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EXHIBIT 10.12
Draft Dated August 8, 1997
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
__________ ___, 1997, is between AUTHENTIC SPECIALTY FOODS, INC., a Texas
corporation (the "Company"), TSG2 L.P., a Delaware limited partnership
("TSG2"), Shansby Partners, L.L.C., a Delaware limited liability company
("Shansby Partners"), and Xxxxx X. Xxxxxx ("Xx. Xxxxxx"). TSG2, Shansby
Partners and Xx. Xxxxxx and permitted assignees of their rights and duties
hereunder are each referred to herein as a "Holder" and are collectively
referred to herein as the "Holders."
W I T N E S S E T H:
WHEREAS, the Company, TSG2, Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxx and
TSG2 Management, L.L.C. 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 Company, TSG2 and Xx. Xxxxxx 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 currently contemplates undertaking an 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 Company, TSG2 and Xx. Xxxxxx to consummate
the transactions contemplated by the Contribution and Exchange Agreement; and
WHEREAS, in connection with the Initial Public Offering, the Company
and Shansby Partners have entered into a Warrant Agreement dated __________,
1997, pursuant to which the Company has agreed to issue to Shansby Partners a
number of common stock purchase warrants (the "Warrants") to purchase shares
(the "Warrant Shares") of Common Stock, determined in the manner set forth in
the Warrant Agreement and subject to the terms and conditions set forth
therein; 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 and Exchange Act of 1934, as amended (the "Exchange Act"); and
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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.
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. Holders agree 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, the Holders agree, 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 (i)
all shares of Common Stock issued to TSG2 and Xx. Xxxxxx pursuant to
the Contribution and Exchange Agreement and owned by TSG2 and Xx.
Xxxxxx 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 and (ii) the Warrants and the Warrant
Shares (including any securities received by Shansby Partners or its
successors pursuant to Section 12 of the Warrant Agreement). 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. 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
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registered in such offering. The term "Minimum Number" shall mean the
lesser of (i) 50% of the initial number of shares of Restricted Stock
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 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 shares shall be excluded
pro rata, based on the respective numbers of shares of Common Stock as
to which registration shall have been requested by such Holders.
(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.
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
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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 2 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 shares of Common
Stock that the 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 shares of Common Stock to be offered for the
account of the Holders shall be reduced on a pro rata basis based on
the number of shares proposed to be sold by the Holders to the extent
necessary to reduce the total number of shares of Common Stock to be
included in such offering for the Holders other than the Company to
the number of shares recommended by such managing underwriter. 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 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
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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 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;
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(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 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
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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.
(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 (iv) 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
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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.
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 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
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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 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 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.
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(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 indemnifying party shall have failed to
assume the defense of such action or proceeding and employ counsel
reasonably satisfactory to such indemnified party, or (iii) the use of
counsel chosen by the indemnifying party to represent the indemnified
party would 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; 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' 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
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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 or the Warrant 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.
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
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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 terminate and be of no
further force or effect if the Initial Public Offering is not consummated.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement on the date first written above.
AUTHENTIC SPECIALTY FOODS, INC.
By:
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Name:
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Title:
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TSG2 L.P.
By:
------------------------------------
Name:
-------------------------------
Title:
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SHANSBY PARTNERS, L.L.C.
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
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Xxxxx X. Xxxxxx
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