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EXHIBIT 10.9
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of September
2, 1997, is between AUTHENTIC SPECIALTY FOODS, INC., a Texas corporation (the
"Company"), and XXXXXX X. XXXXXXXX ("Holder").
W I T N E S S E T H:
WHEREAS, the Company, Holder, TSG2 L.P., TSG2 Management, L.L.C. and Xxxxx
X. Xxxxxx have entered into a Contribution and Exchange Agreement dated June 20,
1997 (the "Contribution and Exchange Agreement"), pursuant to which, among other
things, the Company has agreed to issue a number of shares of its Common Stock,
par value $1.00 per share ("Common Stock"), determined in the manner set forth
in the Contribution and Exchange Agreement and subject to the terms and
conditions set forth therein; and
WHEREAS, the parties have agreed to enter into this Agreement in order to
satisfy one of the conditions to obligations of the parties to consummate the
transactions contemplated by the Contribution and Exchange Agreement; and
WHEREAS, the Company is prepared to consummate its initial public offering
(the "Initial Public Offering") of shares of Common Stock; and
WHEREAS, the consummation of the Initial Public Offering is a condition to
the obligations of the parties to consummate the transactions contemplated by
the Contribution and Exchange Agreement; and
WHEREAS, after the Initial Public Offering, each Holder will own a
substantial number of shares of Common Stock; and
WHEREAS, the Common Stock will be registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
WHEREAS, under the provisions of the Securities Act of 1933, as amended
(the "Securities Act") and the General Rules and Regulations promulgated by the
Securities and Exchange Commission (the "SEC") thereunder, Holder is or may be
limited in the manner of selling the shares of Common Stock owned by Holder,
absent registration under the Securities Act of the sale of such shares or the
availability of another exemption from the registration requirements of the
Securities Act.
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto hereby agree as follows:
1. Demand Registration.
(A) Request for Registration. Holder agrees to execute on an expedited
basis any lockup agreements reasonably requested by the managing
underwriter for the Initial Public Offering; provided, however, that the
lockup period shall not exceed 180 days after the consummation of the
Initial Public Offering. Without limiting the generality of the foregoing,
Holder agrees, for the benefit of the Company and the underwriters for the
Initial Public Offering, that no Holder or any affiliate or family member
thereof will directly or indirectly sell, transfer or otherwise dispose of
any shares of Restricted Stock (as defined below) prior to the expiration
of 180 days after the consummation of the Initial Public Offering (such
expiration date shall be referred to herein as the "Lockup Expiration
Date"). As used in this Agreement, "Restricted Stock" shall mean all shares
of Common Stock issued to Holder pursuant to the Contribution and Exchange
Agreement and owned by any Holder after the Initial Public Offering,
together with any securities issued or issuable with respect to any such
Common Stock by way of stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization, or otherwise. As to any particular shares of Restricted
Stock, such securities shall cease to be Restricted Stock when (a) a
registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (b)
such securities may be distributed to the public pursuant to Rule 144 (or
any successor provision) under the Securities Act (even though not actually
sold pursuant thereto), (c) such securities shall have been otherwise
transferred, new certificates representing such securities not bearing a
legend restricting transfer shall have been delivered by the Company and
subsequent disposition of such securities (without any volume limitations)
shall not require registration or qualification of such securities under
the Securities Act or any similar state law then in force, (d) such
securities shall have ceased to be outstanding, or (e) the Holder or
Holders thereof shall agree in writing to terminate this Agreement (each
Holder and any permitted assignee of such Holder's rights and duties
hereunder are referred to herein as the "Holders" or individually as a
"Holder"). Subject to the conditions and limitations set forth in Section 4
of this Agreement, at any time after the Lockup Expiration Date, one or
more Holders may make a written request for registration under the
Securities Act of all or part of its or their Restricted Stock pursuant to
this Section 1 (a "Demand Registration"), provided that the Minimum Number
(as hereinafter defined) of shares of Restricted Stock shall be registered
in such offering. The term "Minimum Number" shall mean the lesser of (i)
50% of the initial number of shares of Restricted Stock issued pursuant to
the Contribution and Exchange Agreement (as adjusted for any stock splits,
stock combinations, stock dividends or recapitalizations that are effected
after the Initial Public Offering) or (ii) 100% of the number of shares of
Restricted Stock then beneficially owned by all of the Holders in the
aggregate. The Holder making such a request for a Demand Registration is
sometimes herein referred to as the "Designating Holder." Such request will
specify the aggregate number of shares of Restricted Stock proposed to be
sold and will also specify the intended method of
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disposition thereof. The Holders shall have the right to two Demand
Registrations in the aggregate; provided, however, that the Holders may not
elect more than one Demand Registration in any 18 month period. Within ten
days after receipt of such request, the Company will give written notice of
such registration request to all other Holders of Restricted Stock and
include, subject to the provisions of Section 1(B) hereof, in such
registration all Restricted Stock with regard to which the Company has
received written requests for inclusion therein within 15 business days
after the receipt by the applicable Holders of the Company's notice. Each
such request will also specify the aggregate number of shares of Restricted
Stock to be registered and the intended method of disposition thereof. The
Company may delay for a maximum of 90 days the filing of a registration
statement upon request from a Holder pursuant to this Section 1 when, it
its good faith judgment the Company reasonably believes that the filing
thereof at the time requested, or the offering of securities pursuant
thereto, would materially and adversely affect a pending or proposed public
offering of securities of the Company, an acquisition, merger,
recapitalization, consolidation, reorganization or similar transaction
relating to the Company or negotiations, discussions or pending proposals
with respect thereto or require premature disclosure of information not
otherwise required to be disclosed to the potential detriment of the
Company.
(B) Priority on Demand Registrations. If a registration pursuant to
this Section 1 involves an underwritten offering and the managing
underwriter shall advise the Company that, in its judgment, the number of
shares proposed to be included in such offering should be limited due to
market conditions, then the Company will promptly so advise each Holder of
Restricted Stock that has requested registration, and the shares of the
Company to be included in the offering, if any, shall first be excluded
from such offering to the extent necessary to meet such limitation; and if
further exclusions are necessary to meet such limitation, the securities
shall be excluded pro rata, based on the respective numbers of shares of
Common Stock and/or Warrants as to which registration shall have been
requested by such Holders and any "Holder," (as defined in the Registration
Rights Agreement of even date herewith by and among the Company and Shansby
Partners, L.L.C., TSG2 L.P. and Xxxxx X. Xxxxxx (the "Xxxxxxx Registration
Rights Agreement") and referred to herein as a "Shansby Holder") that have
elected to participate in such registration. The term "Warrant" and
"Warrant Shares" shall have the respective meanings ascribed to such terms
in the Shansby Registration Rights Agreement. For purposes of this
paragraph, each Warrant shall be treated treated as representing the number
of Warrant Shares for which such Warrant is then exercisable.
(C) Selection of Underwriters and Counsel. The Board of Directors of
the Company will select and obtain the services of the investment banker or
investment bankers and manager or managers that will administer the
offering and the counsel to such investment bankers and managers; provided
that such investment bankers, managers and counsel must be approved by the
Holders of a majority in number of the shares of Restricted Stock to be
registered, which approval shall not be unreasonably withheld. Moreover, if
the registration of which the Company gives notice does involve an
underwriting, the right of each Holder to registration pursuant to this
Section 1 shall, unless the Company otherwise agrees, be conditioned upon
such Holder's participation as a seller in such underwriting and
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its execution of an underwriting agreement with the managing underwriter or
underwriters selected by the Company.
2. Piggyback Registration. If the Company proposes to file a registration
statement under the Securities Act with respect to an offering (other than the
Initial Public Offering) for the Company's own account of any class of its
equity securities (other than a registration statement on Form S-8 (or any
successor form) or any other registration statement relating solely to director
and/or employee benefit plans or filed in connection with an exchange offer, a
transaction to which Rule 145 (or any successor rule) under the Securities Act
applies, a transaction relating solely to an exchange offering, a transaction
relating solely to an acquisition of assets or property for securities or an
offering of securities solely to the Company's existing stockholders), then the
Company shall in each case give written notice of such proposed filing to the
Holders of Restricted Stock as soon as practicable (but no later than 15
business days) before the anticipated filing date, and such notice shall offer
such Holders the opportunity to register such number of shares of Restricted
Stock as each such Holder may request. Each Holder of Restricted Stock desiring
to have such Holder's Restricted Stock included in such registration statement
shall so advise the Company in writing within ten business days after the date
of the Company's notice, setting forth the amount of such Holder's Restricted
Stock for which registration is requested. If the Company's offering is to be an
underwritten offering, the Company shall, subject to the further provisions of
this Agreement, use its reasonable best efforts to cause the managing
underwriter or underwriters of a proposed underwritten offering to permit the
Holders of the Restricted Stock requested to be included in the registration for
such offering to include such securities in such offering on the same terms and
conditions as any similar securities of the Company included therein. Moreover,
if the registration of which the Company gives notice does involve an
underwriting, the right of each Holder to registration pursuant to this Section
1 shall, unless the Company otherwise agrees, be conditioned upon such Holder's
participation as a seller in such underwriting and its execution of an
underwriting agreement with the managing underwriter or underwriters selected by
the Company. Notwithstanding the foregoing, if the managing underwriter of such
offering advises the Company that the total number of securities that the
Holders and the Shansby Holders, other than the Company, intend to include in
such offering will in the good faith opinion of such managing underwriter
adversely affect the terms or pricing of such offering, then the number of
securities to be offered for the account of the Holders and the Shansby Holders
shall be reduced on a pro rata basis based on the number of shares of Common
Stock and/or Warrants proposed to be sold by the Holders and the Shansby Holders
to the extent necessary to reduce the total number of shares of Common Stock
and/or Warrants to be included in such offering for the Holders and the Shansby
Holders other than the Company to the number of shares of Common Stock and/or
Warrants recommended by such managing underwriter (with each Warrant being
treated for such purposes as representing the number of Warrant Shares for which
such Warrant is then exercisable). Any Restricted Stock excluded from an
underwriting shall be withdrawn from registration and shall not, without the
consent of the Company and the manager of the underwriting, be transferred in a
public distribution prior to the expiration of 180 days (or such other shorter
period of time as the manager of the underwriting may require) after the
effective date of the registration statement.
3. Registration Procedures. Whenever, pursuant to Section 1 or 2, any of
the Holders of Restricted Stock has requested that any Restricted Stock be
registered, the Company will, subject
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to the provisions of Section 4, use all reasonable best efforts to effect the
registration and the sale of such Restricted Stock in accordance with the
intended method of disposition thereof as promptly as practicable, and in
connection with any such request, the Company will:
(A) in connection with a request pursuant to Section 1, prepare and
file with the SEC, not later than 60 days after receipt of a request to
file a registration statement with respect to Restricted Stock, a
registration statement on any form for which the Company then qualifies and
which counsel for the Company shall deem appropriate and which form shall
be available for the sale of such Restricted Stock in accordance with the
intended method of distribution thereof, and use its reasonable best
efforts to cause such registration statement to become effective; provided
(i) that, before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company will furnish to one counsel
selected by the Holders of a majority in number of shares of the Restricted
Stock covered by such registration statement copies of all such documents
proposed to be filed, which documents will be subject to the review of such
counsel, and (ii) that after the filing of the registration statement, the
Company will promptly notify each of the selling Holders of Restricted
Stock of any stop order issued or, to the knowledge of the Company,
threatened by the SEC and take all reasonable actions to prevent the entry
of such stop order or to remove it if entered;
(B) in connection with a registration pursuant to Section 1, prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not
less than 180 days or such shorter period as shall terminate when all
shares of Restricted Stock covered by such registration statement have been
sold, and comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of disposition
by the selling Holders thereof set forth in such registration statement;
(C) as soon as reasonably practicable, furnish to each of the selling
Holders, prior to filing a registration statement, copies of such
registration statement as proposed to be filed, and thereafter furnish to
such selling Holders such number of copies of such registration statement,
each amendment and supplement thereto (in each case, if specified by such
Holder, including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus) and such
other documents as a selling Holder may reasonably request in order to
facilitate the disposition of the Restricted Stock owned by such selling
Holder;
(D) with reasonable promptness, use its reasonable best efforts to
register or qualify (or cause to be registered or qualified) such
Restricted Stock under such other securities or blue sky laws of such
jurisdictions within the United States as any selling Holder (or managing
underwriter in the case of an underwritten offering) reasonably (in light
of such selling Holder's or managing underwriter's intended plan of
distribution) requests and do any and all other acts and things that may be
reasonably necessary or advisable to enable such selling Holder to
consummate the disposition in such jurisdictions of the
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Restricted Stock owned by such selling Holder; provided that the Company
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this subsection (D), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(E) with reasonable promptness, use reasonable best efforts to cause
the Restricted Stock covered by such registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of
the Company to enable the selling Holder or Holders thereof to consummate
the disposition of such Restricted Stock;
(F) promptly notify each selling Holder of such Restricted Stock, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the occurrence of any event known to the
Company requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Restricted Stock, such prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
promptly make available to each selling Holder any such supplement or
amendment;
(G) in connection with a request pursuant to Section 1, enter into an
underwriting agreement in customary form, the form and substance of such
underwriting agreement being subject to the reasonable satisfaction of the
Company; provided, however, that the Holders will not be required to make
any representation or warranty with respect to the Company in connection
with or as a part of such underwriting agreement;
(H) in the event such sale is pursuant to an underwritten offering,
use its reasonable efforts to obtain a comfort letter or letters from the
Company's independent public accountants in customary form and covering
such matters of the type customarily covered by comfort letters as the
managing underwriter reasonably requests;
(I) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering a period of twelve months, beginning within three months after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act; and
(J) with reasonable promptness, use its reasonable efforts to cause
all such Restricted Stock to be qualified for trading on the NASDAQ
National Market and/or listed on each securities exchange on which the
Common Stock of the Company is then listed, provided that the applicable
qualification or listing requirements are satisfied.
Each selling Holder of Restricted Stock agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
subsection (F) hereof, such selling Holder will forthwith discontinue
disposition of Restricted Stock pursuant to the registration
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statement covering such Restricted Stock until such selling Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by subsection
(F) hereof, and, if so directed by the Company, such selling Holder will deliver
to the Company (at the Company's expense) all copies, other than permanent file
copies then in such selling Holder's possession, of the prospectus covering such
Restricted Stock current at the time of receipt of such notice. In the event the
Company shall give any such notice, the Company shall extend the period during
which such registration statement shall be maintained effective pursuant to this
Agreement (including the period referred to in subsection (B)) by the number of
days during the period from and including the date of the giving of such notice
pursuant to subsection (F) hereof to and including the date when each selling
Holder of Restricted Stock covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
subsection (F) hereof. Each selling Holder also agrees to notify the Company if
any event relating to such selling Holder occurs that would require the
preparation of a supplement or amendment to the prospectus so that 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 not misleading.
4. Conditions and Limitations.
(A) The Company's obligations under Section 1 shall be subject to the
following limitations:
(i) the Company shall not be required to furnish any audited
financial statements other than those audited statements customarily
prepared at the end of its fiscal year, or to furnish any unaudited
financial information with respect to any period other than its
regularly reported interim quarterly periods unless in the absence of
such other unaudited financial information the registration statement
would contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(ii) A registration statement will not count as a Demand
Registration until it has become effective and remains continuously
effective for the lesser of (i) the period during which all Restricted
Stock registered in the Demand Registration is sold and (ii) 180 days;
provided, however, that a registration shall not constitute a Demand
Registration if (x) after such Demand Registration has become
effective, such registration or the related offer, sale or
distribution of Restricted Stock thereunder is interfered with by any
stop order, injunction or other order or requirement of the SEC or
other governmental agency or court for any reason not attributable to
the Holders and such interference is not thereafter eliminated and (y)
the conditions to closing specified in the underwriting agreement, if
any, entered into in connection with such Demand Registration are not
satisfied or waived, other than by reason of a failure by the Holders;
and
(iii) the Company shall have received the information and
documents specified in Section 5 and each selling Holder shall have
observed or performed its other covenants and conditions contained in
such section.
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(B) The Company's obligation under Section 2 shall be subject to the
limitations and conditions specified in such section and in clauses (i),
(ii) and (iii) of subsection (A) of this Section 4, and to the condition
that the Company may at any time terminate its proposal to register its
shares and discontinue its efforts to cause a registration statement to
become or remain effective.
5. Information from and Certain Covenants of Holders of Restricted Stock.
The Holders for whom Restricted Stock is to be registered pursuant to this
Agreement shall provide to the Company such information regarding the Restricted
Stock to be so registered, the Holder and the intended method of disposition of
such Restricted Stock as shall reasonably be required in connection with the
action to be taken. Any Holder whose Restricted Stock is included in a
registration statement pursuant to this Agreement shall execute all consents,
powers of attorney, registration statements and other documents reasonably
required to be signed by it in order to cause such registration statement to
become effective. Each selling Holder covenants that, in disposing of such
Holder's shares, such Holder will comply with Regulation M of the SEC adopted
pursuant to the Exchange Act.
6. Registration Expenses. All Registration Expenses (as defined herein)
will be borne by the Company. Underwriting discounts and commissions applicable
to the sale of Restricted Stock shall be borne by each selling Holder of the
Restricted Stock to which such discount or commission relates, and each selling
Holder shall be responsible for the fees and expenses of any counsel,
accountants or other agents retained by such selling Holder and all other
out-of-pocket expenses incurred by such selling Holder in connection with any
registration under this Agreement other than fees and expenses of counsel for
the Holders which are treated as Registration Expenses as set forth below.
As used herein, the term "Registration Expenses" means all expenses
incident to the Company's performance of or compliance with this Agreement
(whether or not the registration in connection with which such expenses are
incurred ultimately becomes effective), including without limitation all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Restricted Stock), rating agency
fees, printing expenses, messenger and delivery expenses incurred by the
Company, internal expenses incurred by the Company (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the fees and expenses incurred in connection with
the listing of the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed, and fees and
disbursements of counsel for the Company (but shall not include the fees or
disbursements of counsel for the Holders) and the Company's independent
certified public accountants (including the expenses of any special audit or
comfort letters required by or incident to such performance), securities acts
liability insurance (if the Company elects to obtain such insurance), the
reasonable fees and expenses of any special experts retained by the Company and
the fees and expenses of other persons retained by the Company in connection
with such registration.
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7. Indemnification; Contribution.
(A) Indemnification by the Company. The Company agrees to indemnify
and hold harmless each selling Holder of Restricted Stock, its officers,
directors and agents and each person, if any, who controls such selling
Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable attorneys'
fees and costs of investigation) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Restricted Stock or in
any amendment or supplement thereto or in any preliminary prospectus
relating to the Restricted Stock, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of, or are based upon, any such untrue statement or
omission or allegation thereof based upon information furnished in writing
to the Company by such selling Holder or on such selling Holder's behalf
expressly for use therein and provided further, that with respect to any
untrue statement or omission or alleged untrue statement or omission made
in any preliminary prospectus, the indemnity agreement contained in this
subsection shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a copy of the final
prospectus was not sent or given to the person asserting any such losses,
claims, damages, liabilities or expenses at or prior to the written
confirmation of the sale of the Restricted Stock concerned to such person
if a final prospectus is made available by the Company on a timely basis.
The Company also agrees to include in any underwriting agreement with any
underwriters of the Restricted Stock provisions indemnifying and providing
for contribution to such underwriters, their officers and directors and
each person who controls such underwriters on substantially the same basis
as the provisions of this Section 8 indemnifying and providing for
contribution to the selling Holders.
(B) Indemnification by Holders of Restricted Stock. Each selling
Holder agrees to indemnify and hold harmless the Company, its officers,
directors and agents and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable attorneys' fees and costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
or prospectus relating to the Restricted Stock or in any amendment or
supplement thereto or in any preliminary prospectus relating to the
Restricted Stock, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided (i) that
such losses, claims, damages, liabilities or expenses arise out of, or are
based upon, any such untrue statement or omission or allegation thereof
based upon information furnished in writing to the Company by such selling
Holder or on such selling Holder's behalf expressly for use therein, (ii)
that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus, the indemnity
agreement contained in this subsection shall not
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apply to the extent that any such loss, claim, damage, liability or expense
results from the fact that a copy of the final prospectus was not sent or
given to the person asserting any such losses, claims, damages, liabilities
or expenses at or prior to the written confirmation of the sale of the
Restricted Stock concerned to such person, and (iii) that no selling Holder
shall be liable for any indemnification under this Section 8 in an
aggregate amount that exceeds the total net proceeds (before deducting
expenses) received by such selling Holder from the offering. Each selling
Holder also agrees to include in any underwriting agreement with
underwriters of the Restricted Stock provisions indemnifying and providing
for contribution to such underwriters, their officers and directors, and
each person who controls such underwriters, on substantially the same basis
as the provisions of this Section 7 indemnifying and providing for
contribution to the Company.
(C) Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any indemnified party hereunder in respect of which
indemnity may be sought from an indemnifying party, the indemnifying party
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such indemnified party, and shall assume the
payment of all expenses. Such indemnified party shall have the right to
employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party has
agreed to pay such fees and expenses or (ii) the use of counsel chosen by
the indemnifying party to represent the indemnified party would, in the
opinion of counsel representing both parties, present such counsel with a
conflict of interest (in which case the indemnifying party shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be
borne by the indemnifying party and paid as incurred, upon presentation of
reasonable evidence of same; provided that the indemnifying party shall
only be responsible for the fees and expenses of one counsel for the
indemnified party or parties hereunder. The indemnifying party shall not be
liable for any settlement of any such action or proceeding effected without
its written consent, but if settled with its written consent, or if there
is a final judgment for the plaintiff in any such action or proceeding, the
indemnifying party agrees to indemnify and hold harmless such indemnified
party from and against any loss or liability (to the extent stated above)
by reason of such settlement or judgment.
(D) Contribution. If the indemnification provided for in this Section
7 is unavailable to the Company or the selling Holders in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then
each such indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities and
judgments, in such proportion as is appropriate to reflect the relative
fault of each such party in connection with such statements or omissions,
as well as any other relevant equitable considerations. The relative fault
of each such party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such party, and the parties'
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relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 7(D) were determined by
pro rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages, liabilities or judgments referred
to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigation or defending any such action or claim. Notwithstanding the
provisions of this Section 7(D), no selling Holder shall be required to
contribute any amount in excess of the amount by which the total price at
which the Restricted Stock of such selling Holder were offered to the
public exceeds the amount of any damages which such selling Holder 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.
8. Amendments. This Agreement may be amended or modified upon the written
consent thereto of the Company and the Holders of not less than 66-2/3% of the
Restricted Stock.
9. Assignments. This Agreement shall be binding on and inure to the benefit
of the respective successors and assigns of the parties hereto and shall be
expressly assignable by the Holders with respect to their respective rights
created under this Agreement, provided a Holder may only assign the rights
created under this Agreement in conjunction with the transfer of a majority of
such Holder's Restricted Stock and the rights of the transferor under this
Agreement shall terminate upon such assignment.
10. Entire Agreement; Governing Law. This Agreement constitutes the entire
agreement of the parties relating to the subject matter hereof and all prior or
contemporaneous written or oral agreements are merged herein. This Agreement
shall be governed by and construed in accordance with the domestic laws of the
State of Texas without giving effect to any choice or conflict of law provision
or rule (whether of the State of Texas or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
Texas.
11. Notices. Any and all notices or other communications required or
permitted under this Agreement shall be given in writing and delivered in person
or sent by United States certified or registered mail, postage prepaid, return
receipt requested, or by overnight express mail, or by telex, facsimile or
telecopy to the address of such party set forth in the Contribution and Exchange
Agreement. Any such notice shall be effective upon receipt or three days after
placed in the mail, whichever is earlier. Any party may, by notice so delivered,
change its address for notice purposes hereunder.
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12. Severability. If any provision of this Agreement is invalid, illegal or
unenforceable, the balance of this Agreement shall remain in full force and
effect and this Agreement shall be construed in all respects as if such invalid,
illegal or unenforceable provision were omitted. If any provision is
inapplicable to any person or circumstance, it shall, nevertheless, remain
applicable to all other persons and circumstances.
13. Construction; Counterparts. Any section headings in this Agreement are
for convenience of reference only, and shall be given no effect in the
construction or interpretation of this Agreement or any provisions thereof. No
provision of this Agreement will be interpreted in favor of, or against, any
party by reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or thereof. This
Agreement shall be deemed the mutual form of the parties hereto. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, and which together shall constitute but one and the same instrument.
14. Termination. This Agreement shall be terminate and be of no further
force or effect if the Contribution and Exchange Agreement is terminated in
accordance with its terms without the consummation of the transactions
contemplated thereby.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement on the date first written above.
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------
XXXXXX X. XXXXXXXX
AUTHENTIC SPECIALTY FOODS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Name: XXXXXX X. XXXXXX, XX.
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Title: Chief Financial Officer
and Vice President
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