FORM OF SECOND AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT dated as of April [ ], 2004 among B&G FOODS HOLDINGS CORP. BRUCKMANN, ROSSER, SHERRILL & CO., L.P., CANTERBURY MEZZANINE CAPITAL II, L.P., THE CIT GROUP/EQUITY INVESTMENTS, INC. and...
Exhibit 10.12
FORM OF SECOND
AMENDED AND RESTATED
SECURITIES HOLDERS AGREEMENT
dated as of April [ ], 2004
among
B&G FOODS HOLDINGS CORP.
BRUCKMANN, XXXXXX, XXXXXXXX & CO., L.P.,
CANTERBURY MEZZANINE CAPITAL II, L.P.,
THE CIT GROUP/EQUITY INVESTMENTS, INC.
and
MANAGEMENT STOCKHOLDERS
TABLE OF CONTENTS
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SECOND AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT
SECOND AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT, dated as of April [ ], 2004 (the “Agreement”), by and among (1) B&G FOODS HOLDINGS CORP., a Delaware corporation (“B&G Foods”), (2) BRUCKMANN, XXXXXX, XXXXXXXX & CO., L.P., a Delaware limited partnership (“BRS”), the individuals listed on Exhibit A hereto as the BRS Stockholders (the “BRS Stockholders” and, together with BRS and their respective BRS Permitted Transferees, the “BRS Entities”), (3) CANTERBURY MEZZANINE CAPITAL II, L.P., a Delaware limited partnership (“Canterbury” and, together with its Permitted Transferees, the “Canterbury Entities”), (4) THE CIT GROUP/EQUITY INVESTMENTS, INC., a New Jersey corporation (“CIT” and, together with its Permitted Transferees, the “CIT Entities”), and (5) the individuals listed on Exhibit A hereto as “Management Stockholders” (such individuals, together with their Permitted Transferees, the “Management Stockholders”). The BRS Entities, the Canterbury Entities, the CIT Entities and the Management Stockholders are sometimes referred to hereinafter individually as a “Stockholder” and collectively as the “Stockholders.”
Background
A. B&G Foods and the Stockholders are parties to the Amended and Restated Securities Holders Agreement, dated as of December 22, 1999 (the “Existing Securities Holders Agreement”), and desire to amend and restate the Existing Securities Holders Agreement in its entirety effective upon consummation of the Initial Public Offering (as defined below).
B. Prior to the Initial Public Offering each of the BRS Entities is the record owner of (i) the number of shares of Common Stock, par value $.01 per share (the “Existing Common Stock”), of B&G Foods set forth opposite its name on Exhibit A hereto, (ii) the number of shares of 13% Series A Cumulative Preferred Stock, par value $.01 per share (the “Series A Preferred Stock”), of B&G Foods set forth opposite its name on Exhibit A hereto, (iii) the number of shares of 13% Series B Cumulative Preferred Stock, par value $.01 per share (the “Series B Preferred Stock”), of B&G Foods set forth opposite its name on Exhibit A hereto, (iv) the number of shares of Series C Senior Preferred Stock, par value $.01 per share (the “Series C Preferred Stock”), of B&G Foods set forth opposite its name on Exhibit A hereto and (v) the number of warrants to purchase shares of Common Stock (the “Existing Warrants”) of B&G Foods set forth opposite its name on Exhibit A hereto.
C. Canterbury is the record owner of (i) the number of shares of Series C Preferred Stock of B&G Foods set forth opposite its name on Exhibit A hereto and (ii) the number of Existing Warrants of B&G Foods set forth opposite its name on Exhibit A hereto.
D. CIT is the record owner of (i) the number of shares of Series C Preferred Stock of B&G Foods set forth opposite its name on Exhibit A hereto and (ii) the number of Warrants of B&G Food s set forth opposite its name on Exhibit A hereto.
E. Each of the Management Stockholders is the record owner of (i) the number of shares of Existing Common Stock of B&G Foods set forth opposite his or her name
on Exhibit A hereto, (ii) the number of shares of Series A Preferred Stock of Holdings Corp. set forth opposite his or her name on Exhibit A hereto and (iii) the number of stock options to purchase shares of Existing Common Stock (the “Existing Options”) of Holdings Corp. set forth opposite his or her name on Exhibit A hereto.
F. B&G Foods desires to conduct an initial public offering (the “Initial Public Offering”) of Enhanced Income Securities (“XXXx”), each initially representing one share of B&G Foods Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”) and $6.00 aggregate principal amount of B&G Foods’ Senior Subordinated Notes (the “Senior Subordinated Notes”) pursuant to a registration statement on Form S-1 (the “EIS Registration Statement”) filed under the Securities Act of 1933, as amended (the “Securities Act”).
G. Immediately prior to the Initial Public Offering, B&G Foods, Inc. will be merged with and into B&G Foods Holdings Corp., the sole asset of which is the capital stock of B&G Foods, Inc. (the “Merger”). Concurrently with the Merger, B&G Foods Holdings Corp. will be renamed B&G Foods, Inc. (the “Name Change”).
H. At the effective time of the Merger (the “Effective Time”), each share of B&G Foods’ Existing Common Stock issued and outstanding immediately prior to the Effective Time, will be automatically reclassified as and converted (the “Reclassification and Conversion”) into 155.5556 shares of B&G Foods’ Class B Common Stock, par value $0.01 per share (“Class B Common Stock”). Any stock certificate that, immediately prior to the Effective Time, represented shares of the Existing Common Stock will, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent the number of shares of Class B Common Stock as equals the product obtained by multiplying the number of shares of Existing Common Stock represented by such certificate immediately prior to the Effective Time by 155.5556. In lieu of any fractional shares to which the holders of the Existing Common Stock would otherwise be entitled upon conversion, B&G Foods shall pay cash equal to such fraction multiplied by the fair market value (as determined by the Board Directors of B&G Foods) of one share of Class B Common Stock.
I. Upon completion of the Initial Public Offering, B&G Foods shall subject to the terms and conditions set forth in this Agreement repurchase from the Stockholders Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Class B Common Stock, Existing Options and Existing Warrants as set forth in Article VII, and any Existing Warrants not so repurchased will be exercised by the holders thereof for shares of Class B Common Stock.
J. Pursuant to an underwriting agreement to be entered into among B&G Foods and the underwriters of the Initial Public Offering (collectively, the “Underwriters”), B&G Foods will grant to the Underwriters an option to purchase additional XXXx (the “Over-Allotment Option”). If the Underwriters exercise their Over-Allotment Option, B&G Foods will repurchase a portion of the remaining shares of Class B Common Stock held by the Stockholders.
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K. As used herein, the term “Subsidiaries” shall mean, collectively, (i) BGH Holdings, Inc., a Delaware corporation, (ii) Xxxxx & Xxxxxxxxxxxx, Inc., a Delaware corporation, (iii) Heritage Acquisition Corp., a Delaware corporation, (iv) Les Produits Alimentaires Jacques Et Fils, Inc., a Quebec corporation, (v) Maple Grove Farms of Vermont, Inc., a Vermont corporation, (vi) Xxxxxx Holdings Inc., a Delaware corporation, (vii) Polaner, Inc., a Delaware corporation, (viii) Trappey’s Fine Foods, Inc., a Delaware corporation, (ix) Xxxxxxx Xxxxxxxxx Company, a Massachusetts business trust, and (x) all future subsidiaries of B&G Foods, and the term “Subsidiary” shall be construed accordingly. As used herein, the term “Securities” shall mean the Class B Common Stock and any options to purchase shares of Class B Common Stock (“Class B Options”) held by any Stockholder after the date of consummation of the Initial Public Offering, including shares of Class B Common Stock, Class B Options and all other securities of B&G Foods or a successor to B&G Foods (other than XXXx, shares of Class A Common Stock and Senior Subordinated Notes (each as defined below)), including, without limitation, all securities (other than XXXx, shares of Class A Common Stock and Senior Subordinated Notes) issued in connection with any merger, consolidation, stock dividend, stock distribution, stock split, reverse stock split, stock combination, recapitalization, reclassification, subdivision, conversion or similar transaction in respect thereof. A reference to any class of Securities shall be deemed to include reference to all Securities issued in respect thereof. As used herein, the term “Existing Securities” shall mean collectively the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Existing Common Stock, the Existing Options and the Existing Warrants.
L. The Stockholders and B&G Foods wish to set forth, among other things, certain agreements regarding their future relationships and their rights and obligations with respect to the Securities and the XXXx.
Terms
In consideration of the mutual representations, warranties and covenants contained herein, and intending to be legally bound hereby, the parties hereto acknowledge and agree that this Agreement shall in accordance with Section 7.1 hereof amend and supersede in its entirety the Existing Securities Holders Agreement, and agree as follows:
REPRESENTATIONS,
WARRANTIES AND
COVENANTS OF B&G FOODS
1.1. Representations, Warranties and Covenants of B&G Foods. B&G Foods represents and warrants to, and covenants and agrees with, each of the Stockholders as follows:
(a) B&G Foods is a corporation validly existing and in good standing under the laws of the State of Delaware.
(b) B&G Foods has full corporate power and corporate authority to make, execute, deliver and perform this Agreement and to carry out all of the transactions provided for herein.
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(c) B&G Foods has taken such corporate action as is necessary or appropriate to enable it to perform its obligations hereunder, and this Agreement constitutes the legal, valid and binding obligation of B&G Foods, enforceable against B&G Foods in accordance with the terms hereof.
(d) [As of the date of consummation of the Initial Public Offering (after giving effect to the Initial Public Offering and the repurchase of the securities of B&G Foods as set forth in Section 7.2 hereof, the authorized capital stock of B&G Foods will consist of (i) [ ] shares of Common Stock, consisting of [ ] shares of Class A Common Stock and [ ] shares of Class B Common Stock, of which [ ] shares of Class A Common Stock, or if the Over-Allotment Option (as defined below) is exercised in full [ ] shares of Class A Common Stock, and [ ] shares of Class B Common Stock, or if the Over-Allotment Option is exercised in full [ ] shares of Class B Common Stock, will be issued and outstanding and (ii) [100,000] shares of preferred stock, par value $0.01 per share (such shares, of any class whether heretofore or hereafter designated, being referred to as “Preferred Stock”), none of which will be issued and outstanding. Except as provided in this Agreement, in the foregoing sentence, as set forth in the terms of the capital stock of B&G Foods or as described the EIS Registration Statement, as of the date of consummation of the Initial Public Offering (x) there will be no rights, subscriptions, warrants, options, conversion rights, or agreements of any kind outstanding to purchase from B&G Foods, or otherwise require B&G Foods to issue, any shares of capital stock of B&G Foods or securities or obligations of any kind convertible into or exchangeable for any shares of capital stock of B&G Foods; (y) B&G Foods will not be subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its capital stock; and (z) the Class A Common Stock and the Class B Common Stock will constitute all of the outstanding shares of B&G Foods’ capital stock].
REPRESENTATIONS,
WARRANTIES AND
COVENANTS OF EACH STOCKHOLDER
2.1. Representations, Warranties and Covenants of Each Stockholder. Each of the Stockholders severally represents and warrants to, and covenants and agrees with, B&G Foods that:
(a) Such Stockholder has full legal right, capacity, power and authority (including the due authorization by all necessary corporate or partnership action in the case of corporate or partnership Stockholders) to enter into this Agreement and to perform such Stockholder’s obligations hereunder without the need for the consent of any other person or entity, except, in the case of CIT, the consent of Protostar Equity Partners, L.P., a Delaware limited partnership (“Protostar”), which consent has been obtained on or prior to the date hereof and a copy of which has been provided to B&G Foods; and this Agreement has been duly authorized, executed and delivered and constitutes the legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with the terms hereof.
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(b) Such Management Stockholder’s residence address and social security number are as set forth on Exhibit C hereto.
(c) Such Stockholder will not effect a Transfer (as hereinafter defined) of any Securities or XXXx (including the shares of Class A Common Stock and the Senior Subordinated Notes comprising the XXXx) except in compliance with the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) (and applicable state securities laws) or pursuant to an available exemption therefrom, and, without limiting the foregoing, will not effect a Transfer of any Securities or XXXx (including the shares of Class A Common Stock and the Senior Subordinated Notes comprising the XXXx) prior to the lapse of such period of time following acquisition thereof as may be required to comply with applicable state securities laws.
(d) Upon the effectiveness of this Agreement in accordance with Section 7.1(a) hereof, such Stockholder hereby waives any preemptive rights or registration rights, including any rights relating to the failure to receive advance notice in connection with any such rights, that such Stockholder may have had under the Existing Securities Holders Agreement, and any such preemptive rights, registration rights or rights in connection therewith under the Existing Securities Holders Agreement are no longer of any force or effect.
(e) The number of Existing Securities owned by such Stockholder (prior to giving effect to the Reclassification and Conversion) is set forth opposite such Stockholder’s name on Exhibit A. Such Stockholder has good, valid and marketable title to the Existing Securities free and clear of any liens, charges, claims, pledges, security interests, conditional sale agreements, and other encumbrances whatsoever, except, in the case of CIT, a conditional sale agreement to Protostar, a copy of which has been provided to B&G Foods (the “CIT Conditional Sale Agreement”).
(f) Such Stockholder has not sold, transferred, assigned, conveyed, pledged or encumbered in any manner whatsoever all or any part of the Existing Securities, except that CIT has entered into the CIT Conditional Sale Agreement.
(g) Such Stockholder has received a copy of the EIS Registration Statement, and that such Stockholder has been given the opportunity to obtain information regarding the business and affairs of B&G Foods to such Stockholder’s satisfaction.
2.2. Legend. The certificates representing the Securities or the XXXx (including the shares of Class A Common Stock and the Senior Subordinated Notes comprising the XXXx), including certificates issued upon any voluntary or involuntary transfer of such Securities, XXXx, Class A Common Stock or Senior Subordinated Notes, unless such transfer is pursuant to a registered public offering of the Securities, XXXx, Class A Common Stock or Senior Subordinated Notes or the conditions specified in Section 2.3 hereof are satisfied, shall bear the following legend in addition to any other legend required under applicable law:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED WITHOUT
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REGISTRATION UNDER THE SECURITIES ACT OR STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO B&G FOODS, INC., THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE TERMS AND CONDITIONS OF A SECOND AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT BY AND AMONG B&G FOODS, INC. AND THE HOLDERS SPECIFIED THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF B&G FOODS, INC. THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
2.3. Provisions Regarding Transfers of Securities. The following provisions shall apply with respect to the Transfer (as hereinafter defined) of any Securities owned by any Management Stockholder, BRS Entity, Canterbury Entity or CIT Entity:
(a) Subject to the additional conditions to Transfer by the Management Stockholders imposed by Section 6.2 hereof, each Management Stockholder, BRS Entity, Canterbury Entity and CIT Entity is prohibited from Transferring any of his or its Securities except in the following circumstances: (i) to Permitted Transferees (as hereinafter defined), and (ii) pursuant to an effective registration statement under the Securities Act; provided, however, that, in the case of any such Transfer, except in the case of a sale pursuant to an effective registration statement, each such transferee shall take such Securities subject to and be fully bound by the terms of this Agreement applicable to it with the same effect as if it were a party hereto; and provided, further, that no Transfer shall be effected except in compliance with the registration requirements of the Securities Act (and applicable state securities laws) or pursuant to an available exemption therefrom.
(b) No Transfer shall, in any event, except in the case of a sale pursuant to an effective registration statement, be made by any Management Stockholder, BRS Entity, Canterbury Entity or CIT Entity unless in connection with such Transfer, the applicable transferee has complied with the terms and provisions of this Agreement. No Management Stockholder, BRS Entity, Canterbury Entity, CIT Entity or transferee may effect any Transfer of Securities, whether to a Permitted Transferee or otherwise, unless the transferee executes an agreement pursuant to which such transferee agrees to be bound by the terms and provisions of this Agreement applicable to the transferor (except in the case of a sale pursuant to an effective registration statement under the Securities Act or as otherwise specifically provided herein). Any purported Transfer in violation of this covenant shall be null and void and of no force and effect and the purported transferee shall have no rights or privileges in or with respect to B&G Foods. As used herein, “Transfer” means the making of any sale, exchange, assignment, hypothecation, gift, security interest, pledge or other encumbrance, or any contract therefor, any voting trust or other agreement or arrangement with respect to the transfer of voting rights (including any proxy or similar arrangement (whether or not revocable)) or any other beneficial interest in any of the Securities, the creation of any other claim thereto or any other transfer or disposition whatsoever, whether voluntary or involuntary, affecting the right, title, interest or possession in or to such Securities.
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Prior to any proposed Transfer of any Securities, the holder thereof shall give written notice to B&G Foods describing the manner and circumstances of the proposed Transfer accompanied, if requested by B&G Foods, by a written opinion of legal counsel reasonably satisfactory to B&G Foods, addressed to B&G Foods and the transfer agent, if other than B&G Foods, and reasonably satisfactory in form and substance to each addressee, to the effect that the proposed Transfer of the Securities may be effected without registration under the Securities Act and applicable state securities laws. Each certificate evidencing the Securities transferred shall bear the legend set forth in Section 2.2, except that such certificate shall not bear such legend if the opinion of counsel referred to above is to the further effect that such legend is not required in order to establish compliance with any provision of the Securities Act or applicable state securities laws.
(c) As used herein, “Permitted Transferee” shall mean:
(i) in the case of any Management Stockholder, (A) B&G Foods or any BRS Entity, (B) any spouse or lineal descendant of a Management Stockholder, or any heir, executor, administrator, testamentary trustee, legatee or beneficiary of a Management Stockholder or any of the foregoing persons referred to in this clause (B) (collectively, “Management Stockholder Associates”) and (C) any trust, the beneficiaries of which, or any corporation, limited liability company or partnership, the stockholders, members or general and limited partners of which include only such Management Stockholders and their respective Management Stockholder Associates;
(ii) in the case of any BRS Entity, (A) any other BRS Entity, (B) any Affiliate (as hereinafter defined) of any BRS Entity, (C) any member or partner of BRS, provided that, in the case of a distribution to BRS’s members or partners, such distribution shall be made in accordance with the terms of its agreement of limited partnership, (D) any spouse or lineal descendant of a member or partner of BRS, or any heir, executor, administrator, testamentary trustee, legatee or beneficiary of BRS or any of the foregoing persons referred to in this clause (D) (collectively, “BRS Associates”), (E) any trust, the beneficiaries of which, or any corporation, limited liability company or partnership, the stockholders, members or general and limited partners of which include only BRS or their respective BRS Associates, and (F) one or more banks or other financial institutions or entities which are not then in direct competition with B&G Foods or any of the Subsidiaries, but only if BRS is required to make a Transfer of its Securities to such bank or financial institution or entity pursuant to BRS’s agreement of limited partnership or in connection with any dissolution of BRS pursuant to its agreement of limited partnership;
(iii) in the case of any Canterbury Entity, (A) any other Canterbury Entity, (B) any Affiliate of any Canterbury Entity, (C) any member or partner of Canterbury, provided that, in the case of a distribution to Canterbury’s members or partners, such distribution shall be made pro rata to all such members or partners in accordance with the terms of its agreement of limited partnership and (D) one or more banks or other financial institutions or entities which are not then in direct competition with B&G Foods or any of the Subsidiaries, but only if Canterbury is required to make a Transfer of its Securities to such bank or financial institution or entity pursuant to Canterbury’s agreement of limited partnership or in connection with any dissolution of Canterbury pursuant to its agreement of limited partnership; and
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(iv) in the case of any CIT Entity, (A) any other CIT Entity, (B) any Affiliate of any CIT Entity, (C) Protostar and (D) any Affiliate of Protostar.
(d) As used herein, “Affiliate” of any person means any person, directly or indirectly, controlling, controlled by or under common control with such person, and includes any person who is an officer, director or employee of such person and any person who would be deemed to be an “affiliate” or an “associate” of such person, as those terms are defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended. As used in this definition, “controlling” (including, with its correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, partnership or other ownership interests, by contract or otherwise).
2.4. Notation. A notation will be made in the appropriate transfer records of B&G Foods with respect to the restrictions on transfer of the Securities and XXXx (including the shares of Class A Common Stock and the Senior Subordinated Notes comprising the XXXx) referred to in this Agreement.
2.5. Limitation on Repurchase of Securities and Dividend Payments. Each Stockholder understands that B&G Foods has entered into certain financing agreements which contain prohibitions, restrictions and limitations on the ability of B&G Foods to purchase any of the Securities and XXXx (including the shares of Class A Common Stock and the Senior Subordinated Notes comprising the XXXx) and, under certain circumstances, to pay dividends on the Class A Common Stock and Class B Common Stock.
2.6. Restrictions on Acquisition of Senior Subordinated Notes. Each Stockholder hereby represents that it does not currently hold any Senior Subordinated Notes. Subject to Section 6.1 hereof and so long as any XXXx are issued and outstanding, each Stockholder agrees that it shall not purchase or otherwise acquire any Senior Subordinated Notes other than Senior Subordinated Notes (i) purchased or acquired in connection with an exchange of its shares of Class B Common Stock for XXXx, (ii) issued or distributed to such Stockholder in connection with XXXx previously acquired by such Stockholder or (iii) purchased or acquired in the form of XXXx. Each Stockholder agrees that from time to time as requested by the Company such Stockholders will provide a written Certificate to the Company certifying compliance with this Section 2.6.
2.7. Lock-Up Agreements. Each Stockholder agrees that it will enter into a lock-up agreement with the Underwriters as described in the EIS Registration Statement and substantially in the form provided to such Stockholder prior to the date hereof (each, a “Lock-Up Agreement”) whereby such Stockholder will agree not to directly or indirectly, offer, sell or otherwise dispose of any XXXx or shares of Class A Common Stock or Class B Common Stock, Senior Subordinated Notes or any securities which may be converted into or exchanged or exercised for such securities for a period of 180 days from the date of the prospectus included in the EIS Registration Statement (the “Lock-Up Period”).
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2.8. Reliance. Each Stockholder acknowledges that B&G Foods and each of the other Stockholders is entering into this Agreement in reliance upon such Stockholder’s representations and warranties and other covenants and agreements contained herein.
OTHER COVENANTS AND REPRESENTATIONS
3.1. Covenant Not to Compete. Each Management Stockholder hereby agrees that during the term of his employment by B&G Foods or any of the Subsidiaries and for a period of ten (10) months after the Management Stockholder ceases his or her employment with B&G Foods or the Subsidiaries for any reason other than termination without cause (the “Restriction Period”), such Management Stockholder shall not, directly or indirectly, own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be connected as an officer, director, employee, consultant, stockholder, partner or otherwise with, any component of a business which at any relevant time during such period directly or indirectly competes with B&G Foods or any of the Subsidiaries or their Affiliates in the Covered Business (as hereafter defined) in the States of California, Delaware, Maryland, Michigan, New Jersey, New York or Vermont or any other state in the United States in which B&G Foods or any of the Subsidiaries or their Affiliates are conducting business during the term of his employment. For purposes hereof, the term “Covered Business” shall mean the purchase, manufacture, marketing or selling of the products and the raw materials with respect to such products as to which the Management Stockholder has assisted B&G Foods, the Subsidiaries or their Affiliates in purchasing, manufacturing, marketing or selling during the term of the employment of the Management Stockholder, together with any use or modification of any such products for the same, new or additional purposes or applications. The restrictive covenant contained in this Section 3.1 is a covenant independent of any other provision of this Agreement, and the existence of any claim which such Management Stockholder may allege against B&G Foods or any of the Subsidiaries, whether based on this Agreement or otherwise, shall not prevent the enforcement of this covenant. Each of the Management Stockholders agrees that a breach by him of this Section 3.1 shall cause irreparable harm to B&G Foods, the Subsidiaries and their Affiliates and that the Subsidiaries’ and B&G Foods’ remedies at law for any breach or threat of breach by any of the Management Stockholders of the provisions of this Section 3.1 shall be inadequate, and that the Subsidiaries or B&G Foods shall be entitled to an injunction or injunctions to prevent breaches of this Section 3.1 and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which B&G Foods or the Subsidiaries may be entitled at law or in equity. The length of time for which this covenant not to compete shall be in force shall not include any period of violation or any other period required for litigation during which B&G Foods or any of the Subsidiaries seeks to enforce this covenant. In the event that this covenant not to compete shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too long a period of time or over too large a geographical area or by reason of its being too extensive in any other respect, it shall be interpreted to extend only over the longest period of time for which it may be enforceable, and/or over the largest geographical area as to which it may be enforceable and/or to the maximum extent in all other aspects as to which it may be enforceable, all as determined by such court in such action.
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CORPORATE ACTIONS
4.1. Directors. For so long as the BRS Entities are the beneficial owners (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of more than 10% of the outstanding shares of Common Stock in the aggregate on a fully-diluted basis and as a result the holders of Class B Common Stock have the right to elect two directors in accordance with the Amended and Restated Certificate of Incorporation of B&G Foods, each Stockholder and Permitted Transferee agrees that it shall take, at any time and from time to time, all action necessary (including voting the Class B Common Stock owned by him, her or it, calling special meetings of stockholders and executing and delivering written consents) to ensure that the Board of Directors of B&G Foods at all times includes two individuals designated by BRS.
4.2. Right to Remove Certain of B&G Foods’ Directors. BRS may request that any director designated by it be removed (with or without cause) by written notice to the other Stockholders, and, in any such event, each Stockholder shall promptly consent in writing or vote or cause to be voted all shares of Class B Common Stock now or hereafter owned or controlled by it for the removal of such person as a director. In the event any person ceases to be a director, such person shall also cease to be a member of any committee of the Board of Directors of B&G Foods.
4.3. Right to Fill Certain Vacancies in B&G Foods’ Board. In the event that a vacancy is created on B&G Foods’ Board of Directors at any time by the death, disability, retirement, resignation or removal (with or without cause) of a director designated by BRS and elected by the holders of Class B Common Stock, or if otherwise there shall exist or occur any vacancy on B&G Foods’ Board of Directors in a directorship subject to designation by BRS and election by the holders of Class B Common Stock, such vacancy shall not be filled by the remaining members of B&G Foods’ Board of Directors, but each Stockholder hereby agrees promptly to consent in writing or vote or cause to be voted all shares of Class B Common Stock now or hereafter owned or controlled by it to elect that individual designated to fill such vacancy and serve as a director, as shall be designated by BRS.
4.4. Confidentiality.
(a) Each Stockholder hereby agrees that Confidential Information (as defined below) has been and may be made available to him or it in connection with such Stockholder’s interest in B&G Foods and its subsidiaries. Each Stockholder agrees that he or it will not use the Confidential Information in any way that is reasonably likely to result in a material detriment to the business of B&G Foods and its Subsidiaries. Each Stockholder further acknowledges and agrees that he or it will not disclose any Confidential Information to any person; provided that Confidential Information may be disclosed (i) to such Stockholder’s Representatives (as defined below) in the normal course of the performance of their duties, (ii) to the extent required by applicable statute, 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 Stockholder is subject) or by generally
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accepted accounting principles, (iii) to any third party to whom such Stockholder is contemplating a transfer of his or its Securities, provided that such transfer would not be in violation of the provisions of this Agreement and as long as such third party is advised of the confidential nature of such information and agrees to be bound by a confidentiality agreement in form and substance satisfactory to B&G Foods and substantially similar to the provisions hereof or (iv) if the prior consent of the Board of Directors of B&G Foods 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 B&G Foods or any Stockholder.
(b) “Confidential Information” means any information concerning B&G Foods, its financial condition, business, subsidiaries, operations or prospects in the possession of or to be furnished to any Stockholder in his or its capacity as a shareholder of B&G Foods or by virtue of his or its present or former position as, or right to designate, a director of B&G Foods; provided that the term “Confidential Information” does not include information which (a) was or becomes generally available publicly other than as a result of a disclosure by a Stockholder or his or its partners, directors, officers, employees, agents, counsel, investment advisers, accountants, consultants or representatives (all such persons being collectively referred to as “Representatives”) in violation of this Section 4.4(b) was or becomes available to such Stockholder on a nonconfidential basis from a source other than B&G Foods, any regulatory entity or a Stockholder or his or its Representatives, provided that such source is or was (at the time of receipt of the relevant information) not, to the best of such Stockholder’s knowledge, bound by a confidentiality agreement with B&G Foods or another person.
REGISTRATION RIGHTS
The Stockholders shall have registration rights with respect to the XXXx, Class A Common Stock and Class B Common Stock as set forth in the Registration Rights Agreement attached hereto as Exhibit B (the “Registration Rights Agreement”). Each of the Stockholders agrees not to effect any public sale or public distribution of any securities of B&G Foods (other than any XXXx, Class A Common Stock or Senior Subordinated Notes not acquired by such Stockholder upon exchange of Class B Common Stock) during the periods specified in the Registration Rights Agreement, except as permitted thereby, and each such Stockholder agrees to be bound by the rights of priority to participate in offerings as set forth therein.
EXCHANGE OF CLASS B COMMON STOCK FOR XXXx
6.1. Exchange of Class B Common Stock for XXXx.
(a) Shares of Class B Common Stock shall be exchangeable for XXXx at the option of the holder thereof on any Exchange Date (as defined below) at the Exchange Rate (as defined below); provided, however, that until the second anniversary of the date of consummation of the Initial Public Offering, shares of Class B Common Stock shall not be exchangeable for XXXx if after giving effect to such exchange, the total shares of Class B
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Common Stock outstanding would be fewer than [3,994,396] shares on a fully diluted basis. If on any Exchange Date, the Stockholders propose to exchange a greater number of shares of Class B Common Stock than may be exchanged in accordance with the immediately preceding sentence, the shares of Class B Common Stock accepted for exchange by the Company shall be allocated among the Stockholders in the following priority: (i) first, pro rata among the BRS Entities, the Canterbury Entities and the CIT Entities pro rata in proportion to the number of shares, if any, of Class B Common Stock proposed to be exchanged by such Stockholders on such Exchange Date and (ii) second, pro rata among the Management Stockholders in proportion to the number of shares of Class B Common Stock proposed to be exchanged by such Management Stockholders on such Exchange Date.
Notwithstanding anything in this Article VI to the contrary other than Section 6.1(e) and (f), no Stockholder shall have any right to exchange, and the Company may not exchange, any shares of Class B Common Stock for XXXx: (i) so long as an Event of Default as defined in the Indenture (for the Senior Subordinated Notes), dated as of the date of the Initial Public Offering, between B&G Foods and The Bank of New York, as Trustee, as amended, supplemented or otherwise modified from time to time (the “Senior Subordinated Note Indenture”) has occurred and is continuing or would be caused thereby or so long as an Event of Default as defined in the Indenture (for B&G Foods’ Senior Notes), dated as of the date of the Initial Public Offering, between B&G Foods and The Bank of New York, as Trustee, as amended, supplemented or otherwise modified from time to time, has occurred and is continuing or would be caused thereby, (ii) unless the Lock-Up Period has expired and (iii) unless the XXXx issuable upon such exchange have been registered under the Securities Act.
(b) To exercise the exchange right, the holder of Class B Common Stock to be exchanged shall surrender the certificate representing such Class B Common Stock, duly endorsed or assigned to B&G Foods or in blank, at the principal office of the Transfer Agent (as defined below) accompanied by written notice to B&G Foods that such holder elects to exchange such Class B Common Stock. Unless the XXXx issuable on exchange are to be issued in the same name as the name in which the Class B Common Stock is registered, in which case B&G Foods shall bear the related taxes, each share surrendered for exchange shall be accompanied by instruments of transfer, in form and substance satisfactory to the Transfer Agent and B&G Foods, duly executed by the holder or such holder’s duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Transfer Agent and B&G Foods demonstrating that such taxes have been paid).
(c) Each exchange consummated pursuant to this Section 6.1 shall be deemed to have been effected immediately prior to the close of business on the applicable Exchange Date, provided that certificates representing shares of Class B Common Stock shall have been surrendered and such notice (and if applicable, payment of an amount equal to the distribution payable on such shares) received by B&G Foods as aforesaid, and the person or persons in whose name or names any certificate or certificates representing XXXx shall be issuable upon such exchange shall be deemed to have become the holder or holders of record of the shares represented thereby at such time on such Exchange Date, and such exchange shall be at the Exchange Rate in effect at such time and on such date unless the stock transfer records of B&G Foods for the Class B Common Stock shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders or record at the close
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of business on the next succeeding day on such stock transfer records for the Class B Common Stock are open, but such exchange shall be at the Exchange Rate in effect on the date on which such shares have been surrendered and such notice received by B&G Foods.
(d) As promptly as practicable after the surrender of the certificates representing the Class B Common Stock as aforesaid, B&G Foods shall issue and deliver at such office to such holder, or on his written order, certificates representing the full number of shares of Class A Common Stock and Senior Subordinated Notes represented by the XXXx issuable upon the exchange of such shares of Class B Common Stock in accordance with the provisions of this Section 6.1, and any fractional interest shall be settled as provided by Section 6.2 below.
(e) Notwithstanding anything to the contrary contained in this Agreement, in the event of a mandatory or optional redemption by B&G Foods of 100% of the Senior Subordinated Notes such that following the redemption there will no longer be any Senior Subordinated Notes and XXXx outstanding, B&G Foods shall give notice to the holders of the Class B Common Stock [15] days prior to such redemption date (the “Notes Redemption Date”). Notwithstanding the Lock-Up Period or any other restrictions on exchange set forth in this Agreement, if B&G Foods redeems all of the Senior Subordinated Notes outstanding, all outstanding shares of the Class B Common Stock will be automatically (and without any action required on the part of the holders of the Class B Common Stock) exchanged on the Notes Redemption Date for XXXx at the Exchange Rate, and the Senior Subordinated Notes acquired by the holders of the Class B Common Stock as part of the XXXx in such exchange shall be redeemed by B&G Foods as part of such mandatory or optional redemption. If such exchange occurs during the Lock-Up Period, all shares of Class A Common Stock acquired upon the exchange will remain subject to the Lock-Up Agreement for the remainder of the Lock-Up Period.
(f) Notwithstanding anything to the contrary contained in this Agreement, following the maturity date of the Senior Subordinated Notes, and during any period in which there are otherwise no longer any Senior Subordinated Notes and XXXx outstanding (other than in connection with a mandatory or optional redemption of 100% of the Senior Subordinated Notes), the holders of Class B Common Stock shall have the right to exchange their shares of Class B Common Stock for shares of Class A Common Stock on a one-for-one basis.
6.2. No Fractional Shares. No fractional portion of an EIS shall be issued upon exchange of Class B Common Stock. Instead of any fraction of an EIS that would otherwise be deliverable upon the exchange of Class B Common Stock, B&G Foods shall pay to the holder of such shares an amount in cash in respect of such fractional interest based upon the Fair Market Value (as defined below) of XXXx on the Trading Day immediately preceding the Exchange Date.
6.3. Exchange Rate Adjustments.
(a) The Exchange Rate shall be adjusted from time to time as follows:
(i) If B&G Foods shall after the date on hereof:
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(1) pay or make a distribution to holders of Class A Common Stock in the form of shares of Class A Common Stock or Class B Common Stock;
(2) subdivide its outstanding Class A Common Stock or Class B Common Stock into a greater number of shares of Class A Common Stock or Class B Common Stock;
(3) combine its outstanding Class A Common Stock or Class B Common Stock into a smaller number of shares of Class A Common Stock or Class B Common Stock;
(4) issue any equity securities by reclassification of its Class A Common Stock or Class B Common stock (other than any reclassification by way of merger or binding share exchange that is subject to Section 6.3(b)); or
(5) issue rights, options or warrants to all holders of Class A Common Stock entitling them [(for a period expiring within 45 days after the record date for determination of stockholders entitled to receive such rights, options or warrants)] to subscribe for or purchase XXXx, Class A Common Stock [and/or Class B Common Stock] at a price per share less than the Fair Market Value per share of XXXx, Class A Common Stock [or Class B Common Stock] on the record date for the determination of stockholders entitled to receive such rights, options or warrants;
then the Exchange Rate in effect at the opening of business on the day following the record date for the determination of stockholders entitled to receive such distribution or at the opening of business on the day following the day on which such subdivision, combination or reclassification becomes effective, as the case may be, shall be adjusted so that the holder of any share of Class B Common Stock thereafter surrendered for exchange shall be entitled to receive the number of XXXx (including the number of shares of Class A Common Stock and the principal amount of Senior Subordinated Notes comprising the XXXx) and other equity securities issued by reclassification of Class A Common Stock or Class B Common Stock that such holder would have owned or have been entitled to receive after the happening of any of the events described above had such shares been exchanged immediately prior to the record date in the case of a distribution or the effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this subparagraph (i) shall become effective immediately after the opening of business on the day following such record date (except as provided in Section 6.3(e)) in the case of a distribution and shall become effective immediately after the opening of business on the day next following the effective date in the case of a subdivision, combination or reclassification.
(ii) If B&G Foods shall after the date of consummation of the Initial Public Offering issue or sell XXXx (or securities convertible into or exchangeable for XXXx) at a price per EIS less than the Fair Market Value per EIS on the date of issuance or sale, then the Exchange Rate in effect immediately prior to such issuance or sale shall be adjusted to equal the amount determined by multiplying (I) the Exchange Rate in effect immediately prior to such issuance or sale by (II) a fraction, the numerator of which shall be the sum of (A) the number of XXXx outstanding immediately prior to such issuance or sale and (B) the number of additional
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XXXx issued or sold and the denominator of which shall be the sum of (A) the number of XXXx outstanding immediately prior to such issuance or sale and (B) the number of shares that the aggregate proceeds to B&G Foods from the issuance or sale of such XXXx would purchase at such Fair Market Value. Such adjustment shall become effective immediately after the opening of business on the day following such issuance or sale. In determining whether any such issuance or sale would allow the holders of XXXx to subscribe for or purchase XXXx at less than the Fair Market Value, the value of any consideration received by B&G Foods other than cash shall be determined by the Board of Directors of B&G Foods.
(iii) Except as provided in clauses (i) or (ii) of this Section 6.3(a), if B&G Foods shall after the date of consummation of the Initial Public Offering issue or sell shares of Class A Common Stock (or securities convertible into or exchangeable for shares of Class A Common Stock) at a price per share of Class A Common Stock less than the Fair Market Value per share of Class A Common Stock on the date of issuance or sale, then the Exchange Rate in effect immediately prior to the issuance or sale shall be adjusted as the board of Directors determines to be equitable in the circumstances. Such adjustment shall become effective immediately after the opening of business on the day following such issuance or sale. In determining whether any such issuance or sale would allow the a person or entity to subscribe for or purchase shares of Class A Common Stock at less than the Fair Market Value, the value of any consideration received by B&G Foods upon such sale other than cash shall determined by the Board of Directors of B&G Foods.
(iv) No adjustment in the Exchange Rate shall be required unless such adjustment would require a cumulative increase or decrease of at least [1]% in the Exchange Rate; provided, however, that any adjustments that by reason of this subparagraph (iv) are not required to be made shall be carried forward and taken into account in any subsequent adjustment until made; [and provided, further, that any adjustment shall be required and made in accordance with the provisions of this Section 6.3 (other than this subparagraph (iv)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of XXXx]. All calculations under this Section 6.3 shall be made to the nearest cent (with $.005 being rounded upward) or to the nearest one-tenth of a share (with .05 of a share being rounded upward), as the case may be. Anything in this subsection (a) to the contrary notwithstanding, B&G Foods shall be entitled, to the extent permitted by law, to make such increases in the Exchange Rate, in addition to those required by this subsection (a), as it in its discretion shall determine to be advisable in order that any share distributions, subdivision, reclassification or combination of shares, distribution of rights, options or warrants to purchase shares or securities, or a distribution of other assets (other than cash distributions) hereafter made by B&G Foods to its stockholders shall not be taxable.
(b) Except as otherwise provided for in Section 6.3(a)(i), if B&G Foods shall be a party to any transaction (including, without limitation, a merger, consolidation, statutory share exchange, tender offer for all or substantially all of the XXXx or Class A Common Stock, sale or transfer of all or substantially all of B&G Foods’ assets or recapitalization of the XXXx or Class A Common Stock) (each of the foregoing being referred to herein as a “Transaction”), in each case as a result of which XXXx or Class A Common Stock shall be converted into the right to receive shares, stock, securities or other property (including cash or any combination thereof), B&G Foods (or its successor in such Transaction) shall make
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appropriate provision so that each share of Class B Common Stock, if not converted into the right to receive shares, stock, securities or other property in connection with such Transaction in accordance with the third to last sentence of this subsection (b) shall thereafter be exchangeable into the kind and amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon the consummation of such Transaction by a holder of that number of XXXx into which one share of Class B Common Stock was convertible immediately prior to such Transaction, assuming such holder of Common Stock (i) is not a Person with which B&G Foods consolidated or into which B&G Foods merged or which merged into B&G Foods or to which such sale or transfer was made, as the case may be (a “Constituent Person”), or an affiliate of a Constituent Person and (ii) failed to exercise his rights of the election, if any, as to the kind or amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon such Transaction (each, a “Non-Electing Share”) (provided that if the kind and amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon consummation of such Transaction is not the same for each Non-Electing Share, the kind and amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon such Transaction by each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-Electing Shares). B&G Foods shall not be a party to any Transaction in which any share of Class B Common Stock is converted into the right to receive shares, stock, securities or other property (including cash or any combination thereof) with an aggregate value (as determined by the Board of Directors in good faith, whose determination shall be conclusive) less than that receivable by the number of shares of XXXx into which shares of Class B Common Stock were exchangeable immediately prior to such Transaction. B&G Foods shall not be a party to any Transaction unless the terms of such Transaction are consistent with the provisions of this subsection (b), and it shall not consent or agree to the occurrence of any Transaction until B&G Foods has entered into an agreement with the successor or purchasing entity, as the case may be, for the benefit of the holders of the Class B Common Stock that will contain provisions enabling holders of Class B Common Stock that remains outstanding after such Transaction to exchange their Class B Common Stock into the consideration received by holders of XXXx at the Exchange Rate in effect immediately prior to such Transaction. The provisions of this subsection (b) shall similarly apply to successive Transactions.
(c) If:
(i) B&G Foods shall declare a distribution on the Class A Common Stock, in the form of shares of Class A Common Stock or Class B Common Stock, [(other than cash distributions which do not constitute extraordinary dividends)] or there shall be a reclassification, subdivision or combination of the Class A Common Stock or Class B Common Stock; or
(ii) B&G Foods shall grant to the holders of Class A Common Stock rights, options or warrants to subscribe for or purchase XXXx, Class A Common Stock [or Class B Common Stock] at less than Fair Market Value; or
(iii) B&G Foods shall sell XXXx, Class A Common Stock or securities convertible into XXXx or Class A Common Stock for less than Fair Market Value; or
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(iv) B&G Foods shall enter into a Transaction; or
(v) there shall occur the voluntary or involuntary liquidation, dissolution or winding up of B&G Foods;
then B&G Foods shall cause to be filed with the Transfer Agent and shall cause to be mailed to the holders of the Class B Common Stock at their addresses as shown on the stock transfer records of B&G Foods, as promptly as possible, but at least 15 days prior to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such distribution or rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock or XXXx of record to be entitled to such distribution or rights, options or warrants are to be determined or (ii) the date on which such reclassification, subdivision, combination, Transaction or liquidation, dissolution or winding up is expected to become effective, and the date as of which it is expected that holders of XXXx of record shall be entitled to exchange their EIS (or shares of Class A Common Stock or Senior Subordinated Notes comprising the XXXx) for securities or other property, if any, deliverable upon such reclassification, subdivision, combination, Transaction or liquidation, dissolution or winding up. Failure to give or receive such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section 6.3.
(d) Whenever the Exchange Rate is adjusted as herein provided, B&G Foods shall promptly file with the Transfer Agent an officer’s certificate setting forth the Exchange Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error. Promptly after delivery of such certificate, B&G Foods shall prepare a notice of such adjustment of the Exchange Rate setting forth the adjusted Exchange Rate and the effective date such adjustment becomes effective and shall mail such notice of such adjustment of the Exchange Rate to the holder of each share of Class B Common Stock at such holder’s last address as shown on the stock transfer records of B&G Foods.
(e) In any case in which Section 6.3(a) provides that an adjustment shall become effective on the day following the record date for an event, B&G Foods may defer until the occurrence of such event (i) issuing to the holder of any share of Class B Common Stock converted after such record date and before the occurrence of such event the additional XXXx issuable upon such conversion by reason of the adjustment required by such event over and above the shares of XXXx issuable upon such conversion before giving effect to such adjustment and (ii) fractionalizing any share of Class B Common Stock and/or paying to such holder any amount of cash in lieu of any fraction pursuant to Section 6.2.
(f) There shall be no adjustment of the Exchange Rate in case of the issuance of any equity securities of B&G Foods in a reorganization, acquisition or other similar transaction except as specifically set forth in this Section 6.3. If any action or transaction would require adjustment of the Exchange Rate pursuant to more than one subsection of Section 6.3(a), only one adjustment shall be made, and such adjustment shall be the amount of adjustment that has the highest absolute value.
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6.4. Related Covenants.
(a) If B&G Foods shall take any action affecting the XXXx, Class A Common Stock or Class B Common Stock, other than the actions described in this Article VI, that in the opinion of the Board of Directors of B&G Foods would materially and adversely affect the exchange rights of the holders of Class B Common Stock, the Exchange Rate for the Class B Common Stock shall be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors of B&G Foods, in its sole discretion, determines to be equitable in the circumstances.
(b) B&G Foods shall at all times reserve and keep available, free from preemptive rights, out of the aggregate authorized but unissued Class A Common Stock, for the purpose of effecting the exchange of the Class B Common Stock, the full number of shares of Class A Common Stock deliverable upon the exchange of all outstanding shares of Class B Common Stock not theretofore exchanged. For purposes of this subsection (b), the number of shares of Class A Common Stock that shall be deliverable upon the exchange of all outstanding shares of Class B Common Stock shall be computed as if at the time of computation all outstanding shares were held by a single holder.
(c) B&G Foods covenants that any shares of Class A Common Stock issued upon the exchange of Class B Common Stock for XXXx, shall be validly issued, fully paid and non-assessable.
(d) B&G Foods shall list the XXXx required to be delivered upon exchange of the Class B Common Stock, prior to such delivery, upon each national exchange, if any, upon which the outstanding XXXx are listed at the time of such delivery.
(e) Prior to the delivery of the XXXx (including the shares of Class A Common Stock and the Senior Subordinated Notes comprising the XXXx) that B&G Foods shall be obligated to deliver upon the exchange of the Class B Common Stock, B&G Foods shall comply with all federal and state laws and regulations thereunder requiring registration of such securities with, or any approval or consent to the delivery thereof, by any governmental authority.
(f) [B&G Foods shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue and delivery of XXXx or other securities or property on exchange of the Class B Common Stock pursuant hereto; provided, however, that B&G Foods shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of XXXx or other securities or property in a name other than that of the record holder of the Class B Common Stock to be exchanged, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to B&G Foods the amount of any such tax or established, to the reasonable satisfaction of B&G Foods, that such tax has been paid.]
6.5. Certain Defined Terms.
(a) As used herein the term “Current Market Price” of any EIS or equity security of B&G Foods or any other issuer for any day shall mean the last reported sales price, regular way, on such day, or, if no sale takes place on such day, the average of the reported
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closing bid and asked prices on such day, regular way, in either case as reported on the American Stock Exchange or, if such security is not listed or admitted for trading on the American Stock Exchange, on the principal national securities exchange on which such security is listed or admitted for trading or, if not listed or admitted for trading on any national securities exchange, on The Nasdaq National Market or, if such security is not quoted on the Nasdaq National Market, the average of the closing bid and asked prices on such day in the over-the-counter market.
(b) As used herein, the term “Exchange Date” shall mean any date on or after the 181st day after the date of this Agreement and prior to the maturity date of the Senior Subordinated Notes (as such maturity date may be extended from time to time in accordance with the Senior Subordinated Note Indenture) designated by BRS or a majority of the holders of Class B Common Stock as an Exchange Date by providing not less than 15 days written notice to B&G Foods and each of the other Stockholders; provided, however, that (i) a date within 6 months of any previous Exchange Date may not be designated as an Exchange Date and (ii) BRS and the holders of Class B Common Stock may not declare an Exchange Date if the number of shares of Class B Common Stock to be exchanged on such Exchange Date is less than the lesser of shares or % of the total number of shares of Class B Common Stock then outstanding.
(c) As used herein the term “Exchange Rate” shall mean an amount equal to (i) the per EIS Initial Public Offering price of the XXXx less $6.00 divided by (ii) the per EIS Initial Public Offering Price of the XXXx, as adjusted from time to time in accordance with this Article VI;
(d) As used herein the term “Fair Market Value” shall mean the average of the daily Current Market Prices per EIS during the ten consecutive Trading Days selected by B&G Foods commencing not more than 20 Trading Days before, and ending not later than, the earlier of the day in question and the day before the “ex-date” with respect to the issuance or distribution requiring such computation. The term “ex-date,” when used with respect to any issuance or distribution, means the first day on which the XXXx trade regular way, without the right to receive such issuance or distribution, on the exchange or in the market, as the case may be, for purposes of determining that day’s Current Market Price.
(e) As used herein, the term “Trading Day” shall mean any day on which the securities in question are traded on the American Stock Exchange or, if such securities are not listed or admitted for trading on the American Stock Exchange, on the principal national securities exchange on which securities are listed or admitted or, if not listed or admitted for trading on any national securities exchange, on The Nasdaq National Market or, if such securities are not quoted on The Nasdaq National Market, on the applicable securities market in which such securities are traded. If such securities are not trading on any securities market, the Board of Directors of B&G Foods shall determine which day shall be deemed the Trading Day.
(f) As used herein, the term “Transfer Agent” shall mean The Bank of New York or any successor transfer agent of B&G Foods’ XXXx and Class B Common Stock.
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AMENDMENT AND RESTATEMENT; REPURCHASE OF PREFERRED STOCK, WARRANTS AND OPTIONS
7.1. Amendment and Restatement of Existing Securities Holders Agreement; Approvals of Initial Public Offering Transactions.
(a) Each party hereto agrees that, upon completion of the Initial Public Offering, (i) the Existing Securities Holders Agreement shall be amended and restated and replaced in its entirety with this Agreement and (ii) the terms of the Existing Securities Holders Agreement shall cease to be of any effect.
(b) Each Stockholder consents and agrees to take all action necessary for the completion of the Initial Public Offering and the related transactions, and consents to B&G Foods entering into the Underwriting Agreement and the transactions contemplated thereby and by this Agreement.
(c) Each party hereto consents to the Merger and the Name Change and to the amendment and restatement of the certificate of incorporation of B&G Foods and to the amendment and restatement of the bylaws of B&G Foods, substantially in the forms as filed by B&G Foods as exhibits to the EIS Registration Statement.
7.2. Repurchase Upon Initial Public Offering. Upon consummation of the Initial Public Offering (the “Initial Repurchase Date”), each Stockholder hereby sells, transfers and assigns to B&G Foods, and B&G Foods hereby purchases from such Stockholder, free and clear of all liens, claims, security interests, pledges, charges, equities, options, restrictions and encumbrances (except, in the case of CIT, for the CIT Conditional Sale Agreement):
(a) all of such Stockholders’ shares of Series A Preferred Stock;
(b) all of such Stockholders’ shares of Series B Preferred Stock;
(c) all of such Stockholder’ shares of Series C Preferred Stock;
(d) the number of shares of Class B Common Stock set forth opposite such Stockholder’s name in the second column of Exhibit D hereto;
(e) all of such Stockholders’ Existing Options (as adjusted following the Reclassification and Conversion);
(f) the number of Existing Warrants set forth opposite such Stockholder’s name in the second column of Exhibit E hereto;
7.3. Repurchase Upon Exercise of the Over-Allotment Option.
(a) Upon exercise by the Underwriters of the Over-Allotment Option in full, each Stockholder hereby sells, transfers and assigns to B&G Foods, and B&G Foods
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hereby purchases from such Stockholder, free and clear of all liens, claims, security interests, pledges, charges, equities, options, restrictions and encumbrances (except, in the case of CIT, for the CIT Conditional Sale Agreement) the number of shares of Class B Common Stock and Existing Warrants set forth opposite such Stockholder’s name in the third column of Exhibit D and in the third column of Exhibit E hereto.
(b) Upon any partial exercise of the Over-Allotment Option, each Stockholder hereby sells, transfers and assigns to B&G Foods, and B&G Foods hereby purchases from such Stockholder, free and clear of all liens, claims, security interests, pledges, charges, equities, options, restrictions and encumbrances such pro rata number of shares of Class B Common Stock and Existing Warrants of such Stockholder based on the number of shares of Class B Common Stock and Existing Warrants set forth opposite such Stockholder’s name in the third column of Exhibit D hereto and in the third column of Exhibit E hereto as will be purchased by the total proceeds received by B&G Foods in such partial exercise of the Over-Allotment Option. For purposes of determining such pro rata allocation each share of Class B Common Stock shall be treated the same as each Existing Warrant.
7.4. Repurchase Price.
(a) The per share purchase price for the Series A Preferred Stock on the Initial Repurchase Date is 100% of the then effective Liquidation Preference (as defined in the applicable certificate of designation) per share plus an amount equal to a prorated dividend for the period from the Dividend Payment Date (as defined in the applicable certificate of designation) immediately prior to the Initial Repurchase Date to the Initial Repurchase Date..
(b) The per share purchase price for the Series B Preferred Stock on the Initial Repurchase Date is 100% of the then effective Liquidation Preference (as defined in the applicable certificate of designation) per share plus an amount equal to a prorated dividend for the period from the Dividend Payment Date (as defined in the applicable certificate of designation) immediately prior to the Initial Repurchase Date to the Initial Repurchase Date.
(c) The per share purchase price for the Series C Preferred Stock on the Initial Repurchase Date is 100% of the then effective Liquidation Preference (as defined in the applicable certificate of designation) per share plus an amount equal to a prorated dividend for the period from the Dividend Payment Date (as defined in the applicable certificate of designation) immediately prior to the Initial Repurchase Date to the Initial Repurchase Date.
(d) The per share purchase price for the Class B Common Stock is an amount equal to the Exchange Rate multiplied by the per EIS Initial Public Offering price of the XXXx.
(e) The per option purchase price for the Existing Options is an amount equal to the Exchange Rate multiplied by the per EIS Initial Public Offering price of the XXXx less the exercise price thereof (as such exercise price has been adjusted following the Reclassification and Conversion).
(f) The per warrant purchase price for the Existing Warrants is an amount equal to the Exchange Rate multiplied by the initial per EIS Initial Public Offering Price
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of the XXXx less the exercise price thereof (as such exercise price has been adjusted following the Reclassification and Conversion).
The purchase price for the Existing Securities shall be delivered to the Stockholders, [by wire transfer of immediately available funds], to the bank account(s) provided to B&G Foods by such Stockholders.
7.5. Exercise of Remaining Existing Warrants Following IPO and Expiration of Over-Allotment Option.
(a) Each Stockholder hereby agrees that the balance of any Existing Warrants (as adjusted following the Reclassification and Conversion) held by such Stockholder following the Initial Public Offering and the expiration of the Over-Allotment Option that have not been repurchased in accordance with Section 7.2 or Section 7.3 hereof, shall be deemed exercised by such Stockholder without any further action on the part of such Stockholder, and such Stockholder shall receive in accordance with the terms of the Existing Warrants (as adjusted following the Reclassification and Conversion) the applicable number of shares of Class B Common Stock following such deemed exercise upon payment by such Stockholder of the exercise price therefor as set forth under the terms of the Existing Warrants (as adjusted following the Reclassification and Conversion).
(b) Upon such exercise, no fractional portion of a share of Class B Common Stock shall be issued upon exercise of such Existing Warrants. Instead of any fraction of a share of Class B Common Stock that would otherwise be deliverable upon the exercise of Existing Warrants, B&G Foods shall pay to the holder of such Existing Warrant an amount in cash in respect of such fractional interest based upon the value of one share of Class B Common Stock being equal to the Exchange Rate multiplied by the per EIS Initial Public Offering price of the XXXx.
7.6. Release From Liability. The Stockholders hereby release and discharge B&G Foods from any and all claims and/or causes of action, known or unknown, arising from or relating to the Existing Securities, the Existing Securities Holders Agreement and the option agreements and the warrant agreements entered into by such Stockholders in connection with the Existing Options and Existing Warrants, with respect to any Existing Securities repurchased by B&G Foods in accordance with this Article VII.
MISCELLANEOUS
8.1. Amendment and Modification. This Agreement may be amended or modified, or any provision hereof may be waived, provided that such amendment, modification or waiver is set forth in a writing executed by (i) B&G Foods, (ii) BRS (so long as the BRS Entities own in the aggregate at least 3% of the outstanding Common Stock on a fully diluted basis), (iii) Canterbury (so long as the Canterbury Entities own in the aggregate at least 3% of the outstanding Common Stock on a fully diluted basis), (iv) the holders of a majority of the
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Common Stock held by the Management Stockholders and (v) the holders of a majority of the outstanding Common Stock on a fully diluted basis (including Common Stock owned by the BRS Entities, but not including Common Stock held by holders not a party hereto or hereafter made a party hereto). Notwithstanding the foregoing, no amendment or waiver of Sections 2.3, 3.1 or 4.4, Article V, VI or VII, this Section 8.1 or the Registration Rights Agreement will be effective against any Stockholder that would be adversely affected by such amendment or waiver unless such Stockholder consents to such amendment or waiver. No course of dealing between or among any persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any person under or by reason of this Agreement.
8.2. Survival of Representations and Warranties. The representations and warranties set forth in Section 2.1 of this Agreement will survive the execution and delivery of this Agreement, regardless of any investigation made by a Stockholder or on its behalf. No other representations, warranties or covenants set forth herein shall so survive.
8.3. Successors and Assigns; Entire Agreement. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns and executors, administrators and heirs; provided, however, no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement, except to a Permitted Transferee in connection with a Transfer to such Permitted Transferee or as otherwise set forth in this Agreement. This Agreement (including the Registration Rights Agreement) sets forth the entire agreement and understanding among the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
8.4. Separability. In the event that any provision of this Agreement or the application of any provision hereof is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected except to the extent necessary to delete such illegal, invalid or unenforceable provision unless that provision held invalid shall substantially impair the benefits of the remaining portions of this Agreement.
8.5. Notices. All notices provided for or permitted hereunder shall be made in writing by hand-delivery, registered or certified first-class mail, telex, telecopier or air courier guaranteeing overnight delivery to the other party at the following addresses (or at such other address as shall be given in writing by any party to the others):
If to B&G Foods, to:
B&G Foods Holdings Corp.
(and, following the Merger, B&G Foods, Inc.)
Four Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
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with required copies to:
Dechert LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Glyndwr X. Xxxx, Esq.
and (prior to the Initial Public Offering)
Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
If to any BRS Entity, to:
Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
with a required copy to:
Dechert LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Glyndwr X. Xxxx, Esq.
If to any Canterbury Entity, to:
Canterbury Mezzanine Capital II, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X.X. Xxxxxx
with a required copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
If to any CIT Entity, to:
The CIT Group/Equity Investments, Inc.
000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, XX XXX 0X0
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Canada
Attention: Xxxxx Xxxxx
with required copies to:
Sidley Xxxxxx Xxxxx & Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
and
Laud Xxxxxxx
& Company, LLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
If to the Management Stockholders or any of them, to their addresses as listed in the books of B&G Foods or the relevant Subsidiary.
All such notices shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery.
8.6. Governing Law. The validity, performance, construction and effect of this Agreement shall be governed by and construed in accordance with the internal law of New York, without giving effect to principles of conflicts of law, except to the extent that Delaware law shall be mandatorily applicable.
8.7. Headings. The headings in this Agreement are for convenience of reference only and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. Unless otherwise specified, section references herein refer to sections of this Agreement and schedules and exhibits refer to schedules and exhibits attached hereto.
8.8. Counterparts. This Agreement may be executed in two or more counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same instrument.
8.9. Further Assurances. Each party shall cooperate and take such action as may be reasonably requested by another party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby.
8.10. Remedies. In the event of a breach or a threatened breach by any party to this Agreement of its obligations under this Agreement, any party injured or to be injured by such breach, in addition to being entitled to exercise all rights granted by law, including recovery
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of damages, will be entitled to specific performance of its rights under this Agreement. The parties agree that the provisions of this Agreement shall be specifically enforceable, it being agreed by the parties that the remedy at law, including monetary damages, for breach of such provision will be inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived.
8.11. Party No Longer Owning Securities. If a party hereto ceases to own any Existing Securities, Securities or XXXx, such party will no longer be deemed to be a Stockholder or Management Stockholder for purposes of this Agreement.
8.12. No Effect on Employment. Nothing herein contained shall confer on any Management Stockholder the right to remain in the employ of B&G Foods or any of the Subsidiaries or their Affiliates.
8.13. Pronouns. Whenever the context may require, any pronouns used herein shall be deemed also to include the corresponding neuter, masculine or feminine forms.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
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B&G FOODS HOLDINGS CORP. |
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Executive Vice President Finance |
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BRUCKMANN, XXXXXX, XXXXXXXX & CO., L.P. |
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CANTERBURY MEZZANINE CAPITAL II, L.P. |
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THE CIT GROUP/EQUITY INVESTMENTS, INC. |
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[Signature Pages to the Second Amended and Restated Securities Holders Agreement]
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BRS STOCKHOLDERS |
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Xxxxx X. Xxxxxxxxx |
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Xxxxxx X. Xxxxxx XX |
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Xxxxxxx X. Xxxxxxxx |
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Xxxxxx Xxxxxxxxx |
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H. Xxxxxx Xxxxxxxx |
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Xxxxx Xxxxx |
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Xxxxxxx Place |
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BCB PARTNERSHIP |
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By: Xxxxx X. Xxxxxxxxx, General Partner |
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NAZ PARTNERSHIP |
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XXXXXXX LYNCH, PIERCE, XXXXXX |
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& XXXXX INCORPORATED, CUSTODIAN FBO |
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XXXX X. XXXXXXXX XXX |
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Attorney-in-Fact |
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MANAGEMENT STOCKHOLDERS |
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Xxxxxxx X. Xxxxxxxx, III |
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[Signature Pages to the Second Amended and Restated Securities Holders Agreement]
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EMERIL’S FOOD OF LOVE PRODCUTIONS, LLC |
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XXXXXXX XXXXXX AGENCY, INC. |
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[Signature Pages to the Second Amended and Restated Securities Holders Agreement]
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms, as used herein, shall have the following meanings:
“Agreement” means the Second Amended and Restated Securities Holders Agreement to which this Registration Rights Agreement is an Exhibit.
“Board” means the board of directors of B&G Foods.
“BRS Demand Transferee” means any third party to whom any BRS Entity assigns registration rights in accordance with Section 2.11 hereof.
“Canterbury Demand Transferee” means any third party to whom any Canterbury Entity assigns registration rights in accordance with Section 2.11 hereof.
“CIT Demand Transferee” means any third party to whom any CIT Entity assigns registration rights in accordance with Section 2.11 hereof.
“Demand Registration” means a registration under the Securities Act made at the request of any of the BRS Entities or BRS Demand Transferees, and a registration on Form S-2 or Form S-3 (or any successor form(s) under the Securities Act) under the Securities Act made at the request of any of the Canterbury Entities, the CIT Entities or their respective Demand Transferees in accordance with Section 2.2 hereof.
“Demand Transferee” means any of the BRS Demand Transferees, the Canterbury Demand Transferees or the CIT Demand Transferees.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Holders” has the meaning given to such term in Section 2.1(a) hereof.
“Maximum Offering Size” has the meaning given to such term in Section 2.1(b) hereof.
“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Public Offering” means an underwritten public offering of Securities pursuant to an effective registration statement under the Securities Act.
B-1
“Registrable Securities” means (i) any XXXx, shares of Class A Common Stock and Senior Subordinated Notes issued or issuable to or otherwise acquired by any BRS Entity, Canterbury Entity, CIT Entity or Management Stockholders upon the exchange of their Class B Common Stock in accordance with Section 6.1 of the Agreement and (ii) any XXXx, shares of Class A Common Stock and Senior Subordinated Notes issued or issuable with respect to the securities referred to in clause (i) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization, in any case until (x) a registration statement covering such XXXx, shares of Class A Common Stock and Senior Subordinated Notes has been declared effective by the SEC and such securities have been disposed of pursuant to such effective registration statement, (y) such securities have been sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act have been met, or such securities may be sold pursuant to Rule 144(k) or (z) such securities have been otherwise transferred, B&G Foods has delivered a new certificate or other evidence of ownership for such securities not bearing the legend set forth in Section 2.2 of the Agreement (or other legend of similar import) 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 relating to 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 B&G Foods (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 B&G Foods and customary fees and expenses for independent certified public accountants retained by B&G Foods (including the expenses of 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 2.4(h) hereof), (vi) reasonable fees and expenses of any special experts retained by B&G Foods in connection with such registration, (vii) reasonable fees and expenses of one counsel for the BRS Entities and BRS Demand Transferees participating in the offering selected by the BRS Entities and BRS Demand Transferees and reasonably acceptable to B&G Foods, (viii) reasonable fees and expenses of one counsel for the Canterbury Entities, CIT Entities and their respective Demand Transferees participating in the offering selected by the Canterbury Entities, CIT Entities and their respective Demand Transferees and reasonably acceptable to B&G Foods, (ix) 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 (x) fees and disbursements of underwriters customarily paid by issuers or sellers of securities (but not including any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities, or any out-of-pocket expenses (except as set forth in clauses (vii) and (viii) above) of the Shareholders (or the agents who manage their accounts) or any fees and expenses of underwriter’s counsel).
“Registration Securities” has the meaning given to such term in Section 2.1(a).
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
B-2
“Selling Shareholder” means any BRS Entity, Canterbury Entity, CIT Entity or Demand Transferee who makes a request pursuant to Section 2.2 hereof that B&G Foods effect a Demand Registration.
“Shareholder” means each Person (other than B&G Foods) who is a party to the Agreement, whether in connection with the execution and delivery hereof as of the date of execution or otherwise in accordance herewith, so long as such Person shall beneficially own any Registrable Securities or have the irrevocable right to acquire Registrable Securities. The term “Shareholder,” to the extent such Shareholder has transferred any of its, his or her Registrable Securities to transferees in accordance with Section 2.11 hereof, shall mean such Shareholder and such transferees, taken together, and any right or action that may be exercised or taken at the election of such Shareholder may be exercised or taken at the election of such Shareholder and such transferees.
Unless otherwise defined in this Exhibit, all terms used in this Exhibit shall have the meanings ascribed to them in the Agreement.
ARTICLE II
REGISTRATION RIGHTS
2.1 Registration. (a) If B&G Foods proposes to register any of its XXXx (or shares of Class A Common Stock or Senior Subordinated Notes comprising the XXXx) under the Securities Act (other than a registration (i) on Form S-8 or S-4 or any successor or similar forms or (ii) relating to XXXx, Class A Common Stock or Senior Subordinated Notes issuable upon exercise of employee stock options or in connection with any employee benefit or similar plan of B&G Foods), B&G Foods shall each such time, subject to the provisions of Section 2.1(b) hereof, give prompt written notice at least concurrently with the initial filing date of the registration statement relating to such registration to each Shareholder, which notice shall set forth such Shareholder’s rights under this Section 2.1 and shall offer all such Shareholders the opportunity to include in such registration statement such amount of Registrable Securities as such Shareholders shall request (each, an “Incidental Registration” and the Shareholders requesting an Incidental Registration, the “Relevant Shareholders”). Upon the written request of any Relevant Shareholder made within 15 days after the receipt of notice from B&G Foods (which request shall specify the amount and kinds of Registrable Securities intended to be disposed of by such Relevant Shareholders), B&G Foods will use its best efforts to effect the registration under the Securities Act of all such Registration Securities which B&G Foods has been so requested to register by such Relevant Shareholders, to the extent required to permit the disposition of such Registration Securities to be so registered; provided that (y) if such registration involves a Public Offering, all Relevant Shareholders must sell their Registration Securities to the underwriters selected as provided in Section 2.4(f) on the same terms and conditions as applicable to B&G Foods and (z) if, at any time after giving written notice of its intention to register any Class B Common Stock pursuant to this Section 2.1(a) and prior to the effective date of the registration statement filed in connection with such registration, B&G Foods shall determine for any reason not to register such Class B Common Stock, B&G Foods shall give written notice thereof to all such Relevant Shareholders and, thereupon, shall be relieved of its obligation to register any Registration Securities in connection with such registration. B&G Foods will pay all
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Registration Expenses in connection with each registration of Registration Securities requested to be registered pursuant to this Section 2.1 and Section 2.2. All Shareholders properly requesting registration of Registrable Securities under this Section 2.1 are referred to as “Holders” and all Registrable Securities sought to be registered by such Holders pursuant to this Section 2.1 or by a BRS Entity, a Canterbury Entity, a CIT Entity or a Demand Transferee pursuant to Section 2.2 are referred to as “Registration Securities.”
(b) If a registration pursuant to this Section 2.1 involves a Public Offering (other than in the case of a Public Offering pursuant to a Demand Registration, in which case the provisions with respect to priority of inclusion in such offering set forth in Section 2.2(c) shall apply) and the managing underwriter(s) shall advise B&G Foods that, in its view, the amount of securities which B&G Foods and the Relevant Shareholders intend to include in such registration will exceed the amount which can be sold in such Public Offering (the “Maximum Offering Size”), B&G Foods shall include in such registration, up to the Maximum Offering Size, so many of the securities proposed to be registered by B&G Foods as would not cause the offering to exceed the Maximum Offering Size allocated in the following orders of priority: (i) first, all of the shares of Common Stock that B&G Foods proposes to sell for its own account and (ii) second, the Registration Securities requested to be included in such Incidental Registration by the Holders; provided that if all the Registration Securities requested to be included in such Incidental Registration by the Holders are not to be included, selection of Registration Securities to be included shall be made pro rata based on the number of Registration Securities that each Holder shall have requested to be included therein.
2.2 Demand Registration.
(a) At any time after the date of the Agreement, a BRS Entity or a BRS Demand Transferee or, if registration on Form S-2 or Form S-3 (or any successor form(s) under the Securities Act) shall be available to B&G Foods, a Canterbury Entity, a CIT Entity, a Canterbury Demand Transferee or a CIT Demand Transferee may make a written request for registration with the SEC under and in accordance with the provisions of the Securities Act of all or part of its, his or her Registrable Securities; provided, that B&G Foods may, if the Board so determines in the exercise of its reasonable judgment that it would be inadvisable to effect such Demand Registration at such time, defer such Demand Registration for a single period not to exceed 180 days.
(b) BRS Entities, Canterbury Entities and CIT Entities (including each of their respective Demand Transferees) shall each be entitled to two (2) Demand Registrations.
(c) If a Demand Registration involves a Public Offering and the managing underwriter(s) shall advise B&G Foods that, in its view, the amount of securities proposed to be sold in such Demand Registration will exceed the Maximum Offering Size, B&G Foods shall include in such registration, up to the Maximum Offering Size, so many of the securities proposed to be registered as would not cause the offering to exceed the Maximum Offering Size allocated in the following orders of priority: (i) first, the Registrable Securities requested to be included in such Demand Registration by the Selling Shareholder(s), (ii) second, the Registrable Securities requested to be included in such Demand Registration by the Shareholders other than the Selling Shareholder(s) and (iii) any Common Stock proposed to be registered by B&G
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Foods; provided that (y) if all the Registrable Securities requested to be included in such Demand Registration by members of any group set forth above are not to be included, selection of Registrable Securities to be included from within such group shall be made pro rata based on the number of Registrable Securities that each member of such group shall have requested to be included therein, and (z) if any Shareholder has requested inclusion in such Demand Registration and if 10% or more of the Registrable Securities requested to be included by such Shareholder are not so included, such Shareholder shall be entitled to an additional Demand Registration hereunder on the same terms and conditions as would have applied to such Shareholder had such earlier Demand Registration not been effected.
2.3 Holdback Agreements. If any registration of Registration Securities shall be in connection with a Public Offering, each Shareholder and B&G Foods agree not to effect any public sale or distribution, including, without limitation, any sale pursuant to Rule 144, or any successor provision, under the Securities Act, of any securities of the same kind as the Registration Securities and not to effect any such public sale or distribution of any other security convertible into or exchangeable or exercisable for any such securities of B&G Foods (in each case, other than as part of such Public Offering) during the 10 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 shall be required by the managing underwriter(s) (but not to exceed 180 days). B&G Foods agrees that it will use its best efforts to require a similar commitment from future holders of its securities.
2.4 Registration Procedures. Whenever any Shareholder requests that any Registration Securities be registered pursuant to Section 2.1 or 2.2 hereof, B&G Foods will, subject to the provisions of such Sections, use its best efforts to effect the registration and the sale of such Registration Securities in accordance with the intended method of disposition thereof as quickly as practicable and in connection with any such request:
(a) B&G Foods will as expeditiously as possible prepare and file with the SEC a registration statement on any form for which B&G Foods then qualifies or which counsel for B&G Foods shall deem appropriate and which form shall be available for the sale of the Registration 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 and remain effective and usable for a period of not less than 270 days (or such shorter period in which all of the Registration Securities of the Shareholders included in such registration statement shall have actually been sold thereunder), subject to proviso (z) of Section 2.1(a).
(b) B&G Foods will, if requested, prior to filing a registration statement or prospectus or any amendment or supplement thereto, furnish to each Shareholder that is participating in a registration hereunder and each underwriter, if any, of the securities covered by such registration statement copies of such registration statement as proposed to be filed, and thereafter B&G Foods will furnish to each such Shareholder 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 each such Shareholder or underwriter, if any, may reasonably request in order to facilitate the proposed sale or disposition
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of the Registration Securities owned by each such Shareholder which are covered by such registration statement. B&G Foods hereby consents to the use of the prospectus, including each preliminary prospectus, each as referred to in the immediately preceding sentence, by each such Shareholder and each underwriter, if any, of the Registration Securities covered by such registration statement, in connection with the offering and sale of such securities covered by such prospectus or preliminary prospectus.
(c) After the filing of the registration statement, B&G Foods will (i) prepare and file with the SEC such amendments and post-effective amendments to the registration statement as may be necessary to keep such registration statement effective and usable for the period set forth in Section 2.4(a), (ii) 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, (iii) comply with the provisions of the Securities Act with respect to the disposition of all Registration 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 prospectus and (iv) promptly notify each Shareholder holding Registration Securities covered by such registration statement of any stop order issued or threatened by the SEC or any state securities commission under state blue sky laws and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.
(d) B&G Foods will use its best efforts to (i) register or qualify the Registration Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions in the United States as any Shareholder holding such Registration Securities reasonably (in light of such Shareholder’s intended plan of distribution) requests and (ii) cause such Registration 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 B&G Foods and do any and all other acts and things that may be reasonably necessary or advisable to enable such Shareholder to consummate the disposition of such Registration Securities owned by such Shareholder; provided that B&G Foods 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 2.4(d), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.
(e) B&G Foods will immediately notify each Shareholder holding such Registration Securities, 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 Registration 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, in the light of the circumstances under which they were made, not misleading and promptly prepare and make available to each such Shareholder any such supplement or amendment.
(f) In the event of a Public Offering, B&G Foods may, subject to its other contractual obligations, select in its sole discretion, an underwriter or underwriters and legal counsel as it may deem appropriate. B&G Foods will enter into customary agreements
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(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, without limitation, the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with the NASD, maintaining a current marketmaking prospectus and conducting customary “road show” presentations.
(g) B&G Foods shall make available for inspection by any Shareholder and any underwriter participating in any disposition pursuant to a registration statement being filed by B&G Foods pursuant to this Section 2.4 and any attorney, accountant or other professional retained by any such Shareholder or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of B&G Foods (collectively, the “Records”) as shall be reasonably requested by any such Inspector, and cause B&G Foods’ officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such registration statement; provided that Records which B&G Foods determines, in good faith, to be confidential and which B&G Foods notifies the Inspectors as being confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement, (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of or agency with competent jurisdiction or (iii) such Records have previously been generally made available to the public.
(h) B&G Foods will obtain and furnish to each such Shareholder and to each such underwriter, if any, a signed counterpart of (i) an opinion or opinions of counsel to B&G Foods and (ii) a comfort letter or comfort letters from B&G Foods’ 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 holders of a majority of the aggregate amount of Registration Securities or the managing underwriter therefor reasonably requests.
(i) B&G Foods shall use its best efforts to effect the listing of the Registration Securities on each securities exchange, if any, on which such Registration Securities are then listed or will be listed in connection with the registration of the Registration Securities, to the extent the Registration Securities satisfy the applicable listing requirements of such exchanges.
(j) B&G Foods shall 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 12 months, beginning within three months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder.
B&G Foods may require each such Shareholder to promptly furnish in writing to B&G Foods such information regarding the distribution of the Registration Securities as B&G Foods may from time to time reasonably request and such other information as may be legally required in connection with such registration.
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Each such Shareholder agrees that, upon receipt of any notice from B&G Foods of the happening of any event of the kind described in Section 2.4(e) hereof, such Shareholder will forthwith discontinue disposition of Registration Securities pursuant to the registration statement covering such Registration Securities until such Shareholder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.4(e) hereof, and, if so directed by B&G Foods, such Shareholder will deliver to B&G Foods all copies, other than any permanent file copies then in such Shareholder’s possession, of the most recent prospectus covering such Registration Securities at the time of receipt of such notice. In the event that B&G Foods shall give such notice, B&G Foods shall extend the period during which such registration statement shall be maintained effective (including the period referred to in Section 2.4(a) hereof) by the number of days during the period from and including the date of the giving of notice pursuant to Section 2.4(e) hereof to the date when B&G Foods shall make available to such Holder a prospectus supplemented or amended to conform with the requirements of Section 2.4(e) hereof.
2.5 Indemnification by B&G Foods. B&G Foods agrees to indemnify and hold harmless each Shareholder, each Person, if any, who controls such Shareholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the respective officers, directors, partners, employees, representatives and agents of each Shareholder and each controlling Person, to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation and as incurred, reimbursement of all costs of investigating, preparing, pursuing and defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the fees and expenses of counsel to any such indemnified Person) (collectively, “Losses”) directly or indirectly caused by or arising out of any untrue statement or alleged untrue statement of a material fact contained in any registration statement (or any amendment thereto) or prospectus relating to such Shareholder’s Registration Securities (as amended or supplemented if B&G Foods shall have furnished any amendments or supplements thereto) or any preliminary prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus or any preliminary prospectus, in light of the circumstances under which they were made) not misleading, except insofar as such Losses are caused by any such untrue statement or omission or alleged untrue statement or omission that is made in reliance upon and in conformity with information furnished in writing to B&G Foods by such Shareholder or on such Shareholder’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 Losses results from the fact that a current copy of the prospectus (or amended or supplemented prospectus, as the case may be) was not sent or given to the Person asserting any such Losses at or prior to the written confirmation of the sale of the Registration Securities concerned to such Person if it is determined that B&G Foods has provided such prospectus (or amended or supplemented prospectus, as the case may be) and it was the responsibility of such Shareholder to provide such Person with a current copy of the prospectus (or amended or supplemented prospectus, as the case may be) and such current copy of the prospectus (or amended or supplemented prospectus, as the case may be) would have completely cured the defect giving rise to such Losses. B&G Foods also agrees to indemnify any underwriters of the Registration Securities, their officers and
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directors and each Person who controls such underwriters on substantially the same basis as that of the indemnification of the Shareholders provided in this Section 2.5.
2.6 Indemnification by Participating Shareholders. Each Shareholder holding Registration Securities included in any registration statement agrees, severally but not jointly, to indemnify and hold harmless B&G Foods, each Person, if any, who controls B&G Foods within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the respective officers, directors, partners, employees, representatives and agents of B&G Foods and each controlling Person to the same extent as the foregoing indemnity from B&G Foods to such Shareholder, but only (a) with respect to information furnished in writing by such Shareholder or on such Shareholder’s behalf expressly for use in any registration statement or prospectus relating to such Registration Securities, or any amendment or supplement thereto, or any preliminary prospectus or (b) to the extent that any Losses described in Section 2.5 results from the fact that a current copy of the prospectus (or amended or supplemented prospectus, as the case may be) provided by B&G Foods was not sent or given to the Person asserting any such Losses at or prior to the written confirmation of the sale of the Registration Securities concerned to such Person if it is determined that it was the responsibility of such Shareholder to provide such Person with a current copy of the prospectus (or amended or supplemented prospectus, as the case may be) and such current copy of the prospectus (or amended or supplemented prospectus, as the case may be) would have completely cured the defect giving rise to such Losses. Each such Shareholder also agrees to indemnify and hold harmless any underwriters of the Registration Securities, their officers and directors and each Person who controls such underwriters on substantially the same basis as that of the indemnification of B&G Foods provided in this Section 2.6.
2.7 Conduct of Indemnification Proceedings. In case any proceeding (including, without limitation, any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to this Article II, 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, without limitation, the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses related thereto; provided that the failure of any Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party of any obligations hereunder except to the extent that the Indemnifying Party is prejudiced by such failure to notify. In any such proceeding, each Indemnified Party shall have the right to retain its, his or her own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (a) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (b) in the reasonable judgment of such Indemnified Party representation of both parties by the same counsel would be inappropriate due to an actual or potential conflict of interest between them. The Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the 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, unless in the reasonable judgment of any Indemnified Party a conflict of interest may exist between such Indemnified Party and any other of such Indemnified Parties with respect to such proceeding, and all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm(s) for the Indemnified Parties, such firm(s) shall be designated in
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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 consent is withheld and there shall be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any Losses (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.
2.8 Contribution. If the indemnification provided for in this Article II is unavailable to the Indemnified Parties in respect of any Losses 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 (a) as between B&G Foods and the Shareholders holding Registration Securities covered by a registration statement, on the one hand, and the underwriters, if any, on the other hand, in such proportion as is appropriate to reflect the relative benefits received by B&G Foods and such Shareholders, on the one hand, and the underwriters, if any, on the other hand, from the offering of the Registration 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 B&G Foods and such Shareholders, on the one hand, and of such underwriters, if any, on the other hand, in connection with the statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations and (b) as between B&G Foods, on the one hand, and each such Shareholder, on the other hand, in such proportion as is appropriate to reflect the relative fault of B&G Foods and of each such Shareholder in connection with such statements or omissions, as well as any other relevant equitable considerations. The relative benefits received by B&G Foods and such Shareholders, on the one hand, and such underwriters, if any, on the other hand, shall be deemed to be in the same proportion as the aggregate proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by B&G Foods and such Shareholders bear to the aggregate 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 relative fault of B&G Foods and such Shareholders, on the one hand, and of such underwriters, if any, on the other hand, 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 B&G Foods and such Shareholders or by such underwriters. The relative fault of B&G Foods, on the one hand, and of each such Shareholder, on the other hand, 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.
B&G Foods and the Shareholders agree that it would not be just and equitable if contribution pursuant to this Section 2.8 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
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preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the Losses 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 2.8, no underwriter shall be required to contribute, or shall be liable under any other provision of this Article II for, any amount in excess of the amount by which the aggregate price at which the Registration Securities underwritten by it and distributed to the public were offered to the public 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 Shareholder shall be required to contribute, or shall be liable under any other provision of this Article II for, any amount in excess of the amount by which the aggregate price at which the Registration Securities of such Shareholder were offered to the public exceeds the amount of any damages which such Shareholder 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 such Shareholder’s obligation to contribute pursuant to this Section 2.8 is several in the proportion that the proceeds of the offering received by such Shareholder bears to the aggregate proceeds of the offering received by all such Shareholders and not joint.
2.9 Participation in Public Offering. No Person may participate in any 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 the Agreement in respect of registration rights.
2.10 Other Indemnification. Indemnification similar to that specified herein (with appropriate modifications) shall be given by B&G Foods and each Shareholder 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.
2.11 Transfer of Registration Rights. In connection with any transfer of Registrable Securities by the Shareholders to any third party (which transfer must be in compliance with the Securities Act and the Agreement), the Shareholders may assign any registration rights to which they are entitled hereunder, provided that such third party agrees to be bound by all of the terms and conditions of the Agreement. It is understood and agreed that B&G Foods will be under no obligation to effect a registration of Registrable Securities held by such third party except and to the extent such third party requests in notices provided by it to B&G Foods in accordance with Section 2.1 or 2.2.
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