1
================================================================================
Exhibit 10.5
RIGHT OF FIRST REFUSAL AGREEMENT
BY AND BETWEEN
XXXXXXX X. XXXXX, III AND XXXXX X. XXXXX,
INDIVIDUALLY AND AS CO-TRUSTEES OF THE
THE XXXXX REVOCABLE TRUST
AND
NESTLE HOLDINGS, INC.
DATED AS OF JUNE 14, 1994
================================================================================
2
TABLE OF CONTENTS
PAGE
----
SECTION 1. Right of First Refusal......................................... 2
(a) Grant of Right........................................................ 2
(b) Exercise of Right..................................................... 2
(c) Elective Sales........................................................ 2
(d) Rule 144 Sales........................................................ 3
(e) Closing............................................................... 3
SECTION 2. Transfers of Shares............................................ 4
(a) Restrictions.......................................................... 4
(b) Exceptions to Restrictions............................................ 4
(c) Endorsement of Certificates........................................... 5
(d) Improper Transfer..................................................... 6
SECTION 3. Representations and Warranties of the Seller................... 6
(a) Beneficial Ownership.................................................. 6
(b) Good and Valid Title.................................................. 6
(c) Due Authorization; Good and Valid Title
Upon Purchase......................................................... 7
(d) No Inconsistent Agreements............................................ 7
(e) Brokerage or Finder's Fees............................................ 7
(f) Third Party Consents, etc............................................. 8
(g) Governmental Consents, etc............................................ 8
(h) Agreement is Valid, Binding and Enforceable........................... 8
SECTION 4. Representations and Warranties of the
Purchaser...................................................... 8
(a) Organization and Qualification........................................ 8
(b) Due Authorization..................................................... 8
(c) Purchase Representations.............................................. 8
(d) Accredited Investor................................................... 9
SECTION 5. Covenants of the Seller........................................ 9
i
3
PAGE
----
SECTION 6. Miscellaneous.................................................. 9
(a) Further Assurances.................................................... 9
(b) Severability.......................................................... 10
(c) Specific Enforcement.................................................. 10
(d) Entire Agreement...................................................... 10
(e) Counterparts.......................................................... 10
(f) Notices and Other Communications...................................... 10
(g) Amendments............................................................ 11
(h) Successors and Assigns................................................ 11
(i) Survival of Representations and Warranties............................ 11
(j) Governing Law......................................................... 12
(k) Signatures............................................................ 12
(l) Termination........................................................... 12
ii
4
RIGHT OF FIRST REFUSAL AGREEMENT
THIS RIGHT OF FIRST REFUSAL AGREEMENT (the"Agreement") is
dated as of June 14, 1994 (the "Effective Date") and entered into by and between
XXXXXXX X. XXXXX, III ("X.Xxxxx"), XXXXXXX X. XXXXX, III as co-trustee of the
Xxxxx Revocable Trust created under that certain Trust Agreement Establishing
Xxxxx Revocable Trust dated as of December 30, 1981, as amended and restated by
that certain Amended Revocable Trust Agreement dated as of October 12, 1987 and
as amended by those certain amendments thereto dated as of May 3, 1988, February
4, 1990, December 16, 1990, December 6, 1991 and June 12, 1994 (the "Xxxxx
Revocable Trust") ("W.Trustee"), XXXXX X. XXXXX ("X.Xxxxx"), and XXXXX X. XXXXX
as co-trustee of the Xxxxx Revocable Trust ("J.Trustee," and together with
X.Xxxxx, W.Trustee and X.Xxxxx, the "Seller") and NESTLE HOLDINGS, INC., a
Delaware corporation (the "Purchaser"). Capitalized terms used herein but not
otherwise defined shall have the meaning assigned such terms in the Purchase
Agreement (as defined below).
WHEREAS, the Purchaser and Xxxxxx'x Grand Ice Cream, Inc., a
Delaware corporation ("Dreyer's") have entered into a Stock and Warrant Purchase
Agreement dated as of May 6, 1994 (the "Purchase Agreement") providing, among
other things, for the purchase by the Purchaser of three million shares of the
Common Stock of Dreyer's, par value $1.00 per share (the "Common Stock"), and
warrants exercisable for two million shares of Common Stock;
WHEREAS, the Seller currently Beneficially Owns 1,115,901
shares of Common Stock (of which 895,521 shares are owned of record by W.Trustee
and J.Trustee, 178,380 shares are issuable upon exercise of stock options owned
of record by X.Xxxxx (the "Stock Options"), 14,000 shares are owned of record by
Xxxxxxx Xxxxxxx Xxxxx as trustee of the Xxxxxxx Xxxxxxx Xxxxx 1993 Irrevocable
Trust created under that certain Trust Agreement Establishing the Xxxxx Family
1993 Irrevocable Trusts dated as of February 19, 1993, as amended (the "Xxxxx
Family Trust Agreement") (the "WJC Trust"), 14,000 shares are owned of record by
Xxxxxxx X. Xxxxxxx as trustee of the Xxxxxx Xxxxx Xxxxx 1993 Irrevocable Trust
created under the Xxxxx Family Trust Agreement (the "RJC Trust") and 14,000
shares are owned of record by Xxxxxxx X. Xxxxxxx as trustee of the Xxxxxxxxxxx
Xxxx Xxxxx 1993 Irrevocable Trust created under the Xxxxx Family Trust Agreement
(the "CCC Trust")) and may acquire additional shares of Common Stock or other
voting securities of Dreyer's in the future (the shares of Common Stock and
other voting securities of Dreyer's (i) now owned by the Seller, (ii) issuable
upon exercise of the Stock Options or any other options or warrants of Dreyer's
now owned by the Seller, (iii) issuable upon conversion or exchange of any other
securities of Dreyer's now owned by the Seller or (iv) hereafter acquired by, or
which become Beneficially Owned by, the Seller or any of its Affiliates, are
referred to herein as the "Shares");
WHEREAS, a condition to the closing of the transactions
contemplated by the Purchase Agreement is that the Seller shall have granted the
Purchaser a right of first refusal with respect to the Shares; and
WHEREAS, the Purchaser and the Seller desire to provide for
such grants and to establish various rights and obligations in connection
therewith.
1
5
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein set forth, the parties hereto agree as
follows:
SECTION 1. Right of First Refusal.
(a) Grant of Right. In consideration of the payment of
$1,000 by the Purchaser to the Seller, the receipt and sufficiency of which is
hereby acknowledged, the Seller hereby grants to the Purchaser a right of first
refusal with respect to all of the Shares (the "Right of First Refusal").
(b) Exercise of Right. Subject to Sections 1(c) and (d),
if at any time the Seller receives a bona fide offer (an "Offer") from any
person or entity to purchase any or all of the Shares which the Seller wishes to
accept, the Seller shall cause the Offer to be reduced to writing and shall
notify the Purchaser in writing of its wish to accept the Offer (the "Offer
Notice"). The Offer Notice shall contain an irrevocable offer to sell such
Shares to the Purchaser at a purchase price equal to the price contained in, and
on the same terms and conditions of, the Offer and shall be accompanied by a
true copy of the Offer (which shall identify the offeror). At any time within
five business days after the date of receipt by the Purchaser of the Offer
Notice (the "Right of First Refusal Exercise Period"), the Purchaser shall have
the right to purchase all, but not less than all, the Shares covered by the
Offer at the same price and on the same terms and conditions as the Offer by
notifying the Seller in writing of its election to purchase the Shares (the
"Right of First Refusal Exercise Notice"). Upon the Seller's receipt of the
Right of First Refusal Exercise Notice, the Seller shall sell the Shares to the
Purchaser pursuant to the provisions of Section 1(e). If at the end of the Right
of First Refusal Exercise Period the Purchaser has not delivered a Right of
First Refusal Exercise Notice to the Seller, the Seller may, during the
succeeding 90-day period, sell not less than all of the Shares covered by the
Offer to the offeror at a price not less than that contained in the Offer and on
terms and conditions not less favorable in the aggregate to the Seller than
those contained in the Offer. Upon such sale, the Right of First Refusal shall
terminate with respect to the Shares so sold. If at the end of 90 days following
the expiration of the Right of First Refusal Exercise Period the Seller has not
completed the sale of the Shares covered by the Offer (or tendered or exchanged
such Shares pursuant to a tender or exchange offer) as aforesaid, then the
Seller shall not thereafter sell such Shares without again complying with the
provisions of this Section 1.
(c) Elective Sales. If at any time the Seller has a bona
fide intention to sell any of the Shares, but at such time has not received an
Offer from any person or entity to purchase such Shares, the Seller shall
provide the Purchaser with a notice (the "Elective Sale Notice") which (i)
notifies the Purchaser of such intention, (ii) sets forth the number of Shares
desired to be sold (the "Elective Shares") and (iii) irrevocably offers to sell
the Elective Shares to the Purchaser at a purchase price and on terms and
conditions set forth in such notice. At any time within five business days after
the date of receipt by the Purchaser of the Elective Sale Notice (the "Elective
Sale Exercise Period"), the Purchaser shall have the right to purchase all, but
not less than all, of the Elective Shares at the price and on the terms and
conditions set forth in the Elective Sale Notice by notifying the Seller in
writing of its election to purchase such Shares (the "Elective Sale Exercise
Notice"). Upon the Seller's receipt of the Elective Sale Exercise Notice, the
Seller shall sell the Elective Shares to the Purchaser pursuant to the
2
6
provisions of Section 1(e). If at the end of the Elective Sale Exercise Period
the Purchaser has not delivered an Elective Sale Exercise Notice to the Seller,
the Seller may, during the succeeding 90-day period, sell not less than all of
the Elective Shares at a price not less than that contained in the Elective Sale
Notice and on terms and conditions not less favorable in the aggregate to the
Seller than those contained in the Elective Sale Notice. Upon such sale, the
Right of First Refusal shall terminate with respect to the Elective Shares so
sold. If at the end of 90 days following the expiration of the Elective Sale
Exercise Period the Seller has not completed the sale of the Elective Shares as
aforesaid, then the Seller shall not thereafter sell the Elective Shares without
again complying with the provisions of this Section 1.
(d) Rule 144 Sales. If at any time the Seller has a bona
fide intention to sell any of the Shares pursuant to Rule 144 ("Rule 144") of
the Rules and Regulations issued under the Securities Act of 1933, as amended
(the "Act") during the immediately succeeding 90 calendar day period (such
period being referred to as the "Qualified Period"), the Seller shall provide
the Purchaser with a notice (the "Rule 144 Notice") which (i) notifies the
Purchaser of such intention, (ii) sets forth the number of Shares desired to be
sold (the "Rule 144 Shares") and (iii) irrevocably offers to sell the Rule 144
Shares to the Purchaser at a per-share price equal to (1) the reported closing
price of the outstanding shares of Common Stock on the day preceding the date of
the Rule 144 Notice as reported by the Nasdaq National Market System, (2) if
such shares are listed on a national securities exchange, the last reported
sales price of the outstanding shares of Common Stock on such exchange (which
shall be for consolidated trading if applicable to such exchange) on the day
preceding the date of the Rule 144 Notice, or (3) if neither so reported or
listed, the last reported bid price of such shares (the "Rule 144 Purchase
Price"). At any time within five business days after the date of receipt by the
Purchaser of the Rule 144 Notice (the "Rule 144 Exercise Period"), the Purchaser
shall have the right to purchase all, but not less than all, of the Rule 144
Shares by notifying the Seller in writing of its election to purchase such
Shares (the "Rule 144 Exercise Notice"), whereupon the Purchaser shall be
unconditionally (unless prohibited by applicable law) obligated to purchase the
Rule 144 Shares. Upon the Seller's receipt of the Rule 144 Exercise Notice, the
Seller shall sell the Rule 144 Shares to the Purchaser pursuant to the
provisions of Section 1(e). If at the end of the Rule 144 Exercise Period the
Purchaser has not delivered a Rule 144 Exercise Notice to the Seller, then the
Seller may, during the Qualified Period, sell any or all of the Rule 144 Shares
pursuant to Rule 144 at a per-share price not less than 97.5% of the Rule 144
Purchase Price. Such sale shall be otherwise without restriction and shall not
require further notice to the Purchaser. Upon such sale, the Right of First
Refusal shall terminate with respect to the Rule 144 Shares so sold. If at the
end of the Qualified Period the Seller has not sold all of the Rule 144 Shares
as aforesaid, then the Seller shall not thereafter sell such unsold Shares
without again complying with the provisions of this Section 1.
(e) Closing. If the Purchaser exercises its Right of
First Refusal with respect to any Shares, then the closing of the purchase of
the subject Shares shall take place at the principal office of Xxxxxx & Xxxxxxx,
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000, at 10:00
a.m. California time, on the later of (i) the 10th business day following the
receipt by the Seller of the Right of First Refusal Exercise Notice or Elective
Sale Exercise Notice or Rule 144 Exercise Notice, as the case may be, or (ii) if
applicable, the closing date provided for in the Offer Notice or Elective Sale
Notice, as the case may be;
3
7
provided, however, that if any of the Shares to be acquired by the Purchaser
would result in the Purchaser holding "Excess Shares" under Section 6.1(d) of
the Purchase Agreement, then the closing of the purchase of those Shares shall
occur, at the Purchaser's sole and absolute discretion, no later than 90
calendar days following the receipt by the Seller of the Right of First Refusal
Exercise Notice or Elective Sale Exercise Notice or Rule 144 Exercise Notice, as
the case may be; provided, further, however, that if at the time the Seller
receives the Right of First Refusal Exercise Notice or Elective Sale Exercise
Notice or Rule 144 Exercise Notice, as the case may be, the requirements of the
HSR Act must be complied with in order for the Purchaser to consummate the
purchase of the Shares contemplated by such notice, then (A) as soon as
practicable, the Seller shall cause Dreyer's to make all filings required under
the HSR Act and the Purchaser shall make all filings required under the HSR Act
and (B) the closing of the purchase of the subject Shares shall occur only after
the applicable waiting period, including any extension thereof, under the HSR
Act shall have expired or been terminated and neither the Department of Justice
nor the Federal Trade Commission shall have instituted any litigation to enjoin
or delay the consummation of such purchase. The payment of the appropriate
purchase price shall be paid by delivery to the Seller (or Seller's bank or
other financial institution if so directed by the Seller) of a certified check
payable to the Seller (or Seller's bank or other financial institution if so
directed by the Seller) against delivery of certificates or other instruments
representing the Shares, appropriately endorsed or executed by the Seller,
together with such instruments of transfer and conveyance, satisfactory in form
and substance to the Purchaser, sufficient to vest the Purchaser with good and
marketable title, free and clear of any and all liens, charges, encumbrances,
covenants, conditions, restrictions, voting trust arrangements, adverse claims
or rights whatsoever (collectively, the "Encumbrances").
SECTION 2. Transfers of Shares.
(a) Restrictions. The Seller agrees that it shall not,
directly or indirectly, offer, sell, transfer, assign or otherwise dispose of
(or make any exchange, gift, assignment or pledge of) (collectively, "Transfer")
any of the Shares except as provided in Section 1 and this Section 2.
(b) Exceptions to Restrictions.
The provisions of Section 2(a) shall not apply to a Transfer,
if such Transfer is made without consideration (except for Section 2(b)(vi)), by
the Seller to:
(i) any lineal descendant of X.Xxxxx and X.Xxxxx
or any spouse of such lineal descendant;
(ii) a trust for the sole benefit of X.Xxxxx and
X.Xxxxx and/or one or more of X.Xxxxx'x and X.Xxxxx'x family members;
(iii) a corporation or other entity a majority of
the equity interests of which are owned by X.Xxxxx and X.Xxxxx and/or X.Xxxxx'x
and X.Xxxxx'x family members;
(iv) an educational or charitable organization;
4
8
(v) the executor, administrator or personal
representative of X.Xxxxx or X.Xxxxx or the guardian or conservator of X.Xxxxx
or X.Xxxxx if X.Xxxxx or X.Xxxxx is adjudged disabled or incompetent by a court
of competent jurisdiction, acting in his or her capacity as such; or
(vi) a bank or other financial institution, if
such Transfer is solely in the form of a pledge to secure bona fide indebtedness
of the Seller to such bank or other financial institution.
Provided, however, that none of the foregoing Transfers shall
be permitted unless:
(1) Such Transfer complies with all applicable
requirements of the Securities Act of 1933, as amended (the "Act") and the
Securities Exchange Act of 1934, as amended;
(2) Prior to such Transfer, the Seller shall have
caused the transferee to execute an agreement in form and substance reasonably
satisfactory to the Purchaser, providing that such transferee shall fully comply
with the terms of this Agreement;
(3) The Transferred Shares shall remain subject
to the Purchaser's Right of First Refusal and to this Section 2; and
(4) With respect to a Transfer to a bank or
other financial institution in the form of a pledge pursuant to Section
2(b)(vi), the bank or other financial institution to which such pledge is made
agrees in writing that (i) the Purchaser's Right of First Refusal with respect
to the Shares so pledged (the "Pledged Shares") is senior to any security
interest or lien of such bank or financial institution created by such pledge,
(ii) any sale of the Pledged Shares by such bank or financial institution is
subject to the Purchaser's Right of First Refusal and shall be conducted in
accordance with the terms of this Agreement and (iii) any Pledged Shares may be
sold to the Purchaser pursuant to the terms of this Agreement without the bank's
or other financial institution's prior consent, and once so sold, such Shares
shall be free and clear of any and all claims or liens of such bank or other
financial institution.
(c) Endorsement of Certificates.
(i) Upon the execution of this Agreement, the
certificates representing all Shares shall be endorsed as follows:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS SUCH
TRANSFER COMPLIES WITH THE PROVISIONS OF
THE RIGHT OF FIRST REFUSAL AGREEMENT,
DATED AS OF JUNE 14, 1994, BY AND BETWEEN
XXXXXXX X. XXXXX, III AND XXXXX X. XXXXX,
5
9
INDIVIDUALLY AND AS CO-TRUSTEES OF THE XXXXX
REVOCABLE TRUST AND NESTLE HOLDINGS, INC., A COPY OF
WHICH IS ON FILE AT THE OFFICES OF XXXXXX'X GRAND ICE
CREAM, INC.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS AND MAY BE OFFERED, SOLD OR
TRANSFERRED ONLY IF EXEMPTIONS FROM SUCH REGISTRATION
REQUIREMENTS ARE AVAILABLE.
(ii) All certificates representing Shares hereafter
issued to or acquired by the Seller shall bear the legend set forth above.
Certificates for Shares as to which the Right of First Refusal has terminated
shall be issued without such legend when Transferred.
(d) Improper Transfer.
Any attempt to Transfer or encumber any Shares not in
accordance with this Agreement shall be null and void and neither the issuer of
such securities nor any transfer agent of such securities shall give any effect
to such attempted transfer or encumbrance in its stock records.
SECTION 3. Representations and Warranties of the
Seller. The Seller represents and warrants as of the Effective Date as follows:
(a) Beneficial Ownership. The Seller Beneficially Owns a
total of 1,115,901 shares of Common Stock of which 895,521 shares are owned of
record by W.Trustee and J.Trustee, 178,380 shares are issuable upon exercise of
the Stock Options, 14,000 shares are owned of record by the Xxxxxxx Xxxxxxx
Xxxxx as trustee of the WJC Trust, 14,000 shares are owned of record by Xxxxxxx
X. Xxxxxxx as trustee of the RJC Trust and 14,000 shares are owned of record by
Xxxxxxx X. Xxxxxxx as trustee of the CCC Trust. Except as set forth in the
preceding sentence, no other shares of Dreyer's capital stock, or any securities
convertible into or exchangeable for, or options or warrants to purchase, shares
of Dreyer's capital stock, or any other voting securities of Dreyer's are
Beneficially Owned by the Seller or any of its Affiliates.
(b) Good and Valid Title. The Seller has good, valid and
marketable title to the Shares which are the subject of this Agreement, free and
clear of any and all Encumbrances, except as created hereby and by the Xxxxxx
BOA Security Documents; provided, however, that Bank of America National Trust
and Savings Association ("Bank of America") has consented to the grant by the
Seller to the Purchaser of the Right of First Refusal with respect to all Shares
pursuant to the Agreement Regarding Right of First Refusal, the form of which is
attached as Exhibit K to the Purchase Agreement (the "Consent"), and has agreed
that (i) the Purchaser's
6
10
Right of First Refusal is senior to any security interest of Bank of America
with respect to the Shares, (ii) any sale of Shares by Bank of America is
subject to the Purchaser's Right of First Refusal and shall be conducted in
accordance with the terms of this Agreement and, where applicable, the Consent
and (iii) any Shares may be sold to the Purchaser pursuant to the terms of this
Agreement without Bank of America's prior consent, provided that such Shares are
sold at a price equal to or greater than the lesser of their fair market value
(which for purposes of the Consent only is calculated based on the average
closing price of Dreyer's Common Stock for the 5 trading days prior to the date
on which the Purchaser provides the notice under this Agreement initiating the
subject sale) or an amount sufficient to repay Bank of America in full, and once
so sold, such Shares shall be free and clear of any and all claims and liens of
Bank of America.
(c) Due Authorization; Good and Valid Title Upon
Purchase. The Seller has all right, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, including,
without limitation, the transfer, conveyance and sale to the Purchaser of the
Shares upon the Purchaser's exercise of the Right of First Refusal. W.Trustee
and J.Trustee are the only trustees of the Xxxxx Revocable Trust. The execution
and delivery of this Agreement and the consummation by W.Trustee and J.Trustee
of the transactions contemplated hereby are authorized by that certain Trust
Agreement Establishing Xxxxx Revocable Trust dated as of December 30, 1981, as
amended and restated by that certain Amended Revocable Trust Agreement dated as
of October 12, 1987 and as amended by those certain amendments thereto dated as
of May 3, 1988, February 4, 1990, December 16, 1990, December 6, 1991 and June
12, 1994 and the laws of the State of California. This Agreement has been duly
executed and delivered by the Seller and constitutes a valid and binding
agreement of the Seller enforceable in accordance with its terms. Upon
consummation of any purchase of the Shares upon exercise of the Right of First
Refusal, the Seller shall deliver good and marketable title to the Shares sold
to the Purchaser, free and clear of any and all Encumbrances and upon the sale
to the Purchaser of such Shares, there shall be no options, warrants, calls,
commitments or agreements of any nature whatsoever granted by the Seller or
Dreyer's pursuant to which any person will have the right to purchase or
otherwise acquire the Shares.
(d) No Inconsistent Agreements. The Seller is not a party
to, subject to or bound by any agreement or judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body or any statute,
law, rule or regulation that would prevent the execution, delivery or
performance of this Agreement by the Seller, or the transfer, conveyance and
sale of the Shares to the Purchaser upon exercise of its rights hereunder,
including, without limitation, the Xxxxx BOA Security Documents, as amended by
the amendment in the form of Exhibit K to the Purchase Agreement.
(e) Brokerage or Finder's Fees. No broker or finder has
acted or will act for the Seller in connection with this Agreement or the
transactions contemplated hereby, and no broker or finder or other person is
entitled to any brokerage or finder's fees or other commissions in respect of
such transactions based in any way on agreements, arrangements or understandings
made by or on behalf of the Seller.
7
11
(f) Third Party Consents, etc. The Seller has obtained
all consents, approvals and waivers from any individual, firm, corporation,
partnership, trust, unincorporated organization or other entity, or any
successors (by merger or otherwise) to the foregoing, including, without
limitation, Bank of America, known by the Seller to be necessary to permit the
Seller to consummate the transactions contemplated by this Agreement.
(g) Governmental Consents, etc. To the best of its
knowledge, the Seller is not required to obtain any consent, approval or
authorization of, or to make any declaration or filing with, any governmental
authority as a condition to or in connection with the valid execution, delivery
and performance of this Agreement or the consummation by the Seller of the
transactions contemplated hereby, except for any filings required (i) under the
HSR Act and (ii) pursuant to state and federal securities laws.
(h) Agreement is Valid, Binding and Enforceable. This
Agreement has been duly and validly executed and delivered by the Seller and
constitutes a legal, valid and binding obligation of the Seller, enforceable in
accordance with its terms.
SECTION 4. Representations and Warranties of the
Purchaser. The Purchaser represents and warrants as of the Effective Date as
follows:
(a) Organization and Qualification. The Purchaser is a
corporation duly organized and existing in good standing under the laws of the
State of Delaware and has the corporate power to own its property and to carry
on its business as now being conducted. The Purchaser is duly qualified to do
business and in good standing in every jurisdiction in which the nature of the
respective business conducted or property owned by it makes such qualification
necessary, except where the failure to so qualify would not prevent consummation
of the transactions contemplated hereby or have a material adverse effect on the
results of operations (on a recurring basis), financial condition or business of
the Purchaser and its subsidiaries taken as a whole.
(b) Due Authorization. The Purchaser has all right, power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation by the Purchaser of the transactions contemplated hereby have been
duly authorized by all necessary action on behalf of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser and constitutes
a valid and binding agreement of the Purchaser enforceable in accordance with
its terms.
(c) Purchase Representations. Any Shares purchased by the
Purchaser pursuant to its exercise of the Right of First Refusal granted to the
Purchaser hereunder will be purchased by it for its own account and not with a
view to or for sale in connection with any distribution thereof in any
transaction that would violate the securities laws of the United States or any
state thereof. The Purchaser acknowledges that any Shares purchased pursuant to
such exercise have not been registered under the Act and may be sold or disposed
of in the absence of such registration only pursuant to an exemption from such
registration.
8
12
(d) Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 promulgated under the Act.
SECTION 5. Covenants of the Seller.
The Seller covenants as follows for the period from the
Effective Date until such time as the Right of First Refusal has terminated in
respect of all of the Shares in accordance with the provisions of Section 1.
(a) The Seller shall not do or permit any act which would
cause any representation or warranty in this Agreement to be or become untrue in
any material respect;
(b) The Seller shall use its best efforts to take all
action required to obtain all consents, approvals and agreements of, and to give
all notices and make all other filings with, any person, entity, government or
agency necessary to authorize, approve or permit the consummation of the
transactions contemplated by this Agreement. In addition, the Seller covenants
and agrees to use its best efforts to take, or cause to be taken, all action or
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated hereby and to cause the fulfillment of the Seller's
obligations hereunder.
(c) The Seller shall give prompt notice to the Purchaser
of (i) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect and (ii) any
material failure of the Seller to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder, and the Seller
shall use its best efforts to remedy same.
(d) The Seller shall not become a party to, subject to or
bound by any agreement that would prevent or prohibit the consummation of the
transactions contemplated by this Agreement, including without limitation, the
transfer, conveyance and sale of the Shares to the Purchaser upon exercise of
the Right of First Refusal, free and clear of any and all Encumbrances.
SECTION 6. Miscellaneous.
(a) Further Assurances. Upon the terms and subject to the
conditions contained herein, each of the parties hereto agrees (i) to use its
best efforts to take, or cause to be taken, all action or do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated
hereby and to cause the fulfillment of its obligations hereunder, (ii) to
execute any documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to carry out any of the transactions
contemplated hereby and (iii) to cooperate with each other in connection with
the foregoing.
9
13
(b) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable.
(c) Specific Enforcement. The Purchaser, on the one hand,
and the Seller, on the other, acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction to
prevent breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to which
they may be entitled at law or equity.
(d) Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the transactions contemplated
hereby.
(e) Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more of the counterparts have
been signed by each party and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
(f) Notices and Other Communications. Except as otherwise
provided, all notices, consents, requests, instructions and other communications
provided for herein shall be promptly given, if in writing and delivered
personally, by telecopy, express courier or sent by registered mail, postage
prepaid, if to:
THE SELLER:
c/o Dreyer's Grand Ice Cream, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, III
With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxx & Xxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
10
14
THE PURCHASER:
President
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
With copies to:
Xxxxx X. Xxxx, Esq.
Senior Vice President and General Counsel
Nestle USA, Inc.
000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
and
Xxxxx X. Xxxxxxxx, Esq.
Vice President and Deputy General Counsel
Nestle USA, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxx, Xxxx 00000
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner.
(g) Amendments. This Agreement may not be amended,
modified or supplemented other than by a written instrument signed by all
parties hereto which are, at the time of such amendment or modification, subject
to this Agreement.
(h) Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns (including, without limitation,
successor trustees under the Xxxxx Revocable Trust); provided, however, that the
Seller may not assign any of its rights or obligations hereunder except in
accordance with the provisions of Section 2 and the Purchaser may not assign any
of its rights or obligations hereunder except to its affiliates.
(i) Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement, regardless of any investigation made by or on behalf of any party.
(j) Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Delaware.
11
15
(k) Signatures. This Agreement shall be effective upon
delivery of original signature pages or facsimile copies thereof executed by
each of the parties hereto.
(l) Termination. The Right of First Refusal granted by
the Seller to the Purchaser shall terminate when the Purchaser no longer
Beneficially Owns 10% or more of the outstanding voting securities of Dreyer's,
on a Fully Diluted basis; provided, however, that for purposes of this Section
6(l), the Purchaser's Beneficial Ownership of Dreyer's outstanding voting
securities on a Fully Diluted basis shall be deemed to be reduced solely as a
result of sales of shares by the Purchaser, but not by reason of a percentage
reduction occurring as a result of the issuance by Dreyer's of any shares of its
capital stock, or any other securities, or any securities convertible into or
exchangeable for, or options or warrants to purchase, shares of its capital
stock or any other securities, other than the issuance of such securities
pursuant to (i) the conversion of any of the 6.25% Subordinated Convertible
Notes of Dreyer's due June 30, 2001, (ii) the exercise of any options
outstanding as of the Effective Date which were granted pursuant to any stock
option plan of Dreyer's or (iii) the exercise of any rights (excluding the
Rights) outstanding as of the Effective Date which were granted pursuant to any
employee stock purchase or gift plan of Dreyer's.
[SIGNATURE PAGE TO FOLLOW]
12
16
IN WITNESS WHEREOF, the Purchaser and the Seller have caused
this Agreement to be executed and delivered as of the day and year first above
first written.
/s/ XXXXXXX X. XXXXX, III
--------------------------------------
Xxxxxxx X. Xxxxx, III
/s/ XXXXXXX X. XXXXX, III
--------------------------------------
Xxxxxxx X. Xxxxx, III as co-trustee of
the Xxxxx Revocable Trust
/s/ XXXXX X. XXXXX
--------------------------------------
Xxxxx X. Xxxxx
/s/ XXXXX X. XXXXX
--------------------------------------
Xxxxx X. Xxxxx as co-trustee of
the Xxxxx Revocable Trust
NESTLE HOLDINGS, INC.
/s/ XXXXX X. XXXXX
--------------------------------------
By: Xxxxx X. Xxxxx
Title: Senior Vice President - Finance
S-1
