment being
made by bank check or wire transfer to the account
designated by Specialty Foods Acquisition Corporation), all
at the Exercise Price (as defined in the Warrant Agreement)
and on the terms and conditions specified in this Warrant
Certificate and the Warrant Agreement herein referred to.
The undersigned hereby irrevocably surrenders this Warrant
Certificate and all right, title and interest therein to
Specialty Foods Acquisition Corporation and directs that the
shares of Common Stock deliverable upon the exercise of said
Warrants be registered or placed in the name and at the
address specified below and delivered thereto.
Date:_________, 19__.
____________________________1
Signature of Owner
______________________________
(Xxxxxx Xxxxxxx)
______________________________
(City) (State) (Zip Code)
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
FORM OF ASSIGNMENT
For VALUE RECEIVED, the undersigned registered
holder of this Warrant Certificate hereby sells, assigns,
and transfers unto the Assignee(s) named below (including
the undersigned with respect to any Warrants constituting a
part of the Warrants evidenced by this Warrant Certificate
not being assigned hereby) all of the right of the under
signed under this Warrant Certificate, with respect to the
number of Warrants set forth below:
Social Security
Names of or other Identifying Number of
Assignees Address Number of Assignee(s) Warrants
and does hereby irrevocably constitute and appoint
__________________________ the undersigned's attorney to
make such transfer on the books of Specialty Foods
Acquisition Corporation maintained for the purpose, with
full power of substitution.
Dated: ___________, 19__
______________________________
_________________________
_____________
(1) The signature must correspond with the name as written
upon the face of this Warrant Certificate in every
particular, without alteration or enlargement or any change
whatever.
EXHIBIT B
WARRANTS ISSUED
Holders Amount
[Name]
[Address]
[Name]
[Address]
[Name]
[Address]
Exhibit C
GENERAL ASSIGNMENT AND XXXX OF SALE
THIS GENERAL ASSIGNMENT AND XXXX OF SALE dated as of
the 27th day of June, 1997, is made and delivered pursuant
to, and subject to the terms of, that certain Equity
Investment Agreement dated as of May 13, 1997 (the
"Agreement") by and among Specialty Foods Acquisition
Corporation ("SFAC"), Acadia Partners, L.P. ("Acadia"), Xxxx
Wheat & Partners Incorporated ("HWAP") and Keystone, Inc.
("Keystone"). The terms of the Agreement are incorporated
herein by reference, and capitalized terms not otherwise
defined in this General Assignment and Xxxx of Sale shall
have the same meanings as set forth in the Agreement.
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
Participating Purchaser, in consideration of the issuance by
SFAC of the Units pursuant to Section 1(a) of the Agreement,
does hereby sell, convey, assign, transfer and deliver to
SFAC and its successors and assigns, all of such
Participating Purchaser's right, title and interest, free
and clear of all liabilities, obligations, liens and
encumbrances, in the Purchased Receivable owed to such
Participating Purchaser.
IN WITNESS WHEREOF, each of SFAC and the Participating
Purchaser, by its authorized officer, has caused this
General Assignment and Xxxx of Sale to be duly executed as
of the day and year first above written.
SPECIALTY FOODS ACQUISITION
CORPORATION
By:
__________________________
Name:
__________________________
Title:
__________________________
[PARTICIPATING PURCHASER]
By:
__________________________
Name:
__________________________
Title:
__________________________
_______________________________
1 The signature must correspond with the name as written
upon the face of this Warrant Certificate in every
particular, without alteration or enlargement or any
change whatever.
