EXHIBIT 10.18
EXECUTION COPY
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SECURITIES PURCHASE AND STOCKHOLDERS AGREEMENT
DATED
NOVEMBER 25, 1996
AMONG
CGW SOUTHEAST PARTNERS III, L.P.,
NATIONSBANC INVESTMENT CORPORATION,
MELLON BANK, N.A., AS TRUSTEE FOR FIRST PLAZA GROUP TRUST,
J. XXXXX XXXXXXX,
XXXXXXX X. XXXXXXXX,
XXXXXXX X. XXXXXXX,
XXXXXX X. XXXXXX,
XXXXXXXX XXXXXX,
STUART XXXX XXXXX,
AND
GORGES HOLDING CORPORATION
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SECURITIES PURCHASE AND STOCKHOLDERS AGREEMENT
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This Securities Purchase and Stockholders Agreement is entered into on
this 25th day of November, 1996, by and among GORGES HOLDING CORPORATION, a
Delaware corporation (the "Company"), CGW SOUTHEAST PARTNERS III, L.P., a
Delaware limited partnership ("CGW"), MELLON BANK, N.A., as Trustee for First
Plaza Group Trust ("First Plaza"), NATIONSBANC INVESTMENT CORPORATION, a
Delaware corporation ("NationsBank"), J. Xxxxx Xxxxxxx, Xxxxxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxxx Xxxxxx and Xxxxxx Xxxx Xxxxx
(Messrs. Culwell, Mitchell, Collins, Powers, Xxxxxx and Xxxxx are each a
"Management Purchaser and are collectively the "Management Purchasers"). CGW,
First Plaza, NationsBank and the Management Purchasers are each referred to as a
"Purchaser" and are collectively referred to as the "Purchasers".
BACKGROUND
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CGW has caused the Company to be formed for the purpose of owning all
of the issued and outstanding capital stock of Gorges/Quik-to-Fix Foods, Inc., a
Delaware corporation ("Gorges"). CGW has subscribed for and purchased and now
owns one thousand (1,000) shares of the common capital stock of Gorges and is
presently the sole shareholder of Gorges. Gorges was formed for the purpose of
purchasing substantially all of the business and assets of the Gorges/Quik-to-
Fix Foods division of Tyson Foods, Inc. (the "Division") as provided in the
Asset Purchase Agreement, dated October 17, 1996 between Gorges, Tyson Foods,
Inc., Gorges Foodservice, Inc. and Tyson Holding Company (the "Purchase
Agreement"). Each of the Purchasers wish to subscribe for and purchase shares
of the capital stock of the Company as herein provided in order to capitalize
the Company and, in turn, Gorges, so that the transactions contemplated by the
Purchase Agreement can be consummated.
AGREEMENT
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NOW, THEREFORE, Purchasers and the Company agree as follows:
DEFINITIONS
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1.1 Certain Defined Terms.
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The following terms used in this Agreement have the following
meanings:
"Act" means the Securities Act of 1933, as amended from time to time,
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or any successor statute.
"Affiliate" means, as to any Person, any other Person that directly or
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indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, "control" (including, with its correlative
meanings, "controlled by" and "under common control with") means possession,
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directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of securities, or partnership or other
ownership interests, by contract or otherwise), provided that, in any event: (a)
any Person that owns directly or indirectly fifty percent (50%) or more of the
securities having ordinary voting power for the election of directors or other
members of the governing body of a corporation or fifty percent (50%) or more of
the partnership or other ownership interests of any other Person (other than as
a limited partner of such other Person) will be deemed to control such
corporation or other Person; (b) each director or officer of such Person shall
be deemed to be an Affiliate of such Person and (c) with respect to First Plaza,
each trust relating to an employee benefit plan of the General Motors
Corporation shall be deemed to be an Affiliate of First Plaza.
"Agreement" means this Securities Purchase Agreement, as it may be
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amended from time to time.
"Board of Directors" means the Company's board of directors.
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"Business" means the business of the Company and its Subsidiaries as
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presently conducted and as presently proposed to be conducted.
"Business Day" means any day on which commercial banks in Atlanta,
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Georgia are required to be open for business.
"CGW" has the meaning set forth in the first paragraph of this
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Agreement.
"Call Price" means (i) if a Management Purchaser's employment with the
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Company or any of its Subsidiaries is terminated for any reason other than Cause
(as defined in the Employment Agreement between the Company and such Management
Purchaser), the greater of Fair Value or Cost, and (ii) if such termination of
employment is for Cause, the lesser of Fair Value or Cost.
"Class A Stock" means the Class A Voting Common Stock, $.01 par value,
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of the Company.
"Class B Stock" means the Class B Non-Voting Common Stock, $.01 par
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value, of the Company.
"Closing" has the meaning set forth in Section 2.5.
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"Closing Date" has the meaning set forth in Section 2.5.
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"Code" means the Internal Revenue Code of 1986, as amended from time
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to time, or any successor statute.
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"Common Stock" means the Class A Stock and/or the Class B Stock, as
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the context so requires.
"Company" has the meaning set forth in the first paragraph of this
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Agreement.
"Consulting Agreement" means the Consulting Agreement to be entered
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into by Gorges and the General Partner substantially in the form attached as
EXHIBIT A hereto.
"Cost" means the amount per share of Common Stock paid by a Management
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Purchaser upon his acquisition of such share of Common Stock.
"Credit Agreement" means the Credit Agreement, dated November 25,
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1996, between Gorges, as borrower, NationsBank of Texas, N.A., as administrative
agent, and the several lenders that are party thereto, pursuant to which such
lenders will provide Gorges with a $30 million revolving credit facility and a
$40 million term loan facility, as the same may be amended from time to time.
"Dollars" and "$" mean the lawful money of the United States of
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America.
"Effective Date of Termination" means the effective date of
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Termination of Employment as stated in any notice of termination given by the
Company (including notice given by a Subsidiary of the Company) or the
Management Purchaser, or in the event no such notice of termination is given by
either the Company (including notice given by a Subsidiary of the Company), or
the Management Purchaser, then the date on which the Management Purchaser last
performs the duties of the Management Purchaser's employment or position with
the Company or a Subsidiary of the Company as determined by the Board of
Directors of the Company.
"Employment Agreements" mean the written contracts of employment
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between Gorges and each of the Management Purchasers.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
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from time to time, or any successor statute.
"Fair Value" means the value of the Common Stock of a Management
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Purchaser determined as follows: within thirty (30) days following the date the
Company gives written notice of the exercise of its repurchase rights under
Section 9.3, the Management Purchaser (or his executor or personal
representative) and the Company shall determine and mutually agree upon Fair
Value. If the Management Purchaser (or his executor or personal representative)
and the Company cannot agree upon Fair Value within such period, the Company and
such Management Purchaser (or his executor or personal representative) shall
have an additional ten (10) days within which to select an investment banking
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firm of nationally recognized standing with experience in valuing businesses
similar to the Company ("Independent Investment Banking Firm") which they shall
mutually agree upon to determine Fair Value. If the Management Purchaser (or
his executor or personal representative) and the Company cannot mutually agree
upon an Independent Investment Banking Firm within such period, an Independent
Investment Banking Firm shall be selected by an arbitrator chosen in accordance
with the rules of commercial arbitration of the American Arbitration Association
then in effect upon petition by either the Management Purchaser (or his executor
or personal representative) or the Company. The Independent Investment Banking
Firm selected either by mutual agreement of the parties or by the arbitrator as
provided in the preceding sentence shall determine the Fair Value of a share of
Common Stock of the Company and deliver its opinion in writing to the Company
and to the Management Purchaser within sixty (60) days after its election or
appointment. If the Independent Investment Banking Firm expresses its opinion
as to the Fair Value of a share of Common Stock in terms of a range of values,
the mean of such range shall be deemed to be Fair Value for purposes of this
Agreement, or if such opinion expresses Fair Value as an absolute number, such
number shall be deemed to be the Fair Value. Any determination of Fair Value
made in accordance with the foregoing provisions shall be conclusive and binding
on the Company and the Management Purchaser (and his executor or personal
representative) for purposes of determining the amount payable for each share of
Common Stock of the Company upon the exercise by the Company of its rights under
Section 9.3 hereof. The Company, on the one hand, and the Management Purchaser
(or his executor or personal representative), on the other hand, shall bear (x)
his or its out-of-pocket fees and expenses in connection with the determination
of Fair Value, and (y) one-half of the fees and expenses of the Independent
Investment Banking Firm making the determination of Fair Value.
"Fiscal Year" means the fiscal year of the Company, which shall be the
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twelve-month period ending on the last day in the month of December.
"GAAP" means generally accepted accounting principles and practices,
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consistently applied, as promulgated in (i) the documents of Rule 203 of the
Code of Professional Conduct of the American Institute of Certified Public
Accountants, (ii) Statement of Accounting Standards No. 43 "Omnibus Statement on
Auditing Standards" of the Auditing Standards Board of the American Institute of
Certified Public Accountants and (iii) any superseding or supplemental
documentation of equal authority promulgating generally accepted accounting
principles and practices, all as in effect from time to time.
"General Partner" means CGW Southeast III, L.L.C., the general partner
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of CGW.
"Indenture" means the Indenture among Gorges, as issuer of the Senior
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Subordinated Notes, and IBJ Xxxxxxxxx Bank & Trust Company, as trustee, dated
November 25, 1996, as the same may be amended from time to time.
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"Initial Public Offering" means the Company's first offering of Common
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Stock of the Company that is registered under the Act, which offering is
underwritten on a firm commitment basis and produces gross proceeds to the
Company in excess of $30,000,000.
"Investment Banking Agreement" means the Investment Banking Agreement
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to be entered into by Gorges and the Management Company substantially in the
form attached as EXHIBIT B hereto.
"Management Company" means CGW Southeast Management III, L.L.C.
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"Material Adverse Effect" means any circumstances, change in, or
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effect on the Company, its Subsidiaries or its business that, individually or
when taken together with all other circumstances, changes in or effects on the
Company, its Subsidiaries or its business is or is reasonably likely to be
materially adverse to the condition (financial or otherwise), results of
operations, earnings, business, assets (including intangible assets) or
prospects of the Company or its Subsidiaries or a material and adverse effect on
the Company's or any of its Subsidiaries' ability to perform its obligations
under any of this Agreement, the Indenture or the Credit Agreement or under any
other document, instrument or agreement issued in connection herewith or
therewith to which the Company or any of its Subsidiaries is a party or any
adverse effect, whether or not material, upon the binding nature, validity or
enforceability of any material provision of this Agreement.
"Permitted Transferee" means as to any Purchaser who is an individual
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his executor or administrator, any spouse, child, grandchild or sibling of such
Purchaser or any trust created for the benefit of any such spouse, child,
grandchild or sibling.
"Person" means and includes natural persons, corporations,, limited
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partnerships, general partnerships, limited liability companies, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts and other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof.
"Purchaser" or "Purchasers" has the meaning set forth in the first
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paragraph of this Agreement.
"Registrable Securities" means (i) any Common Stock issued pursuant to
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this Agreement, (ii) any Common Stock owned by the Purchasers, and (iii) any
capital stock of the Company issued or issuable with respect to the Common Stock
described in clauses (i) and (ii) by way of a stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when they
have been distributed to the public pursuant to an offering registered under the
Act or sold to the public through a broker, dealer or market maker in compliance
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with Rule 144 under the Act (or any similar rule then in force) or repurchased
by the Company or any Subsidiary of the Company. For purposes of this
Agreement, a Purchaser shall be deemed to be a holder of Registrable Securities,
and the Registrable Securities shall be deemed to be in existence, whenever such
Purchaser has the right to acquire directly or indirectly such Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected, and such Purchaser shall be entitled to exercise the rights of a
holder of Registrable Securities hereunder.
"Sale of the Company" shall mean the sale of the Company and all of
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its Subsidiaries as a whole (whether by merger, share exchange, consolidation,
reorganization, recapitalization, sale of all of the outstanding capital stock
or sale of substantially all of their respective assets) to any Person other
than to an Affiliate of CGW.
"Second Closing" has the meaning set forth in Section 2.5.
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"Second Closing Date" has the meaning set forth in Section 2.5.
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"Senior Subordinated Notes" means the 11.5% Senior Subordinated Notes
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due 2006 to be issued by Gorges as provided in the Indenture.
"Stock Incentive Plan" has the meaning set forth in Section 3.2.2.
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"Subsidiary" of any Person means any other Person of which more than
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fifty percent (50%) of the securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
managers of such Person is owned by such first Person, by one or more
Subsidiaries of such first Person, or by such first Person and one or more of
its Subsidiaries or which is controlled directly or indirectly by the first
Person.
"Termination of Employment" means the termination of the employee-
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employer relationship between the Management Purchaser and the Company (and its
Subsidiaries), regardless of the fact that severance or similar payments are
made to the Management Purchaser, for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, disability, or
retirement.
1.2 Accounting Terms. For purposes of this Agreement, all accounting
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terms not otherwise defined herein have the meanings assigned to them in
conformity with GAAP.
1.3 Other Definitional Provisions.
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1.3.1 Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, to the singular
include the plural, and to the part include the whole. The term "including" is
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not limiting and the term "or" has the inclusive meaning represented by the term
"and/or." The words "hereof," "herein," "hereunder," and similar terms in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. References to "Sections," "Appendices," "Exhibits"
and "Schedules" are to Sections, Appendices, Exhibits and Schedules,
respectively, of this Agreement, unless otherwise specifically provided. Terms
defined herein may be used in the singular or the plural.
1.3.2 Accounting principles and practices are "consistently applied"
when the accounting principles and practices observed in a current period are
comparable in all material respects to the accounting principles and practices
applied in the preceding period.
SECTION 2
PURCHASE AND SALE OF SECURITIES
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2.1 Purchase and Sale of Class A Common Stock by CGW and First Plaza.
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Each of CGW and First Plaza agrees to purchase from the Company, and the Company
agrees to issue and sell to each such Purchaser, that number of shares of Class
A Stock of the Company set forth opposite such Purchaser's name as follows:
CGW 250,000
First Plaza 110,000
In consideration of the issuance and sale of such shares to it, CGW shall
at the Closing and against delivery by the Company to CGW of a certificate for
the shares of Class A Stock purchased by CGW hereunder, (a) transfer, assign and
convey to the Company the one thousand (1,000) shares of the Common Stock of
Gorges owned by CGW, which the parties agree is valued at one thousand dollars
($1,000.00) and (b) deliver to the Company by wire transfer to an account
designated by the Company the sum of Twenty Four Million Nine Hundred Ninety
Nine Thousand Dollars ($24,999,000). In consideration of the issuance and sale
of such shares to it, First Plaza shall, at the Closing and against delivery by
the Company to First Plaza of a certificate for the shares of Class A Stock
purchased by First Plaza hereunder, deliver to the Company by wire transfer to
an account designated by the Company the sum of Eleven Million Dollars
($11,000,000).
2.2 Purchase and Sale of Class B Stock. NationsBank agrees to purchase
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from the Company, and the Company agrees to issue and sell to NationsBank,
Ninety Thousand (90,000) shares of Class B Stock of the Company. In
consideration of the issuance and sale of such shares to it, NationsBank shall,
at the Closing and against delivery by the Company to NationsBank of a
certificate for the shares of Class B Stock purchased by it hereunder, deliver
to the Company by wire transfer to an account designated by the Company the sum
of Nine Million Dollars ($9,000,000).
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2.3 Purchase of Class A Stock by Management Purchasers. Each Management
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Purchaser agrees to purchase from the Company at the Second Closing, and the
Company agrees to issue and sell to such Management Purchaser at that time, the
number of shares of Class A Stock of the Company set forth opposite the name of
such Management Purchaser on SCHEDULE 2.3 hereto. As payment for the shares of
Class A Stock respectively to be purchased by him hereunder, each Management
Purchaser agrees to pay the Company at the Second Closing, by check or wire
transfer to an account designated by the Company, and against delivery by the
Company to such Management Purchaser of a certificate for the shares of Class A
Stock purchased by him hereunder, the sum set forth opposite the name of such
Management Purchaser on SCHEDULE 2.3 hereto. Unless and until a Management
Purchaser pays for the shares of Class A Stock to be purchased by him hereunder
and a certificate for such shares is issued as herein provided, such Management
Purchaser shall not be or be deemed to be a stockholder of the Company and shall
have no rights as a stockholder of the Company in respect of the shares of Class
A Stock subscribed for by such Management Purchaser herein.
2.4 Other Agreements. At the Closing, the Company shall cause Gorges to
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enter into (a) the Consulting Agreement with the General Partner, and (b) the
Investment Banking Agreement with the Management Company.
2.5 Closing. Subject to the satisfaction or waiver of all conditions
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precedent which are set forth in Section 4.1 to the obligations of the parties
in Sections 2.1 and 2.2, the purchase and sale of Common Stock by CGW, First
Plaza and NationsBank provided for herein shall be consummated at a closing (the
"Closing") to be held at the offices of Xxxxxx & Bird, 0000 X. Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000, on the date of and immediately prior to the consummation
of the transactions provided for in the Purchase Agreement. The date on which
the Closing occurs is referred to herein as the "Closing Date." Subject to the
satisfaction or waiver of all conditions precedent which are set forth in
Section 4.3 to the obligations of the parties in Section 2.3, the purchase and
sale of Class A Stock by the Management Purchasers provided for herein shall be
consummated at a closing (the "Second Closing") to be held at the offices of the
Company on March 31, 1997. The date on which the Second Closing occurs is
referred to as the "Second Closing Date."
SECTION 3
REPRESENTATIONS AND WARRANTIES
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3.1 Representations and Warranties of Purchasers. Each Purchaser,
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severally but not jointly, represents and warrants to the Company and each other
Purchaser as follows:
3.1.1 Organization and Qualification. If such Purchaser is a trust,
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it is validly existing under the laws of the jurisdiction of its formation. If
such Purchaser is a corporation or a partnership, it is an entity duly
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organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.
3.1.2 Authority. Such Purchaser is an "accredited investor" as such
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term is defined in Rule 501 of the Rules and Regulations promulgated under the
Act, and has full power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. If such Purchaser is a trust,
corporation or partnership, the execution, delivery and performance by such
Purchaser of this Agreement have been duly and validly authorized and approved
by all necessary action on the part of such Purchaser. This Agreement is the
legal, valid and binding obligation of such Purchaser enforceable against such
Purchaser in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general principles of equity (whether considered in an action at law or in
equity). Neither the execution and delivery by such Purchaser of this Agreement
nor the consummation by such Purchaser of the transactions contemplated hereby
will (a) if such Purchaser is a trust, corporation or partnership, violate such
Purchaser's organizational documents, (b) to the knowledge of such Purchaser,
violate any provisions of law or any order of any court or any governmental unit
to which such Purchaser is subject, or by which its assets are bound, or (c)
conflict with, result in a breach of, or constitute a default under any material
indenture, mortgage, lease, agreement or other instrument to which such
Purchaser is a party or by which its assets or properties are bound.
3.1.3 Investment. The Common Stock to be purchased by such Purchaser
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hereunder is being acquired for investment purposes only and for such
Purchaser's own account and not with a view to the resale or distribution of any
part thereof.
3.1.4 Sophistication. Such Purchaser has such knowledge and
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experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment in the Common Stock; such Purchaser has the
ability to bear the economic risks of such investment; such Purchaser has the
capacity to protect his or its own interests in connection with the transactions
contemplated by this Agreement; and such Purchaser has had an opportunity to
obtain such financial and other information from the Company as it deems
necessary or appropriate in connection with evaluating the merits of the
investment in the Common Stock. If such Purchaser is a Management Purchaser, he
has been employed as an executive officer of the Division, is now employed as an
executive officer of the Company or one of its Subsidiaries and is familiar with
the business and affairs of the Division.
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3.2 Representations and Warranties of the Company. The Company represents
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and warrants to each Purchaser as follows:
3.2.1 Legal Status; Qualification.
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(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company is duly
qualified or licensed to do business and in good standing as a foreign
corporation in all jurisdictions where the failure to be so qualified or
licensed would have a Material Adverse Effect. The Company has furnished to
Purchasers a complete and correct copy of the Company's Certificate of
Incorporation and Bylaws, each as currently in effect and as is in effect as of
the Closing. The Company is not in violation of any of the provisions of its
Certificate of Incorporation or Bylaws.
(b) As of the Closing, the only Subsidiary of the Company is Gorges.
Gorges is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Gorges is duly qualified or licensed
to do business and in good standing as a foreign corporation in all
jurisdictions where the failure to be so qualified or licensed would have a
Material Adverse Effect. The Company has furnished to Purchasers a complete and
correct copy of the Certificate of Incorporation and Bylaws of Gorges, each as
currently in effect and as in effect as of the Closing. Gorges is not in
violation of any of the provisions of its Certificate of Incorporation or
Bylaws.
3.2.2 Capitalization.
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(a) The authorized capital stock of the Company consists of one
million (1,000,000) shares of Class A Stock, one hundred thousand (100,000)
shares of Class B Stock, and one million (1,000,000) shares of preferred stock
without designation (the "Preferred Stock"). On the date hereof and at all
times prior to the Closing no shares of the Class A Stock, no shares of the
Class B Stock and no shares of the Preferred Stock are or will be issued and
outstanding. Immediately following the Closing, there will be issued and
outstanding 360,000 shares of the Class A Stock, 90,000 shares of the Class B
Stock and no shares of the Preferred Stock. Except for this Agreement, the
rights of the holders of Class B Stock to exchange shares of Class B Stock for
shares of Class A Stock as provided in the Company's Certificate of
Incorporation, and except for a total of one hundred twelve thousand five
hundred (112,500) shares of Class A Stock reserved for issuance upon the
exercise of stock options granted or to be granted pursuant to the Company's
1996 Stock Incentive Plan (the "Stock Incentive Plan"), there are not now
outstanding and will not be outstanding immediately following the Closing any
agreements, rights or options to acquire, or any debt or equity securities
convertible into or exchangeable for, any shares of the capital stock of the
Company.
(b) The authorized capital stock of Gorges consists of 2,000 shares of
common stock, $.01 par value, of which 1,000 shares are now and will be on the
Closing Date issued and outstanding. As of the Closing, all of the issued and
outstanding shares of capital stock of Gorges will be owned by the Company, free
and clear of all liens, charges and encumbrances except for the lien in favor of
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NationsBank of Texas, N.A. pursuant to the Credit Agreement. Except for this
Agreement, there are not now outstanding and will not be outstanding immediately
following the Closing any agreements, rights or options giving to any Person the
right to acquire, or any debt or equity securities convertible into or
exchangeable for, any shares of the capital stock of Gorges.
3.2.3 No Violation. The execution, delivery and performance by the
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Company of this Agreement and any other instruments or documents executed and
delivered by the Company hereunder and the execution, delivery and performance
by Gorges of the Purchase Agreement, the Indenture and the Credit Agreement and
any other instruments or documents executed and delivered by Gorges thereunder:
(a) do not conflict with the Company's or Gorges' Certificate of Incorporation
or Bylaws, (b) do not violate any provision of any law, rule, regulation or
ordinance, or any order or ruling of any court or governmental entity to which
the Company or Gorges is subject, and (c) do not result in a breach of or
constitute a default (or an event which with the passage of time or giving of
notice, or both, would constitute a default) under, or cause or permit the
acceleration of the maturity of or give rise to any right of termination,
cancellation, imposition of fees or penalties under, any contract, obligation,
debt, note, bond, lease, mortgage, license, indenture or other instrument to
which the Company or Gorges is a party or by which it or Gorges, or any of their
respective properties or assets, may be bound.
3.2.4 Corporate Power and Authority; Governmental or Other Consents.
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The Company and Gorges each have all requisite corporate power and authority to
carry on their business as presently conducted and as currently proposed to be
conducted, and to own, lease, sell or operate their properties. The Company has
the requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement, and any other instruments or documents
executed and delivered by it hereunder. Gorges has the requisite corporate
power and authority to execute, deliver and perform its obligations under the
Purchase Agreement, the Indenture and the Credit Agreement and any other
instruments or documents executed and delivered by it thereunder. The Company
has furnished to Purchasers a complete and correct copy of the Purchase
Agreement, the Indenture and the Credit Agreement each as in effect on the date
hereof and on the Closing Date. No governmental or other consents, approvals,
authorizations, registrations, declarations or filings are required for the
execution, delivery and performance of this Agreement by the Company and the
Purchase Agreement, Indenture and Credit Agreement by Gorges. Neither the
Company nor Gorges is subject to any law, rule or regulation restricting in any
way its ability to issue shares of its capital stock or rights to acquire such
shares.
3.2.5 Due Authorization; Validity; Enforceability. This Agreement
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and all other instruments or documents executed by the Company in connection
herewith have been duly authorized, executed and delivered, and constitute
legal, valid and binding obligations of the Company, enforceable in accordance
with their respective terms, except as enforceability may be limited by
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applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general principles
of equity (whether considered in an action at law or in equity). The Purchase
Agreement, the Indenture and the Credit Agreement, and all other instruments or
documents executed by Gorges in connection therewith, have been duly authorized,
executed and delivered by Gorges, and constitute legal, valid and binding
obligations of Gorges, enforceable in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity (whether considered
in an action at law or in equity).
3.2.6 Truth and Accuracy of Information. None of the documents,
---------------------------------
instruments and other information furnished to Purchasers by the Company or
Gorges contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make any statements made therein not
misleading. No representation, warranty or statement made by the Company in
this Agreement, or in any document, certificate, exhibit or schedule attached to
or delivered in connection herewith, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make any statements made therein not misleading. There is no fact
which could reasonably be expected to have a Material Adverse Effect and which
has not been disclosed in the documents provided to Purchasers.
3.2.7 Litigation. There is no (a) legal, administrative, arbitration
----------
or other proceeding, suit, claim or action of any nature, investigation or
controversy, pending or, to the knowledge of the Company, threatened against the
Company or Gorges, whether at law or in equity, or before or by any arbitrator
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality that, if decided adversely to the
Company or Gorges would have a Material Adverse Effect or would restrain or
prohibit the Company from consummating the transactions provided for herein or
would restrain or prohibit Gorges from consummating the transactions provided
for in the Purchase Agreement; or (b) judgment, decree, injunction or order of
any court, governmental department, commission, agency, instrumentality or
arbitrator against the Company or Gorges that would have a Material Adverse
Effect or that would restrain or prohibit the Company from consummating the
transactions provided for herein or would restrain or prohibit Gorges from
consummating the transactions provided for in the Purchase Agreement.
3.2.8 Valid Issuance. All of the outstanding capital stock of the
--------------
Company and Gorges has been duly authorized and validly issued and is fully paid
and non-assessable and has been issued in compliance with applicable securities
and other similar laws. When issued in accordance with, and for the
consideration specified in, this Agreement, the Common Stock to be purchased by
each Purchaser hereunder will have been duly authorized and validly issued and
will be fully paid and non-assessable with no personal liability attaching to
the ownership thereof. Each Purchaser will receive title to the Common Stock
purchased by it hereunder free and clear of any lien, charge or encumbrance,
other than as may be created by the action or inaction of such Purchaser.
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3.2.9 Business Operations. The Company and Gorges are each newly
-------------------
formed corporations. The Company has not engaged in any business or operations
since its formation other than entering into this Agreement. Gorges has not
engaged in any business or operations since its formation other than entering
into the Purchase Agreement and arranging for the issuance and sale by Gorges of
the Senior Subordinated Notes and for certain secured credit facilities such
that the net proceeds to Gorges from the issuance and sale of the Senior
Subordinated Notes and amounts available to be borrowed by Gorges under such
credit facilities, when taken together with capital to be contributed by the
Company to Gorges, will provide funds to pay the purchase price for the business
and assets of the Division to be acquired under the Purchase Agreement and
provide working capital for the operations of Gorges following such acquisition.
3.2.10 Purchase Agreement Representations. The representations and
----------------------------------
warranties of Gorges contained in Article 6 of the Purchase Agreement are true
and correct. To the best knowledge of the Company, the representations and
warranties of Tyson Foods, Inc., Gorges Foodservice, Inc. and Tyson Holding
Company contained in Article 5 of the Purchase Agreement are true and correct.
SECTION 4
CONDITIONS PRECEDENT
--------------------
4.1 CGW's, First Plaza's and NationsBank's Conditions to Closing. The
------------------------------------------------------------
obligation of each of CGW, First Plaza and NationsBank to purchase the Common
Stock at the Closing is subject to the fulfillment or waiver of all of the
following conditions prior to, or contemporaneously with, the Closing.
4.1.1 Representations and Warranties. The representations and
------------------------------
warranties of the Company contained herein shall be true and correct in all
material respects on and as of the Closing Date, with the same effect as though
made on and as of the Closing Date, and each such Purchaser shall have received
a certificate of an officer of the Company certifying the provisions of this
Section 4.1.1.
4.1.2 Certified Documents, Etc. The Company shall have delivered, or
------------------------
shall have caused to be delivered, to each such Purchaser copies of the
following documents, duly certified, or the following certificates, as
applicable:
(a) Resolutions of the Board of Directors of the Company authorizing
(i) the execution, delivery and performance of this Agreement and all other
agreements to be executed and delivered by the Company hereunder, (ii) the
consummation of the transactions contemplated by this Agreement, and (iii) all
other actions to be taken by the Company in connection with this Agreement;
(b) Resolutions of the Board of Directors of Gorges authorizing (i)
the execution, delivery and performance of the Purchase Agreement, the Indenture
and the Credit Agreement and all other agreements to be executed and delivered
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by Gorges thereunder, (ii) the consummation of the transactions contemplated by
the Purchase Agreement, the Indenture and the Credit Agreement, and (iii) all
other actions to be taken by Gorges in connection with the Purchase Agreement,
the Indenture and the Credit Agreement.
(c) Certificates, signed by the Secretary of the Company, dated as of
the Closing Date, as to the incumbency, and containing the specimen signature or
signatures, of the officer or officers of the Company authorized to execute this
Agreement on behalf of the Company, together with evidence of the incumbency of
such company officer;
(d) The Certificate of Incorporation of the Company and Gorges,
certified as of a recent date by the Secretary of State of Delaware, and copies
of the Bylaws of the Company and Gorges, certified as of the Closing Date by the
Secretary of the Company; and
(e) A certificate of status, good standing or existence with respect
to the Company and Gorges from the Secretary of State of Delaware, and of each
state or other jurisdiction in which the Company or Gorges is qualified to do
business, dated as of a recent date.
4.1.3 Executed Agreements. Gorges shall have executed and delivered
-------------------
the Consulting Agreement to the General Partner and the Investment Banking
Agreement to the Management Company.
4.1.4 Opinion of Counsel to Company. Each such Purchaser shall have
-----------------------------
received the written opinion of Xxxxxx & Bird, counsel to the Company in the
form of EXHIBIT C hereto.
4.1.5 Delivery of Certificates for Common Stock. The Company shall
-----------------------------------------
have delivered to each such Purchaser, against payment therefore as herein
provided, a certificate, registered in the name of each such Purchaser or its
nominee, representing the shares of the Common Stock respectively to be
purchased by each such Purchaser hereunder.
4.1.6 Other Acts, Conditions, Etc. All acts, conditions and things
----------------------------
(including, without limitation, the obtaining of any necessary regulatory
approvals and the making of any required filings, recordings or registrations)
required to be done and performed and to have happened precedent to the
execution, delivery and performance of this Agreement and to constitute the same
legal, valid and binding obligations of the parties thereto, enforceable in
accordance with their respective terms, shall have been done and performed and
shall have happened in due and strict compliance with all applicable laws.
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4.1.7 Documents in Satisfactory Form. All documentation, including,
------------------------------
without limitation, documentation for corporate and legal proceedings, and all
instruments in connection with the transactions contemplated by this Agreement
and all documents executed and delivered in connection with this Agreement
(including, without limitation, the Consulting Agreement, the Investment Banking
Agreement, the Indenture, the Credit Agreement and the Employment Agreements)
shall be reasonably satisfactory in form and substance to each such Purchaser
and its counsel.
4.1.8 Purchase of Common Stock. Each other Purchaser (other than the
------------------------
Management Purchasers) shall have purchased and paid for the Common Stock it is
obligated to purchase under this Agreement.
4.1.9 Consummation of Other Transactions. Each of the conditions
----------------------------------
precedent to the obligations of Gorges under the Purchase Agreement, the
Indenture and the Credit Agreement shall have occurred (or been waived by Gorges
with the consent of each such Purchaser), the transactions contemplated in the
Purchase Agreement, the Indenture and the Credit Agreement shall have been
consummated in accordance with the respective terms thereof concurrently with
the Closing, and each such Purchaser shall have received copies of the executed
Purchase Agreement, Indenture, Credit Agreement, Consulting Agreement,
Investment Banking Agreement and Employment Agreements and all other documents
and instruments executed and delivered by any of the parties to such agreements
as such Purchaser shall reasonably request.
4.2 The Company's Conditions to Closing. The obligation of the Company to
-----------------------------------
sell the Common Stock to each of CGW, First Plaza and NationsBank at the
Closing, is subject to the fulfillment or waiver of all of the following
conditions prior to, or contemporaneously with, the Closing.
4.2.1 Representations and Warranties. The representations and
------------------------------
warranties of such Purchasers contained herein shall be true and correct in all
material respects on and as of the Closing Date, with the same effect as though
made on and as of the Closing Date.
4.2.2 Payment of Purchase Price. CGW, First Plaza and NationsBank
-------------------------
shall have delivered to the Company, against delivery of certificates for the
Common Stock respectively purchased by such Purchaser hereunder, the
consideration for such Common Stock to be paid by such Purchaser as provided in
Sections 2.1 and 2.2 above.
4.3 Management Purchasers' Conditions to Closing. The obligation of each
--------------------------------------------
Management Purchaser to purchase Class A Stock at the Second Closing is subject
to the fulfillment or waiver of all of the following conditions prior to, or
contemporaneously with, the Second Closing.
4.3.1. Representations and Warranties. The representations and
------------------------------
warranties of the Company contained herein shall be true and correct in all
material respects on and as of the Second Closing Date, with the same effect as
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if made on and as of the Second Closing Date, except for such changes as may
result from the passage of time and the conduct of the business of the Company
and its Subsidiaries in the ordinary course between the Closing Date and the
Second Closing Date, and such Management Purchaser shall have received a
certificate of an officer of the Company certifying the provisions of this
Section 4.3.1.
4.3.2 Delivery of Certificates for Class A Stock. The Company shall
------------------------------------------
have delivered to each Management Purchaser, against payment therefore as herein
provided, a certificate registered in the name of such Management Purchaser
representing the shares of Class A Stock respectively to be purchased by such
Management Purchaser hereunder.
4.3.3 Consummation of Other Transactions. The transactions provided
----------------------------------
for in the Purchase Agreement and in Sections 2.1 and 2.2 of this Agreement
shall have been consummated in accordance with the respective terms thereof.
4.4 The Company's Conditions to the Second Closing. The obligations of
----------------------------------------------
the Company to sell the Class A Stock to any Management Purchaser at the Second
Closing is subject to the fulfillment or waiver of all of the following
conditions prior to, or contemporaneously with, the Second Closing.
4.4.1 Representations and Warranties. The representations and
------------------------------
warranties of such Management Purchaser contained herein shall be true and
correct in all material respects on and as of the Second Closing Date, with the
same effect as though made on and as of the Second Closing Date, and such
Management Purchaser shall have executed and delivered to the Company a
certificate, dated the Second Closing Date, to that effect.
4.4.2 Payment of Purchase Price. Such Management Purchaser shall
-------------------------
have paid to the Company, by check or wire transfer to an account designated by
the Company, against delivery of a certificate for the Class A Stock purchased
by such Management Purchaser, the consideration for such Class A Stock to be
paid by such Management Purchaser as provided in Section 2.3 above.
4.4.3 Continued Employment. Such Management Purchaser is on the
--------------------
Second Closing Date an employee of the Company or one of its Subsidiaries.
SECTION 5
AFFIRMATIVE COVENANTS
---------------------
The Company covenants separately with each of First Plaza and
NationsBank that so long as such Purchaser and any Affiliate of it owns,
directly or beneficially, in the aggregate at least twenty-five percent (25%) of
the shares of Common Stock purchased by it hereunder, the Company shall:
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5.1 Reporting Requirements. Provide such Purchaser all of the following:
----------------------
(a) copies of all notices of meeting delivered to the members of the
Board of Directors and each committee thereof and of all other materials
delivered to the members of the Board of Directors and each committee thereof in
their capacity as such;
(b) as soon as available and in any event within 120 days after the
end of each Fiscal Year, audited consolidated and consolidating financial
statements of the Company and its Subsidiaries as of the end of and for such
Fiscal Year, together with the report thereon of the Company's independent
certified public accounting firm, such financial statements to include a balance
sheet, statements of income, stockholders' equity and cash flows, and footnotes,
all prepared in accordance with GAAP;
(c) as soon as available and in any event within 30 days after the end
of each fiscal reporting period, a consolidated and consolidating balance sheet
of the Company and its Subsidiaries as of the end of such fiscal reporting
period and statements of income, retained earnings and cash flows of the Company
and its Subsidiaries for such fiscal reporting period and for the Fiscal Year to
date, prepared in accordance with GAAP;
(d) as soon as possible and in any event within ten Business Days
after acquiring knowledge thereof, written notice of all litigation, actions,
suits or proceedings threatened or commenced affecting the Company or any of its
Subsidiaries or the properties or business of the Company or any of its
Subsidiaries if the relief sought thereunder is either unspecified as to amount,
or is for damages in excess of $100,000 or, if awarded, could reasonably be
expected to have a Material Adverse Effect, and as soon as possible and in any
event within five Business Days after any material development or change in the
status of any such litigation, action, suit or proceeding, notice of such
development or change;
(e) prompt written notice of the occurrence of any other event that
has had, or that could reasonably be expected to have, a Material Adverse Effect
on the Company and its Subsidiaries, taken as a whole;
(f) promptly from time to time, such other information or documents
respecting the business, properties or the condition or operations, financial or
otherwise, of the Company or any of its Subsidiaries, as such Purchaser may from
time to time reasonably request;
(g) promptly after the execution and delivery thereof by all parties
thereto, all amendments to the Indenture, the Credit Agreement or any other
agreement evidencing or relating to an obligation of the Company or any of its
Subsidiaries to repay borrowed monies;
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(h) prompt written notice of the occurrence of any default or event of
default under the Indenture, the Credit Agreement or any other agreement
evidencing or relating to an obligation of the Company or any of its
Subsidiaries to repay borrowed monies; and
(i) not less than thirty (30) Business Days prior to the first day of
each Fiscal Year, consolidated capital and operating expense budgets, cash flow
projections and income and loss projections for the Company and its Subsidiaries
in respect of such Fiscal Year, all itemized in reasonable detail and prepared
on a monthly basis, and, promptly after preparation, any revisions to any of the
foregoing.
5.2 Visitation Rights. Permit any representatives designated by such
-----------------
Purchaser, upon reasonable written notice and during normal business hours and
such other times as such Purchaser may reasonably request, to (i) visit and
inspect any of the properties of the Company or its Subsidiaries, (ii) examine
the corporate and financial records of the Company or its Subsidiaries and make
copies thereof or extracts therefrom, and (iii) discuss the affairs, finances
and accounts of the Company or its Subsidiaries with the directors, officers,
key employees and independent accountants of the Company or its Subsidiaries.
The presentation of an executed copy of this Agreement by any Purchaser to the
Company's independent accountants shall constitute the Company's permission to
its independent accountants to participate in discussions with such Persons.
5.3 Reservation of Class A Shares. The Company shall at all times reserve
-----------------------------
and keep available out of its authorized but unissued shares of Class A Stock,
for the purpose of effecting the conversion or exchange of the Class B Stock,
such number of its duly authorized shares of Class A Stock as shall be
sufficient to effect the conversion or exchange, in accordance with the terms
thereof, of any Class B Stock from time to time outstanding.
5.4 Corporate Existence. The Company shall maintain and cause each of its
-------------------
Subsidiaries to maintain their respective corporate existence, rights and
franchises in full force and effect.
5.5 Directors of Subsidiaries. The Company shall cause the boards of
-------------------------
directors of each of its Subsidiaries to be comprised of only those persons who
are directors of the Company.
5.6 Compliance with Laws. The Company shall comply with all applicable
--------------------
laws, except to the extent the failure to so comply would not have a Material
Adverse Effect.
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SECTION 6
NEGATIVE COVENANTS
------------------
The Company covenants that, so long as any shares of Common Stock remain
outstanding, without the prior written consent of Purchasers owning not less
than 75% of the number of shares of Common Stock owned by the Purchasers,
neither the Company nor any of its Subsidiaries shall:
6.1 Business. Discontinue its business or engage in any business
--------
activities or operations substantially different from or unrelated to the
manufacture, distribution, and sale of further processed meat.
6.2 Restrictions on Sales of Assets. Sell or otherwise dispose of any
-------------------------------
property except:
(a) sales, leases, rentals or dispositions of property as a result of
a constructive loss or similar loss of the property;
(b) sales, leases, rentals or dispositions of property in the ordinary
course of business and for consideration not less than the fair market value;
(c) sales, leases, rentals or dispositions of property having a fair
market value not in excess of $500,000 in the aggregate during any Fiscal Year;
and
(d) the disposition of any obsolete or retired property not used or
useful in its business the fair market value of which obsolete or retired
property, singly or when aggregated with all other such assets sold pursuant to
this clause, does not exceed $500,000.
6.3 Management or Consulting Fees. Pay fees or any other amount to any
-----------------------------
Person for consulting services or the management of the business or of any
assets of the Company or any Subsidiaries except for (a) the management of
employee benefit plan assets, (b) consulting fees payable to the General Partner
pursuant to the Consulting Agreement, (c) fees paid to the Management Company
pursuant to the Investment Banking Agreement; and (d) consulting, management or
similar fees payable to Persons who are not Affiliates of the Company, any
Purchaser or the General Partner for services provided to the Company or its
Subsidiaries pursuant to agreements entered into in the ordinary course of
business.
6.4 Transactions with Affiliates. Lend or advance money to, or contract
----------------------------
with or engage in any other transactions with Affiliates, except in the ordinary
course of business and on terms and for consideration which are no less
favorable to the Company or more favorable to the Affiliate than the terms and
consideration which the Company or such Affiliate, as the case may be, would be
obligated to pay or entitled to receive in an arm's length transaction.
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6.5 Amendments of Corporate Documents. Amend its Certificate of
---------------------------------
Incorporation or Bylaws in a manner that could reasonably be expected to have a
Material Adverse Effect, increase the authorized capital stock of the Company or
affect the rights of any Purchaser hereunder.
6.6 Executive Compensation. Allow any of its officers, directors or
----------------------
employees to use any assets or property of the Company or any of its
Subsidiaries for personal purposes, or increase the salary or other compensation
or benefits paid or provided to any officer or director of the Company or such
Subsidiary except to the extent that such increase is commercially reasonable,
in accordance with industry standards, and not in excess of the value of the
services rendered.
6.7 Issuance of Capital Stock. Except for shares of Common Stock issued
-------------------------
to employees pursuant to the terms and conditions of the Stock Incentive Plan in
effect on the Closing Date, not issue shares of Common Stock or Preferred Stock
or any options, rights, or warrants convertible into or exercisable or
exchangeable for Common Stock or Preferred Stock.
6.8 Amendments to Certain Other Agreements. Amend the Consulting
--------------------------------------
Agreement or the Investment Banking Agreement.
6.9 Demand Registrations. Enter into any agreement with any other holder
--------------------
of capital stock of the Company which permits such holder to demand registration
of such capital stock under the Act or under any other securities or blue sky
laws of any jurisdiction.
6.10 No Restrictive Agreements. Except as contemplated by the Credit
-------------------------
Agreement and the Indenture (each as in effect on the date hereof), enter into
any agreement which would restrict or otherwise be inconsistent with any of the
rights and obligations of any Purchaser under this Agreement.
SECTION 7
CO-SALE RIGHTS AND OBLIGATIONS
------------------------------
7.1 Co-Sale Rights of Non-CGW Purchasers. In the event that CGW receives
------------------------------------
a bona fide offer from any Person (a "Proposed Purchaser") to purchase all or
any portion of the Common Stock owned by CGW (a "Proposed Transfer"), then each
Purchaser other than CGW shall have the right, as a precondition to such
Proposed Transfer, to cause CGW to require the Proposed Purchaser to purchase
such percentage of the Common Stock owned by such Purchaser, as it elects, up to
and including the percentage of CGW's Common Stock being purchased by the
Proposed Purchaser. Any Common Stock purchased from such Purchaser pursuant to
this Section 7.1 shall be paid and contracted for at the same price per share,
with the same form of consideration and otherwise upon the same terms and
conditions as the sale by CGW.
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7.2 Co-Sale Obligations of Purchasers. (a) In the event the Board of
---------------------------------
Directors and the holders of a majority of the Common Stock then outstanding
approve a Sale of the Company, each Purchaser will (i) consent to, vote for and
raise no objections against such Sale of the Company, (ii) waive any dissenter's
or appraisal rights and similar rights with respect thereto and (iii) if such
Sale of the Company is structured as a sale of Common Stock, agree to sell all
of such Common Stock on the terms and conditions approved by the Board of
Directors and the holders of a majority of the Common Stock then outstanding.
The Purchasers will take all necessary and desirable actions in connection with
the consummation of any Sale of the Company including (x) if such sale is
structured as a sale of assets, actions necessary to cause the orderly
liquidation of the Company following the consummation of such Sale and (y) the
making of the same representations, warranties, covenants and undertakings (to
the extent applicable to any such Purchaser in his, her or its capacity as a
stockholder of the Company) to the prospective transferee(s) in such Sale of the
Company as the holders of a majority of the Common Stock then outstanding;
provided, that none of First Plaza, NationsBank or their respective permitted
transferees shall be required to make any representations or warranties
specifically concerning, or with respect to, the Company or its Subsidiaries or
their respective businesses or assets or provide indemnification for any
representations or warranties except out of funds of such Sale which are
retained as an escrow, hold back or similar arrangement, and provided, further,
if either First Plaza or NationsBank determines in good faith that any sale by
it of the capital stock of the Company owned by it would constitute a violation
of applicable law or regulation, such Purchaser shall not be required to sell
such capital stock in such Sale of the Company.
(b) The obligations of the Purchasers with respect to the Sale of the
Company are subject to the satisfaction of the condition that the consideration
received in such Sale by each Purchaser in respect of a share of Common Stock
owned by such Purchaser shall be in the same amount and form, and shall be
received at the same time, as each other Purchaser shall receive in respect of a
share of Common Stock owned by such other Purchaser. If any Purchaser shall be
given the right to elect the form of such consideration or the time or manner in
which such consideration is payable, such right to elect shall be given to all
Purchasers. Consideration received in such Sale shall be deemed to include all
consideration received by any Purchaser in any transaction which is consummated
substantially contemporaneously with such Sale.
(c) Notwithstanding anything to the contrary contained herein, in no
event shall First Plaza be required to sell its Common Stock if such sale would
cause First Plaza to engage in a prohibited transaction within the meaning of
Section 406 of the Employee Retirement Income Security Act of 1974, as amended,
or Section 4975 of the Code unless an exemption therefrom shall have been
obtained or otherwise apply.
(d) Notwithstanding anything to the contrary contained herein, in no
event shall NationsBank be required to sell its Common Stock if such sale would
cause NationsBank to take (i) any voting securities, the voting provisions of
which would cause NationsBank to violate any law, regulation or other
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requirement of any governmental body applicable to NationsBank, or (ii) any
securities convertible into voting securities, the voting provisions of which if
such conversion took place would cause NationsBank to violate any law,
regulation or other requirement of any governmental body applicable to
NationsBank other than securities which are specifically provided to be
convertible into voting securities only in the event that such conversion may
occur without any such violation.
7.3 Participation Notice. CGW shall, not less than fifteen (15) nor more
--------------------
than forty-five (45) days prior to any Proposed Transfer or Sale of the Company,
notify each other Purchaser in writing of any such Proposed Transfer or Sale of
the Company (the "Participation Notice"). Such Participation Notice shall set
forth: (a) the number and type of securities proposed to be transferred (the
"Transferred Securities"); (b) the name(s) and address(es) of the Proposed
Purchaser(s) in the event of a Proposed Transfer or the proposed transferee in
the event of a Sale of the Company; (c) the proposed amount and all forms of
consideration (with an adequate description of any non-cash consideration) and
terms and conditions of payment offered by such Proposed Purchaser in the event
of a Proposed Transfer or the proposed transferee in the event of a Sale of the
Company; (d) the date, time and place at which the Proposed Transfer or Sale of
the Company is to be consummated (the "Scheduled Closing"); and (v) that the
Proposed Purchaser in the case of a Proposed Transfer has been informed of the
co-sale rights of each Purchaser provided for in Section 7.1 hereof and has
agreed to purchase the Transferred Securities in accordance with the terms of
that Section.
7.4 Exercise of Co-Sale Rights or Obligations. The co-sale rights and
-----------------------------------------
obligations described in Sections 7.1 and 7.2 may be exercised by delivery of a
written notice (the "Exercise Notice"), at least ten (10) Business Days prior to
the Scheduled Closing, to either (a) CGW, in case of the co-sale rights
described in Section 7.1 hereof, or (b) each Purchaser, in case of the co-sale
obligations described in Section 7.2 hereof. In case of the co-sale rights
described in Section 7.1 hereof, such notice shall state the number of shares of
Common Stock that each Purchaser, as the case may be, elects to include in such
sale to the Proposed Purchaser.
7.5 Miscellaneous. In the event that any Purchaser exercises its co-sale
-------------
rights pursuant to Section 7.1 hereof and the Proposed Purchaser is not willing
to purchase shares of Common Stock from such Purchaser, as the case may be, on
the same terms and conditions as specified in the Participation Notice, then CGW
shall not be permitted to transfer or otherwise dispose of any of its shares of
Common Stock to the Proposed Purchaser pursuant to the Proposed Transfer unless
the Proposed Purchaser agrees to purchase (a) a lesser amount of CGW's shares of
Common Stock and (b) a pro rata amount (based on the number of shares of Common
Stock that CGW and all other Purchasers elect to sell) of the shares of Common
Stock of such Purchaser on the same terms and conditions as CGW's shares of
Common Stock are purchased. Upon exercising its respective co-sale rights
pursuant to Section 7.1, a Purchaser shall be obligated until the date of the
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Scheduled Closing, to transfer such number and type of securities as specified
in the Exercise Notice, to the Proposed Purchaser on the terms and conditions
stated in the Participation Notice and in accordance with the provisions of
Section 7.1.
7.6 Inapplicability of Article. Notwithstanding anything to the contrary
--------------------------
set forth in this Section 7, the rights and obligations arising under this
Section 7 shall not apply to the sale by CGW of shares of Common Stock pursuant
to a public offering of securities of the Company in which all Purchasers shall
be permitted to sell shares of Common Stock as set forth in Section 11.1 below.
7.7 CGW Distribution. CGW agrees with First Plaza and NationsBank that
----------------
CGW will not make any distribution to its partners of all or any portion of the
Common Stock owned by it (other than in connection with a final liquidation and
winding up of CGW) unless it has first offered to purchase from First Plaza and
NationsBank, respectively, all (or such lesser portion as First Plaza and
NationsBank respectively may elect) of the Common Stock owned by each of them
for a price equal to the fair market value thereof. As used in this Section
7.7, "fair market value" shall be determined in the same manner as set forth in
the definition of "Fair Value" (substituting for the rights of a Management
Purchaser described therein the rights of First Plaza and NationsBank) and any
valuation of the Common Stock by an Independent Investment Banking Firm shall be
made based on an arm's length sale of the Company as an entirety without
discount for minority interests, disparate voting rights or any similar matter.
SECTION 8
PREEMPTIVE RIGHTS
-----------------
8.1 Preemptive Rights. Except as provided in Section 8.2 below, if after
-----------------
the date hereof the Company authorizes the issuance and sale of any shares of
its Common Stock or other equity securities or any securities containing options
or rights to acquire any shares of Common Stock or other equity securities of
the Company, the Company, by written notice (the "First Notice"), will first
offer to sell to each Purchaser a portion of such Common Stock, equity
securities, options or rights equal to the percentage determined by dividing (i)
the number of shares of Common Stock then held by such Purchaser by (ii) the
number of shares of Common Stock then issued and outstanding. Each Purchaser
will be entitled to purchase its portion of such Common Stock, equity
securities, options or rights at the most favorable price and on the most
favorable terms as such Common Stock, equity securities, options or rights are
to be offered to any other Person. In the event any Purchaser shall not timely
exercise its right under this Section 8.1 to purchase a portion of such Common
Stock, equity securities, options or rights, or if after timely exercising such
right shall fail timely to consummate such purchase (a "Non-Purchasing
Purchaser"), each other Purchaser that has fully exercised its right under this
Section 8.1 to purchase such Purchaser's portion of such Common Stock, equity
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securities, options or rights and who has timely consummated such purchase (a
"Purchasing Purchaser") shall have the right to purchase such Purchasing
Purchaser's pro rata share (determined among all Purchasing Purchasers on the
basis of their respective ownership of Common Stock of the Company) of the
portion of such Common Stock, equity securities, options or rights which the
Non-Purchasing Purchaser had the right to purchase under this Section 8.1. The
Company shall notify all Purchasing Purchasers in writing within five (5) days
after the expiration of such thirty (30) day period of the amount of Common
Stock, equity securities, options or rights that were not subscribed for within
such thirty (30) day period by all Non-Purchasing Purchasers (the "Second
Notice"). Any computation of the number of shares of Common Stock, equity
securities, options or rights that a Purchaser has the right to purchase under
this Section 8.1 shall be rounded to the nearest whole share. Each Purchaser
must exercise its purchase rights, if it elects to do so, within thirty (30)
days after receipt of the First Notice or in the case of the purchase by a
Purchasing Purchaser of a portion of the Common Stock, equity securities,
options or rights that a Non-Purchasing Purchaser had the right to, but did not
purchase, within ten (10) days after receipt of the Second Notice.
If NationsBank shall so request, the Company shall offer to NationsBank, in
lieu of any Class A Stock or other voting securities that the Company proposes
to sell and that NationsBank has the right to acquire under this Section 8.1, a
comparable number of shares of Class B Stock or other securities which have no
voting rights and are convertible into Class A Stock on the same terms as Class
B Stock is convertible into Class A Stock but which are otherwise identical to
the stock or securities being offered.
The provisions of this Section 8.1 shall terminate upon the consummation of
an Initial Public Offering.
8.2 Exceptions for Stock Options, Etc. Section 8.1 above and the rights
---------------------------------
of the Purchasers thereunder shall not apply to (a) Class A Stock or any
securities of the Company which are convertible into or exchangeable for Class A
Stock that are issued to employees of the Company or any direct or indirect
Subsidiary of the Company, either directly or upon exercise of options, rights,
warrants, grants or awards, pursuant to the terms of the Stock Incentive Plan;
provided, however, that the aggregate number of shares of Class A Stock (or
securities exerciseable for, convertible into or exchangeable for shares of
Class A Stock) issued or issuable pursuant to such Stock Incentive Plan and all
similar plans adopted and approved by the directors of the Company shall not
exceed 112,500, (b) Class A Stock to be issued on the conversion or exchange of
Class B Stock, and (c) Class B Stock (or any other non-voting securities) to be
issued upon the conversion or exchange of any Class A Stock (or any other
comparable voting securities).
SECTION 9
RESTRICTIONS ON TRANSFER
------------------------
9.1 Restrictions on Transfer. Each Purchaser agrees that it will not
------------------------
sell, transfer, or assign any shares of Common Stock now owned or hereafter
acquired by it except (a) as provided in Section 7 above, (b) as provided in
this Section 9, (c) subject to Section 7.1 if the transferor is CGW, if such
Purchaser is a trust, corporation or partnership, to an Affiliate of such
Purchaser, (d) if such Purchaser is an individual, to a Permitted Transferee or
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(e) if such Purchaser is CGW, to its partners in connection with the liquidation
and winding up of its affairs; provided, however, any such Affiliate or
Permitted Transferee shall take such shares of Common Stock subject to all of
the rights, obligations and restrictions thereon set forth herein and shall
execute and deliver to the Company and each Purchaser such agreements as the
Company and such Purchasers shall reasonably require to evidence the agreement
thereto of such Affiliate or Permitted Transferee.
9.2 Right of First Refusal. If any Purchaser other than CGW shall receive
----------------------
a bona fide offer from a Person (other than an Affiliate of such Purchaser) to
purchase shares of Common Stock owned by such Purchaser and such Purchaser
desires to accept such offer, such Purchaser shall, within five (5) Business
Days after receipt of such bona fide offer, notify the Company of the offer,
stating in such notice (the "Notice") the following: (a) the name and address
of the offeror; (b) the number of shares subject to such offer and the price per
share offered by such offeror for such shares (the "Price"); (c) the terms and
methods of payment by such offeror for such shares, and (d) the agreement of
such offeror to acquire such shares subject to the restrictions on transfer set
forth herein. The Notice given by such Purchaser shall constitute an offer by
such Purchaser to the Company to sell such shares (the "Offered Shares"), at the
price and upon the terms and conditions set forth in this Section 9.2. The
Notice shall include a representation by such Purchaser to the effect that the
proposed terms in the Notice are contained in a bona fide offer and that the
offeror is an independent, unrelated third party, and the Notice shall be
accompanied by a copy of the written offer to purchase the Offered Shares by the
offeror, binding upon the offeror, and subject only to the terms and conditions
of this Agreement.
(a) The Company shall have an option to purchase all, but not less
than all, of the Offered Shares, which option shall be exerciseable by giving
written notice of exercise to such Purchaser within thirty (30) Business Days
after receipt of the Notice.
(b) The purchase price for each of the Offered Shares to be purchased
pursuant to this Section 9.2 by the Company shall be the Price set forth in the
Notice. The purchase price shall be paid, at the Company's option, (i) in
accordance with the terms offered by the offeror as set forth in the Notice, or
(ii) in immediately available funds delivered at the closing described in
Section 9.2(c) below.
(c) The closing of the purchase of the Offered Shares under this
Section 9.2 shall be at the principal office of the Company. The Company shall
designate a closing date and time, which date shall be within thirty (30)
Business Days after the date of the Notice or such later date and time as may be
agreed upon by the Company and such Purchaser. At the closing, such Purchaser
shall deliver certificates duly endorsed or accompanied by duly executed stock
powers for the Offered Shares being purchased pursuant to this Section 9.2, and
such Purchaser shall transfer the Offered Shares being purchased pursuant to
this Section 9.2 to the Company, free and clear of all liens, claims, charges,
or encumbrances, against payment to such Purchaser for the Offered Shares.
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(d) In the event that the right of first refusal provided in this
Section 9.2 is not exercised within the time period set forth in Section 9.2(a),
or if the purchase of the Offered Shares is not consummated within the time
period set forth in Section 9.2(c) through no fault of such Purchaser, such
Purchaser may transfer the Offered Shares to the offeror upon terms and
conditions no more favorable than those set forth in the Notice; provided
however, that prior to the consummation of any such transfer, the Company shall
have received the opinion of its counsel, or counsel reasonably satisfactory to
it, that such transfer does not require registration under the Act or any
applicable securities laws, and such offeror shall have entered into such
written agreements as the Company and the other Purchasers shall reasonably
request pursuant to which the shares of Common Stock acquired by such offeror
shall continue in the hands of such offeror to be subject to the restrictions on
transfer set forth herein. The Company shall not give effect on its books to
any transfer or purported transfer of shares held or owned by such Purchaser to
any Person unless each and all of the conditions hereof affecting such transfer
shall have been satisfied. If the transfer by such Purchaser to the offeror
named in the Notice is not made within ninety (90) days after the date that the
Purchaser first became free to make such transfer, the right to transfer in
accordance with this Section 9.2(d) shall expire. In such event, the
restrictions of this Agreement shall be reinstated as to the Offered Shares, and
any transfer of such Offered Shares proposed to be made by such Purchaser
subsequent to the expiration of such ninety (90) day period, whether or not to
the same transferee or on the same terms and conditions, must be made in
accordance with this Section 9.2.
9.3 Company's Right to Repurchase from Management Purchaser. For a period
-------------------------------------------------------
of one hundred eighty (180) days following the Effective Date of Termination as
to any Management Purchaser, the Company shall have the right, but not the
obligation, to repurchase from such Management Purchaser (or where shares of
Common Stock are owned or held by a Permitted Transferee of such Management
Purchaser, such Permitted Transferee) at a price per share equal to the Call
Price of all or any portion of the shares of Common Stock then owned by such
Management Purchaser or Permitted Transferee. If the Company elects to exercise
its right to repurchase pursuant to this Section 9.3, it shall do so by giving
written notice thereof to such Management Purchaser or such Permitted
Transferee, as the case may be, prior to the expiration of such 180-day period,
which notice shall specify the number of shares held by such Management
Purchaser or such Permitted Transferee as to which the Company is exercising its
repurchase right. The closing of any purchase of shares of Common Stock owned
by such Management Purchaser or such Permitted Transferee pursuant to this
Section 9.3 shall take place at the principal office of the Company not earlier
than thirty (30) nor later than forty-five (45) days after the date of the
Company's written notice of the exercise of its right to purchase such shares
pursuant to this Section 9.3.
9.4 Assignment to Purchasers. If the Company shall at any time during the
------------------------
term of this Agreement have the right pursuant to Sections 9.2 or 9.3 to
purchase from any Purchaser or any Affiliate or Permitted Transferee thereof, as
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the case may be, any shares of the Common Stock then owned by such Purchaser or
such Affiliate or Permitted Transferee, and the Company at such time is either
unable, or elects not, to exercise such right with respect to all or any part of
such shares of capital stock, the Company may, but shall not be obligated to,
assign its rights and delegate its obligations hereunder to the other
Purchasers, pro rata among them on the basis of their respective ownership of
Common Stock, which may then, pro rata among them in such manner, exercise all
of the rights of the Company with respect to the purchase of such shares of
Common Stock as to which such rights are assigned.
9.5 Prohibited Transactions. Notwithstanding anything to the contrary
-----------------------
contained herein, in no event shall First Plaza be required to sell its Common
Stock pursuant to this Section 9 if such sale would cause First Plaza to engage
in a prohibited transaction within the meaning of Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, or Section 4975 of the Code
unless an exemption therefrom shall have been obtained or otherwise apply.
9.6 Legends. During the term of this Agreement, each certificate
-------
representing shares of the Common Stock held by the parties to this Agreement
shall bear the following legend (any such certificate not having such legend
shall be surrendered upon demand by the Company and so endorsed):
On the face of the certificate:
"Transfer of this stock is restricted in accordance with
conditions printed on the reverse of this certificate."
On the reverse:
"The shares of stock evidenced by this certificate are subject to
and transferable only in accordance with that certain Securities
Purchase and Stockholders Agreement by and among Gorges Holding
Corporation (the "Company") and certain Purchasers of the capital
stock thereof, dated as of November 25, 1996, a copy of which is
on file at the principal office of the Company in Dallas, Texas.
No transfer or pledge of the shares evidenced hereby shall be
made except in accordance with and subject to the provisions of
said Agreement. By acceptance of this certificate, any holder,
transferee, or pledgee hereof agrees to be bound by all of the
provisions of said Agreement."
A copy of this Agreement shall be kept on file in the principal offices of the
Company in Dallas, Texas. Upon termination of all applicable restrictions set
forth herein and upon tender to the Company of the appropriate stock
certificates, the Company shall reissue to the holder of such stock new stock
certificates which shall contain only such restrictive legend as may be required
by the terms and conditions of this Agreement.
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9.7 No Transfer If Change of Control. Notwithstanding anything to the
--------------------------------
contrary herein contained, a Purchaser may not sell, assign, transfer or convey
any shares of Common Stock or other securities of the Company owned by it if
such sale, assignment, transfer or conveyance would, either singly or when taken
together with the sale, assignment, transfer or conveyance by one or more other
Purchasers, shall cause, constitute or result in a Change of Control, as such
term is defined in the Indenture, or would cause, constitute or result in a
default or event of default under Section 9.1(j) the Credit Agreement.
SECTION 10
VOTING AGREEMENTS; ATTENDANCE RIGHTS
------------------------------------
10.1 Election of Directors. The Purchasers agree that the number of
---------------------
directors constituting the Board of Directors shall be not more than five (5).
Each Purchaser agrees to vote at each meeting of the stockholders of the Company
duly called and held for the purpose of electing directors all shares of the
capital stock of the Company respectively owned by such Purchaser and entitled
to vote for the election of directors of the Company (or otherwise take all
consensual action required) to fix the number of directors of the Company in
accordance with the preceding sentence, and to elect and qualify a Board of
Directors consisting of not more than five (5) persons nominated by CGW. If a
vacancy on the Board of Directors shall occur by reason of the death,
resignation or removal of any director elected as herein provided, CGW shall
have the right to nominate the successor to such director. Each Purchaser
agrees to vote all shares of the capital stock of the Company respectively owned
by such Purchaser and entitled to vote for the election of such successor
director (or otherwise take all consensual action required) for the election of
the person so nominated to fill such vacancy.
10.2 Right to Attend Board Meetings. The Company shall use its best
------------------------------
efforts to ensure that meetings of its Board of Directors and the Board of
Directors of any Subsidiary of the Company are held on the same day at least
four (4) times each year and at least once each quarter. So long as First Plaza
(or any Affiliate thereof) or NationsBank (or any Affiliate thereof), as the
case may be owns of record or beneficially at least twenty-five percent (25%) of
the number of shares of Common Stock purchased by it hereunder, such Purchaser
shall have the right to have one representative attend each meeting of the
Boards of Directors of the Company and any Subsidiary of the Company and each
meeting of any committee thereof and to participate in all discussions during
each such meeting. The Company shall send notice to each such Purchaser of the
time and place of any such meeting in the same manner and at the same time as it
shall send notice thereof to the directors or committee members of the Company
and any Subsidiary of the Company, as the case may be. The Company shall also
provide, and shall cause any Subsidiary of the Company to provide, to each such
Purchaser copies of all notices, reports, minutes and consents at the time and
in the manner as they are provided to the Boards of Directors or committee of
the Company or any Subsidiary of the Company, except for information reasonably
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designated as classified information of such Boards of Directors. The Company
shall furnish, and shall cause any Subsidiary of the Company to furnish, to each
such Purchaser a true and correct copy of all consensual action taken by the
Boards of Directors of the Company or any Subsidiary of the Company not later
than thirty (30) Business Days after such consensual action is taken. The
Company shall promptly reimburse in full each representative of such Purchaser
who attends any such meeting of such Boards of Directors of the Company or any
Subsidiary of the Company or any committee thereof for all of such
representative's reasonable out-of-pocket expenses incurred in attending such
meeting.
10.3 Stock Option Plan. The Company proposes to adopt the Stock Incentive
-----------------
Plan pursuant to which the Company shall be permitted to grant stock incentives
in the form of incentive stock options, non-qualified stock options, restricted
stock grants, and stock appreciation rights to employees of the Company as and
to the extent approved by the Board of Directors. The Purchasers hereby consent
and agree to the adoption of the Stock Incentive Plan and to the reservation of
112,500 shares of Class A Stock for issuance upon exercise of stock incentives
granted thereunder.
10.4 Certain Agreements with Affiliates of CGW. First Plaza and
-----------------------------------------
NationsBank hereby consent and agree to Gorges entering into (a) the Consulting
Agreement and (b) the Investment Banking Agreement, and further agree to the
performance by Gorges of all of its obligations thereunder, including the
payment by Gorges to CGW and the Management Company, respectively, of the fees
and remuneration provided to be paid thereunder.
10.5 Regulatory Matters. In the event of any reasonable determination by
------------------
any Purchaser (a "Regulated Holder") that, by reason of any existing or future
Federal or state rule, regulation, guideline, order, request or directive
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) (collectively, a "Regulatory Requirement"), it is
effectively restricted or prohibited from holding any of the Common Stock
(including any shares of capital stock or other securities distributable to such
Regulated Holder in any merger, reorganization, readjustment or other
reclassification of securities), the Company agrees to use reasonable efforts to
take, and to cause the other Purchasers to take, such action as may be
reasonably necessary to permit such Regulated Holder to comply with such
Regulatory Requirement. Any expenses related to taking such action will be borne
by the Regulated Holder. Such action to be taken may include, without
limitation, the Company's authorization of one or more new classes of capital
stock and the modification or amendment of the Certificate of Incorporation or
any other document or instrument executed in connection with the capital stock
or other securities held by such Regulated Holder. Such Regulated Holder shall
give written notice to the Company of any such determination and the action or
actions necessary to comply with such Regulatory Requirement, and the Company
shall take, and shall use its reasonable efforts to cause the other Purchasers
to take, all steps reasonably necessary to comply with such determination as
expeditiously as possible. Without limitation of the foregoing, the Company
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shall not effect any redemption or other similar transaction if NationsBank
would own upon consummation of such redemption or transaction greater than 24.9%
of the aggregate capital interests in the Company.
SECTION 11
REGISTRATION RIGHTS
-------------------
11.1 Piggyback Registrations.
-----------------------
(a) Whenever the Company proposes to register any of its securities
under the Act (whether in connection with the offering of securities for sale by
the Company or its stockholders or both), other than in the Initial Public
Offering where only securities of the Company are proposed to be included
therein, and the registration form to be used may be used for the registration
of any Registrable Securities (a "Piggyback Registration"), the Company shall
give prompt written notice to all Purchasers of its intention to effect such a
registration and shall include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within twenty (20) Business Days after the receipt of the Company's
notice.
(b) The Registration Expenses (as defined below) of the Purchasers
shall be paid by the Company in all Piggyback Registrations.
(c) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company shall include securities in such registration in the following order of
priority (i) first, the securities the Company proposes to sell, (ii) second,
the Registrable Securities requested to be included in such registration, pro
rata among the Purchasers on the basis of the number of shares of Registrable
Securities as to which registration was requested by each such Purchaser, and
(iii) third, other securities requested to be included in such registration.
(d) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the marketability
of the offering, the Company shall include securities in such registration in
the following order of priority (i) first, the Registrable Securities requested
to be included in such registration, pro rata among the Purchasers on the basis
of the number of shares of Registrable Securities as to which registration was
requested by each such Purchaser, (ii) second, the securities requested to be
included therein by the other holders requesting such registration and (iii)
third, other securities requested to be included in such registration.
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(e) If the Company has previously filed a registration statement with
respect to Registrable Securities pursuant to this Section 11.1, and if such
previous registration has not been withdrawn or abandoned, the Company shall not
file or cause to be effected any other registration of any of its equity
securities or securities convertible or exchangeable into or exercisable for its
equity securities under the Act (except on Form S-8 or any successor form),
whether on its own behalf or at the request of any holder or holders of such
securities, until a period of at least 180 days has elapsed from the effective
date of such previous registration.
(f) The Purchasers who are selling Registrable Securities in an
underwritten offering shall not be required to make any representations or
warranties to the Company or the underwriters (other than representations and
warranties regarding such Purchaser and such Purchaser's intended method of
distribution) or to undertake any indemnification obligations to the Company or
the underwriters with respect thereto, except as otherwise provided in Section
11.6.
11.2 Lockup Agreements. If requested to do so by the underwriters managing
-----------------
the registered public offering, the Company (a) shall not effect any public sale
or distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the one hundred eighty (180) day period beginning on the effective
date of any underwritten Piggyback Registration (except as part of such
underwritten registration or pursuant to registrations on Form S-8 or any
successor form), and (b) each Purchaser shall agree not to effect any public
sale or distribution (including sales pursuant to Rule 144) of any such
securities during such period (except as part of such underwritten registration,
if otherwise permitted).
11.3 Designation of Underwriter. In the case of any registration pursuant
--------------------------
to the provisions of Section 11.1 hereof which is proposed to be effected
pursuant to a firm commitment underwriting, the Company shall select the
managing underwriter, and any Purchaser whose shares are included in such
registration statement shall sell such shares only pursuant to such
underwriting.
11.4. Registration Procedures. Whenever any Purchaser has requested that
-----------------------
any Registrable Securities be registered pursuant to this Agreement, the Company
shall use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company shall as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
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supplements thereto, the Company shall furnish to the counsel selected by the
Purchasers copies of all such documents proposed to be filed, and such counsel
shall have the opportunity to review and comment on such);
(b) notify each Purchaser of the effectiveness of each registration
statement filed hereunder and prepare and file with the Securities and Exchange
Commission 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 and to
comply with the provisions of the 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 sellers thereof set
forth in such registration statement;
(c) furnish to each Purchaser such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such
Purchaser;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall 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 subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each Purchaser, at any time when a prospectus relating
thereto is required to be delivered under the Act, of the happening of any event
as a result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of any such
seller, the Company shall prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statements therein not
misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its best
efforts to secure designation of all such Registrable Securities covered by such
registration statement as a NASDAQ "national market system security" within the
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meaning of Rule 11Aa2-I of the Securities and Exchange Commission or, failing
that, to secure NASDAQ authorization for such Registrable Securities and,
without limiting the generality of the foregoing, use its best efforts to
arrange for at least two market makers to register as such with respect to such
Registrable Securities with the NASD;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Purchasers
or the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(i) otherwise use its best efforts to comply with all applicable rules
and regulations of the Securities and Exchange Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 thereunder;
(j) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order;
(k) use its best efforts to cause such Registrable Securities covered
by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities;
(l) use its best efforts to obtain a cold comfort letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by cold comfort letters as the holders
of a majority of the Registrable Securities being sold reasonably request
(provided that such Registrable Securities constitute at least ten percent (10%)
of the securities covered by such registration statement); and
(m) if any such registration or comparable statement refers to any
holder by name or otherwise as the holder of any securities of the Company and
if in such holder's sole and exclusive judgment, such holder is or might be
deemed to be an underwriter or a controlling person of the Company, such holder
shall have the right to require (i) the insertion therein of language, in form
and substance reasonably satisfactory to such holder and presented to the
Company in writing, to the effect that the holding by such holder of such
securities is not to be construed as a recommendation by such holder of the
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investment quality of the Company's securities covered thereby and that such
holding does not imply that such holder shall assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such holder by name or otherwise is not required by the Act or any similar
Federal statute then in force, the deletion of the reference to such holder;
provided that with respect to this clause (ii) such holder shall furnish to the
Company an opinion of counsel to such effect, which opinion and counsel shall be
reasonably satisfactory to the Company.
11.5 Registration Expenses.
---------------------
(a) All expenses incident to the Company's performance of or
compliance with this Section 11, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses"), shall be borne as provided in this
Section 11, except that the Company shall, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit or quarterly review, the expense of any liability insurance and
the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed or on the NASD automated quotation system.
(b) In connection with each Piggyback Registration, the Company shall
reimburse the Purchasers for their respective share of the reasonable fees and
disbursements of one counsel chosen by the sellers of Registrable Securities.
(c) To the extent Registration Expenses are not required to be paid by
the Company, each Purchaser shall pay those Registration Expenses allocable to
the registration of such Purchaser's securities so included, and any
Registration Expenses not so allocable shall be borne by all sellers of
securities included in such registration in proportion to the aggregate selling
price of the securities to be so registered.
(d) Underwriting discounts and commissions and transfer taxes relating
to the Registrable Securities included in any registration hereunder, and all
fees and expenses of counsel for any Purchaser (other than fees and expenses of
one counsel chosen by the sellers of Registrable Securities as provided in
Section 11.5(b) above) shall be borne and paid by the sellers of Registrable
Securities.
11.6 Indemnification.
---------------
(a) The Company agrees to indemnify, to the extent permitted by law,
each Purchaser, its officers and directors and each Person who controls such
Purchaser (within the meaning of the Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue statement of
material fact contained in any registration statement, prospectus or preliminary
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prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the Company by
such Purchaser expressly for use therein or by such Purchaser's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such Purchaser with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company shall indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning of
the Act) to the same extent as provided above with respect to the
indemnification of each Purchaser.
(b) In connection with any registration statement in which a Purchaser
is participating, each such Purchaser shall furnish to the Company in writing
such information and affidavits relating to the Purchaser as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, shall indemnify the Company,
its directors and officers and each Person who controls the Company (within the
meaning of the Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by such Purchaser; provided that the obligation to indemnify shall be
individual, not joint and several, for each Purchaser and shall be limited to
the net amount of proceeds received by such Purchaser from the sale of
Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
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(d) The indemnification provided for under this Section 11.6 shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
11.7 Contribution. If the indemnification provided for in this Section 11
------------
is unavailable to or insufficient to hold harmless an indemnified party under
Section 11.6 hereof (other than by reason of exceptions or other limitations
provided in such Section) in respect of any losses referred to therein, then
each applicable 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 or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and any such Purchaser on the other hand from its sale
of Registrable Securities or if such allocation is not permitted by applicable
law, the relative fault of the Company on the one hand and of the indemnified
Purchaser on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative fault of the Company
on the one hand and of the indemnified Purchaser on the other 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 the Company or by the
indemnified Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 11.6,
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Company and the Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 11.7 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. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
11.8. Other Indemnification. Indemnification similar to that specified
---------------------
herein (with appropriate modifications) shall be given by the Company and the
Purchasers with respect to any required registration or other qualification of
securities under any state law or regulation or governmental authority other
than the Act.
11.9 Public Reports. If the Company shall have filed a registration
--------------
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Act, the Company
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thereafter shall use its best efforts to file the reports required to be filed
by it under the Exchange Act on a timely basis. Further, the Company shall use
its best efforts to make such filings and disclosures as are necessary for the
Purchasers to dispose of their Common Stock pursuant to Rule 144 under the
Securities Act.
SECTION 12
MISCELLANEOUS
-------------
12.1 Termination.
-----------
12.1.1 Method of Termination. This Agreement and the transactions
---------------------
contemplated in Sections 2.1 and 2.2 hereof may be terminated at any time prior
to the Closing:
(a) By the mutual consent of the Company, CGW, First Plaza and
NationsBank;
(b) By the Company after December 31, 1996 if the transactions
contemplated hereby have not been closed or if any of the conditions to the
Company's obligations set forth in Section 4.2 have not been satisfied or waived
by the Company, unless the failure to close such transactions is due to any
failure by the Company to perform in any material respect its agreements
contained herein required to be performed by it on or prior to the Closing Date,
or a material breach of any of the Company's representations, warranties or
covenants contained herein;
(c) By CGW, First Plaza or NationsBank after December 31, 1996, if the
transactions contemplated hereby have not been closed or if any of the
conditions to such Purchaser's obligations set forth in Section 4.1 have not
been satisfied or waived by such Purchaser, unless the failure to close such
transactions is due to any failure by such Purchaser to perform in any material
respect its agreements contained herein required to be performed by it on or
prior to the Closing Date, or a material breach of any of such Purchaser's
representations, warranties or covenants contained herein;
(d) By the Company, CGW, First Plaza or NationsBank at any time after
January 31, 1997, if the Closing shall not have occurred for any reason on or
prior to January 31, 1997;
(e) By either CGW, First Plaza or NationsBank, on the one hand, or the
Company, on the other hand, if there shall be any order, writ, injunction or
decree of any court or governmental or regulatory agency binding on any such
Purchaser or the Company, which prohibits or restrains such Purchaser and/or the
Company from consummating the transactions contemplated by this Agreement,
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provided that each party to this Agreement who is prohibited or restrained by
such order, writ, injunction, or decree shall have used its reasonable best
efforts to have any such order, writ, injunction or decree lifted and the same
shall not have been lifted within thirty (30) days after entry, by any such
court or governmental or regulatory agency.
12.1.2 Notice of Termination. Notice of termination of this
---------------------
Agreement, as provided for in this Section 12.1, shall be given by the party so
terminating to the other party or parties hereto in accordance with Section 12.2
of this Agreement.
12.1.3 Effect of Termination. If this Agreement terminates pursuant
---------------------
to Section 12.1, this Agreement shall become void and of no further force and
effect, and each party shall pay the costs and expenses incurred by it in
connection with this Agreement and, provided this Agreement was not terminated
as a result of a breach of this Agreement, no party (or any of its officers,
directors, employees, agents, representatives or stockholders) shall be liable
to any other party for any costs, expenses, damages (direct or indirect) or loss
of anticipated profits. If, however, this Agreement is terminated as a result
of a breach, this Section 12.1.3 shall not relieve a breaching or defaulting
party from any liability to the other parties.
12.1.4 Termination of Certain Provisions. The rights, obligations
---------------------------------
and agreements of the Purchasers contained in Section 7 hereof, the restrictions
on transfer contained in Section 9 hereof, the voting agreement contained in
Section 10 hereof and the rights to attend meetings of the Board of Directors as
set forth in Section 10 hereof shall terminate upon the earliest to occur of (a)
completion of the Initial Public Offering, or (b) agreement to such termination
by the parties hereto or their permitted successors or assigns. Unless
theretofore terminated in accordance with the preceding sentence, the voting
agreement contained in Section 10.1 hereof shall terminate on the tenth
anniversary of the date hereof.
12.2 Notices. In order to be effective, any notice or other communication
-------
required or permitted hereunder, shall, unless otherwise stated herein, be in
writing and shall be transmitted by messenger, delivery service, mail or
telecopy, as specified below:
If to Purchasers:
CGW Southeast Partners III, L.P.
Twelve Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
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with a copy (which shall not constitute notice) to:
Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Mellon Bank, N.A., as Trustee of First Plaza Group Trust
c/o General Motors Investment Management Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Mellon Bank, N.A.
One Mellon Bank Center
Room 3346
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
with a copy (which shall not constitute notice) to:
Legal Department
General Motors Investment Management Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxxxx, Esq.
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NationsBanc Investment Corporation
c/o NationsBank Leveraged Capital
000 Xxxxx Xxxxx Xxxxxx
NationsBank Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxx
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
NationsBank Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to the Company:
Gorges Holding Corporation
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xx. Xxxxx Xxxxxxx
with a copy (which shall not constitute notice) to:
Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
or at such other address as a party shall designate in a written notice to the
other parties hereto given in accordance with this Section 12.2. All notices
and other communications shall be effective (a) if sent by messenger or delivery
service, when delivered, (b) if sent by mail, five days after having been sent
by certified mail, with return receipt requested, or (c) if sent by telecopier
with receipt acknowledged, when sent.
12.3 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
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12.4 Entire Agreement, Amendment. This Agreement (including the Exhibits
---------------------------
and Schedules hereto) executed by the Company and Purchasers in connection with,
or as required by, this Agreement constitutes the entire agreement between the
Company and Purchasers with respect to the transactions contemplated by this
Agreement; supersedes all prior or contemporaneous negotiations, communications,
discussions and correspondence concerning the subject matter hereof; and may be
amended or modified only with the written consent of the Company and all of the
Purchasers.
12.5 Severability of Provisions. If any provision of this Agreement shall
--------------------------
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Agreement, and the parties shall use their respective best efforts to negotiate
and enter into an amendment to this Agreement whereby such provision will be
modified in a manner that is consistent with the intended economic consequences
of the invalid provision and that, as modified, is legal and enforceable.
12.6 Governing Law. This agreement shall be governed by and construed in
-------------
accordance with the internal laws of the State of Delaware without giving effect
to any choice of law or conflict, provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the laws of any
jurisdiction other than the State of Delaware to be applied.
12.7 Incorporation of Exhibits and Schedules by Reference. All Appendices,
----------------------------------------------------
Exhibits and Schedules to this Agreement are incorporated herein by this
reference.
12.8 Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which, when so executed, shall be deemed to be an original
and all of which, when taken together, shall constitute but one and the same
agreement.
12.9 Survival. The representations, warranties, covenants and agreements
--------
made herein shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, notwithstanding any
investigation made by Purchasers or their agents or representatives.
12.10 Certain Expenses. The Company will pay all reasonable expenses of
----------------
the Purchasers (including reasonable fees, charges and disbursements of counsel)
in connection with the preparation and negotiation of this Agreement and any
amendment, supplement, modification or waiver of or to any provision of this
Agreement or the Certificate of Incorporation or any consent to any departure by
the Company from the terms of any provision of this Agreement or the Certificate
of Incorporation.
12.11 Publicity. Except as may be required by applicable law, none of the
---------
parties hereto shall issue a publicity release or announcement or otherwise
make any public disclosure concerning this Agreement or the transactions
contemplated hereby without prior approval by the other parties hereto. If any
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announcement is required by law to be made by any party hereto, prior to making
such announcement such party will deliver a draft of such announcement to the
other parties and shall give the other parties an opportunity to comment
thereon.
12.12 Additional Stockholders as Parties Hereto. Any person who
-----------------------------------------
hereinafter becomes a stockholder of the Company may become a party hereto by
executing a counterpart copy of this Agreement. Any such person executing this
Agreement shall thereafter be deemed a Purchaser as fully and to the same extent
as if he, she or it had been an original signatory hereof, provided however,
that with respect to such person, Sections 2, 3 and 4 shall be of no force and
effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first written above.
GORGES HOLDING CORPORATION
By: /s/ Xxxxx X. X'Xxxxxxx
-------------------------------------
President
CGW SOUTHEAST PARTNERS III, L.P.
By: CGW Southeast III, L.L.C., its
General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
Managing Director
MELLON BANK, N.A., as Trustee for First Plaza
Group Trust (as directed by General Motors
Investment Management Corporation)
By: /s/ Xxxxxxx X. Xxx, its
--------------------
Authorized Officer
Associate Counsel
NATIONSBANC INVESTMENT CORPORATION
By: /s/ , its
------------------------
Authorized Officer
Senior Vice President
/s/ J. Xxxxx Xxxxxxx (Seal)
------------------------------
J. Xxxxx Xxxxxxx
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/s/ Xxxxxxx X. Xxxxxxxx (Seal)
------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx (Seal)
-------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx (Seal)
-------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxxx Xxxxxx (Seal)
-------------------------------
Xxxxxxxx Xxxxxx
/s/ Stuart Xxxx Xxxxx (Seal)
-------------------------------
Stuart Xxxx Xxxxx
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SCHEDULE 2.3
TO
SECURITIES PURCHASE AND STOCKHOLDERS AGREEMENT
Number of Shares of Aggregate
Management Stock to be Purchase
Purchaser Purchased Price
----------- -------------------- ----------
J. Xxxxx Xxxxxxx 500 $ 50,000
Xxxxxxx X. Xxxxxxxx 2,250 225,000
Xxxxxxx X. Xxxxxxx 750 75,000
Xxxxxx X. Xxxxxx 1,000 100,000
Xxxxxxxx Xxxxxx 750 75,000
Stuart Xxxx Xxxxx 350 35,000
EXHIBIT A
AGREEMENT FOR CONSULTING SERVICES
THIS AGREEMENT FOR CONSULTING SERVICES is entered into this November ___,
1996, by and between GORGES/QUIK-TO-FIX FOODS, INC., a Delaware corporation (the
"Corporation"), and CGW SOUTHEAST III, L.L.C., a Delaware limited liability
company ("CGW").
BACKGROUND
A. The Corporation desires to engage CGW for the purpose of providing
financial and management consulting services to the Corporation.
B. CGW is willing to accept such engagement upon the terms and conditions
set forth herein.
AGREEMENT
For and in consideration of the above premises and the mutual covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties hereto agree as
follows:
1. SCOPE OF CONSULTING SERVICES. The Corporation retains CGW, and CGW
accepts engagement by the Corporation, to provide financial advisory and
management consulting services to the Corporation and its subsidiaries. In such
capacity, CGW will assist the Corporation and its subsidiaries in financial and
strategic planning and analysis. Such consulting services shall include having
a representative of CGW in attendance at all meetings of the Board of Directors
of the Corporation, evaluation of and negotiations with potential candidates for
acquisition by the Corporation, assisting the Corporation in relations with its
lenders, and providing advice to the Corporation on its capital needs and
structure, including general advice and assistance regarding refinancings or
public offerings or sale of the Corporation. CGW agrees to be available to the
Corporation as needed and to cause such services to be provided by persons
employed or retained by or affiliated with CGW or its general partner. Unless
required by reason of the nature of the particular consulting service, such
services may be performed at the offices of CGW.
2. TERM. The term (the "Term") of this Agreement shall commence on the
date hereof and end on the fifth anniversary of the date hereof. This Agreement
may be terminated prior to the expiration of the Term only (i) by mutual
agreement of CGW and the Corporation, (ii) as provided in Section 5 below, or
(iii) by the Corporation upon the willful failure of CGW to provide consulting
services hereunder if such failure is not remedied within thirty (30) days after
receipt by CGW of written notice by the Corporation to CGW. Upon any
termination of this Agreement for any reason other than as provided in Section 5
below, CGW's right to receive compensation pursuant to Section 3 hereof shall
cease and terminate.
EXECUTION COPY
3. COMPENSATION.
(a) For the services rendered by CGW hereunder, the Corporation shall
pay to CGW (i) a monthly fee of $30,000 on the first day of each calendar month
occurring during the Term, (ii) a fee with respect to each fiscal year of the
Corporation that ends during the Term in an amount equal to the bonus paid to
the Chief Executive Officer of the Corporation with respect to such fiscal year,
such additional fee to be paid at the same time as such bonus is paid to the
Chief Executive Officer, and (iii) a fee with respect to the portion of the
fiscal year of the Corporation in which this Agreement begins or ends and during
which this Agreement is in effect in an amount equal to the portion of the bonus
paid to the chief executive officer of the Corporation with respect to such
fiscal year pro rated based upon the number of days during such fiscal year this
Agreement is in effect. The amount payable under this Section 3(a) is herein
referred to as the "Retainer Fee." Notwithstanding the foregoing, in no event
shall the Retainer Fee exceed $500,000 in any fiscal year that ends during the
term.
(b) In addition to the Retainer Fee, the Corporation shall pay to CGW
fees in such amounts as shall be mutually agreed upon in advance for any
services provided by CGW with respect to services provided to the Corporation by
CGW at the request of the Corporation or any of its subsidiaries which fall
outside the scope of services generally contemplated by Section 1 of this
Agreement.
(c) Upon termination of this Agreement as provided in Section 5 below,
the Corporation shall pay to CGW an amount equal to the aggregate Retainer Fee
that would have been paid over the remaining Term had such termination not
occurred. For purposes of determining such amount the bonus deemed to be paid
to the Chief Executive Officer of the Corporation for any fiscal year of the
Corporation ending after any such termination shall be the average of the
annual bonus paid to such officer for the full fiscal years of the Corporation
ended after the date hereof and prior to such termination, and if no full fiscal
years have ended during such period, then the bonus deemed to be paid to the
chief executive officer for each fiscal year of the Corporation ending after
such termination of this Agreement shall be $140,000.
4. EXPENSES. The Corporation shall reimburse CGW for all of CGW's costs
and expenses (other than ordinary overhead) reasonably incurred in connection
with (i) attendance at meetings with the Corporation or any subsidiary, and (ii)
provision of its services hereunder. Such reimbursements shall be paid to CGW
in a timely manner in accordance with the regular expense reimbursement policy
of the Corporation and upon submission by CGW of all documentation ordinarily
required by the Corporation's policy on reimbursement of expenses.
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5. CHANGE OF CONTROL. This Agreement shall terminate upon the occurrence
of a Change in Control with respect to the Corporation. As used herein, a
"Change in Control" shall be deemed to have occurred with respect to the
Corporation upon (i) the consummation of any merger, share exchange or
consolidation (other than with an affiliate of the Corporation) of the
Corporation in which the shareholders of the Corporation immediately prior to
such merger, share exchange or consolidation shall not following such merger,
share exchange or consolidation, own, directly or indirectly, at least fifty
percent (50%) of the aggregate voting power of the outstanding securities of
the continuing or surviving entity, (ii) any issuance or sale by the Corporation
in a single transaction or series of related transactions of shares of the
Corporation's capital stock which constitute after such issuance and sale fifty
percent (50%) or more of the aggregate voting power of the outstanding
securities of the Corporation, other than the issuance and sale of capital stock
in a public offering of such securities or in connection with the exercise of
options to purchase such voting securities granted to its employees or lenders,
(iii) any other transaction or series of transactions in which the current
holders of the Corporation's common stock cease to own, directly or indirectly,
fifty percent (50%) or more of the aggregate voting power of the outstanding
securities of the Corporation, other than through a public offering of the
voting securities of the Corporation or other than in connection with the
exercise of options to purchase voting securities of the Corporation granted to
employees or lenders of the Corporation, or (iv) any sale in a single
transaction or a series of related transactions of all or substantially all of
the assets of the Corporation. The Corporation agrees to notify CGW promptly of
any Change in Control of the Corporation by mailing to CGW written notice of
such Change in Control, it being the intent of this provision that CGW be
informed at all times concerning the ownership of the Corporation.
6. ENTIRE AGREEMENT. This Agreement embodies the entire agreement of the
parties hereto with respect to the services to be provided by CGW hereunder. No
amendment or modification of this Agreement shall be valid or binding upon the
Corporation or CGW unless made in writing and signed by the parties hereto.
7. INDEPENDENT CONTRACTOR. CGW is and shall be an independent
contractor, and no employment relationship between the Corporation and CGW is
intended to be created hereby.
8. INDEMNIFICATION.
(a) The Corporation shall indemnify and hold harmless CGW and its
affiliates, their respective officers, directors, controlling persons
(within the meaning of Section 15 of the Securities Act of 1933 or
Section 20(a) of the Securities Exchange Act of 1934), if any,
employees and agents of CGW or any of CGW's affiliates (each such
person being an "Indemnified Person") from and against any losses,
claims, damages or liabilities related to, arising out of or in
connection with CGW's engagement hereunder.
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(b) The Corporation shall reimburse each Indemnified Person for all
reasonable expenses (including fees and expenses of counsel) as they
are incurred in connection with investigating, preparing, pursuing or
defending any action, claim, suit, investigation or proceeding related
to, arising out of or in connection with CGW's engagement hereunder,
whether or not pending or threatened and whether or not any
Indemnified Person is a party; provided however, that if a final
judicial determination is made that any losses, claims, damages or
liabilities (or expenses related thereto) have resulted from the bad
faith or gross negligence of any Indemnified Person, then each
Indemnified Person will remit to the Corporation any amounts
reimbursed under this subparagraph 8(b).
(c) The Corporation will not be responsible for any losses, claims,
damages or liabilities (or expenses related thereto) that are finally
judicially determined to have resulted from the bad faith or gross
negligence of any Indemnified Person. The Corporation further agrees
that no Indemnified Person shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Corporation or to
any person claiming through the Corporation (including, without
limitation, equity holders and creditors of the Corporation) for or in
connection with CGW's engagement hereunder except for any such
liability for losses, claims, damages or liabilities incurred by the
Corporation that are finally judicially determined to have resulted
from the bad faith or gross negligence of such Indemnified Person. If
multiple claims are brought against CGW in an arbitration, with
respect to at least one of which indemnification is permitted under
applicable law and provided for under this Agreement, the Corporation
agrees that any arbitration award shall be conclusively deemed to be
based on claims as to which indemnification is permitted and provided
for, except to the extent the arbitration award expressly states that
the award, or any portion thereof, is based solely on a claim as to
which indemnification is not available.
(d) The Corporation agrees that each Indemnified Person is entitled to
retain separate counsel of its choice in connection with any of the
matters to which the indemnification and reimbursement commitments set
forth in subparagraphs 8(a) and 8(b) above relate.
(e) No Indemnified Person seeking indemnification, reimbursement or
contribution under this Agreement will, without the Corporation's
prior written consent, settle, compromise, consent to the entry of any
judgment in or otherwise seek to terminate any action, claim, suit,
investigation or proceeding referred to in this subparagraph 8(a)
above.
(f) The foregoing rights to indemnity and contribution shall be in
addition to any rights that CGW and/or any other Indemnified Person
may have at common law or otherwise and shall remain in full force and
4
EXECUTION COPY
effect following the completion or any termination of CGW's
engagement. The Corporation hereby consents to personal jurisdiction
and to service and venue in any court in which any claim which is
subject to this Agreement is brought against CGW or any other
Indemnified Person.
(g) The Corporation and CGW agree that if any indemnification or
reimbursement sought pursuant to this Section 8 is finally judicially
determined to be unavailable (except by reason of the gross negligence
or bad faith of any Indemnified Person), then, whether or not CGW is
the person entitled to indemnification or reimbursement, the
Corporation and CGW shall contribute to the losses, claims, damages,
liabilities and expenses for which such indemnification or
reimbursement is held unavailable in such proportion as is appropriate
to reflect the relative benefits to the Corporation on the one hand,
and CGW on the other, in connection with the transaction to which such
indemnification or reimbursement relates, and other equitable
considerations; provided however, that in no event shall the amount to
be contributed by CGW exceed the amount of the fee actually received
by CGW hereunder.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
10. DELEGATION. CGW hereby delegates to CGW Southeast Management III,
L.L.C. ("Management") the performance of all duties of CGW hereunder, and
directs the Corporation to make payment of the Retainer Fee and all other
amounts due CGW hereunder to Management. The Corporation hereby consents to the
delegation of the performance of CGW's duties hereunder to Management, and
agrees to make payment of the Retainer Fee and such other amounts as so
directed. CGW may terminate the delegation of its duties hereunder to
Management by a written notice to the Corporation which shall be effective upon
receipt by the Corporation. From and after the receipt of such written notice,
all amounts payable hereunder to CGW shall be paid to CGW rather than to
Management. Management agrees to accept the delegation of the duties hereunder
from CGW until such delegation is terminated by CGW, and agrees to provide the
consulting services herein described in accordance with the terms hereof.
[Signatures on Next Page]
5
EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
GORGES/QUIK-TO-FIX FOODS, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CGW SOUTHEAST III, L.L.C.
By:
----------------------------------
Name:
--------------------------------
Managing Director
CGW SOUTHEAST MANAGEMENT III, L.L.C.
By:
----------------------------------
Name:
--------------------------------
Managing Director
6
EXHIBIT B
AGREEMENT FOR INVESTMENT BANKING SERVICES
THIS AGREEMENT is entered into this November 25, 1996, by and between
GORGES/QUIK-TO-FIX FOODS, INC., a Delaware corporation (the "Corporation"), and
CGW SOUTHEAST MANAGEMENT III, L.L.C., a Delaware limited liability company
("CGW").
BACKGROUND
CGW has heretofore provided investment banking services to the Company in
connection with the transactions contemplated by that certain Asset Purchase
Agreement, dated October 17, 1996, among the Corporation, Tyson Foods, Inc.,
Tyson Holding Company and Gorges Foodservice, Inc. (the "Asset Purchase
Agreement"), and in connection with structuring and negotiating certain senior
credit facilities and the terms of the issuance and sale by the Corporation of
senior subordinated notes and in arranging for contributions to the equity
capital of the Corporation (collectively, the "Financings"). The Corporation
desires to continue to engage CGW to provide such investment banking services in
connection with the consummation of the transactions contemplated by the Asset
Purchase Agreement and the Financings.
AGREEMENT
For and in consideration of the above premises and the mutual covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties hereto agree as
follows:
1. SCOPE OF CONSULTING SERVICES. CGW has provided and agrees to continue
to provide to the Corporation investment banking and advisory services in
connection with the structuring and negotiation of the transactions contemplated
by the Asset Purchase Agreement and the Financings and the consummation of such
transactions.
2. COMPENSATION. For the services rendered by CGW as herein described,
upon consummation of the transactions provided for in the Asset Purchase
Agreement and the Financings the Corporation shall pay to CGW Two Million Six
Hundred Fifty Thousand Dollars ($2,650,000) (the "Fee"). The Fee shall be paid
at the time of the consummation of such transactions by wire transfer of
immediately available funds.
3. EXPENSES. The Corporation shall reimburse CGW for all of CGW's costs
and expenses (other than ordinary overhead) reasonably incurred in connection
with providing the investment banking services hereunder. Such reimbursements
shall be paid to CGW upon submission by CGW of all documentation ordinarily
required by the Corporation's policy on reimbursement of expenses.
EXECUTION COPY
4. INDEPENDENT CONTRACTOR. CGW is and shall be an independent
contractor, and no employment or agency relationship between the Corporation and
CGW is intended to be created hereby.
5. INDEMNIFICATION.
(a) The Corporation shall indemnify and hold harmless CGW and its
affiliates, their respective officers, directors, controlling
persons (within the meaning of Section 15 of the Securities Act
of 1933 or Section 20(a) of the Securities Exchange Act of 1934),
if any, employees and agents of CGW or any of CGW's affiliates
(each such person being an "Indemnified Person") from and against
any losses, claims, damages or liabilities related to, arising
out of or in connection with CGW's engagement hereunder.
(b) The Corporation shall reimburse each Indemnified Person for all
reasonable expenses (including fees and expenses of counsel) as
they are incurred in connection with investigating, preparing,
pursuing or defending any action, claim, suit, investigation or
proceeding related to, arising out of or in connection with CGW's
engagement hereunder, whether or not pending or threatened and
whether or not any Indemnified Person is a party; provided
however, that if a final judicial determination is made that any
losses, claims, damages or liabilities (or expenses related
thereto) have resulted from the bad faith or gross negligence of
any Indemnified Person, then each Indemnified Person will remit
to the Corporation any amounts reimbursed under this subparagraph
8(b).
(c) The Corporation will not be responsible for any losses, claims,
damages or liabilities (or expenses related thereto) that are
finally judicially determined to have resulted from the bad faith
or gross negligence of any Indemnified Person. The Corporation
further agrees that no Indemnified Person shall have any
liability (whether direct or indirect, in contract or tort or
otherwise) to the Corporation or to any person claiming through
the Corporation (including, without limitation, equity holders
and creditors of the Corporation) for or in connection with CGW's
engagement hereunder except for any such liability for losses,
claims, damages or liabilities incurred by the Corporation that
are finally judicially determined to have resulted from the bad
faith or gross negligence of such Indemnified Person. If
multiple claims are brought against CGW in an arbitration, with
respect to at least one of which indemnification is permitted
under applicable law and provided for under this Agreement, the
Corporation agrees that any arbitration award shall be
2
EXECUTION COPY
conclusively deemed to be based on claims as to which
indemnification is permitted and provided for, except to the
extent the arbitration award expressly states that the award, or
any portion thereof, is based solely on a claim as to which
indemnification is not available.
(d) The Corporation agrees that each Indemnified Person is entitled
to retain separate counsel of its choice in connection with any
of the matters to which the indemnification and reimbursement
commitments set forth in subparagraphs 8(a) and 8(b) above
relate.
(e) No Indemnified Person seeking indemnification, reimbursement or
contribution under this Agreement will, without the Corporation's
prior written consent, settle, compromise, consent to the entry
of any judgment in or otherwise seek to terminate any action,
claim, suit, investigation or proceeding referred to in this
subparagraph 8(a) above.
(f) The foregoing rights to indemnity and contribution shall be in
addition to any rights that CGW and/or any other Indemnified
Person may have at common law or otherwise and shall remain in
full force and effect following the completion or any termination
of CGW's engagement. The Corporation hereby consents to personal
jurisdiction and to service and venue in any court in which any
claim which is subject to this Agreement is brought against CGW
or any other Indemnified Person.
(g) The Corporation and CGW agree that if any indemnification or
reimbursement sought pursuant to this Section 8 is finally
judicially determined to be unavailable (except by reason of the
gross negligence or bad faith of any Indemnified Person), then,
whether or not CGW is the person entitled to indemnification or
reimbursement, the Corporation and CGW shall contribute to the
losses, claims, damages, liabilities and expenses for which such
indemnification or reimbursement is held unavailable in such
proportion as is appropriate to reflect the relative benefits to
the Corporation on the one hand, and CGW on the other, in
connection with the transaction to which such indemnification or
reimbursement relates, and other equitable considerations;
provided however, that in no event shall the amount to be
contributed by CGW exceed the amount of the fee actually received
by CGW hereunder.
6. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
3
EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
GORGES/QUIK-TO-FIX FOODS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
CGW SOUTHEAST MANAGEMENT L.L.C.
By:
--------------------------------
Name:
-----------------------------
Managing Director
4
EXHIBIT C
November 25, 1996
CGW Southeast Partners III, L.P.
Twelve Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
NationsBanc Investment Corporation
000 Xxxxx Xxxxx Xxxxxx
NationsBank Corporate Center, 10th Floor
Charlotte, NC 28253
Mellon Bank, N.A., as Trustee for First
Plaza Group Trust
c/o General Motors Investment Management
Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Gorges Holding Corporation, a Delaware
corporation (the "Company"), in connection with the preparation of the
Securities Purchase and Stockholders Agreement between the Company, NationsBanc
Investment Corporation, Mellon Bank, N.A. as Trustee for First Plaza Group
Trust, CGW Southeast Partners III, L.P., J. Xxxxx Xxxxxxx, Xxxxxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxxx Xxxxxx and Xxxxxx X. Xxxxx, dated
November 25, 1996 (the "Agreement") and have participated in the closing of the
issuance and sale by the Company of shares of its Common Stock at the Closing as
provided in the Agreement (the "Transaction"). This opinion letter is rendered
pursuant to Section 4.1.4 of the Agreement.
This opinion letter is limited by, and is in accordance with, the January
1, 1992 edition of the Interpretive Standards applicable to Legal Opinions to
Third Parties in Corporate Transactions adopted by the Legal Opinion Committee
of the Corporate and Banking Law Section of the State Bar of Georgia, which
Interpretive Standards are attached hereto as Appendix I and are incorporated in
this opinion letter by this reference. For purposes of the opinions herein
which are based on the general corporate law of the State of Delaware, the
Interpretive Standards shall be deemed to refer to the general corporate law of
the State of Delaware as in effect on the date of this opinion letter instead of
the Georgia Business Corporation Code as in effect on the date of this opinion
letter. Capitalized terms used in this opinion letter and not otherwise defined
herein shall have the meanings assigned to such terms in the Interpretive
Standards and the Agreement.
In the capacity described above, we have considered such matters of law and
of fact, including the examination of originals or copies, certified or
CGW Southeast Partners III, L.P.
NationsBanc Investment Corporation
Mellon Bank, N.A., as Trustee for
First Plaza Group Trust
Page 2
otherwise identified to our satisfaction, of such records and documents of the
Company, certificates of officers and representatives of the Company,
certificates of public officials and such other documents as we have deemed
appropriate as a basis for the opinions hereinafter set forth.
The opinions set forth herein are limited to the laws of the State of
Georgia, the general corporate law of the State of Delaware, and applicable
federal laws.
Based upon the foregoing, it is our opinion that:
(1) Each of the Company and Gorges was duly organized as a
corporation, and is existing and in good standing, under the laws of the
State of Delaware.
(2) The Company has the corporate power to execute and deliver the
Agreement, to perform its obligations thereunder, to own and use its assets
and to conduct its business. Gorges has the corporate power to execute
and deliver the Purchase Agreement, to perform its obligations thereunder,
to own and use its assets and to conduct its business.
(3) The Company has duly authorized the execution and delivery of the
Agreement and all performance by the Company thereunder and has duly
executed and delivered the Agreement. Gorges has duly authorized the
execution and delivery of the Purchase Agreement and all performance by
Gorges thereunder and has duly executed and delivered the Purchase
Agreement.
(4) The execution and delivery by the Company of the Agreement do not,
and if the Company were now to perform its obligations under the Agreement
such performance would not, result in any:
(i) violation of the Company's certificate of incorporation or
bylaws;
(ii) violation of any existing federal or state constitution,
statute, regulation, rule, order, or law to which the Company is
subject;
(iii) breach of or default under any material written agreements
to which the Company is a party;
(iv) creation or imposition of a contractual lien or security
interest in, on or against the assets and properties of the Company
under any material written agreements to which the Company is a party;
or
2
CGW Southeast Partners III, L.P.
NationsBanc Investment Corporation
Mellon Bank, N.A., as Trustee for
First Plaza Group Trust
Page 3
(v) violation of any judicial or administrative decree, writ,
judgment or order to which, to our knowledge, the Company is subject.
(5) The execution and delivery by Gorges of the Purchase Agreement do
not, and if Gorges were now to perform its obligations under the Purchase
Agreement such performance would not, result in any:
(i) violation of Gorges' certificate of incorporation or bylaws;
(ii) violation of any existing federal or state constitution,
statute, regulation, rule, order, or law to which Gorges is subject;
(iii) breach of or default under the material written agreements
to which Gorges is a party listed on Schedule I hereto;
(iv) creation or imposition of a contractual lien or security
interest in, on or against the assets and properties of Gorges under
any material written agreements to which Gorges is a party listed on
Schedule I hereto; or
(v) violation of any judicial or administrative decree, writ,
judgment or order to which, to our knowledge, Gorges is subject.
(6) No consent, approval, authorization or other action by, or filing
with, any governmental authority of the United States or the States of
Georgia or Delaware is required for the Company's execution and delivery of
the Agreement and consummation of the Transaction, or for Gorges' execution
and delivery of the Purchase Agreement and the consummation of the
transactions provided for therein.
(7) The Agreement is enforceable against the Company. The Purchase
Agreement is enforceable against Gorges.
(8) The Company's authorized shares consist of 1,000,000 shares of
Class A Stock, 100,000 shares of Class B Stock and 1,000,000 shares of
Preferred Stock. After giving effect to the Transaction there are
outstanding 360,000 shares of Class A Stock, 90,000 shares of Class B
Stock, and no shares of Preferred Stock. Five Thousand Six Hundred (5,600)
shares of Class A Stock are reserved for issuance to the Management
Purchasers at the Second Closing, One Hundred Twelve Thousand Five Hundred
(112,500) shares of Class A Stock are reserved for issuance pursuant to the
3
CGW Southeast Partners III, L.P.
NationsBanc Investment Corporation
Mellon Bank, N.A., as Trustee for
First Plaza Group Trust
Page 4
Stock Incentive Plan and 90,000 shares of Class A Stock are reserved for
issuance upon conversion of the Class B Stock. All shares of the Common
Stock issued and outstanding on the date hereof are duly authorized,
validly issued, fully paid and nonassessable.
(9) The authorized capital stock of Gorges consists of 2,000 shares of
common stock, $.01 par value, of which 1,000 are issued and outstanding and
owned by the Company. All of the issued and outstanding shares of the
common stock of Gorges are duly authorized, validly issued, fully paid and
nonassessable.
(10) Assuming the accuracy of the representations and warranties of
the Purchasers contained in Section 3.1 of the Agreement, the issuance and
sale of the Common Stock to the Purchasers as provided in the Agreement is
exempt from the registration requirements of the Securities Act of 1933, as
amended, and applicable state securities laws.
Based upon the limitations and qualifications set forth above, we confirm
to you that:
(1) To our knowledge, no litigation or other proceeding against the
Company or Gorges or any of their respective properties is pending or
overtly threatened by a written communication to the Company or Gorges.
(2) The Company is not qualified to transact business as a foreign
corporation in any state. Gorges is qualified to transact business as a
foreign corporation in the states of Texas, Iowa, Arkansas, California,
North Carolina, Georgia, Minnesota and Colorado.
This opinion letter is provided to you for your exclusive use solely in
connection with the Transaction, and may not be relied upon by any other person
or for any other purpose without our prior written consent.
Very truly yours,
XXXXXX & BIRD
4
APPENDIX I
----------
INTERPRETIVE STANDARDS
APPLICABLE TO CERTAIN LEGAL OPINIONS
TO THIRD PARTIES IN CORPORATE TRANSACTIONS
Effective January 1, 1992
Purpose and Scope of Interpretive Standards
-------------------------------------------
The purpose of these Interpretive Standards is to explain the meaning
of Opinion Letters (which incorporate these Interpretive Standards by reference)
addressed to non-client third parties in connection with corporate acquisition
or financing transactions. Included in these Interpretive Standards are general
qualifications to legal opinions, common assumptions as to fact and law,
standards governing an opinion that an agreement is "enforceable" and
interpretations of certain recurring legal opinions and confirmations of fact.
Incorporation in an Opinion Letter of these Interpretive Standards is intended
to shorten the content of the letter while expanding the mutual understanding of
its meaning. Any part of these Interpretive Standards, however, may be
overridden by a specific statement in an Opinion Letter which supersedes a
contrary Interpretive Standard.
Definitions of Terms Used in Interpretive Standards
---------------------------------------------------
The following capitalized terms have the following meanings when used
in these Interpretive Standards:
Agreement means the primary legal document which evidences the
---------
Transaction.
Assets means all of the tangible and intangible real and personal
------
property of Company.
Company means the entity which is the client of Opinion Giver and on
-------
whose behalf the Opinion Letter is given.
Documents means the Agreement, together with any other document
---------
identified in the Opinion Letter,. which contains one or more obligations of
Company related to the Transaction.
GBCC means the Georgia Business Corporation Code in effect on the date
----
of the Opinion Letter.
Law(s), whether or not a capitalized term, means the constitution,
------
statutes, judicial and administrative decisions, and rules and regulations of
governmental agencies of the Opining Jurisdiction and, unless otherwise
specified, federal law.
Local Law means the statutes, administrative decisions, and any rules
---------
and regulations of any county, municipality or subdivision, whether created at
the federal, state or regional level.
Opining Jurisdiction means a jurisdiction, the law of which Opinion
--------------------
Giver addresses.
Opinion means a legal opinion contained in an Opinion Letter.
-------
Opinion Giver means the law firm or lawyer giving an Opinion .
-------------
Opinion Letter means the letter containing one or more Opinions or
--------------
confirmations of fact by Opinion Giver.
Opinion Recipient means the person or persons to whom the Opinion
-----------------
Letter is addressed.
Other Agreements mean documents (other than the Documents) to which
----------------
Company is a party or by which Company is bound.
Other Counsel means counsel (other than Opinion Giver) providing a
-------------
legal opinion or confirmation of fact on aspects of the Transaction directed to
Opinion Recipient or Opinion Giver or both.
Other Jurisdiction means any jurisdiction (other than the Opining
------------------
Jurisdiction) the law of which is stipulated to be the governing law.
Personal Property means all of the tangible and intangible personal
-----------------
property of Company.
Primary Lawyer Group has the meaning discussed in Interpretive
--------------------
Standard 7.
Public Authority Documents means certificates issued by a governmental
--------------------------
office or agency, such as the Secretary of State, or by a private organization
having access to and regularly reporting on government files and records, as to
a person's property or status.
Remedies opinion means an Opinion dealing with the enforceability
----------------
against Company of one or more Documents.
Transaction means the transaction with respect to which the Opinion
-----------
Letter is given.
- 2 -
Qualifications To Each Opinion
------------------------------
1. Law Addressed by Opinion.
------------------------
If an Opinion Letter is expressly limited to the Law of one or more
specified jurisdictions or to one or more discrete laws within one or more
jurisdictions, an Opinion with respect to any other law, or the effect of any
other law, is disclaimed.
2. Scope of Opinion.
----------------
An Opinion covers only those matters both essential to the conclusion
stated by the Opinion and, based upon prevailing norms and expectations found
among experienced legal practitioners in the Opining Jurisdiction, reasonable in
the circumstances. Other matters are not included in an Opinion by implication.
The following matters, including their effects and the effects of noncompliance,
are not covered by implication or otherwise in any Opinion, unless coverage is
specifically addressed in the Opinion Letter as provided by Interpretive
Standard 11:
(1) Local Law
(2) Law relating to permissible rates, computation or disclosure of
interest, e.g., usury
----
(3) Antitrust and unfair competition law
(4) Securities law
(5) Fiduciary obligations
(6) Pension and employee benefit law, e.g., ERISA
----
(7) Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System
(8) Fraudulent transfer law
(9) Environmental law
(10) Land use and subdivision law
(11) Except with respect to a No Consent Opinion (Interpretive Standard
28), Xxxx-Xxxxx-Xxxxxx, Exon-Xxxxxx and other laws related to filing
requirements, other than charter-related filing requirements, such as
requirements for filing articles of merger
(12) Except with respect to a No Violation Opinion (Interpretive Standard
27), law concerning creation, attachment, perfection or priority of a
security interest in any Assets
(13) Bulk transfer law
(14) Tax law
(15) Patent, copyright, trademark and other intellectual property law
(16) Racketeering law, e.g., RICO
----
(17) Criminal statutes of general application, e.g., mail fraud and wire
----
fraud
(18) Health and safety law, e.g., OSHA
----
(19) Labor law
- 3 -
(20) Law concerning national or local emergency
3. Unwarranted Reliance.
--------------------
Opinion Giver may not rely for purposes of the Opinion Letter upon
information, whether or not in a Public Authority Document, or (except in the
case of arbitrary or hypothetical assumptions contained in an overriding
agreement referred to in Interpretive Standard 11 or as stated in Interpretive
Standard 22 with respect to choice of law) upon an assumption otherwise
appropriate, if Opinion Giver has knowledge that such information or assumption
is false, or recognizes factors that compel the conclusion that reliance upon
such information or assumption would be unreasonable. "Knowledge" or
"recognizes" for purposes of the foregoing sentence and wherever used in these
Interpretive Standards means the current awareness of information by any lawyer
in the Primary Lawyer Group.
4. Reliance on Other Sources of Information.
----------------------------------------
Subject to Interpretive Standard 3, Opinion Giver may rely, without
investigation, upon facts established by a Public Authority Document, facts
provided by an agent of Company or others and, if disclosed in the Opinion
Letter, facts asserted by a party to the Transaction in a representation or
warranty embodied in the Documents, provided:
(1) if not established by a Public Authority Document, the facts do
not constitute a statement, directly or in practical effect, of the legal
conclusion in question;
(2) the person providing facts is, in Opinion Giver's professional
judgment, an appropriate source; and
(3) if the facts are set forth in a certificate, Opinion Giver has
used reasonable professional judgment as to its form and content.
5. Scope of Opinion Giver's Inquiry.
--------------------------------
Opinion Giver is presumed to have reviewed such documents and given
consideration to such matters of law and fact as Opinion Giver deemed
appropriate in order to give an Opinion or confirmation of fact, unless Opinion
Giver has expressly limited the scope of inquiry in the Opinion Letter. A
recital of specific documents reviewed or specific procedures followed, without
more, is not a limitation on the scope of Opinion Giver's inquiry for purposes
of the foregoing presumption.
- 4 -
6. Opinion or Confirmation Qualified by Knowledge of Opinion Giver.
---------------------------------------------------------------
Whenever an Opinion Letter qualifies an Opinion or confirmation of
fact by the words "to our knowledge," "known to us" or words of similar meaning,
the quoted words mean the current awareness by lawyers in the Primary Lawyer
Group of information such lawyers recognize as relevant to the Opinion or
confirmation so qualified. The quoted words do not include within what is
"known" information not within such current awareness that might be revealed if
a canvass of lawyers outside the Primary Lawyer Group were made, if the Opinion
Giver's files were searched or if any other investigation were made.
7. "Primary Lawyer Group".
----------------------
"Primary Lawyer Group" means that lawyer in Opinion Giver's
organization who signs the Opinion Letter and, solely as to information relevant
to an Opinion or confirmation issue, any lawyer in Opinion Giver's organization
who is primarily responsible for providing the response concerning the
particular issue.
8. Who May Rely On Opinion.
-----------------------
Opinion Recipient and designated principals of Opinion Recipient, if
Opinion Recipient is identified in the Opinion Letter as an agent for designated
principals, are the only persons entitled to rely upon any Opinion or
confirmation of fact contained in the Opinion Letter, and then only for purposes
of the Transaction.
9. Other Counsel.
-------------
Opinion Giver's responsibility for the opinion of Other Counsel
depends upon what is stated in the Opinion Letter. A statement that Opinion
Giver has relied on an opinion of Other Counsel means only that Opinion Giver
believes that (i) based upon Other Counsel's professional reputation, it is
competent to render such opinion, and (ii) such opinion on its face appears to
address the matters upon which Opinion Giver places reliance. A statement that
Opinion Giver believes that Opinion Recipient is justified in relying on an
opinion of Other Counsel means only that Opinion Giver believes that, based upon
Other Counsel's professional reputation, it is competent to render such opinion.
A statement that Opinion Giver concurs in an opinion of Other Counsel means that
Opinion Giver has assumed the responsibility for verifying the accuracy of the
opinion of Other Counsel. If no concurrence by Opinion Giver is expressed, no
concurrence is implied. If Opinion Giver merely identifies or remains silent
with respect to the opinion of Other Counsel, Opinion Giver assumes no
responsibility for Other Counsel's opinion, and Opinion Recipient may assume
that Opinion Giver has relied upon Other Counsel's opinion.
- 5 -
10. Updating.
--------
An Opinion Letter speaks as of the date of its delivery, and Opinion
Giver has no obligation to advise Opinion Recipient or anyone else of any matter
of fact or law thereafter occurring, whether or not brought to the attention of
Opinion Giver, even though that matter affects any analysis or conclusion in the
Opinion Letter.
11. Overriding Agreement.
--------------------
Opinion Giver and Opinion Recipient may agree upon arbitrary or
hypothetical assumptions that may not be true and upon qualifications, standards
or interpretations inconsistent with these Interpretive Standards. Any such
agreement with respect to such assumptions, qualifications, standards or
interpretations, when described with reasonable particularity in the Opinion
Letter, will supersede any contrary provision of these Interpretive Standards.
Assumptions
-----------
12. Assumptions As To Parties Other Than Company.
--------------------------------------------
Opinion Recipient in the Transaction has acted in good faith and
without notice of any defense against enforcement of rights created by, or
adverse claim to any property transferred as part of, the Transaction. Each
party to the Transaction other than Company has complied with all laws
applicable to it that affect the Transaction.
13. Assumptions As To Natural Persons and Documents.
-----------------------------------------------
Each natural person acting on behalf of any party to the Transaction
has sufficient legal competency to carry out such person's role in the
Transaction. Each document submitted to Opinion Giver for review is accurate
and complete, each document purporting to be original is authentic, each
document purporting to be a copy conforms to an authentic original, and each
signature on a document is genuine.
14. Assumptions As To Transaction.
-----------------------------
The Transaction complies with any test required by law of good faith
or fairness. Each party will act in accordance with the terms and conditions of
the Documents.
15. Assumption As To Accessibility of Laws.
--------------------------------------
Each Law for which Opinion Giver is deemed to be responsible is
published, accessible and generally available to lawyers practicing in the
Opining Jurisdiction.
- 6 -
16. Assumptions As To Company.
-------------------------
No discretionary act of Company or on its behalf will be taken after
the date of the Transaction if such act might result in a violation of law or
breach or default under any agreement, decree, writ, judgment or court order.
Company will obtain all permits and governmental approvals and take all other
actions which are both (i) relevant to performance of the Documents or
consummation of the Transaction, and (ii) required in the future under
applicable law. Company holds requisite title and rights to its Assets.
17. Assumptions As To Other Agreement.
---------------------------------
Any Other Agreement will be enforced as written.
18. Assumption As To Understandings.
-------------------------------
There is no understanding or agreement not embodied in a Document
among parties to the Transaction that would modify any term of a Document or any
right or obligation of a party.
19. Assumption As To Absence of Mistake or Fraud.
--------------------------------------------
With respect to the Transaction and the Documents, there has been no
mutual mistake of fact and there exists no fraud or duress.
20. Assumption As To Invalidity.
---------------------------
No issue of unconstitutionality or invalidity of a relevant Law exists
unless a reported case has so held.
Remedies Opinion Standards
--------------------------
21. Meaning of Remedies Opinion.
---------------------------
A. General Meaning. The Remedies Opinion, with respect to any
---------------
referenced Document, and subject to the limitations contained in these
Interpretive Standards and in the Opinion Letter, means that:
(i) a contract has been formed under the law of contracts of the
jurisdiction applicable under Interpretive Standard 22; and
(ii) under laws normally applicable to contracts like the Document, to
parties like the Company and to transactions like the Transaction, each
obligation imposed on Company by the Document, each agreement made by
Company in the Document, and each right, benefit and remedy conferred by
Company in the Document, will be given effect as stated in the Document.
- 7 -
B. Existence of Contract. The professional judgment reflected in
---------------------
subparagraph A(i) above requires the Opinion Giver to conclude that:
(i) All legal requirements under contract law for the formation of
a contract of the type involved in the referenced Document effective
against Company (other than requirements that would be covered by a
Corporate Status Opinion, a Corporate Powers Opinion and a Corporate Acts
Opinion discussed at Interpretive Standards 24, 25 and 26) are met, such as
necessary formalities (including compliance with any applicable statute of
frauds), consideration (where necessary), definiteness, and the inclusion
of essential terms.
(ii) The Document does not violate a law as to formation of
contracts that would prevent a court presented with the Document from
enforcing it.
(iii) Company does not presently have available any contractual
defense to the Document, such as the statute of limitations.
22. Choice of Law in Remedies Opinion.
---------------------------------
If a Document covered by the Remedies Opinion contains no governing
law provision, or contains a governing law provision which names the Opining
Jurisdiction, the Remedies Opinion means that if Company is brought before a
proper court of the Opining jurisdiction to enforce rights under the Document,
and if such court applies the substantive law of the Opining Jurisdiction, the
result will be as stated in the Opinion and these Interpretive Standards.
If the Document contains a governing law provision which names a
jurisdiction other than the Opining Jurisdiction, the Remedies Opinion does not
opine whether any court of any jurisdiction will give effect to the governing
law provision in the Agreement, but assumes that if Company is brought before a
proper court of the Opining Jurisdiction to enforce rights under the Document,
such court will apply the substantive law of the Opining Jurisdiction,
notwithstanding the governing law provision in the Document, and based upon such
assumption the result will be as stated in the Opinion and these Interpretive
Standards.
The Remedies Opinion does not extend to the content or effect of any
law other than the law of the Opining Jurisdiction and federal law.
23. Exceptions To The Remedies Opinion.
----------------------------------
Any Remedies Opinion contained in an Opinion Letter which incorporates
these Interpretive Standards by reference will be deemed not to address the
matters excluded in Interpretive Standard 2 and subject to the following
exceptions:
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(i) The effect of bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the rights and remedies of
creditors. This includes the effect of the Federal Bankruptcy Code in its
entirety, including matters of contract rejection, fraudulent conveyance
and obligation, turn-over, preference, equitable subordination, automatic
stay, conversion of a non-recourse obligation into a recourse obligation,
and substantive consolidation. This also includes state laws regarding
fraudulent transfers, obligations, and conveyances, including O.C.G.A.
(S) 18-2-20, et seq., and state receivership laws.
-- ---
(ii) The effect of general principles of equity, whether applied by
a court of law or equity. This includes the following concepts: (a)
principles governing the availability of specific performance, injunctive
relief or other traditional equitable remedies; (b) principles affording
traditional equitable defenses (e.g., waiver, laches and estoppel); (c)
----
good faith and fair dealing; (d) reasonableness; (e) materiality of the
breach; (f) impracticability or impossibility of performance; (g) the
effect of obstruction, failure to perform or otherwise to act in accordance
with an agreement by any person other than Company; (h) the effect of
Section 1-102(3) of the Uniform Commercial Code; and (i) unconscionability.
(iii) The effect and possible unenforceability of contractual
provisions providing for choice of governing law.
(iv) The possible unenforceability of provisions purporting to waive
certain rights of guarantors.
(v) The possible unenforceability of provisions requiring
indemnification for, or providing exculpation, release or exemption from
liability for, action or inaction, to the extent such action or inaction
involves negligence or willful misconduct or to the extent otherwise
contrary to public policy.
(vi) The possible unenforceability of provisions purporting to
require arbitration of disputes.
(vii) The possible unenforceability of provisions prohibiting
competition, the solicitation or acceptance of customers, of business
relationships or of employees, the use or disclosure of information, or
other activities in restraint of trade.
(viii) The possible unenforceability of provisions imposing increased
interest rates or late payment charges upon delinquency in payment or
default or providing for liquidated damages, or for premiums on prepayment,
acceleration, redemption, cancellation, or termination, to the extent any
such provisions are deemed to be penalties or forfeitures.
- 9 -
(ix) The possible unenforceability of waivers or advance consents
that have the effect of waiving statutes of limitation, marshalling of
assets or similar requirements, or as to the jurisdiction of courts, the
venue of actions, the right to jury trial or, in certain cases, notice.
(x) The possible unenforceability of provisions that waivers or
consents by a party may not be given effect unless in writing or in
compliance with particular requirements or that a person's course of
dealing, course of performance, or the like or failure or delay in taking
actions may not constitute a waiver of related rights or provisions or that
one or more waivers may not under certain circumstances constitute a waiver
of other matters of the same kind.
(xi) The effect of course of dealing, course of performance, or the
like, that would modify the terms of an agreement or the respective rights
or obligations of the parties under an agreement.
(xii) The possible unenforceability of provisions that enumerated
remedies are not exclusive or that a party has the right to pursue multiple
remedies without regard to other remedies elected or that all remedies are
cumulative.
(xiii) The effect of O.C.G.A. (S)13-1-11 on provisions relating to
attorneys fees.
(xiv) The possible unenforceability of provisions that
determinations by a party or a party's designee are conclusive.
(xv) The possible unenforceability of provisions permitting
modifications of an agreement only in writing.
(xvi) The possible unenforceability of provisions that the
provisions of an agreement are severable.
(xvii) The effect of laws requiring mitigation of damages.
(xviii) The possible unenforceability of provisions permitting the
exercise, under certain circumstances, of rights without notice or without
providing opportunity to cure failures to perform.
(xix) The effect of agreements as to rights of set off otherwise
than in accordance with the applicable law.
- 10 -
Interpretations
---------------
24. Corporate Status Opinion.
------------------------
An Opinion to the effect that Company was duly organized as a
corporation and is existing in good standing under the laws of the State of
Georgia (Corporate Status Opinion) is subject to the following understandings:
(1) "duly organized" means that Company (i) properly complied with the
Georgia statutory requirements for incorporation, and (ii) thereafter
properly complied with the Georgia statutory requirements for organization;
(2) "is existing" means that Company is a corporation which has not
ceased to exist under the GBCC;
(3) the Opinion refers to the status of Company only for purposes of
and under the GBCC; and
(4) "good standing" has no official meaning under the GBCC, and for
purposes of any Opinion with respect to a corporation subject to the GBCC
means:
(i) Company has filed no notice of intent to dissolve under
Section 1403 of the GBCC;
(ii) the Secretary of State has signed no certificate of
dissolution with respect to Company;
(iii) the Superior Court of the county of Company's registered
office has entered no decree ordering Company dissolved; and
(iv) Company has satisfied its tax and annual registration
requirements under Section 1420 of the GBCC.
An Opinion limited to the conclusion that the Company "is a
corporation" means that third parties may not challenge Company's corporate
existence, the State of Georgia recognizes such existence, and the state may
challenge Company's incorporation only under the circumstances described in
Section 203(b) of the GBCC.
25. Corporate Powers Opinion.
------------------------
An Opinion to the effect that Company has the corporate power to
execute and deliver a Document, to perform its obligations under a Document, to
own and use its Assets and to conduct its business (Corporate Powers Opinion) is
subject to the following understandings:
- 11 -
(1) the Opinion refers only to the GBCC and Company's articles of
incorporation as sources of corporate power;
(2) "power" refers only to whether the acts referenced in the Opinion
are ultra xxxxx;
------------
(3) the Opinion is built upon an assumption that the Corporate Status
Opinion could also be given;
4) "own and use" refers to every right Company has in the Assets;
(5) the Opinion refers to Assets owned and used and business conducted
on the date of the Opinion, and not those contemplated for future
ownership, use or conduct except to the extent the acquisition of the
Assets or conduct of the business is concurrent with, and recognized by
Opinion Giver as constituting part of, the consummation of the Transaction;
and
(6) the Opinion does not affirm that Company is engaged in no unlawful
business and in no business which Georgia law would not permit to be
conducted by a corporation incorporated under the GBCC.
26. Corporate Acts Opinion.
----------------------
An Opinion to the effect that Company has duly authorized the
execution and delivery of, and performance by Company under, the Documents and
has duly executed and delivered the Documents (Corporate Acts Opinion) is
subject to the following understandings:
(1) the Opinion affirms compliance with all corporate action necessary
under the GBCC, Company's articles of incorporation and bylaws and, if
applicable, Company's duly adopted policies and practices for delegation of
authority in order to authorize the execution and delivery of, and
performance under, the Documents;
2) the Opinion affirms that the execution and delivery of the
Documents was, and Company's performance of its obligations under the
Documents in accordance with the Documents as written will be, in
accordance with the authorization;
(3) the Opinion is built upon an assumption that the Corporate Status
Opinion and the Corporate Powers Opinion could also be given;
(4) the Opinion addresses no law other than the GBCC and applicable
law of agency.
- 12 -
27. No Violation Opinion.
--------------------
An Opinion to the effect that Company's execution and delivery of the
Documents do not, and if Company were now to perform its obligations under the
Documents such performance would not, result in (i) a violation of Company's
articles of incorporation, bylaws or any law to which Company or its Assets are
subject, or (ii) a breach of or default under described agreements, or (iii) a
creation or imposition of contractual liens or security interests arising out of
described agreements, or (iv) a violation of any known judicial or
administrative decree, writ, judgment or order to which Company or its Assets
are subject (No Violation Opinion) is subject to the following understandings:
(1) a "violation" or "breach or default" means any act or omission
that, by itself or upon notice or the passage of time or both, would
constitute a violation, breach or default giving rise to a remedy under the
document or law in question;
(2) the Opinion addresses only the relevant facts and law as they
exist on the date of the Opinion Letter;
(3) "agreements" refers to agreements, indentures, documents and other
instruments in writing, identified in the Opinion Letter;
(4) references to any law or to "'decree, writ, judgment or order" or
the like include only those (i) which either prohibit performance by
Company under the Documents or subject Company to a fine, penalty or other
similar sanction, and (ii) which a lawyer, using customary professional
diligence, would reasonably recognize as applicable to Company and the
Transaction;
(5) the Opinion addresses only whether the specific terms of the
relevant Document violate law or cause a breach of or default under the
specific terms of an obligation created by a described Other Agreement,
taking into account information provided in accordance with Interpretive
Standard 4 and other facts known to Opinion Giver;
(6) the Opinion does not address acts permitted or contemplated but
not required, or inferred but not set forth, by the relevant Document,
except to the extent such acts are concurrent with, and recognized by
Opinion Giver as constituting part of, the consummation of the Transaction;
(7) to the extent the interpretation of words in described agreements
requires resort to law, the law is that of the Opining Jurisdiction; and
- 13 -
(8) the Opinion does not address liens or security interests created
by or in favor of Opinion Recipient, created under a Document or arising by
operation of law.
28. No Consent Opinion.
------------------
An Opinion to the effect that no consent, approval, authorization or
other action by, or filing with, any governmental authority is required for
Company's execution and delivery of the Documents and consummation of the
Transaction (No Consent Opinion) is subject to the understandings set forth in
Interpretive Standards 2 and 27(2) and (4). "Required" means that there is no
governmental consent, approval, authorization or filing, the absence of which
would either prohibit performance by Company of its obligations under the
Documents or subject Company to a fine, penalty or other similar sanction.
29. Capitalization Opinion.
----------------------
An Opinion to the effect that described shares have been duly
authorized and are, or upon issuance will be, validly issued, fully paid and
nonassessable (Capitalization Opinion) is subject to the following
understandings:
(1) the Opinion affirms compliance with all corporate action necessary
to create and issue the shares under the Georgia corporate law in effect at
the time of such creation and issuance ("Corporate Code") and Company's
articles of incorporation and bylaws;
(2) "duly authorized" means Company had the corporate power to create
the shares, the shares so created have the rights and attributes required
by the Corporate Code, and the rights and attributes of the shares so
created were permitted by the Corporate Code and are permitted by the GBCC
and Company's articles of incorporation and bylaws;
(3) "validly issued" means that at the time of issuance Company had
sufficient authorized and unissued shares to permit the shares to be
issued, Company took the steps necessary to accord shareholder status to
the persons to whom the shares were issued and Company has taken no step to
deprive the shares of the "validly issued" status;
(4) "fully paid and nonassessable" means that the consideration
received upon issuance of the shares (i) was legally sufficient, (ii)
satisfied the requirements of the Corporate Code, Company's articles of
incorporation and bylaws, and relevant corporate resolutions, (iii) was
approved (e.g., as to value of property or services) by the directors or
shareholders, as required, and (iv) was in fact received, subject to
paragraph (1) above; and
- 14 -
(5) the opinion is based upon the assumption that the Corporate Status
Opinion could also be given.
30. Share Transfer Opinion.
----------------------
The only laws addressed in any Opinion as to the rights of a seller in
shares of Company acquired by any purchaser are the GBCC and Article 8 of the
UCC, and no Opinion is given regarding liens (other than UCC security interests)
that may be perfected without filing or possession of the share certificate.
The Opinion is based upon the assumption that the Capitalization Opinion could
also be given.
31. Personal Property Transfer Opinion.
----------------------------------
An Opinion as to Company's transfer of Personal Property expresses no
opinion as to Company's title. See Interpretive Standard 16.
32. Foreign Qualification Confirmation.
----------------------------------
A confirmation to the effect that Company is qualified to transact
business as a foreign corporation in any one or more named jurisdictions is not
a legal opinion, but a statement which may be based solely upon one or more
certificates referenced in the Opinion Letter and limited in meaning to the
words of each certificate. No implication arises from such confirmation that
certificates have been acquired from all jurisdictions in which Company is
required to be qualified, or that certificates obtained are from the appropriate
public officials in the jurisdictions referenced.
33. Litigation Confirmation.
-----------------------
A confirmation regarding litigation pending or threatened in writing
against Company or any Assets derives from Opinion Giver's knowledge as defined
at Interpretive Standard 6 and certificate reliance discussed at Interpretive
Standard 4, but not from any reviews of public or court records or files of
Opinion Giver or others.
Incorporation by Reference Accord
---------------------------------
34. These Interpretive Standards may be incorporated by reference in the
Opinion Letter by a Statement similar to the following:
This Opinion Letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to
Legal Opinions to Third Parties in Corporate Transactions adopted by
the Legal Opinion Committee of the Corporate and Banking Law Section
of the State Bar of Georgia, which Interpretive Standards are
incorporated in this Opinion Letter by this reference.
- 15 -
SCHEDULE I
----------
MATERIAL CONTRACTS
------------------
1. Asset Purchase Agreement, dated as of October 17, 1996, by and among Tyson
Foods, Inc., Gorges Foodservice, Inc., Tyson Holding Company and
Gorges/Quik-to-Fix Foods, Inc.
2. Transition Services Agreement, dated as of November 25, 1996, by and
between Tyson Foods, Inc. and Gorges/Quik-to-Fix Foods, Inc.
3. Credit Agreement dated as of November 25, 1996, by and among Gorges/Quik-
to-Fix Foods, Inc., Gorges Holding Corporation, the Lenders identified
therein and NationsBank of Texas, N.A.
4. Indenture dated as of November 25, 1996, between Gorges/Quik-to-Fix Foods,
Inc. and IBJ Xxxxxxxx Bank & Trust, as Trustee.
5. Purchase Agreement dated November 25, 1996, by and between NationsBanc
Capital Markets, Inc. and Gorges/Quik-to-Fix Foods, Inc.
6. Registration Rights Agreement dated November 25, 1996, by and between
NationsBanc Capital Markets, Inc. and Gorges/Quik-to-Fix Foods, Inc.
7. Agreement of Lease dated December 15, 1995 by and between Xxxxxx Steel
Structures, Inc. and Tyson Foods, Inc. assigned to Gorges/Quik-to-Fix
Foods, Inc. pursuant to that certain Xxxx of Sale dated as of November 25,
1996 by and among Tyson Foods, Inc., Gorges Foodservice, Inc., Tyson
Holding Company and Gorges/Quik-to-Fix Foods, Inc.
8. Lease Agreement dated May 1992 by and between Cope Properties and Tyson
Foods, Inc., as amended by letter agreement dated August 25, 1992, from
Xxxxx X. Xxxxx and as amended by letter agreement dated May 23, 1995 from
Xxxxx X. Xxxxx assigned to Gorges/Quik-to-Fix Foods, Inc. pursuant to that
certain Xxxx of Sale dated as of November 25, 1996 by and among Tyson
Foods, Inc., Gorges Foodservice, Inc., Tyson Holding Company and
Gorges/Quik-to-Fix Foods, Inc.
9. Supply Agreement dated November 9, 1990 by and between Xxxxxx'x
Distribution, Inc. and Tyson Foods, Inc., as amended by Modification to
Supply Agreement dated September 14, 1993 and Second Modification to Supply
Agreement dated May 1, 1995 assigned to Gorges/Quik-to-Fix Foods, Inc.
pursuant to that certain Assignment Assumption and Consent Agreement dated
as of November 25, 1996 by and among Tyson Foods, Inc., Xxxxxx'x
Distribution, Inc. and Gorges/Quik-to-Fix Foods, Inc.
10. Letter Agreement dated September 12, 1996 by and between Sonic Corporation
and Tyson Foods, Inc. assigned to Gorges/Quik-to-Fix Foods, Inc. pursuant
to that certain Xxxx of Sale dated as of November 25, 1996 by and among
Tyson Foods, Inc., Gorges Foodservice, Inc., Tyson Holding Company and
Gorges/Quik-to-Fix Foods, Inc.
11. Beef Xxxxxx Contract dated November 1, 1995, by and between Sam's Clubs and
Tyson Foods, Inc. assigned to Gorges/Quik-to-Fix Foods, Inc. pursuant to
that certain Xxxx of Sale dated as of November 25, 1996 by and among Tyson
Foods, Inc., Gorges Foodservice, Inc., Tyson Holding Company and
Gorges/Quik-to-Fix Foods, Inc.
12. Gas Sales Agreement dated December 1, 1995 by and between Tyson Foods, Inc.
and US Gas Services LLC assigned to Gorges/Quik-to-Fix Foods, Inc. pursuant
to that certain Xxxx of Sale dated as of November 25, 1996 by and among
Tyson Foods, Inc., Gorges Foodservice, Inc., Tyson Holding Company and
Gorges/Quik-to-Fix Foods, Inc.
13. Contract for Industrial Gas Service dated February 14, 1996 by and between
Lone Star Gas Company and Tyson Foods, Inc., as amended by (i) Amendment of
Contract for Industrial Gas Service dated February 14, 1996, (ii) Addendum
to Amendment of Contract for Industrial Gas Service (a/k/a Interruptible
Gas Service Agreement) dated February 14, 1996, and (iii) letter of March
21, 1996 assigned to Gorges/Quik-to-Fix Foods, Inc. pursuant to that
certain Xxxx of Sale dated as of November 25, 1996 by and among Tyson
Foods, Inc., Gorges Foodservice, Inc., Tyson Holding Company and
Gorges/Quik-to-Fix Foods, Inc.
14. Gas Sales Agreement dated June 1, 1995 by and between Tyson Foods, Inc. and
Xxxxxxx Gas Services, Inc. assigned to Gorges/Quik-to-Fix Foods, Inc.
pursuant to that certain Xxxx of Sale dated as of November 25, 1996 by and
among Tyson Foods, Inc., Gorges Foodservice, Inc., Tyson Holding Company
and Gorges/Quik-to-Fix Foods, Inc.
15. Waste Water Treatment Agreement dated October 25, 1995 by and between the
City of Orange City, Iowa and Tyson Foods, Inc. assigned to Gorges/Quik-to-
Fix Foods, Inc. pursuant to that certain Xxxx of Sale dated as of November
25, 1996 by and among Tyson Foods, Inc., Gorges Foodservice, Inc., Tyson
Holding Company and Gorges/Quik-to-Fix Foods, Inc.
16. Securities Purchase and Stockholders Agreement dated November 25, 1996 by
and among CGW Southeast Partners III, L.P., NationsBanc Investment
Corporation, Mellon Bank, N.A., as Trustee for First Plaza Group Trust, J.
Xxxxx Xxxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx,
Xxxxxxxx Xxxxxx, Xxxxxx Xxxx Xxxxx, and Gorges Holding Corporation.