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EXHIBIT 10.22
FORM OF STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT made this ___ day of _______________, 1998, by
and among FLOWERS INDUSTRIES, INC., a Georgia corporation (hereinafter referred
to as "Purchaser"), ARTAL LUXEMBOURG S.A., a Luxembourg corporation
(hereinafter referred to as "Seller") and KEEBLER FOODS COMPANY, a Delaware
corporation (hereinafter referred to as "Keebler").
W I T N E S S E T H:
WHEREAS, Purchaser and Seller are stockholders of Keebler; and
WHEREAS, Seller has requested, and Purchaser has consented to, a demand
registration pursuant to Section 1.1(a) of Annex A of the Stockholders'
Agreement;
WHEREAS, Seller and Purchaser have caused Keebler to file a
Registration Statement with the Securities and Exchange Commission relating to
the sale of such number of Seller's Shares and Bermore's Shares (other than
Acquired Shares) as may be determined by Seller; and
WHEREAS, if the initial public offering is consummated, Seller and
Purchaser have agreed that Purchaser will purchase a portion of Seller's Shares
simultaneously with and conditioned upon the Closing, upon the terms and
conditions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and the mutual
promises, agreements, representations, warranties and covenants hereinafter set
forth, and the sum of ten dollars and other good and valuable consideration,
the receipt and sufficiency of which is hereby specifically agreed to and
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
As used herein, the following terms shall have the following meanings
unless the context otherwise requires:
1.1 "Acquired Shares" shall mean 9,581,169 shares of Keebler Stock to
be sold by Seller to Purchaser at Closing, representing approximately 11.4% of
the outstanding Keebler Stock and which, together with the purchase of the
Bermore Purchase Shares, shall
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result in approximately fifty-one percent (51%) ownership of the Keebler Stock,
on a fully diluted basis, by Purchaser on the Closing Date.
1.2 "Affiliate" shall mean any Person which, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, another Person. The term "control" includes, without
limitation, the possession, directly or indirectly, of the power to direct the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
1.3 "Agreement" shall mean this Stock Purchase Agreement.
1.4 "Bermore" shall mean Bermore, Ltd., a Bermuda Limited Company.
1.5 "Bermore Agreement" shall mean the Stock Purchase and Stockholder's
Agreement, among Bermore, Purchaser, Seller and Keebler of even date herewith.
1.6 "Bermore Purchase Shares" shall mean 1,616,691 shares of Keebler
Stock to be sold by Bermore to Purchaser at Closing, representing approximately
1.9% of the outstanding Keebler Stock and which, together with the purchase of
the Acquired Shares, shall result in approximately fifty-one percent (51%)
ownership of the Keebler Stock, on a fully diluted basis, by Purchaser on the
Closing Date.
1.7 "Bermore's Shares" shall mean the shares of Keebler Stock owned by
Bermore.
1.8 "CEO Consent Period" shall have the meaning set forth in Section
13.1.3.
1.9 "Closing" shall mean the consummation of the sale of the Acquired
Shares pursuant to the terms and conditions of this Agreement.
1.10 "Closing Date" shall mean the date on which the Closing occurs
pursuant to Section 7.1.
1.11 "DGCL" shall mean the General Corporation Law of the State of
Delaware.
1.12 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.13 "Extension Period" shall have the meaning set forth in Section
13.4.
1.14 "GFI Stockholder's Agreement" shall mean that certain GFI
Stockholder's Agreement dated as of June 4, 1996 by and among Xxxxxxx, X. X.
Industries, Inc., Seller and Xxxxxxxxx.
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0.00 "XXX Xxx" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust and
Improvements Act of 1976, as amended.
1.16 "Initial Stock Repurchase Consent Period" shall have the meaning
set forth in Section 13.2.1.
1.17 "IPO" shall mean a public offering of shares of Keebler Stock
owned by Seller and Bermore pursuant to the provisions of Section 2.3 hereof.
1.18 "IPO Price" shall mean the price per share of Keebler Stock at
which it will be sold to the public pursuant to the Underwriting Agreement,
without giving effect to any underwriting spread, discounts, commissions or
reallowances.
1.19 "Keebler" shall mean Keebler Foods Company, a Delaware
corporation, formerly named "INFLO Holdings Corporation."
1.20 "Keebler Stock" shall mean the common stock, $.01 par value per
share, of Keebler.
1.21 "Lockup Period" shall mean the period set forth in the
Underwriting Agreement during which restrictions will be placed on transfers of
Keebler Stock by Seller, as such period may be reduced or waived by the
Underwriters, with respect to all of the remaining shares of Keebler Stock
owned by the Seller upon Closing.
1.22 "Management" shall mean the members of management of Keebler who
either (i) directly own shares of Keebler Stock as of the date hereof or (ii)
have been granted stock options by Keebler to purchase shares of Keebler Stock
(A) as of the date hereof, (B) pursuant to stock option plans approved by
Seller pursuant to Section 13.1 or (C) pursuant to stock options issued under
plans permitted pursuant to the proviso set forth in paragraph (f) of Annex C.
1.23 "1933 Act" shall mean the Securities Act of 1933, as amended.
1.24 "Per Share Purchase Price" shall mean the price derived by
dividing (i) the sum of (A) one hundred ten percent (110%) of the IPO Price
times the aggregate number of Acquired Shares and Bermore Purchase Shares, plus
(B) the lesser of (1) five percent (5%) of the IPO Price times the aggregate
number of Acquired Shares and Bermore Purchase Shares, or (2) $13,000,000 by
(ii) the number of Acquired Shares and Bermore Purchase Shares.
1.25 "Person" shall mean an individual, a partnership, a joint venture,
a corporation, an association, a joint stock company, a limited liability
company, a trust, an unincorporated organization or a governmental entity or
any department, agency or political subdivision thereof.
1.26 "Public Float" shall mean the number of shares of Keebler Stock
that are available for trading in the public market, and shall not in any event
include (i) shares of capital
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stock of Keebler beneficially owned by Seller, Purchaser, Bermore or
Management prior to being sold in a transaction resulting in such shares
trading in the public market or (ii) shares of capital stock of Keebler which
are subject to statutory, contractual or other restrictions on transfer.
1.27 "Purchase Price" shall have the meaning set forth in Section 2.2
hereof.
1.28 "Purchaser" shall mean Flowers Industries, Inc., a Georgia
corporation.
1.29 "Registration Statement" shall mean a Registration Statement on
Form S-1 in respect of the IPO (File No. 333-42075).
1.30 "SEC" shall mean the U.S. Securities and Exchange Commission.
1.31 "Second Stock Repurchase Consent Period" shall have the meaning
set forth in Section 13.2.2.
1.32 "Securities" shall mean (a) Keebler Stock, (b) any other capital
stock of Keebler issued after the date hereof and (c) any capital stock of
Keebler issued in respect of previously issued capital stock, or in
substitution thereof, in connection with any stock split, reverse stock split,
dividend or combination, or any recapitalization, reclassification, merger,
consolidation, exchange or other similar reorganization.
1.33 "Seller" shall mean Artal Luxembourg S.A., a Luxembourg
corporation.
1.34 "Seller Directors" shall mean members of the Board of Directors of
Keebler nominated by Seller pursuant to Section 12.1 hereof.
1.35 "Seller's Shares" shall mean the shares of Keebler Stock owned by
Seller.
1.36 "Standard Consent Period" shall have the meaning set forth in
Section 13.1.1.
1.37 "Stockholders' Agreement" shall mean that certain Stockholders'
Agreement dated as of January 26, 1996 among Keebler, Seller and Purchaser.
1.38 "Underwriters" shall mean Credit Suisse First Boston Corporation,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxx Xxxxxxx & Co.
Incorporated and SBC Warburg Dillon Read Inc.
1.39 "Underwriting Agreement" shall mean the Underwriting Agreement to
be executed contemporaneously with this Agreement among the Underwriters,
Keebler, Bermore and Seller in respect of the IPO.
2. COVENANTS AND UNDERTAKINGS.
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2.1 Purchase of Acquired Shares. Upon the terms and subject to the
conditions set forth in this Agreement and on the basis of the representations,
warranties, covenants, agreements, undertakings and obligations contained
herein, Seller hereby agrees to sell to Purchaser, and Purchaser hereby agrees
to purchase, the Acquired Shares, free and clear of all liens, claims and
encumbrances of any nature at the Closing.
2.2 Purchase Price and Payment for the Acquired Shares. The purchase
price (the "Purchase Price") to be paid by Purchaser to Seller for the Acquired
Shares will be equal to the Per Share Purchase Price times the number of
Acquired Shares, and shall be payable at Closing in cash by wire transfer in
same day funds to an account or accounts specified by Seller.
2.3 IPO. The parties hereto acknowledge that Keebler has filed the
Registration Statement with the SEC for registration of such numbers of
Seller's Shares and Bermore's Shares as may be determined by Seller. The
parties hereto agree that Seller has requested and Purchaser has consented to a
demand registration pursuant to Section 1.1(a) of Annex A of the Stockholders'
Agreement, and in connection therewith, agree to use their reasonable best
efforts to (i) cause the Registration Statement to be declared effective by the
SEC, (ii) engage in all actions reasonably requested by the Seller, Purchaser
or the Underwriters in order to effectuate or facilitate the marketing and sale
of Seller's Shares and Bermore's Shares and (iii) assist in and take all other
actions in furtherance of the consummation of the IPO. The procedures, further
agreements, rights and obligations of the parties hereto regarding the
Registration Statement and the sale of any portion of Seller's Shares
thereunder (including any procedures, further agreements, rights and
obligations applicable after the Closing) shall be governed by the procedures
in Annex A of the Stockholders' Agreement applicable to demand registrations
made pursuant to Section 1.1(a) of such Annex A, except that notwithstanding
anything to the contrary contained therein or herein, the reasonable fees and
disbursements of counsel to Seller in respect of the IPO shall be paid by
Keebler as provided in Section 14.7. Seller agrees that it shall not terminate
or materially amend, extend or otherwise modify the Underwriting Agreement
without the prior written consent of Purchaser (which consent shall not be
unreasonably withheld or delayed).
2.4 Bermore Purchase. The parties hereto recognize that pursuant to
Section 3.3 and 3.4 of the GFI Stockholder's Agreement, Bermore has certain
"tag along" rights and Purchaser and Seller have certain "drag along" rights as
more fully described in said sections. In lieu thereof, the parties recognize
that, pursuant to the Bermore Agreement, Bermore will sell to Purchaser, and
Purchaser will purchase from Bermore, the Bermore Purchase Shares at the Per
Share Purchase Price.
2.5 Bermore Participation in IPO. The parties hereto acknowledge that
pursuant to Section 1.2 of Annex A to the GFI Stockholder's Agreement, (i)
Bermore has certain rights regarding "Incidental Registrations" as more fully
described therein, (ii) the written notification requirements of such Section
1.2 have been satisfied and/or waived and (iii) Bermore has elected to include
the Bermore IPO Shares (as such term is defined in the Bermore Agreement) for
sale in the IPO in accordance with the terms and provisions of the Bermore
Agreement.
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2.6 Termination of Stockholders' Agreement. Seller, Purchaser and
Keebler covenant and agree to terminate, the Stockholders' Agreement effective
upon the Closing except that the provisions contained in Annex A thereof which
by their terms are applicable after the consummation of an offering made
pursuant thereto (including, without limitation, provisions relating to
indemnification and contribution) shall continue to remain in full force and
effect as provided therein with respect to Seller's Shares sold in the IPO.
2.7 Compliance with Securities Laws. In connection with the
transactions contemplated by this Agreement, the parties hereto agree to
cooperate with one another in complying with the applicable provisions of the
1933 Act and the Exchange Act and the general rules and regulations of the SEC
thereunder, and all other applicable federal and state securities laws, and
each of them agree to furnish the other, or its counsel, with such information
and to take such actions as may be reasonably requested in respect of such
compliance.
2.8 Resignation. Seller covenants to cause to be delivered at the
Closing the resignation of one (1) of the three (3) Directors nominated by it
currently serving on the Board of Directors of Keebler, such resignation to be
effective immediately following the Closing. The remaining Directors nominated
by Seller shall continue to serve and remain on Keebler's Board of Directors
for the remainder of their terms in accordance with, and subject to, the
provisions of Keebler's Bylaws and Section 12.1 hereof. The parties
acknowledge that prior to the IPO, the terms of Keebler's Board of Directors
will be staggered such that (i) approximately one-third of the members shall be
elected each year for a three-year term, (ii) in order to effectuate such
staggered terms the individuals serving on the Board of Directors immediately
following the IPO will be classified as to whether they will stand for
re-election at the next ensuing annual meeting of Shareholders, the annual
meeting one year thereafter, or the annual meeting two years thereafter and
(iii) the Seller Directors shall be classified in the annual meeting two years
thereafter category.
2.9 Consents and Approvals. The parties agrees to use their respective
best efforts to obtain the waiver, consent and approval of all persons whose
waiver, consent or approval is required in order to consummate the transactions
contemplated by this Agreement.
2.10 HSR Act Filings. The parties hereunder acknowledge that the
required filings in connection with the transactions contemplated by this
Agreement under the HSR Act have been made with the Federal Trade Commission
and the Antitrust Division of the United States Department of Justice, and, the
parties hereunder agree that, as promptly as practicable from time to time
hereafter, they shall make, in cooperation with each other, all such further
filings and submissions, and take such further action, as may be required in
connection therewith. The parties shall furnish each other all information in
its or their possession necessary for compliance by the others with the
provisions of this Section 2.10. The parties hereto shall each notify the
others immediately upon receiving any request for additional information with
respect to such filings from either the Antitrust Division of the Department
of Justice or the Federal Trade Commission and the party receiving the request
shall use its best efforts to comply with such request as soon as possible.
Subject to the termination provisions of this Agreement, no party shall
withdraw any such filing or submission without the written consent of the
other parties.
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2.11 DGCL Section 203 Opt-Out. Seller, Purchaser and Keebler covenant
and agree to take all actions necessary to cause Keebler, on or prior to the
Closing Date, to adopt an amendment to Keebler's certificate of incorporation
or bylaws expressly electing not to be governed by Section 203 of the DGCL (or
any successor statute adopted subsequent to the date hereof by the State of
Delaware or, if Keebler reincorporates in a jurisdiction other than the State
of Delaware, any similar statute of any such jurisdiction) and further covenant
to take all actions necessary to cause such amendment to be approved by vote of
a majority of the shares of Keebler Stock entitled to vote thereon. Such
amendment shall be effective as provided in DGCL Section 203(b) and if such
amendment is made to Keebler's bylaws it shall not be further amended by the
Board of Directors.
2.12 Actions by Keebler. Each of Artal and Flowers will use its best
efforts to cause Keebler to (i) take any action required to be taken in
connection with the consummation of the transactions contemplated hereby or
(ii) refrain from taking any action inconsistent with the consummation of the
transactions contemplated hereby. Artal and Flowers, acting jointly, will, if
necessary, take all steps permitted under applicable law to replace any
director who refuses or otherwise fails to use his best efforts to direct
Keebler to comply with such covenants with a director who both Artal and
Flowers believe in good faith will cause Keebler to comply with such covenants.
2.13 FIRPTA. Keebler agrees to deliver to Seller, at Closing, the
Certificate set forth on Section 8.2.3.4 and to deliver to the Internal Revenue
Service, as promptly as practicable and in any event within thirty (30) days of
the Closing, the Notice set forth in Section 8.2.3.4.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants to, and for the benefit of,
Keebler and Purchaser as follows:
3.1 Organization and Standing. Seller is a duly organized and
validly existing corporation in good standing under the laws of Luxembourg.
3.2 Authority and Status. The Seller has the corporate
capacity and authority to execute and deliver this Agreement, to perform
hereunder, and to consummate the transactions contemplated hereby. The
execution, delivery and performance by the Seller of this Agreement and each
and every agreement, document, and instrument provided for herein have been
duly authorized and approved by the Directors of Seller and this Agreement has
been duly executed and delivered by the Seller. This Agreement and each and
every agreement, document, and instrument to be executed, delivered and
performed by the Seller in connection herewith constitute or will, when
executed and delivered, constitute the valid and legally binding obligations of
the Seller, enforceable against it in accordance with their respective terms,
except as enforceability may be limited by applicable general equitable
principles (whether considered in a proceeding in equity or at law) or by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or
similar laws from time to time in effect affecting the enforcement of
creditors' rights generally.
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3.3 Agreement Does Not Violate Other Instruments. The execution and
delivery of this Agreement by the Seller do not, and the consummation of the
transactions contemplated hereby will not, violate any provision of the Acte de
Constitution of the Seller or violate or constitute an occurrence of default
under any provision of, or conflict with, or result in acceleration of any
obligation under, or give rise to a right by any party to terminate its
obligations under, any mortgage, deed of trust, conveyance to secure debt,
note, loan, lien, lease, agreement, instrument, or any order, judgment, decree
or other arrangement to which the Seller is a party or is bound except where
the occurrence of any such event would not have a material adverse effect on
the consummation of the transactions contemplated hereby. Except for the
filings with the SEC and various state securities authorities with regard to
the IPO and the filings required under the HSR Act, no consent, approval, order
or authorization of, or registration, declaration or filing with, any
governmental entity is required to be obtained or made by or with respect to
the Seller, in connection with the execution and delivery by the Seller of this
Agreement or the consummation of the transactions contemplated hereby, except
where the failure to obtain or make any of the foregoing would not have a
material adverse effect on the consummation of the transactions contemplated
hereby.
3.4 Litigation. There is no suit, action, proceeding, claim or
investigation pending, or, to the knowledge of Seller, threatened against the
Seller which, if pursued and/or resulting in a judgment, would have a material
adverse effect on the right of the Seller to consummate the transactions
contemplated hereby.
3.5 Shares. The Seller owns the Acquired Shares free and clear of any
liens, claims or encumbrances of any nature. Except as contemplated by the
Stockholders' Agreement, the Seller has not granted any option or right, and is
not a party to any other agreement, and no such option, right or agreement
exists, which requires, or which upon the passage of time, the payment of money
or the occurrence of any other event, may require, the Seller to transfer any
of the Seller's Shares to any one other than Purchaser. When Purchaser
acquires the Acquired Shares from the Seller as contemplated by this Agreement,
the Purchaser will receive them free and clear of any liens, claims or
encumbrances of other persons, other than liens, claims or encumbrances
resulting from acts of Purchaser.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to, and for the benefit of, the
Seller and Keebler as follows:
4.1 Organization and Standing. Purchaser is a duly organized and validly
existing corporation in good standing under the laws of the State of Georgia.
4.2 Authority and Status. Purchaser has the corporate capacity and
authority to execute and deliver this Agreement, to perform hereunder, and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by Purchaser of this Agreement and each and every agreement,
document, and instrument provided for herein have been duly authorized and
approved by its Board of Directors and this Agreement has been duly executed
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and delivered by Purchaser. This Agreement and each and every other agreement,
document, and instrument to be executed, delivered and performed by Purchaser
in connection herewith constitute or will, when executed and delivered,
constitute the valid and legally binding obligations of Purchaser, enforceable
against it in accordance with their respective terms, except as enforceability
may be limited by applicable general equitable principles (whether considered
in a proceeding in equity or at law) or by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, or similar laws from time to time in
effect affecting the enforcement of creditors' rights generally.
4.3 Agreement Does Not Violate Other Instruments. The execution and
delivery of this Agreement by Purchaser do not, and the consummation of the
transactions contemplated hereby will not, violate any provisions of the
Articles of Incorporation, as amended, or Bylaws, as amended, of Purchaser, or
violate or constitute an occurrence of default under any provision of, or
conflict with, or result in acceleration of any obligation under, or give rise
to a right by any party to terminate its obligations under, any mortgage, deed
of trust, conveyance to secure debt, note, loan, lien, lease, agreement,
instrument, or any order, judgment, decree or other arrangement to which
Purchaser is a party or is bound, except where the occurrence of any such event
would not have a material adverse effect on the consummation of the
transactions contemplated hereby. Except for the filings with the SEC and
various state securities authorities with regard to the IPO and the filings
required under the HSR Act, no consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental entity is required
to be obtained or made by or with respect to Purchaser, in connection with the
execution and delivery by Purchaser of this Agreement or the consummation of
the transactions contemplated hereby, except where the failure to obtain or
make any of the foregoing would not have a material adverse effect on the
consummation of the transactions contemplated hereby.
4.4 Litigation. There is no suit, action, proceeding, claim or
investigation pending, or, to the knowledge of Purchaser, threatened against or
affecting Purchaser which, if pursued and/or resulting in a judgment, would
have a material adverse effect on the right of Purchaser to consummate the
transactions contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES OF KEEBLER.
Keebler represents and warrants to, and for the benefit of, the Seller
and Purchaser as follows:
5.1 Organization and Standing. Keebler is a duly organized and validly
existing corporation in good standing under the laws of the State of Delaware.
5.2 Authority and Status. Keebler has the corporate capacity and
authority to execute and deliver this Agreement, to perform hereunder, and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by Keebler of this Agreement and each and every agreement,
document, and instrument provided for herein have been duly authorized and
approved by its Board of Directors and this Agreement has been duly executed
and delivered by Keebler. This Agreement and each and every other agreement,
document, and
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instrument to be executed, delivered and performed by Keebler in
connection herewith constitute or will, when executed and delivered, constitute
the valid and legally binding obligations of Keebler, enforceable against it in
accordance with their respective terms, except as enforceability may be limited
by applicable general equitable principles (whether considered in a proceeding
in equity or at law) or by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, or similar laws from time to time in effect
affecting the enforcement of creditors' rights generally.
5.3 Agreement Does Not Violate Other Instruments. The execution and
delivery of this Agreement by Keebler do not, and the consummation of the
transactions contemplated hereby will not, violate any provisions of the
Articles of Incorporation, as amended, or Bylaws, as amended, of Keebler, or
violate or constitute an occurrence of default under any provision of, or
conflict with, or result in acceleration of any obligation under, or give rise
to a right by any party to terminate its obligations under, any mortgage, deed
of trust, conveyance to secure debt, note, loan, lien, lease, agreement,
instrument, or any order, judgment, decree or other arrangement to which
Keebler is a party or is bound, except for (A) any defaults or violations under
Keebler's senior credit facility, which defaults or violations shall have been
waived or cured on or prior to the Closing Date and (B) Keebler's obligation to
make an offer to purchase its Senior Subordinated Notes due 2006 from the
holders thereof at a purchase price of 101% of the principal amount thereof
after the Closing, which obligation shall be satisfied by Keebler in accordance
with the provisions of the indenture governing such senior subordinated notes.
Except for the filings with the SEC and various state securities authorities
with regard to the IPO and the filings required under the HSR Act, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any governmental entity is required to be obtained or made by or with
respect to Keebler, in connection with the execution and delivery by Keebler of
this Agreement or the consummation of the transactions contemplated hereby,
except where the failure to obtain or make any of the foregoing would not have
a material adverse effect on the consummation of the transactions contemplated
hereby.
5.4 Litigation. There is no suit, action, proceeding, claim or
investigation pending, or, to the knowledge of Keebler, threatened against or
affecting Keebler which, if pursued and/or resulting in a judgment, would have
a material adverse effect on the right of Keebler to consummate the
transactions contemplated hereby.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.
All of the obligations of Purchaser to consummate the purchase of the
Acquired Shares contemplated by this Agreement shall be contingent upon and
subject to the satisfaction, on or before the Closing Date, of each and every
one of the following conditions, all or any of which may be waived, in whole or
in part, by Purchaser for purposes of consummating such transactions, but
without prejudice to any other right or remedy which they may have hereunder as
a result of any misrepresentation by, or breach of any covenant or warranty of
Seller contained in this Agreement or any other certificate or instrument
furnished by Seller hereunder.
6.1 Representations True at Closing. The representations and
warranties made by Seller and Keebler to Purchaser in this Agreement and the
Exhibits and Annexes hereto shall
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be true and correct in all material respects on the Closing Date with the same
force and effect as though such representations and warranties had been made
on and as of such date, except for changes contemplated by this Agreement.
6.2 Covenants of Seller and Keebler. Each of Seller and Keebler shall
have duly performed all of the covenants, acts and undertakings to be performed
by it on or prior to the Closing Date, and a duly authorized officer of each of
Seller and Keebler shall deliver to Purchaser certificates dated as of the
Closing Date certifying, as to themselves only, to the fulfillment of this
condition and the condition set forth in Section 6.1 hereof.
6.3 No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation which is related to or arises out of this Agreement
or the transactions contemplated hereby shall have been instituted, threatened
or proposed before any court, governmental agency or legislative body which is
reasonably likely to enjoin, restrain, prohibit or obtain substantial damages
from Purchaser or Keebler in respect of, this Agreement or the consummation of
the transactions contemplated hereby.
6.4 Approvals. The execution and the delivery of this Agreement and
the consummation of the transactions contemplated hereby shall have been
approved by all regulatory authorities whose approvals are required by law and
all applicable waiting periods under the HSR Act shall have expired or been
terminated.
6.5 Effectiveness of Registration Statement. The Registration
Statement shall have been declared effective by the SEC, and no stop order
suspending effectiveness shall have been issued, and no action, suit,
proceeding or investigation by the SEC to suspend the effectiveness thereof
shall have been initiated and be continuing. The shares of Keebler Stock to be
sold by the Seller and Bermore pursuant to the Registration Statement shall
have been registered for issuance under all applicable Blue Sky laws or shall
be exempt from such registration, and no stop order shall have been issued with
respect to the issuance or sale of such securities by any Blue Sky authority.
6.6 Closing of IPO. The closing of the IPO shall have occurred
contemporaneously with the Closing.
6.7 No Amendment, Extension or Termination of Underwriting Agreement.
Seller shall not have terminated or have materially amended, extended or
otherwise modified the Underwriting Agreement without the prior written consent
of Purchaser (which consent shall not be unreasonably withheld or delayed).
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER TO CLOSE.
All of the obligations of Seller to consummate the sale of the Acquired
Shares contemplated by this Agreement shall be contingent upon and subject to
the satisfaction, on or before the Closing Date, of each and every one of the
following conditions, all or any of which may be waived, in whole or in part by
Seller, but without prejudice to any other right or remedy
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which they may have hereunder as a result of any misrepresentation by, or
breach of any covenant or warranty of, Purchaser contained in this Agreement,
or any certificate or instrument furnished by it hereunder.
7.1 Representations True at Closing. The representations and
warranties made by Purchaser and Keebler to Seller in this Agreement and the
Exhibits and Annexes hereto shall be true and correct in all material respects
on the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of such date, except for
changes contemplated by this Agreement.
7.2 Covenants of Purchaser and Keebler. Each of Purchaser and Keebler
shall have duly performed all of the covenants, acts and undertakings to be
performed by them on or prior to the Closing Date, and a duly authorized
officer of each of Purchaser and Keebler shall deliver certificates dated as of
the Closing Date certifying, as to themselves only, to the fulfillment of this
condition and the condition set forth under Section 7.1 above.
7.3 No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation which is related to or arises out of this Agreement
or the transactions contemplated hereby shall have been instituted, threatened
or proposed before any court, governmental agency or legislative body which is
reasonably likely to enjoin, restrain, prohibit or obtain substantial damages
from Seller or Keebler in respect of, this Agreement or the consummation of the
transactions contemplated hereby.
7.4 Approvals. The execution and the delivery of this Agreement and
the consummation of the transactions contemplated hereby shall have been
approved by all regulatory authorities and all courts whose approvals are
required by law and all applicable waiting periods under the HSR Act shall have
expired or been terminated.
7.5 Effectiveness of Registration Statement. The Registration
Statement shall have been declared effective by the SEC, and no stop order
suspending effectiveness shall have been issued, and no action, suit,
proceeding or investigation by the SEC to suspend the effectiveness thereof
shall have been initiated and be continuing. The shares of Keebler Stock to be
sold by the Seller and Bermore pursuant to the Registration Statement shall
have been registered for issuance under all applicable Blue Sky laws or shall
be exempt from such registration, and no stop order shall have been issued with
respect to the issuance or sale of such securities by any Blue Sky authority.
7.6 Closing of IPO. The closing of the IPO shall have occurred
contemporaneously with the Closing.
8. CLOSING.
8.1 Time and Place of Closing. The consummation of the transactions
provided for in this Agreement (herein referred to as the "Closing") shall be
held at the offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000,
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contemporaneously with, and conditioned upon, the closing of the IPO
(herein referred to as the "Closing Date") unless another place or date is
agreed to in writing by the Seller and Purchaser.
8.2 Transactions at Closing. At the Closing, each of the following
transactions shall occur:
8.2.1 Seller's Performance. Seller shall deliver to Purchaser
and Keebler the following:
8.2.1.1 all certificates representing the Acquired
Shares, duly endorsed for transfer or accompanied by instruments of transfer
reasonably satisfactory in form and substance to Purchaser and its counsel;
8.2.1.2 the certificate of a duly authorized officer
of the Seller described in Section 6.2;
8.2.1.3 certified copies of resolutions of the Board
of Directors of the Seller approving the transactions set forth in and
contemplated by this Agreement;
8.2.1.4 certificates of incumbency for the officers of
the Seller who are executing this Agreement and the other documents
contemplated hereby;
8.2.1.5 resignation of the Director of Keebler
described in Section 2.8; and
8.2.1.6 such other evidence of the performance of all
covenants and satisfaction of all conditions required of Seller by this
Agreement, at or prior to the Closing, as Purchaser, or its counsel may
reasonably require.
8.2.2 Performance by Purchaser. Purchaser shall deliver to the
Seller and Keebler the following:
8.2.2.1 the Purchase Price payable to Seller by wire
transfer of same day funds to the account or accounts designated by Seller in
writing at least two (2) business days prior to Closing;
8.2.2.2 the certificate of a duly authorized officer
of Purchaser described in Section 7.2;
8.2.2.3 certificate of incumbency of the officers of
Purchaser who are executing this Agreement and the other documents
contemplated hereby;
8.2.2.4 certified copies of resolutions of the Board
of Directors of the Purchaser approving the transactions set forth in and
contemplated by this Agreement; and
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8.2.2.5 such other evidence of the performance of all the
covenants and satisfaction of all of the conditions required of Purchaser by
this Agreement at or before the Closing as the Seller or its counsel may
reasonably require.
8.2.3 Performance by Keebler. Keebler shall deliver to the Seller
and Purchaser the following:
8.2.3.1 the certificate of a duly authorized officer of
Keebler described in Sections 6.2 and 7.2;
8.2.3.2 certificate of incumbency of the officers of
Keebler who are executing this Agreement and the other documents contemplated
hereby;
8.2.3.3 certified copies of resolutions of the Board of
Directors of the Keebler approving the transactions set forth in and
contemplated by this Agreement;
8.2.3.4 FIRPTA Certificate and Notice to Internal Revenue
Service Pursuant to Reg. Section 1.897-2(H) in form and substance to comply
with Treasury Regulations Sections 1.1445-2(c)(3)(i) and 1.897-2(h); and
8.2.3.5 such other evidence of the performance of all the
covenants and satisfaction of all of the conditions required of Keebler by
this Agreement at or before the Closing as the Seller, Purchaser or their
counsel may reasonably require.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
9.1 Survival of Representations and Warranties of the Seller. All
representations, warranties, agreements, covenants and obligations made or
undertaken by the Seller in this Agreement or in any document or instrument
executed and delivered pursuant hereto are material, have been relied upon by
Purchaser and Keebler, shall survive the Closing hereunder, and shall not merge
in the performance of any obligation by any party hereto.
9.2 Survival of Representations and Warranties of Purchaser. All
representations, warranties, agreements, covenants and obligations made or
undertaken by Purchaser in this Agreement or in any document or instrument
executed and delivered pursuant hereto are material, have been relied upon by
the Seller and Keebler, shall survive the Closing hereunder and shall not merge
in the performance of any obligation by any party hereto.
9.3 Survival of Representations and Warranties of Keebler. All
representations, warranties, agreements, covenants and obligations made or
undertaken by Keebler in this Agreement or in any document or instrument
executed and delivered pursuant hereto are material, have been relied upon by
Purchaser and Seller, shall survive the Closing hereunder, and shall not merge
in the performance of any obligation by any party hereto.
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10. TERMINATION.
10.1 Method of Termination Prior to Closing. This Agreement shall
terminate immediately upon termination or abandonment of the Underwriting
Agreement by the parties thereto without any further action by the parties
hereto, and may also be terminated or abandoned prior to Closing only by the
mutual written consent of Purchaser and Seller, notwithstanding prior approval
by either of such corporations.
10.2 Effect of Termination Prior to Closing. In the event of a
termination of this Agreement, prior to Closing (i) each party shall pay
the costs and expenses incurred by it in connection herewith, (ii) no party (or
any of its officers, directors, employees, agents, representatives) shall be
liable to any other party for any costs, expenses, damage or loss of
anticipated profits hereunder, (iii) each party shall retain any and all rights
attendant to any breach of any covenant, representation or warranty made
hereunder and (iv) the Stockholders' Agreement shall remain in full force and
effect.
10.3 Termination Following Closing. Should Closing occur, this
Agreement (i) shall not terminate, (ii) shall be in full force and effect ,
(iii) shall be binding on any party hereto until January 26, 2006, and (iv) as
of January 26, 2006, (A) shall terminate, (B) shall thereafter have no further
forces or effect, and (C) shall not be binding any party hereto except that the
provisions contained in Annex A hereto which by their terms are applicable
after consummation of an offering made pursuant thereto (including, without
limitation, provisions relating to indemnification and contribution) shall
continue to remain in full force and effect as provided therein with respect to
offerings made pursuant thereto prior to January 26, 2006..
11. REGISTRATION RIGHTS.
11.1 The procedures and further agreements of the parties hereto
regarding the Seller's Registration Rights for Seller's Shares which are not
sold to Purchaser pursuant to this Agreement and not sold in the IPO are set
forth in Annex A to this Agreement and incorporated herein by reference.
12. DIRECTORS DESIGNATED BY SELLER; RIGHT OF FIRST REFUSAL.
12.1 Election of Directors. From and after the Closing Date, Seller
shall be entitled to nominate two (2) individuals for election to the Keebler
Board of Directors, provided, however, that if Seller (together with its
Affiliates) ceases to beneficially own at least 6,879,000 shares of Keebler
Stock on a fully-diluted basis, Seller shall only be entitled to nominate one
(1) individual for election to the Keebler Board of Directors pursuant to this
Section 12.1, and provided, further, that if Seller (together with its
Affiliates) ceases to beneficially own at least 2,866,250 shares of Keebler
Stock on a fully-diluted basis, Seller shall no longer be entitled to nominate
an individual to the Keebler Board of Directors pursuant to this Section 12.1.
Purchaser agrees to vote, in person or by proxy, or to enter into written
consents in respect of, all of the Keebler Stock owned by Purchaser at any
annual or special meeting of the stockholders of Keebler called for the purpose
of voting on the election of Directors or by consensual action of
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stockholders without a meeting with respect to the election of
Directors, in favor of the election of the individuals nominated by Seller in
accordance with this Section 12.1. At all times Seller shall have the right to
recommend the removal, with or without cause, of such Directors and the
nomination of a replacement therefor. At such time as Seller (together with
its Affiliates) becomes the beneficial owner of less than 6,879,000 shares of
Keebler Stock, on a fully-diluted basis, Seller shall cause one of the
Directors nominated by it and then serving on the Keebler Board of Directors
pursuant to this Section 12.1 to tender his or her resignation. At such time
as Seller (together with its Affiliates) becomes the beneficial owner of less
than 2,866,250 shares of Keebler Stock, on a fully diluted basis, Seller shall
cause each of the Directors nominated by it and then serving on the Keebler
Board of Directors pursuant to this Section 12.1 to tender his or her
resignation. Only Keebler Stock owned by Seller on the date hereof shall be
counted for purposes of determining whether Seller (together with its
Affiliates) holds the requisite percentages to be entitled to nominate
Directors. In addition, for so long as Seller is entitled to nominate at least
one Director, it may designate one of its nominees to sit on each committee of
the Board of Directors unless such director is prohibited from sitting on such
committee under the rules of any applicable stock exchange or regulatory
authority.
12.2 Vacancies. In the event a vacancy is created on the Board by
reason of the death, removal or resignation (other than a vacancy pursuant to
Section 12.1 resulting from the reduction in the number of shares of Keebler
Stock beneficially owned by Seller and its Affiliates) of any one of the Seller
Directors, the parties hereby agree to cause Keebler's Board of Directors to
promptly hold a special meeting of the Board or to enter into a written consent
of Directors without a meeting, and to designate a person selected in
accordance with Section 12.1 hereof to fill such vacancy until the next annual
meeting of stockholders of Keebler and, if necessary, in favor of removing any
director, if any, who had been elected to fill such vacancy otherwise than in
accordance with the selection procedures of Section 12.1 hereof. At such next
annual meeting of stockholders of Keebler, each of Purchaser and Seller agrees
to vote all its shares of Keebler Stock in favor of the person or persons
selected in accordance with Section 12.1 for a term equal to the remaining
term of the original director whose death, removal or resignation created the
vacancy.
12.3 Restrictions on Other Agreements.
12.3.1 Neither Seller nor Purchaser shall grant any proxy or
enter into or agree to be bound by any voting trust or voting agreement or any
stockholder agreements or arrangements of any kind with any Person with respect
to any Securities on terms inconsistent with the provisions of this Agreement,
including but not limited to, agreements or arrangements with respect to the
acquisition or disposition of Securities in a manner which is inconsistent with
this Agreement.
12.3.2 Seller shall not, without the prior approval of a
majority of the Board of Directors of Keebler (excluding for the purpose of
determining whether there is a majority any Seller Director) (a) solicit, or
in any way encourage or assist in the solicitation of, proxies with respect to
any Securities intended to result in the election of directors of Keebler in
opposition to those directors recommended by the Board of Directors of Keebler,
so long as such board recommendation is not inconsistent with the terms of this
Agreement, nor shall it become a
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"participant" in any "solicitation" (as such terms are used in Rule
14a-11 under the Exchange Act) relating to any such election or (b) join a
"group" (as such term is used in Section 13(d)(3) of the Exchange Act), or
otherwise act in concert with any other Person for the purpose of seeking to
(i) enter into, directly or indirectly, any merger or business combination
involving Keebler (ii) purchase, directly or indirectly, a controlling interest
in Keebler or (iii) change the directors of Keebler, so long as, with respect
to clauses (i), (ii) and (iii), Seller has received prior written notification
from Keebler that such action is opposed by a majority of the Board of
Directors of Keebler (excluding for the purpose of determining whether there is
a majority any Seller Director); it being understood that neither (a) nor (b)
shall prevent (x) soliciting efforts by Seller not as a member of a "group" or
in concert with any other Person either in favor of or against any transaction
(including a merger or other business combination) involving Keebler or its
stockholders or (y) the sale of shares of Keebler Stock by Seller at any time
to any Person.
12.3.3 By execution of this Agreement, each of Seller and
Purchaser represents that it is not presently a party to, or bound by, any
arrangement prohibited by this Section 12.3.
12.4 The procedures and further agreements of the parties hereto
regarding the grant by Seller to Keebler of a right of first refusal in respect
of the Seller's Shares (other than the Acquired Shares and Seller's Shares sold
in the IPO) are set forth in Annex B to this Agreement and incorporated herein
by reference.
13. SELLER CONSENT RIGHTS.
13.1 Corporate Actions.
13.1.1 From the Closing Date until the earlier of (i) the
date on which Seller (together with its Affiliates) beneficially owns less than
4,586,000 shares of Keebler Stock or (ii) thirty-six (36) months after the
termination of the Lockup Period (such period, the "Standard Consent Period"),
the actions set forth in subsections (b), (c), (e) and (f) of Annex C shall
require the prior written consent of Seller, and Keebler and Purchaser shall
not take or permit to be taken any such actions without such prior written
consent; provided, however, that the Extension Period shall be added to, and
extend, the thirty-six (36) month period set forth in (ii) above.
13.1.2 From the Closing Date until the date on which Seller
(together with its Affiliates) beneficially owns less than 2,293,000 shares of
Keebler Stock, the actions set forth in subsections (a) and (g) of Annex C shall
require the prior written consent of Seller, and Keebler and Purchaser shall
not take or permit to be taken any such action without such prior written
consent.
13.1.3 From the Closing Date until the earlier of (i) the
date on which Seller (together with its Affiliates) beneficially owns less than
4,586,000 shares of Keebler Stock or (ii) thirty-six (36) months after the
Closing Date (such period, the "CEO Consent Period"), the action set forth in
subsection (d) of Annex C shall require the prior written consent of at least
one
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of the Seller Directors, and Keebler and Purchaser shall not take or permit
to be taken any such action without such prior written consent; provided,
however, that the Extension Period shall be added to, and extend, the
thirty-six (36) month period set forth in (ii) above.
13.1.4 With respect to each of the actions set forth in
subsections (a) through (g) of Annex C, the actions set forth in subsection
(h) of Annex C shall require the prior written consent of Seller, and Keebler
and Purchaser shall not take or permit to be taken any such action without
such prior written consent, for so long as each such underlying action
requires such prior written consent.
13.2 Purchases of Keebler Stock.
13.2.1 From the Closing Date until the earlier of (i) the date
on which Seller (together with its Affiliates) beneficially owns less than
4,586,000 shares of Keebler Stock or (ii) twenty-four (24) months after the
termination of the Lockup Period (such period, the "Initial Stock Repurchase
Consent Period"), any purchase of shares of Keebler Stock by Purchaser or
Keebler (other than purchases (A) by Purchaser or Keebler pursuant to put
rights contained in agreements in effect on the Closing Date, (B) by Purchaser
or Keebler from Artal or Management so long as such shares of Keebler Stock
are not part of the Public Float at the time of purchase, (C) by Keebler from
Bermore of Bermore's Shares which are permitted to be transferred by Bermore as
a "Monthly Transfer" pursuant to Section 4.2(e) of the Bermore Agreement or by
Purchaser or Keebler, as the case may be, pursuant to the tag-along and
drag-along rights contained in Sections 4.3 and 4.4 of the Bermore Agreement
and (D) by Purchaser and Keebler which together, in the aggregate with any
prior such purchases, do not exceed fifteen percent (15%) of the Public Float
in Keebler Stock immediately after the Closing) shall not be consummated
without the prior written consent of Seller, and Keebler and Purchaser shall
not take or permit to be taken any such action without such prior written
consent; provided, however, that the Extension Period shall be added to the
twenty-four (24) month period set forth in (ii) above; and provided, further,
that Purchaser will have the right at any time to purchase the number of
shares of Keebler Stock required to maintain beneficial ownership of at least
fifty- one percent (51%) of Keebler Stock on a fully diluted basis.
13.2.2 After the expiration of the Initial Stock Repurchase
Consent Period (including any Extension Period added thereto) and until the
earlier of (i) the date on which Seller (together with its Affiliates)
beneficially owns less than 4,586,000 shares of Keebler Stock or (ii)
thirty-six (36) months after the termination of the Lockup Period (the Second
Stock Repurchase Consent Period), any purchase of shares of Keebler Stock by
Purchaser or Keebler (other than purchases (A) by Purchaser or Keebler pursuant
to put rights contained in agreements in effect on the Closing Date, (B) by
Purchaser or Keebler from Artal, Bermore or Management so long as such
shares of Keebler Stock are not part of the Public Float at the time of
purchase, (C) by Keebler from Bermore of Bermore's Shares which are permitted
to be transferred by Bermore as a "Monthly Transfer" pursuant to Section 4.2(e)
of the Bermore Agreement or by Purchaser or Keebler, as the case may be,
pursuant to the tag-along and drag-along rights contained in Sections 4.3 and
4.4 of the Bermore Agreement and (D) by Purchaser and Keebler which together,
in the aggregate with any prior such purchases during the Second Stock
Repurchase Consent Period and purchases made during the Initial Stock
Repurchase Consent
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Period, do not exceed fifteen percent (15%) of the Public Float in
Keebler Stock on the date immediately preceding any such purchase) shall not be
consummated without the prior written consent of Seller, and Keebler and
Purchaser shall not take or permit to be taken any such action without such
prior written consent; provided, however, that the Extension Period shall be
added to the thirty-six (36) month period set forth in (ii) above, and
provided, further, that Purchaser will have the right at any time to purchase
the number of shares of Keebler Stock required to maintain beneficial ownership
of at least fifty-one percent (51%) of Keebler Stock on a fully diluted basis.
13.3 Sales of Keebler Stock. Until the expiration of the Standard
Consent Period (including any Extension Period added thereto), the Purchaser
agrees not to sell any shares of Keebler Stock without the prior written
consent of Seller, and Purchaser shall not take or permit to be taken any such
action without such prior written consent, other than private placements of
Keebler Stock by Purchaser in connection with any strategic joint venture or
other similar transactions entered into by Purchaser so long as Purchaser
retains a majority of the economic benefit and the controlling voting interest
in such joint venture or other similar entity.
13.4 For purposes of this Agreement, the "Extension Period" shall mean
the period equal to the aggregate periods of any postponements or suspensions
made pursuant to Section 1.1(g) of Annex A, excluding the first thirty days of
the first such postponement or suspension; provided, however, that the
Extension Period shall extend the Standard Consent Period, the CEO Consent
Period, the Initial Stock Repurchase Consent Period or the Second Stock
Repurchase Consent Period only if such postponements or suspensions occur prior
to the end of such respective period and shall only extend such respective
period for the lesser of (i) one hundred eighty (180) days or (ii) that number
of days that would provide for a full number of days in the respective period
if there had not been a postponement or suspension. Should there be any ]
postponement or suspension occurring during the Extension Period then the
Extension Period shall be extended further for the amount of time of each such
postponement or suspension.
13.5 No After Acquired Shares. For purposes of calculating the share
ownership of Seller (together with its Affiliates) under this Agreement
(including, without limitation, Articles 12 and 13 hereof) only the shares
owned by Seller as of the date hereof shall be counted and any shares acquired
by Seller or any of its Affiliates after the date hereof (except for shares
owned as of the date hereof by Seller or any of its Affiliates which are
subsequently acquired by Seller or any Affiliate through transfers among
themselves) shall not be counted.
13.6 Beneficial Ownership. For purposes of this Agreement, Seller
(together with its Affiliates) shall be deemed to beneficially own shares of
Keebler Stock if they would be deemed a beneficial owner for purposes of Rule
13d-3 of the Exchange Act.
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14. GENERAL PROVISIONS.
14.1 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered by hand, mailed by
registered or certified mail, return receipt requested, or sent by Federal
Express or other nationally recognized overnight delivery service addressed as
follows:
14.1.1 If to the Seller:
Artal Luxembourg S.A.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxx, Xxxxxxxxxx
Attn: Managing Director
with copies to:
c/o The Invus Group, Ltd.
000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx
and:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
14.1.2 If to Purchaser:
G. Xxxxxxx Xxxxxxxx, Esq.
Flowers Industries, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxx, Esq. and
Xxxxx X. Xxxxx, Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
0000 XxxXxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
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14.1.3 If to Keebler:
Xxxxxx X. X'Xxxxx, Esq.
Keebler Company
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxx X. Xxxx
Xxxxxxx & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
14.1.4 If delivered personally, the date on which a notice, request,
instruction or document is delivered shall be the date on which such delivery
is made. If delivered by mail or overnight delivery service, the date on which
such notice, request, instruction or document is received shall be the date of
delivery. In the event any such notice, request, instruction or document is
mailed or sent to a party in accordance with this Section 13.1 and is returned
to the sender as nondeliverable, then such notice, request, instruction or
document shall be deemed to have been delivered or received on the fifth day
following the deposit of such notice, request, instruction or document in the
United States mails or overnight delivery service, as the case may be.
14.1.5 Any party hereto may change its address specified for notices
herein by designating a new address by notice in accordance with this Section
12.1.
14.2 Certificates Representing Seller's Shares. Immediately upon
consummation of the Closing, Keebler will deliver to Seller validly issued and
executed stock certificates representing the remaining Seller's Shares, which
certificates shall no longer bear the legends currently required by the
Stockholders' Agreement.
14.3 Remedies.
14.3.1 Each party hereto shall have all rights and remedies
reserved for such party pursuant to this Agreement, Keebler's certificate of
incorporation and by-laws and all rights and remedies which such holders have
been granted at any time under any other agreement or contract and all of the
rights which such holders have under any law or equity. Any Person having any
rights under any provision of this Agreement will be entitled to enforce such
rights specifically, to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law or
equity.
14.3.2 The parties hereto agree that if any parties seek to
resolve any dispute arising under this Agreement pursuant to a legal
proceeding, the "prevailing" parties to such proceeding shall be entitled to
receive reasonable fees and expenses (including reasonably attorneys' fees and
expenses) incurred in connection with such proceedings. For purposes of this
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Section 14.3.2, a party shall be deemed to be a "prevailing" party only if it
prevails on each element of its claim (including the amount and type of
damages sought). If neither party is the prevailing party, the parties agree
to request the court or other decision making body to make a separate
determination as to the allocation of fees and expenses.
14.3.3 It is acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations herein imposed on them and that in the
event of any such failure, an aggrieved Person will be irreparably damaged and
will not have an adequate remedy at law. Any such Person shall, therefore, be
entitled to injunctive relief, including specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law.
14.4 Brokers.
14.4.1 Seller agrees to indemnify and hold harmless the
Purchaser from and against any fee, claim, loss, or expense arising out of any
claim by any investment banker, broker or finder employed or alleged to have
been employed by it.
14.4.2 Purchaser agrees to indemnify and hold harmless the
Seller from and against any fee, claim, loss, or expense arising out of any
claim by any investment banker, broker or finder employed or alleged to have
been employed by it.
14.4.3 Keebler agrees to indemnify and hold harmless the
Purchaser and the Seller from and against any fee, claim, loss or expense
arising out of any claim by any investment banker, broker, or finder employed
or alleged to have been employed by it.
14.5 Further Assurances. Each party covenants that at any time, and
from time to time, after the Closing Date, it will execute such additional
instruments and take such actions as may be reasonably requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this Agreement.
14.6 Waiver. Any failure on the part of any party hereto to comply
with any of its obligations, agreements or conditions hereunder may be waived
by any other party to whom such compliance is owed. No waiver of any
provision of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver.
14.7 Expenses. All expenses incurred by the parties hereto in
connection with or related to the authorization, preparation and execution of
this Agreement and the closing of the transactions contemplated hereby,
including, without limiting the generality of the foregoing, all fees and
expenses of brokers, agents, representatives, counsel and accountants employed
by any such party, shall be borne solely and entirely by the party which has
incurred the same. Notwithstanding the foregoing, except for the underwriting
discounts in respect of the Seller's Shares sold in the IPO and Seller's
out-of-pocket expenses, Keebler will bear all costs and
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expenses in connection with the registration of Seller's Shares in the
Registration Statement, review and finalization of underwriting arrangements
and all other aspects of the IPO in accordance with Annex A of the
Stockholders' Agreement (except that the reasonable fees and disbursements of
Seller's counsel related to the IPO shall also be borne by Keebler).
14.8 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and assigns. Except as
provided in Section 1.9 of Annex A, this Agreement shall not be assignable by
Seller, Purchaser or Keebler without the prior written consent of Seller and
Purchaser, except that Seller may transfer all or any portion of the Seller's
Shares, including all rights and obligations hereunder associated with
beneficial ownership of such Seller's Shares, to any of its Affiliates
(excluding Keebler) and any such Affiliate shall be subject to all of the
rights and obligations contained in this Agreement applicable to Seller.
14.9 Headings. The section and other headings in this Agreement are
inserted solely as a matter of convenience and for reference, and are not a
part of this Agreement.
14.10 Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes and cancels any prior
agreements, representations, warranties, or communications, whether oral or
written, among the parties hereto relating to the transactions contemplated
hereby or the subject matter herein, except that the provisions contained in
Annex A of the Stockholders' Agreement which by their terms are applicable
after the consummation of an offering made pursuant thereto (including without
limitation, provisions relating to indemnification and contribution) shall
continue in full force and effect as provided therein with respect to Seller's
Shares sold in the IPO. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by an agreement in
writing signed by Purchaser and Seller. Any such change, waiver, discharge or
termination may be made without the agreement of Keebler, unless such change,
waiver, discharge or termination would materially and adversely affect
Keebler's rights and obligations hereunder.
14.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to the principles thereof regarding conflict of laws, except for matters
directly within the purview of the DGCL.
14.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
14.13 Pronouns. All pronouns used herein shall be deemed to refer to
the masculine, feminine or neuter gender as the context requires.
14.14 Exhibits Incorporated. All Exhibits and Annexes attached hereto
are incorporated herein by reference.
14.15 Time of Essence. Time is of the essence in this Agreement.
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14.16 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such a manner as to be effective and valid
under applicable law. The parties agree that (i) the provisions of this
Agreement shall be severable in the event that any of the provisions hereof are
held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable, (ii) such invalid, void or otherwise unenforceable provisions
shall be automatically replaced by other provisions which are as similar as
possible in terms to such invalid, void or otherwise unenforceable provisions
but are valid and enforceable and (iii) the remaining provisions shall remain
enforceable to the extent permitted by law.
14.17 Jurisdiction; Venue; Process.
14.17.1 The parties to this Agreement agree that
jurisdiction and venue in any action brought by any party hereto pursuant to
this Agreement shall properly lie and shall be brought in any federal or state
court located in the State of New York. By execution and delivery of this
Agreement, each party hereto irrevocably submits to the jurisdiction of such
courts for itself or himself and in respect of its or his property with
respect to such action. The parties hereto irrevocably agree that venue would
be proper in such court, and hereby irrevocably waive any objection that such
court is an improper or inconvenient forum for the resolution of such action.
14.17.2 Seller hereby irrevocably and unconditionally
designates and directs Xx. Xxxxx Xxx Xxxxx, with offices on the date hereof at
Northwestern University School of Law, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, as its agent to receive service of any and all process and
documents on its behalf in any legal action or proceeding related to this
Agreement and agrees that service upon such agent shall constitute valid and
effective service upon Seller and that failure of such agent to give any
notice of such service to Seller shall not affect or impair in any way the
validity of such service or of any judgment rendered in any action or
proceeding based thereon.
14.18 Mutual Waiver of Jury Trial. The parties hereto waive all right
to trial by jury in any action, suit or proceeding brought to enforce or defend
any rights or remedies under this Agreement or any documents related hereto.
14.19 Financial Statements. At all times while Seller is entitled to
nominate a Seller Director to serve on the Board of Directors of Keebler,
Keebler shall deliver to any person who is a Seller Director (on behalf of
Seller and such person who is a Seller Director) all information furnished to
any person who is a director of Keebler (or to any related or associated person
on his or her behalf), and any person who is a Seller Director (and up to three
other individuals who are designated by Seller in writing from time to time to
act on behalf of Seller and such person who is a Seller Director) may request
(on behalf of Seller and such person who is a Seller Director) and will receive
from any of Keebler's executive officers a copy of any written information or
report which has been generated by Keebler; provided, however, that Keebler
shall not be required to draft or generate specifically for Seller and any such
person who is a Seller Director any new information or report not otherwise
prepared; and provided, further, that the scope and timing of any such request
do not unreasonably interfere with management's
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25
ability to conduct the business of Keebler or the ability of any
particular executive officer to perform his duties. Any person who is a Seller
Director (and up to three other individuals who are designated by Seller in
writing from time to time to act on behalf of Seller and such person who is a
Seller Director) may also contact any of Keebler's executive officers from time
to time to receive (on behalf of Seller and such person who is a Seller
Director) an oral report on the status of Keebler's operations and business;
provided, that the scope and timing of any such contact do not unreasonably
interfere with management's ability to conduct the business of Keebler or the
ability of any particular executive officer to perform his duties. Seller
hereby covenants to keep all such information and reports confidential and,
without Keebler's prior written consent, not to disclose (except (i) as
required by judicial or administrative order or (ii), in the written opinion of
counsel for Seller, as required by law) any such information or reports other
than to those of its officers, directors, employees, advisors and
representatives with a need to know the information contained therein; provided
that each such person, as well as the Seller Directors and the three other
individuals who are designated from time to time as described above, shall be
informed of the confidential nature of the information and reports and Seller
will be responsible for any breach of this provision by any such person. The
preceding sentence shall be inoperative as to any particular information or
report if it (i) becomes generally available to the public other than as a
result of a disclosure by Seller or its officers, directors, employees,
advisors or representatives in violation of the preceding sentence, (ii) was
available to Seller or any such person on a non-confidential basis at or prior
to the time of its disclosure to Seller or any such person by Keebler or its
executive officers or (iii) becomes available to Seller on a non-confidential
basis from a source other than Keebler or its executive officers, when Seller
has no reasonable basis to believe that such source is prohibited by a legal,
contractual or fiduciary obligation from making such disclosure to Seller or
any such person.
14.20 Antidilution. The parties recognize that all references to amounts of
shares of Keebler Stock and the price per share to be paid by Purchaser for any
such shares referenced herein give effect to a 1-for-10 reverse stock split
that occurred prior to the date hereof and assumes consummation of a
57.325-for-1 stock split of the Keebler Stock to be consummated by the Company
immediately prior to Closing. An appropriate and proportionate adjustment
shall be made to all references to amounts of shares of Keebler Stock
referenced herein for any event, subsequent to Closing, whereby the outstanding
shares of Keebler Stock shall be, without consideration, increased, decreased,
changed into, or exchanged for a different number or kind of shares or
securities through recapitalization, reclassification, stock dividend, stock
split, reverse stock split, or other like changes to Keebler's capitalization.
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IN WITNESS WHEREOF, each party hereto has executed or caused this
Agreement to be executed on its behalf, all on the day and year first above
written.
FLOWERS INDUSTRIES, INC.
"Purchaser"
By:________________________________________
Name:___________________________________
Title:__________________________________
ARTAL LUXEMBOURG S.A.
"Seller"
By:________________________________________
Name:____________________________________
Title:___________________________________
KEEBLER FOODS COMPANY
"Keebler"
By:________________________________________
Name:___________________________________
Title:__________________________________
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LIST OF ANNEXES
Annex A -- Provisions Relating to Shelf and Demand Registration
Annex B -- Provisions Relating to Purchaser's Right of First Refusal
Annex C -- Seller Consent Rights
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ANNEX B
RIGHT OF FIRST REFUSAL
If, at any time after the Closing, Seller receives a bona fide offer to
purchase any or all of its shares of Keebler Stock, (the "Offer") from any of
the entities named in a letter signed by the Seller and Purchaser on the date
hereof, or from any of such entity's affiliates or successors (the "Offeror"),
which Seller wishes to accept, Seller shall cause the Offer to be reduced to
writing and shall notify Purchaser in writing (the "Offer Notice") of its wish
to accept the Offer. The Offer Notice will disclose in reasonable detail the
proposed type and number of shares of Keebler Stock (the "Offered Securities")
and the proposed terms and conditions of the transfer (including, in the event
that the consideration to be received by Seller in the Offer includes non-cash
consideration, Seller's good faith reasonable estimate (the "Seller Estimate")
of the cash value of such non-cash consideration), and shall be accompanied by
a true copy of the Offer (which shall identify the Offeror). Seller shall not
be permitted to accept any such Offer unless the right of first refusal
procedures set forth in this Annex B are complied with. Purchaser may elect to
purchase all (but not less than all) of such Offered Securities at the price
and on the terms specified in the Offer Notice by delivering written notice of
such election to Seller as soon as practicable, but in any event within 15 days
after delivery of the Offer Notice (the "Election Period"). In the event that
the terms of any Offer provide for the delivery of non-cash consideration for
the Offered Securities, Purchaser may deliver cash for such Offered Securities
in an amount equal to the value of such non- cash consideration either in
accordance with the Seller Estimate (or such other amount as agreed by Seller
and Purchaser) or, if Purchaser and Seller do not agree, as determined by in
investment banking firm of national reputation selected by mutual agreement of
Purchaser and Seller, provided, that such investment banking firm shall not
have a material direct or indirect financial interest in or other relationship
with any of the parties hereto or their respective subsidiaries or affiliates.
If Purchaser has elected to purchase all the Offered Securities from Seller,
the transfer of such Offered Securities shall be consummated as soon as
practicable after the delivery of the election notice, but in any event within
15 days after the expiration of the Election Period (unless a longer period of
time is necessary to comply with the requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, in which case such longer
period). If Purchaser has not elected to purchase (or has failed within such
15-day period or longer period, if applicable, to purchase after electing to do
so) the Offered Securities being offered, Seller may, within 75 days after the
date of the Offer Notice, transfer all the Offered Securities to the Offeror at
a price no less than the price specified in the Offer Notice and on other terms
no less favorable to Seller than those contained in the Offer. If, at the end
of such 75 day period, Seller has not completed the transfer of such Offered
Securities as aforesaid, all the restrictions or transfer contained in this
Annex B shall again be in effect with respect to such Keebler Stock.
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ANNEX C
SELLER CONSENT RIGHTS
(a) Any amendment to the certificate of incorporation (including any
certificate of designations) or bylaws of Keebler or any other related
corporate actions such as adoption of a "poison pill" or rights plan by
Keebler or electing to opt into the provisions of Section 203 of the DGCL
(or any successor statute adopted subsequent to the date hereof by the
State of Delaware or, if Keebler reincorporates in a jurisdiction other
than the State of Delaware, any similar statute of any such jurisdiction)
which could reasonably be expected to adversely affect (except in
immaterial respects) or is otherwise inconsistent with (except in
immaterial respects), Seller's rights under this Agreement (it being
expressly agreed that (i) customary defensive charter, by-law and related
provisions or plans adopted or approved by the Board of Directors of
Keebler in connection with or after the IPO and (ii) any impediments or
restrictions (other than impediments or restrictions (x) imposed pursuant
to mandatory applicable law or Annex B hereto or (y) which are immaterial)
on (A) Seller's ability to own, vote or dispose of the Seller's Shares or
engage in transactions involving Keebler, or (B) any acquiror or potential
acquiror of Seller's Shares ability to own, vote or dispose of the
Seller's Shares or engage in transactions involving Keebler, would
adversely affect Seller's rights under, and are inconsistent with the
provisions of, this Agreement for purposes of this paragraph (a) of Annex
C, and it being expressly acknowledged that the fact that a proposed
corporate action not of the nature described in (i) or (ii) of this
parenthetical could reasonably by expected to, or does, affect the
economic value of the Keebler Stock would not, by itself, subject such
matter to the Seller consent right described in this paragraph (a)).
(b) Any merger, consolidation or similar business combination involving
Keebler or any sale of substantially all of Keebler's assets or equity, or
any reorganization or recapitalization having similar effect, if such
transaction results in any consideration other than cash being paid to
Keebler shareholders.
(c) Any acquisition or disposition (whether by way of sale, lease, assignment,
transfer or other disposition) of assets (including, without limitation,
primary or secondary stock or assets of Keebler's subsidiaries) involving
aggregate consideration with a value in excess of $250,000,000, other than
the sale of goods in the ordinary course of business.
(d) Termination of the Chief Executive Officer or appointment of a Chief
Executive Officer other than Xxxxxx X. Xxxx.
(e) Issuance or sale by Keebler of any capital stock or stock options or
securities convertible into or exchangeable for capital stock, other than
pursuant to (i) outstanding stock options, (ii) stock options or other
executive compensation permitted to be granted pursuant to the proviso set
forth in paragraph (f) below, (iii) stock option plans or stock option
grants approved by Seller pursuant to Section 13.1 hereof, or (iv) in
connection with acquisitions (subject to paragraph (c) above), provided
that capital stock issued in
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connection with such acquisitions (A) shall not exceed in the aggregate
$50,000,000 in value (which value shall be determined by (i) multiplying
the number of shares of capital stock issued on any one occasion by the
closing trading price of such capital stock on the business day
immediately preceding such issuance and (ii) aggregating the amounts from
each such occasion) from the Closing Date until the period ending during
the twelve (12) months following the termination of the Lockup Period; (B)
shall not exceed in the aggregate $75,000,000 in value (which value shall
be determined by (i) multiplying the number of shares of capital stock
issued on any one occasion by the closing trading price of such capital
stock on the business day immediately preceding such issuance and (ii)
aggregating the amounts from each such occasion) during any consecutive
thirty-six (36) month period following the termination of the Lockup
Period (including amounts issued pursuant to clause (A)) and (C) shall be
issued pursuant to an exemption from registration under the 1933 Act in
an unregistered transaction and shall be subject to contractual resale
restrictions which extend for a period of no less than one year from the
date of issuance.
(f) Grants under currently existing stock option or executive compensation
plans or any other stock option or executive compensation plan that
provides for the issuance of Keebler Stock or Securities convertible into
Keebler Stock; provided that this subparagraph (f) shall not apply to
grants of stock options or executive compensation to the extent that such
grants or executive compensation provide in the aggregate for further
issuances of shares of Keebler Stock after the IPO in an amount equal to
no more than four percent (4%) of the amount of Keebler Stock issued, on a
fully-diluted basis, immediately upon consummation of the Closing of the
IPO.
(g) Any related-party transaction with Keebler, except for transactions in the
ordinary course of business on terms no less favorable to Keebler than
could be obtained in a comparable arm's-length transaction with an
independent third party.
(h) Any contract or agreement to do any of the foregoing.
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ANNEX A
PROVISIONS REGARDING REGISTRATION RIGHTS
This Annex A is part of and is incorporated into that certain Stock
Purchase Agreement (the "SPA"), dated as of _____________, 1998, among Keebler
Foods Company, a Delaware corporation (the "Company"), Artal Luxembourg S.A., a
Luxembourg corporation (together with any of its Affiliates (excluding the
Company) who are beneficial owners of any Seller's Shares "Artal"), and Flowers
Industries, Inc., a Georgia corporation ("Flowers"). Capitalized terms used in
this Annex A and not otherwise defined shall have the meanings ascribed to them
in the SPA. Certain capitalized terms used herein are defined in Section 1.11 of
this Annex A. It is understood and acknowledged that at Closing, the
registration rights set forth in this Annex A shall supersede and replace
entirely those registration rights set forth in Annex A to the Stockholders'
Agreement which is also to be terminated and superseded at Closing, except that
the provisions contained in Annex A thereof which by their terms are applicable
after the consummation of any offering made pursuant thereto shall continue to
remain in full force and effect as provided therein with respect to the Seller's
Shares sold in the IPO.
1.1 Demand Registration Statements.
(a) Filing and Effectiveness. (i) The Company shall, on or after the
Initial Demand Date, upon receipt of a written request (a "Demand Notice") given
by Artal to register Registrable Securities, (A) as promptly as practicable but
in any event within 30 days (the "Filing Date") after receiving such Demand
Notice, file with the Securities and Exchange Commission (the "SEC") a
Registration Statement on Form S-3 (including, if requested by Artal in such
Demand Notice, a Registration Statement filed pursuant to Rule 415 of the 0000
Xxx) or, if the Company is ineligible to file on Form S-3, such other form
available to the Company for the registration of securities (such Registration
Statement, a "Demand Registration Statement"), and include in such Demand
Registration Statement for registration the Registrable Securities requested to
be registered in the Demand Notice for resale in the manner or manners
designated by
32
Artal (including, without limitation, underwritten offerings, block trades,
or market sales) and (B) use its best efforts to have such Demand Registration
Statement declared effective by the SEC as promptly as practicable and within 60
days after the Filing Date (the "Effectiveness Date"); provided, however, that
the Company will not in any event be required to have any such Demand
Registration Statement declared effective by the SEC prior to the Lockup
Expiration Date; and provided further, however, that the Company shall have
the right once during the term of the SPA to impose a single period of four
successive months from the expiration of the effectiveness of any Demand
Registration Statement under which Artal sold shares of Common Stock during
which the Company does not have to commence its response to a Demand Notice.
(b) Number of Demand Registration Statements. Artal shall be entitled to
four (4) Demand Registration Statements, provided that if (i) a Demand
Registration Statement is not declared and maintained effective for the period
required by Section 1.1(d) or if the consummation of the offering of Registrable
Securities pursuant to such Demand Registration is interfered with by any stop
order, injunction or other order or requirement of the SEC or other governmental
agency or court; or (ii) Artal shall be prevented through the operation of
clause first of Section 1.1(e) from registering more than 15% of its Registrable
Securities requested to be registered in a Demand Notice, Artal shall be
entitled to an additional Demand Registration Statement in lieu thereof;
provided however that any such additional Demand Registration Statement filed
pursuant to the provisions of (i) above because effectiveness of a Demand
Registration Statement has not been maintained for the period required by
Section 1.1(d), shall only be required to be kept effective for the length of
time measured by the difference between the required effectiveness period of the
related prior Demand Registration Statement under Section 1.1(d) and the period
such Demand Registration Statement was actually kept effective.
(c) Minimum Amount of Registrable Securities. The Company shall not be
required to effect any Demand Registration unless (i) the aggregate amount of
the class of Registrable Securities requested to be registered by Artal shall be
equal to at least one third (33 1/3%) of the aggregate amount of such
Registrable Securities held by Artal on the date of the Demand Notice and (ii)
the product of the number of shares of Registrable Securities included in such
Demand Notice times the closing price of the Registrable Securities on the New
York Stock Exchange on the trading day immediately preceding the date of
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such Demand Notice shall be not less than $75 million; provided, however,
that, notwithstanding clause (i) and (ii) hereof, a fourth (as such number may
be increased pursuant to Section 1.1(b)) Demand Notice, if any, shall cover all
remaining Registrable Securities then owned by Artal.
(d) Effective Period of Demand Registration Statements. Subject to the
provisions of Section 1.1(g), the Company hereby agrees to use its best efforts
to comply with all necessary provisions of the federal securities laws in order
to keep each Demand Registration Statement effective for a period measured by
the earlier of (i) distribution of all Registrable Securities which are the
subject of such Demand Registration Statement; and (ii) 180 days from its
Effectiveness Date, plus any Additional Registration Period resulting from the
provisions of Section 1.1(g); provided, however, that Artal will be entitled to
make, and the Company will be required to comply with, one (1) request in a
Demand Notice to maintain the effectiveness of the related Demand Registration
Statement (which must be made pursuant to Rule 415) (such Demand Registration
Statement, the "Two-Year Registration Statement") for a period measured by the
earlier of (i) distribution of all Registrable Securities which are the subject
of such Demand Registration Statement; (ii) 24 months from its Effectiveness
Date plus any Additional Registration Period resulting from the provisions of
Section 1.1(g); and (iii) three years from the Lockup Expiration Date.
(e) Priority on Demand Registrations. If the Registrable Securities
registered pursuant to a Demand Registration Statement are to be sold in a firm
commitment underwritten offering and the sole or managing Underwriter, as the
case may be, of a registered underwritten offering filed pursuant to Section
1.1(a) hereof advises the Holders of such securities that, in its opinion, the
amount of securities requested to be included in such registration exceeds the
amount which can be sold in such offering without adversely affecting the
distribution of the securities being offered, then the Company shall register
first, the maximum number of Registrable Securities requested to be included in
such registration by Artal and its Assignees and by Bermore, Ltd. (together with
any Person who becomes the owner of Registrable Securities in accordance with
Sections 4.2(a) (c) or (d) of the Bermore Agreement "Bermore") (to the extent
permitted by, and in accordance with, its incidental registration rights
contained in Annex A to the Bermore Agreement) which, with respect to both
Artal, Bermore and their respective Assignees, in the Underwriter's opinion
can be sold, and second, shares requested to be included by the Management
Stockholders and any other holders of the Company's
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securities pursuant to any incidental registration rights granted after the
date hereof (the Management Stockholders and such other holders together the
"Other Holders"), which, in the Underwriter's opinion can be sold, pro rata
based on the number of securities requested to be included by such stockholders;
provided, however, that the provisions regarding priorities contained in
registration rights agreements to which stockholders other than Artal or Bermore
are parties shall control the relative prioritization as among such
stockholders; and provided further, that (i) application of the preceding
proviso shall not, in any manner, adversely affect or prejudice Artal's or
Bermore's registration priority or other rights in respect of any such Demand
Registration Statement and (ii) in respect of a Demand Registration Statement
under Rule 415, any incidental or piggyback registration rights of any Other
Holders shall apply only to registration of such Other Holders' securities
pursuant to such Demand Registration Statement, and not to mandatory inclusion
of such Other Holders' securities in any particular disposition (whether or not
underwritten) of Seller's shares pursuant to such Demand Registration Statement.
(f) Other Registrations. The Company shall not effect any registration of
its Securities (except on Form X-0, X-0 or any successor forms to such Forms and
only to the extent permitted by the SPA) from the date of a Demand Notice to
register Registrable Securities pursuant to, and in accordance with Section
1.1(a) until the earlier of (i) 90 days after the date on which all securities
covered by such Demand Registration Statement have been sold or (ii) 180 days
after the Effectiveness Date of such Demand Registration Statement (or, in the
case of a Two-Year Registration Statement, if any, the earlier of 24 months
after the Effectiveness Date of such Registration Statement or the third
anniversary of the Lockup Expiration Date), unless the Company shall have first
notified in writing the selling stockholders of the Registrable Securities
covered by such Demand Registration Statement of its intention to do so, and
Artal and, if applicable, the managing Underwriter shall have consented thereto
in writing; provided, however, that in the event of any conflict between the
provisions of clause (ii) of this paragraph (f) and the lock-up provisions
contained in any underwriting agreement which has been entered into in
connection with a registered underwritten offering under the Two Year
Registration Statement which contains a lock-up period which extends beyond 24
months after the Effectiveness Date of such Two Year Registration Statement, the
provisions of such underwriting agreement shall be controlling.
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(g) Postponement and Suspension of Registration. Notwithstanding anything
to the contrary contained herein, the Company may postpone for up to sixty (60)
days the filing or the effectiveness of a Demand Registration Statement or may
suspend the right to transfer securities which are the subject of an effective
Demand Registration Statement if a majority of the Board of Directors, including
the two (2) independent directors, has in good faith determined, and has
delivered to Artal a written certification signed by such majority of the Board
of Directors, including the two (2) independent directors, to the effect that,
(i) the Company is intending to currently consummate, and has a reasonable
likelihood of currently consummating, a material corporate transaction outside
of the ordinary course of business (any such transaction, a "Significant
Corporate Transaction") that would, in the written opinion of outside counsel,
require additional disclosure regarding such Significant Corporate Transaction
in the applicable Registration Statement in order for sales of securities
pursuant to such Registration Statement to not be in violation of applicable
securities laws, (ii) failure to engage in such Significant Corporate
Transaction at such time would be materially adverse to the Company and (iii) no
disclosure could be made in the applicable Registration Statement regarding such
Significant Corporate Transaction that would not be materially adverse to the
Company; provided, however, that a period representing two times the period of
any such postponement or suspension (the "Additional Registration Period") shall
be added to the effectiveness periods set forth under Section 1.1(d) and
provided further, however, that no such postponement or suspension shall be
imposed unless at least four (4) months have expired since the termination of
any prior such postponement or suspension pursuant to this Section 1.1(g).
(h) In order to assist the Company and Flowers in complying with any
trading restrictions or reporting obligations with respect to Keebler Stock
promulgated under the Exchange Act including, but not limited to Regulation M or
any successor provision, Artal, the Company and Flowers shall cooperate in all
reasonable respects, by communicating Flowers' and Keebler's intentions with
respect to open market repurchases of Keebler Stock and Artal's intentions with
respect to sales of Artal Registrable Securities, so long as the fulfillment of
such obligation does not in any way interfere with Artal's ability to dispose of
Artal Registrable Securities in any such transaction, including, but not limited
to, (i) during the period that any Demand Registration Statement covering shares
of Keebler Stock
5
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held by Artal is effective, Artal agrees to use its reasonable
efforts to provide at least three business days prior written notice to Keebler
and Flowers of any proposed sale of Artal Registrable Securities pursuant to any
such Registration Statement, provided, however, that notwithstanding anything to
the contrary in this clause (i), Artal shall not be prevented from engaging in
or be delayed with respect to any such sale of Artal Registrable Securities if
such notice has not been given and (ii) Artal shall notify Keebler and Flowers
promptly upon the completion of any distribution of Artal Registrable Securities
pursuant to such Registration Statement.
(i) The obligations of the Company under Section 1.1(a) shall expire on the
earlier of (i) January 26, 2006 and (ii) that point in time when Artal and its
Assignees shall cease to own any Artal Registrable Securities.
1.2 Incidental Registrations.
(a) "Piggy-back" Registrations. If the Company at any time proposes to
register (including a registration effected by the Company for shareholders
other than Artal and its Assignees) any Common Stock under the Securities Act
(other than a registration on Form X-0, X-0 or any successor or similar forms)
for public offerings for cash, whether or not for its own account, it will, each
such time, give prompt written notice to Artal and its Assignees, Bermore (to
the extent permitted by and in accordance with its incidental registration
rights contained in Annex A to the Bermore Agreement) and all Other Holders of
Registrable Securities with then existing rights of registration of its
intention to do so and of such stockholders' rights under this Section 1.2, at
least 30 days prior to the anticipated date of the initial filing of the
registration statement relating to such registration. Such notice shall offer
all such stockholders the opportunity to include in such registration statement
such number of Registrable Securities as each such stockholder may request. Upon
the written request of any such stockholder made within 20 days after the
receipt of the Company's notice (which request shall specify the number of
Registrable Securities intended to be disposed of by such stockholder), the
Company shall use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by such stockholders and to permit the disposition of the
Registrable Securities so to be registered, provided that (i) if such
registration involves an underwritten offering, all stockholders of Registrable
Securities requesting to be included in the Company's registration must sell
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their Registrable Securities to the underwriters selected by the Company on the
same terms and conditions as apply to the Company or a demanding shareholder
pursuant to a demand registration right granted after the date hereof, as the
case may be, (except that indemnification obligations of the holders shall be
limited to those obligations set forth in 1.5(b)); (ii) if, at any time after
giving written notice of its intention to register any securities pursuant to
this Section 1.2 and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason not to register such securities, the Company shall give written notice to
all stockholders of Registrable Securities and, thereupon, shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration; and (iii) any stockholder that owns less than 3% of the
outstanding class of any securities to be registered in accordance with this
Section, if such stockholder requests to include in such registration any of
such stockholder's shares of such class, shall request to include in such
registration all of such stockholder's shares of such class. A registration
effected pursuant to this Section 1.2(a) is referred to herein as an "Incidental
Registration."
(b) Priority in Incidental Registrations. If a registration pursuant to
this Section 1.2 involves an underwritten offering and the managing underwriter
advises the Company that, in its opinion, the number of shares of Common Stock
(including all Registrable Securities) which the Company, Artal and its
Assignees and any other stockholders propose to include in such registration
exceeds the largest number of shares which can be sold without having an adverse
effect on such offering, including the price at which such shares can be sold,
the Company will include in such registration up to such maximum number of
shares (i) first, all the shares the Company initially proposes to sell for its
own account, or for the account of a demanding shareholder, pursuant to a demand
registration right granted after the date hereof as the case may be, and (ii)
second, to the extent that the number of shares referred to in clause (i) is
less than the number of shares which the Company has been advised can be sold in
such offering without having the adverse effect referred to above, all
Registrable Securities requested to be included in such registration by Artal
and its Assignees pursuant to Section 1.2(a), Bermore (to the extent permitted
by and accordance with its incidental registration rights contained in Annex A
to the Bermore Agreement), or by any other stockholder of securities entitled to
elect and electing to register securities pursuant to any other registration
rights
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agreement to which the Company is a party, provided that if the number of
Registrable Securities requested to be included in such registration by Artal,
its Assignees, Bermore and such other stockholders, together with the number of
securities which the Company proposes to sell for its own account to be included
in such registration pursuant to clause (i) of this Section exceeds the number
which the Company has been advised can be sold in such offering without having
the adverse effect referred to above, the number of such Registrable Securities
requested to be included in such registration shall be limited to such extent
and shall be allocated pro rata first among Artal and its Assignees requesting
such registration pursuant to Section 1.2(a) and Bermore (to the extent
permitted by and in accordance with its incidental registration rights contained
in Annex A to the Bermore Agreement) and second among all Other Holders on the
basis of the relative number of securities requested to be included in such
registration, and provided further, however, that the provisions regarding
priorities contained in registration rights agreements to which stockholders
other than Artal and its Assignees or Bermore are parties shall control the
relative priorities among such other stockholders; provided further, that
application of the preceding proviso shall not, in any manner, adversely affect
or prejudice Artal's or Bermore's registration priority or other rights in
respect of any such Registration Statement.
(c) Artal and its Assignees shall be entitled to have their Registrable
Securities included in all registrations covered by this Section 1.2 until the
earlier of (i) January 26, 2006 and (ii) that point in time when Artal and its
Assignees shall cease to own any Artal Registrable Shares.
1.3 Registration Procedures. In connection with the registration of any
Registrable Securities, the Company shall effect such registrations to permit
the sale of such Registrable Securities in accordance with the intended method
or methods of disposition thereof (including, without limitation, block trades,
market sales or underwritten offerings), and pursuant thereto the Company shall
as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or Registration
Statements on Form S-3 (including, if requested by a demanding holder, a
Registration Statement under Rule 415 of the 0000 Xxx) or such other form
available for the sale of the Registrable Securities by the holders thereof in
accordance with the intended method of distribution thereof, and use its best
efforts to cause each such Registration Statement to become effective and remain
effective as provided herein;
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provided, however, that before filing any Registration Statement or
Prospectus or any amendments or supplements thereto (not including documents
that would be incorporated or deemed to be incorporated therein by reference),
the Company shall afford the holders of the Registrable Securities covered by
such Registration Statement, their Special Counsel, if any, and the managing or
sole Underwriter, if any, an opportunity to review copies of all such documents
proposed to be filed. The Company shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto in respect of which Artal
and its Assignees have a right to review prior to the filing of such document,
if Artal (or, if Artal has elected not to include any of its Registrable
Securities in such Registration Statement, the holders of a majority of the
Registrable Securities covered by such Registration Statement, Special Counsel,
if any, or the managing Underwriter, if any), shall reasonably object, in
writing, on a timely basis.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the effectiveness period
provided herein; cause the related Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to it with respect to
the disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented.
(c) Notify Artal and its Assignees, Special Counsel, if any, and the
managing Underwriters, if any, promptly (but in any event within 5 business
days), and confirm such notice in writing, (i) when a Registration Statement,
Prospectus or prospectus supplement or post-effective amendment has been filed,
and, with respect to a Registration Statement or any post-effective amendment,
when the same has become effective (including in such notice a written statement
that any such stockholder may, upon request, obtain, without charge, one
conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules and all documents incorporated or
deemed to be incorporated by reference and exhibits), (ii) of the issuance by
the SEC of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that purpose,
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iii) if at any time when a prospectus is required by the Securities Act to
be delivered in connection with sales of the Registrable Securities the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 1.3(k) below
cease to be true and correct in all material respects, (iv) of the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement or any
of the Registrable Securities for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event that makes any statement made in such Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in such Registration Statement, Prospectus or
documents so that, in the case of such Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (vi) of the
Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) Use its best efforts (i) to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, and, (ii) if any such order is issued, to obtain the
withdrawal of any such order at the earliest possible moment.
(e) If requested by the managing or sole Underwriter, if any, or Artal (or,
if Artal has elected not to include any of its Registrable Securities in such
Registration Statement, the holders of a majority of the Registrable Securities
covered by such Registration Statement), (i) promptly incorporate in a
Registration Statement, Prospectus, prospectus supplement or post-effective
amendment such information as the managing or sole Underwriter, if any, or Artal
or such other stockholders reasonably request to be included therein to comply
with applicable law, (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as
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practicable after the Company has received notification of the matters to
be incorporated in such Registration Statement, Prospectus, prospectus
supplement or post-effective amendment, and (iii) supplement or make amendments
to such Registration Statement; provided, however, that the Company shall not be
required to take any actions under this Section 1.3(e) that are not, in the
opinion of counsel for the Company, in compliance with applicable law.
(f) Furnish to each selling stockholder of Registrable Securities who so
requests and to Special Counsel and each managing Underwriter, if any, without
charge, one conformed copy of the Registration Statement or Statements and each
post-effective amendment thereto, including financial statements and schedules,
all documents incorporated or deemed to be incorporated therein by reference and
all exhibits.
(g) Deliver to each selling stockholder of Registrable Securities, Special
Counsel, and the Underwriters, if any, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request; and, the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling stockholders of Registrable Securities
and the Underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Securities, to use its best
efforts to register or qualify, and cooperate with the selling stockholders of
Registrable Securities and the Underwriters or sales agents, if any, in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or "blue sky" laws of such jurisdictions within the United
States as any such selling stockholder or the managing Underwriters or sales
agents, if any, reasonably request in writing, provided that where Registrable
Securities are offered other than through an underwritten offering, the Company
agrees to cause its counsel to perform "blue sky" investigations and file
registrations and qualifications required to be filed pursuant to this Section
1.3(h); use its best efforts to keep each such registration or qualification (or
exemption therefrom) effective during the period during which the related
Registration Statement is required to be kept effective hereby and use its best
efforts to
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do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable Securities covered by
the applicable Registration Statement; provided, however, that the Company will
not be required to (A) qualify generally to do business in any jurisdiction
where it is not then so qualified or (B) take any action that would subject it
to general service of process in any such jurisdiction where it is not then so
subject.
(i) Cooperate with the selling stockholders of Registrable Securities and
the managing or sole Underwriter, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold,
which certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company; and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing or sole Underwriter, if any, or such selling stockholders may
reasonably request at least two business days prior to any sale of Registrable
Securities.
(j) Upon the occurrence of any event contemplated by clause (v) or (vi) of
Section 1.3(c) above, as promptly as practicable after and in any event within
ten business days of the Company's having become aware of such event prepare and
file a supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(k) If the offering is to be underwritten, enter into an underwriting
agreement in form, scope and substance as is customary in underwritten offerings
and take all such other actions as are reasonably requested by the managing or
sole Underwriter in order to expedite or facilitate the registration or the
disposition of such Registrable Securities, and in such connection: (i) make
such representations and warranties to the Underwriters, with respect to the
business of the Company and its subsidiaries, and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, in form, substance and scope as
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are customarily made by issuers to Underwriters in underwritten offerings,
and confirm the same if and when requested; (ii) obtain opinions of counsel to
the Company and updates thereof (which counsel and opinions shall be reasonably
satisfactory (in form, scope and substance) to the managing or sole
Underwriters), addressed to the Underwriters covering the matters customarily
covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by the Underwriters; (iii) obtain "cold comfort"
letters and updates thereof from the independent certified public accountants of
the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each of the
Underwriters, such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection with
underwritten offerings; (iv) cause the Company's management to be made available
for, and assist in, the marketing and disposition of such Registrable Securities
in the manner and to the extent reasonably requested by the Underwriters,
including, without limitation, participation by management in customary road
shows, investor conferences and other similar presentations; and (v) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in Section 1.5
hereof (or such other provisions and procedures acceptable to stockholders
holding a majority of the Registrable Securities covered by such Registration
Statement) with respect to all parties to be indemnified pursuant to said
Section. The above shall be done as, when and to the extent required under each
underwriting agreement.
(l) Use its best efforts to cause the Registrable Securities covered by a
Registration Statement to be rated with the appropriate rating agencies, if
applicable, if so requested by Artal (or, if Artal and its Assignees have
elected not to include any of their Registrable Securities in such Registration
Statement, the holders of a majority of the Registrable Securitiescovered by
such Registration Statement) or the managing or sole Underwriter, if any.
(m) Use its best efforts to cause all Registrable Securities covered by
such Registration Statement to be (i) listed on each securities exchange on
which securities issued by the Company are then listed, or (ii) authorized to be
quoted on the NASDAQ or the National Market System of the NASDAQ if the
securities so qualify, in each case, if requested by Artal (or,
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if Artal and its Assignees have elected not to include any of their
Registrable Securities in such Registration Statement, the holders of a majority
of the Registrable Securities covered by such Registration Statement) or the
managing or sole Underwriter, if any.
(n) (i) Make available for inspection by a representative of the selling
stockholders of Registrable Securities being sold, any Underwriter participating
in any such disposition of Registrable Securities, if any, and any accountant
retained by such representative of such stockholders or Underwriter or Special
Counsel, if any (collectively, the "Representatives"), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors and employees of the Company and
its subsidiaries to supply all information in each case reasonably requested by
any such Representative in connection with such Registration Statement;
provided, however, that any information that is designated in writing by the
Company, in good faith, as confidential at the time of delivery of such
information, shall be kept confidential by such Representative unless (i)
disclosure of such information is required by court or administrative order,
(ii) disclosure of such information, in the opinion of counsel to such
Representative, is necessary to avoid or correct a misstatement or omission of a
material fact in the Registration Statement, Prospectus or any supplement or
post-effective amendment thereto or disclosure is otherwise required by law, or
(iii) such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by such Representative; without
limiting the foregoing, no such information shall be used by such Representative
as the basis for any market transactions in securities of the Company or its
subsidiaries in violation of law and (ii) cause the Company's management to be
made available, upon reasonable request and under circumstances, including the
frequency of such requests and the number of shares involved, that do not unduly
impose on such management's ability to conduct the business of the Company, for
presentations or discussions with (A) agents representing Artal and its
Assignees in connection with proposed sales of Seller's Shares by any means
other than an underwritten offering (including, without limitation, by means of
block trades; and (B) prospective purchasers of such Seller's Shares.
(o) Comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders
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earnings statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing atthe end of any fiscal quarter in which Registrable
Securities are sold to Underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to Underwriters in xxxxxx offering,
commencing on the first day of the first fiscal quarter of the Company after the
Effectiveness Date of a Registration Statement, which statements shall cover
said 12-month periods.
The Company may require each seller of Registrable Securities as to which
any registration is being effected hereunder to furnish to the Company such
information regarding such seller and the distribution of such Registrable
Securities as the Company may, from time to time, reasonably request in writing,
provided that such information shall be used only in connection with such
registration. The Company may exclude from such registration the Registrable
Securities of any seller who unreasonably fails to furnish such information
promptly after receiving such request.
Artal and its Assignees hereby agree that upon receipt of any notice from
the Company of the happening of any event of the kind described in clause (ii),
(iv) or (v) (it being understood that, if any event of the kind described in
clause (v) of Section 1.3(c) also would constitute a Significant Corporate
Transaction, so long as the Company has complied with the requirements of
Section 1.1(g)) of Section 1.3(c), such stockholder will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement or Prospectus until such stockholder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 1.3(j), or, if
earlier, until it is advised in writing (the "Advice") by the Company that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event the Company shall give any such
notice at any time during the effectiveness period of a Registration Statement,
the effectiveness period shall be extended by the number of days during such
periods from and including the date of the giving of such notice (the "Notice
Date") to and including the date when each seller of Registrable Securities
covered by such Registration Statement shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 1.3(j) or (y) the
Advice, except that in
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respect of any event of the kind described in clause (v) of Section 1.3(c)
which is a Significant Corporate Transaction, the effectiveness period of any
such Registration Statement shall be extended for the Additional Registration
Period as determined under Section 1.1(g).
1.4 Registration Expenses.
(a) All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by the Company whether or not any
Registration Statement is filed or becomes effective, including, without
limitation, (i) all registration and filing fees (including, without limitation,
(A) fees with respect to filings required to be made with the National
Association of Securities Dealers, Inc. in connection with an underwritten
offering and (B) fees and expenses of compliance with state securities or "blue
sky" laws (including, without limitation, reasonable fees and disbursements of
counsel for the Underwriters or counsel for the Company, in connection with
"blue sky" qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as provided in Section 1.3(h), in the case of Registrable
Securities), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with The Depository Trust Company and of printing Prospectuses if the printing
of Prospectuses is requested by the managing or sole Underwriter, if any, or by
the holders of a majority of the Registrable Securities included in any
Registration Statement), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company, (v) fees and disbursements of
all independent certified public accountants referred to in Section 1.3(k)
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (vi) rating
agency fees, (vii) Securities Act liability insurance, if the Company so desires
such insurance, (viii) the expense of any annual audit and (ix) the fees and
expenses incurred in connection with the listing of the securities to be
registered on any securities exchange.
(b) Without limiting Section 1.4(a), in connection with any Registration
Statement relating to Artal Registrable Securities, Artal and its Assignees
shall bear no fees and expenses of any kind other than the discounts,
commissions, or fees of Underwriters, selling brokers, dealer managers or
similar securities industry professionals relating to the distribution of
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such Registrable Securities, the fees and disbursements of Special Counsel
or such other counsel chosen by Artal and its Assignees and actual out-of-pocket
expenses incurred by Artal and its Assignees in connection with the Registration
Statement.
1.5 Indemnification, Contribution.
(a) Indemnification by the Company. The Company shall indemnify and hold
harmless, to the full extent permitted by law, each of Artal and its Assignees,
the officers, directors and agents and employees of each of them, each Person
who controls each such stockholder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act), the officers, directors,
agents and employees of each such controlling person and any financial or
investment adviser (each, an "Indemnified Party"), from and against any and all
losses, claims, damages, liabilities, actions or proceedings (whether commenced
or threatened), reasonable costs (including, without limitation, reasonable
costs of preparation and reasonable attorneys, fees) and reasonable expenses
(including reasonable expenses of investigation) (collectively, "Losses"), as
incurred, arising out of or based upon (i) any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, Prospectus
or form of prospectus or in any amendment or supplements thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, except to the extent that the same arise
out of or are based upon information furnished in writing to the Company by such
Indemnified Party or the related holder of Registrable Securities expressly for
use therein or (ii) any violation by the Company of any federal, state or common
law rule or regulation applicable to the Company and relating to action required
of or inaction by the Company in connection with any such registration;
provided, however, that the Company shall not be liable to any Indemnified Party
to the extent that any such Losses arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus if (x) such Indemnified Party or the related holder
of Registrable Securities failed to send or deliver (if it had a duty to do so)
a copy of the Prospectus with or prior to the delivery of written confirmation
of the sale by such Indemnified Party or the related holder of Registrable
Securities to the Person asserting the claim from which such Losses arise, (y)
the Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, and (z) the Company has complied
with its obligations under Section
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1.3(c). Such indemnity and reimbursement of costs and expenses shall remain
in full force and effect regardless of any investigation made by or on behalf of
such Indemnified Party.
(b) Indemnification by Artal and its Assignees. In connection with any
Registration Statement in which Artal or its Assignees are participating, an
authorized officer of such selling stockholder of Registrable Securities shall
furnish to the Company in writing such information as the Company reasonably
requests for use in connection with any Registration Statement or Prospectus and
agrees, severally and not jointly, to indemnify, to the full extent permitted by
law, the Company and its respective directors, officers, agents and employees
each Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers,
agents or employees of such controlling persons, from and against all Losses
arising out of or based upon any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement, the Prospectus or any
amendment or supplement thereto or arising out of or based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading (in the case of any
Prospectus or form of Prospectus, in light of the circumstances in which they
were made), in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance on and in conformity with written information about Artal and its
Assignees furnished by such stockholder to the Company expressly for use in such
Registration Statement or Prospectus provided, however, that such selling
stockholder of Registrable Securities shall not be liable in any such case to
the extent that such stockholder has furnished in writing to the Company within
a reasonable period of time prior to the filing of any such, Registration
Statement or Prospectus or amendment or supplement thereto information expressly
for use in such Registration Statement or Prospectus or any amendment or
supplement thereto which corrected or made not misleading, information
previously furnished to the Company, and the Company failed to include such
information therein. In no event shall the liability of Artal or its Assignees
be greater in amount than the dollar amount of the proceeds (net of payment of
all expenses) received by such stockholder upon the sale of the Registrable
Securities giving rise to such indemnification obligation. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Indemnified Party.
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(c) Conduct of Indemnification Proceedings. If any Person shall be entitled
to indemnity hereunder (an "indemnified party"), such indemnified party shall
give prompt notice to the party or parties from which such indemnity is sought
(the "indemnifying parties") of the commencement of any action, suit, proceeding
or investigation or written threat thereof (a "Proceeding") with respect to
which such indemnified party seeks indemnification or contribution pursuant
hereto; provided, however, that the failure to so notify the indemnifying
parties shall not relieve the indemnifying parties from any obligation or
liability except to the extent that the indemnifying parties have been
prejudiced by such failure. The indemnifying parties shall have the right,
exercisable by giving written notice to an indemnified party promptly after the
receipt of written notice from such indemnified party of such Proceeding, to
assume, at the indemnifying parties' expense, the defense of any such
Proceeding, with counsel reasonably satisfactory to such indemnified party;
provided, however, that an indemnified party or parties (if more than one such
indemnified party is named in any Proceeding) shall have the right to employ
separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless: (1) the indemnifying parties agree to
pay such fees and expenses; (2) the indemnifying parties fail promptly to assume
the defense of such Proceeding or fail to employ counsel reasonably satisfactory
to such indemnified party or parties; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such indemnified party
or parties and the indemnifying parties or an affiliate of the indemnifying
parties or such indemnified parties, and there may be one or more defenses
available to such indemnified party or parties that are different from or
additional to those available to the indemnifying, parties, in which case, if
such indemnified party or parties notifies the indemnifying parties in writing
that it elects to employ separate counsel at the expense of the indemnifying
parties, the indemnifying parties shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the indemnifying parties, it
being understood, however, that, unless there exists a conflict among
indemnified parties, the indemnifying parties shall not, in connection with any
one such Proceeding but substantially similar or related Proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
together with appropriate local counsel) at any time for such indemnified party
or parties. Whether or not such defense is assumed by the
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indemnifying parties, such indemnifying parties or indemnified party or
parties will not be subject to any liability for any settlement made without its
or their consent (but such consent will not be unreasonably withheld). The
indemnifying parties shall not consent to entry of any judgment or enter into
any settlement which (i) provides for other than monetary damages without the
consent of the indemnified party or parties (which consent shall not be
unreasonably withheld or delayed) or (ii) that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party or parties of a release, in form and substance satisfactory to
the indemnified party or parties, from all liability in respect of such
Proceeding for which such indemnified party would be entitled to indemnification
hereunder.
(d) Contribution. If the indemnification provided for in this Section 1.5
is unavailable to an indemnified party or is insufficient to hold such
indemnified party harmless for any Losses in respect of which this Section 1.5
would otherwise apply by its terms, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the amount paid or payable by such indemnified party
as a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying party, on the one hand,
and indemnified party, on the other hand, shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue-statement of a material fact or omission or alleged omission to
state a material fact, has been taken by or relates to information supplied by,
such indemnifying party or indemnified party, and the parties relative intent,
knowledge, access to information and opportunity to correct or prevent any such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include any legal or other fees or expenses
incurred by such party in connection with any Proceeding, to the extent such
party would have been indemnified for such expenses if the indemnification
provided for in Section 1.5(a) or 1.5(b) was available to such party.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 1.5(d) were determined by pro rata
allocation or by any other method of
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allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provision of this Section 1.5(d), an indemnifying party that is a selling
stockholder of Registrable Securities shall not be required to contribute any
amount in excess of the amount by which the net proceeds received by such
indemnifying party exceeds the amount of any damages that such indemnifying
party has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
1.6 Rules 144 and 144A. The Company shall file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations promulgated thereunder (or, if the Company is not required to file
such reports, it will, upon the request of Artal and its Affiliates make
publicly available other information so long as such information is necessary to
permit sales under Rules 144 and 144A), and will take such further action as any
such stockholder may reasonably request, all to the extent required from time to
time to enable such stockholder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 and Rule 144A. Upon the request of any such stockholder,
the Company shall deliver to such stockholder a written statement as to whether
it has complied with such requirements.
1.7 Underwritten Registrations. As to Registrable Securities covered by any
underwritten offering under a Demand Registration Statement, the investment
banker or investment bankers and manager or managers that will manage the
offering will be selected by Artal (or if Artal and its Assignees have elected
not to include any of their Securities in such Registration Statement, the
holders of a majority of the Registrable Securities covered by such Registration
Statement) which selection will be subject to the consent of Flowers (which
consent will not be unreasonably withheld or delayed). No selling stockholder of
Registrable Securities may participate in any underwritten registration
hereunder unless such stockholder (a) agrees to sell such stockholder's
Registrable Securities on the basis provided in any underwritten arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other
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documents required under the terms of such underwriting arrangements
(except that indemnification obligations of such stockholders shall be limited
to those obligations set forth in Section 1.5(b).
1.8 Assignment. The rights and obligations of Artal hereunder (except for
Artal's rights to request the Two-Year Registration Statement) may be assigned
to a purchaser of Registrable Securities from Artal in a private, unregistered
transaction (an "Assignee") but only subject to the satisfaction of all of the
following conditions: (i) any such Assignee must agree in writing to be bound by
all of the provisions of this Agreement as though such Assignee had been an
original signatory hereof; (ii) in no event shall the Company be required to
honor requests for more than four (4) Demand Registration Statements, including
the Two-Year Registration Statement, and such Demand Registrations shall be in
conformity in all respects with the provisions of this Agreement; and (iii) at
the time such Assignee delivers a Demand Notice, the product of the number of
shares which are being requested to be included in such registration times the
closing price of the Registrable Securities on the New York Stock Exchange or
such other exchange on which such shares are then listed on the trading day
immediately preceding the date of such Demand Notice shall be not less than $75
million.
1.9 Other Registration Rights. The Company shall not grant any registration
rights after the date hereof (i) that are superior to the rights granted to
Artal hereunder (including, without limitation, Artal's piggyback registration
rights hereunder) or (ii) which would give another party the right to include
shares of Common Stock in any Demand Registration Statement which is being filed
pursuant to this Agreement (except where such right to include shares in a
Demand Registration Statement is subordinate to the right of Artal and its
Assignees to include shares in such Demand Registration Statement with respect
to prioritization in the event of any underwriter cutback) or (iii) which would
give any party demand registration rights exercisable at any time prior to the
expiration of Artal's demand registration rights hereunder or (iv) which are
superior to the piggyback registration rights granted to Bermore pursuant to the
Bermore Agreement.
1.10 Regulatory Filings. The Company will, to the extent reasonably
requested by Artal, provide information to Artal and otherwise assist Artal in
connection with all filings with the SEC or the New York Stock Exchange required
to be made by Artal or its Affiliates in respect of the Company, including,
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without limitation, filings on Forms 3, 4 and 5 or Schedule 13D under the
Exchange Act, with the understanding that the ultimate responsibility for making
such filings and for the accuracy of such filings remains with Artal or its
Affiliates.
1.11 Definitions. Capitalized terms used in this Annex A shall have the
meanings set forth below:
"Additional Registration Period" shall have the meaning specified in
Section 1.1(g).
"Advice" shall have the meaning specified in Section 1.3.(o).
"Affiliate" means any Person which, directly or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control
with, another Person. The term "control" includes, without limitation, the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Artal Registrable Securities" means, collectively, (a) the Securities
owned of record by Artal on the date hereof, and (b) all Securities issued with
respect to the Securities described in clause (a) above by way of any
recapitalization, stock split or other similar transaction.
"Assignee" shall have the meaning specified in Section 1.8.
"Demand Notice" shall have the meaning specified in Section 1.1(a).
"Demand Registration Statement" shall have the meaning specified in Section
1.1(a).
"Effectiveness Date" shall have the meaning specified in Section 1.1(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Filing Date" shall have the meaning specified in Section 1.1(a).
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"Indemnified Party" shall have the meaning specified in Section 1.5(a).
"Initial Demand Date" means the date that is 75 days prior to the Lockup
Expiration Date.
"Lockup Expiration Date" means the date on which the Lockup Period expires.
"Losses" shall have the meaning specified in Section 1.5(a).
"Management Stockholders" shall mean those members of management of the
Keebler Corporation who have entered into
Management Stockholder Agreements with INFLO Holdings Corporation prior to
the date hereof.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System.
"Notice Date" shall have the meaning specified in Section 1.3(o).
"Other Holders" shall mean the Management Stockholders and any stockholders
of the Company with registration rights granted after the date hereof.
"Person" shall mean an individual, a partnership, a joint venture, a
corporation, an association, a joint stock company, a limited liability company,
a trust, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"Proceeding" shall have the meaning specified in Section 1.5(c).
"Registrable Securities" means the Artal Registrable Securities, and any
securities of the Company owned by Bermore or any Other Holder.
"Registration Statement" means any registration statement of the Company
under which any of the Registrable Securities are included therein pursuant to
the provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits, and all material incorporated
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by reference or deemed to be incorporated by reference in such registration
statement.
"Representative" has the meaning set forth in Section 1.3(n).
"Rule 144" means Rule 144 promulgated by the SEC under the Securities Act
as such rule may be amended from time to time, or any similar rule then in
force.
"Rule 144A" means Rule 144A under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
"Rule 415" means Rule 415 under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
"SEC" means the Securities and Exchange Commission.
"Special Counsel" means a single law firm selected by Artal and its
Assignees in connection with any Registration Statement.
"Underwriter" has the meaning set forth in Section 2(11) of the Securities
Act.
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