AMENDED AND RESTATED
SECURITIES HOLDERS AGREEMENT
dated as of December 22, 1999
among
B&G FOODS HOLDINGS CORP.
BRUCKMANN, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & 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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Page
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ARTICLE I REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOLDINGS CORP..............................................2
1.1 Representations, Warranties and Covenants of Holdings Corp...............................................2
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH STOCKHOLDER..........................................3
2.1 Representations, Warranties and Covenants of Each Stockholder............................................3
2.2 Legend...................................................................................................4
2.3 Provisions Regarding Transfers of Securities.............................................................4
2.4 Notation.................................................................................................6
2.5 Limitation on Repurchase of Securities...................................................................6
2.6 Reliance.................................................................................................6
ARTICLE III OTHER COVENANTS AND REPRESENTATIONS...................................................................6
3.1 Financial Statements and Other Information. So long as BRS, Canterbury or
CIT,
as the case may be, owns any of the Securities, Holdings Corp............................................6
3.2 Sale of Holdings Corp. or any of the Companies...........................................................7
3.3 Tag-Along Rights.........................................................................................7
3.4 Covenant Not to Compete..................................................................................9
3.5 Preemptive Rights.......................................................................................10
ARTICLE IV CORPORATE ACTIONS.....................................................................................11
4.1 Directors...............................................................................................11
4.2 Right to Remove Certain of Holdings Corp.'s Directors...................................................11
4.3 Right to Fill Certain Vacancies in Holdings Corp.'s Board...............................................12
4.4 Subsidiaries Governance.................................................................................12
4.5 Management Rights of BRS................................................................................12
4.6 Management Rights of Canterbury.........................................................................13
4.7 Confidentiality.........................................................................................13
ARTICLE V ADDITIONAL RESTRICTIONS ON TRANSFERS OF SECURITIES HELD BY MANAGEMENT STOCKHOLDERS.....................14
5.1 Certain Definitions.....................................................................................14
5.2 Restrictions on Transfer................................................................................16
5.3 Purchase Option.........................................................................................17
5.4 Right of First Refusal on Transfer of Management Stockholder Securities.................................20
5.5 Purchaser Representative................................................................................21
5.6 Section 83(b) Elections.................................................................................21
5.7 Involuntary Transfers...................................................................................22
ARTICLE VI REGISTRATION RIGHTS...................................................................................23
ARTICLE VII MISCELLANEOUS........................................................................................23
7.1 Amendment and Modification..............................................................................23
7.2 Survival of Representations and Warranties..............................................................24
7.3 Successors and Assigns; Entire Agreement................................................................24
7.4 Separability............................................................................................24
7.5 Notices.................................................................................................24
7.6 Governing Law...........................................................................................26
7.7 Headings................................................................................................26
7.8 Counterparts............................................................................................26
7.9 Further Assurances......................................................................................26
7.10 Remedies................................................................................................26
7.11 Party No Longer Owning Securities.......................................................................26
7.12 No Effect on Employment.................................................................................26
7.13 Pronouns................................................................................................26
DEFINITIONS
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AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT
AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT, dated as of December
22, 1999 (the "Agreement"), by and among (1) B&G FOODS HOLDINGS CORP., a
Delaware corporation ("Holdings Corp."), (2) BRUCKMANN, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & 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. Holdings Corp., the BRS Entities and the Management Stockholders are
parties to the Securities Purchase and Holders Agreement, dated as of March 27,
1997 (the "Original Shareholders Agreement"), and desire to amend and restate
the Original Shareholders Agreement in its entirety.
B. Each of the BRS Entities is the record owner of (i) the number of
shares of Common Stock, par value $.01 per share (the "Common Stock"), of
Holdings Corp. 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 Holdings Corp. 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
Holdings Corp. 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 Holdings Corp. set forth opposite its name on
Exhibit A hereto and (v) the number of warrants to purchase shares of Common
Stock (the "Warrants") of Holdings Corp. 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 Holdings Corp. set forth opposite its name on Exhibit A
hereto and (ii) the number of Warrants of Holdings Corp. 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 Holdings Corp. set forth opposite its name on Exhibit A
hereto and (ii) the number of Warrants of Holdings Corp. 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 Common Stock of Holdings Corp. set forth opposite his name
on Exhibit A hereto, (ii) the number of shares of Series A Preferred Stock of
Holdings Corp. set forth opposite his name on Exhibit A hereto and (iii) the
number of stock options to purchase shares of Common Stock (the "Options") of
Holdings Corp. set forth opposite his name on Exhibit A hereto.
F. As used herein, the term "Companies" shall mean, collectively, (i)
B&G Foods, Inc., a Delaware corporation, (ii) BGH Holdings, Inc., a Delaware
corporation, (iii) ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc., a Delaware corporation, (iv)
▇▇▇▇▇ & ▇▇▇▇▇▇, Inc., a Delaware corporation, (v) Heritage Acquisition Corp., a
Delaware corporation, (vi) Les Produits Alimentaires Jacques Et Fils, Inc., a
Quebec corporation, (vii) Maple Grove Farms of Vermont, Inc., a Vermont
corporation, (viii) Roseland Distribution Company, a Delaware corporation, (ix)
RWBV Acquisition Corp., a Delaware corporation, (x) Trappey's Fine Foods, Inc.,
a Delaware corporation and (xi) all future subsidiaries of Holdings Corp., and
the term "Company" shall be construed accordingly. As used herein, the term
"Securities" shall mean the Common Stock, the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, the Warrants and the
Options now and hereafter held by any Stockholder, including shares of Common
Stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, the Warrants, the Options and all other securities of Holdings Corp. (or
a successor to Holdings Corp.) received on account of ownership of the Common
Stock, the Series A Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock, the Warrants or the Options including, without limitation, all
securities 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.
G. The Stockholders and Holdings Corp. wish to set forth certain
agreements regarding their future relationships and their rights and obligations
with respect to the Securities.
Terms
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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 amend and
supersede in its entirety the Original Shareholders Agreement, and agree as
follows:
ARTICLE I
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF HOLDINGS CORP.
1.1 Representations, Warranties and Covenants of Holdings Corp.
Holdings Corp. represents and warrants to, and covenants and agrees with, each
of the Stockholders as follows:
(a) Holdings Corp. is a corporation validly existing and in good
standing under the laws of the State of Delaware.
(b) Holdings Corp. 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.
(c) Holdings Corp. 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 Holdings Corp.,
enforceable against Holdings Corp. in accordance with the terms hereof.
(d) As of the date hereof, the authorized capital stock of
Holdings Corp. consists of (i) 250,000 shares of Common Stock, of which
102,499.99 shares are 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"), of
which (A) 22,000 shares have been designated as Series A Preferred Stock, of
which 20,321.31 shares are issued and outstanding, (B) 35,000 shares have been
designated as Series B Preferred Stock, of which 12,310.54 shares are issued and
outstanding and (C) 25,000 shares have been designated as Series C Preferred
Stock, all of which are issued and outstanding. Except as provided in this
Agreement, in the foregoing sentence or as set forth in the terms of the capital
stock of Holdings Corp., and except for the Warrants and the Options, as of the
Closing Date (x) there will be no rights, subscriptions, warrants, options,
conversion rights, or agreements of any kind outstanding to purchase from
Holdings Corp., or otherwise require Holdings Corp. to issue, any shares of
capital stock of Holdings Corp. or securities or obligations of any kind
convertible into or exchangeable for any shares of capital stock of Holdings
Corp.; (y) Holdings Corp. 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 Common Stock, the Series A Preferred Stock, the
Series B Preferred Stock and the Series C Preferred Stock will constitute all of
the outstanding shares of Holdings Corp.'s capital stock.
ARTICLE II
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, Holdings Corp. 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; 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.
(b) Such Management Stockholder's residence address and social
security number are as set forth below such Management Stockholder's signature
to this Agreement.
(c) Such Stockholder will not effect a Transfer (as hereinafter
defined) of any Securities 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 prior to the lapse of such period of time following acquisition
thereof as may be required to comply with applicable state securities laws.
2.2 Legend. The certificates representing the Securities, including
certificates issued upon any voluntary or involuntary transfer of such
Securities, unless such transfer is pursuant to a registered public offering of
the Securities 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 REGISTRATION UNDER THE
SECURITIES ACT OR STATE SECURITIES LAWS OR AN OPINION OF COUNSEL,
SATISFACTORY TO B&G FOODS HOLDINGS CORP., THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE
TERMS AND CONDITIONS OF AN AMENDED AND RESTATED SECURITIES HOLDERS
AGREEMENT BY AND AMONG B&G FOODS HOLDINGS CORP. AND THE HOLDERS
SPECIFIED THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF B&G FOODS HOLDINGS CORP. 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, Canterbury Entity or CIT
Entity:
(a) Except as provided in Sections 3.3 and 5.2 hereof and the
provisions set forth below in this Section 2.3, each Management Stockholder,
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), (ii) pursuant to an Approved Sale (as
hereinafter defined) and in accordance with Section 3.2 hereof and (iii)
pursuant to an effective registration statement under the Securities Act
following exercise of such Stockholder's registration rights under the
Registration Rights Agreement (as defined in Article VI); provided, however,
that, in the case of any such Transfer, except in the case of an Approved Sale
or 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 an
Approved Sale or sale pursuant to an effective registration statement, be made
by any Management
Stockholder, 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, 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 an Approved Sale,
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 Holdings Corp. 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.
Prior to any proposed Transfer of any Securities, the holder thereof
shall give written notice to Holdings Corp. describing the manner and
circumstances of the proposed Transfer accompanied, if requested by Holdings
Corp., by a written opinion of legal counsel reasonably satisfactory to Holdings
Corp., addressed to Holdings Corp. and the transfer agent, if other than
Holdings Corp., 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) Holdings
Corp. 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 Canterbury Entity, (A) any other
Canterbury Entity, (B) any Affiliate (as hereinafter defined) 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
Holdings Corp. or any of the Companies, 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
(iii) in the case of any CIT Entity, (A) any other CIT Entity
and (B) any Affiliate of any CIT Entity.
(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 Holdings Corp. with respect to the restrictions on transfer of the
Securities referred to in this Agreement.
2.5 Limitation on Repurchase of Securities. Each Stockholder
understands that Holdings Corp. has entered into certain financing agreements
which contain prohibitions, restrictions and limitations on the ability of
Holdings Corp. to purchase any of the Securities and to pay dividends on the
Common Stock and Preferred Stock.
2.6 Reliance. Each Stockholder acknowledges that Holdings Corp. 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.
ARTICLE III
OTHER COVENANTS AND REPRESENTATIONS
3.1 Financial Statements and Other Information. So long as BRS,
Canterbury or CIT, as the case may be, owns any of the Securities, Holdings
Corp. shall deliver to BRS, Canterbury or CIT, as the case may be:
(a) as soon as practicable and in any event within 30 days after
the end of each of the first eleven monthly accounting periods of each fiscal
year of Holdings Corp. (other than the monthly accounting periods in which
quarterly accounting periods end), monthly reports which shall include the
consolidated balance sheets of Holdings Corp. and its subsidiaries as of the end
of such period, and consolidated statements of income and cash flows of Holdings
Corp. and its subsidiaries for the period then ended prepared in conformity with
generally accepted accounting principles applied on a consistent basis, except
as otherwise noted therein, and subject to the absence of footnotes and to
year-end adjustments;
(b) as soon as available and in any event within 45 days after the
end of each of the first three quarterly accounting periods of each fiscal year
of Holdings Corp., consolidated balance sheets of Holdings Corp. and its
subsidiaries as of the end of such period, and consolidated statements of income
and cash flows of Holdings Corp. and its subsidiaries for the period then ended
prepared in conformity with generally accepted accounting principles applied on
a consistent basis, except as otherwise noted therein, and subject to the
absence of footnotes and to year-end adjustments; and
(c) as soon as available and in any event within 90 days after the
end of each fiscal year of Holdings Corp., a consolidated balance sheet of
Holdings Corp. and its subsidiaries as of the end of such year, and consolidated
statements of income and cash flows of Holdings Corp. and its subsidiaries for
the year then ended prepared in conformity with generally accepted accounting
principles applied on a consistent basis, except as otherwise noted therein,
together with an auditor's report thereon of a firm of established national
reputation.
3.2 Sale of Holdings Corp. or any of the Companies.
(a) If the Board of Directors of Holdings Corp. and holders of at
least a majority of Holdings Corp.'s Common Stock then outstanding approve the
sale of Holdings Corp. or any of the Companies to an unaffiliated third person
(whether by merger, consolidation, reorganization, sale of all or substantially
all of its assets or sale of a majority of the outstanding capital stock) (an
"Approved Sale"), each Stockholder and his or its transferees (including
Permitted Transferees, but excluding transferees who receive such shares of
Common Stock unrestricted as to transfer under the Securities Act)
("Transferees") will consent to, vote for, and raise no objections against, and
waive dissenters and appraisal rights (if any) with respect to, the Approved
Sale, and will sell all of his or its Securities in such Approved Sale upon the
terms and conditions approved by the Board of Directors of Holdings Corp. and
the holders of a majority of the Common Stock then outstanding, provided that
all Stockholders receive the same form and amounts of consideration per share of
the applicable Securities. Each Stockholder and Transferee will take all
necessary and desirable actions in connection with the consummation of an
Approved Sale.
(b) The obligations of each of the Stockholders and the
Transferees with respect to an Approved Sale are subject to the satisfaction of
the conditions that: (i) upon the consummation of the Approved Sale, all of the
Stockholders and the Transferees will receive the same form and amount of
consideration per share of the applicable Securities, or if any holder of
Securities is given an option as to the form and amount of consideration to be
received, all Stockholders and Transferees will be given the same option and
(ii) the terms of the Approved Sale shall not include any provisions subjecting
a Stockholder or its Transferees to any indemnification obligation or other
liability that is beyond the value of the consideration received in the Approved
Sale by such Stockholder or Transferees or that is not ratable with respect to
all such Stockholders and Transferees.
3.3 Tag-Along Rights.
(a) Except in connection with an Approved Sale, each of the BRS
Entities covenants and agrees with the other Stockholders and their Transferees
and assigns that he, she or it will not effect a Transfer of shares of Common
Stock and/or Preferred Stock in, or otherwise participate in, any transaction
that constitute a "Significant Transfer" (as hereinafter defined) unless all
other Stockholders and their Transferees and assigns (collectively, the
"Tag-Along Rightholders") are offered an equal opportunity (the "Tag-Along
Right") to participate in such transaction or transactions on a pro rata basis
(based on the number of shares of Common Stock or Preferred Stock outstanding on
a fully-diluted basis) and on identical terms. As used herein, a "Significant
Transfer" means a Transfer, which either alone or taken together with all prior
Transfers by any BRS Entity, to any person or persons other than a BRS Permitted
Transferee (as hereinafter defined), aggregate to
one-tenth (1/10) or more of the total number of shares of Common Stock or
Preferred Stock set forth opposite the name of such Stockholder on Exhibit A
hereto. A "BRS Permitted Transferee" shall mean, (A) any other BRS Entity or
other Stockholder, (B) any general partner of a BRS Entity (a "BRS Partner") and
any corporation, partnership or other entity that is an Affiliate of any BRS
Entity or BRS Partner (collectively, "BRS Affiliates"), (C) any managing
director, director, general partner, limited partner, officer or employee of any
BRS Entity or any BRS Affiliate, or any spouse, lineal descendant, sibling or
immediate family member of any BRS Entity or any heir, executor, administrator,
testamentary trustee, legatee or beneficiary of a BRS Entity or any of the
foregoing persons described in this clause (C) (collectively, "BRS Associates")
and (D) 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 Entities, BRS Affiliates or BRS
Associates; and
(b) Prior to any sale of Common Stock and/or Preferred Stock
subject to the provisions of Section 3.3(a), the seller (the "Tag-Along Seller")
shall notify Holdings Corp. in writing of the proposed sale. Such notice (the
"Tag-Along Sale Notice") shall set forth: (i) the number of shares of Common
Stock and/or Preferred Stock subject to the proposed sale; (ii) the name and
address of the proposed purchaser; and (iii) the proposed amount of
consideration and terms and conditions of payment offered by such proposed
purchaser. Holdings Corp. shall promptly, and in any event within ten days, mail
or hand deliver or cause to be mailed or hand delivered the Tag-Along Sale
Notice to the Tag-Along Rightholders. Each Tag-Along Rightholder may exercise
the Tag-Along Right by delivery of a written notice (the "Tag-Along Acceptance
Notice") to the Tag-Along Seller within fifteen days of the date Holdings Corp.
mailed or caused to be mailed the Tag-Along Sale Notice. The Tag-Along
Acceptance Notice shall state the number of shares of Common Stock and/or
Preferred Stock that the Tag-Along Rightholder proposes to include in the
proposed sale. If no Tag-Along Acceptance Notice is received during the
fifteen-day period referred to above, the Tag-Along Seller shall have the right
for a 90-day period to effect the proposed sale of shares of Common Stock and/or
Preferred Stock on terms and conditions no more favorable than those stated in
the Tag-Along Sale Notice. Any Stockholder delivering a Tag-Along Acceptance
Notice shall participate in the proposed transaction as set forth in Section
3.3(a). Concurrently with the consummation of the Significant Transfer, the
Tag-Along Seller shall (i) notify each Tag-Along Rightholder who has delivered a
Tag-Along Acceptance Notice (an "Accepting Tag-Along Holder"), (ii) remit to the
Accepting Tag-Along Holder the aggregate consideration for the shares of Common
Stock and/or Preferred Stock to be sold by the Accepting Tag-Along Holders in
the Significant Transfer as contemplated pursuant to Section 3.3(a) hereof, and
(iii) furnish such other evidence of the completion and time of completion of
the Significant Transfer and the terms thereof as may be reasonably requested by
the Accepting Tag-Along Holders.
(c) (i) Notwithstanding the other requirements of this Section
3.3, a Tag-Along Seller may sell Common Stock and/or Preferred Stock at any time
without complying with the requirements of Section 3.3(b) so long as the
Tag-Along Seller deposits into escrow with a nationally recognized financial
institution at the time of sale that amount of consideration received in the
sale equal to the "Escrow Amount." As used herein, the "Escrow Amount" shall
equal that amount of consideration that all Tag-Along Rightholders would have
been entitled to receive if they had the opportunity to participate in the sale
on a pro rata basis, determined as if each Tag-Along Rightholder (A) delivered a
Tag-Along Acceptance Notice to the Tag-Along Seller in the time period set forth
in Section 3.3(b) and (B) proposed to include all of her, his or its shares of
Common Stock and/or Preferred Stock in such sale.
(ii) The Tag-Along Seller shall notify Holdings Corp. in
writing of the proposed sale pursuant to this Section 3.3(c) no later than the
date of such sale. Such notice (the "Escrow Notice") shall set forth the
information required in the Tag-Along Sale Notice, and in addition, such notice
shall state the name of the escrow agent and, if the consideration (in whole or
in part) for the sale was cash, then the account number of the escrow account.
Holdings Corp. shall promptly, and in any event within ten days, mail or cause
to be mailed the Escrow Notice to each Tag-Along Rightholder. Such Tag-Along
Rightholder may exercise the Tag-Along Right by delivery to the Tag-Along
Seller, within fifteen days of the date Holdings Corp. mailed or caused to be
mailed the Escrow Notice, of (A) a written notice specifying the number of
shares of Common Stock and/or Preferred Stock it proposes to sell and (B) the
certificates for such Common Stock and/or Preferred Stock, with stock powers
duly endorsed in blank and with signatures guaranteed.
(iii) Promptly after the expiration of the fifteenth day
after Holdings Corp. has mailed or caused to be mailed the Escrow Notice, (A)
the Tag-Along Seller shall purchase that number of shares of Common Stock and/or
Preferred Stock as the Tag-Along Seller would have been required to include in
the sale had the Tag-Along Seller complied with the provisions of Section
3.3(b), (B) all shares of Common Stock and/or Preferred Stock not required to be
purchased by the Tag-Along Seller shall be returned to the Tag-Along
Rightholders thereof and (C) all funds and other consideration held in escrow
shall be released to the Tag-Along Seller. If the Tag-Along Seller received
consideration other than cash in his, her or its sale, the Tag-Along Seller
shall purchase the shares of Common Stock and/or Preferred Stock tendered by
paying to the Tag-Along Rightholders the same non-cash consideration and cash in
the same proportion as received by the Tag-Along Seller in the sale. The
Tag-Along Seller shall pay all costs and expenses of the escrow agent, and any
interest on the Escrow Amount shall accrue to the benefit of Holdings Corp.
(d) The Tag-Along Rights provided pursuant to this Section 3.3
shall terminate upon an Initial Public Offering or upon a distribution by BRS
upon its liquidation of all the Securities to its partners. An "Initial Public
Offering" shall mean the sale by Holdings Corp. pursuant to an effective
registration statement under the Securities Act of Common Stock for gross
offering proceeds of at least $20 million.
3.4 Covenant Not to Compete. Each Management Stockholder hereby agrees
that during the term of his employment by any of the Companies and for a period
of six (6) months after the Management Stockholder has incurred a Termination
Date (as defined in Section 5.3(a)) for any reason other than termination
without Cause (as defined in Section 5.1) (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 any of the
Companies 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 any of the Companies 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 the
Companies 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 3.4
is a covenant independent of any other provision of this Agreement, and the
existence of any
claim which such Management Stockholder may allege against any of the Companies,
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 3.4 shall cause irreparable harm to the Companies and their
Affiliates and that the Companies' and Holdings Corp.'s remedies at law for any
breach or threat of breach by any of the Management Stockholders of the
provisions of this Section 3.4 shall be inadequate, and that the Companies or
Holdings Corp. shall be entitled to an injunction or injunctions to prevent
breaches of this Section 3.4 and to enforce specifically the terms and
provisions hereof, in addition to any other remedy to which the Companies 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 any of the Companies 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.
3.5 Preemptive Rights. Except for Exempt Issuances (as defined below),
if Holdings Corp. issues any equity securities or any securities containing
options or rights to acquire any equity securities or any securities convertible
or exchangeable for equity securities in each case, after the date hereof to any
person (the "Offeree"), Holdings Corp. will offer to sell to each Stockholder, a
number of such securities ("Offered Shares") so that the Ownership Ratio (as
defined below) immediately after the issuance of such securities for each
Stockholder would be equal to the Ownership Ratio for such Stockholder
immediately prior to such issuance of securities. Holdings Corp. shall give each
Stockholder at least 30 days prior written notice of any proposed issuance,
which notice shall disclose in reasonable detail the proposed terms and
conditions of such issuance (the "Issuance Notice"). Each Stockholder will be
entitled to purchase such securities at the same price, on the same terms, and
at the same time as the securities are issued to the Offeree by delivery of
written notice to Holdings Corp. of such election within 15 days after delivery
of the Issuance Notice (the "Election Notice"). If any of the Stockholders have
elected to purchase any Offered Shares, the sale of such shares shall be
consummated as soon as practical (but in any event within 10 days) after the
delivery of the Election Notice. In the event any Stockholder elects not to
exercise its rights pursuant to this Section 3.5, no other Stockholder shall
have the right to purchase the securities offered to such Stockholder. This
Section 3.5 will terminate automatically, and be of no further force and effect,
upon the consummation of an Initial Public Offering. As used herein, the term
"Exempt Issuances" mean (i) the issuance of equity securities pursuant to the
conversion or exercise of convertible or exercisable securities, (ii) the
issuance or sale of up to ten percent (10%) of equity securities or options or
warrants therefor (on a fully diluted basis and after giving effect to such
issuance or sale) to service providers of Holdings Corp. or its subsidiaries for
the primary purpose of soliciting or retaining their services or employment, or
otherwise providing compensation to such person, (iii) the issuance of
securities (other than to Affiliates of Holdings Corp.) in connection with a
bona fide business acquisition of or by Holdings Corp. or its subsidiaries,
whether by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise and (iv) the issuance of up to ten percent (10%) of securities (on a
fully diluted basis and after giving effect to such issuance) to persons (other
than Affiliates of Holdings Corp.) with which Holdings Corp. or its subsidiaries
have bona fide business relationships, provided such issuances are for other
than equity financing purposes. As used herein, the term "Ownership Ratio"
means, as to a Stockholder at the time of determination, the percentage obtained
by dividing the amount of shares of Common Stock held by
such Stockholder on a fully diluted basis at such time by the aggregate amount
of shares of Common Stock held by all shareholders of Holdings Corp. on a fully
diluted basis at such time.
ARTICLE IV
CORPORATE ACTIONS
4.1 Directors. (a) Each Stockholder and Permitted Transferee agrees
that it shall take, at any time and from time to time, all action necessary
(including voting the 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 Holdings Corp. is composed at all times of
such number of persons as the Board of Directors shall determine and that the
Board of Directors shall be composed of at least the following persons: one
individual designated by the Management Stockholders holding a majority of the
Common Stock owned by the Management Stockholders (who shall be, subject to the
rights of the Management Stockholders under Section 4.2, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ for so
long as he is President of B&G Foods, Inc., a Delaware corporation); one
individual designated by Canterbury (until the later of (i) the date on which
the Canterbury Entities cease to own at least 50% of the Series C Preferred
Stock and 50% of the Warrants set forth opposite their names on Exhibit A hereto
and (ii) 455 days from the date hereof); and three individuals designated by BRS
(so long as the BRS Entities continue to own at least 50% of the Common Stock
set forth opposite their names on Exhibit A hereto).
(b) In accordance with the procedures established in Section 228
of the Delaware General Corporation Law, the Stockholders, being all of the
shareholders of Holdings Corp. entitled to vote, do hereby dispense with the
formality of a meeting and approve and ratify the election of the following
persons as the directors of Holdings Corp. to hold office until the next annual
meeting of stockholders and until their respective successors shall have been
elected and qualified or until resignation, removal or death as provided in the
Bylaws of Holdings Corp. and this Agreement:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ L. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇
4.2 Right to Remove Certain of Holdings Corp.'s Directors. Each of BRS,
Canterbury and the Management Stockholders holding a majority of the Common
Stock owned by the Management Stockholders, as the case may be, 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 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
Holdings Corp.
4.3 Right to Fill Certain Vacancies in Holdings Corp.'s Board. In the
event that a vacancy is created on Holdings Corp.'s Board of Directors at any
time by the death, disability, retirement, resignation or removal (with or
without cause) of a director designated by BRS, Canterbury or the Management
Stockholders holding a majority of the Common Stock owned by the
Management Stockholders, as the case may be, or if otherwise there shall exist
or occur any vacancy on Holdings Corp.'s Board of Directors in a directorship
subject to designation by BRS, Canterbury or the Management Stockholders holding
a majority of the Common Stock owned by the Management Stockholders, as the case
may be, such vacancy shall not be filled by the remaining members of Holdings
Corp.'s Board of Directors, but each Stockholder hereby agrees promptly to
consent in writing or vote or cause to be voted all shares of 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,
Canterbury or the Management Stockholders holding a majority of the Common Stock
owned by the Management Stockholders, as the case may be.
4.4 Subsidiaries Governance. Each Stockholder agrees that the board of
directors of each of the Companies shall be comprised of one individual
designated by BRS (so long as the BRS Entities continue to own at least 50% of
the Common Stock set forth opposite their names on Exhibit A hereto). Each
Stockholder agrees to vote all of its Securities and to cause its
representatives on the Board of Directors of Holdings Corp., subject to their
fiduciary duties, to vote and take other appropriate action to effectuate the
agreement set forth in this Sections 4.4 in respect of each of the Companies.
4.5 Management Rights of BRS. For so long as the BRS Entities own in
the aggregate at least 2% of the outstanding Common Stock on a fully diluted
basis and there has not been an Initial Public Offering:
(a) Right of Consultation. BRS shall have the right, and Holdings
Corp. shall cause each of the Companies to grant to BRS the right, to consult
with and advise the management of Holdings Corp. and its subsidiaries, at any
time or from time to time, on all matters relating to the operation of Holdings
Corp. and its subsidiaries, including, without limitation, significant changes
in management personnel and compensation or employee benefits, the introduction
of new products or new lines of business, important acquisitions or dispositions
of plant and equipment, significant research and development programs, the
purchase or sale of important patents, trademarks, licenses and concessions, and
the proposed compromise of any significant litigation.
(b) Observation Rights. BRS shall have the right, and Holdings
Corp. shall cause each of the Companies to grant to BRS the right, to have its
representatives (in addition to its representatives that are directors) attend
meetings of the Board of Directors (and committees thereof) of Holdings Corp.
and each of the Companies. Holdings Corp. shall give, or shall cause each of the
Companies to give, as appropriate, to BRS (i) at least three days' notice of
each regular meeting of the Board of Directors of Holdings Corp. and each of the
Companies, (ii) such notice as is necessary under the circumstances to enable
BRS's representatives to attend each special or emergency meeting of the Board
of Directors of Holdings Corp. and each of the Companies, (iii) on or prior to
the date of each meeting of the Board of Directors of Holdings Corp. and each of
the Companies all information given to the directors at such meeting and (iv)
within 90 days following each meeting of the Board of Directors of Holdings
Corp. and each of the Companies, copies of the minutes of such meeting.
(c) Inspection and Access. In addition to the reporting
requirements set forth in Section 3.1 hereof, Holdings Corp. shall provide to
BRS Entities true and correct copies of all quarterly and annual financial
reports of each of the Companies and budgets prepared by or on behalf of
Holdings Corp. and of each of the Companies, and such other documents, reports,
financial
data and other information as BRS Entities may reasonably request. Holdings
Corp. shall permit any authorized representatives designated by BRS Entities to
visit and inspect any of the properties of Holdings Corp. or any of its
subsidiaries, including its and their books of account (and to make copies and
take extracts therefrom), and to discuss its and their affairs, finances and
accounts with its and their officers and their current and prior independent
public accountants (and by this provision Holdings Corp. authorizes such
accountants to discuss with such representatives the affairs, finances and
accounts of Holdings Corp. and its subsidiaries, whether or not a representative
of Holdings Corp. is present), all at such reasonable times and as often as BRS
Entities may reasonably request.
4.6 Management Rights of Canterbury. For so long as the Canterbury
Entities own in the aggregate at least 2% of the outstanding Common Stock on a
fully diluted basis and there has not been an Initial Public Offering,
Canterbury shall have the right, and Holdings Corp. shall cause each of the
Companies to grant to Canterbury the right, to have its representatives (in
addition to its representative that is a director) attend meetings of the Board
of Directors (and committees thereof) of Holdings Corp. and each of the
Companies. Holdings Corp. shall give, or shall cause each of the Companies to
give, as appropriate, to Canterbury (i) at least three days' notice of each
regular meeting of the Board of Directors of Holdings Corp. and each of the
Companies, (ii) such notice as is necessary under the circumstances to enable
Canterbury's representatives to attend each special or emergency meeting of the
Board of Directors of Holdings Corp. and each of the Companies, (iii) on or
prior to the date of each meeting of the Board of Directors of Holdings Corp.
and each of the Companies all information given to the directors at such meeting
and (iv) within 90 days following each meeting of the Board of Directors of
Holdings Corp. and each of the Companies, copies of the minutes of such meeting.
4.7 Confidentiality.
(a) Each Stockholder hereby agrees that Confidential Information
(as defined below) has been and will be made available to him or it in
connection with such Stockholder's interest in Holdings Corp. 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 Holdings Corp. 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 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 Holdings Corp.
and substantially similar to the provisions hereof or (iv) if the prior consent
of the Board of Directors of Holdings Corp. 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 Holdings Corp. or any
Stockholder.
(b) "Confidential Information" means any information concerning
Holdings Corp., 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 Holdings
Corp. or by virtue of his or its present or former position as, or right to
designate, a director of Holdings Corp.; 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 4.7
or (b) was or becomes available to such Stockholder on a nonconfidential basis
from a source other than Holdings Corp., 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 Holdings Corp. or another
person.
ARTICLE V
ADDITIONAL RESTRICTIONS ON TRANSFERS OF
SECURITIES HELD BY MANAGEMENT STOCKHOLDERS
5.1 Certain Definitions. The terms defined below shall have the
following meanings when used in this Article V:
(a) "Accumulated Dividends" mean, with respect to any share of
Preferred Stock, the dividends that have accumulated on such share as of such
specific date for dividend periods ending on or prior to such date and that have
not previously been paid in cash;
(b) "Adjusted Cost Price" for each share of Common Stock or
Preferred Stock means the lower of (i) the relevant Fair Market Value Price and
(ii) the original purchase price per share for the Management Stockholder's
Common Stock or Preferred Stock, as the case may be (adjusted for any stock
dividend payable upon, or subdivision or combination of, the Common Stock or
Preferred Stock, as the case may be);
(c) "Cause", when used in connection with the termination of a
Management Stockholder's employment with any of the Companies, means that the
Management Stockholder shall have, in the judgment of a majority of the board of
directors of the relevant Company: (i) committed a felony, or committed an act
of fraud, embezzlement or theft in connection with his duties with such Company
or in the course of his employment with such Company; (ii) wrongfully caused
significant damage to property of such Company; (iii) engaged in conduct which
constitutes a material violation of published corporate policy of such Company,
(iv) been convicted of a criminal offense (whether felony or a misdemeanor) the
nature of which renders him unfit to serve in his present capacity with such
Company; or (v) persistently failed to adequately perform his duties and
responsibilities assigned in connection with his employment with such Company by
either the board of directors or a superior executive officer of such Company,
provided that in the case of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ such duties and responsibilities
shall be determined by the Board of Directors of Holdings Corp. and shall not
require ▇▇. ▇▇▇▇▇▇▇ to devote more than 100 days per year to the performance of
such duties and responsibilities (and it is understood that ▇▇. ▇▇▇▇▇▇▇ has
other responsibilities and conflicts that may require reasonable reconciliation
with his duties and responsibilities to the Companies; provided that, the
foregoing considerations in no way shall limit ▇▇. ▇▇▇▇▇▇▇'▇ obligations under
Section 3.4 hereof);
(d) "Consolidated Net Earnings" mean, for any period, the
consolidated net income of Holdings Corp. during such period determined in
accordance with generally accepted
accounting principles, but excluding therefrom all extraordinary and/or
nonrecurring items of income or loss;
(e) "EBITDA" means, for any period, an amount equal to the sum of
(i) the Consolidated Net Earnings of Holdings Corp. for such period, plus (ii)
all amounts deducted in the computation thereof on account of (a) taxes, (b)
amortization and depreciation and (c) Interest Charges;
(f) "Fair Market Value Price" for each share of Common Stock or
Preferred Stock at any particular date of determination means (i) in the case of
the Common Stock, the price per share for the Management Stockholder's Common
Stock based on (a) multiplying Holdings Corp.'s EBITDA during the 12 full
calendar months immediately preceding such date by the number six (6), (b)
subtracting from the product obtained pursuant to clause (a) all Indebtedness
for Borrowed Money of Holdings Corp. and its subsidiaries outstanding on such
date and the aggregate liquidation preference (plus accrued and unpaid
dividends) of all shares of Preferred Stock of Holdings Corp. and its
subsidiaries outstanding on such date and (c) dividing the difference of the
foregoing clauses (a) and (b) (such difference being referred to herein as the
"Enterprise Value") by the total number of outstanding shares of Common Stock;
provided, that if any of the Common Stock is traded on a national securities
exchange or quoted on the National Association of Securities Dealers, Inc.
Automated Quotation System, then the "Fair Market Value Price" shall equal for
each share of Common Stock the closing price per common share on such exchange,
or as so quoted, on the Management Stockholder's Termination Date; and (ii) in
the case of the Preferred Stock, the lesser of (a) the Liquidation Preference
(plus an amount equal to a pro rated dividend from the end of the last dividend
period to the particular date of determination) of each share of Preferred Stock
and (b) the price per share for the Management Stockholder's Preferred Stock
calculated by dividing the Enterprise Value (calculated without deducting the
aggregate Liquidation Preference of the outstanding Preferred Stock) by the
number of outstanding shares of Preferred Stock;
(g) "Indebtedness" includes all obligations, contingent and
otherwise, which in accordance with generally accepted accounting principles
should be classified upon the obligor's balance sheet as liabilities, or to
which reference should be made by footnotes thereto, including without
limitation, in any event and whether or not so classified: (i) all debt and
similar monetary obligations, whether direct or indirect; (ii) all liabilities
secured by any mortgage, pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject thereto, whether or
not the liability secured thereby shall have been assumed; (iii) all guaranties,
endorsements and other contingent obligations whether direct or indirect in
respect of Indebtedness of others, including any obligation to supply funds to
or in any manner to invest in, directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the Indebtedness held by such owner or otherwise;
and (iv) obligations to reimburse issuers of any letters of credit;
(h) "Indebtedness for Borrowed Money" means (i) all Indebtedness
of Holdings Corp. and its subsidiaries for borrowed money, whether current or
funded, or secured or unsecured, (ii) all Indebtedness of Holdings Corp. and its
subsidiaries for the deferred purchase price of property or services represented
by a note or other security, (iii) all Indebtedness of Holdings Corp. and its
subsidiaries created or arising under any conditional sale or other title
retention agreement with respect to property acquired by Holdings Corp. or its
subsidiaries (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to
repossession or sale of such property), (iv) all Indebtedness of Holdings Corp.
and its subsidiaries secured by a purchase money mortgage or other lien to
secure all or part of the purchase price of property subject to such mortgage or
lien, (v) all obligations under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases in respect of which Holdings Corp. or its subsidiaries are liable as
lessee, (vi) any liability of Holdings Corp. or its subsidiaries in respect of
banker's acceptances or letters of credit, and (vii) all Indebtedness referred
to in clause (i), (ii), (iii), (iv), (v) or (vi) above which is directly or
indirectly guaranteed by Holdings Corp. or any of its subsidiaries or which
Holdings Corp. or any of its subsidiaries has agreed (contingently or otherwise)
to purchase or otherwise acquire or in respect of which it has otherwise assured
a creditor against loss;
(i) "Interest Charges" mean, for any period, the expenses of
Holdings Corp. and its subsidiaries for such period for interest on Indebtedness
(including the current portion thereof) and for commitment fees, agency fees,
facility fees, balance deficiency fees and similar expenses in connection with
the borrowing of money;
(j) "Liquidation Preference" means, on any specific date, with
respect to any share of Preferred Stock, the sum of (i) the original purchase
price per share of the Preferred Stock plus (ii) the Accumulated Dividends with
respect to such share; and
(k) "Purchase Option Period" means, as to a particular Management
Stockholder, (i) in the event such Management Stockholder does not incur a
Termination Date (as defined in Section 5.3(a)) on or prior to the fifth
anniversary of the date on which such Management Stockholder acquired or shall
have acquired the subject share(s) of Common Stock or Preferred Stock (the
"Acquisition Date"), the period beginning on the Acquisition Date and ending on
(and including) the fifth anniversary of the Acquisition Date, and (ii) in the
event such Management Stockholder incurs a Termination Date on or prior to the
fifth anniversary of the Acquisition Date, the period beginning on the
Acquisition Date and ending on (and including) the date which is 165 days after
the later of such Termination Date or the date Holdings Corp. receives the
notice of termination of such Management Stockholder referred to in Section
5.3(a).
5.2 Restrictions on Transfer. In addition to complying with the
conditions to Transfer imposed by Section 2.3, and notwithstanding anything to
the contrary contained herein, during the Purchase Option Period, no Management
Stockholder nor his Permitted Transferees shall effect a Transfer of any
Securities other than (i) pursuant to Section 3.2 in connection with an Approved
Sale, (ii) pursuant to Section 3.3 in connection with the exercise of Tag-Along
Rights, (iii) pursuant to the Registration Rights Agreement (as defined in
Article VI), (iv) pursuant to Section 5.3 in connection with the Purchase Option
(as hereinafter defined), (v) with the consent of Holdings Corp. (as evidenced
by a resolution duly adopted by at least a majority of the non-employee members
of Holdings Corp.'s Board of Directors) or (vi) to a Permitted Transferee of the
Management Stockholder in question. Following the Purchase Option Period, each
Management Stockholder and his Permitted Transferees agree that none of them
will effect a Transfer of any Securities without first complying with the
provisions of Section 5.4 hereof, if then in effect.
In exercising the consent and approval provided for in clause (v)
above, Holdings Corp. may employ its sole discretion in evaluating the nature of
the proposed transferee and Holdings Corp. may impose such conditions on
Transfer as it deems appropriate in its sole discretion, including, but not
limited to, requirements that the transferee be an employee of Holdings Corp. or
its subsidiaries and that the transferee purchase the Management Stockholder's
(or his Permitted
Transferee's) Securities as a "Management Stockholder" subject to the
restrictions of this Agreement and, in particular, Section 2.3 and this Article
V. In the event any Transfer is authorized pursuant to clause (v) above to an
employee of Holdings Corp. or its subsidiaries as a "Management Stockholder,"
such employee shall execute an agreement, in form and substance satisfactory to
Holdings Corp., pursuant to which such employee shall agree to be bound by the
terms and conditions of this Agreement and such other provisions as Holdings
Corp. may determine, and upon such execution such employee shall be entitled to
the benefit of such provisions hereof and such other provisions as Holdings
Corp. determines and are set forth in such agreement. Any purported Transfer in
violation of this Agreement shall be null and void and of no force and effect
and the purported transferees shall have no rights or privileges in or with
respect to Holdings Corp. Notwithstanding the foregoing provisions, each
Management Stockholder agrees that he will not effect a Transfer of any
Securities prior to the lapse of such period of time following acquisition
thereof as may be required to comply with applicable state securities laws.
5.3 Purchase Option.
(a) General Terms. In the event that on or prior to the fifth
anniversary of the Acquisition Date, any Management Stockholder shall cease to
be employed by any of the Companies for any reason (including, but not limited
to, death, temporary or permanent disability, retirement, resignation or
termination by such Company with or without Cause), other than by reason of a
leave of absence approved by such Company, such Management Stockholder or such
Management Stockholder's Permitted Transferees (or, in the case of death, his or
their estate) shall give prompt notice to Holdings Corp. of such termination of
employment, and Holdings Corp., or one or more designee(s) selected by a
majority of the members of the Board of Directors of Holdings Corp., shall have
the right and option (the "Purchase Option") at any time within 120 days after
the later of the effective date of such termination of employment (the
"Termination Date") or the date of Holdings Corp.'s receipt of the aforesaid
notice, to purchase from such Management Stockholder, or such Management
Stockholder's Permitted Transferees, as the case may be, any or all of the
Securities then owned by such Management Stockholder and such Management
Stockholder's Permitted Transferees at the Option Purchase Price (as hereinafter
defined). Holdings Corp. or its designee(s) shall give notice to the terminated
Management Stockholder (or such Management Stockholder's Permitted Transferees)
of its intention to purchase the Securities not later than within 120 days after
the later of the Termination Date or the date of Holdings Corp.'s receipt of the
aforesaid notice. The Termination Date for a Permitted Transferee shall be the
Termination Date with respect to the Management Stockholder who first acquired
the Securities held by such Permitted Transferee.
(i) Exercise of Purchase Option. The Purchase Option shall be
exercised by written notice to the terminated Management Stockholder and
Permitted Transferees signed by an officer of Holdings Corp. on behalf of
Holdings Corp. or by its designee(s), as the case may be, prior to the end of
the 120-day period. Such notice shall set forth the number of shares of Common
Stock and Preferred Stock desired to be purchased and shall set forth a time and
place of closing which shall be no earlier than 10 days and no later than 60
days after the date such notice is sent. At such closing, the seller shall
deliver the certificates evidencing the number of shares of Common Stock and
Preferred Stock to be purchased by Holdings Corp. and/or its designee(s),
accompanied by stock powers duly endorsed in blank or duly executed instruments
of transfer, and any other documents that are necessary to transfer to Holdings
Corp. and/or its designee(s) good title to the Securities to be transferred,
free and clear of all pledges, security interests, liens, charges, encumbrances,
equities, claims and options of whatever nature other than those imposed under
this
Agreement, and concurrently with such delivery, Holdings Corp. and/or its
designee(s) shall deliver to the seller the full amount of the Option Purchase
Price for such Securities in cash or by certified or bank cashier's check.
In the event that Holdings Corp. (or its designee(s)) does
not send the notice described above within such 120-day period or does not
exercise the Purchase Option with respect to all of the Securities subject to
the Purchase Option, Holdings Corp. (or if Holdings Corp. fails to give such
notice, the terminated Management Stockholder) shall give notice of such failure
to the other Stockholders, and the other Stockholders shall thereupon have the
right and option to purchase the Securities not to be purchased by Holdings
Corp. (or its designee(s)) and may give notice of such intention at any time not
later than 45 days after the date on which the notice is sent to the other
Stockholders. The notice to the Stockholders shall set forth the number and kind
of Securities available for purchase by such Stockholders and the applicable
purchase prices.
If the other Stockholders elect to purchase an aggregate
number of Common Stock and/or Preferred Stock in excess of the number of Common
Stock and/or Preferred Stock that are ultimately determined to be available for
purchase by them, such Common Stock and/or Preferred Stock shall be allocated
among the other Stockholders who desire to purchase such Common Stock and/or
Preferred Stock in proportion to the number of Common Stock and/or Preferred
Stock (on a fully diluted basis) owned by each of them; provided that no such
other Stockholder shall become bound to purchase a number of offered Common
Stock and Preferred Stock greater than the number of shares of such Common Stock
and/or Preferred Stock it or he had elected to purchase. If the foregoing
allocation procedure does not allocate all the Common Stock and/or Preferred
Stock (because one or more Stockholders would otherwise have been allocated more
than the number of shares of Common Stock and/or Preferred Stock it or he
elected to purchase), then the remaining such shares of Common Stock and/or
Preferred Stock shall be allocated among the other Stockholders who desire to
purchase such Common Stock and/or Preferred Stock in proportion to the number of
shares of Common Stock and/or Preferred Stock (on a fully diluted basis) owned
by each of them, and such allocation procedure shall continue until all such
Common Stock and/or Preferred Stock shall have been allocated. Promptly upon
determining the number and kind of shares of Common Stock and/or Preferred Stock
which each purchasing Stockholder will purchase and the purchase prices
therefor, Holdings Corp. shall send notices thereof to the terminated Management
Stockholder and each of the purchasing Stockholders. Such notices shall also set
forth a time and place of closing for the purchases by the other Stockholders,
which closing shall be no earlier than 10 days and no later than 60 days after
the date such notices are sent.
(ii) Option Purchase Price. If the Management Stockholder
shall be terminated by any of the Companies without Cause or shall cease to be
employed by any of the Companies by reason of death or temporary or permanent
disability, the "Option Purchase Price" for the Common Stock and/or Preferred
Stock to be purchased from such Management Stockholder or such Management
Stockholder's Permitted Transferees pursuant to the Purchase Option (such number
of shares of Common Stock and/or such number of shares of Preferred Stock, each
being referred to as the "Purchase Number") shall equal the price calculated as
set forth in the table below opposite the applicable Termination Date of such
Management Stockholder:
Option
If the Termination Date Occurs: Purchase Price
------------------------------ --------------
On or prior to the first anniversary Adjusted Cost Price multiplied by
of the Acquisition Date the Purchase Number
After the first anniversary of the Adjusted Cost Price multiplied by
Acquisition Date, and on or prior 80% of the Purchase Number, plus Fair
to the second anniversary of the Market Value Price multiplied by 20%of
Acquisition Date the Purchase Number
After the second anniversary of the Adjusted Cost Price multiplied by 60% of
Acquisition Date, and on or prior to the Purchase Number, plus Fair Market
the third anniversary of the Value Price multiplied by 40% of the
Acquisition Date Purchase Number
After the third anniversary of the Adjusted Cost Price multiplied by 40% of
Acquisition Date, and on or prior the Purchase Number, plus Fair Market
to the fourth anniversary of the Value Price multiplied by 60% of the
Acquisition Date Purchase Number
After the fourth anniversary of the Adjusted Cost Price multiplied by 20% of
Acquisition Date, and on or prior the Purchase Number, plus Fair Market
to the fifth anniversary of the Value Price multiplied by 80% of the
Acquisition Date Purchase Number
After the fifth anniversary of the Fair Market Value Price multiplied by
Acquisition Date the Purchase Number
Notwithstanding anything to the contrary contained herein, if
the Management Stockholder shall cease to be employed by any of the Companies
for any reason other than those set forth in the first sentence of this Section
5.3(a)(ii) (including, but not limited to, termination for Cause), the Option
Purchase Price for all shares of Common Stock and/or Preferred Stock to be
purchased from the Management Stockholder (and such Management Stockholder's
Permitted Transferees) pursuant to the Purchase Option shall equal the Adjusted
Cost Price multiplied by the Purchase Number.
The Purchase Option will lapse upon the earliest to occur of
(i) the expiration of the Purchase Option Period with respect to all Securities
held by Management Stockholders, (ii) the 180th day following an Initial Public
Offering and (iii) a transfer of Securities by BRS as to which Tag-Along Rights
apply, but only with respect to Securities sold pursuant to such Tag-Along
Rights.
(iii) Sale In Public Offering. Common Stock sold pursuant to
an effective registration statement under the Securities Act will be sold free
of the restrictions contained in this Article V, but this Article V shall
continue to apply in accordance with its terms to all Common Stock not sold in
such offering. If less than all of a Management Stockholder's shares of Common
Stock are sold in such an offering, for purposes of any subsequent calculation
hereunder of
the Option Purchase Price for the Common Stock, the Option Purchase Price for
the Common Stock shall equal: (a) the Adjusted Cost Price multiplied by the
product of the Adjusted Cost Price Percentage and the Adjusted Purchase Number
(as hereinafter defined); plus (b) the Fair Market Value Price multiplied by the
product of the Fair Market Value Price Percentage and the Adjusted Purchase
Number, less (c) the product of the Publicly-Sold Stock (as hereinafter defined)
and the Fair Market Value Price, where: (w) "Publicly-Sold Stock" means the
total number of shares of Common Stock previously sold by the respective
Management Stockholder in a public offering, (x) "Adjusted Purchase Number"
means the sum of the Purchase Number and the Publicly-Sold Stock, (y) "Fair
Market Value Price Percentage" means 20% multiplied by the number of full years
elapsed since the Closing Date, and (z) "Adjusted Cost Price Percentage" means
100% minus the Fair Market Value Price Percentage. Notwithstanding the
foregoing, the Option Purchase Price for the Common Stock at all times shall
equal or exceed the product of the Adjusted Cost Price and the Purchase Number.
5.4 Right of First Refusal on Transfer of Management Stockholder
Securities.
(a) Right of First Refusal. In the event that any time after the
expiration of the Purchase Option Period, a Management Stockholder (or his
Permitted Transferees) receives a bona fide offer (a "Transfer Offer") to
purchase any or all of the Securities (the "Transfer Securities") then owned by
the Management Stockholder (or his Permitted Transferees) from any person (the
"Offeror") which the Management Stockholder (or his Permitted Transferees)
wishes to accept, then the Management Stockholder (and his Permitted
Transferees) shall give Holdings Corp. and the other Stockholders written notice
thereof ("Transfer Notice"), which Transfer Notice shall state in reasonable
detail all material terms of such proposed sale or other transfer, the identity
of the Offeror, the price or other consideration for which the Securities are
proposed to be sold or transferred, and the number of Securities to be sold or
transferred, and shall also contain an irrevocable offer to sell the Transfer
Securities to Holdings Corp. at the price and on the terms contained in the
Transfer Offer. After its receipt of the Transfer Notice, Holdings Corp. and/or
its designee(s) shall have the right and option to purchase all, but not less
than all (unless other Stockholders purchase the remainder), of the Transfer
Securities at the price and on the terms of the Transfer Offer set forth in the
Transfer Notice. Within 45 days after receipt of the Transfer Notice, Holdings
Corp. and/or its designee(s) shall notify such Management Stockholder (or his
Permitted Transferees) whether or not it wishes to purchase the Transfer
Securities and, if so, indicating the number of Transfer Securities desired to
be purchased.
In the event that Holdings Corp. and/or its designee(s) does not
elect to purchase all such Transfer Securities, the selling Management
Stockholder (or his Permitted Transferees) shall give notice of such failure to
the other Stockholders, and the other Stockholders shall thereupon have the
right and option to purchase in the aggregate all, but not less than all, the
Transfer Securities not to be purchased by Holdings Corp. and/or its designee(s)
and may give notice to the selling Management Stockholder (or his Permitted
Transferees) (with a copy to Holdings Corp.) of such intention at any time not
later than 45 days after the date on which such notice is sent by the selling
Management Stockholder (or his Permitted Transferees) to such other
Stockholders. Each electing Stockholder's notice shall indicate the number of
Transfer Securities it desires to purchase. If the other Stockholders elect to
purchase an aggregate number of Transfer Securities in excess of the number of
Transfer Securities which Holdings Corp. and/or its designee(s) did not elect to
purchase, the Transfer Securities shall be allocated among the other
Stockholders who desire to purchase such Transfer Securities in accordance with
the allocation provisions which are set forth in Section 5.3(a)(i). Promptly
upon determining the number of the selling Management Stockholder's
Securities which each purchasing Stockholder will purchase and the purchase
price therefor, Holdings Corp. shall send notices thereof to the selling
Management Stockholder and each of the purchasing Stockholders.
(b) Exercise and Nonexercise of Right of First Refusal. Exercise
of the option provided for in Section 5.4(a) shall be effected by the giving of
written notice to the Management Stockholder (and his Permitted Transferees) by
Holdings Corp. (on its own behalf and/or on behalf of its designee(s), as the
case may be), signed by an officer of Holdings Corp., and, if applicable, the
other Stockholders, prior to the end of the period during which the option is
exercisable (and such notice shall be effective when given). If Holdings Corp.
or Holdings Corp. and the other Stockholders in the aggregate elect to purchase
all of the Transfer Securities, the closing of the purchase and sale of the
Transfer Securities pursuant to any such option exercise shall be held at such
place and such date to be established by Holdings Corp. in the later of its
notice to the selling Management Stockholder in response to the Transfer Notice
and its notice to the other Stockholders of the allocation of the number of
Transfer Securities which such Stockholders are to purchase, which in no event
shall be earlier than 10 days or later than 60 days from the date of such
notice.
In the event Holdings Corp. and/or its designees and the other
Stockholders fail to exercise the purchase option provided for in Section
5.4(a), then, subject to the other provisions of this Agreement, for a period of
30 days, the Transfer Securities may be sold or transferred by or an behalf of
the Management Stockholder (or his Permitted Transferees) to the Offeror
specified in the Transfer Notice at a price not less than the price per
Securities specified therein and otherwise on terms no less favorable to the
Management Stockholder and no more favorable to the Offeror than those contained
in the Transfer Notice.
5.5 Purchaser Representative. If Holdings Corp. or any Stockholder
enters into any negotiation or transaction for which Rule 506 (or any similar
rule then in effect) promulgated by the Securities and Exchange Commission under
the Securities Act may be available with respect to such negotiation or
transaction (including a merger, consolidation or other reorganization), each
Stockholder will, at the request of Holdings Corp., appoint a purchaser
representative (as such term is defined in Rule 501(h) promulgated by the
Securities and Exchange Commission under the Securities Act) reasonably
acceptable to Holdings Corp. If any Stockholder appoints the purchaser
representative designated by Holdings Corp., Holdings Corp. will pay the fees of
such purchaser representative, but if any Stockholder declines to appoint the
purchaser representative designated by Holdings Corp., such Stockholder will
appoint, at his own expense, another purchaser representative (reasonably
acceptable to Holdings Corp.).
5.6 Section 83(b) Elections. Each Management Stockholder shall make the
election to include in his income, in the year he purchases the Common Stock and
the Preferred Stock, the excess, if any, of the fair market value of the Common
Stock and the Preferred Stock at that time over the Management Stockholder's
original purchase price for such Securities, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, in the manner and within the time
period specified by the regulations promulgated thereunder. Unless required by
law or by any taxing authority, each party to this Agreement agrees to file its
income tax returns on the basis that: (i) the fair market value of the Common
Stock at the time of its purchase by a Management Stockholder is equal to such
Management Stockholder's original purchase price for the Common Stock, and (ii)
the fair market value of the Preferred Stock at the time of its purchase by a
Management Stockholder is equal to such Management Stockholder's original
purchase price for the Preferred Stock. Unless required by law or by any taxing
authority, Holdings Corp. will not seek an income tax deduction for
compensation for the services of a Management Stockholder on the basis that: (i)
the fair market value of the Common Stock at the time of its purchase by a
Management Stockholder exceeds such Management Stockholder's original purchase
price for the Common Stock, or (ii) the fair market value of the Preferred Stock
at the time of its purchase by a Management Stockholder exceeds such Management
Stockholder's original purchase price for the Preferred Stock.
5.7 Involuntary Transfers.
(a) Option to Purchase. In the event that the Securities owned by
a Management Stockholder (or his Permitted Transferees) shall be subject to sale
or other transfer by reason of any of the following events (a "Nonvolitional
Event"): (i) bankruptcy or insolvency proceedings, whether voluntary or
involuntary, or (ii) a divorce (whether in connection with a settlement of the
divorce or entry of a decree or judgment of divorce), or (iii) distraint, levy,
execution or other involuntary transfer, then the Management Stockholder (and
his Permitted Transferees) shall give Holdings Corp. written notice thereof
("Involuntary Transfer Notice") promptly upon the occurrence of such
Nonvolitional Event, which Involuntary Transfer Notice shall state the terms of
such proposed sale or other transfer, the identity of the proposed purchaser or
other transferee, the price or other consideration, if readily determinable, for
which the Securities are proposed to be sold or transferred, and the number of
Securities to be sold or transferred (the "Involuntarily Transferred
Securities"). After its receipt of the Involuntary Transfer Notice or, failing
such receipt, after Holdings Corp. otherwise obtains actual knowledge of such a
proposed sale or other transfer, Holdings Corp. and/or its designee(s) shall
have the right and option to purchase all, but not less than all (unless other
Stockholders purchase the remainder), of the Involuntarily Transferred
Securities, such option to be exercisable at any time within 120 days after
receipt of the Involuntary Transfer Notice or, failing such receipt, after
Holdings Corp. otherwise obtains actual knowledge of such a proposed sale or
other transfer.
In the event that Holdings Corp. and/or its designee(s) does not
elect to purchase all such Involuntarily Transferred Securities, the Management
Stockholder (or his Permitted Transferees) shall give notice of such failure to
the other Stockholders, and the other Stockholders shall thereupon have the
right and option to purchase in the aggregate all, but not less than all, the
Involuntarily Transferred Securities not to be purchased by Holdings Corp.
and/or its designee(s) and may give notice to the Management Stockholder (or his
Permitted Transferees) (with a copy to Holdings Corp.) of such intention at any
time not later than 45 days after the date on which such notice is sent by the
selling Management Stockholder (or his Permitted Transferees) to such other
Stockholders. Each electing Stockholder shall indicate the number of
Involuntarily Transferred Securities it desires to purchase. If the other
Stockholders elect to purchase an aggregate number of Involuntarily Transferred
Securities in excess of the number of Involuntarily Transferred Securities which
Holdings Corp. and/or its designee(s) did not elect to purchase, the
Involuntarily Transferred Securities shall be allocated among the other
Stockholders who desire to purchase such Involuntarily Transferred Securities in
accordance with the allocation provisions which are set forth in Section
5.3(a)(i). Promptly upon determining the number of the Involuntarily Transferred
Securities which each purchasing Stockholder will purchase and the purchase
price thereof, Holdings Corp. shall send notices thereof to the Management
Stockholder and each of the purchasing Stockholders.
(b) Purchase Price. Any purchase pursuant to the foregoing option
contained in Section 5.7(a) shall be at the lower of (i) the price applicable to
such proposed sale or transfer or (ii) on or before the fifth anniversary of the
Acquisition Date, the Adjusted Cost Price multiplied by the number of
Involuntarily Transferred Securities and, following the fifth anniversary
of the Acquisition Date, the Fair Market Value Price multiplied by the number of
Involuntarily Transferred Securities.
(c) Exercise and Nonexercise of Option. Exercise of the option
provided for in Section 5.7(a) shall be effected by the giving of written notice
to the Management Stockholder (and his Permitted Transferees) and the proposed
purchaser or transferee by Holdings Corp. (on its own behalf and/or on behalf of
its designee(s), as the case may be), signed by an officer of Holdings Corp.,
and, if applicable, by the purchasing Stockholders prior to the end of the
period during which the option is exercisable (and such notice shall be
effective when given). The closing of the purchase and sale of the Involuntarily
Transferred Securities pursuant to any such option exercise shall be held at
such place and such date to be established by Holdings Corp., which in no event
shall be less than 10 or more than 60 days from the date of such notice.
In the event Holdings Corp. and/or its designee(s) or the other
Stockholders fail to exercise the purchase option provided for in Section
5.7(a), then the Involuntarily Transferred Securities may be sold or transferred
by or on behalf of the Management Stockholder (and his Permitted Transferees) on
the terms contained in the Involuntary Transfer Notice, but the transferee or
purchaser shall be subject to all of the obligations contained in this Agreement
which were applicable to the Management Stockholder in respect of the
Involuntarily Transferred Securities and, without limiting the generality of the
foregoing, if the Management Stockholder incurs a Termination Date on or prior
to the fifth anniversary of the Acquisition Date, the Purchase Option contained
in Section 5.3 hereof shall apply to the Involuntarily Transferred Securities at
the applicable Option Purchase Price.
ARTICLE VI
REGISTRATION RIGHTS
The Stockholders shall have registration rights with respect to the
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 distribution of any securities of
Holdings Corp. 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.
ARTICLE VII
MISCELLANEOUS
7.1 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) Holdings Corp.,
(ii) BRS (so long as the BRS Entities own in the aggregate at least 5% of the
outstanding Common Stock on a fully diluted basis), (iii) Canterbury (so long as
the Canterbury Entities own in the aggregate at least 5% of the outstanding
Common Stock on a fully diluted basis), (iv) the holders of a majority of the
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, 3.2, 3.3, 3.5,
Article IV, this Section 7.1 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.
7.2 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.
7.3 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, that except as set forth
in this Agreement, no party may assign, delegate or otherwise transfer any of
its rights or obligations under 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.
7.4 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.
7.5 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 Holdings Corp., to:
B&G Foods Holdings Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with required copies to:
Dechert Price & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Glyndwr ▇. ▇▇▇▇, Esq.
Bruckmann, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
If to any BRS Entity, to:
Bruckmann, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a required copy to:
Dechert Price & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Glyndwr ▇. ▇▇▇▇, Esq.
If to any Canterbury Entity, to:
Canterbury Mezzanine Capital II, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
with a required copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
If to any CIT Entity, to:
The CIT Group/Equity Investments, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a required copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Ele ▇▇▇▇▇, Esq.
If to the Management Stockholders or any of them, to their
addresses as listed in the books of Holdings Corp. or the relevant Company.
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.
7.6 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.
7.7 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.
7.8 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.
7.9 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.
7.10 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 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.
7.11 Party No Longer Owning Securities. If a party hereto ceases to own
any Securities, such party will no longer be deemed to be a Stockholder or
Management Stockholder for purposes of this Agreement.
7.12 No Effect on Employment. Nothing herein contained shall confer on
any Management Stockholder the right to remain in the employ of Holdings Corp.
or any of the Companies or any of its subsidiaries or Affiliates.
7.13 Pronouns. Whenever the context may require, any pronouns used
herein shall be deemed also to include the corresponding neuter, masculine or
feminine forms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
B&G FOODS HOLDINGS CORP.
By:
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President Finance
BRUCKMANN, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & CO., L.P.
By: BRS Partners, Limited Partnership,
the general partner,
By: BRSE Associates, Inc., its general
partner
By:
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
CANTERBURY MEZZANINE CAPITAL II, L.P.
By: Canterbury Capital II, LLC,
its general partner
By:
----------------------------------
Name:
Title:
THE CIT GROUP/EQUITY INVESTMENTS, INC.
By:
------------------------------------------
Name:
Title:
BRS STOCKHOLDERS
*
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
SS#: ###-##-####
Residence Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
*
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
SS#: ###-##-####
Residence Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SS#: ###-##-####
Residence Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
*
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
SS#: ###-##-####
Residence Address:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
*
-----------------------------------
H. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SS#: ###-##-####
Residence Address:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
*
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇
SS#: ###-##-####
Residence Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
*
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SS#: ###-##-####
Residence Address:
▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
*
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
SS#:
Residence Address:
BCB PARTNERSHIP
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
General Partner
By: *
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: General Partner
NAZ PARTNERSHIP
By: ▇▇▇▇▇ ▇▇▇▇▇, General Partner
By: *
--------------------------------
Name:
Title:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED, CUSTODIAN FBO
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: *
--------------------------------
Name:
Title:
* By:
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attorney-in-Fact
MANAGEMENT STOCKHOLDERS
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SS#:
Residence Address:
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
SS#:
Residence Address:
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
SS#:
Residence Address:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SS#:
Residence Address:
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
SS#:
Residence Address:
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SS#:
Residence Address:
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇
SS#:
Residence Address:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
SS#:
Residence Address:
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SS#:
Residence Address:
EXHIBIT A
---------
Series A Series B Series C
Common Preferred Preferred Preferred Series B Series C
Stock Stock Stock Stock Warrants Warrants
----- --------- --------- --------- -------- --------
BRUCKMANN, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & CO., L.P.
("BRS") 79,690.92 17,602.30 11,540.72 4,687.34 11,001.74 3,080.48
CANTERBURY MEZZANINE CAPITAL II, L.P. ----- ----- ----- 15,000.00 ----- 9,857.92
THE CIT GROUP/EQUITY INVESTMENTS, INC.
BRS STOCKHOLDERS ----- ----- ----- 5,000.00 ----- 3,285.97
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 1,613.69 356.51 241.32 98.01 230.05 64.41
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ 324.20 71.61 47.01 19.09 44.81 12.55
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1,664.23 367.59 241.32 98.01 230.05 64.41
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 216.10 47.74 ----- ----- ----- -----
H. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,080.51 238.66 156.70 63.65 149.38 41.83
▇▇▇▇▇ ▇▇▇▇▇ 64.86 14.33 9.40 3.82 8.96 2.51
BCB Partnership 92.96 20.54 13.48 5.47 12.85 3.60
NAZ Partnership 44.86 9.91 6.50 2.64 6.20 1.74
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 78.56 17.36 22.75 9.24 21.69 6.07
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇,
custodian FBO ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇▇ 78.56 17.36 ----- ----- ----- -----
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 25.27 5.54 ----- ----- ----- -----
▇▇▇▇▇▇▇ Place 25.27 5.54 ----- ----- ----- -----
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ----- ----- 31.34 12.73 29.88 8.37
Series A Series B Series C
Common Preferred Preferred Preferred Series B Series C
Stock Stock Stock Stock Warrants Warrants
----- --------- --------- --------- -------- --------
MANAGEMENT STOCKHOLDERS
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 3,000.00 145.00 ----- ----- ----- -----
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 3,000.00 20.00 ----- ----- ----- -----
▇▇▇▇▇ ▇▇▇▇▇ 3,000.00 20.00 ----- ----- ----- -----
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 3,000.00 20.00 ----- ----- ----- -----
▇▇▇▇▇ ▇▇▇▇▇ 3,000.00 20.00 ----- ----- ----- -----
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 500.00 110.44 ----- ----- ----- -----
▇▇▇▇▇▇ ▇▇▇ 500.00 110.44 ----- ----- ----- -----
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III 1,450.00 1,050.94 ----- ----- ----- -----
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 50.00 49.50 ----- ----- ----- -----
---------------------------------------- ------------- ------------- -------------- ------------- ------------- --------------
TOTAL 102,499.99 20,321.31 12,310.54 25,000.00 11,735.61 16,429.86
===== ========== ========= ========= ========= ========= =========
In addition, there are a total of 6,250 options to acquire Common Stock
outstanding to employees, officers or directors of subsidiaries of Holdings
Corp. under Holdings Corp.'s 1997 Incentive Stock Option Plan.