Item 2(k)(b) – Forward Purchase Agreement
Item
2(k)(b) – Forward Purchase Agreement
Between
XXXXX
X. XXXXXXX, IN HIS INDIVIDUAL CAPACITY AND AS TRUSTEE OF THE XXXXX X. XXXXXXX
LIVING TRUST DATED MAY 28, 1986, AS AMENDED, as Seller
and
2009
XXXX FOOD AUTOMATIC COMMON EXCHANGE SECURITY TRUST,
as
Purchaser
Dated
as of October 22, 2009
|
|
ARTICLE
I
|
|
|
DEFINITIONS;
INTERPRETATION
|
|
|
Section
1.1
|
Defined
Terms
|
2
|
|
|
Section
1.2
|
Interpretation
|
6
|
|
|
ARTICLE
II
|
|
|
SALE
AND PURCHASE
|
|
|
Section
2.1
|
Sale
and Purchase
|
7
|
|
|
Section
2.2
|
Purchase
Price
|
8
|
|
|
Section
2.3
|
Payment
for and Delivery of Contract Stock
|
8
|
|
|
ARTICLE
III
|
|
|
REPRESENTATIONS
AND WARRANTIES
|
|
|
Section
3.1
|
Representations
and Warranties of Seller
|
10
|
|
|
Section
3.2
|
Representations
and Warranties of Purchaser
|
10
|
|
|
ARTICLE
IV
|
|
|
CONDITIONS TO
PURCHASER’S OBLIGATIONS
|
|
|
Section
4.1
|
Condition to
Delivery of Firm Purchase Price
|
10
|
|
|
Section
4.2
|
Condition to
Delivery of Additional Purchase Price
|
10
|
|
|
ARTICLE
V
|
|
|
COVENANTS
|
|
|
Section
5.1
|
Covenants of
Seller
|
10
|
|
|
Section
5.2
|
Further
Assurances
|
12
|
|
|
ARTICLE
VI
|
|
|
ADJUSTMENTS TO
EXCHANGE RATE, APPRECIATION THRESHOLD PRICE AND INITIAL PRICE;
REORGANIZATION EVENTS
|
|
|
Section
6.1
|
Dilution
Adjustments
|
12
|
|
|
Section
6.2
|
Adjustment for
Consolidation, Merger or Other Reorganization Event
|
16
|
|
|
Section
6.3
|
Spin-Off
Distributions
|
17
|
|
|
Section
6.4
|
Adjustments
with Respect to Marketable Securities
|
18
|
|
|
ARTICLE
VII
|
|
|
ACCELERATION
UPON AN EVENT OF DEFAULT; TRANSFER AGENT
INSTRUCTIONS
|
|
|
Section
7.1
|
Events
of Default
|
18
|
|
|
Section
7.2
|
Transfer Agent
Instructions
|
19
|
|
|
ARTICLE
VIII
|
|
|
MISCELLANEOUS
|
|
|
Section
8.1
|
Adjustments of
Exchange Rate; Selection of Independent Investment Banking
Firm
|
19
|
|
|
Section
8.2
|
No
Assumption of Liability
|
20
|
|
|
Section
8.3
|
Notices
|
20
|
|
|
Section
8.4
|
Governing Law;
Severability
|
20
|
|
|
Section
8.5
|
Entire
Agreement
|
20
|
|
|
Section
8.6
|
Amendments;
Waivers
|
20
|
|
|
Section
8.7
|
Non-Assignability
|
21
|
|
|
Section
8.8
|
No
Third Party Rights; Successors and Assigns
|
21
|
|
|
Section
8.9
|
Counterparts
|
21
|
FORWARD
PURCHASE AGREEMENT (this “Agreement”), dated as
of October 22, 2009, between Xxxxx X. Xxxxxxx, in his individual capacity
and as trustee of the Xxxxx X. Xxxxxxx Living Trust dated May 28,
1986, as amended, a trust organized under the laws of the State of California
(“Seller”), and
the 2009 Xxxx Food Automatic Common Exchange Security Trust, a trust organized
under the laws of the State of New York under and by virtue of an Amended and
Restated Trust Agreement, dated as of October 22, 2009 (the “Trust Agreement”;
such trust and the trustees thereof acting in their capacity as such being
referred to in this Agreement as “Purchaser”).
WITNESSETH:
WHEREAS,
Seller as of the date hereof owns shares of Common Stock (“Common Stock”), par
value $.001 per share, of Xxxx Food Company, Inc., a Delaware corporation (the
“Company”), and
Seller will own such shares of Common Stock as of the First Time of Delivery (as
defined below) and as of the Second Time of Delivery (as defined below);
and
WHEREAS,
Purchaser has prepared an offering circular contemplating the offering of up to
27,600,000 $0.875 Trust Issued Automatic Common Exchange Securities (the “Securities”), the
terms of which contemplate delivery by Purchaser to the holders of such
Securities of a number of shares of Common Stock (or, in certain circumstances,
cash or other property in lieu of such Common Stock) on, or, in certain
circumstances, prior to, the Exchange Date referred to below; and
WHEREAS,
Seller has agreed, pursuant to the Collateral Agreement, dated as of
October 22, 2009 (together with any substitute agreement therefor entered
into pursuant to Section 2.2(a) of the Trust Agreement, the “Collateral
Agreement”), among Seller, as Pledgor, U.S. Bank National Association, as
Collateral Agent (as defined below), and Purchaser to grant to the Collateral
Agent, for the benefit of Purchaser, a security interest in shares of Common
Stock and, in certain circumstances, certain other collateral to secure the
obligations of Seller under this Agreement; and
WHEREAS,
Purchaser has agreed, effective as of the First Time of Delivery, pursuant to
the Securities Purchase Agreement, dated October 22, 2009 (the “Securities Purchase
Agreement”), among Purchaser, Seller, the Company, and Xxxxxxx,
Xxxxx & Co., Deutsche Bank Securities Inc., Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated and Xxxxx Fargo Securities, LLC
(collectively, the “Initial Purchasers”),
to issue and sell to the Initial Purchasers an aggregate of 24,000,000
Securities (the “Firm
Securities”) and, at the Initial Purchasers’ option as provided herein,
up to 3,600,000 additional Securities (such additional Securities as the Initial
Purchaser shall actually purchase pursuant to the Securities Purchase Agreement,
the “Optional
Securities”);
NOW,
THEREFORE, the parties to this Agreement, intending to be bound, agree as
follows:
1
ARTICLE
I
DEFINITIONS;
INTERPRETATION
Section
1.1 Defined
Terms. As used in this Agreement, the following terms have the
following meanings:
“Accelerated Portion”
means, in relation to any Cash Merger, the portion of the Merger Consideration,
other than Marketable Securities, that has a Value equal to the amount
determined by multiplying the Basic Reorganization Event Amount by a fraction,
(i) the numerator of which is the Value of the portion of the Merger
Consideration received in exchange for a single share of Common Stock that
consists of assets other than Marketable Securities, and (ii) the
denominator of which is the Transaction Value.
“Additional Purchase
Price” has the meaning specified in Section
2.2(b).
“Additional Share Base
Amount” means a number equal to the number of Optional Securities that
the Initial Purchasers elect to purchase under the Securities Purchase
Agreement.
“Additional Shares”
has the meaning specified in Section
2.1(b).
“Additional Treasury
Securities” means the U.S. Government Securities purchased by Purchaser
pursuant to Section 2.3(b)(ii) of the Trust Agreement for settlement at the
Second Time of Delivery.
“Administrator” means
U.S. Bank National Association, administrator for Purchaser under the
Administration Agreement, dated as of October 22, 2009 between the
Administrator and Purchaser, or its successor in such capacity, or any other
Administrator appointed pursuant to the Trust Agreement and the Administration
Agreement.
“Administration
Agreement” means the Administration Agreement, dated as of
October 22, 2009, between the Administrator and Purchaser.
“Agreement” has the
meaning set forth in the Preamble.
“Appreciation Threshold
Price” has the meaning specified in Section
2.1(c).
“Average Market Price”
per share of Common Stock or Marketable Securities on any date means the average
Closing Price per share of Common Stock or Marketable Securities for the
Calculation Period consisting of the 20 Trading Days immediately prior to but
not including the third Trading Day prior to such date.
“Basic Reorganization Event
Amount” has the meaning specified in Section
6.2(a).
2
“Business Day” means a
day on which the NYSE is open for trading and that is not a day on which
commercial banks in The City of New York are authorized or obligated by law to
close.
“Calculation Period”
means any period of Trading Days for which an average security price must be
determined pursuant to this Agreement.
“Cash Merger” has the
meaning specified in Section
6.2(b).
“Cash Percentage” has
the meaning specified in Section
2.3(d).
“Cash Settlement
Alternative” has the meaning specified in Section
2.3(d).
“Closing Price” of a
share of Common Stock (or any other common equity security, including any
Marketable Securities) on any Trading Day means (i) the last reported sale
price per share (or, if no last sale price is reported, the average of the bid
and ask prices per share or, if more than one in either case, the average of the
average bid and the average ask prices per share) on such day reported by the
NYSE, or, if the Common Stock (or such other property) is not listed on the
NYSE, as reported by the principal U.S. national or regional securities exchange
on which the Common Stock (or such other property) is listed, (ii) if the
Common Stock (or such other property) is not traded on a U.S. national or
regional securities exchange, the last quoted bid price on that day for the
Common Stock (or such other property) in the over-the-counter market as reported
by Pink OTC Markets Inc. or a similar organization or (iii) if the Common
Stock (or such other property) is not traded on a U.S. national or regional
securities exchange or so quoted by Pink OTC Markets Inc. or a similar
organization, the market price of the Common Stock (or such other property) on
that day as determined by a nationally recognized independent investment banking
firm retained by the Administrator for this purpose, whose determination shall
be conclusive; provided, that if any
event that results in an adjustment to the number of shares of Common Stock or
Marketable Securities deliverable under this Agreement pursuant to Article VI occurs
during any Calculation Period, the Closing Price as determined pursuant to the
foregoing for each Trading Day in the Calculation Period occurring prior to the
date on which such adjustment is effected will be appropriately adjusted to
reflect the occurrence of such event.
“Collateral Agent”
means U.S. Bank National Association, in its capacity as Collateral Agent under
the Collateral Agreement, or its successor in such capacity, or any other
Collateral Agent appointed pursuant to the Trust Agreement and the Collateral
Agreement.
“Collateral Agreement”
has the meaning specified in the recitals to this Agreement.
“common equity
security” means any security of any class of capital stock (whether
voting or non-voting) that has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the issuer of such capital stock and that is not
subject to redemption by the issuer of such capital stock.
“Common Stock” has the
meaning specified in the recitals to this Agreement.
3
“Company” has the
meaning specified in the recitals to this Agreement.
“Company Successor”
has the meaning specified in Section
6.2(a).
“Contract Shares” has
the meaning specified in Section
2.1(b).
“Custodian” means U.S.
Bank National Association, as custodian for Purchaser under the Custodian
Agreement, dated as of October 22, 2009, between the Custodian and
Purchaser, or its successor in such capacity, or any other Custodian appointed
pursuant to the Trust Agreement and the Custodian Agreement.
“Custodian Agreement”
means the Custodian Agreement, dated as of October 22, 2009, between the
Custodian and Purchaser.
“Dilution Adjustment”
means any fraction or number by which the Exchange Rate shall be multiplied
pursuant to Section
6.1(a), (b), (c), (d) or (e).
“Event of Default” has
the meaning specified in Section
7.1.
“Exchange Date” means
November 1, 2012, provided that if the number of shares of Common Stock
deliverable to the Purchaser on that date would exceed 15% of the then
outstanding shares of Common Stock, such excess portion will be delivered on
successive Business Days (with no delivery on any Business Day of a number of
shares of Common Stock in excess of 15% of the then outstanding share of Common
Stock) until such entire excess portion has been delivered. Each reference in
this Agreement to the Exchange Date shall be deemed a reference to
November 1, 2012 and each such other Business Day.
“Exchange Rate” has
the meaning specified in Section
2.1(c).
“Expiration Time” has
the meaning specified in Section
6.1(e).
“Firm Purchase Price”
has the meaning specified in Section
2.2(a).
“Firm Securities” has
the meaning specified in the recitals to this Agreement.
“Firm Share Base
Amount” means 24,000,000 shares of Common Stock.
“Firm Shares” has the
meaning specified in Section
2.1(a).
“First Time of
Delivery” has the meaning specified in Section
2.3(a).
“Full Share Number”
has the meaning in Section
2.3(d).
“Initial Price” has
the meaning specified in Section
2.1(c).
“Initial Purchasers”
has the meaning specified in the recitals to this Agreement.
4
“Initial Treasury
Securities” means the U.S. Government Securities purchased by Purchaser
pursuant to Section
2.3(b)(i) of the Trust Agreement for settlement at the First Time of
Delivery.
“Liens” means any
lien, mortgage, security interest, pledge, charge, encumbrance or adverse claim
of any kind.
“Market Disruption
Event” means the occurrence or existence on any scheduled trading day for
the Common Stock (or any other applicable security or other property) of any
suspension or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by the stock exchange or otherwise) in the Common
Stock (or such other property) or in any options, contracts or futures contracts
relating to the Common Stock (or such other property), and such suspension or
limitation occurs or exists at any time within 30 minutes prior to the closing
time of the relevant stock exchange on such day.
“Marketable
Securities” means any common equity securities (whether voting or
non-voting) listed on a U.S. national or regional securities
exchange.
“Merger Consideration”
has the meaning specified in Section
6.2(a).
“NYSE” means the New
York Stock Exchange, Inc.
“Optional Securities”
has the meaning specified in the recitals to this Agreement.
“Purchaser” has the
meaning specified in the preamble to this Agreement.
“Reorganization Event”
has the meaning specified in Section
6.2(a).
“Second Time of
Delivery” has the meaning specified in Section
2.3(b).
“Securities” has the
meaning specified in the recitals to this Agreement.
“Securities Purchase
Agreement” has the meaning specified in the recitals to this
Agreement.
“Seller” has the
meaning specified in the preamble to this Agreement.
“Spin-Off
Distribution” means a distribution by the Company to holders of Common
Stock of Marketable Securities issued by an issuer other than the
Company.
“Tender Offer Valuation
Period” has the meaning specified in Section
6.1(e).
“Then-Current Market
Price” of the Common Stock means the average Closing Price per share of
Common Stock for the applicable Calculation Period.
“Trading Day” means
any day on which (i) there is no Market Disruption Event and
(ii) (x) the NYSE is open for trading, or, if the Common Stock (or any
other applicable security or other property) is not listed on the NYSE, the
principal U.S. national or regional securities exchange on which the Common
Stock (or such other property) is listed is open for trading, (y) if the
Common Stock (or such other property) is not traded on a U.S. national or
regional securities exchange but is quoted on the over-the-counter market by
Pink OTC Markets Inc. or a similar organization, Pink OTC Markets Inc. or such
similar organization, as applicable, is open for quoting or (z) if the
Common Stock (or such other property) is not traded on a U.S. national or
regional securities exchange or quoted by Pink OTC Markets Inc. or a similar
organization, such day is a Business Day. A “Trading Day” only
includes those days that have a scheduled closing time of 4:00 p.m. (New
York City time) or the then standard closing time for regular trading on the
relevant exchange or trading system or, if applicable, regular quoting on the
relevant quotation system.
5
“Transaction Value”
means the sum of: (i) for any cash received in the
Reorganization Event, the amount of the cash received per share of Common Stock;
(ii) for any property other than cash or Marketable Securities received in
the Reorganization Event, an amount equal to the market value on the date the
Reorganization Event is consummated of the property received per share of Common
Stock (as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Administrator, whose determination shall
be conclusive); and (iii) for any Marketable Securities received in the
Reorganization Event, an amount equal to the average Closing Price of those
Marketable Securities on the Exchange Date (or, in the case of a Cash Merger,
the average Closing Price for the 20 Trading Days immediately before the date
the Reorganization Event is consummated), multiplied by the number of those
Marketable Securities received for each share of Common Stock. The
number of Marketable Securities included in the calculation of Transaction Value
for purposes of the preceding clause will be adjusted if a dilution event of the
type described in Article VI hereof
occurs with respect to the issuer of the Marketable Securities between the time
of the Reorganization Event and the Exchange Date.
“Transfer
Restrictions” has the meaning specified in the Collateral
Agreement.
“Transferred
Securities” has the meaning specified in Section
2.3(e).
“Trust Agreement” has
the meaning specified in the preamble to this Agreement.
“Trustees” has the
meaning specified in the Trust Agreement.
“U.S. Government
Securities” means direct obligations of the United States of
America.
“Value” means
(i) in respect of cash, the amount of such cash; (ii) in respect of
any property other than cash or Marketable Securities, an amount equal to the
market value on the date the Reorganization Event is consummated (as determined
by a nationally recognized independent investment banking firm retained for this
purpose by the Administrator, whose determination shall be conclusive); and
(iii) in respect of any share of Marketable Securities, an amount equal to
the average Closing Price per share of those Marketable Securities for the 20
Trading Days immediately before the date the Reorganization Event is
consummated.
6
Section
1.2
Interpretation.
(a) When a
reference is made in this Agreement to Articles, Sections, Exhibits or
Schedules, such reference is to Articles or Sections of, or Exhibits or
Schedules to, this Agreement unless otherwise indicated.
(b) The table
of contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement, and shall not be deemed to limit or
otherwise affect any of the provisions of this Agreement.
(c) Whenever
the words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation”.
(d) Any
reference to any statute, regulation or agreement is a reference to such
statute, regulation or agreement as supplemented or amended from time to
time.
ARTICLE
II
SALE
AND PURCHASE
Section
2.1
Sale and
Purchase.
(a) Firm
Shares. Upon the terms and subject to the conditions of this
Agreement, and subject to Seller’s cash settlement alternative as provided in
Section 2.3(d),
Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from
Seller, the number of shares of Common Stock (the “Firm Shares”) equal
to the product of the Firm Share Base Amount and the Exchange Rate.
(b)
Additional
Shares. Upon the terms and subject to the conditions of this
Agreement, if the Initial Purchasers exercise the option to purchase Optional
Securities pursuant to the Securities Purchase Agreement, Seller agrees to sell
to Purchaser, and Purchaser agrees to purchase from Seller, the number of
additional shares of Common Stock (the “Additional Shares”)
equal to the product of the Additional Share Base Amount and the Exchange
Rate. If the Initial Purchasers exercise their option to purchase
Optional Securities pursuant to the Securities Purchase Agreement, Purchaser
shall notify Seller in writing that Purchaser will purchase the Additional
Shares, which notice shall specify the Additional Share Base Amount and the
Second Time of Delivery. The Firm Shares and the Additional Shares
(if any) are collectively referred to in this Agreement as the “Contract
Shares”.
(c) Exchange
Rate. The “Exchange Rate” shall
be the rate determined in accordance with the following formula, subject to
adjustment as a result of certain events as provided in Article
VI:
(i) if the
Average Market Price is less than $15.00 (the “Appreciation Threshold
Price”) but equal to or greater than $12.50 (the “Initial Price”), the
Exchange Rate will be a fraction (rounded upward or downward to the nearest
1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th) equal to the Initial Price divided by the Average Market
Price;
7
(ii)
if the
Average Market Price is equal to or greater than the Appreciation Threshold
Price, the Exchange Rate will be 0.8333; and
(iii)
if the
Average Market Price is less than the Initial Price, the Exchange Rate will be
1.000.
Section
2.2 Purchase
Price.
(a) Firm Purchase
Price. The purchase price for the Firm Shares (the “Firm Purchase Price”)
shall be an amount equal to the difference between (i) the aggregate
proceeds to Purchaser from the sale of the Firm Securities and (ii) the
aggregate cost to Purchaser, as notified by Purchaser to Seller at the First
Time of Delivery, of the Initial Treasury Securities.
(b) Additional Purchase
Price. The purchase price for the Additional Shares (the
“Additional Purchase
Price”) shall be an amount equal to the difference between (i) the
aggregate proceeds to Purchaser from the sale of the Optional Securities and
(ii) the aggregate cost to Purchaser, as notified by Purchaser to Seller at
the Second Time of Delivery, of the Additional Treasury Securities.
Section
2.3
Payment for and Delivery of
Contract Stock.
(a) First Time of
Delivery. Upon the terms and subject to the conditions of this
Agreement, Purchaser shall deliver to Seller the Firm Purchase Price on
October 28, 2009 (the “First Time of
Delivery”), at the offices of Xxxxxxxx & Xxxxxxxx LLP, 0000
Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, XX 00000, or at such other place as shall be
agreed upon by Purchaser and Seller, paid by wire transfer to an account
designated by Seller, in Federal (immediately available) funds.
(b) Second Time of
Delivery. Upon the terms and subject to the conditions of this
Agreement, Purchaser shall deliver to Seller the Additional Purchase Price on
the date of delivery of the Optional Securities to the Initial Purchasers (the
“Second Time of
Delivery”), at the offices of Xxxxxxxx & Xxxxxxxx LLP, 0000
Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, XX 00000, or at such other place as shall be
agreed upon by Purchaser and Seller, paid by wire transfer to an account
designated by Seller, in Federal (immediately available) funds.
(c) Sale and Delivery of
Contract Shares. Seller agrees to deliver, except as otherwise
provided in this Agreement, the Contract Shares to Purchaser on the Exchange
Date. Unless Seller elects the Cash Settlement Alternative as
provided in Section
2.3(d), delivery shall be effected by delivery by the Collateral Agent to
the Custodian, for the account of Purchaser, of shares of Common Stock then held
by the Collateral Agent as collateral under the Collateral Agreement, in an
amount equal to the number of Contract Shares, rounded down to the nearest whole
number. Alternatively, in accordance with Section 5.2 of the
Collateral Agreement, Seller may elect to deliver shares of Common Stock in an
amount equal to the number of Contract Shares, rounded down to the nearest whole
number, to the Custodian for the account of Purchaser on the Exchange Date by
notifying the Collateral Agent and the Custodian on or prior to the Exchange
Date of such election, in which case, the Collateral Agent shall deliver to the
Seller the shares of Common Stock then held by the Collateral Agent as
collateral under the Collateral Agreement on the Exchange
Date. Seller agrees to make a cash payment in respect of any
fractional shares included in the Contract Shares at the Exchange Date, in an
amount equal to the value of such fractional shares at the Average Market
Price. In addition, if the difference between (A) the aggregate
proceeds of any sale (net of any brokerage or related expenses) of any Common
Stock or Marketable Securities sold by Purchaser pursuant to Section
2.4(f)(ii) of the Trust Agreement and (B) the product of the number of
shares of Common Stock or Marketable Securities so sold and the Average Market
Price, is negative, Seller shall pay such difference to Purchaser. If
such difference is positive, Purchaser shall pay the difference to
Seller. Notwithstanding the foregoing, if a Reorganization Event
shall have occurred prior to the Exchange Date then, in lieu of the foregoing,
delivery shall be effected as follows: (i) in the case of any
cash required to be delivered on the Exchange Date as provided in Section 6.2, by wire
transfer to an account designated by Purchaser, in Federal (immediately
available) funds; (ii) in the case of any Marketable Securities elected by
Seller to be delivered in lieu of cash, as provided in Section 6.2, by
delivery by the Collateral Agent to the Custodian, for the account of Purchaser,
of the applicable number of Marketable Securities then held as collateral under
the Collateral Agreement, as provided in Section 5.7 of the Collateral
Agreement; and (iii) in the case of any cash included in the Accelerated
Portion as provided in Section 6.2(b), by
wire transfer as provided in clause (i) above or in the case of any
non-cash assets included in such Accelerated Portion, by delivery of such assets
to the Custodian, for the account of Purchaser. Alternatively, Seller may elect
to deliver shares of Marketable Securities in lieu of cash, as provided in Section 6.2, to the
Custodian for the account of Purchaser on the Exchange Date by notifying the
Collateral Agent and the Custodian on or prior to the Exchange Date of such
election, in which case, the Collateral Agent shall deliver to the Seller the
shares of Marketable Securities then held by the Collateral Agent as collateral
under the Collateral Agreement on the Exchange Date.
8
(d) Cash Settlement
Alternative. At its option, Seller may deliver to Purchaser on
the Exchange Date, in lieu of the Contract Shares, in whole or in part, an
amount in cash (the “Cash Settlement
Alternative”) equal to the value, based on the Average Market Price of
the Contract Shares at the Exchange Date, of the number of shares Seller would
otherwise be required to deliver on the Exchange Date (the “Full Share Number”),
multiplied by the Cash Percentage (as defined below), paid by wire transfer to
an account designated by Purchaser, in Federal (immediately available) funds, in
which case the number of Contract Shares to be delivered by Seller on the
Exchange Date will be the product of (x) 100% less the Cash Percentage and
(y) the Full Share Number. If the Seller elects the Cash
Settlement Alternative, it may do so by notice to Purchaser, the Collateral
Agent and the Custodian (including as to the portion to be settled in cash as a
fixed percentage between 0% and 100% (the “Cash Percentage”))
not less than 60 days, nor more than 90 days, preceding the Exchange Date then
in effect, including with respect to the portion to be delivered in
cash. If Seller elects the Cash Settlement Alternative, Purchaser
shall provide notice of such election to the holders of the Securities, not less
than 45 days, nor more than 90 days, prior to the Exchange Date as then in
effect.
(e) Satisfaction of
Obligations. Notwithstanding any other provision of this
Agreement, if on or prior to the Exchange Date, Seller transfers Securities to
Purchaser, free and clear of any Liens and Transfer Restrictions, for
cancellation (any Securities so transferred being referred to in this Agreement
as the “Transferred
Securities”) then the number of Contract Shares, or the cash in lieu
thereof in the event the Cash Settlement Alternative is elected, deliverable by
Seller pursuant to this Agreement shall be reduced by a number equal to the
product of (i) the number of Contract Shares before giving effect to any
such transfers and (ii) a fraction, the numerator of which is the number of
Transferred Securities and the denominator of which is the sum of the Firm Share
Base Amount and the Additional Share Base Amount (rounded down to the nearest
whole share).
9
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
Section
3.1
Representations and
Warranties of Seller. Seller represents and warrants to
Purchaser that each representation and warranty made by Seller pursuant to
Section 1(b) of the Securities Purchase Agreement is true and correct on
the date of this Agreement.
Section
3.2
Representations and
Warranties of Purchaser. Purchaser represents and warrants to
Seller that each representation and warranty made by Purchaser pursuant to
Section 1(a) of the Securities Purchase Agreement is true and correct
on the date of this Agreement.
ARTICLE
IV
CONDITIONS
TO PURCHASER’S OBLIGATIONS
Section
4.1
Condition to Delivery of
Firm Purchase Price. The obligation of Purchaser to deliver
the Firm Purchase Price at the First Time of Delivery is subject to the
condition that the purchase by the Initial Purchasers of the Firm Securities
pursuant to the Securities Purchase Agreement shall have been consummated as
contemplated under the Securities Purchase Agreement and that Seller shall have
delivered to Purchaser such forms as set forth in Section
5.1(a)(ii) below.
Section
4.2
Condition to Delivery of
Additional Purchase Price. The obligation of Purchaser to
deliver the Additional Purchase Price at the Second Time of Delivery is subject
to the condition that the purchase by the Initial Purchasers of the Optional
Securities shall have been consummated as contemplated under the Securities
Purchase Agreement and that Seller shall have delivered to Purchaser such forms
as set forth in Section
5.1(a)(ii) below.
ARTICLE
V
COVENANTS
Section
5.1
Covenants of
Seller.
(a) Taxes.
(i) Seller
shall pay any and all documentary, stamp, transfer or similar taxes and charges
that may be payable in respect of the execution of this Agreement and the
transfer and delivery of the Contract Shares (or any cash or Marketable
Securities or other property in lieu of the Contract Shares) and the sale by the
purchaser of any assets pursuant to this Agreement. Purchaser may
withhold from any payment under this Agreement any tax required by law, and
Seller may withhold from any payment under this Agreement to the extent such
withholding is the result of Purchaser failing to provide the Seller with an IRS
Form W-9 setting forth an exemption from withholding, provided the Seller
is eligible under law to deliver such IRS Form W-9 to the
Purchaser.
10
(ii) As of the
First Time of Delivery and the Second Time of Delivery, Seller shall deliver to
Purchaser a non-foreign person affidavit duly certifying that the Seller is not
a foreign person in the form that satisfies the requirements of Section 1445 of
the Internal Revenue Code of 1986, as amended, and is reasonably acceptable to
the Purchaser and any other duly executed form reasonably requested by the
Purchaser in order to avoid withholding tax on any payment under this
Agreement. Seller shall immediately notify Purchaser when a statement
included in such certificates or forms is no longer accurate.
(b) Forward
Contract. Each of Seller and Purchaser hereby agree
that: (i) it will not treat this Agreement, any portion of this
Agreement, or any obligation under this Agreement as giving rise to any interest
expense or income or other inclusions or expense of ordinary income;
(ii) it will not treat the delivery of any portion of the Contract Shares,
cash, Marketable Securities or other property to be delivered pursuant to this
Agreement as the payment of interest or ordinary income; (iii) it will
treat this Agreement in its entirety as a forward contract for the delivery of
such Contract Shares, cash, Marketable Securities or other property; and
(iv) it will not take any action (including filing any tax return or form
or taking any position in any tax proceeding, other than in connection with good
faith negotiations in settlement of a tax proceeding) that is inconsistent with
the obligations contained in clauses (i) through (iii) of this Section 5.1(b).
Notwithstanding the preceding sentence Purchaser may in its discretion withhold
tax on payments to the security holders in the Purchaser regardless of the legal
theory or characterization supporting such withholding. Seller and Purchaser may
also take any action or position required by law provided, that Seller
or Purchaser, as the case may be, provides an opinion of counsel, nationally
recognized as expert in Federal tax matters, to the effect that such action or
position is required by a statutory change, Treasury regulation, or applicable
court decision published after the date of this Agreement.
(c) Limitations on Trading
During Certain Days. Seller hereby agrees that it will not buy
Common Stock for its own account during the 60 days prior to the Exchange
Date.
(d) Notices. Seller
will cause to be delivered to Purchaser:
(i) Immediately
upon the occurrence of any Event of Default, or upon Seller’s obtaining
knowledge that any of the conditions or events described in Section 7.1(a) or
(b) hereof shall have occurred with respect to the Company, notice
of such occurrence; and
(ii) If at any
time prior to the Exchange Date Seller receives notice, or otherwise obtains
knowledge, that any event requiring an adjustment to be effected pursuant to
Article VI
hereof shall have occurred or be pending, then Seller shall promptly cause to be
delivered to Purchaser a notice identifying such event and stating, if known to
Seller, the date on which such event occurred or is to occur and, if applicable,
the record date relating to such event. Seller shall cause further
notices to be delivered to Purchaser if Seller shall subsequently receive
notice, or otherwise obtain knowledge, of any further or revised information
regarding the terms or timing of such event or any record date relating to such
event.
11
Section
5.2
Further
Assurances. From time to time on and after the date of this
Agreement through the Exchange Date, each of the parties to this Agreement shall
use its commercially reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things reasonably necessary, proper
or advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement in accordance with the terms and
conditions of this Agreement, including (i) using commercially reasonable
efforts to remove any legal impediment to the consummation of such transactions
and (ii) the execution and delivery of all such deeds, agreements,
assignments and further instruments of transfer and conveyance reasonably
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement in accordance with the terms and conditions of
this Agreement.
ARTICLE
VI
ADJUSTMENTS
TO EXCHANGE RATE, APPRECIATION THRESHOLD PRICE AND INITIAL PRICE;
REORGANIZATION EVENTS
Section
6.1
Dilution
Adjustments. The Exchange Rate, Appreciation Threshold Price
and Initial Price shall be subject to adjustment from time to time as
follows:
(a) Stock Dividends, Splits,
Etc. If the Company shall, after the date of this
Agreement,
(i) pay a
stock dividend or make a distribution with respect to the Common Stock in shares
of Common Stock;
(ii)
subdivide
or split the outstanding shares of Common Stock into a greater number of shares
of Common Stock; or
(iii) combine
the outstanding shares of Common Stock into a smaller number of shares of Common
Stock;
then, in
each such case, the Exchange Rate shall be multiplied by a Dilution Adjustment
equal to the fraction, (x) the numerator of which shall be the number of
shares of Common Stock outstanding immediately after the effective time of the
adjustment relating to such event (giving effect to such event as of such
effective time), and (y) the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to the effective time of
the adjustment relating to such event. The Appreciation Threshold
Price and Initial Price shall also be adjusted in the manner described in Section
6.1(f).
(b) Right or Warrant
Issuances. If the Company shall, after the date of this
Agreement, issue, or declare a record date in respect of an issuance of, rights
or warrants to all holders of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the Then-Current
Market Price of the Common Stock (other than rights to purchase Common Stock
pursuant to a plan for the reinvestment of dividends or interest) for the five
Trading Days ending on, and including, the Trading Day immediately preceding the
ex-dividend date for such issuance, then, in each such case, the Exchange Rate
shall be multiplied by a Dilution Adjustment equal to a fraction, (i) the
numerator of which shall be the number of shares of Common Stock outstanding
immediately before the time (determined as described below) the adjustment is
effected by reason of the issuance of those rights or warrants, plus the number
of additional shares of Common Stock offered for subscription or purchase
pursuant to those rights or warrants, and (ii) the denominator of which
shall be the number of shares of Common Stock outstanding immediately before the
time (determined as described below) the adjustment is effected by reason of the
issuance of those rights or warrants, plus the number of additional shares of
Common Stock that the aggregate offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at the
Then-Current Market Price of the Common Stock for the five Trading Days ending
on, and including the Trading Day immediately preceding the ex-dividend date for
such issuance, which shall be determined by multiplying the total number of
shares so offered for subscription or purchase by the exercise price of such
rights or warrants and dividing the product so obtained by such Then-Current
Market Price. For purposes of this Section 6.1(b), in
determining whether any rights or warrants entitle the holders to subscribe for
or purchase, or exercise a conversion right for, Common Stock at less than the
applicable Then-Current Market Price, and in determining the aggregate exercise
or conversion price payable for such Common Stock, there shall be taken into
account any consideration the Company receives for such rights or warrants and
any amount payable on exercise or conversion thereof, with the value of such
consideration, if other than cash, to be determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Administrator, whose determination shall be conclusive. The
Appreciation Threshold Price and Initial Price shall also be adjusted in the
manner described in Section
6.1(f).
12
(c) Distributions of Other
Assets. If the Company shall, after the date of this
Agreement, declare or pay a dividend or make a distribution to all holders of
Common Stock, in either case, consisting of evidences of its indebtedness or
other non-cash assets (excluding (A) any dividends or distributions referred to
in Section
6.1(a) and (B) any Spin-Off Distributions) or shall issue to all
holders of Common Stock rights or warrants to subscribe for or purchase any of
its securities (other than rights or warrants referred to in Section 6.1(b)),
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to a fraction, (i) the numerator of which shall be the
Then-Current Market Price per share of Common Stock for the five Trading Days
ending on, and including, the Trading Day immediately preceding the ex-dividend
date for such distribution, and (ii) the denominator of which shall be such
Then-Current Market Price per share of Common Stock for the five Trading Days
ending on, and including, the Trading Day immediately preceding the ex-dividend
date for such distribution, less the fair market value (as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Administrator, whose determination shall be conclusive) as of the
time the adjustment is effected of the portion of those evidences of
indebtedness or non-cash assets or rights or warrants applicable to one share of
Common Stock. An adjustment to each Exchange Rate made pursuant to
this Section
6.1(c) shall be made successively whenever any such distribution is
made. The Appreciation Threshold Price and Initial Price shall also
be adjusted in the manner described in Section
6.1(f).
13
(d) Cash
Dividends. If the Company shall, after the date of this
Agreement, declare a record date in respect of a distribution of cash (other
than any cash distributed in consideration of fractional shares of Common Stock
and any cash distributed in a Reorganization Event), by dividend or otherwise,
to all holders of Common Stock, then the Exchange Rate will be multiplied by a
Dilution Adjustment equal to a fraction, (i) the numerator of which shall
be the Then-Current Market Price per share of Common Stock for the five Trading
Days ending on, and including, the Trading Day immediately preceding the
ex-dividend date for such dividend or distribution, and (ii) the
denominator of which shall be such Then-Current Market Price per share of Common
Stock for the five Trading Days ending on, and including, the Trading Day
immediately preceding the ex-dividend date for such dividend or distribution,
less the amount in cash per share that the Company distributes to holders of
Common Stock. The Appreciation Threshold Price and Initial Price
shall also be adjusted in the manner described in Section
6.1(f).
(e) Tender or Exchange
Offers. If the Company or any of its subsidiaries shall, after
the date of this Agreement, make a payment in respect of a tender or exchange
offer for the Common Stock (other than a tender offer solely to holders of fewer
than 100 shares of Common Stock), and the cash and the value (as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Administrator, whose determination shall be conclusive), of any
other consideration included in the payment per share of Common Stock exceeds
the Then-Current Market Price for the five consecutive Trading Day period
commencing on the Trading Day next succeeding the last day on which tenders or
exchanges may be made pursuant to such tender or exchange offer, then the
Exchange Rate will be multiplied by a Dilution Adjustment equal to a fraction,
(i) the numerator of which shall be the sum of (A) the aggregate cash and
the value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator, whose determination
shall be conclusive), on the expiration date, of the other consideration paid or
payable for shares accepted for purchase or exchange in such tender or exchange
offer, plus (B) the product of (x) the Then-Current Market Price per share
of Common Stock for the five consecutive Trading Day period commencing on the
Trading Day next succeeding the expiration date (such period, the “Tender Offer Valuation
Period”), multiplied by (y) the number of shares of Common Stock
outstanding immediately after the time (the “Expiration Time”)
such tender or exchange offer expires (after giving effect to such tender offer
or exchange offer), and (ii) the denominator of which shall be such
Then-Current Market Price per share of Common Stock for the Tender Offer
Valuation Period multiplied by the number of shares of Common Stock outstanding
immediately prior to the Expiration Time (prior to giving effect to such tender
offer or exchange offer). If the application of the foregoing formula would
result in a decrease in the Exchange Rate, no adjustment to the Exchange Rate
will be made. The Appreciation Threshold Price and Initial Price
shall also be adjusted in the manner described in Section
6.1(f).
(f) Corresponding Adjustments to
Initial Price, Appreciation Threshold Price and Closing
Price.
(i) If any
adjustment is made to the Exchange Rate pursuant to Section 6.1(a), (b), (c),
(d) or (e), the Appreciation Threshold Price and the Initial Price
shall also be adjusted by dividing each of the Appreciation Threshold Price and
the Initial Price by the applicable Dilution Adjustment.
14
(ii) If,
during any Calculation Period used in calculating the Average Market Price or
the Then-Current Market Price, an adjustment to the Exchange Rate becomes
effective pursuant to this Section 6.1, then the
average Closing Prices used to calculate such Average Market Price or
Then-Current Market Price for the trading days preceding the effective date of
the adjustment in the Exchange Rate shall be adjusted proportionally to the
corresponding adjustments to the Initial Price and Threshold Appreciation
Price.
(g) Timing of Dilution
Adjustments. Each Dilution Adjustment shall be
effected:
(i) in the
case of any adjustment made pursuant to Section 6.1(a),
immediately after 5:00 p.m., New York City time, on the date fixed for
determination of the holders of Common Stock entitled to receive such dividend
or distribution or the effective date of such subdivision, split or combination,
as applicable;
(ii) in the
case of any adjustment made pursuant to Section 6.1(b),
immediately after 5:00 p.m., New York City time, on the date fixed for the
determination of holders of Common Stock entitled to receive such rights or
warrants;
(iii) in the
case of any adjustment made pursuant to Section 6.1(c),
immediately after 5:00 p.m., New York City time, on the date fixed for
determination of the holders of Common Stock entitled to receive such
distribution;
(iv) in the
case of any adjustment made pursuant to Section 6.1(d),
immediately after 5:00 p.m., New York City time, on the date fixed for the
determination of the holders of Common Stock entitled to receive such dividend
or distribution; and
(v) in the
case of any adjustment made pursuant to Section 6.1(e),
immediately after 5:00 p.m., New York City time, on the final Trading Day
of the Tender Offer Valuation Period; provided, that if the
Exchange Date occurs within the five consecutive Trading Days next succeeding
the expiration date, references with respect to “five consecutive Trading Day
period” in Section
6.1(e) shall be deemed replaced with such lesser number of Trading
Days as have elapsed between the expiration date and the Exchange Date in
determining the applicable Exchange Rate.
(h) General; Failure of Dilution
Event to Occur. All Dilution Adjustments shall be rounded
upward or downward to the nearest 1/10,000th or, if there is not a nearest
1/10,000th, to the next lower 1/10,000th. No adjustment in the
Exchange Rate shall be required unless such adjustment would require an increase
or decrease of at least one percent in the Exchange Rate; provided, however, that any
adjustments that by reason of this sentence are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. If any dividend or distribution of the type described in
Section
6.1(a) is declared but not so paid or made, or the outstanding
shares of Common Stock are not subdivided, split or combined, as the case may
be, each new Exchange Rate shall be immediately readjusted, effective as of the
date the board of directors of the Company determines not to pay such dividend
or distribution or to effect such subdivision, dividend, distribution, split or
combination, to the Exchange Rate that would then be in effect if such
subdivision, dividend, distribution, share split or share combination had not
been declared or announced. If any rights or warrants described in
Section 6.1(b) are
not so issued, the Exchange Rate shall be readjusted, effective as of the date
the Company’s board of directors publicly announces its decision not to issue
such rights or warrants, to the Exchange Rate that would then be in effect if
such issuance had not been declared. If any rights or warrants described in
Section
6.1(b) are not exercised or converted prior to the expiration of the
exercisability or convertibility thereof, the Exchange Rate shall be readjusted
to the Exchange Rate that would then be in effect if the adjustments made upon
the issuance of such right or warrant had been made on the basis of the delivery
of only the number of shares of the Common Stock actually
delivered. If any dividend or distribution described in Section
6.1(d) is declared but not so paid or made, each new Exchange Rate
shall be readjusted, effective as of the date the Company’s board of directors
publicly announces its decision not to pay such dividend or distribution, to the
Exchange Rate that would then be in effect if such dividend or distribution had
not been declared. If the Company or one of its subsidiaries is
obligated to purchase shares of Common Stock pursuant to any tender or exchange
offer described in Section 6.1(e), but
the Company or such subsidiary is permanently prevented by applicable law from
effecting any such purchase, or all such purchases are rescinded, then each new
Exchange Rate shall be readjusted to be the Exchange Rate that would then be in
effect if such tender or exchange offer had not been made. If a
Reorganization Event shall occur after the occurrence of one or more events
requiring an adjustment pursuant to this Section 6.1, the
Dilution Adjustments previously applied to the Exchange Rate in respect of such
events shall not be rescinded but shall be applied to the new Exchange Rate
provided for under Section
6.2.
15
Section
6.2
Adjustment for
Consolidation, Merger or Other Reorganization Event.
(a) In the
event of (i) any consolidation or merger of the Company, or any surviving
entity or subsequent surviving entity of the Company (a “Company Successor”),
with or into another entity (other than a merger or consolidation in which the
Company is the continuing corporation and in which the Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another corporation),
(ii) any sale, transfer, lease or conveyance to another corporation of the
property of the Company or any Company Successor as an entirety or substantially
as an entirety, (iii)(x) any statutory exchange of securities of the
Company or any Company Successor with another corporation or (y) any sale
of all or substantially all of the outstanding equity securities of the Company
or any Company Successor, including pursuant to any plan of arrangement or
similar scheme with the Company’s stockholders under any applicable law, rule or
regulation or order of any court or governmental authority (in the case of each
of the preceding clauses (x) and (y), other than in connection with a
consolidation or merger referred to in clause (i) immediately above), or
(iv) any liquidation, dissolution or winding up of the Company or any
Company Successor (any such event described in clause (i), (ii), (iii) or
(iv), a “Reorganization
Event”), Seller shall deliver on the Exchange Date, in lieu of the
Contract Shares, cash in an amount (the “Basic Reorganization Event
Amount”) equal to the product of (x) the sum of the Firm Shares and
the Additional Shares and (y)(i) if the Transaction Value is less than the
Appreciation Threshold Price but equal to or greater than the Initial Price, the
Initial Price, (ii) if the Transaction Value is equal to or greater than
the Appreciation Threshold Price, 0.8333 multiplied by the Transaction Value,
and (iii) if the Transaction Value is less than the Initial Price, the
Transaction Value. Notwithstanding the foregoing, if the
consideration received by the holders of the Common Stock in the Reorganization
Event (the “Merger
Consideration”) includes any Marketable Securities, Seller may, at its
option, deliver those Marketable Securities on the Exchange Date in lieu of
delivering an amount of cash equal to the value of those Marketable Securities
as described above based on the Average Market Price of the Marketable
Securities on the Exchange Date.
16
(b) Notwithstanding
Section 6.2(a),
if at least 30% of the Merger Consideration in any Reorganization Event consists
of property, other than Marketable Securities (a “Cash Merger”), then
Seller shall be required (i) within five Business Days after Seller
receives the Merger Consideration, to deliver the Accelerated Portion to
Purchaser; provided, that to the
extent the Accelerated Portion consists of property other than cash or cash
equivalents, Seller may, at its option, deliver, in lieu of such other property,
cash in an amount equal to the Value of such other property; and (ii) on
the Exchange Date, to deliver to Purchaser the number of Marketable Securities
equal to the product of (x) the sum of the Firm Share Base Amount and the
Additional Share Base Amount and (y) the Exchange Rate, adjusted as
described in the next sentence, and the provisions of Section
2.3(c) shall apply mutatis mutandis to such Marketable Securities,
provided that Seller may exercise the Cash Settlement Alternative in respect of
such Marketable Securities, in which case Section
2.3(d) shall apply to such election mutatis mutandis to such
Marketable Securities, and Seller shall deliver cash equal to the value, based
on the Average Market Price of the Marketable Securities at the Exchange Date,
of the number of Marketable Securities that the Seller would otherwise be
required to deliver on the Exchange Date. For purposes of calculating such
Exchange Rate, (A) the Initial Price and Appreciation Threshold Price shall
each be adjusted by multiplying the Initial Price and Appreciation Threshold
Price, as applicable, as then in effect, by a fraction, (i) the numerator
of which is the Value of a share of the Marketable Securities, and (ii) the
denominator of which shall be the Transaction Value; and (B) the Exchange
Rate shall be adjusted by multiplying the Exchange Rate (computed on the basis
of the adjusted Initial Price and Appreciation Threshold Price and the Average
Market Price of the Marketable Securities) by a fraction, (i) the numerator
of which is the aggregate Value of the Marketable Securities included in the
Merger Consideration received in exchange for a single share of Common Stock,
and (ii) the denominator of which is the Value of a share of the Marketable
Securities.
(c) If a Cash
Merger occurs during a Calculation Period used to calculate the Average Market
Price, average Closing Price or Transaction Value, then the average Closing
Prices used to calculate such Average Market Price, the average Closing Price or
the average Closing Price referred to in clause (iii) of the definition of
Transaction Value, in each case for the Trading Days preceding the effective
date of the adjustment in the Exchange Rate, shall be adjusted proportionally to
the corresponding adjustments to the Initial Price and Threshold Appreciation
Price.
(d) For the
avoidance of doubt, if 100% of the Merger Consideration in a Cash Merger
consists of cash, then delivery of the entire Merger Consideration will be
accelerated as set forth in Section
6.2(b) above.
Section
6.3
Spin-Off
Distributions. (a) If the Company shall, after the
date of this Agreement or during the term of this Agreement, make a Spin-Off
Distribution, then for all purposes of this Agreement, from and after the record
date in respect of such Spin-Off Distribution, (i) the Contract Shares
shall be deemed to include both (A) that number of shares of Common Stock equal
to the product of (x) the sum of the Firm Share Base Amount and the
Additional Share Base Amount and (y) the Exchange Rate, and (B) that number
of Marketable Securities of the class distributed in respect of the Contract
Shares in such Spin-Off Distribution equal to the product of (x) the sum of
the Firm Share Base Amount and the Additional Share Base Amount, (y) the
Exchange Rate, and (z) the number of shares of such Marketable Securities
distributed per share of Common Stock in the Spin-Off Distribution;
(ii) Seller’s obligations under Section 2.3 shall
include delivery of such Marketable Securities together with the Common Stock
comprising the Contract Shares and the provisions of Section
2.3(c) shall apply mutatis mutandis to such Marketable Securities;
and (iii) the “Closing Price” of the
Common Stock, for purposes of calculating the Exchange Rate and for all other
purposes under the Agreement, shall thereafter be deemed to be equal to the sum
of (A) the Closing Price per share of Common Stock and (B) the product
of (x) the Closing Price per share of the spun-off Marketable Securities
and (y) the number of shares of such Marketable Securities distributed per
share of Common Stock in the Spin-Off Distribution. The formula for
determining the “Closing Price” in this Section
6.3(a) will be adjusted if any event that would, if it had occurred
with respect to the Common Stock or the Company, have required an adjustment
pursuant to the provisions described under Article VI hereof
occurs with respect to those Marketable Securities or their issuer between the
time of the Spin-Off Distribution and the Exchange Date.
17
(b) Instead
of delivering Marketable Securities on the Exchange Date, Seller may exercise
the Cash Settlement Alternative in respect of such Marketable Securities, in
which case Section
2.3(d) shall apply to such election mutatis mutandis to such
Marketable Securities, and Seller shall deliver cash equal to the value, based
on the Average Market Price of the Marketable Securities at the Exchange Date,
of the number of Marketable Securities that the Seller would otherwise be
required to deliver on the Exchange Date.
Section
6.4
Adjustments with Respect to
Marketable Securities. The number of any Marketable Securities
included in any calculation pursuant to this Agreement shall be subject to
adjustment if any event that would, had it occurred with respect to the Common
Stock or the Company, have required an adjustment pursuant to Article VI hereof,
shall occur with respect to such Marketable Securities or the issuer of such
Marketable Securities between the time of the Spin-Off Distribution or
Reorganization Event and the Exchange Date. Adjustment for such
subsequent events shall be as nearly equivalent as practicable to the
adjustments provided for in Article VI
hereof.
ARTICLE
VII
ACCELERATION
UPON AN EVENT OF DEFAULT; TRANSFER AGENT INSTRUCTIONS
Section
7.1
Events of
Default. If one or more of the following events (each an
“Event of
Default”) shall occur:
(a) Seller or
Xxxxx X. Xxxxxxx shall commence a voluntary case or other proceeding seeking a
liquidation, reorganization or other relief with respect to such person’s debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of such person or any substantial part of such person’s
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against such person, or shall make a general assignment for the
benefit of creditors, or shall take any action to authorize any of the
foregoing; or
18
(b) an
involuntary case or other proceeding shall be commenced against Seller or Xxxxx
X. Xxxxxxx seeking liquidation, reorganization or other relief with respect to
such person or such person’s debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of such person or any
substantial part of such person’s property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days; or an
order for relief shall be entered against such person under the federal
bankruptcy laws as now or hereafter in effect; or
(c) a
Collateral Event of Default within the meaning of the Collateral Agreement shall
occur;
then,
upon the occurrence of any such event, Seller’s obligations under this Agreement
will automatically be accelerated and Seller shall become obligated to deliver
the Contract Shares (or, after a Reorganization Event or Spin-Off Distribution,
the Marketable Securities or cash or other assets or a combination of Marketable
Securities or cash or other assets deliverable instead of or in addition to
those shares of Common Stock) then deliverable under this Agreement, or any U.S.
Government Securities or other property then pledged as collateral under the
Collateral Agreement for Seller’s obligations. Purchaser and Seller
agree that such amount is a reasonable preestimate of loss and not a
penalty. Such amount is payable for the loss of bargain and Purchaser
will not be entitled to recover additional damages as a consequence of any loss
resulting from an Event of Default.
Section
7.2
Transfer Agent
Instructions. Seller agrees to provide the transfer agent for
the Common Stock or any Marketable Securities with standing instructions to pay
over directly to the Collateral Agent for the benefit of Purchaser all cash or
other property received in respect of distributions or dividends on the Common
Stock or Marketable Securities or in connection with a Reorganization
Event. Purchaser agrees to instruct the Collateral Agent, and to
cause the Collateral Agent, to promptly pay over to Seller any dividends,
interest, principal or other payments received by the Collateral Agent on any
collateral pledged by Seller, including any substitute collateral, unless Seller
is in default on its obligations under the Collateral Agreement (including
Seller’s obligation to pledge additional shares of Common Stock when required
under the Collateral Agreement), or unless the payment of that amount to Seller
would cause the collateral to become insufficient under the Collateral
Agreement. Seller will have the right to vote any pledged shares of
Common Stock or Marketable Securities for so long as those shares are owned by
it and pledged under the Collateral Agreement, unless an event of default occurs
under this Agreement or the Collateral Agreement.
19
ARTICLE
VIII
MISCELLANEOUS
Section
8.1
Adjustments of Exchange
Rate; Selection of Independent Investment Banking
Firm. Purchaser shall be responsible for the effectuation and
calculation of any adjustment pursuant to Article VI hereof and
shall furnish Seller notice of any such adjustment and shall provide Seller
reasonable opportunity to review the calculations pertaining to any such
adjustment. If, pursuant to the terms and conditions of this
Agreement, the Administrator shall be required to retain a nationally recognized
independent investment banking firm for any purpose provided in this Agreement,
such nationally recognized independent investment banking firm shall be selected
and retained by the Administrator only after consultation with
Seller.
Section
8.2
No Assumption of
Liability. By executing this Agreement, none of the Trustees
assumes any personal liability under this Agreement.
Section
8.3
Notices.
(a) All
notices and other communications provided for in this Agreement, unless
otherwise specified, shall be in writing and shall be given at the addresses set
forth in the following sentence or at such other addresses as may be designated
by notice duly given in accordance with this Section 8.3 to each
other party to this Agreement. Until such notice is given,
(i) notices to Purchaser shall be directed to it in care of the
Administrator, U.S. Bank National Association, Corporate Trust Services, 000
Xxxx 0xx Xxxxxx, 24th Floor, LM-CA T24T, Xxx Xxxxxxx, XX 00000, Telecopier
No. (000) 000-0000, Attention: 2009 Xxxx Food Automatic Common Exchange
Security Trust; and (ii) notices to Seller shall be directed to it at 00000
Xxxxxxxx Xxxx., 0000, Xxx Xxxxxxx, XX 00000, Telecopier No. (310) 824 -
7756, Attention: Xxxxx X. Xxxxxxx.
(b)
Each
notice given pursuant to Section
8.3(a) shall be effective (i) if sent by certified mail (return
receipt requested), 72 hours after being deposited in the United States mail,
postage prepaid; (ii) if given by telex or telecopier, when such telex or
telecopied notice is transmitted (with electronic confirmation of transmission
or verbal confirmation of receipt); or (ii) if given by any other means,
when delivered at the address specified in this Section
8.3.
Section
8.4
Governing Law;
Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. To
the extent permitted by law, the unenforceability or invalidity of any provision
or provisions of this Agreement shall not render any other provision or
provisions contained in this Agreement unenforceable or invalid.
Section
8.5
Entire
Agreement. Except as expressly set forth in this Agreement,
this Agreement constitutes the entire agreement among the parties with respect
to the subject matter of this Agreement and supersedes all prior agreements,
understandings and negotiations, both written and oral, among the parties with
respect to the subject matter of this Agreement.
Section
8.6
Amendments;
Waivers. Any provision of this Agreement may be amended or
waived (either generally or in a particular instance and either retrospectively
or prospectively) if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Purchaser and Seller or, in the case of
a waiver, by the party against whom the waiver is to be
effective. Purchaser agrees that it will not, without Seller’s
written consent, agree to amend or waive any provision of the Trust Agreement in
any manner that materially and adversely affects the rights or obligations of
Seller hereunder. No failure or delay by either party in exercising
any right, power or privilege under this Agreement shall operate as a waiver of
such right, power or privilege nor shall any single or partial exercise of any
such right, power or privilege preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power or
privilege. The rights and remedies provided in this Agreement shall
be cumulative and not exclusive of any rights or remedies provided by
law.
20
Section
8.7
Non-Assignability. This
Agreement and the rights and obligations of the parties under this Agreement may
not be assigned or delegated by either party without the prior written consent
of the other party, and any purported assignment without such consent shall be
void.
Section
8.8
No Third Party Rights;
Successors and Assigns. This Agreement is not intended and
shall not be construed to create any rights in any person other than Seller and
Purchaser and their respective successors and assigns and no person shall assert
any rights as third party beneficiary under this Agreement. Whenever
any of the parties to this Agreement is referred to, such reference shall be
deemed to include the successors and assigns of such party. All the
covenants and agreements contained in this Agreement by or on behalf of Seller
and Purchaser shall bind and be enforceable by, and inure to the benefit of,
their respective successors and assigns whether so expressed or not, and shall
be enforceable by and inure to the benefit of Purchaser and Seller and their
respective successors and assigns.
Section
8.9
Counterparts. This
Agreement may be executed, acknowledged and delivered in any number of
counterparts, each of which shall be an original, but all of which shall
constitute a single agreement, with the same effect as if the signatures on each
such counterpart were upon the same instrument. A copy of a
counterpart sent by facsimile machine or other electronic means must be treated
as an original counterpart, is sufficient evidence of the execution of the
original and may be produced in evidence for all purposes in place of the
original.
21
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered as of the first date set forth above.
SELLER:
XXXXX X. XXXXXXX, in his
individual capacity
and as trustee of the Xxxxx
X. Xxxxxxx Living
Trust dated
May 28, 1986, as amended
By: _______________________________________
Name: Xxxxx
X. Xxxxxxx
PURCHASER:
2009 XXXX FOOD
AUTOMATIC COMMON
EXCHANGE SECURITY
TRUST
By: _________________________________________
Xxxxxx X. Xxxxxxx, as
Trustee
By: _________________________________________
Xxxxxxx X. Xxxxxx
III, as Trustee
By: _________________________________________
Xxxxx X. X’Xxxxx, as
Trustee
22
