<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of Earliest Event Reported)
May 6, 1994
Dreyer's Grand Ice Cream, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-14190 94-2967523
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
5929 College Avenue, Oakland, California 94618
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(510) 652-8187
__________________________________
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 6, 1994, Dreyer's Grand Ice Cream, Inc. (the "Company") entered
into a Stock and Warrant Purchase Agreement (the "Agreement") with Nestle
Holdings, Inc. (the "Purchaser") pursuant to which the Purchaser agreed to
purchase from the Company three million shares of Common Stock, par value $1.00
per share (the "Common Stock"), for a price of $32 per share, and three-year
warrants to purchase one million shares for a price of $32 per share and five-
year warrants to purchase one million shares for a price of $32 per share, the
aggregate purchase price for such warrants being $10 million. A copy of the
Agreement is attached hereto as Exhibit 2.1, and is incorporated herein by
reference. The Warrant Agreement is attached thereto as Exhibit A to the
Agreement; the forms of Right of First Refusal Agreements, pursuant to which
Gary Rogers, the Chairman and Chief Executive Officer of the Company, and
William Cronk, the President and Chief Operating Officer of the Company, as
well as certain of their related entities, have granted a right of first
refusal to the Purchaser on the shares of Common Stock owned by them, are
attached as Exhibits B and C to the Agreement; the Distributor Agreement,
pursuant to which the Company will distribute the Purchaser's frozen novelty
and ice cream products in certain markets beginning in 1995, is attached as
Exhibit D to the Agreement; a proposed amendment to the GECC Registration
Rights Agreement is attached thereto as Exhibit E to the Agreement; an
amendment to the Company's Rights Agreement, to allow the Purchaser to
consummate the transactions contemplated by the Agreement without becoming an
"Acquiring Person" as defined in the Rights Agreement, is attached as Exhibit F
to the Agreement; and the Registration Rights Agreement, pursuant to which the
Purchaser will have certain rights to request the Company to cause its shares
to be registered, is attached as Exhibit G to the Agreement. A copy of a press
release (the "Press Release") issued by the Company on May 6, 1994 in
connection with the transactions contemplated by the Agreement is attached
hereto as Exhibit 99.1. Capitalized terms used herein without definition have
the meanings ascribed to them in the Agreement.
As described in the Press Release, the Agreement contains provisions
providing the Purchaser with certain board representation and creating certain
standstill arrangements.
As described in the Press Release, the Company is embarking on a five-
year plan to accelerate the sale of its branded products by greatly increasing
its consumer marketing efforts and expanding its distribution system into
additional markets. Under the plan, the Company will increase the amount of
its spending for advertising and consumer promotion from a level of
approximately $13 million in 1993 to $40 million in 1994 and plans to spend
approximately $50 million annually on these marketing activities from 1995
through 1998.
The Company also announced that its board of directors has authorized
a program to repurchase up to 5 million shares through open market purchases
and negotiated transactions. The timing and amount of such purchases will
depend upon, among other things, market conditions, availability of shares for
purchase and the prices at which such shares may be available.
2
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Separately, the Company issued a release (the "Earnings Release")
announcing earnings results for the fiscal quarter ended March 26, 1994. A
copy of the Earnings Release is attached as Exhibit 99.2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
It is impracticable for the Company to file the required financial
statements for the acquired business at this time. The Company will file the
required financial statements as soon as practicable by an Amendment on Form 8
to this Current Report on Form 8-K, but in no event later than 60 days after
this Form 8-K is required to be filed.
(b) Pro forma financial information.
It is impracticable for the Company to file the required pro forma
financial information at this time. The Company will file such pro forma
financial information as soon as practicable by an Amendment on Form 8 to this
Current Report on Form 8-K, but in no event later than 60 days after this Form
8-K is required to be filed.
(c) Exhibits.
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<CAPTION>
Exhibit No. Description
---------- -----------
<S> <C>
2.1 Stock and Warrant Purchase Agreement between Dreyer's Grand Ice Cream, Inc. and
Nestle Holdings, Inc., dated May 6, 1994, with Exhibits.
99.1 Press Release dated May 6, 1994.
99.2 Earnings Release dated May 6, 1994.
</TABLE>
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DREYER'S GRAND ICE CREAM, INC.,
a Delaware corporation
Date: May 6, 1994 By /s/ Paul R. Woodland
_________________________________________
Paul R. Woodland,
Vice President - Finance and
Administration and Chief Financial Officer
4
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EXHIBIT INDEX
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<CAPTION>
Exhibit No. Description
- - ---------- -----------
<S> <C>
2.1 Stock and Warrant Purchase Agreement between Dreyer's Grand Ice Cream, Inc. and Nestle
Holdings, Inc., dated May 6, 1994, with Exhibits.
99.1 Press Release dated May 6, 1994.
99.2 Earnings Release dated May 6, 1994.
</TABLE>
5
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Exhibit-2.1
==============================================================================
STOCK AND WARRANT PURCHASE AGREEMENT
BY AND BETWEEN
DREYER'S GRAND ICE CREAM, INC.
AND
NESTLE HOLDINGS, INC.
DATED AS OF MAY 6, 1994
==============================================================================
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TABLE OF CONTENTS
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1. Issuance and Sale of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Issuance, Purchase and Sale of Shares . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Issuance, Purchase and Sale of Warrants . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Deliveries at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Financial Statements; No Material Undisclosed Liabilities; Absence of Material
Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6 Actions Pending; Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 8
2.7 Title to Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.8 Governmental Consents, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.9 Holding Company Act and Investment Company Act . . . . . . . . . . . . . . . . . . 8
2.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.11 Conflicting Agreements and Charter Provisions . . . . . . . . . . . . . . . . . . . 9
2.12 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.13 Status of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.14 Status of Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.15 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.16 Possession of Franchises, Licenses, Etc. . . . . . . . . . . . . . . . . . . . . . 11
2.17 Compliance With Legislation Regulating Environmental Quality . . . . . . . . . . . 11
2.18 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.19 Offering of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.20 Unlawful Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.21 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.22 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.23 Ben & Jerry's Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.24 Ownership of Certain Common Shares . . . . . . . . . . . . . . . . . . . . . . . . 14
3. Representations and Warranties of the Purchaser . . . . . . . . . . . . . . . . . . . . . 14
3.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2 Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.3 Conflicting Agreements and Other Matters . . . . . . . . . . . . . . . . . . . . . 15
3.4 Acquisition Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.5 Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
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3.6 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.7 Plan Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4. Covenants of the Company and the Purchaser prior to the Closing . . . . . . . . . . . . . 15
4.1 Investigation by the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Consents and Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5. Covenants of the Company after Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Inspection of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Board Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.5 Special Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.6 Nondisclosure of the Purchaser's Confidential Information . . . . . . . . . . . . . 19
5.7 Repurchase Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.8 Limitation on Distribution of Certain Products . . . . . . . . . . . . . . . . . . 21
6. Covenants of the Purchaser after Closing . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.1 Standstill Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2 Contingent Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.3 Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.4 Nondisclosure of the Company's Confidential Information . . . . . . . . . . . . . . 25
7. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.2 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(b) In the Event of Termination . . . . . . . . . . . . . . . . . . . . . . . . 32
8.2 Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.4 Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.6 Specific Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.9 Notices and Other Communications . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.10 No Waivers; Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.11 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.12 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
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8.13 Special Payment and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.14 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . 38
8.15 Transfer of Securities and Warrant Shares . . . . . . . . . . . . . . . . . . . . . 38
8.16 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.17 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.18 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
EXHIBIT E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
EXHIBIT F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
EXHIBIT G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
EXHIBIT H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-1
EXHIBIT I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
EXHIBIT J . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-1
EXHIBIT K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-1
EXHIBIT L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-1
EXHIBIT M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . M-1
SCHEDULE 2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
SCHEDULE 2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
SCHEDULE 2.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
SCHEDULE 2.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4
SCHEDULE 2.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-5
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SCHEDULE 2.12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
SCHEDULE 2.15(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-7
SCHEDULE 2.15(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-8
SCHEDULE 2.18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-9
SCHEDULE 2.22(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-10
SCHEDULE 2.22(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-11
SCHEDULE 2.22(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-12
SCHEDULE 2.24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-13
</TABLE>
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STOCK AND WARRANT PURCHASE AGREEMENT
THIS STOCK AND WARRANT PURCHASE AGREEMENT is dated as of May ___, 1994
(the "Effective Date") and entered into by and between DREYER'S GRAND ICE CREAM,
INC., a Delaware corporation (the "Company") and NESTLE HOLDINGS, INC., a
Delaware corporation (the "Purchaser") (this "Agreement").
WHEREAS, the Purchaser wishes to purchase from the Company, and the
Company wishes to sell to the Purchaser, three million shares of the Company's
Common Stock, par value $1.00 per share (the "Shares");
WHEREAS, the Purchaser wishes to purchase from the Company, and the
Company wishes to sell to the Purchaser, pursuant to the terms and conditions
of the Warrant Agreement in the form of Exhibit A hereto (the "Warrant
Agreement"), one million Series A Warrants and one million Series B Warrants
(the "Warrants," and together with the Shares, the "Securities"). Each of the
Warrants shall be exercisable for one Common Share (individually, a "Warrant
Share" and collectively, the "Warrant Shares");
WHEREAS, the Purchaser and the Company desire to provide for the
foregoing purchases and sales and to establish various rights and obligations
in connection therewith.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:
1. Issuance and Sale of Shares
1.1 Issuance, Purchase and Sale of Shares. Upon the terms set
forth herein, the Company will issue and sell to the Purchaser, and the
Purchaser will purchase from the Company, the Shares at a price of $96 Million
($32 per Share) (the "Share Purchase Price").
1.2 Issuance, Purchase and Sale of Warrants. Upon the terms set
forth herein, the Company will issue and sell to the Purchaser, and the
Purchaser will purchase from the Company, the Warrants at a price of $10
Million ($4 per Series A Warrant and $6 per Series B Warrant) (the "Warrant
Purchase Price").
1.3 Closing. The closing of the transactions contemplated hereby
(the "Closing") will take place at the offices of Latham & Watkins, 633 West
Fifth Street, Suite 4000, Los Angeles, California 90071-2007, at 10:00 a.m.
California time, two Business Days after the satisfaction of all of the
conditions set forth in Section 1.4, or on such other date as shall be mutually
agreed by the Company and the Purchaser (the "Closing Date").
1.4 Conditions to Closing.
(a) The obligations of the Company and the Purchaser to
consummate the transactions contemplated hereby at the Closing are subject to
the satisfaction of the following conditions:
<PAGE> 7
(i) No injunction or other order or decree which
prevents consummation of the transactions
contemplated hereby shall have been issued
and remain in effect; and
(ii) The applicable waiting period, including any
extension thereof, under the HSR Act shall
have expired or been terminated and neither
the Department of Justice nor the Federal
Trade Commission shall have instituted any
litigation to enjoin or delay the
consummation of the transactions contemplated
hereby.
(b) The obligation of the Purchaser to consummate the
transactions contemplated hereby at the Closing is subject to the satisfaction
or waiver of the following conditions:
(i) Each of the representations and warranties of
the Company contained in Sections 2.1, 2.2,
2.3, 2.5, 2.8, 2.12, 2.13, 2.14, 2.17, 2.19,
2.21, 2.23 and 2.24 and in the first sentence
of Section 2.18 shall be true and correct in
all respects at and as of the Closing Date as
if such representations and warranties were
made at and as of the Closing Date; all other
representations and warranties of the Company
contained in Article 2 shall be true and
correct at and as of the Closing Date as if
such representations and warranties were made
at and as of the Closing Date, with such
exceptions as would not in the aggregate have
a Material Adverse Effect on the Company or
on the Company's ability to consummate the
transactions contemplated by this Agreement
and each of the Collateral Agreements (as
defined in Section 1(b)(ix)); and the Company
shall have performed in all material respects
all agreements and covenants required hereby
to be performed by it prior to or at the
Closing Date. There shall be delivered to
the Purchaser a certificate (signed by the
Chief Executive Officer and the Chief
Financial Officer of the Company) to the
foregoing effect;
(ii) All consents, approvals and waivers, in form
and substance reasonably satisfactory to the
Purchaser, from any Person necessary to
permit the Company to consummate the
transactions contemplated by this Agreement
and each of the Collateral Agreements,
including, without limitation, the sale and
issuance of the Securities to the Purchaser
as contemplated hereby, shall have been
obtained;
(iii) All consents, approvals and waivers, in form
and substance reasonably satisfactory to the
Purchaser, from any Person necessary at
Closing to permit T. Gary Rogers ("G.Rogers")
and Kathleen Tuck Rogers ("K.Rogers"),
individually and as co-
2
<PAGE> 8
trustees of the Rogers Revocable Trust and
the Four Rogers Trust (collectively, the
"Rogers Entities") to consummate the
transactions contemplated by the right of
first refusal agreement in the form of
Exhibit B hereto (the "Rogers Right of First
Refusal Agreement") shall have been obtained;
(iv) All consents, approvals and waivers, in form
and substance reasonably satisfactory to the
Purchaser, from any Person necessary at
Closing to permit William F. Cronk, III
("W.Cronk") and Janet M. Cronk ("J.Cronk"),
individually and as co-trustees of the Cronk
Revocable Trust (collectively, the "Cronk
Entities") to consummate the transactions
contemplated by the right of first refusal
agreement in the form of Exhibit C hereto
(the "Cronk Right of First Refusal
Agreement," and together with the Rogers
Right of First Refusal Agreement, the "Right
of First Refusal Agreements") shall have been
obtained;
(v) No suit, action, investigation, inquiry or
other proceeding by any Person shall have
been instituted or threatened which questions
the validity or legality of, or seeks to
enjoin or invalidate, the transactions
contemplated hereby and which is reasonably
likely to succeed and which, if successful,
is reasonably likely to materially and
adversely affect: the value of the Securities
or the Warrant Shares; the Purchaser's
representation on the Board of Directors of
the Company (the "Board of Directors"); the
Purchaser's registration rights; the
Purchaser's rights under the Right of First
Refusal Agreements; and the distribution
relationship between Nestle Ice Cream Company
("NICC") and the Company contemplated by the
Distributor Agreement in the form of Exhibit
D hereto (the "Distributor Agreement"), all
as expected to be obtained by the Purchaser
through the consummation of the transactions
contemplated by this Agreement and each of
the Collateral Agreements and the Right of
First Refusal Agreements;
(vi) The Company shall have furnished the
Purchaser with such certificates of the
respective officers of the Company and others
to evidence compliance with the conditions
set forth in this Section 1.4(b) as may be
reasonably requested by the Purchaser;
(vii) At the Closing, each of the Company and
General Electric shall have executed and
delivered to the Purchaser an amendment to
the GECC Registration Rights Agreement in the
form of Exhibit E hereto (the "GECC
Amendment");
(viii) At the Closing, each of the Company and FICAL
shall have executed and delivered to the
Purchaser an amendment to the
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<PAGE> 9
Rights Agreement in the form of Exhibit F
hereto (the "Rights Agreement Amendment");
(ix) At the Closing, the Company shall have
executed and delivered to the Purchaser the
Warrant Agreement, the Registration Rights
Agreement in the form of Exhibit G hereto
(the "Registration Rights Agreement") and the
Distributor Agreement (collectively, the GECC
Amendment, the Rights Agreement Amendment,
the Warrant Agreement, the Registration
Rights Agreement and the Distributor
Agreement are referred to herein as the
"Collateral Agreements");
(x) Wachtell, Lipton, Rosen & Katz and Manwell &
Milton, counsel to the Company, shall have
executed and delivered to the Purchaser
opinions in the form of Exhibits H and I
hereto, respectively, dated as of the Closing
Date;
(xi) At the Closing, each of the Rogers Entities
shall have executed and delivered to the
Purchaser the Rogers Right of First Refusal
Agreement, and each of the Rogers Entities
and Bank of America shall have executed and
delivered to the Purchaser an amendment to
the Rogers BOA Security Documents in the form
of Exhibit J hereto; and
(xii) At the Closing, each of the Cronk Entities
shall have executed and delivered to the
Purchaser the Cronk Right of First Refusal
Agreement, and each of the Cronk Entities and
Bank of America shall have executed and
delivered to the Purchaser an amendment to
the Cronk BOA Security Documents in the form
of Exhibit K hereto.
(c) The obligation of the Company to consummate the
transactions contemplated hereby at the Closing is subject to the satisfaction
or waiver of the following conditions:
(i) All representations and warranties of the
Purchaser contained in this Agreement shall
be true and correct at and as of the Closing
Date as if such representations and
warranties were made at and as of the Closing
Date, with such exceptions as would not in
the aggregate have a Material Adverse Effect
on the Purchaser taken as a whole or on the
Purchaser's ability to consummate the
transactions contemplated by this Agreement;
and the Purchaser shall have performed in all
material respects all agreements and
covenants required hereby to be performed by
it prior to or at the Closing Date. There
shall be delivered to the Company a
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<PAGE> 10
certificate (signed by the President and the
Chief Financial Officer of the Purchaser) to
the foregoing effect;
(ii) All consents, approvals and waivers from any
Person necessary to permit the Company to
consummate the transactions contemplated by
this Agreement and each of the Collateral
Agreements, including the sale and issuance
of the Securities to the Purchaser as
contemplated hereby, shall have been
obtained;
(iii) No suit, action, investigation, inquiry or
other proceeding by any Person shall have
been instituted or threatened which questions
the validity or legality of, or seeks to
enjoin or invalidate, the transactions
contemplated hereby and which is reasonably
likely to succeed and which, if successful,
is reasonably likely to have a Material
Adverse Effect on the Company if the
transactions contemplated hereunder are
consummated;
(iv) The Purchaser shall have furnished the
Company with such certificates of its
officers and others to evidence compliance
with the conditions set forth in this Section
1.4(c) as may be reasonably requested by the
Company;
(v) Latham & Watkins, special counsel to the
Purchaser and James H. Ball, General Counsel
to the Purchaser shall have executed and
delivered to the Company opinions in the form
of Exhibits L and M hereto, respectively,
dated as of the Closing Date; and
(vi) NICC shall have executed and delivered to the
Company the Distributor Agreement.
1.5 Deliveries at Closing.
(a) At the Closing, the Company shall deliver to the
Purchaser, against payment in full of the Share Purchase Price, certificates
for the Shares in such denominations as the Purchaser has requested, dated the
Closing Date and registered in the names requested by the Purchaser; and
(b) At the Closing, the Company shall deliver to the
Purchaser, against payment in full of the Warrant Purchase Price, certificates
for the Warrants in such denominations as the Purchaser has requested, dated
the Closing Date and registered in the names requested by the Purchaser.
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<PAGE> 11
2. Representations and Warranties of the Company
The Company represents and warrants as of the Effective Date and as of
the Closing Date as follows:
2.1 Organization and Qualification. Each of the Company and its
Subsidiaries is a corporation duly organized and existing in good standing
under the laws of the jurisdiction in which it is incorporated and has the
power and authority to own its respective property and to carry on its
respective business as now being conducted. Each of the Company and its
Subsidiaries is duly qualified as a foreign corporation to do business and in
good standing in every jurisdiction in which the nature of the respective
business conducted or property owned by it makes such qualification necessary,
except where the failure so to qualify would not have a Material Adverse Effect
on the Company. The Company has heretofore delivered to the Purchaser true and
correct copies of its, and each of its Subsidiaries', Charter Documents, all as
presently in effect, and has identified on Schedule 2.1 hereto all
jurisdictions in which it and its Subsidiaries are qualified or licensed to do
business as a foreign corporation.
2.2 Due Authorization. The Company has all right, power and
authority to enter into this Agreement and each of the Collateral Agreements
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and each of the Collateral Agreements
and the issuance and sale of the Securities and Warrant Shares by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (i) have (or, with respect to the Warrant Shares, will have) been duly
authorized by all necessary corporate action on behalf of the Company and (ii)
do not or will not require the approval or consent of the stockholders of the
Company (including, without limitation, any consents or approvals of the
stockholders of the Company that may be required for qualification of the
Common Shares on the Nasdaq National Market System). This Agreement and each
of the Collateral Agreements have been (or, when executed and delivered, will
have been) duly executed and delivered by the Company and constitute (or, when
executed and delivered, will constitute) valid and binding agreements of the
Company, enforceable in accordance with their respective terms, except that (i)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought. The Board of Directors has unanimously approved of (i) the execution
and delivery of this Agreement and each of the Collateral Agreements and the
consummation of the transactions contemplated hereby and thereby, (ii) the
transactions contemplated by this Agreement and each of the Collateral
Agreements and the Right of First Refusal Agreements, which transactions will
result in each of the Purchaser, its affiliates and associates becoming an
"interested stockholder" within the meaning of Sections 203(a)(1) and
203(c)(1), (2) and (5) of the General Corporation Law of the State of Delaware
and (iii) the Purchaser (as well as any Affiliates to which any Common Shares
may be transferred as permitted by this Agreement) becoming "Substantial
Stockholders" within the meaning of Articles TENTH and ELEVENTH of the
Certificate of Incorporation of the Company. The Board of Directors has duly
adopted resolutions approving of the items described in the
6
<PAGE> 12
preceding sentence and such resolutions are in full force and effect and have
not been amended or otherwise modified.
2.3 Subsidiaries. The Company has identified on Schedule 2.3
hereto (i) the name and jurisdiction of incorporation of each Subsidiary and
(ii) the number of shares of capital stock and other equity securities and the
percentage of the issued and outstanding capital stock and other equity
securities (including rights, warrants and options to acquire such capital
stock) of each such Subsidiary owned or to be owned by the Company following
the Closing Date. All such shares of capital stock and other equity securities
have been validly issued and are fully paid and nonassessable and are (except
for directors' qualifying shares) owned by the Company and its Subsidiaries or,
after the Closing Date, will be owned by the Company and its Subsidiaries, free
and clear of any Lien.
Except as set forth on Schedule 2.3 hereto, no Subsidiary of
the Company has, and after the Closing Date, no Subsidiary will have,
outstanding capital stock or securities convertible into or exchangeable or
exercisable for any shares of its capital stock, nor does it have outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to, any shares of
its capital stock or any securities convertible into or exchangeable or
exercisable for any shares of its capital stock.
2.4 SEC Reports. The Company has filed all proxy statements,
reports and other documents required to be filed by it under the Exchange Act
since January 1, 1992; and the Company has furnished the Purchaser copies of
its Annual Report on Form 10-K for the fiscal year ended December 25, 1993, and
all proxy statements and reports and other documents under the Exchange Act
filed by the Company after such date, each as filed with the Commission
(collectively, the "SEC Reports"). Each SEC Report complied with the
requirements of the Exchange Act. As of their respective dates, each SEC
Report (including all information incorporated therein by reference) did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and as of the Effective Date, there are no facts required to be disclosed in
the SEC Reports which are not disclosed as required.
2.5 Financial Statements; No Material Undisclosed Liabilities;
Absence of Material Changes. The financial statements (including any related
schedules and/or notes) included or incorporated by reference in each SEC
Report have been prepared in accordance with generally accepted accounting
principles consistently followed (except as indicated in the notes thereto)
throughout the periods involved and fairly present the consolidated financial
position and results of operations and changes in financial position of the
Company and its Subsidiaries as of the dates thereof and for the periods ended
on such dates (in each case subject, as to interim statements, to changes
resulting from normal year-end adjustments, none of which will be material in
amount or effect). The Company has no material liabilities or obligations
(individually or in the aggregate), whether absolute, accrued, contingent or
otherwise, and whether due or to become due, not reflected in the Company's
balance sheet as of December 25, 1993, except for such matters as may be
disclosed in the SEC Reports, other than any such
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<PAGE> 13
liabilities incurred in the ordinary course of business since December 25,
1993. Except as set forth on Schedule 2.5 hereto, since December 25, 1993, the
Company and each of its Subsidiaries have operated their respective businesses
only in the ordinary course and have experienced no changes or events
reasonably likely to result in a Material Adverse Effect, other than changes or
events disclosed or referred to in the SEC Reports or the Schedules hereto, and
neither the Company nor any of its Subsidiaries have (i) incurred any
indebtedness for borrowed money, assumed, guaranteed, endorsed or otherwise
become responsible for obligations of any other Person, or made any loans or
advances to any Person, except in the ordinary course of business and
consistent with past practice, (ii) made any changes in accounting principles
or methods, (iii) issued any shares of its capital stock, or any other
securities, or any securities convertible into or exchangeable for, or options
or warrants to purchase, shares of its capital stock or any other securities
except pursuant to options and warrants outstanding prior to the Effective Date
or (iv) made any change to its Charter Documents.
2.6 Actions Pending; Compliance with Laws. Except as set forth on
Schedule 2.6 hereto, there is no action, suit, investigation or proceeding
pending or, to the knowledge of the Company, threatened by any Person against
the Company or any of its Subsidiaries or any of their respective properties or
assets by or before any court, arbitrator or governmental body, department,
commission, board, bureau, agency or instrumentality, which is reasonably
likely to succeed, and neither the Company nor any of its Subsidiaries is in
default with respect to any judgment, order, writ, injunction, decree or award.
2.7 Title to Properties; Insurance. The Company and its
Subsidiaries have good and valid title to, or, in the case of property leased
by any of them as lessee, a valid and subsisting leasehold interest in, their
respective properties and assets, free of all Liens other than those referred
to in the financial statements of the Company (or the notes thereto) for the
year ended December 25, 1993, included in the SEC Reports, except in each case
for such defects in title and such other Liens which are disclosed in the SEC
Reports. The Company and its Subsidiaries maintain insurance in such amounts
(to the extent available in the public market), including self-insurance,
retainage and deductible arrangements, and of such a character as is reasonable
for companies engaged in the same or similar business.
2.8 Governmental Consents, etc. The Company is not required to
obtain any consent, approval or authorization of, or to make any declaration or
filing with, any governmental authority as a condition to or in connection with
the valid execution, delivery and performance of this Agreement and each of the
Collateral Agreements and the valid offer, issue, sale or delivery of the
Securities and Warrant Shares, or the consummation by the Company of the
transactions contemplated hereby and thereby, except for filings under the HSR
Act, any filings required to effect any registration pursuant to the
Registration Rights Agreement, any filings required pursuant to state and
federal securities laws which will be timely made after the Closing hereunder
and the filing of a Nasdaq National Market Notification Form for Listing of
Additional Shares.
2.9 Holding Company Act and Investment Company Act. Neither the
Company nor any Subsidiary is: (i) a "public utility company" or a "holding
company," or an "affiliate" or a "subsidiary company" of a "holding company,"
or an "affiliate" of such a "subsidiary
8
<PAGE> 14
company," as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended (the "PUHCA"), or (ii) a "public utility," as defined in
the Federal Power Act, as amended (the "FPA"), or (iii) an "investment company"
or an "affiliated person" thereof or an "affiliated person" of any such
"affiliated person," as such terms are defined in the Investment Company Act of
1940, as amended (the "ICA"); provided, however, that the Company may be deemed
to be an "affiliate" of General Electric for purposes of the PUHCA and FPA and
an "affiliated person" of Northern Trust Corporation, State of Wisconsin
Investment Board and RCM Capital Management for purposes of the ICA.
2.10 Taxes. The Company and its Subsidiaries have filed or caused
to be filed all income tax returns which are required to be filed and have paid
or caused to be paid all taxes as shown on said returns and on all assessments
received by them to the extent that such taxes have become due, except taxes
the validity or amount of which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
set aside. The federal income tax returns of the Company and its Subsidiaries
have been examined and reported on by the Internal Revenue Service (or closed
by applicable statutes) and all tax liabilities including additional
assessments have been satisfied for all fiscal years prior to and including the
fiscal year ended December 31, 1988. The Company and its Subsidiaries have
paid or caused to be paid, or have established reserves that the Company
reasonably believes to be adequate for all federal income tax liabilities and
state income tax liabilities applicable to the Company and its Subsidiaries for
all fiscal years which have not been examined and reported on by the taxing
authorities (or closed by applicable statutes).
2.11 Conflicting Agreements and Charter Provisions. Neither the
Company nor its Subsidiaries is a party to any contract or agreement or subject
to any Charter Document provision, or judgment or decree which does or in all
reasonable likelihood will have a Material Adverse Effect on the Company.
Except as set forth on Schedule 2.11, none of (i) the execution and delivery of
this Agreement and each of the Collateral Agreements and the Right of First
Refusal Agreements and the issuance of the Securities, (ii) the consummation of
the transactions contemplated hereby and thereby and (iii) the exercise of the
Warrants for, and the issuance of, the Warrant Shares, will conflict with or
result in a breach of the terms, conditions or provisions of, or give rise to a
right of termination under, or constitute a default under, or result in any
violation of, the Charter Documents of the Company or any Subsidiary or any
mortgage, agreement, instrument, order, judgment, decree, statute, law, rule or
regulations to which the Company or any of its Subsidiaries or any of their
respective property is subject. Neither the Company nor any of its
Subsidiaries is in default under any outstanding indenture or other debt
instrument or with respect to the payment of principal of or interest on any
outstanding obligation for borrowed money, under any of their respective
contracts or agreements, or under any instrument by which the Company or any of
its Subsidiaries is bound.
2.12 Capitalization. The authorized capital stock of the Company
consists of (i) 30,000,000 Common Shares of which, as of May 2, 1994,
14,764,596 shares are outstanding and (ii) 10,000,000 shares of Preferred
Stock, including the Series A Convertible Preferred Stock (the "Series A
Preferred") and Series B Convertible Preferred Stock (the "Series B
Preferred"), none of which are issued and outstanding. All of the outstanding
Common Shares have been validly issued and are fully paid and nonassessable.
No class of capital stock of the
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<PAGE> 15
Company is entitled to preemptive rights. Except for the Rights, the options
and warrants listed on Schedule 2.12 hereto, the 6.25% Subordinated Convertible
Notes due June 30, 2001 (the "Convertible Notes"), the Series A Preferred and
the Series B Preferred, there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, shares of any class of
capital stock of the Company, or contracts, commitments, understandings, or
arrangements by which the Company is or may become bound to issue additional
shares of its capital stock or options, warrants or rights to purchase or
acquire any shares of its capital stock. Since December 25, 1993, the Company
has not changed the amount of its authorized capital stock or subdivided or
otherwise changed any shares of any class of its capital stock, whether by way
of reclassification, recapitalization, stock split or otherwise, or issued or
reissued, or agreed to issue or reissue, any of its capital stock. Between May
2, 1994 and the Effective Date, the Company has not issued any additional
shares of capital stock, or any other securities, or any securities convertible
into or exchangeable for shares of its capital stock or any other securities,
other than pursuant to the exercise of outstanding stock options and other
employee benefit plans in effect on the Effective Date.
2.13 Status of Securities. The Securities have been duly
authorized by all necessary corporate action on the part of the Company (no
consent or approval of stockholders being required by law, the Charter
Documents of the Company, the qualification criteria of the Nasdaq National
Market System or otherwise), and upon issuance and sale hereunder will be
validly issued and outstanding, fully paid and nonassessable, and the issuance
thereof is not subject to preemptive rights of any other stockholder of the
Company.
2.14 Status of Warrant Shares. The Warrant Shares will be duly
authorized by all necessary corporate action on the part of the Company (no
consent or approval of stockholders being required by law, the Charter
Documents of the Company, the qualification criteria of the Nasdaq National
Market System or otherwise), and upon issuance in accordance with the terms of
the Warrant Agreement, will be validly issued and outstanding, fully paid and
nonassessable, and the issuance thereof is not subject to preemptive rights of
any other stockholder of the Company. The Warrant Shares have been validly
reserved for issuance upon the exercise of the Warrants.
2.15 ERISA. No accumulated funding deficiency (as defined in
Section 302 of ERISA or Section 412 of the Code), whether or not waived, exists
with respect to any Pension Plan (other than a Multiemployer Plan (as defined
below)). No liability to the PBGC has been, or is reasonably likely to be,
incurred with respect to any Pension Plan (other than a Multiemployer Plan) by
the Company, any of its Subsidiaries or any ERISA Affiliate (as defined below).
Neither the Company nor any of its Subsidiaries nor any ERISA Affiliate has
incurred, or is reasonably likely to incur, any withdrawal liability under
Title IV of ERISA with respect to any Multiemployer Plan, and if the Company,
its Subsidiaries and ERISA Affiliates, were to completely withdraw as of the
Effective Date from each Multiemployer Plan to which they have or have ever had
an obligation to contribute, the Company, its Subsidiaries and its ERISA
Affiliates would not incur any withdrawal liability under Title IV of ERISA.
The Company is not a "party in interest" (as defined in Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(e)(2) of the Code) with
respect to the Purchaser. To the best knowledge
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<PAGE> 16
of the Company, no fiduciary of or "party in interest" or "disqualified person"
with respect to any employee benefit plan (as defined in Section 3(3) of ERISA)
maintained or contributed to by the Company or any of its subsidiaries, for the
benefit of their respective employees (each an "Employee Plan") has engaged in
or caused any Employee Plan to engage in any "prohibited transaction" (within
the meaning of Section 4975 of the Code and Sections 406 or 407 of ERISA) that
has resulted in the imposition of any tax or penalty imposed under Section 4975
of the Code or Section 502 of ERISA that has not been satisfied. Except as set
forth on Schedule 2.15(a), each Employee Plan has been maintained and
administered in compliance with all applicable law including ERISA and the
Code. Except as set forth on Schedule 2.15(a), each Employee Plan which is
intended to qualify under Section 401(a) of the Code has been so qualified
during the period from its adoption to date. There are no pending IRS audits
or controversies with respect to any Pension Plan other than a Multiemployer
Plan. An "ERISA Affiliate" for purposes of this Section 2.15 is any trade or
business, whether or not incorporated, which, together with the Company, is
under common control, as described in Section 414(b) or (c) of the Code, and
the term "Multiemployer Plan" shall mean any Pension Plan which is a
"multiemployer plan" (as such term is defined in Section 4001(a)(3) of ERISA).
Schedule 2.15(b) hereto contains a complete list of each Pension Plan,
Multiemployer Plan, Employee Plan, employment, consulting, severance or other
similar contract, arrangement and policy and each plan, arrangement, program,
agreement or commitment providing for welfare benefits or for deferred
compensation, profit-sharing bonuses, stock options, stock appreciation rights,
stock purchases or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which are maintained or contributed to by
the Company and which cover or have covered employees of the Company or any of
its subsidiaries (with respect to their relationship with such entities).
2.16 Possession of Franchises, Licenses, Etc. The Company and its
Subsidiaries possess all franchises, certificates, licenses, permits and other
authorizations from governmental or political subdivisions or regulatory
authorities and all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary to the Company and its Subsidiaries for the ownership,
maintenance and operation of their respective businesses, properties and
assets, and neither the Company nor any of its Subsidiaries is in violation of
any thereof.
2.17 Compliance With Legislation Regulating Environmental Quality.
Except where non-compliance is not reasonably likely to have a Material Adverse
Effect on the Company, the Facilities which currently are owned, operated or
leased by the Company are and at all times have been maintained and operated in
compliance with all applicable federal, state and local environmental
protection, occupational, health and safety or similar laws, ordinances,
restrictions, orders, regulations and licenses (collectively "Environmental
Laws") including but not limited to the Federal Water Pollution Control Act (33
U.S.C Section 1251 et seq. ), Resource Conservation & Recovery Act (42 U.S.C.
Section 6901 et seq.), Safe Drinking Water Act (21 U.S.C. Section 349, 42
U.S.C. Section Section 201, 300f), Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), Clean Air Act (42 U.S.C. Section 7401 et seq.),
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601 et seq.), California Health & Safety Code (Section 25100
et seq., Section 39000 et seq.), and California Water Code (Section 13000
et seq.). No materials, substances, or products have been at any time placed,
held, located, disposed of or released on,
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<PAGE> 17
under, at, within, or about the Facilities which may reasonably be expected to
result in a regulatory agency or other governmental entity requiring clean up,
removal or other remedial action by the Company under Environmental Laws with
such exceptions as would not in the aggregate have a Material Adverse Effect on
the Company. No hazardous or toxic substance, waste or material (collectively
"Hazardous Materials") has at any time been used, stored, treated, transported
or handled by the Company or any of its consultants, contractors or agents on,
under, at, within, or about the Facilities except Hazardous Materials that are
used, stored, treated, transported or handled on, under, at, within or about
the Facilities in material compliance with Environmental Laws. Except in cases
or circumstances not reasonably likely to have a Material Adverse Effect on the
Company, no litigation, administrative enforcement actions, proceedings or
notices of potential liability have been (x) received, served or, to the best
knowledge of the Company, filed or threatened against the Company or (y) to the
actual knowledge of the Company, received, served, filed or threatened against
any predecessor business or landowner or with respect to any Facility, in each
case, relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Materials or arising out of the use,
generation, storage, treatment, release, discharge, transportation, handling or
disposal of Hazardous Materials or resulting from a violation or alleged
violation of Environmental Laws.
2.18 Certain Agreements. The Purchaser has been provided access to
all material contracts and agreements to which the Company or any of its
Subsidiaries is a party. Except as set forth on Schedule 2.18, the Company is
not a party to (i) any written arrangement (or group of related written
arrangements) concerning a partnership or joint venture with any other Person
involving commitments or assets of the Company in excess of $100,000, (ii) any
written arrangement (or group of related written arrangements) concerning
non-competition arrangements, (iii) any written arrangement with any of its
directors, officers, shareholders or employees or any member of any such
Person's immediate family (1) providing for the furnishing of material services
by or (2) otherwise requiring material payments to any such Person or any
Person in which any such Person has a substantial interest as a shareholder,
officer, director, trustee or partner or (iv) any oral contract or agreement
with respect to any of the matters referred to in the foregoing clauses (i)
through (iii).
2.19 Offering of Securities. Neither the Company nor any Person
acting on its behalf has offered the Securities or Warrant Shares or any
similar securities of the Company for sale to, solicited any offers to buy the
Securities or Warrant Shares or any similar securities of the Company from or
otherwise approached or negotiated with respect to the Company with any Person
other than the Purchaser and other "Accredited Investors" (as defined in Rule
501(a) under the Securities Act). Neither the Company nor any Person acting on
its behalf has taken or will take any action (including, without limitation,
any offering of any securities of the Company under circumstances which would
require the integration of such offering with the offering of the Securities or
Warrant Shares under the Securities Act and the rules and regulations of the
Commission thereunder) which could reasonably be expected to subject the
offering, issuance or sale of the Securities or Warrant Shares to the
registration requirements of Section 5 of the Securities Act.
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2.20 Unlawful Use of Proceeds.
(a) The Company does not own, directly or indirectly, any
"margin security", as defined in Regulation G issued by the Board of Governors
of the Federal Reserve System (12 CFR Part 207); and the Company will not use
any proceeds from the sale of the Securities or exercise of the Warrants to
purchase or carry any "Security", as defined in Section 3(a)(10) of the
Exchange Act, or for any other purpose which would result in any transaction
contemplated by this Agreement constituting a "purpose credit" within the
meaning of said Regulation G, or which would involve a violation of Section 7
of the Exchange Act or Regulation T, U or X of said Board of Governors (12 CFR
Parts 220, 221 and 224, respectively); and
(b) The Company does not intend to apply and will not
apply any part of the proceeds of the sale of the Securities or exercise of the
Warrants in any manner which is unlawful or which would involve a violation of
Executive Orders 12775 and 12779 (56 Fed. Reg. 50645 and 55976) Prohibiting
Certain Transactions with respect to Haiti or any of the following regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended): the Foreign Assets Control Regulations, the Transactions Control
Regulations, the Cuban Assets Control Regulations, the Foreign Funds Control
Regulations, the Iranian Assets Control Regulations, the Iraqi Transactions
Regulations, the Nicaraguan Trade Control Regulations, the South African
Transactions Regulations and the Libyan Sanctions Regulations.
2.21 Payments. The Company has not, directly or indirectly, paid
or delivered any fee, commission or other sum of money or item or property,
however characterized, to any finder, agent, government official or other
party, in the United States or any other country, which is in any manner
related to the business or operations of the Company, which any officer or
director of the Company knows or has reason to believe to have been illegal
under any federal, state or local laws of the United States or any other
country having jurisdiction; and the Company has not participated, directly or
indirectly, in any boycotts prohibited by the Export Administration Regulations
(15 CFR, Part 769 (1993)).
2.22 Labor Matters. Except as set forth on Schedule 2.22(a), the
Company is not a party to any labor agreement with respect to its employees
with any labor organization, group or association. Except as set forth on
Schedule 2.22(b), since December 25, 1993, the Company has not experienced any
attempt by organized labor or its representatives to make the Company conform
to demands of organized labor relating to its employees or to enter into a
binding agreement with organized labor that would cover the employees of the
Company. The Company is in compliance with all applicable laws respecting
employment practices, terms and conditions of employment and wages and hours
and is not engaged in any unfair labor practice. Except as set forth on
Schedule 2.22(c), there is no unfair labor practice charge or complaint against
the Company pending before the National Labor Relations Board or any other
governmental agency arising out of the Company's activities, and the Company
has no knowledge of any facts or information which would give rise thereto;
there is no labor strike or labor disturbance pending or threatened against the
Company nor is any grievance currently being asserted; and the Company has not
experienced a work stoppage or other labor difficulty.
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2.23 Ben & Jerry's Confirmation. The transactions contemplated by
this Agreement and each of the Collateral Agreements and the Right of First
Refusal Agreements do not conflict with, or result in a breach of the terms,
conditions or provisions of, or give rise to any right to terminate the Ben &
Jerry's Distribution Agreement, as amended by the Ben & Jerry's Amendments, and
do not trigger the payment of a termination or other fee under such agreements.
2.24 Ownership of Certain Common Shares. The Company has
identified on Schedule 2.24, as of May 2, 1994 (i) the Common Shares which are
owned of record by each of the Rogers Entities and the Cronk Entities and (ii)
all other shares of the Company's capital stock, or any securities convertible
into or exchangeable for, or options or warrants to purchase, shares of the
Company's capital stock which are owned of record by each of the Rogers
Entities and the Cronk Entities.
3. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants as of the Effective Date and as of the Closing Date as
follows:
3.1 Organization and Qualification. The Purchaser is a
corporation duly organized and existing in good standing under the laws of the
state of Delaware and has the power to own its properties and to carry on its
businesses as now being conducted. The Purchaser is duly qualified to do
business and in good standing in every jurisdiction in which the nature of the
respective business conducted or property owned by it makes such qualification
necessary, except where the failure to so qualify would not prevent
consummation of the transactions contemplated hereby or materially and
adversely effect the Purchaser's ability to perform its obligations hereunder.
3.2 Due Authorization. The Purchaser has all right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and each of
the Collateral Agreements to which it is a party by the Purchaser and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on behalf of the
Purchaser. This Agreement and each of the Collateral Agreements to which it is
a party have been (or, when executed and delivered, will have been) duly
executed and delivered by the Purchaser and constitute (or, when executed and
delivered, will constitute) valid and binding agreements of the Purchaser
enforceable in accordance with their respective terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought. The Board of Directors of the Purchaser has approved of the execution
and delivery of this Agreement and each of the Collateral Agreements to which
it is a party and the consummation of the transactions contemplated hereby and
thereby and has duly adopted resolutions approving of the items described in
the preceding sentence; such resolutions are in full force and effect and have
not been amended or otherwise modified.
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3.3 Conflicting Agreements and Other Matters. Neither the
execution and delivery of this Agreement and each of the Collateral Agreements
to which it is a party nor the performance by the Purchaser of its obligations
hereunder or thereunder will conflict with, result in a breach of the terms,
conditions or provisions of, constitute a default under, or require any
consent, approval or other action by or any notice to or filing with any court
or administrative or governmental body pursuant to, the organizational
documents or agreements of the Purchaser or any material mortgage, agreement,
instrument, order, judgment, decree, statute, law, rule or regulation to which
the Purchaser or any of its respective properties are subject, except for
filings under the HSR Act.
3.4 Acquisition Representations. The Purchaser is acquiring the
Securities being purchased by it for its own account and not with a view to or
for sale in connection with any distribution thereof in any transaction that
would violate the securities laws of the United States or any state thereof and
the Purchaser has no present plan or intention to effect any distribution
thereof. The Purchaser acknowledges that the Securities and the Warrant Shares
issuable upon exercise of the Warrants have not been registered under the
Securities Act and may be sold or disposed of in the absence of such
registration only pursuant to an exemption from such registration and in
accordance with this Agreement. At the Effective Date, the Purchaser does not
Beneficially Own, directly or, to the knowledge of the Purchaser, indirectly
(or have any option or right to acquire), any securities of the Company other
than as contemplated under this Agreement, the Collateral Agreements and the
Right of First Refusal Agreements. The Purchaser has provided the Company with
the form of Item 4 of the statement on Schedule 13D it intends to file with
respect to the transactions contemplated hereby.
3.5 Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 promulgated under the Securities Act.
3.6 Funding. The Purchaser has or will have available on the
Closing Date sufficient funds to perform its obligations hereunder.
3.7 Plan Assets. No part of the funds used by the Purchaser to
purchase the Securities hereunder constitutes assets allocated to any separate
account (as defined in Section 3(17) of ERISA) maintained by the Purchaser or
assets of any employee benefit plan (as defined in Section 3(3) of ERISA).
4. Covenants of the Company and the Purchaser prior to the Closing.
The Company and the Purchaser covenant as follows for the period from
the Effective Date through the Closing Date:
4.1 Investigation by the Purchaser. The Company shall allow the
Purchaser during regular business hours through the Purchaser's employees,
agents and representatives, to make such investigation of the business,
properties, books and records of the Company, and to conduct such examination
of the condition of the Company, as the Purchaser deems necessary or advisable
to familiarize itself with such business, properties, books, records, condition
and other matters, and to verify the representations and warranties of the
Company hereunder.
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4.2 Consents and Best Efforts. As soon as practicable, but in any
event within five Business Days after the Effective Date, the Company and the
Purchaser shall make all filings required under the HSR Act. In addition, the
Company shall as soon as practicable after the Effective Date, commence to take
all action required to obtain all consents, approvals and agreements of, and to
give all notices and make all other filings with, any Persons necessary to
authorize, approve or permit the consummation of the transactions contemplated
by this Agreement and each of the Collateral Agreements and the Right of First
Refusal Agreements, including the full and complete sale, conveyance,
assignment or transfer of all of the Securities (and the Warrant Shares when
issued upon exercise of the Warrants), and the Purchaser shall cooperate with
the Company with respect thereto. In addition, subject to the terms and
conditions provided herein, each of the parties hereto covenants and agrees to
use its best efforts to take, or cause to be taken, all action or do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated
hereby and to cause the fulfillment of the parties' obligations hereunder.
4.3 Notification of Certain Matters. The Company shall give
prompt notice to the Purchaser, and the Purchaser shall give prompt notice to
the Company, of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
as of the Closing Date and (ii) any material failure of the Company or the
Purchaser, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder, and
each party shall use all reasonable efforts to remedy same.
5. Covenants of the Company after Closing
The Company covenants that so long as the Purchaser (and/or its
Affiliates) Beneficially Own any Common Shares:
5.1 Financial Statements and Other Reports.
(a) The Company will, as soon as practicable and in any
event within 60 days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year, furnish to the Purchaser statements
of consolidated net income and cash flows and a statement of changes in
consolidated stockholders' equity of the Company and its Subsidiaries for the
period from the beginning of the then current fiscal year to the end of such
quarterly period, and a consolidated balance sheet of the Company and its
Subsidiaries as of the end of such quarterly period, setting forth in each case
in comparative form figures for the corresponding period or date in the
preceding fiscal year, all in reasonable detail and certified by an authorized
financial officer of the Company, subject to changes resulting from year-end
adjustments; provided, however, that delivery pursuant to clause (c) below of a
copy of the Quarterly Report on Form 10-Q of the Company for such quarterly
period filed with the Commission shall be deemed to satisfy the requirements of
this Section 5.1(a);
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(b) The Company will, as soon as practicable and in any
event within 100 days after the end of each fiscal year, furnish to the
Purchaser statements of consolidated net income and cash flows and a statement
of changes in consolidated stockholders' equity of the Company and its
Subsidiaries for such year, and a consolidated balance sheet of the Company and
its Subsidiaries as of the end of such year, setting forth in each case in
comparative form the corresponding figures from the preceding fiscal year, all
in reasonable detail and examined and reported on by independent public
accountants of recognized national standing selected by the Company; provided,
however, that delivery pursuant to clause (c) below of a copy of the Annual
Report on Form 10-K of the Company for such fiscal year filed with the
Commission shall be deemed to satisfy the requirements of this Section 5.1(b);
(c) The Company will, promptly upon transmission thereof,
furnish to the Purchaser copies of all such financial statements, proxy
statements, notices and reports as it shall send to its stockholders and copies
of all such registration statements (without exhibits), other than registration
statements relating to employee benefit or dividend reinvestment plans, and all
such regular and periodic reports as it shall file with the Commission;
(d) The Company will, promptly after such package becomes
available, furnish to the Purchaser a copy of the Company's monthly management
executive summary or any substantially similar replacement therefor for the
third month of each fiscal quarter; and
(e) The Company will promptly furnish to the Purchaser
copies of any compliance certificates furnished to lenders in respect of
Indebtedness (as defined in the GECC Agreement) of the Company and its
Subsidiaries and, with reasonable promptness, furnish to the Purchaser such
other financial and other data of the Company and its Subsidiaries as the
Purchaser may reasonably request, including, but not limited to, operating
financial information for each facility owned or operated by the Company or any
of its Subsidiaries.
Notwithstanding the foregoing, the Company shall not be
required to furnish to the Purchaser the reports described in Sections 5.1(d)
and (e) when the Purchaser Beneficially Owns less than 1% of the outstanding
Common Shares, on a Fully Diluted basis.
5.2 Inspection of Property. The Company shall permit
representatives of the Purchaser to visit and inspect, at the Purchaser's
expense, any of the properties of the Company and its Subsidiaries, to examine
the corporate books and make copies or extracts therefrom and to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with the
principal officers of the Company, all at such reasonable times, upon
reasonable notice and as often as the Purchaser may reasonably request;
provided, however, that the foregoing shall be subject to compliance with
reasonable safety, operating and production requirements and shall not require
the Company or any of its Subsidiaries to permit any inspection which in the
reasonable judgment of the Company would result in the violation of any statute
or regulation with respect to confidentiality or security. The Purchaser
agrees that the information received pursuant to Sections 5.1 and 5.2 shall be
subject to the confidentiality provisions of Section 6.4.
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5.3 Board Membership. The provisions of this Section 5.3 shall be
applicable so long as the Purchaser shall Beneficially Own 10% or more of the
Common Shares on a Fully Diluted Basis:
(a) As promptly as practicable following the Closing, the
Board of Directors shall take all necessary action to increase the size of the
Board of Directors by two and to elect two Persons nominated by the Purchaser
(the "Purchaser's Nominees") to the Board of Directors, with such Purchaser's
Nominees being elected to Class II and Class III, respectively;
(b) At each subsequent stockholders meeting at which
directors will be elected or solicitation of written consents for the election
of directors, the Purchaser will be entitled to propose as members of the Board
of Directors (and the Company will nominate to separate classes, recommend and
use the same efforts it uses with respect to all other of the Board of
Director's nominees to cause the election of) that number of Persons which when
added to Persons who are Purchaser's Nominees and who are continuing to serve
on the Board of Directors is equal to the number of Purchaser's Nominees to
which the Purchaser is then entitled pursuant to this Section 5.3. In the
event of any vacancy arising by reason of the resignation, death, removal or
inability to serve of one of the Purchaser's Nominees, the Purchaser shall be
entitled to designate a successor to fill such vacancy and such successor shall
serve as a board member until the next regularly scheduled election for such
board seat. One of the Purchaser's Nominees shall be entitled to membership on
all committees of the Board of Directors, including, without limitation, the
executive committee, if any, or any committee performing substantially similar
functions;
(c) The Company agrees that if any of the Purchaser's
Nominees are not reelected to the Board of Directors by the stockholders of the
Company, the Purchaser shall be entitled to have that number of observers equal
to the number of the Purchaser's Nominees that were not so elected present at
all meetings of the Board of Directors and committees of the Board of Directors
and such observer(s) shall have the same access to information concerning the
business and operations of the Company and its Subsidiaries and at the same
time as directors of the Company, subject to the provisions of Section 6.4, and
shall be entitled to participate in discussions and consult with the Board of
Directors, without voting;
(d) The Company further agrees that at all times the
Purchaser shall be entitled to nominate to the Board of Directors a number of
Purchaser's Nominees which bears the same proportion to the total number of
members of the Board of Directors as the number of Common Shares actually owned
by the Purchaser (excluding Warrant Shares relating to Warrants which have not
been exercised) bears to the total number of Common Shares then actually
outstanding; provided, however, that if such proportion is not a whole number,
the number of Purchaser's Nominees will be rounded down if the fraction is .49
or less and will be rounded up if the fraction is .50 or greater; provided,
further, however that at all times the Purchaser shall be entitled to nominate
to the Board of Directors a minimum of two Purchaser's Nominees. The
provisions of Sections 5.3(b) and (c) shall be applicable with respect to all
of the Purchaser's Nominees, including the Purchaser's Nominees elected to the
Board of Directors pursuant to the provisions of this Section 5.3(d); and
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(e) All Purchaser's Nominees shall be reasonably
acceptable to the Board of Directors.
5.4 Preemptive Rights. In the event of the sale by the Company of
Common Shares, or any other voting or other security of the Company or security
convertible into or exercisable for such Common Shares or other voting
security, for cash effected subsequent to the Effective Date, the Purchaser
shall be entitled to purchase shares in such sale on a pro rata basis in
respect of the Common Shares then Beneficially Owned by it, on a Fully Diluted
basis, so that following such sale, the Purchaser will, if it has elected to
purchase the securities to be sold, Beneficially Own the same percentage of the
equity ownership of the Company on a Fully Diluted basis as it had by reason of
its Beneficial Ownership of Common Shares prior to such sale. The Company
shall provide the Purchaser with a minimum of two Business Days notice of the
anticipated pricing of such offering, which notice shall indicate the
anticipated size and range of pricing of the offering, and based on such
notice, the Purchaser shall advise the Company within one Business Day as to
whether it elects to exercise its rights under this Section 5.4, and if it so
elects, the Purchaser shall tender payment for the same securities, at the same
time, and in the same manner as the other purchasers in such offering.
5.5 Special Notices. If (a) the Company determines to initiate,
solicit or pursue (i) a sale or transfer of all or substantially all of the
Company's assets or Common Shares representing 20% or more of the then
outstanding Common Shares or (ii) a merger, reorganization, consolidation or
similar transaction between the Company and any other Person (individually, any
of the events described in clauses (i) and (ii) are referred to herein as a
"Transaction") or (b) any officer, director, agent or representative of the
Company begins pursuing with any Person substantive discussions concerning, or
substantive negotiations with respect to, any Transaction (any such initiation,
solicitation, pursuit, discussions or negotiations referred to in clauses (a)
and (b) is referred to herein as an "Initiating Event"), then the Company
shall:
(1) notify the Purchaser of the occurrence of any
Initiating Event, as promptly as possible, but in no
event later than one Business Day after the
occurrence of such event; and
(2) notify the Purchaser that the Company may enter into
an agreement, contract, letter of intent or similar
instrument for a Transaction not less than 45 days
prior to the execution of any such agreement,
contract, letter of intent or similar instrument
which has any binding effect (a "Transaction
Notification").
5.6 Nondisclosure of the Purchaser's Confidential Information.
(a) Without the prior written consent of the Purchaser,
any information relating to the Purchaser provided to the Company in connection
with this Agreement and each of the Collateral Agreements and the Right of
First Refusal Agreements, which is either confidential, proprietary, or
otherwise not generally available to the public (but excluding information (i)
which was or becomes generally available to the Company or its Affiliates on
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a non-confidential basis, other than through a direct or indirect breach of
this Agreement by the Company, its Affiliates or any of their respective
Representatives, (ii) that was, prior to December 16, 1993, in the Company's,
its Affiliates' or any of their respective Representatives' possession, (iii)
that becomes available to the Company, its Affiliates or any of their
respective Representatives on a non-confidential basis from a source other
than the Purchaser, its Affiliates or any of their respective Representatives
without the Company's or its Affiliates' knowledge that the source has violated
any fiduciary or other duty not to disclose such information or (iv) was
independently developed by the Company or its Affiliates without reference to
the Purchaser's Confidential Information) (the "Purchaser's Confidential
Information") will be used solely for the purpose of evaluating the Purchaser's
investment in the Company and will be kept confidential by the Company, its
Affiliates and their respective Representatives, using the same standard of
care in safeguarding the Purchaser's Confidential Information as the Company
employs in protecting its own proprietary information which the Company desires
not to disseminate or publish, and will not be disclosed to any Person, except
for Representatives of the Company who need to know such Purchaser's
Confidential Information for purposes of evaluating the Purchaser's investment
in the Company. It is understood (i) that such Representatives shall be
informed by the Company of the confidential nature of the Purchaser's
Confidential Information, (ii) that such Representatives shall be bound by the
provisions of this Section 5.6 as a condition of receiving the Purchaser's
Confidential Information and (iii) that, in any event, the Company shall be
responsible for any breach of this Agreement by any of its Representatives;
(b) Without the prior consent of the Purchaser, other
than as required by applicable law, the Company will not, and will direct its
Affiliates and Representatives not to, disclose to any Person either the fact
that the Purchaser's Confidential Information has been made available to the
Company or that the Company has inspected any portion of the Purchaser's
Confidential Information; and
(c) If the Company, its Affiliates or any of their
respective Representatives are requested or required (by oral question,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any Purchaser's
Confidential Information, the Company will, as soon as practicable, notify the
Purchaser of such request or requirement so that the Purchaser may seek an
appropriate protective order. If, in the absence of a protective order, the
Company, its Affiliates or any of their respective Representatives are, in the
opinion of the Company's counsel, compelled to disclose the Purchaser's
Confidential Information or else stand liable for contempt or suffer other
censure or significant penalty, the Company or its Affiliates may disclose only
such of the Purchaser's Confidential Information to the party compelling
disclosure as is required by law. The Company and its Affiliates shall not be
liable for the disclosure of Purchaser's Confidential Information pursuant to
the preceding sentence. The Company and its Affiliates will, at the
Purchaser's expense, cooperate with the Purchaser's reasonable efforts to
obtain a protective order or other reliable assurance that confidential
treatment will be accorded the Purchaser's Confidential Information.
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5.7 Repurchase Programs.
The Company shall notify the Purchaser of the initiation,
suspensions (of any duration) and completion or termination by the Company of
any program pursuant to which the Company is effecting repurchases of its
Common Shares, as promptly as possible, but in no event later than five
Business Days after the occurrence of such event.
5.8 Distribution of Certain Products.
Unless Ben & Jerry's shall have agreed in writing to
unconditionally waive the payment of the termination payment specified in the
Previously Added Change of Control Provisions (as defined in the Ben & Jerry's
Distribution Agreement, as amended by the Ben & Jerry's Amendments) (the
"Termination Payment"), the Company shall not, directly or indirectly, take any
action which would permit Ben & Jerry's to be entitled to receive such
Termination Payment pursuant to clauses (a) or (b) of Section 1(ii) of the Ben
& Jerry's Amendments.
6. Covenants of the Purchaser after Closing
6.1 Standstill Provisions. Unless otherwise consented to by a
majority of the Board of Directors, until the earlier of (i) one year after the
date on which the Purchaser no longer Beneficially Owns 1% or more of the
outstanding Common Shares, on a Fully Diluted basis, (ii) the 10th anniversary
of the Closing Date or (iii) the occurrence of a Triggering Event, the
Purchaser covenants and agrees that:
(a) The Purchaser (and any of its Affiliates who hold
Common Shares) shall (i) cooperate with the Company in keeping the Rights
Agreement in full force and effect and (ii) notify the Company two Business
Days prior to making open market purchases of Common Shares that are not
otherwise precluded by the terms of this Section 6.1 ("Permitted Purchases");
provided, however, that the Purchaser acknowledges that the Company will begin
a Common Share repurchase program on or immediately after the Effective Date
pursuant to which the Company will seek to acquire up to 5 million Common
Shares (the "Repurchase Program"), and the Purchaser hereby agrees to refrain
from making any Permitted Purchases during the period commencing with the
Effective Date and ending on the earlier of the Company's termination of the
Repurchase Program or the last day of the six-month period following the
Effective Date. If the Repurchase Program has not been terminated upon the
expiration of such six-month period, the Purchaser may notify the Company of
its desire to make Permitted Purchases, and if the Company has not made open
market purchases of Common Shares in excess of 1% of the outstanding Common
Shares during the 30 days prior to such notice ("Significant Repurchases"),
then the Purchaser shall be entitled to make Permitted Purchases for a 90-day
period commencing with such notification and the Company hereby agrees not to
make any open market purchases during such 90-day period, unless earlier
notified by the Purchaser that the Purchaser has terminated its Permitted
Purchases. Thereafter, the Company may notify the Purchaser of its intention
to resume the Repurchase Program and, upon receipt of such notice, the
Purchaser shall refrain from making Permitted Purchases during the following
90-day period, unless earlier notified by the Company that the Company has
terminated its Repurchase Program. If, at the
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expiration or earlier termination of such 90-day period, the Company has not
made Significant Repurchases and the Purchaser desires to make Permitted
Purchases, the Purchaser may make Permitted Purchases upon notice to the
Company and the Company shall refrain from making open market repurchases
during the following 90-day period, unless earlier notified by the Purchaser
that the Purchaser has terminated its Permitted Purchases. If at any time
thereafter and prior to the termination of the Repurchase Program either the
Company or the Purchaser desire to make open market purchases, then the Company
shall make open market purchases of its Common Shares pursuant to the second
preceding sentence and the Purchaser shall make Permitted Purchases pursuant to
the immediately preceding sentence;
(b) Neither the Purchaser nor any of its Affiliates shall
solicit proxies or initiate, propose or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the Exchange
Act) in opposition to any matter which has been recommended by a majority of
the directors of the Company or in favor of any matter which has not been
approved by a majority of the directors of the Company or seek to advise,
encourage or influence any Person with respect to the voting of Common Shares
in such manner, or induce or attempt to induce any Person to initiate any
stockholder proposal;
(c) Neither the Purchaser nor any of its Affiliates shall
form, join or participate in, or encourage the formation of, a partnership,
limited partnership, syndicate or other group, or otherwise act in concert with
any other Person (except as specifically contemplated by this Agreement, any of
the Collateral Agreements or the Right of First Refusal Agreements), for the
purpose of acquiring, holding, voting or disposing of Common Shares, or
otherwise become a "person" or a member of a "group" within the meaning of
Section 13(d)(3) of the Exchange Act with respect to the Company or any Common
Shares (a "13D Group");
(d) The Purchaser and its Affiliates will not directly or
indirectly acquire, propose to acquire or agree to acquire any Common Shares
(except (i) the Securities and Warrant Shares, (ii) the Common Shares which are
or may become the subject of the Right of First Refusal Agreements (the "First
Refusal Shares") and are acquired pursuant to such Right of First Refusal
Agreements and (iii) as a result of a stock split, stock dividend, stock
reclassification or recapitalization of the Company) if the effect of such
acquisition would be to increase the Purchaser's Beneficial Ownership of Common
Shares to more than 25% of the outstanding Common Shares, after giving effect
to such acquisition, on a Fully Diluted basis; provided, however, that if an
acquisition by the Purchaser of any of the First Refusal Shares would cause the
Purchaser to Beneficially Own 35% or more of the outstanding Common Shares,
after giving effect to such acquisition, on a Fully Diluted basis (the shares
in excess of such limitation being referred to as the "Excess Shares"), then
the Purchaser shall Transfer (as defined in Section 6.3) the Excess Shares
prior to or simultaneous with its actual acquisition of the First Refusal
Shares. Notwithstanding the foregoing, if (a) due to actions of the Company
(including, without limitation, stock repurchases and recapitalizations) the
Purchaser is required to Transfer Excess Shares to enable the Purchaser to
acquire any of the First Refusal Shares and (b) the Purchaser's percentage
Beneficial Ownership of outstanding Common Shares, at any time after such
Transfer, is diluted by the issuance by the Company of any shares of its
capital stock, or any other securities, or any securities convertible into or
exchangeable for, or options or warrants to purchase, shares of its capital
stock or any other securities, then the Purchaser shall
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be entitled to acquire additional Common Shares without reference to the
restrictions set forth in this Section 6.1(d) equal to the product of (I) the
total number of Common Shares then outstanding and (II) the quotient of the
total number of (1) Excess Shares described in clause (a) above and (2) Common
Shares outstanding when the Excess Shares described in clause (a) above were
Transferred, but in no event shall the acquisitions permitted by this proviso
cause the Purchaser to Beneficially Own 35% or more of the outstanding Common
Shares, after giving effect to such acquisitions, on a Fully Diluted basis.
The Purchaser shall not be in breach of the provisions of this Section 6.1(d)
or proviso (B) to Section 6.1 below if it exceeds either of the foregoing
percentage thresholds, if such thresholds are exceeded through no affirmative
act of the Purchaser or its Affiliates (by way of example only, if such
threshold is exceeded as a result of the repurchase of Common Shares by the
Company or other recapitalization plan of the Company);
(e) Neither the Purchaser nor any of its Affiliates shall
deposit any Common Shares in a voting trust or subject any Common Shares to any
arrangement or agreement with any Person other than an Affiliate of the
Purchaser with respect to the voting of such Common Shares;
(f) Neither the Purchaser nor any of its Affiliates will
present any acquisition proposal or request permission to present any
acquisition proposal to the Company or otherwise act, alone or in concert with
others, to seek to affect or influence the control of the management or Board
of Directors or its business operations or affairs, or make any public
statement with respect thereto; and
(g) Neither the Purchaser nor any of its Affiliates will,
directly or indirectly, participate in, aid and abet or otherwise induce any
Person to take any of the actions enumerated in (a) through (f).
Provided, however, that anything in this Section 6.1 to the
contrary notwithstanding:
(A) Actions taken by the Purchaser's Nominees on the
Board of Directors pursuant to their responsibilities in such capacity, the
exercise by the Purchaser of its voting rights with respect to any Common
Shares it Beneficially Owns and arrangements among and involving only the
Purchasers and its Affiliates in connection with the transactions contemplated
hereby shall not be deemed a violation of the provisions of this Section 6.1;
(B) Following the expiration of the standstill provisions
set forth in this Section 6.1, the Purchaser shall not attempt to purchase or
otherwise acquire (1) any Common Shares if after giving effect to such
acquisition, the Purchaser's actual ownership of Common Shares would represent
35% or more of the outstanding Common Shares, on a Fully Diluted basis or (2)
the Company; except, in each case, pursuant to an offer for all outstanding
Common Shares at the same price per share; and
(C) The Purchaser may (1) acquire any number of Common
Shares in a merger, tender or exchange offer, or other acquisition transaction
approved by the Board of
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<PAGE> 29
Directors and (2) submit any number of acquisition proposals to the Board of
Directors at any time after the third anniversary of the Closing Date, if such
submission(s) would not require public disclosure thereof by the Purchaser or
the Company.
6.2 Contingent Payment. If within five years from the Closing
Date (the "Contingent Payment Period"), the average of the Quoted Prices of the
outstanding Common Shares for 130 consecutive trading days during the
Contingent Payment Period (the last day of such 130 day period being referred
to as the "Reference Date") shall equal or exceed $60.00 per share (subject to
equitable adjustment to reflect stock splits, stock dividends, stock
reclassifications or recapitalizations of the Company), then the Purchaser
shall be required to pay to the Company as soon as practicable following the
later of (i) the Reference Date or (ii) the date of acquisition or purchase of
the subject shares, an additional $2.00 per share in cash for each Share and
Warrant Share acquired by the Purchaser pursuant to Sections 1.1 and 1.2 during
the Contingent Payment Period.
6.3 Restrictions on Transfer.
(a) Until the third anniversary of the Closing Date, the
Purchaser and its Affiliates shall not, directly or indirectly, sell, transfer
or otherwise dispose of (collectively, a "Transfer") any of the Warrants or
Common Shares, except for Transfers of Warrants and/or Common Shares: (i) to
Affiliates who agree to be bound by the provisions of this Agreement, (ii)
which have been consented to by the Company (iii) to the Company, (iv) pursuant
to a bona fide tender or exchange offer, if such tender or exchange offer has
been approved by the Board of Directors and (v) pursuant to a merger,
consolidation or reorganization to which the Company is a party; provided,
however, that all of the foregoing Transfer restrictions shall terminate upon
the earlier to occur of: (1) the dissolution, or the adoption of a plan of
liquidation, of the Company, or the filing of a petition by, or against (but
only if such involuntary petition is not discharged or denied within 60 days
after the filing thereof), the Company in bankruptcy, insolvency or
reorganization, (2) the death, resignation or removal of the Chief Executive
Officer and President, (3) the Transfer of 50% or more of the Common Shares
Beneficially Owned on the Effective Date by either (I) the Chief Executive
Officer and President or (II) Chief Executive Officer (in both instances,
excluding Common Shares purchased by the Purchaser pursuant to its right of
first refusal under the Right of First Refusal Agreements), (4) the delivery by
NICC to the Company of an irrevocable notice of termination pursuant to the
Distributor Agreement upon the occurrence of any Distributor Agreement Event of
Default or (5) Board of Director approval of a change in the principal business
segments in which the Company is engaged from its current principal business,
i.e., the manufacture and distribution of frozen and refrigerated food
products, which change the Purchaser's Nominees on the Board of Directors vote
against;
(b) On and after the third anniversary of the Closing
Date (or upon earlier termination of the Transfer restrictions as set forth in
Section 6.3(a)), the Purchaser shall not Transfer any Warrants or Common
Shares, except for transfers of Warrants and/or Common Shares: (i) described in
Sections 6.3(a)(i)-(v), (ii) in bona fide public distributions, (iii) pursuant
to Rule 144 of the Securities Act or (iv) in a private sale to either an
institutional or financial purchaser or purchasers (A) with the Company's
consent, which consent shall not be
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<PAGE> 30
unreasonably withheld, it being understood that in determining whether or not
to grant such consent, the Board of Directors may take into account such
factors as it deems relevant to the interests of the Company as a whole, or (B)
who would not, after giving effect to such sale, Beneficially Own individually
or in the aggregate with such purchaser's Affiliates, more than 5% of the
outstanding Common Shares, on a Fully Diluted basis;
(c) The Transfer restrictions in Sections 6.3(a) and (b)
shall terminate upon the earlier of (i) one year after the date on which the
Purchaser no longer Beneficially Owns 1% or more of the outstanding Common
Shares, on a Fully Diluted basis, (ii) the 10th anniversary of the Closing Date
or (iii) the occurrence of a Triggering Event. Upon termination of the
Transfer restrictions, the Common Shares shall be freely Transferable; and
(d) Notwithstanding anything to the contrary in this
Section 6.3, the Excess Shares shall be freely Transferable and shall under no
circumstances be subject to the provisions of this Section 6.3.
6.4 Nondisclosure of the Company's Confidential Information.
(a) Without the prior written consent of the Company, any
information relating to the Company provided to the Purchaser in connection
with this Agreement, or to the persons nominated by the Purchaser to be elected
to the Board of Directors, which is either confidential, proprietary, or
otherwise not generally available to the public (but excluding information (i)
which was or becomes generally available on a non-confidential basis to the
Purchaser or its Affiliates, other than through a direct or indirect breach of
this Agreement by the Purchaser, its Affiliates or any of their respective
Representatives, (ii) that was, prior to December 16, 1993, in the Purchaser's,
its Affiliates' or any of their respective Representatives' possession, (iii)
that becomes available to the Purchaser, its Affiliates or any of their
respective Representatives on a non-confidential basis from a source other than
the Company, its Affiliates or any of their respective Representatives without
the Purchaser's or its Affiliates' knowledge that the source has violated any
fiduciary or other duty not to disclose such information or (iv) was
independently developed by the Purchaser or its Affiliates without reference to
the Confidential Information) (the "Company's Confidential Information") will
be used solely for the purpose of evaluating its investment in the Company and
will be kept confidential by the Purchaser, its Affiliates and their respective
Representatives, using the same standard of care in safeguarding the Company's
Confidential Information as the Purchaser employs in protecting its own
proprietary information which the Purchaser desires not to disseminate or
publish, and will not be disclosed to any Person, except for Affiliates and
Representatives of the Purchaser who need to know such Company's Confidential
Information for purposes of evaluating the Purchaser's investment. It is
understood (i) that such Affiliates and Representatives shall be informed by
the Purchaser of the confidential nature of the Company's Confidential
Information, (ii) that such Affiliates and Representatives shall be bound by
the provisions of this Section 6.4 as a condition of receiving the Company's
Confidential Information and (iii) that, in any event, the Purchaser shall be
responsible for any breach of this Agreement by any of its Affiliates or
Representatives;
(b) Without the prior consent of the Company, other than
as required by applicable law, the Purchaser will not, and will direct its
Affiliates and Representatives not to,
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<PAGE> 31
disclose to any Person either the fact that the Company's Confidential
Information has been made available to the Purchaser or that the Purchaser has
inspected any portion of the Company's Confidential Information; and
(c) If the Purchaser, its Affiliates or any of their
respective Representatives are requested or required (by oral question,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any Company's Confidential
Information, the Purchaser will, as soon as practicable, notify the Company of
such request or requirement so that the Company may seek an appropriate
protective order. If, in the absence of a protective order, the Purchaser, its
Affiliates or any of their respective Representatives are, in the opinion of
the Purchaser's counsel, compelled to disclose the Company's Confidential
Information or else stand liable for contempt or suffer other censure or
significant penalty, the Purchaser or its Affiliates may disclose only such of
the Company's Confidential Information to the party compelling disclosure as is
required by law. The Purchaser and its Affiliates shall not be liable for the
disclosure of Company's Confidential Information pursuant to the preceding
sentence. The Purchaser and its Affiliates will, at the Company's expense,
cooperate with the Company's reasonable efforts to obtain a protective order or
other reliable assurance that confidential treatment will be accorded the
Company's Confidential Information.
7. Interpretation
7.1 Definitions.
"Affiliate" with respect to any Person, shall mean any other
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person.
For the purposes of this definition "control" when used with respect to any
specified Person means the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the term
"controlled" has the meaning correlative to the foregoing. For purposes of
this Agreement, Nestle, S.A. shall be deemed to be an Affiliate of the
Purchaser.
"Bank of America" shall mean Bank of America National Trust
and Savings Association.
"Beneficially Own" with respect to any securities shall mean
having "beneficial ownership" of such securities (as determined pursuant to
Rule 13d-3 under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing. The terms
"Beneficially Owned" and "Beneficial Ownership" shall have the meanings
correlative to the foregoing. For purposes of this Agreement, the Purchaser
(i) shall not be deemed to be the Beneficial Owner of the First Refusal Shares
until such shares have actually been acquired by the Purchaser, (ii) shall be
deemed to be the Beneficial Owner of the Warrant Shares issuable upon exercise
of the Warrants, whether or not such Warrants have been exercised, excluding
expired Warrants, and (iii) shall be deemed to be the Beneficial Owner of any
securities of the Company owned by its Affiliates.
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"Ben & Jerry's" shall mean Ben & Jerry's Homemade, Inc.
"Ben & Jerry's Amendments" shall mean (i) the Amendment to
Distribution Agreement dated as of April 18, 1994, amending the Ben & Jerry's
Distribution Agreement and (ii) the related side letter dated April 18, 1994
from the Company to Ben & Jerry's.
"Ben & Jerry's Distribution Agreement" shall mean that certain
Distribution Agreement dated as of January 6, 1987 by and between the Company,
Edy's Grand Ice Cream and Edy's of New York, Inc. and Ben & Jerry's, as
amended, as in effect on April 18, 1994.
"Board of Directors" shall the Board of Directors of the
Company.
"Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of California are
authorized or obligated by law or executive order to close.
"Charter Documents" shall mean, with respect to any Person,
the Articles or Certificate of Incorporation and Bylaws, as amended or restated
(or both) to date, of such Person.
"Chief Executive Officer" shall mean T. Gary Rogers.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Common Shares" shall mean shares of the Common Stock, par
value $1.00 per share, of the Company.
"Commission" shall mean the Securities and Exchange Commission
and any successor commission or agency having similar powers in the United
States.
"Cronk BOA Security Documents" shall mean:
(a) that certain Individual Loan Agreement dated April 9,
1993 by and between Bank of America and W.Cronk and
J.Cronk, as trustees of the Cronk Revocable Trust, as
amended, as in effect on the Effective Date;
(b) that certain Security Agreement: Secured Party in
Possession dated April 9, 1993 executed by W.Cronk
and J.Cronk, as trustees of the Cronk Revocable
Trust, as in effect on the Effective Date; and
(c) that certain Continuing Guaranty dated January 18,
1994 executed by W. Cronk and J. Cronk, as in effect
on the Effective Date.
"Cronk Revocable Trust" shall mean the Cronk Revocable Trust
created under the Cronk Trust Agreement.
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"Cronk Trust Agreement" shall mean that certain Trust
Agreement Establishing Cronk Revocable Trust dated as of December 30, 1981, as
amended and restated by that certain Amended Revocable Trust Agreement dated as
of October 12, 1987 and as amended by those certain amendments thereto dated as
of May 3, 1988, February 4, 1990, and December 16, 1990, as in effect on the
Effective Date.
"Distributor Agreement Event of Default" shall mean any breach
by the Company under the Distributor Agreement which gives rise to NICC's right
to terminate the Distributor Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any successor Federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Exchange Act of 1934, as
amended, shall include reference to the comparable section, if any, of any such
successor Federal statute.
"Facilities" shall mean all plants, offices, manufacturing
facilities, stores, warehouses, improvements, administration buildings, and all
real property and related facilities of the Company, whether currently or
previously owned, operated or leased.
"FICAL" shall mean First Interstate Bank of California, a
California banking corporation, as successor to Bank of America as rights agent
under the Rights Agreement.
"Fully Diluted" shall mean, as of any specified date, the sum
of (a) all outstanding Common Shares and (b) all Common Shares issuable upon
exercise or conversion of all outstanding and unexpired options, warrants or
other securities (including the Convertible Notes) or rights (including,
without limitation, the unexpired Warrants), whether then exercisable or
unexercisable and whether or not they constitute Options Out of the Money,
excluding for all purposes the Rights while the Rights constitute Options Out
of the Money; provided, however, that for purposes of Section 5.3, the term
"Fully Diluted" shall not include Rights whether or not they constitute Options
Out of the Money.
"GECC Agreement" shall mean the Securities Purchase Agreement
dated as of June 24, 1993 by and between the Company and General Electric
Capital Corporation ("GECC"), Trustees of General Electric Pension Trust
("GEPT") and GE Investment Private Placement Partners, I ("GEIPPP"), as in
effect on the Effective Date.
"GECC Event of Default" shall mean each of the happenings or
circumstances enumerated in Section 8.1 of the GECC Agreement, except that
Section 8.1(g) of the GECC Agreement shall only apply to the covenants set
forth in Section 6.1 of the GECC Agreement.
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"GECC Registration Rights Agreement" shall mean the
Registration Rights Agreement dated as of June 30, 1993 by and between the
Company and GECC, GEPT and GEIPPP, as in effect on the Effective Date.
"General Electric" shall mean each of GECC, GEPT and GEIPPP.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder.
"Lien" shall mean any material mortgage, pledge, lien,
encumbrance, charge or adverse claim affecting title or resulting in a charge
against real or personal property, or security interest of any kind (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell and any filing of, or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Material Adverse Effect" shall mean a material adverse effect
on the results of operations (on a recurring basis), financial condition or
business of the specified Person and its Subsidiaries, if any, taken as a
whole.
"Options Out of the Money" shall mean, as of any specified
date, all options, warrants or other securities or rights exercisable or
convertible into Common Shares for which the exercise or conversion price
exceeds the Quoted Price of such Common Shares as of such date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Pension Plan" shall mean any multiemployer plan or single
employer plan, as defined in Section 4001 of ERISA, that is subject to Title IV
of ERISA or the minimum funding standards of Section 412 of the Code, that the
Company, any Subsidiary or any ERISA Affiliate maintains or is or ever has been
obligated to contribute to for the benefit of employees or former employees of
the Company, any Subsidiary or any ERISA Affiliate.
"Person" shall mean any individual, firm, corporation,
partnership, trust, unincorporated organization or other entity or a government
or agency or political subdivision thereof, and shall include any successor (by
merger or otherwise) of such Person.
"President" shall mean William F. Cronk, III.
"Quoted Price" shall mean the last reported sales price of the
outstanding Common Shares as reported by the Nasdaq National Market System on
any trading day, or if the outstanding Common Shares are listed on a national
securities exchange, the last reported sales price of the outstanding Common
Shares on such exchange (which shall be for consolidated trading if applicable
to such exchange), or if neither so reported or listed, the last reported bid
price of the outstanding Common Shares.
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<PAGE> 35
"Representatives" shall mean, with respect to any Person, the
directors, officers, employees, agents and other representatives of such
Person.
"Rights" shall mean the rights to purchase Preferred Stock
issued pursuant to the Rights Agreement, as in effect on the Effective Date.
"Rights Agreement" shall mean the Amended and Restated Rights
Agreement dated as of March 4, 1991 by and between the Company and FICAL, as
successor rights agent to Bank of America.
"Rogers BOA Security Documents" shall mean:
(a) that certain Individual Loan Agreement dated February
21, 1992 by and between Bank of America and G.Rogers
and K.Rogers, as trustees of the Rogers Revocable
Trust, as in effect on the Effective Date;
(b) that certain Security Agreement: Secured Party in
Possession dated February 21, 1992 executed by
G.Rogers and K.Rogers, as trustees of the Rogers
Revocable Trust, as in effect on the Effective Date;
(c) that certain Individual Loan Agreement dated February
21, 1992 by and between Bank of America and G.Rogers
and K.Rogers, as trustees of the Four Rogers Trust,
as in effect on the Effective Date;
(d) that certain Security Agreement: Secured Party in
Possession dated February 21, 1992 executed by
G.Rogers and K.Rogers, as trustees of the Four Rogers
Trust, as in effect on the Effective Date;
(e) that certain Security Agreement: Third Party
Authorization dated February 21, 1992 executed by
G.Rogers and K.Rogers, as trustees of the Rogers
Revocable Trust, as in effect on the Effective Date;
and
(f) that certain Continuing Guaranty dated February 21,
1992 executed by G. Rogers and K. Rogers, as in
effect on the Effective Date.
"Rogers Revocable Trust" shall mean the Rogers Revocable Trust
created under the Rogers Trust Agreement.
"Rogers Trust Agreement" shall mean that certain Trust
Agreement Establishing Rogers Revocable Trust dated as of December 31, 1981, as
amended and restated by that certain First Amendment by Restatement of the
Trust Agreement Establishing Rogers Revocable Trust dated as of March 19, 1991,
as in effect on the Effective Date.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
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<PAGE> 36
"Subsidiary" of any Person means any corporation or other
entity of which a majority of the voting power or the voting equity securities
or equity interests is Beneficially Owned, directly or indirectly, by such
Person.
"Triggering Event" shall mean the occurrence of the earlier of:
(a) the date which the Company provides, or was required
to provide, a Transaction Notification to the Purchaser; provided, however,
that a Triggering Event shall not be deemed to have occurred if the Transaction
Notification was timely provided and such notice relates to an issuance of
Common Shares in connection with a merger, reorganization, consolidation or
otherwise, if following such issuance the Beneficial Owners of all Common
Shares prior to such issuance Beneficially Own at least a majority of the Fully
Diluted common equity of the surviving entity in such transaction;
(b) the date on which the Board of Directors approves of
(or approves in principle, by letter of intent, memorandum of understanding or
similar instrument) any Transaction, except a Transaction described in the
proviso to clause (a) of this definition; or
(c) the date on which any Person (except the Purchaser)
acquires Common Shares if the effect of such acquisition would be to cause such
Person to become the Beneficial Owner of 20% or more of the then outstanding
Common Shares, and the Rights Agreement is not effective for any reason
(including action by the Board of Directors) in promptly diluting such Person's
Beneficial Ownership of Common Shares to below 20% of the then outstanding
Common Shares; provided, however, that a Triggering Event shall not be deemed
to occur under this clause (c) if (i) such Person inadvertently acquired the
Beneficial Ownership of 20% or more of the then outstanding Common Shares and
(ii) promptly divests itself of Common Shares sufficient to reduce its
Beneficial Ownership of such shares to less than 20% of the then outstanding
Common Shares.
7.2 General. All defined terms herein include the plural as well
as the singular. All references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Agreement. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision. All
references in this Agreement to any party shall include any and all permitted
transferees of such party. This Agreement shall not be construed for or
against either party by reason of the authorship or alleged authorship of any
provisions hereof or by reason of the status of the respective parties. This
Agreement shall be construed reasonably to carry out its intent without
presumption against or in favor of either party.
8. Miscellaneous
8.1 Termination.
(a) Termination. This Agreement may be terminated at any
time prior to Closing:
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<PAGE> 37
(i) By mutual written consent of the Purchaser
and the Company; or
(ii) By the Purchaser or the Company if the
Closing shall not have occurred on or before 120 days following the Effective
Date.
(b) In the Event of Termination. In the event of
termination of this Agreement in accordance with its terms:
(i) Each party will redeliver all documents, work
papers and other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the Effective Date, to
the party furnishing the same;
(ii) The provisions of Section 8.4 shall continue
in full force and effect; and
(iii) No party hereto shall have any liability or
further obligation to any other party to this Agreement, except as stated in
Sections 8.1(b)(i) - (iii), except for any willful breach of this Agreement
occurring prior to the proper termination of this Agreement. The foregoing
provisions shall not limit or restrict the availability of specific performance
or other injunctive relief to the extent that specific performance or such
other relief would otherwise be available to a party hereunder.
8.2 Noncompetition Agreement. In connection with the transactions
contemplated by this Agreement, the Purchaser agrees, for itself and its
Affiliates, that during the one-year period following termination by NICC of
the Distributor Agreement without cause, none of them will engage, in the
United States, directly or indirectly, in any business which competes with the
Company in the packaged ice cream segment (as commonly understood in the frozen
dairy dessert business) of the Company's business; provided, however, that the
provisions of this Section 8.2 shall not restrict, prevent or prohibit the
Purchaser and its Affiliates in any manner whatsoever from engaging in any
business (including, without limitation, the packaged ice cream business and
the novelty ice cream business) that any of them were engaged in prior to the
termination of the Distributor Agreement without cause. The Company
acknowledges that as of the Effective Date, Affiliates of the Purchaser are
engaged in the packaged ice cream business and such Affiliates intend to remain
in such business. For purposes of this Section 8.2, a business will be deemed
competitive if it is a business engaged in the manufacture, delivery,
marketing, brokerage, sale or distribution of packaged ice cream. A person
will be deemed to engage in a business if that person participates in such
business as a stockholder, director, officer, employee, manufacturer's
representative, agent, independent contractor, consultant, partner or
individual proprietor, or as an investor (whether directly or beneficially);
provided, however, that nothing herein shall prohibit investment in up to five
percent of the publicly-traded securities of any corporation so long as such
investment is the sole relationship to such corporation. In the event of the
violation of any of the provisions of this Section 8.2, the Company shall be
entitled to injunctive relief prohibiting the Purchaser or any Affiliate from
commencing or continuing such actions, in addition to any other rights or
remedies Company may have.
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The parties intend that the agreement contained in the
preceding paragraph shall be construed as a series of separate agreements, one
for each county and city included. Except for geographic coverage, each such
separate agreement shall be deemed identical in terms to the agreement
contained in the preceding paragraph. If, in any judicial proceeding, a court
shall refuse to enforce any of the separate agreements deemed included in this
paragraph, then the unenforceable agreement shall be deemed eliminated to the
extent necessary to permit the remaining separate agreements to be enforced.
8.3 Further Assurances. Upon the terms and subject to the
conditions contained herein, each of the parties hereto agrees, both before and
after the Closing, (i) to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement and each of the Collateral Agreements and the Right of First
Refusal Agreements, (ii) to execute any documents, instruments or conveyances
of any kind which may be reasonably necessary or advisable to carry out any of
the transactions contemplated hereunder or thereunder and (iii) to cooperate
with each other in connection with the foregoing, including, without
limitation, using their respective best efforts (A) to obtain all consents,
approvals and waivers from any Person necessary to permit the consummation of
the transactions contemplated by this Agreement and each of the Collateral
Agreements and the Right of First Refusal Agreements, (B) to effect all
necessary registrations and filings, including, without limitation, filings
required under the HSR Act and submissions of information requested by
governmental authorities and (C) to fulfill all conditions to this Agreement.
8.4 Confidentiality Agreement. Notwithstanding execution of this
Agreement, the Purchaser and the Company agree that the confidentiality
agreement and standstill agreement dated December 16, 1993 by and between
Nestle USA, Inc. and the Company (the "Confidentiality Agreement") shall
survive and remain in full force and effect until the Closing, if any, at which
time it shall terminate.
8.5 Severability. If any term, provision, covenant or restriction
of this Agreement or any exhibit hereto is held by a court of competent
jurisdiction to be invalid, void or unenforceable (an "Invalidating Event"),
the remainder of the terms, provisions, covenants and restrictions of this
Agreement and such exhibits shall remain in full force and effect and shall in
no way be affected, impaired or invalidated; provided, however, that upon the
occurrence of an Invalidating Event, the parties shall use their best efforts
acting in good faith to amend (or cause to be amended) this Agreement, the
Collateral Agreements and the Right of First Refusal Agreements to provide to
the party who is adversely effected by the Invalidating Event the same benefits
expected to be obtained by such party prior to the occurrence of such
Invalidating Event.
8.6 Specific Enforcement. The Purchaser, on the one hand, and the
Company, on the other, acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction to
prevent breaches of the provisions of this Agreement and to enforce
specifically the terms and
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provisions hereof in any court of the United States or any state thereof having
jurisdiction, this being in addition to any other remedy to which they may be
entitled at law or equity.
8.7 Entire Agreement. This Agreement (including the documents set
forth in the exhibits hereto) contains the entire understanding of the parties
with respect to the transactions contemplated hereby.
8.8 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more of the counterparts have been signed by
each party and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
8.9 Notices and Other Communications. All notices, consents,
requests, instructions, approvals, financial statements, proxy statements,
reports and other communications provided for herein shall be promptly given,
if in writing and delivered personally, by telecopy or sent by registered mail,
postage prepaid, if to:
THE COMPANY:
T. Gary Rogers
Chief Executive Officer and Chairman of the Board
Dreyer's Grand Ice Cream, Inc.
5929 College Ave.
Oakland, California 94618
Facsimile: (510) 601-4444
With a copy to:
Edmund R. Manwell, Esq.
Manwell & Milton
101 California Street, Suite 3750
San Francisco, California 94111
Facsimile: (415) 362-1010
and
Seth A. Kaplan, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Facsimile: (212) 403-2223
34
<PAGE> 40
THE PURCHASER:
President
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
800 North Brand Blvd.
Glendale, California 91203
Facsimile: (818) 549-6850
With a copy to:
James H. Ball, Esq.
Senior Vice President and General Counsel
Nestle USA, Inc.
800 North Brand Boulevard
Glendale, California 91203
Facsimile: (818) 549-7015
and
Wayne Erdelack, Esq.
Vice President and Deputy General Counsel
Nestle USA, Inc.
30003 Bainbridge Road
Solon, Ohio 44139
Facsimile: (216) 248-1617
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner.
8.10 No Waivers; Amendments.
(a) No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law;
(b) This Agreement may not be amended, modified or
supplemented other than by a written instrument signed by all parties hereto
which are, at the time of such amendment or modification, subject to this
Agreement; and
(c) Any provision of this Agreement may be waived if, but
only if, such waiver is in writing and is signed by the party against whom the
enforcement of such waiver is sought.
35
<PAGE> 41
8.11 Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns, it being understood however that the
covenants set forth in (i) Sections 5.1(d), (e) and 5.2 shall not inure to the
benefit of any assignee of the Purchaser (other than Affiliates of the
Purchaser) who does not Beneficially Own 5% or more of the outstanding Common
Shares, on a Fully Diluted basis and (ii) Sections 5.3, 5.4, 5.5, 5.6 and 5.7
shall not inure to the benefit of any assignee of the Purchaser (other than
Affiliates of the Purchaser); and, except as otherwise expressly provided in
Section 6, the restrictions contained in Section 6 shall not be applicable to
any subsequent holder of the Securities or Warrant Shares (other than
Affiliates of the Purchaser) unless such transferee has agreed to be bound by
such terms of this Agreement.
8.12 Remedies
(a) Subject to Section 8.12(c), each party agrees to
indemnify and save harmless the other party hereto and such other party's
officers, directors, employees and agents, and each Person who controls such
other party within the meaning of the Securities Act or the Exchange Act, from
and against any and all costs, expenses, damages, claims, actions, diminution
in value or other liabilities, including costs of investigation and defense
(collectively, "Damages") suffered or incurred by the indemnified party as a
result of any breach by the indemnifying party of any of its agreements,
representations, warranties or covenants contained in this Agreement or in any
of the Collateral Agreements (except for the Distributor Agreement), other than
Damages resulting, directly or indirectly from the breach by the indemnified
party of any of its agreements, representations, warranties or covenants
contained herein or therein; and the Company agrees to indemnify and save
harmless the Purchaser and the Purchaser's officers, directors, employees and
agents, and each Person who controls the Purchaser within the meaning of the
Securities Act or Exchange Act, from and against any and all Damages suffered
or incurred by the Purchaser as a result of any legal, administrative or other
proceedings arising out of the transactions contemplated by this Agreement, the
Collateral Agreements (except for the Distributor Agreement) or the Right of
First Refusal Agreements; provided, however, that, if and to the extent that
such indemnification is unenforceable for any reason, the indemnifying party
shall make the maximum contribution to the payment and satisfaction of such
indemnified liability which shall be permissible under applicable laws. For
purposes of this Agreement, "diminution in value" shall refer to the
Purchaser's and its Affiliates' proportionate share in a reduction in the net
book value of the Company, as reflected in a balance sheet prepared in
accordance with generally accepted accounting principles;
(b) The indemnified party under this Section 8.12 will,
promptly after the receipt of notice of the commencement of any action against
such indemnified party in respect of which indemnity may be sought from the
indemnifying party on account of an indemnity agreement contained in this
Section 8.12, notify the indemnifying party in writing of the commencement
thereof. The omission of any indemnified party so to notify the indemnifying
party of any such action shall not relieve the indemnifying party from any
liability which it may have to such indemnified party except to the extent the
indemnifying party shall have been materially prejudiced by the omission of
such indemnified party to so notify the indemnifying party, pursuant to this
Section 8.12. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the
36
<PAGE> 42
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section 8.12 for any legal or other expense subsequently incurred by
such indemnified party in connection with the defense thereof nor for any
settlement thereof entered into without the consent of the indemnifying party;
provided, however, that (i) if the indemnifying party shall elect not to assume
the defense of such claim or action or (ii) if the indemnified party reasonably
determines (x) that there may be a conflict between the positions of the
indemnifying party and of the indemnified party in defending such claim or
action or (y) that there may be legal defenses available to such indemnified
party different from or in addition to those available to the indemnifying
party, then separate counsel for the indemnified party shall be entitled to
participate in and conduct the defense, in the case of (i) and (ii)(x), or such
different defenses, in the case of (ii)(y), and the indemnifying party shall be
liable for any reasonable legal or other expenses incurred by the indemnified
party in connection with such defense(s);
(c) The Company shall not be liable to the Purchaser for
any Damages relating to diminution in value until the aggregate amount
otherwise due the Purchaser pursuant to this Section 8.12 exceeds an
accumulated total of $5,000,000, at which time the Company shall be liable for
all Damages relating to diminution in value, from the first dollar of such
Damages; and
(d) Notwithstanding anything to the contrary in this
Agreement or the Exhibits or Schedules hereto, the Company hereby agrees to
indemnify the Purchaser for any Damages suffered or incurred by the Purchaser
as a result of (i) any breach of the terms, conditions or provisions of the
agreements set forth on Schedule 2.11, (ii) any failure of the Employee Plans
set forth on Schedule 2.15(a) to be maintained and administered in compliance
with all applicable law, including, without limitation, ERISA and the Code and
(iii) any failure of the Employee Plans set forth on Schedule 2.15(a) to
qualify under Section 401(a) of the Code; provided, however, that any Damages
attributable to "diminution in value" resulting from any of the events
described in clauses (i) - (iii) above shall be subject to the limitations set
forth in Section 8.12(c).
8.13 Special Payment and Indemnity. If the Company becomes
obligated to pay to Ben & Jerry's the Termination Payment by reason of any of
the provisions of the Ben & Jerry's Amendments, and the Purchaser is in
compliance with the provisions of Section 6.1(d) and proviso (B) to Section
6.1, to the extent then applicable, then:
(a) Simultaneous with the making of the Termination
Payment, the Company shall pay to the Purchaser an amount equal to the product
of (I) the Termination Payment and (II) the quotient of (1) the number of the
Common Shares Beneficially Owned by the Purchaser at the time the Termination
Payment is made and (2) all of the then outstanding Common Shares;
(b) Notwithstanding anything to the contrary in this
Agreement, including, without limitation, Section 8.12(c), the Company shall
indemnify the Purchaser against, and hold
37
<PAGE> 43
it harmless from, any and all Damages which may be asserted against the
Purchaser, or by which the Purchaser may suffer or incur, by reason of the
Company's payment of the Termination Payment, and/or the fact that Purchaser's
full exercise of all of its rights under this Agreement, the Collateral
Agreements and the Right of First Refusal Agreements may have contributed to
the Company's obligation to make the Termination Payment, and/or the
Purchaser's knowledge of the effects of such exercise of rights by reason of
the provisions of the Ben & Jerry's Amendments; and
(c) The provisions of Section 8.13(a) shall not be
applicable if the Company becomes obligated to make the Termination Payment by
reason of (i) an acquisition by any Person (including the Purchaser) of all or
substantially all of the Company's assets or all Common Shares or (ii) the
occurrence of any of the events described in clauses (b) and (c) of Section
1(ii) of the Ben & Jerry's Amendments, but only if the "Significant Competitor"
(as defined in the Ben & Jerry's Amendments) referred to in such clauses is a
Person other than the Purchaser and/or its Affiliates.
8.14 Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement and the issuance and delivery of the Securities and Warrant Shares
until the third anniversary of the Closing Date (or until final resolution of
any claim or action arising from the breach of any such representation and
warranty, if notice of such breach was given prior to the third anniversary of
the Closing Date), regardless of any investigation made by or on behalf of any
party.
8.15 Transfer of Securities and Warrant Shares. The Purchaser
understands and agrees that the Securities and Warrant Shares have not been
registered under the Securities Act or the securities laws of any state and
that they may be sold or otherwise disposed of only in one or more transactions
registered under the Securities Act and, where applicable, such laws or
transactions as to which an exemption from the registration requirements of the
Securities Act and, where applicable, such laws are available. The Purchaser
acknowledges that, except as provided in the Registration Rights Agreement, the
Purchaser has no right to require the Company to register the Securities and
Warrant Shares. The Purchaser understands and agrees that each certificate
representing the Securities and Warrant Shares shall bear the following
legends:
"THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY AN AGREEMENT ON FILE AT THE
OFFICES OF THE CORPORATION."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION TO
38
<PAGE> 44
THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS."
8.16 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware.
8.17 Publicity. Each of the parties hereto agrees that it will
make no statement regarding the transactions contemplated hereby which is
inconsistent with the press releases agreed to by the parties hereto.
Notwithstanding the foregoing, each of the parties hereto may, in documents
required to be filed by it with the Commission or other regulatory bodies, make
such statements with respect to the transactions contemplated hereby as each
may be advised is legally necessary upon advice of its counsel.
8.18 Signatures. This Agreement shall be effective upon delivery
of original signature pages or facsimile copies thereof executed by each of the
parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
39
<PAGE> 45
IN WITNESS WHEREOF, the Company and the Purchaser have caused this
Agreement to be executed and delivered by their respective officers thereunto
duly authorized, all as of the day and year first above written.
DREYER'S GRAND ICE CREAM, INC.
____________________________________
By:
Title:
NESTLE HOLDINGS, INC.
____________________________________
By:
Title:
S-1
<PAGE> 46
SCHEDULE 2.1
QUALIFICATION TO DO BUSINESS
BY ENTITY
<TABLE>
<S> <C>
Dreyer's Grand Ice Cream, Inc. Edy's of Illinois, Inc.
------------------------------ -----------------------
(Delaware*) (Illinois*)
-Arizona -Indiana
-California -Iowa
-Colorado -Minnesota
-Nevada -Wisconsin
-New Mexico
-Texas Polar Express Systems International, Inc
-Washington ----------------------------------------
-Wyoming (Kentucky*)
-Indiana**
Edy's Grand Ice Cream
---------------------
(California*) Dreyer's International, Inc***
------------------------------
-Alabama (Virgin Islands*)
-Connecticut
-Florida
-Georgia
-Illinois
-Indiana
-Iowa
-Kansas
-Maryland
-Michigan
-Minnesota
-Missouri
-Nebraska
-New Jersey
-New York
-Ohio
-Pennsylvania
-South Dakota
-Tennessee
-Virginia
-Wisconsin
</TABLE>
*Indicates state of incorporation
**The application for Certificate of Withdrawal is pending.
***Foreign sales corporation.
<PAGE> 47
SCHEDULE 2.3
Name and Jurisdiction of Incorporation of Subsidiaries,
Outstanding Capital Stock and Percentage Beneficially Owned
<TABLE>
<CAPTION>
State of Shares Outstanding % of Actual
Name Incorporation Authorized Capital Stock Ownership
- - ---- ------------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Edy's Grand Ice California 150,000 111,111 100%
Cream Common Common
No Par Value No Par Value
Edy's of Illinois, Inc. Illinois 10,000 3,000 100%
Common Common
No Par Value No Par Value
Polar Express Systems Kentucky 800 Class A 400 Class A 100%
International, Inc. Voting Stock Voting Stock
Common Common
No Par Value No Par Value
200 Class B 200 Class B
Non-Voting Non-Voting
Common Common
No Par Value No Par Value
Dreyer's International, Virgin Islands 100 Common 100 Common 100%
Inc. No Par Value No Par Value
</TABLE>
<PAGE> 48
SCHEDULE 2.5
MATTERS OUTSIDE THE ORDINARY COURSE OF BUSINESS
(1) The acquisition of all of the outstanding capital stock of Polar
Express Systems International, Inc.
(2) The incurrence of up to $100,000,000 in indebtedness to Bank of
America National Trust and Savings Association for the purpose of
financing the Company's purchase of its common stock prior to the
Closing. Proceeds of the sale of the Securities to Purchaser, to the
extent required, will be used to repay this indebtedness.
(3) The purchase and lease back of the real property of Yoshi's
Restaurant.
(4) Letter of Intent with Decatur Foods, Inc. dated January 25, 1994.
(5) Issuance of and the undertaking of the matters described in the Press
Release dated the Effective Date.
<PAGE> 49
SCHEDULE 2.6
PENDING MATTERS
1. Roberson v. Edy's Grand Ice Cream
2. Hudspeth v. Dreyer's Grand Ice Cream, Inc.
3. White v. Dreyer's Grand Ice Cream, Inc.
4. Edy's Grand Ice Cream
NLRB Case No. 25-CA-23141
5. Burton v. Dreyer's Grand Ice Cream, Inc.
6. Amaru v. Dreyer's Grand Ice Cream, Inc.
7. Reeves v. Dreyer's Grand Ice Cream, Inc.
8. Parco v. Dreyer's Grand Ice Cream, Inc.
9. Renner v. Dreyer's Grand Ice Cream, Inc.
10. Smith/Pacific Rim v. Dreyer's Grand Ice Cream, Inc.
11. Hernandez; Rosas v. Dreyer's Grand Ice Cream, Inc.
12. Hernandez v. Dreyer's Grand Ice Cream, Inc.
13. Henderson v. Dreyer's Grand Ice Cream, Inc.
14. Amadio v. Dreyer's Grand Ice Cream, Inc.
15. Martinez, Lucero & Soto v. Dreyer's Grand Ice Cream, Inc.
16. Claims of Stanley Jones Against Polar Express Systems
International, Inc.
17. Don Thomas Claim
18. Ultimate Distributors, Inc. v. Ben and Jerry's Homemade Inc. and
Dreyer's Grand Ice Cream, Inc.
19. Welsh Farms, Inc.
20. Dreyer's Grand Ice Cream, Inc. and Edy's Grand Ice Cream, Inc. v.
Calip Dairies, Inc., T&W Ice Cream, Inc., and T&W Sales, Inc.,
dba T&W Ice Cream of New Jersey, Inc.
21. Clover-Stornetta Farms, Inc. v. Dreyer's Grand Ice Cream, Inc.
22. All matters listed on the Account Experience Listing previously
provided to Purchaser which have not been paid, settled or
otherwise closed.
<PAGE> 50
SCHEDULE 2.11
CONFLICTING AGREEMENTS AND CHARTER DOCUMENTS
1. Steve's New York Store Door Distribution Agreement, dated November
20, 1992, between Steve's Homemade Ice Cream, Inc. and Edy's
Grand Ice Cream.
2. Steve's National Distribution Agreement, dated November 20, 1992,
between Steve's Homemade Ice Cream, Inc. and Edy's Grand Ice Cream.
3. Dolly Madison New York Store Door Distribution Agreement, dated
November 20, 1992, between Calip Dairies, Inc. and Edy's Grand
Ice Cream.
<PAGE> 51
SCHEDULE 2.12
OUTSTANDING RIGHTS, OPTIONS, WARRANTS, ETC.
AS OF APRIL 11, 1994
<TABLE>
<CAPTION>
Options Available
Options Options Outstanding For Grant
- - ------- ------------------- -------------------
<S> <C> <C>
Incentive Stock Option Plan (1982) 417,045 56,945
Stock Option Plan (1992) 290,760 9,240
Stock Option Plan (1993) 370,800 829,200
</TABLE>
Rights
- - ------
Those rights granted to the stockholders of the Company pursuant to
the Amended and Restated Rights Agreement between the Company and First
Interstate Bank of California, as amended.
Other
- - -----
Stock subject to issuance under the Dreyer's Grand Ice Cream, Inc.
Section 423 Employee Stock Purchase Plan (1990).
Stock subject to issuance under the Dreyer's Grand Ice Cream, Inc.
Employee Secured Stock Purchase Plan (1990).
Stock subject to issuance under the Dreyer's Grand Ice Cream, Inc.
Employee Stock Gift Plan.
<PAGE> 52
SCHEDULE 2.15(A)
ERISA EXCEPTIONS
1. Such matters that exist now or may arise in the future because of the
participation in the Company's Savings Plan, as amended, and the Company's Money
Purchase Pension Plan, as amended, of the employees of the Dreyer's Grand Ice
Cream Charitable Foundation and the Edy's Grand Ice Cream Charitable
Foundation.
<PAGE> 53
SCHEDULE 2.15(B)
ERISA PLANS
<TABLE>
<CAPTION>
<S> <C>
1. Dreyer's Grand Ice Cream, Inc. Incentive Stock Option Plan (1982).
2. Dreyer's Grand Ice Cream, Inc. Stock Option Plan (1992).
3. Dreyer's Grand Ice Cream, Inc. Stock Option Plan (1993).
4. Dreyer's Grand Ice Cream, Inc. Section 423 Employee Stock Purchase Plan (1990).
5. Dreyer's Grand Ice Cream, Inc. Employee Secured Stock Purchase Plan (1990).
6. Dreyer's Grand Ice Cream, Inc. Employee Stock Gift Plan.
7. Dreyer's Grand Ice Cream, Inc. Money Purchase Pension Plan, as amended.
8. Dreyer's Grand Ice Cream, Inc. Savings Plan, as amended.
9. Dreyer's Grand Ice Cream, Inc. Bonus Plan.
10. Life Insurance, Accidental Death and Dismemberment, Long Term Disability and Dental Coverage through
Principal Mutual Life Insurance Company.
11. Comprehensive Health Plan and Vision Plan provided through Principal Mutual Life Insurance Company.
12. Preferred Provider Organization Health Plan and Vision Plan provided through Principal Mutual Life
Insurance Company.
13. CIGNA FlexCare Health Maintenance Organization (including CIGNA Medical Group Healthplan, CIGNA Private
Practice Plan, CIGNA Healthplan of San Diego and CIGNA Healthplan of Northern California).
14. Dreyer's Grand Ice Cream, Inc. Flexible Benefit Plan, as amended (and related Rainbow Plan Flexible
Compensation Trust dated January 1, 1987).
15. Dreyer's Grand Ice Cream, Inc. Sick Leave Program.
16. Dreyer's Grand Ice Cream, Inc. Salary Continuance Program.
17. Western Conference of Teamsters Pension Trust (Local 150 and 302) (and corresponding Trust Agreement).
18. Dairy Industry Trust Fund (Local 302) (and corresponding Trust Agreement).
19. United Food and Commercial Workers Union Local 655 Welfare Fund (and corresponding Trust Agreement).
20. Stationary Engineers Local 39 Health & Welfare Plan (and corresponding Trust Agreement).
21. IUOE Stationary Engineers Local 39 Annuity Trust Fund (and corresponding Trust Agreement).
22. IUOE Stationary Engineers Local 39 Pension Plan (and corresponding Trust Agreement).
23. Dreyer's Grand Ice Cream, Inc. Taxsavers Plan (1983).
24. Physicians Health Plan (PHP) provided through Physicians Health Plan of Indiana.
25. Medica Primary #390 provided through Medica (Minnesota).
26. PrinCare Retiree Medical through Principal Mutual Life Insurance Company.
27. Metromatic Life Insurance Program through Metropolitan Life Insurance Company.
</TABLE>
<PAGE> 54
SCHEDULE 2.18
CERTAIN AGREEMENTS
<TABLE>
<S> <C>
1. Joint Venture Agreement, dated March 28, 1990, between Nissho Iwai
Corporation and Dreyer's Grand Ice Cream, Inc.
2. Joint Venture Agreement, dated January 20, 1990, between Dreyer's
Grand Ice Cream, Inc. and DSA Holdings, Inc., as amended by the
Amendment of Joint Venture Agreement, dated January 31, 1990, between
the same parties and the Amendment of Joint Venture Agreement (No.2),
dated August 12, 1993, between Dreyer's Grand Ice Cream, Inc. and DSD
Holdings, Inc. (formerly known as DSA Holdings, Inc.).
3. Oral agreement to pay fees to Manwell & Milton.
4. Limited Partnership Agreement of 1989-Oakland Housing Partnership
Associates, a California limited partnership.
5. Limited Partnership Agreement of 1991-Oakland Housing Partnership
Associates, a California limited partnership.
6. Indemnification Agreements with each of the Company's Officers and
Directors.
7. Non-Competition Agreements benefitting the Company.
8. Territorial restrictions in the following agreements: (a) Distribution
Agreement dated January 6, 1987 with Ben & Jerry's Homemade, Inc., as
amended, (b) Steve's New York Store Door Distribution Agreement, dated
November 20, 1992, between Steve's Homemade Ice Cream, Inc. and Edy's
Grand Ice Cream, (c) Steve's National Distribution Agreement, dated
November 20, 1992, between Steve's Homemade Ice Cream, Inc. and Edy's
Grand Ice Cream, (d) Dolly Madison New York Store Door Distribution
Agreement, dated November 20, 1992, between Calip Dairies, Inc. and
Edy's Grand Ice Cream, and (e) Restated Exclusive Distributorship
Agreement dated March 25, 1988 with Dove International Division of Mars
Incorporated, as amended.
</TABLE>
<PAGE> 55
SCHEDULE 2.22(a)
LABOR AGREEMENTS
<TABLE>
<S> <C>
1. Agreement with the Milk Drivers & Dairy Employees Union, Local 302, dated June 1, 1993.
2. Agreement with the International Union of Operating Engineers, Stationary Local No. 39, dated September 1, 1993.
3. Agreement with the Chauffeurs, Teamsters and Helpers Union, Local 150, dated September 1, 1992.
4. Agreement with the United Food & Commercial Workers Union, Local 655, dated December 16, 1991.
</TABLE>
<PAGE> 56
SCHEDULE 2.22(b)
ORGANIZATIONAL EFFORTS
1. Edy's Grand Ice Cream and United Food and Commercial
Workers Union Local 700, Ft. Wayne, Indiana, NLRB
Case No. 2-RC-9340
The United Food and Commercial Workers
("UFCW") filed a Representation Petition with the
National Labor Relations Board ("NLRB") on January
24, 1994. The UFCW sought a election among all
employees working at Edy's Ft. Wayne Manufacturing
Facility. The approximate size of the unit was 135
employees. An election was scheduled and took place
on March 17, 1994. Edy's prevailed in the election
by a vote of 78 to 53. The Union filed no objections
to the election and the results were certified by the
NLRB on March 25, 1994.
<PAGE> 57
SCHEDULE 2.22(c)
LABOR DISPUTES
<TABLE>
<S> <C>
1. Johnny B. Roberson v. Edy's Grand Ice Cream
Illinois Human Rights Commission
Charge Number: 1993 CF 2935
2. Rosemarie Hudspeth v. Dreyer's Grand Ice Cream
Alameda County Superior Court
Case No. B-007466-1 VO
3. Essex J. White v. Dreyer's Grand Ice Cream
EEOC Charge No. 320941205
4. Edy's Grand Ice Cream
NLRB Case No. 25-CA-23141
5. Edy's Grand Ice Cream and United Food and Commercial
Workers Union Local 700, Ft. Wayne, Indiana
NLRB Case No. 25-RL-9340 (Edy's won the requested union
election on March 17, 1994, with the results being
certified on March 25, 1994)
</TABLE>
<PAGE> 58
SCHEDULE 2.24
SHAREHOLDINGS
<TABLE>
<S> <C> <C>
1. Holding Entity: Trustees of the Rogers Revocable Trust
Number of Shares Held: 1,585,350
Trustee: T. Gary Rogers and Kathleen T. Rogers
Trust Type: Revocable
2. Holding Entity: Trustees of the Four Rogers Trust
Number of Shares Held: 100,000
Trustee: T. Gary Rogers and Kathleen T. Rogers
Trust Type: Irrevocable
3. Holding Entity: Trustees of the Cronk Revocable Trust
Number of Shares Held: 895,521
Trustee: William F. Cronk III and Janet M. Cronk
Trust Type: Revocable
4. Holding Entity: Trustees of the Christopher Clay Cronk 1993 Irrevocable
Trust
Number of Shares Held: 14,000
Trustee: William C. Collett
Trust Type: Irrevocable
5. Holding Entity: Trustees of the Robert James Cronk 1993 Irrevocable
Trust
Number of Shares Held: 14,000
Trustee: William C. Collett
Trust Type: Irrevocable
6. Holding Entity: Trustees of the William Jeffrey Cronk 1993 Irrevocable
Trust
Number of Shares Held: 14,000
Trustee: William Jeffrey Cronk
Trust Type: Irrevocable
7. Holding Entity: T. Gary Rogers
Number of shares subject to
options: 178,380*
8. Holding Entity: William F. Cronk, III
Number of shares subject to
options: 178,380*
</TABLE>
- - ----------------
* 62,000 of these options have been granted under the Company's Stock Option
Plan (1993) subject to stockholder approval of such plan at the Company's
Annual Meeting of Stockholders scheduled for May 11, 1994.
<PAGE> 59
==============================================================================
EXHIBIT A
FORM OF
WARRANT AGREEMENT
BY AND BETWEEN
DREYER'S GRAND ICE CREAM, INC.
AND
NESTLE HOLDINGS, INC.
DATED AS OF MAY ___, 1994
==============================================================================
<PAGE> 60
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Execution of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 3. Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 4. Registration of Transfers and Exchanges . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 5. Warrants; Exercise of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 6. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 7. Mutilated or Missing Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 8. Reservation of Warrant Shares; Rights . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 9. Obtaining Stock Exchange Listings . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 10. Adjustment of Exercise Price and Number of Warrant Shares Issuable . . . . . . . . . 6
(a) Adjustment for Change in Capital Stock . . . . . . . . . . . . . . . . . . . . . . 6
(b) Adjustment for Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Adjustment for Other Distributions . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Adjustment for Common Stock Issue . . . . . . . . . . . . . . . . . . . . . . . . . 9
(e) Adjustment for Convertible Securities Issue . . . . . . . . . . . . . . . . . . . . 10
(f) Current Market Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(g) Consideration Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(h) When De Minimis Adjustment May Be Deferred . . . . . . . . . . . . . . . . . . . . 12
(i) When No Adjustment Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(j) Notice of Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(k) Voluntary Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(l) Notice of Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(m) Reorganization of Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(n) Company Determination Final . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(o) When Issuance or Payment May Be Deferred . . . . . . . . . . . . . . . . . . . . . 14
(p) Adjustment in Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(q) Form of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 11. Fractional Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
<PAGE> 61
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 12. Notices to Warrant holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 13. Notices to Company and Warrant Holder . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 14. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 15. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 16. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 17. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 18. Benefits of This Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 19. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
</TABLE>
ii
<PAGE> 62
THIS WARRANT AGREEMENT (the "Agreement") is dated as of May
___, 1994 and entered into by and between DREYER'S GRAND ICE CREAM, INC., a
Delaware corporation (the "Company"), and NESTLE HOLDINGS, INC., a Delaware
corporation ("Nestle"). Capitalized terms used herein but not otherwise
defined shall have the meaning assigned such terms in the Purchase Agreement
(as defined below).
WHEREAS, the Company proposes to issue to Nestle, or its
designee, Common Stock Purchase Warrants, in Series A and Series B, as
hereinafter described (the "Warrants"), to purchase up to an aggregate of
2,000,000 shares (1,000,000 shares for each of Series A and Series B) of Common
Stock, $1.00 par value (the "Common Stock"), of the Company (the Common Stock
issuable on exercise of the Warrants being referred to herein as the "Warrant
Shares"), pursuant to a Stock and Warrant Purchase Agreement of even date
herewith (the "Purchase Agreement").
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Warrant Certificates. The certificates evidencing
the Warrants (the "Warrant Certificates") to be delivered pursuant to this
Agreement shall be in registered form only and shall be substantially in the
form set forth in Exhibits A and B attached hereto.
SECTION 2. Execution of Warrant Certificates. Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board or its President or a Vice President and by its Secretary or an Assistant
Secretary under its corporate seal. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of the present or any
future Chairman of the Board, President, Vice President, Secretary or Assistant
Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, President,
Vice President, Secretary or Assistant Secretary, notwithstanding the fact that
at the time the Warrant Certificates shall be delivered or disposed of he shall
have ceased to hold such office. The seal of the Company may be in the form of
a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates.
In case any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been disposed of by the Company, such Warrant
Certificates nevertheless may be delivered or disposed of as though such person
had not ceased to be such officer of the Company; and any Warrant Certificate
may be signed on behalf of the Company by any person who, at the actual date of
the execution of such Warrant Certificate, shall be a proper officer of the
Company to sign such Warrant Certificate, although at the date of the execution
of this Warrant Agreement any such person was not such officer.
SECTION 3. Registration. The Company shall number and
register the Warrant Certificates in a register as they are issued.
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<PAGE> 63
SECTION 4. Registration of Transfers and Exchanges. The
Company shall from time to time register the transfer of any outstanding
Warrant Certificates in a Warrant register to be maintained by the Company upon
surrender of such Warrant Certificates accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, duly executed by
the registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate shall be issued to the
transferee(s) and the surrendered Warrant Certificate shall be cancelled and
disposed of by the Company.
The Warrant holders agree that each certificate representing
Warrant Shares will bear the following legend:
"THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY AN AGREEMENT ON FILE AT THE
OFFICES OF THE CORPORATION."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH
LAWS."
Warrant Certificates may be exchanged at the option of the
holder(s) thereof, when surrendered to the Company at its office for another
Warrant Certificate or other Warrant Certificates of like tenor and
representing in the aggregate a like number of Warrants. Warrant Certificates
surrendered for exchange shall be cancelled and disposed of by the Company.
SECTION 5. Warrants; Exercise of Warrants. Subject to the
terms of this Agreement, each holder of Series A Warrants shall have the right,
which may be exercised commencing at the opening of business on ___________,
1994 [Closing Date under Purchase Agreement] and until 5:00 p.m., Los Angeles
time on ___________, 1997 [third anniversary of Closing Date], to receive from
the Company the number of fully paid and nonassessable Warrant Shares which the
holder may at the time be entitled to receive on exercise of such Warrants and
payment to the Company of the Exercise Price (as defined below) then in effect
for such Warrant Shares. Each Series A Warrant not exercised prior to 5:00
p.m., Los Angeles time, on ___________, 1997 [third anniversary of Closing
Date] shall become void and all rights thereunder and all rights in respect
thereof under this Agreement shall cease as of such time.
Subject to the terms of this Agreement, each holder of Series
B Warrants shall have the right, which may be exercised commencing at the
opening of business on __________, 1994 [Closing Date under Purchase Agreement]
and until 5:00 p.m., Los Angeles time on ___________, 1999 [fifth anniversary
of Closing Date], to receive from the Company the number of fully paid and
nonassessable Warrant Shares which the holder may at the time be
2
<PAGE> 64
entitled to receive on exercise of such Warrants and payment of the Exercise
Price then in effect for such Warrant Shares. Each Series B Warrant not
exercised prior to 5:00 p.m., Los Angeles time, on ___________, 1999 [fifth
anniversary of Closing Date] shall become void and all rights thereunder and
all rights in respect thereof under this Agreement shall cease as of such time.
In addition, the Company shall have the right, upon 10
business days' prior written notice, to cause the holder of any Warrants to
exercise such Warrants: (i) at any time prior to ___________, 1997 [third
anniversary of Closing Date], at an Exercise Price that is equal to $24.00 per
share (subject to adjustment pursuant to Section 10), or (ii) with respect to
the Series A Warrants, at any time during the three-year term of such Warrants,
and with respect to the Series B Warrants, at any time during the five-year
term of such Warrants, at the Exercise Price then in effect for such Warrant
Shares, if the average of the Quoted Prices (as defined in Section 10(f)) of
the Common Stock for the 130 trading days preceding the date of such
requirement shall equal or exceed $60.00 per share (provided that such $60.00
per share figure shall be subject to equitable adjustment to reflect stock
splits, stock dividends, or reclassifications or other similar
recapitalizations).
If the requirements of the HSR Act must be complied with in
order for Nestle to consummate the purchase of the Warrant Shares contemplated
by this Section 5, then (A) as soon as practicable, the Company and Nestle
shall make all filings required under the HSR Act and (B) consummation of the
exercise of the subject Warrants shall occur only after the applicable waiting
period, including any extension thereof, under the HSR Act shall have expired
or been terminated and neither the Department of Justice nor the Federal Trade
Commission shall have instituted any litigation to enjoin or delay the
consummation of such exercise.
Notwithstanding the foregoing paragraph, the Company shall
have no right to cause any exercise of the Warrants:
(a) pursuant to clause (i) of the second preceding
paragraph during such time as any GECC Event of Default is outstanding (without
regard to whether notice or passage of time has occurred and whether or not
such GECC Event of Default has been waived), unless Nestle waives in writing
the provisions of this clause (a), or
(b) pursuant to either clause (i) or clause (ii) of the
second preceding paragraph, after the delivery by Nestle Ice Cream Company
("NICC") to the Company of an irrevocable notice of termination under the
Distributor Agreement, whether or not cause exists for such notice and whether
or not the Company has breached any of its obligations under such Distributor
Agreement.
In the event that the Company elects to cause any exercise of the Warrants
pursuant to either clause (i) or clause (ii) of the foregoing paragraph during
such period as NICC is making a claim in good faith that the Company is in
breach of one or more of its commitments under the Distributor Agreement, then
Nestle shall be entitled to offset the aggregate Exercise Price due the Company
with respect to such exercise against the amounts owed by the Company to NICC
for (1) products purchased or (2) pursuant to the indemnification provisions of
Section 5(e) under the Distributor Agreement as of the date of such exercise,
if any.
3
<PAGE> 65
A Warrant may be exercised upon surrender to the Company at
its office designated for such purpose (the address of which is set forth in
Section 13 hereof) of the certificate or certificates evidencing the Warrants
to be exercised with the form of election to purchase on the reverse thereof
duly filled in and signed, which signature shall be guaranteed by a bank or
trust company having an office or correspondent in the United States or a
broker or dealer which is a member of a registered securities exchange or the
National Association of Securities Dealers, Inc., and upon payment to the
Company of the exercise price per share of Common Stock (the "Exercise Price")
which is set forth in the form of Warrant Certificate attached hereto as
Exhibit A or B, subject to adjustment pursuant to Section 10, for the number of
Warrant Shares in respect of which such Warrants are then exercised. Payment
of the aggregate Exercise Price shall be made in cash or by certified or
official bank check payable to the order of the Company.
Subject to the provisions of Section 6 hereof, upon such
surrender of Warrants and payment of the Exercise Price the Company shall issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of the holder and in such name or names as the Warrant holder may
designate, a certificate or certificates for the number of full Warrant Shares
issuable upon the exercise of such Warrants together with cash as provided in
Section 11; provided, however, that if an agreement for a consolidation, merger
or lease or sale of all or substantially all of the assets of the Company shall
have been entered into or approved of by the Company's Board of Directors, or a
tender offer or an exchange offer for shares of Common Stock of the Company
shall have been made, upon such surrender of Warrants and payment of the
Exercise Price as aforesaid, the Company shall, as soon as possible, but in any
event not later than two business days thereafter, issue and cause to be
delivered the full number of Warrant Shares issuable upon the exercise of such
Warrants in the manner described in this sentence together with cash as
provided in Section 11. Such certificate or certificates shall be deemed to
have been issued and any person so designated to be named therein shall be
deemed to have become a holder of record of such Warrant Shares as of the date
of the surrender of such Warrants and payment of the Exercise Price.
The Warrants shall be exercisable, at the election of the
holders thereof, either in full or from time to time in part, in minimum
increments of 100,000 shares, and, in the event that a certificate evidencing
Warrants is exercised in respect of fewer than all of the Warrant Shares
issuable on such exercise at any time prior to the date of expiration of the
Warrants, a new certificate evidencing the remaining Warrant or Warrants will
be issued and delivered pursuant to the provisions of this Section and of
Section 2 hereof.
All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled and disposed of by the Company. The Company shall keep
copies of this Agreement and any notices given or received hereunder available
for inspection by the holders during normal business hours at its office.
SECTION 6. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issue of any Warrant Certificates or any
4
<PAGE> 66
certificates for Warrant Shares in a name other than that of the registered
holder of a Warrant Certificate surrendered upon the exercise of a Warrant, and
the Company shall not be required to issue or deliver such Warrant Certificates
unless or until the person or persons requesting the issuance thereof shall
have paid to the Company the amount of such tax or shall have established to
the satisfaction of the Company that such tax has been paid.
SECTION 7. Mutilated or Missing Warrant Certificates. In
case any of the Warrant Certificates shall be mutilated, lost, stolen or
destroyed, the Company may in its discretion issue, in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of such Warrant
Certificate and indemnity, if requested, also reasonably satisfactory to it.
Applicants for such substitute Warrant Certificates shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Company may prescribe.
SECTION 8. Reservation of Warrant Shares; Rights. The
Company will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued Common Stock or its
authorized and issued Common Stock held in its treasury, for the purpose of
enabling it to satisfy any obligation to issue Warrant Shares upon exercise of
Warrants, the maximum number of shares of Common Stock which may then be
deliverable upon the exercise of all outstanding Warrants.
The Company shall issue, together with each Warrant Share
issued upon exercise of a Warrant, one Right (or other securities in lieu
thereof), and any rights issued to holders of Common Stock in addition thereto
or in replacement therefor, whether or not such rights shall be exercisable at
such time, but only if such rights are issued and outstanding and held by other
holders of Common Stock at such time and have not expired.
The Company or, if appointed, the transfer agent for the
Common Stock (the "Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid will be irrevocably authorized and directed at all
times to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company will furnish such Transfer Agent a
copy of all notices of adjustments and certificates related thereto,
transmitted to each holder pursuant to Section 12 hereof.
Before taking any action which would cause an adjustment
pursuant to Section 10 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares at the Exercise Price as so adjusted.
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<PAGE> 67
The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will, upon issue, be fully paid,
nonassessable, free of preemptive rights and free from all taxes, liens,
charges and security interests with respect to the issue thereof.
SECTION 9. Obtaining Stock Exchange Listings. The Company
will from time to time take all action which may be necessary so that the
Warrant Shares, immediately upon their issuance upon the exercise of Warrants,
will be listed on the principal securities exchanges and markets within the
United States of America, if any, on which other shares of Common Stock are
then listed.
SECTION 10. Adjustment of Exercise Price and Number of
Warrant Shares Issuable. The Exercise Price and the number of Warrant Shares
issuable upon the exercise of each Warrant are subject to adjustment from time
to time upon the occurrence of the events enumerated in this Section 10. For
purposes of this Section 10, "Common Stock" means shares now or hereafter
authorized of any class of common stock of the Company and any other stock of
the Company, however designated, that has the right (subject to any prior
rights of any class or series of preferred stock) to participate in any
distribution of the assets or earnings of the Company without limit as to per
share amount.
(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock
into a greater number of shares;
(3) combines its outstanding shares of Common Stock into
a smaller number of shares;
(4) makes a distribution on its Common Stock in shares of
its capital stock other than Common Stock or
preferred stock; or
(5) issues by reclassification of its Common Stock any
shares of its capital stock;
then the Exercise Price shall be adjusted in accordance with the formula:
O
E' = E x ---
A
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<PAGE> 68
Where:
E' = the adjusted Exercise Price
E = the current Exercise Price
O = the number of shares outstanding prior to such action
A = the number of shares outstanding immediately after such action
In the case of a dividend or distribution the adjustment shall
become effective immediately after the record date for determination of holders
of shares of Common Stock entitled to receive such dividend or distribution,
and in the case of a subdivision, combination or reclassification, the
adjustment shall become effective immediately after the effective date of such
corporate action.
If after an adjustment a holder of a Warrant upon exercise of
it may receive shares of two or more classes of capital stock of the Company,
the Company shall determine the allocation of the adjusted Exercise Price
between the classes of capital stock. After such allocation, the exercise
privilege and the Exercise Price of each class of capital stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to
all holders of its Common Stock entitling them at any time after the record
date mentioned below to purchase shares of Common Stock at a price per share
less than the current market price per share on that record date, the Exercise
Price shall be adjusted in accordance with the formula:
N x P
O + -----
M
E'=E x -------
O + N
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<PAGE> 69
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock issuable upon
exercise of the rights, options or warrants offered.
P = the exercise price per share of the additional shares issuable
upon exercise of the rights, options or warrants.
M = the current market price per share of Common Stock on the
record date.
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
the rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or
warrants shall have been exercised, the Exercise Price shall be immediately
readjusted to what it would have been if "N" in the above formula had been the
number of shares actually issued.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock
any of its assets (including, but not limited to, cash), debt securities,
preferred stock, or any rights or warrants to purchase debt securities,
preferred stock, assets or other securities of the Company, the Exercise Price
shall be adjusted in accordance with the formula:
M - F
E' = E x -------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock on the
record date mentioned below.
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<PAGE> 70
F = the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share of
Common Stock. The Board of Directors shall determine the fair
market value.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the
distribution.
This subsection does not apply to rights, options or warrants
referred to in subsection (b) of this Section 10, nor does it apply to
distributions by the Company of regular quarterly cash dividends to all holders
of its Common Stock to the extent such dividends do not exceed an aggregate
amount (when added to prior regular quarterly cash dividends distributed on or
since December 27, 1992) equal to 40% of the Company's cumulative net income
(or net loss), determined in accordance with generally accepted accounting
principles (but excluding after- tax gains from sales of material assets),
during the period (treated as one accounting period) commencing on December 27,
1992 and ending on the date any such dividend is paid.
(d) Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a
consideration per share less than the current market price per share on the
date the Company fixes the offering price of such additional shares, the
Exercise Price shall be adjusted in accordance with the formula:
P
O + ---
M
E' = E x --------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the current market price per share on the date of issuance of
such additional shares.
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<PAGE> 71
A = the number of shares outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (b)
and (c) of this Section 10,
(2) the exercise of Warrants, or the conversion or
exchange of other securities convertible or exchangeable for Common
Stock,
(3) Common Stock issued to the Company's employees under
bona fide employee benefit plans adopted by the Board of Directors and
approved by the holders of Common Stock when required by law, if such
Common Stock would otherwise be covered by this subsection (d) (but
only to the extent that the aggregate number of shares excluded hereby
and issued after the date of this Warrant Agreement shall not exceed
__% of the Common Stock outstanding at the time of the adoption of
each such plan, exclusive of antidilution adjustments thereunder),
(4) Common Stock issued upon the exercise of rights or
warrants issued to the holders of Common Stock for which rights or
warrants an adjustment has been made pursuant to Section 10(b),
(5) Common Stock issued to shareholders of any person
which merges with the Company or an affiliate thereof in proportion to
their stock holdings of such person immediately prior to such merger,
upon such merger, or
(6) Common Stock issued in a bona fide public offering
pursuant to a firm commitment underwriting.
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (b) and (c) of this Section 10) for a consideration
per share of Common Stock initially deliverable upon conversion or exchange of
such securities less than the current market price per share on the date of
issuance of such securities, the Exercise Price shall be adjusted in accordance
with this formula:
10
<PAGE> 72
O + P
---
M
E' = E x ------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the current market price per share on the date of issuance of
such securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or
exchange of such securities have not been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to:
(1) convertible securities issued to shareholders of any
person which merges into the Company, or with a subsidiary of the
Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger, or
(2) convertible securities issued in a bona fide public
offering pursuant to a firm commitment underwriting.
(f) Current Market Price.
In subsections (b), (c), (d) and (e) of this Section 10, the
current market price per share of Common Stock on any date is the average of
the Quoted Prices of the Common Stock for 30 consecutive trading days
commencing 45 trading days before the date in question. The
11
<PAGE> 73
"Quoted Price" of the Common Stock is the last reported sales price of the
Common Stock as reported by Nasdaq National Market System, or if the Common
Stock is listed on a national securities exchange, the last reported sales
price of the Common Stock on such exchange (which shall be for consolidated
trading if applicable to such exchange), or if neither so reported or listed,
the last reported bid price of the Common Stock. In the absence of one or more
such quotations, the Board of Directors of the Company shall determine the
current market price on the basis of such quotations as it in good faith
considers appropriate.
(g) Consideration Received.
For purposes of any computation respecting consideration
received pursuant to subsections (d) and (e) of this Section 10, the following
shall apply:
(1) in the case of the issuance of shares of Common Stock
for cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock
for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined in good faith by the Board of Directors
(irrespective of the accounting treatment thereof), whose
determination shall be conclusive, and described in a Board
resolution;
(3) in the case of the issuance of securities convertible
into or exchangeable for shares, the aggregate consideration received
therefor shall be deemed to be the consideration received by the
Company for the issuance of such securities plus the additional
minimum consideration, if any, to be received by the Company upon the
conversion or exchange thereof (the consideration in each case to be
determined in the same manner as provided in clauses (1) and (2) of
this subsection).
(h) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the Exercise
Price. Any adjustments that are not made shall be carried forward and taken
into account in any subsequent adjustment.
All calculations under this Section shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be.
(i) When No Adjustment Required.
No adjustment need be made for a transaction referred to in
subsections (a), (b), (c), (d) or (e) of this Section 10 if Warrant holders are
to participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and
notice on which holders of Common Stock participate in the transaction.
12
<PAGE> 74
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no
par value of the Common Stock.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
(j) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 12 hereof.
(k) Voluntary Reduction.
The Company from time to time may reduce the Exercise Price by
any amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period; provided, however, that in no event
may the Exercise Price be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail
to Warrant holders a notice of the reduction. The Company shall mail the
notice at least 15 days before the date the reduced Exercise Price takes
effect. The notice shall state the reduced Exercise Price and the period it
will be in effect.
A reduction of the Exercise Price does not change or adjust
the Exercise Price otherwise in effect for purposes of subsections (a), (b),
(c), (d) and (e) of this Section 10.
(l) Notice of Certain Transactions.
If:
(1) the Company takes any action that would require an
adjustment in the Exercise Price pursuant to subsections (a), (b),
(c), (d) or (e) of this Section 10 and if the Company does not arrange
for Warrant holders to participate pursuant to subsection (i) of this
Section 10;
(2) the Company takes any action that would require a
supplemental Warrant Agreement pursuant to subsection (m) of this
Section 10; or
(3) there is a liquidation or dissolution of the Company,
the Company shall mail to Warrant holders a notice stating the proposed record
date for a dividend or distribution or the proposed effective date of a
subdivision, combination, reclassification, consolidation, merger, transfer,
lease, liquidation or dissolution. The Company
13
<PAGE> 75
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
(m) Reorganization of Company.
If the Company consolidates or merges with or into, or
transfers or leases all or substantially all its assets to, any person, upon
consummation of such transaction the Warrants shall automatically become
exercisable for the kind and amount of securities, cash or other assets which
the holder of a Warrant would have owned immediately after the consolidation,
merger, transfer or lease if the holder had exercised the Warrant immediately
before the effective date of the transaction. Concurrently with the
consummation of such transaction, the corporation formed by or surviving any
such consolidation or merger if other than the Company, or the person to which
such sale or conveyance shall have been made, shall enter into a supplemental
Warrant Agreement so providing and further providing for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Section. The successor Company shall mail to Warrant holders a
notice describing the supplemental Warrant Agreement.
If the issuer of securities deliverable upon exercise of
Warrants under the supplemental Warrant Agreement is an affiliate of the
formed, surviving, transferee or lessee corporation, that issuer shall join in
the supplemental Warrant Agreement.
If this subsection (m) applies, subsections (a), (b), (c), (d)
and (e) of this Section 10 do not apply.
(n) Company Determination Final.
Any determination that the Company or the Board of Directors
must make pursuant to subsection (a), (c), (d), (e), (f), (g) or (i) of this
Section 10 is conclusive.
(o) When Issuance or Payment May Be Deferred.
In any case in which this Section 10 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the holder of any Warrant exercised after such record date
the Warrant Shares and other capital stock of the Company, if any, issuable
upon such exercise over and above the Warrant Shares and other capital stock of
the Company, if any, issuable upon such exercise on the basis of the Exercise
Price and (ii) paying to such holder any amount in cash in lieu of a fractional
share pursuant to Section 11; provided, however, that the Company shall deliver
to such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional Warrant Shares, other capital stock
and cash upon the occurrence of the event requiring such adjustment.
14
<PAGE> 76
(p) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this
Section 10, each Warrant outstanding prior to the making of the adjustment in
the Exercise Price shall thereafter evidence the right to receive upon payment
of the adjusted Exercise Price that number of shares of Common Stock
(calculated to the nearest hundredth) obtained from the following formula:
E
N' = N x ---
E'
where:
N' = the adjusted number of Warrant Shares issuable upon exercise
of a Warrant by payment of the adjusted Exercise Price.
N = the number of Warrant Shares previously issuable upon exercise
of a Warrant by payment of the Exercise Price prior to
adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(q) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants,
Warrants theretofore or thereafter issued may continue to express the same
price and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement.
SECTION 11. Fractional Interests. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If
more than one Warrant shall be presented for exercise in full at the same time
by the same holder, the number of full Warrant Shares which shall be issuable
upon the exercise thereof shall be computed on the basis of the aggregate
number of Warrant Shares purchasable on exercise of the Warrants so presented.
If any fraction of a Warrant Share would, except for the provisions of this
Section 11, be issuable on the exercise of any Warrants (or specified portion
thereof), the Company shall pay an amount in cash equal to the current market
price (as defined in Section 10(f)) on the day immediately preceding the date
the Warrant is presented for exercise, multiplied by such fraction.
SECTION 12. Notices to Warrant holders. Upon any adjustment
of the Exercise Price pursuant to Section 10, the Company shall promptly
thereafter (i) cause to be filed with the Company a certificate of a firm of
independent public accountants of recognized standing selected by the Board of
Directors of the Company (who may be the regular auditors of the
15
<PAGE> 77
Company) setting forth the Exercise Price after such adjustment and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered holders of
the Warrant Certificates at his address appearing on the Warrant register
written notice of such adjustments by first-class mail, postage prepaid. Where
appropriate, such notice may be given in advance and included as a part of the
notice required to be mailed under the other provisions of this Section 12.
In case:
(a) the Company shall authorize the issuance to all
holders of shares of Common Stock of rights, options or warrants to
subscribe for or purchase shares of Common Stock or of any other
subscription rights or warrants; or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or
assets (other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in shares
of Common Stock or distributions referred to in subsection (a) of
Section 10 hereof); or
(c) of any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company
is required, or of the conveyance or transfer of the properties and
assets of the Company substantially as an entirety, or of any
reclassification or change of Common Stock issuable upon exercise of
the Warrants (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer made
by the Company for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company proposes to take any action (other than
actions of the character described in Section 10(a)) which would
require an adjustment of the Exercise Price pursuant to Section 10;
then the Company shall cause to be given to each of the registered holders of
the Warrant Certificates at his address appearing on the Warrant register, at
least 20 days (or 10 days in any case specified in clauses (a) or (b) above)
prior to the applicable record date hereinafter specified, or promptly in the
case of events for which there is no record date, by first-class mail, postage
prepaid, a written notice stating (i) the date as of which the holders of
record of shares of Common Stock to be entitled to receive any such rights,
options, warrants or distribution are to be determined, or (ii) the initial
expiration date set forth in any tender offer or exchange offer made by the
Company for shares of Common Stock, or (iii) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up is expected
16
<PAGE> 78
to become effective or consummated, and the date as of which it is expected
that holders of record of shares of Common Stock shall be entitled to exchange
such shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 12 or any defect therein shall not affect the legality or validity of
any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the
right to vote or to consent or to receive notice as shareholders in respect of
the meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 13. Notices to Company and Warrant Holder. Any
notice or demand authorized by this Agreement to be given or made by the
registered holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made when and if delivered by a recognized overnight
delivery service, or deposited in the mail, first class or registered, postage
prepaid, addressed to the office of the Company expressly designated by the
Company for purposes of this Agreement (until the Warrant holders are otherwise
notified in accordance with this Section by the Company), as follows:
T. Gary Rogers
Chief Executive Officer and Chairman of the
Board
Dreyer's Grand Ice Cream, Inc.
5929 College Avenue
Oakland, California 94618
Any notice pursuant to this Agreement to be given by the
Company to the registered holder(s) of any Warrant Certificate shall be
sufficiently given when and if delivered by a recognized overnight delivery
service, or deposited in the mail, first-class or registered, postage prepaid,
addressed (until the Company is otherwise notified in accordance with this
Section by such holder) to such holder at the address appearing on the warrant
register of the Company.
SECTION 14. Supplements and Amendments. The Company may from
time to time supplement or amend this Agreement without the approval of any
holders of Warrant Certificates in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not in any way adversely affect the
interests of the holders of Warrant Certificates.
SECTION 15. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company shall bind and inure to the
benefit of its respective successors and assigns hereunder.
17
<PAGE> 79
SECTION 16. Termination. This Agreement shall terminate at
5:00 p.m., Los Angeles time on _____________, 1999 [fifth anniversary of
Closing Date]. Notwithstanding the foregoing, this Agreement will terminate on
any earlier date if all Warrants have been exercised.
SECTION 17. Governing Law. This Agreement and each Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be construed in
accordance with the internal laws of said State.
SECTION 18. Benefits of This Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than
the Company and the registered holders of the Warrant Certificates any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company and the registered holders
of the Warrant Certificates.
SECTION 19. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
<PAGE> 80
IN WITNESS WHEREOF, the Company and Nestle have caused this
Agreement to be executed and delivered by their respective officers thereunto
duly authorized, all as of the day and year first above written.
DREYER'S GRAND ICE CREAM, INC.
____________________________________
By:
Title:
NESTLE HOLDINGS, INC.
(OR ITS DESIGNEE)
____________________________________
By:
Title:
19
<PAGE> 81
EXHIBIT A
[Form of Warrant Certificate]
[Face]
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY
AN AGREEMENT ON FILE AT THE OFFICES OF THE CORPORATION. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION
TO THE REGISTRATION REQUIREMENT OF SUCH ACT OR SUCH LAWS.
EXERCISABLE ON OR BEFORE ___________, 1997
No. 1,000,000 Series A Warrants
Series A Warrant Certificate
DREYER'S GRAND ICE CREAM, INC.
This Warrant Certificate certifies that _________________, or
registered assigns, is the registered holder of 1,000,000 Series A Warrants
expiring ______________, 1997 (the "Warrants") to purchase Common Stock, $1.00
par value (the "Common Stock"), of Dreyer's Grand Ice Cream Inc., a Delaware
corporation (the "Company"). Each Series A Warrant entitles the holder upon
exercise to receive from the Company on or before 5:00 p.m. Los Angeles Time on
______________, 1997, one fully paid and nonassessable share of Common Stock (a
"Warrant Share") at the initial exercise price (the "Exercise Price") of $32.00
payable in lawful money of the United States of America upon surrender of this
Warrant Certificate and payment of the Exercise Price at the office of the
Company designated for such purpose, but only subject to the conditions set
forth herein and in the Warrant Agreement referred to on the reverse hereof.
The Exercise Price and number of Warrant Shares issuable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., Los Angeles Time
on _____________, 1997, and to the extent not exercised by such time such
Warrants shall become void.
The Company shall have the right to cause the holder of this
Warrant to exercise this Warrant, in certain circumstances, pursuant to the
terms of the Warrant Agreement.
A-1
<PAGE> 82
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless
countersigned by the Company, as such term is used in the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed by its President and by its Secretary and has caused
its corporate seal to be affixed hereunto or imprinted hereon.
Dated:
DREYER'S GRAND ICE CREAM, INC.
____________________________________
By:
President
____________________________________
By:
Secretary
A-2
<PAGE> 83
[Form of Series A Warrant Certificate]
[Reverse]
The Series A Warrants evidenced by this Warrant Certificate
are part of a duly authorized issue of Warrants expiring _____________, 1997
entitling the holder on exercise to receive shares of Common Stock, $1.00 par
value, of the Company (the "Common Stock"), and are issued or to be issued
pursuant to a Warrant Agreement dated as of May ___, 1994 (the "Warrant
Agreement"), duly executed and delivered by the Company, which Warrant
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants. A copy of the Warrant Agreement
may be obtained by the holder hereof upon written request to the Company.
Warrants may be exercised at any time on or before
_____________, 1997. The holder of Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with
the form of election to purchase set forth hereon properly completed and
executed, together with payment of the Exercise Price in cash at the office of
the Company designated for such purpose. In the event that upon any exercise
of Warrants evidenced hereby the number of Warrants exercised shall be less
than the total number of Warrants evidenced hereby, there shall be issued to
the holder hereof or his assignee a new Warrant Certificate evidencing the
number of Warrants not exercised. No adjustment shall be made for any
dividends on any Common Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the
Warrant Agreement provides that the number of shares of Common Stock issuable
upon the exercise of each Warrant shall be adjusted. No fractions of a share
of Common Stock will be issued upon the exercise of any Warrant, but the
Company will pay the cash value thereof determined as provided in the Warrant
Agreement.
The holders of the Warrants are entitled to certain
registration rights with respect to the Common Stock purchasable upon exercise
thereof. Said registration rights are set forth in full in a Registration
Rights Agreement dated as of May ___, 1994, between the Company and Nestle
Holdings, Inc. A copy of the Registration Rights Agreement may be obtained by
the holder hereof upon written request to the Company.
Warrant Certificates, when surrendered at the office of the
Company by the registered holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
A-3
<PAGE> 84
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Company a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder of the Company.
A-4
<PAGE> 85
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive __________ shares of
Common Stock and herewith tenders payment for such shares to the order of
Dreyer's Grand Ice Cream, Inc. in the amount of $_________ in accordance with
the terms hereof. The undersigned requests that a certificate for such shares
be registered in the name of ________________, whose address is
_______________________________ and that such shares be delivered to
________________ whose address is ___________ ______________________. If said
number of shares is less than all of the shares of Common Stock purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing
the remaining balance of such shares be registered in the name of
______________, whose address is _________________________, and that such
Warrant Certificate be delivered to _________________, whose address is
__________________.
Signature: ____________________________________
Date: ____________________________
Signature Guaranteed: ____________________________________
A-5
<PAGE> 86
EXHIBIT B
[Form of Warrant Certificate]
[Face]
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY
AN AGREEMENT ON FILE AT THE OFFICES OF THE CORPORATION. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION
TO THE REGISTRATION REQUIREMENT OF SUCH ACT OR SUCH LAWS.
EXERCISABLE ON OR BEFORE ___________, 1999
No. 1,000,000 Series B Warrants
Series B Warrant Certificate
DREYER'S GRAND ICE CREAM, INC.
This Warrant Certificate certifies that _________________, or
registered assigns, is the registered holder of 1,000,000 Series B Warrants
expiring ______________, 1999 (the "Warrants") to purchase Common Stock, $1.00
par value (the "Common Stock"), of Dreyer's Grand Ice Cream, Inc., a Delaware
corporation (the "Company"). Each Series B Warrant entitles the holder upon
exercise to receive from the Company on or before 5:00 p.m. Los Angeles Time on
______________, 1999, one fully paid and nonassessable share of Common Stock (a
"Warrant Share") at the initial exercise price (the "Exercise Price") of $32.00
payable in lawful money of the United States of America upon surrender of this
Warrant Certificate and payment of the Exercise Price at the office of the
Company designated for such purpose, but only subject to the conditions set
forth herein and in the Warrant Agreement referred to on the reverse hereof.
The Exercise Price and number of Warrant Shares issuable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., Los Angeles Time
on _____________, 1999, and to the extent not exercised by such time such
Warrants shall become void.
The Company shall have the right to cause the holder of this
Warrant to exercise this Warrant, in certain circumstances, pursuant to the
terms of the Warrant Agreement.
B-1
<PAGE> 87
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless
countersigned by the Company, as such term is used in the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be signed by its President and by its Secretary and has caused
its corporate seal to be affixed hereunto or imprinted hereon.
Dated:
DREYER'S GRAND ICE CREAM, INC.
____________________________________
By:
President
____________________________________
By:
Secretary
B-2
<PAGE> 88
[Form of Series B Warrant Certificate]
[Reverse]
The Series B Warrants evidenced by this Warrant Certificate
are part of a duly authorized issue of Warrants expiring _____________, 1999
entitling the holder on exercise to receive shares of Common Stock, $1.00 par
value, of the Company (the "Common Stock"), and are issued or to be issued
pursuant to a Warrant Agreement dated as of May ___, 1994 (the "Warrant
Agreement"), duly executed and delivered by the Company, which Warrant
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants. A copy of the Warrant Agreement
may be obtained by the holder hereof upon written request to the Company.
Warrants may be exercised at any time on or before
_____________, 1999. The holder of Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with
the form of election to purchase set forth hereon properly completed and
executed, together with payment of the Exercise Price in cash at the office of
the Company designated for such purpose. In the event that upon any exercise
of Warrants evidenced hereby the number of Warrants exercised shall be less
than the total number of Warrants evidenced hereby, there shall be issued to
the holder hereof or his assignee a new Warrant Certificate evidencing the
number of Warrants not exercised. No adjustment shall be made for any
dividends on any Common Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the
Warrant Agreement provides that the number of shares of Common Stock issuable
upon the exercise of each Warrant shall be adjusted. No fractions of a share
of Common Stock will be issued upon the exercise of any Warrant, but the
Company will pay the cash value thereof determined as provided in the Warrant
Agreement.
The holders of the Warrants are entitled to certain
registration rights with respect to the Common Stock purchasable upon exercise
thereof. Said registration rights are set forth in full in a Registration
Rights Agreement dated as of May ___, 1994, between the Company and Nestle
Holdings, Inc. A copy of the Registration Rights Agreement may be obtained by
the holder hereof upon written request to the Company.
Warrant Certificates, when surrendered at the office of the
Company by the registered holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
B-3
<PAGE> 89
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Company a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder of the Company.
B-4
<PAGE> 90
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive __________ shares of
Common Stock and herewith tenders payment for such shares to the order of
Dreyer's Grand Ice Cream, Inc. in the amount of $_________ in accordance with
the terms hereof. The undersigned requests that a certificate for such shares
be registered in the name of ________________, whose address is
_______________________________ and that such shares be delivered to
________________ whose address is ___________ ______________________. If said
number of shares is less than all of the shares of Common Stock purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing
the remaining balance of such shares be registered in the name of
______________, whose address is _________________________, and that such
Warrant Certificate be delivered to _________________, whose address is
__________________.
Signature: ____________________________________
Date: ____________________________
Signature Guaranteed: ____________________________________
B-5
<PAGE> 91
==============================================================================
EXHIBIT B
FORM OF
RIGHT OF FIRST REFUSAL AGREEMENT
BY AND BETWEEN
T. GARY ROGERS AND KATHLEEN T. ROGERS,
INDIVIDUALLY AND AS CO-TRUSTEES OF THE
ROGERS REVOCABLE TRUST
AND
NESTLE HOLDINGS, INC.
DATED AS OF MAY ___, 1994
==============================================================================
<PAGE> 92
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) Grant of Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(b) Exercise of Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(c) Elective Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(d) Rule 144 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(e) Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. Transfers of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Exceptions to Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Endorsement of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(d) Improper Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. Representations and Warranties of the Seller . . . . . . . . . . . . . . . . . . . 6
(a) Beneficial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Good and Valid Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Due Authorization; Good and Valid Title Upon Purchase . . . . . . . . . . . . . . . 7
(d) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Brokerage or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(f) Third Party Consents, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(g) Governmental Consents, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(h) Agreement is Valid, Binding and Enforceable . . . . . . . . . . . . . . . . . . . . 8
SECTION 4. Representations and Warranties of the Purchaser . . . . . . . . . . . . . . . . . . 8
(a) Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Purchase Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 5. Covenants of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Specific Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(d) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(e) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(f) Notices and Other Communications . . . . . . . . . . . . . . . . . . . . . . . . . 10
(g) Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(h) Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
i
<PAGE> 93
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
(i) Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . 11
(j) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(k) Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(l) Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
ii
<PAGE> 94
RIGHT OF FIRST REFUSAL AGREEMENT
THIS RIGHT OF FIRST REFUSAL AGREEMENT (the "Agreement") is
dated as of May ____, 1994 (the "Effective Date") and entered into by and
between T. GARY ROGERS ("G.Rogers"), T. GARY ROGERS as co-trustee of the Rogers
Revocable Trust created under that certain Trust Agreement Establishing Rogers
Revocable Trust dated as of December 31, 1981, as amended and restated by that
certain First Amendment by Restatement of the Trust Agreement Establishing
Rogers Revocable Trust dated as of March 19, 1991 (the "Rogers Revocable
Trust") ("G.Trustee"), KATHLEEN T. ROGERS ("K.Rogers"), and KATHLEEN T. ROGERS
as co-trustee of the Rogers Revocable Trust ("K.Trustee," and together with
G.Rogers, G.Trustee and K.Rogers, the "Seller") and NESTLE HOLDINGS, INC., a
Delaware corporation (the "Purchaser"). Capitalized terms used herein but not
otherwise defined shall have the meaning assigned such terms in the Purchase
Agreement (as defined below).
WHEREAS, the Purchaser and Dreyer's Grand Ice Cream, Inc., a
Delaware corporation ("Dreyer's") have entered into a Stock and Warrant
Purchase Agreement dated as of May ____, 1994 (the "Purchase Agreement")
providing, among other things, for the purchase by the Purchaser of three
million shares of the Common Stock of Dreyer's, par value $1.00 per share (the
"Common Stock"), and warrants exercisable for two million shares of Common
Stock;
WHEREAS, the Seller currently Beneficially Owns 1,863,730
shares of Common Stock (of which 1,585,350 shares are owned of record by
G.Trustee and K.Trustee, 178,380 shares are issuable upon exercise of stock
options owned of record by G.Rogers (the "Stock Options") and 100,000 shares
are owned of record by G.Rogers and K.Rogers as co-trustees of the Four Rogers
Trust created under that certain Trust Agreement Establishing Four Rogers Trust
dated as of December 23, 1986 (the "Four Rogers Trust")) and may acquire
additional shares of Common Stock or other voting securities of Dreyer's in the
future (the shares of Common Stock and other voting securities of Dreyer's (i)
now owned by the Seller, (ii) issuable upon exercise of the Stock Options or
any other options or warrants of Dreyer's now owned by the Seller, (iii)
issuable upon conversion or exchange of any other securities of Dreyer's now
owned by the Seller or (iv) hereafter acquired by, or which become Beneficially
Owned by, the Seller or any of its Affiliates, are referred to herein as the
"Shares");
WHEREAS, a condition to the closing of the transactions
contemplated by the Purchase Agreement is that the Seller shall have granted
the Purchaser a right of first refusal with respect to the Shares; and
WHEREAS, the Purchaser and the Seller desire to provide for
such grants and to establish various rights and obligations in connection
therewith.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein set forth, the parties hereto agree as
follows:
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<PAGE> 95
SECTION 1. Right of First Refusal.
(a) Grant of Right. In consideration of the payment of
$1,000 by the Purchaser to the Seller, the receipt and sufficiency of which is
hereby acknowledged, the Seller hereby grants to the Purchaser a right of first
refusal with respect to all of the Shares (the "Right of First Refusal").
(b) Exercise of Right. Subject to Sections 1(c) and (d),
if at any time the Seller receives a bona fide offer (an "Offer") from any
person or entity to purchase any or all of the Shares which the Seller wishes
to accept, the Seller shall cause the Offer to be reduced to writing and shall
notify the Purchaser in writing of its wish to accept the Offer (the "Offer
Notice"). The Offer Notice shall contain an irrevocable offer to sell such
Shares to the Purchaser at a purchase price equal to the price contained in,
and on the same terms and conditions of, the Offer and shall be accompanied by
a true copy of the Offer (which shall identify the offeror). At any time
within five business days after the date of receipt by the Purchaser of the
Offer Notice (the "Right of First Refusal Exercise Period"), the Purchaser
shall have the right to purchase all, but not less than all, the Shares covered
by the Offer at the same price and on the same terms and conditions as the
Offer by notifying the Seller in writing of its election to purchase the Shares
(the "Right of First Refusal Exercise Notice"). Upon the Seller's receipt of
the Right of First Refusal Exercise Notice, the Seller shall sell the Shares to
the Purchaser pursuant to the provisions of Section 1(e). If at the end of the
Right of First Refusal Exercise Period the Purchaser has not delivered a Right
of First Refusal Exercise Notice to the Seller, the Seller may, during the
succeeding 90-day period, sell not less than all of the Shares covered by the
Offer to the offeror at a price not less than that contained in the Offer and
on terms and conditions not less favorable in the aggregate to the Seller than
those contained in the Offer. Upon such sale, the Right of First Refusal shall
terminate with respect to the Shares so sold. If at the end of 90 days
following the expiration of the Right of First Refusal Exercise Period the
Seller has not completed the sale of the Shares covered by the Offer (or
tendered or exchanged such Shares pursuant to a tender or exchange offer) as
aforesaid, then the Seller shall not thereafter sell such Shares without again
complying with the provisions of this Section 1.
(c) Elective Sales. If at any time the Seller has a bona
fide intention to sell any of the Shares, but at such time has not received an
Offer from any person or entity to purchase such Shares, the Seller shall
provide the Purchaser with a notice (the "Elective Sale Notice") which (i)
notifies the Purchaser of such intention, (ii) sets forth the number of Shares
desired to be sold (the "Elective Shares") and (iii) irrevocably offers to sell
the Elective Shares to the Purchaser at a purchase price and on terms and
conditions set forth in such notice. At any time within five business days
after the date of receipt by the Purchaser of the Elective Sale Notice (the
"Elective Sale Exercise Period"), the Purchaser shall have the right to
purchase all, but not less than all, of the Elective Shares at the price and on
the terms and conditions set forth in the Elective Sale Notice by notifying the
Seller in writing of its election to purchase such Shares (the "Elective Sale
Exercise Notice"). Upon the Seller's receipt of the Elective Sale Exercise
Notice, the Seller shall sell the Elective Shares to the Purchaser pursuant to
the provisions of Section 1(e). If at the end of the Elective Sale Exercise
Period the Purchaser has not delivered an Elective Sale Exercise Notice to the
Seller, the Seller may, during the succeeding 90-day period, sell not less than
all of the Elective Shares at a price not less than that
2
<PAGE> 96
contained in the Elective Sale Notice and on terms and conditions not less
favorable in the aggregate to the Seller than those contained in the Elective
Sale Notice. Upon such sale, the Right of First Refusal shall terminate with
respect to the Elective Shares so sold. If at the end of 90 days following the
expiration of the Elective Sale Exercise Period the Seller has not completed
the sale of the Elective Shares as aforesaid, then the Seller shall not
thereafter sell the Elective Shares without again complying with the provisions
of this Section 1.
(d) Rule 144 Sales. If at any time the Seller has a bona
fide intention to sell any of the Shares pursuant to Rule 144 ("Rule 144") of
the Rules and Regulations issued under the Securities Act of 1933, as amended
(the "Act") during the immediately succeeding 90 calendar day period (such
period being referred to as the "Qualified Period"), the Seller shall provide
the Purchaser with a notice (the "Rule 144 Notice") which (i) notifies the
Purchaser of such intention, (ii) sets forth the number of Shares desired to be
sold (the "Rule 144 Shares") and (iii) irrevocably offers to sell the Rule 144
Shares to the Purchaser at a per-share price equal to (1) the reported closing
price of the outstanding shares of Common Stock on the day preceding the date of
the Rule 144 Notice as reported by the Nasdaq National Market System, (2) if
such shares are listed on a national securities exchange, the last reported
sales price of the outstanding shares of Common Stock on such exchange (which
shall be for consolidated trading if applicable to such exchange) on the day
preceding the date of the Rule 144 Notice, or (3) if neither so reported or
listed, the last reported bid price of such shares (the "Rule 144 Purchase
Price"). At any time within five business days after the date of receipt by the
Purchaser of the Rule 144 Notice (the "Rule 144 Exercise Period"), the Purchaser
shall have the right to purchase all, but not less than all, of the Rule 144
Shares by notifying the Seller in writing of its election to purchase such
Shares (the "Rule 144 Exercise Notice"), whereupon the Purchaser shall be
unconditionally obligated (unless prohibited by applicable law) to purchase the
Rule 144 Shares. Upon the Seller's receipt of the Rule 144 Exercise Notice, the
Seller shall sell the Rule 144 Shares to the Purchaser pursuant to the
provisions of Section 1(e). If at the end of the Rule 144 Exercise Period the
Purchaser has not delivered a Rule 144 Exercise Notice to the Seller, then the
Seller may, during the Qualified Period, sell any or all of the Rule 144 Shares
pursuant to Rule 144 at a per-share price not less than 97.5% of the Rule 144
Purchase Price. Such sale shall be otherwise without restriction and shall not
require further notice to the Purchaser. Upon such sale, the Right of First
Refusal shall terminate with respect to the Rule 144 Shares so sold. If at the
end of the Qualified Period the Seller has not sold all of the Rule 144 Shares
as aforesaid, then the Seller shall not thereafter sell such unsold Shares
without again complying with the provisions of this Section 1.
(e) Closing. If the Purchaser exercises its Right of
First Refusal with respect to any Shares, then the closing of the purchase of
the subject Shares shall take place at the principal office of ______________
on the later of (i) the 10th business day following the receipt by the Seller
of the Right of First Refusal Exercise Notice or Elective Sale Exercise Notice
or Rule 144 Exercise Notice, as the case may be, or (ii) if applicable, the
closing date provided for in the Offer Notice or Elective Sale Notice, as the
case may be; provided, however, that if any of the Shares to be acquired by the
Purchaser would result in the Purchaser holding "Excess Shares" under Section
6.1(d) of the Purchase Agreement, then the closing of the purchase of those
Shares shall occur, at the Purchaser's sole and absolute discretion, no later
than 90 calendar days following the receipt by the Seller of the Right of First
Refusal Exercise Notice or Elective Sale Exercise Notice or Rule 144 Exercise
Notice, as the case may be; provided,
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<PAGE> 97
further, however, that if at the time the Seller receives the Right of First
Refusal Exercise Notice or Elective Sale Exercise Notice or Rule 144 Exercise
Notice, as the case may be, the requirements of the HSR Act must be complied
with in order for the Purchaser to consummate the purchase of the Shares
contemplated by such notice, then (A) as soon as practicable, the Seller shall
cause Dreyer's to make all filings required under the HSR Act and the Purchaser
shall make all filings required under the HSR Act and (B) the closing of the
purchase of the subject Shares shall occur only after the applicable waiting
period, including any extension thereof, under the HSR Act shall have expired
or been terminated and neither the Department of Justice nor the Federal Trade
Commission shall have instituted any litigation to enjoin or delay the
consummation of such purchase. The payment of the appropriate purchase price
shall be paid by delivery to the Seller (or Seller's bank or other financial
institution if so directed by the Seller) of a certified check payable to the
Seller (or Seller's bank or other financial institution if so directed by the
Seller) against delivery of certificates or other instruments representing the
Shares, appropriately endorsed or executed by the Seller, together with such
instruments of transfer and conveyance, satisfactory in form and substance to
the Purchaser, sufficient to vest the Purchaser with good and marketable title,
free and clear of any and all liens, charges, encumbrances, covenants,
conditions, restrictions, voting trust arrangements, adverse claims or rights
whatsoever (collectively, the "Encumbrances").
SECTION 2. Transfers of Shares.
(a) Restrictions. The Seller agrees that it shall not,
directly or indirectly, offer, sell, transfer, assign or otherwise dispose of
(or make any exchange, gift, assignment or pledge of) (collectively,
"Transfer") any of the Shares except as provided in Section 1 and this Section
2.
(b) Exceptions to Restrictions.
The provisions of Section 2(a) shall not apply to a Transfer,
if such Transfer is made without consideration (except for Section 2(b)(vi)),
by the Seller to:
(i) any lineal descendant of G.Rogers and
K.Rogers or any spouse of such lineal descendant;
(ii) a trust for the sole benefit of G.Rogers and
K.Rogers and/or one or more of G.Rogers' and K.Rogers' family members;
(iii) a corporation or other entity a majority of
the equity interests of which are owned by G.Rogers and K.Rogers and/or
G.Rogers' and K.Rogers' family members;
(iv) an educational or charitable organization;
(v) the executor, administrator or personal
representative of G.Rogers or K.Rogers or the guardian or conservator of
G.Rogers or K.Rogers if G.Rogers or K.Rogers is adjudged disabled or
incompetent by a court of competent jurisdiction, acting in his or her capacity
as such; or
4
<PAGE> 98
(vi) a bank or other financial institution, if
such Transfer is solely in the form of a pledge to secure bona fide
indebtedness of the Seller to such bank or other financial institution.
Provided, however, that none of the foregoing Transfers shall be permitted
unless:
(1) Such Transfer complies with all applicable
requirements of the Securities Act of 1933, as amended (the "Act") and the
Securities Exchange Act of 1934, as amended;
(2) Prior to such Transfer, the Seller shall have
caused the transferee to execute an agreement in form and substance reasonably
satisfactory to the Purchaser, providing that such transferee shall fully
comply with the terms of this Agreement;
(3) The Transferred Shares shall remain subject
to the Purchaser's Right of First Refusal and to this Section 2; and
(4) With respect to a Transfer to a bank or other
financial institution in the form of a pledge pursuant to Section 2(b)(vi), the
bank or other financial institution to which such pledge is made agrees in
writing that (i) the Purchaser's Right of First Refusal with respect to the
Shares so pledged (the "Pledged Shares") is senior to any security interest or
lien of such bank or financial institution created by such pledge, (ii) any
sale of the Pledged Shares by such bank or financial institution is subject to
the Purchaser's Right of First Refusal and shall be conducted in accordance
with the terms of this Agreement and (iii) any Pledged Shares may be sold to
the Purchaser pursuant to the terms of this Agreement without the bank's or
other financial institution's prior consent, and once so sold, such Shares
shall be free and clear of any and all claims or liens of such bank or other
financial institution.
(c) Endorsement of Certificates.
(i) Upon the execution of this Agreement, the
certificates representing all Shares shall be endorsed as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH
TRANSFER COMPLIES WITH THE PROVISIONS OF THE RIGHT OF
FIRST REFUSAL AGREEMENT, DATED AS OF MAY __, 1994, BY
AND BETWEEN T. GARY ROGERS AND KATHLEEN T. ROGERS,
INDIVIDUALLY AND AS CO-TRUSTEES OF THE ROGERS
REVOCABLE TRUST AND NESTLE HOLDINGS, INC., A COPY OF
WHICH IS ON FILE AT THE OFFICES OF DREYER'S GRAND ICE
CREAM, INC.
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<PAGE> 99
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS AND MAY BE OFFERED, SOLD OR
TRANSFERRED ONLY IF EXEMPTIONS FROM SUCH REGISTRATION
REQUIREMENTS ARE AVAILABLE.
(ii) All certificates representing Shares hereafter
issued to or acquired by the Seller shall bear the legend set forth above.
Certificates for Shares as to which the Right of First Refusal has terminated
shall be issued without such legend when Transferred.
(d) Improper Transfer.
Any attempt to Transfer or encumber any Shares not in
accordance with this Agreement shall be null and void and neither the issuer of
such securities nor any transfer agent of such securities shall give any effect
to such attempted transfer or encumbrance in its stock records.
SECTION 3. Representations and Warranties of the Seller.
The Seller represents and warrants as of the Effective Date as follows:
(a) Beneficial Ownership. The Seller Beneficially Owns a
total of 1,863,730 shares of Common Stock of which 1,585,350 shares are owned
of record by G.Trustee and K.Trustee, 178,380 shares are issuable upon exercise
of the Stock Options and 100,000 shares are owned of record by G.Rogers and
K.Rogers as co-trustees of the Four Rogers Trust. Except as set forth in the
preceding sentence, no other shares of Dreyer's capital stock, or any
securities convertible into or exchangeable for, or options or warrants to
purchase, shares of Dreyer's capital stock, or any other voting securities of
Dreyer's are Beneficially Owned by the Seller or any of its Affiliates.
(b) Good and Valid Title. The Seller has good, valid and
marketable title to the Shares which are the subject of this Agreement, free
and clear of any and all Encumbrances, except as created hereby and by the
Rogers BOA Security Documents; provided, however, that Bank of America National
Trust and Savings Association ("Bank of America") has consented to the grant by
the Seller to the Purchaser of the Right of First Refusal with respect to all
Shares pursuant to the Agreement Regarding Right of First Refusal, the form of
which is attached as Exhibit J to the Purchase Agreement (the "Consent") and
has agreed that (i) the Purchaser's Right of First Refusal is senior to any
security interest of Bank of America with respect to the Shares, (ii) any sale
of Shares by Bank of America is subject to the Purchaser's Right of First
Refusal and shall be conducted in accordance with the terms of this Agreement
and, where applicable, the Consent and (iii) any Shares may be sold to the
Purchaser pursuant to the terms of this Agreement without Bank of America's
prior consent, provided that such Shares are sold at a price equal to or greater
than the lesser of their fair market value (which for purposes of the Consent
only is calculated based on the average closing price of Dreyer's Common Stock
for the five trading days prior to the date on which the Purchaser provides the
notice under this Agreement initiating the subject sale) or an amount
sufficient to repay Bank of America in full, and once so sold, such Shares
shall be free and clear of any and all claims and liens of Bank of
America.
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<PAGE> 100
(c) Due Authorization; Good and Valid Title Upon
Purchase. The Seller has all right, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, including,
without limitation, the transfer, conveyance and sale to the Purchaser of the
Shares upon the Purchaser's exercise of the Right of First Refusal. G.Trustee
and K.Trustee are the sole trustees of the Rogers Revocable Trust. The
execution and delivery of this Agreement and the consummation by G.Trustee and
K.Trustee of the transactions contemplated hereby are authorized by that
certain Trust Agreement Establishing Rogers Revocable Trust dated as of
December 31, 1981, as amended and restated by that certain First Amendment by
Restatement of the Trust Agreement Establishing Rogers Revocable Trust dated as
of March 19, 1991, and the laws of the State of California. This Agreement has
been duly executed and delivered by the Seller and constitutes a valid and
binding agreement of the Seller enforceable in accordance with its terms. Upon
consummation of any purchase of the Shares upon exercise of the Right of First
Refusal, the Seller shall deliver good and marketable title to the Shares sold
to the Purchaser, free and clear of any and all Encumbrances and upon the sale
to the Purchaser of such Shares, there shall be no options, warrants, calls,
commitments or agreements of any nature whatsoever granted by the Seller or
Dreyer's pursuant to which any person will have the right to purchase or
otherwise acquire the Shares.
(d) No Inconsistent Agreements. The Seller is not a
party to, subject to or bound by any agreement or judgment, order, writ,
prohibition, injunction or decree of any court or other governmental body or
any statute, law, rule or regulation that would prevent the execution, delivery
or performance of this Agreement by the Seller, or the transfer, conveyance and
sale of the Shares to the Purchaser upon exercise of its rights hereunder,
including, without limitation, the Rogers BOA Security Documents, as amended by
the amendment in the form of Exhibit J to the Purchase Agreement.
(e) Brokerage or Finder's Fees. No broker or finder has
acted or will act for the Seller in connection with this Agreement or the
transactions contemplated hereby, and no broker or finder or other person is
entitled to any brokerage or finder's fees or other commissions in respect of
such transactions based in any way on agreements, arrangements or
understandings made by or on behalf of the Seller.
(f) Third Party Consents, etc. The Seller has obtained
all consents, approvals and waivers from any individual, firm, corporation,
partnership, trust, unincorporated organization or other entity, or any
successors (by merger or otherwise) to the foregoing, including, without
limitation, Bank of America, known by the Seller to be necessary to permit the
Seller to consummate the transactions contemplated by this Agreement.
(g) Governmental Consents, etc. To the best of its
knowledge, the Seller is not required to obtain any consent, approval or
authorization of, or to make any declaration or filing with, any governmental
authority as a condition to or in connection with the valid execution, delivery
and performance of this Agreement or the consummation by the Seller of the
transactions contemplated hereby, except for any filings required (i) under the
HSR Act and (ii) pursuant to state and federal securities laws.
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<PAGE> 101
(h) Agreement is Valid, Binding and Enforceable. This
Agreement has been duly and validly executed and delivered by the Seller and
constitutes a legal, valid and binding obligation of the Seller, enforceable in
accordance with its terms.
SECTION 4. Representations and Warranties of the
Purchaser. The Purchaser represents and warrants as of the Effective Date as
follows:
(a) Organization and Qualification. The Purchaser is a
corporation duly organized and existing in good standing under the laws of the
State of Delaware and has the corporate power to own its property and to carry
on its business as now being conducted. The Purchaser is duly qualified to do
business and in good standing in every jurisdiction in which the nature of the
respective business conducted or property owned by it makes such qualification
necessary, except where the failure to so qualify would not prevent
consummation of the transactions contemplated hereby or have a material adverse
effect on the results of operations (on a recurring basis), financial condition
or business of the Purchaser and its subsidiaries taken as a whole.
(b) Due Authorization. The Purchaser has all right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation by the Purchaser of the transactions contemplated hereby
have been duly authorized by all necessary action on behalf of the Purchaser.
This Agreement has been duly executed and delivered by the Purchaser and
constitutes a valid and binding agreement of the Purchaser enforceable in
accordance with its terms.
(c) Purchase Representations. Any Shares purchased by
the Purchaser pursuant to its exercise of the Right of First Refusal granted to
the Purchaser hereunder will be purchased by it for its own account and not
with a view to or for sale in connection with any distribution thereof in any
transaction that would violate the securities laws of the United States or any
state thereof. The Purchaser acknowledges that any Shares purchased pursuant
to such exercise have not been registered under the Act and may be sold or
disposed of in the absence of such registration only pursuant to an exemption
from such registration.
(d) Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 promulgated under the Act.
SECTION 5. Covenants of the Seller.
The Seller covenants as follows for the period from the
Effective Date until such time as the Right of First Refusal has terminated in
respect of all of the Shares in accordance with the provisions of Section 1.
(a) The Seller shall not do or permit any act which would
cause any representation or warranty in this Agreement to be or become untrue
in any material respect;
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(b) The Seller shall use its best efforts to take all
action required to obtain all consents, approvals and agreements of, and to
give all notices and make all other filings with, any person, entity,
government or agency necessary to authorize, approve or permit the consummation
of the transactions contemplated by this Agreement. In addition, the Seller
covenants and agrees to use its best efforts to take, or cause to be taken, all
action or do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated hereby and to cause the fulfillment of the Seller's
obligations hereunder.
(c) The Seller shall give prompt notice to the Purchaser
of (i) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect and (ii) any
material failure of the Seller to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder, and
the Seller shall use its best efforts to remedy same.
(d) The Seller shall not become a party to, subject to or
bound by any agreement that would prevent or prohibit the consummation of the
transactions contemplated by this Agreement, including without limitation, the
transfer, conveyance and sale of the Shares to the Purchaser upon exercise of
the Right of First Refusal, free and clear of any and all Encumbrances.
SECTION 6. Miscellaneous.
(a) Further Assurances. Upon the terms and subject to
the conditions contained herein, each of the parties hereto agrees (i) to use
its best efforts to take, or cause to be taken, all action or do, or cause to
be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated
hereby and to cause the fulfillment of its obligations hereunder, (ii) to
execute any documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to carry out any of the transactions
contemplated hereby and (iii) to cooperate with each other in connection with
the foregoing.
(b) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable.
(c) Specific Enforcement. The Purchaser, on the one
hand, and the Seller, on the other, acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction to prevent breaches of the provisions of this Agreement and to
enforce specifically
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the terms and provisions hereof in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to
which they may be entitled at law or equity.
(d) Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the transactions contemplated
hereby.
(e) Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more of the counterparts have
been signed by each party and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
(f) Notices and Other Communications. Except as
otherwise provided, all notices, consents, requests, instructions and other
communications provided for herein shall be promptly given, if in writing and
delivered personally, by telecopy, express courier or sent by registered mail,
postage prepaid, if to:
THE SELLER:
c/o Dreyer's Grand Ice Cream, Inc.
5929 College Avenue
Oakland, California 94618
Attention: T. Gary Rogers
With a copy to:
Edmund R. Manwell, Esq.
Manwell & Milton
101 California Street, Suite 3750
San Francisco, California 94111
THE PURCHASER:
President
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
800 North Brand Boulevard
Glendale, California 91203
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With copies to:
James H. Ball, Esq.
Senior Vice President and General Counsel
Nestle USA, Inc.
800 North Brand Boulevard
Glendale, California 91203
and
Wayne F. Erdelack, Esq.
Vice President and Deputy General Counsel
Nestle USA, Inc.
30003 Bainbridge Road
Solon, Ohio 44139
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner.
(g) Amendments. This Agreement may not be amended,
modified or supplemented other than by a written instrument signed by all
parties hereto which are, at the time of such amendment or modification,
subject to this Agreement.
(h) Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns (including, without limitation,
successor trustees under the Rogers Revocable Trust); provided, however, that
the Seller may not assign any of its rights or obligations hereunder except in
accordance with the provisions of Section 2 and the Purchaser may not assign
any of its rights or obligations hereunder except to its affiliates.
(i) Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement, regardless of any investigation made by or on behalf of any party.
(j) Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of
Delaware.
(k) Signatures. This Agreement shall be effective upon
delivery of original signature pages or facsimile copies thereof executed by
each of the parties hereto.
(l) Termination. The Right of First Refusal granted by
the Seller to the Purchaser shall terminate when the Purchaser no longer
Beneficially Owns 10% or more of the outstanding voting securities of Dreyer's,
on a Fully Diluted basis; provided, however, that for purposes of this Section
6(l), the Purchaser's Beneficial Ownership of Dreyer's outstanding voting
securities on a Fully Diluted basis shall be deemed to be reduced solely as a
result of
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sales of shares by the Purchaser, but not by reason of a percentage reduction
occuring as a result of the issuance by Dreyer's of any shares of its capital
stock, or any other securities, or any securities convertible into or
exchangeable for, or options or warrants to purchase, shares of its capital
stock or any other securities, other than the issuance of such securities
pursuant to (i) the conversion of any of the 6.25% Subordinated Convertible
Notes of Dreyer's due June 30, 2001, (ii) the exercise of any options
outstanding as of the Effective Date which were granted pursuant to any stock
option plan of Dreyer's or (iii) the exercise of any rights (excluding the
Rights) outstanding as of the Effective Date which were granted pursuant to any
employee stock purchase or gift plan of Dreyer's.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Purchaser and the Seller have caused
this Agreement to be executed and delivered as of the day and year first above
first written.
____________________________________
T. Gary Rogers
____________________________________
T. Gary Rogers as co-trustee of the
Rogers Revocable Trust
____________________________________
Kathleen T. Rogers
____________________________________
Kathleen T. Rogers as co-trustee of
the Rogers Revocable Trust
NESTLE HOLDINGS, INC.
____________________________________
By:
Title:
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==============================================================================
EXHIBIT C
FORM OF
RIGHT OF FIRST REFUSAL AGREEMENT
BY AND BETWEEN
WILLIAM F. CRONK, III AND JANET M. CRONK,
INDIVIDUALLY AND AS CO-TRUSTEES OF
THE CRONK REVOCABLE TRUST
AND
NESTLE HOLDINGS, INC.
DATED AS OF MAY ___, 1994
==============================================================================
<PAGE> 108
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) Grant of Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(b) Exercise of Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(c) Elective Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(d) Rule 144 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(e) Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. Transfers of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Exceptions to Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Endorsement of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(d) Improper Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. Representations and Warranties of the Seller . . . . . . . . . . . . . . . . . . . 6
(a) Beneficial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Good and Valid Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Due Authorization; Good and Valid Title Upon Purchase . . . . . . . . . . . . . . . 7
(d) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Brokerage or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(f) Third Party Consents, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(g) Governmental Consents, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(h) Agreement is Valid, Binding and Enforceable . . . . . . . . . . . . . . . . . . . . 8
SECTION 4. Representations and Warranties of the Purchaser . . . . . . . . . . . . . . . . . . 8
(a) Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Purchase Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 5. Covenants of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 6. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Specific Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(e) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(f) Notices and Other Communications . . . . . . . . . . . . . . . . . . . . . . . . . 10
(g) Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(h) Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
i
<PAGE> 109
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
(i) Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . 11
(j) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(k) Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(l) Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
ii
<PAGE> 110
RIGHT OF FIRST REFUSAL AGREEMENT
THIS RIGHT OF FIRST REFUSAL AGREEMENT (the "Agreement") is
dated as of May ___, 1994 (the "Effective Date") and entered into by and
between WILLIAM F. CRONK, III ("W.Cronk"), WILLIAM F. CRONK, III as co-trustee
of the Cronk Revocable Trust created under that certain Trust Agreement
Establishing Cronk Revocable Trust dated as of December 30, 1981, as amended
and restated by that certain Amended Revocable Trust Agreement dated as of
October 12, 1987 and as amended by those certain amendments thereto dated as of
May 3, 1988, February 4, 1990, and December 16, 1990 (the "Cronk Revocable
Trust") ("W.Trustee"), JANET M. CRONK ("J.Cronk"), and JANET M. CRONK as
co-trustee of the Cronk Revocable Trust ("J.Trustee," and together with
W.Cronk, W.Trustee and J.Cronk, the "Seller") and NESTLE HOLDINGS, INC., a
Delaware corporation (the "Purchaser"). Capitalized terms used herein but not
otherwise defined shall have the meaning assigned such terms in the Purchase
Agreement (as defined below).
WHEREAS, the Purchaser and Dreyer's Grand Ice Cream, Inc., a
Delaware corporation ("Dreyer's") have entered into a Stock and Warrant
Purchase Agreement dated as of May ____, 1994 (the "Purchase Agreement")
providing, among other things, for the purchase by the Purchaser of three
million shares of the Common Stock of Dreyer's, par value $1.00 per share (the
"Common Stock"), and warrants exercisable for two million shares of Common
Stock;
WHEREAS, the Seller currently Beneficially Owns 1,115,901
shares of Common Stock (of which 895,521 shares are owned of record by
W.Trustee and J.Trustee, 178,380 shares are issuable upon exercise of stock
options owned of record by W.Cronk (the "Stock Options"), 14,000 shares are
owned of record by William Jeffrey Cronk as trustee of the William Jeffrey
Cronk 1993 Irrevocable Trust created under that certain Trust Agreement
Establishing the Cronk Family 1993 Irrevocable Trusts dated as of February 19,
1993, as amended (the "Cronk Family Trust Agreement") (the "WJC Trust"), 14,000
shares are owned of record by William C. Collett as trustee of the Robert James
Cronk 1993 Irrevocable Trust created under the Cronk Family Trust Agreement
(the "RJC Trust") and 14,000 shares are owned of record by William C. Collett
as trustee of the Christopher Clay Cronk 1993 Irrevocable Trust created under
the Cronk Family Trust Agreement (the "CCC Trust")) and may acquire additional
shares of Common Stock or other voting securities of Dreyer's in the future
(the shares of Common Stock and other voting securities of Dreyer's (i) now
owned by the Seller, (ii) issuable upon exercise of the Stock Options or any
other options or warrants of Dreyer's now owned by the Seller, (iii) issuable
upon conversion or exchange of any other securities of Dreyer's now owned by
the Seller or (iv) hereafter acquired by, or which become Beneficially Owned
by, the Seller or any of its Affiliates, are referred to herein as the
"Shares");
WHEREAS, a condition to the closing of the transactions
contemplated by the Purchase Agreement is that the Seller shall have granted
the Purchaser a right of first refusal with respect to the Shares; and
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<PAGE> 111
WHEREAS, the Purchaser and the Seller desire to provide for
such grants and to establish various rights and obligations in connection
therewith.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein set forth, the parties hereto agree as
follows:
SECTION 1. Right of First Refusal.
(a) Grant of Right. In consideration of the payment of
$1,000 by the Purchaser to the Seller, the receipt and sufficiency of which is
hereby acknowledged, the Seller hereby grants to the Purchaser a right of first
refusal with respect to all of the Shares (the "Right of First Refusal").
(b) Exercise of Right. Subject to Sections 1(c) and (d),
if at any time the Seller receives a bona fide offer (an "Offer") from any
person or entity to purchase any or all of the Shares which the Seller wishes
to accept, the Seller shall cause the Offer to be reduced to writing and shall
notify the Purchaser in writing of its wish to accept the Offer (the "Offer
Notice"). The Offer Notice shall contain an irrevocable offer to sell such
Shares to the Purchaser at a purchase price equal to the price contained in,
and on the same terms and conditions of, the Offer and shall be accompanied by
a true copy of the Offer (which shall identify the offeror). At any time
within five business days after the date of receipt by the Purchaser of the
Offer Notice (the "Right of First Refusal Exercise Period"), the Purchaser
shall have the right to purchase all, but not less than all, the Shares covered
by the Offer at the same price and on the same terms and conditions as the
Offer by notifying the Seller in writing of its election to purchase the Shares
(the "Right of First Refusal Exercise Notice"). Upon the Seller's receipt of
the Right of First Refusal Exercise Notice, the Seller shall sell the Shares to
the Purchaser pursuant to the provisions of Section 1(e). If at the end of the
Right of First Refusal Exercise Period the Purchaser has not delivered a Right
of First Refusal Exercise Notice to the Seller, the Seller may, during the
succeeding 90-day period, sell not less than all of the Shares covered by the
Offer to the offeror at a price not less than that contained in the Offer and
on terms and conditions not less favorable in the aggregate to the Seller than
those contained in the Offer. Upon such sale, the Right of First Refusal shall
terminate with respect to the Shares so sold. If at the end of 90 days
following the expiration of the Right of First Refusal Exercise Period the
Seller has not completed the sale of the Shares covered by the Offer (or
tendered or exchanged such Shares pursuant to a tender or exchange offer) as
aforesaid, then the Seller shall not thereafter sell such Shares without again
complying with the provisions of this Section 1.
(c) Elective Sales. If at any time the Seller has a bona
fide intention to sell any of the Shares, but at such time has not received an
Offer from any person or entity to purchase such Shares, the Seller shall
provide the Purchaser with a notice (the "Elective Sale Notice") which (i)
notifies the Purchaser of such intention, (ii) sets forth the number of Shares
desired to be sold (the "Elective Shares") and (iii) irrevocably offers to sell
the Elective Shares to the Purchaser at a purchase price and on terms and
conditions set forth in such notice. At any time within five business days
after the date of receipt by the Purchaser of the Elective Sale Notice (the
"Elective Sale Exercise Period"), the Purchaser shall have the right to
purchase all, but not less than all, of the Elective Shares at the price and on
the terms and conditions set forth
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<PAGE> 112
in the Elective Sale Notice by notifying the Seller in writing of its election
to purchase such Shares (the "Elective Sale Exercise Notice"). Upon the
Seller's receipt of the Elective Sale Exercise Notice, the Seller shall sell
the Elective Shares to the Purchaser pursuant to the provisions of Section
1(e). If at the end of the Elective Sale Exercise Period the Purchaser has not
delivered an Elective Sale Exercise Notice to the Seller, the Seller may,
during the succeeding 90-day period, sell not less than all of the Elective
Shares at a price not less than that contained in the Elective Sale Notice and
on terms and conditions not less favorable in the aggregate to the Seller than
those contained in the Elective Sale Notice. Upon such sale, the Right of
First Refusal shall terminate with respect to the Elective Shares so sold. If
at the end of 90 days following the expiration of the Elective Sale Exercise
Period the Seller has not completed the sale of the Elective Shares as
aforesaid, then the Seller shall not thereafter sell the Elective Shares
without again complying with the provisions of this Section 1.
(d) Rule 144 Sales. If at any time the Seller has a bona
fide intention to sell any of the Shares pursuant to Rule 144 ("Rule 144") of
the Rules and Regulations issued under the Securities Act of 1933, as amended
(the "Act") during the immediately succeeding 90 calendar day period (such
period being referred to as the "Qualified Period"), the Seller shall provide
the Purchaser with a notice (the "Rule 144 Notice") which (i) notifies the
Purchaser of such intention, (ii) sets forth the number of Shares desired to be
sold (the "Rule 144 Shares") and (iii) irrevocably offers to sell the Rule 144
Shares to the Purchaser at a per-share price equal to (1) the reported closing
price of the outstanding shares of Common Stock on the day preceding the date
of the Rule 144 Notice as reported by the Nasdaq National Market System, (2) if
such shares are listed on a national securities exchange, the last reported
sales price of the outstanding shares of Common Stock on such exchange (which
shall be for consolidated trading if applicable to such exchange) on the day
preceding the date of the Rule 144 Notice, or (3) if neither so reported or
listed, the last reported bid price of such shares (the "Rule 144 Purchase
Price"). At any time within five business days after the date of receipt by
the Purchaser of the Rule 144 Notice (the "Rule 144 Exercise Period"), the
Purchaser shall have the right to purchase all, but not less than all, of the
Rule 144 Shares by notifying the Seller in writing of its election to purchase
such Shares (the "Rule 144 Exercise Notice"), whereupon the Purchaser shall be
unconditionally obligated (unless prohibited by applicable law) to purchase the
Rule 144 Shares. Upon the Seller's receipt of the Rule 144 Exercise Notice,
the Seller shall sell the Rule 144 Shares to the Purchaser pursuant to the
provisions of Section 1(e). If at the end of the Rule 144 Exercise Period the
Purchaser has not delivered a Rule 144 Exercise Notice to the Seller, then the
Seller may, during the Qualified Period, sell any or all of the Rule 144 Shares
pursuant to Rule 144 at a per-share price not less than 97.5% of the Rule 144
Purchase Price. Such sale shall be otherwise without restriction and shall not
require further notice to the Purchaser. Upon such sale, the Right of First
Refusal shall terminate with respect to the Rule 144 Shares so sold. If at the
end of the Qualified Period the Seller has not sold all of the Rule 144 Shares
as aforesaid, then the Seller shall not thereafter sell such unsold Shares
without again complying with the provisions of this Section 1.
(e) Closing. If the Purchaser exercises its Right of
First Refusal with respect to any Shares, then the closing of the purchase of
the subject Shares shall take place at the principal office of ______________
on the later of (i) the 10th business day following the receipt by the Seller
of the Right of First Refusal Exercise Notice or Elective Sale Exercise Notice
or Rule 144 Exercise Notice, as the case may be, or (ii) if applicable, the
closing date provided for
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<PAGE> 113
in the Offer Notice or Elective Sale Notice, as the case may be; provided,
however, that if any of the Shares to be acquired by the Purchaser would result
in the Purchaser holding "Excess Shares" under Section 6.1(d) of the Purchase
Agreement, then the closing of the purchase of those Shares shall occur, at the
Purchaser's sole and absolute discretion, no later than 90 calendar days
following the receipt by the Seller of the Right of First Refusal Exercise
Notice or Elective Sale Exercise Notice or Rule 144 Exercise Notice, as the
case may be; provided, further, however, that if at the time the Seller
receives the Right of First Refusal Exercise Notice or Elective Sale Exercise
Notice or Rule 144 Exercise Notice, as the case may be, the requirements of the
HSR Act must be complied with in order for the Purchaser to consummate the
purchase of the Shares contemplated by such notice, then (A) as soon as
practicable, the Seller shall cause Dreyer's to make all filings required under
the HSR Act and the Purchaser shall make all filings required under the HSR Act
and (B) the closing of the purchase of the subject Shares shall occur only
after the applicable waiting period, including any extension thereof, under the
HSR Act shall have expired or been terminated and neither the Department of
Justice nor the Federal Trade Commission shall have instituted any litigation
to enjoin or delay the consummation of such purchase. The payment of the
appropriate purchase price shall be paid by delivery to the Seller (or Seller's
bank or other financial institution if so directed by the Seller) of a
certified check payable to the Seller (or Seller's bank or other financial
institution if so directed by the Seller) against delivery of certificates or
other instruments representing the Shares, appropriately endorsed or executed
by the Seller, together with such instruments of transfer and conveyance,
satisfactory in form and substance to the Purchaser, sufficient to vest the
Purchaser with good and marketable title, free and clear of any and all liens,
charges, encumbrances, covenants, conditions, restrictions, voting trust
arrangements, adverse claims or rights whatsoever (collectively, the
"Encumbrances").
SECTION 2. Transfers of Shares.
(a) Restrictions. The Seller agrees that it shall not,
directly or indirectly, offer, sell, transfer, assign or otherwise dispose of
(or make any exchange, gift, assignment or pledge of) (collectively,
"Transfer") any of the Shares except as provided in Section 1 and this Section
2.
(b) Exceptions to Restrictions.
The provisions of Section 2(a) shall not apply to a Transfer,
if such Transfer is made without consideration (except for Section 2(b)(vi)),
by the Seller to:
(i) any lineal descendant of W.Cronk and J.Cronk
or any spouse of such lineal descendant;
(ii) a trust for the sole benefit of W.Cronk and
J.Cronk and/or one or more of W.Cronk's and J.Cronk's family members;
(iii) a corporation or other entity a majority of
the equity interests of which are owned by W.Cronk and J.Cronk and/or W.Cronk's
and J.Cronk's family members;
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(iv) an educational or charitable organization;
(v) the executor, administrator or personal
representative of W.Cronk or J.Cronk or the guardian or conservator of W.Cronk
or J.Cronk if W.Cronk or J.Cronk is adjudged disabled or incompetent by a court
of competent jurisdiction, acting in his or her capacity as such; or
(vi) a bank or other financial institution, if
such Transfer is solely in the form of a pledge to secure bona fide
indebtedness of the Seller to such bank or other financial institution.
Provided, however, that none of the foregoing Transfers shall
be permitted unless:
(1) Such Transfer complies with all applicable
requirements of the Securities Act of 1933, as amended (the "Act") and the
Securities Exchange Act of 1934, as amended;
(2) Prior to such Transfer, the Seller shall have
caused the transferee to execute an agreement in form and substance reasonably
satisfactory to the Purchaser, providing that such transferee shall fully
comply with the terms of this Agreement;
(3) The Transferred Shares shall remain subject
to the Purchaser's Right of First Refusal and to this Section 2; and
(4) With respect to a Transfer to a bank or other
financial institution in the form of a pledge pursuant to Section 2(b)(vi), the
bank or other financial institution to which such pledge is made agrees in
writing that (i) the Purchaser's Right of First Refusal with respect to the
Shares so pledged (the "Pledged Shares") is senior to any security interest or
lien of such bank or financial institution created by such pledge, (ii) any
sale of the Pledged Shares by such bank or financial institution is subject to
the Purchaser's Right of First Refusal and shall be conducted in accordance
with the terms of this Agreement and (iii) any Pledged Shares may be sold to
the Purchaser pursuant to the terms of this Agreement without the bank's or
other financial institution's prior consent, and once so sold, such Shares
shall be free and clear of any and all claims or liens of such bank or other
financial institution.
(c) Endorsement of Certificates.
(i) Upon the execution of this Agreement, the
certificates representing all Shares shall be endorsed as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH
TRANSFER COMPLIES WITH THE PROVISIONS OF THE RIGHT OF
FIRST REFUSAL AGREEMENT,
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DATED AS OF MAY __, 1994, BY AND BETWEEN WILLIAM F.
CRONK, III AND JANET M. CRONK, INDIVIDUALLY AND AS
CO- TRUSTEES OF THE CRONK REVOCABLE TRUST AND NESTLE
HOLDINGS, INC., A COPY OF WHICH IS ON FILE AT THE
OFFICES OF DREYER'S GRAND ICE CREAM, INC.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS AND MAY BE OFFERED, SOLD OR
TRANSFERRED ONLY IF EXEMPTIONS FROM SUCH REGISTRATION
REQUIREMENTS ARE AVAILABLE.
(ii) All certificates representing Shares hereafter
issued to or acquired by the Seller shall bear the legend set forth above.
Certificates for Shares as to which the Right of First Refusal has terminated
shall be issued without such legend when Transferred.
(d) Improper Transfer.
Any attempt to Transfer or encumber any Shares not in
accordance with this Agreement shall be null and void and neither the issuer of
such securities nor any transfer agent of such securities shall give any effect
to such attempted transfer or encumbrance in its stock records.
SECTION 3. Representations and Warranties of the Seller.
The Seller represents and warrants as of the Effective Date as follows:
(a) Beneficial Ownership. The Seller Beneficially Owns a
total of 1,115,901 shares of Common Stock of which 895,521 shares are owned of
record by W.Trustee and J.Trustee, 178,380 shares are issuable upon exercise of
the Stock Options, 14,000 shares are owned of record by the William Jeffrey
Cronk as trustee of the WJC Trust, 14,000 shares are owned of record by William
C. Collett as trustee of the RJC Trust and 14,000 shares are owned of record by
William C. Collett as trustee of the CCC Trust. Except as set forth in the
preceding sentence, no other shares of Dreyer's capital stock, or any
securities convertible into or exchangeable for, or options or warrants to
purchase, shares of Dreyer's capital stock, or any other voting securities of
Dreyer's are Beneficially Owned by the Seller or any of its Affiliates.
(b) Good and Valid Title. The Seller has good, valid and
marketable title to the Shares which are the subject of this Agreement, free
and clear of any and all Encumbrances, except as created hereby and by the
Rogers BOA Security Documents; provided, however, that Bank of America National
Trust and Savings Association ("Bank of America") has consented to the grant by
the Seller to the Purchaser of the Right of First Refusal with respect to all
Shares pursuant to the Agreement Regarding Right of First Refusal, the form of
which is attached as Exhibit K to the Purchase Agreement (the "Consent")
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<PAGE> 116
and has agreed that (i) the Purchaser's Right of First Refusal is senior to any
security interest of Bank of America with respect to the Shares, (ii) any sale
of Shares by Bank of America is subject to the Purchaser's Right of First
Refusal and shall be conducted in accordance with the terms of this Agreement
and, where applicable, the Consent and (iii) any Shares may be sold to the
Purchaser pursuant to the terms of this Agreement without Bank of America's
prior consent, provided that such Shares are sold at a price equal to or
greater than the lesser of their fair market value (which for purposes of the
Consent only is calculated based on the average closing price of Dreyer's
Common Stock for the five trading days prior to the date on which the Purchaser
provides the notice under this Agreement initiating the subject sale) or an
amount sufficient to repay Bank of America in full, and once so sold, such
Shares shall be free and clear of any and all claims and liens of Bank of
America.
(c) Due Authorization; Good and Valid Title Upon
Purchase. The Seller has all right, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, including,
without limitation, the transfer, conveyance and sale to the Purchaser of the
Shares upon the Purchaser's exercise of the Right of First Refusal. W.Trustee
and J.Trustee are the sole trustees of the Cronk Revocable Trust. The
execution and delivery of this Agreement and the consummation by W.Trustee and
J.Trustee of the transactions contemplated hereby are authorized by that
certain Trust Agreement Establishing Cronk Revocable Trust dated as of December
30, 1981, as amended and restated by that certain Amended Revocable Trust
Agreement dated as of October 12, 1987 and as amended by those certain
amendments thereto dated as of May 3, 1988, February 4, 1990, and December 16,
1990, and the laws of the State of California. This Agreement has been duly
executed and delivered by the Seller and constitutes a valid and binding
agreement of the Seller enforceable in accordance with its terms. Upon
consummation of any purchase of the Shares upon exercise of the Right of First
Refusal, the Seller shall deliver good and marketable title to the Shares sold
to the Purchaser, free and clear of any and all Encumbrances and upon the sale
to the Purchaser of such Shares, there shall be no options, warrants, calls,
commitments or agreements of any nature whatsoever granted by the Seller or
Dreyer's pursuant to which any person will have the right to purchase or
otherwise acquire the Shares.
(d) No Inconsistent Agreements. The Seller is not a
party to, subject to or bound by any agreement or judgment, order, writ,
prohibition, injunction or decree of any court or other governmental body or
any statute, law, rule or regulation that would prevent the execution, delivery
or performance of this Agreement by the Seller, or the transfer, conveyance and
sale of the Shares to the Purchaser upon exercise of its rights hereunder,
including, without limitation, the Cronk BOA Security Documents, as amended by
the amendment in the form of Exhibit K to the Purchase Agreement.
(e) Brokerage or Finder's Fees. No broker or finder has
acted or will act for the Seller in connection with this Agreement or the
transactions contemplated hereby, and no broker or finder or other person is
entitled to any brokerage or finder's fees or other commissions in respect of
such transactions based in any way on agreements, arrangements or
understandings made by or on behalf of the Seller.
(f) Third Party Consents, etc. The Seller has obtained
all consents, approvals and waivers from any individual, firm, corporation,
partnership, trust, unincorporated organization or other entity, or any
successors (by merger or otherwise) to the foregoing, including, without
limitation, Bank of America, known by the Seller to be necessary to permit the
Seller to consummate the transactions contemplated by this Agreement.
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<PAGE> 117
(g) Governmental Consents, etc. To the best of its
knowledge, the Seller is not required to obtain any consent, approval or
authorization of, or to make any declaration or filing with, any governmental
authority as a condition to or in connection with the valid execution, delivery
and performance of this Agreement or the consummation by the Seller of the
transactions contemplated hereby, except for any filings required (i) under the
HSR Act and (ii) pursuant to state and federal securities laws.
(h) Agreement is Valid, Binding and Enforceable. This
Agreement has been duly and validly executed and delivered by the Seller and
constitutes a legal, valid and binding obligation of the Seller, enforceable in
accordance with its terms.
SECTION 4. Representations and Warranties of the
Purchaser. The Purchaser represents and warrants as of the Effective Date as
follows:
(a) Organization and Qualification. The Purchaser is a
corporation duly organized and existing in good standing under the laws of the
State of Delaware and has the corporate power to own its property and to carry
on its business as now being conducted. The Purchaser is duly qualified to do
business and in good standing in every jurisdiction in which the nature of the
respective business conducted or property owned by it makes such qualification
necessary, except where the failure to so qualify would not prevent
consummation of the transactions contemplated hereby or have a material adverse
effect on the results of operations (on a recurring basis), financial condition
or business of the Purchaser and its subsidiaries taken as a whole.
(b) Due Authorization. The Purchaser has all right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation by the Purchaser of the transactions contemplated hereby
have been duly authorized by all necessary action on behalf of the Purchaser.
This Agreement has been duly executed and delivered by the Purchaser and
constitutes a valid and binding agreement of the Purchaser enforceable in
accordance with its terms.
(c) Purchase Representations. Any Shares purchased by
the Purchaser pursuant to its exercise of the Right of First Refusal granted to
the Purchaser hereunder will be purchased by it for its own account and not
with a view to or for sale in connection with any distribution thereof in any
transaction that would violate the securities laws of the United States or any
state thereof. The Purchaser acknowledges that any Shares purchased pursuant
to such exercise have not been registered under the Act and may be sold or
disposed of in the absence of such registration only pursuant to an exemption
from such registration.
(d) Accredited Investor. The Purchaser is an "accredited
investor" within the meaning of Rule 501 promulgated under the Act.
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SECTION 5. Covenants of the Seller.
The Seller covenants as follows for the period from the
Effective Date until such time as the Right of First Refusal has terminated in
respect of all of the Shares in accordance with the provisions of Section 1.
(a) The Seller shall not do or permit any act which would
cause any representation or warranty in this Agreement to be or become untrue
in any material respect;
(b) The Seller shall use its best efforts to take all
action required to obtain all consents, approvals and agreements of, and to
give all notices and make all other filings with, any person, entity,
government or agency necessary to authorize, approve or permit the consummation
of the transactions contemplated by this Agreement. In addition, the Seller
covenants and agrees to use its best efforts to take, or cause to be taken, all
action or do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated hereby and to cause the fulfillment of the Seller's
obligations hereunder.
(c) The Seller shall give prompt notice to the Purchaser
of (i) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect and (ii) any
material failure of the Seller to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder, and
the Seller shall use its best efforts to remedy same.
(d) The Seller shall not become a party to, subject to or
bound by any agreement that would prevent or prohibit the consummation of the
transactions contemplated by this Agreement, including without limitation, the
transfer, conveyance and sale of the Shares to the Purchaser upon exercise of
the Right of First Refusal, free and clear of any and all Encumbrances.
SECTION 6. Miscellaneous.
(a) Further Assurances. Upon the terms and subject to
the conditions contained herein, each of the parties hereto agrees (i) to use
its best efforts to take, or cause to be taken, all action or do, or cause to
be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated
hereby and to cause the fulfillment of its obligations hereunder, (ii) to
execute any documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to carry out any of the transactions
contemplated hereby and (iii) to cooperate with each other in connection with
the foregoing.
(b) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. It is hereby
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stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable.
(c) Specific Enforcement. The Purchaser, on the one
hand, and the Seller, on the other, acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state thereof having jurisdiction, this being in addition to any
other remedy to which they may be entitled at law or equity.
(d) Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the transactions contemplated
hereby.
(e) Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more of the counterparts have
been signed by each party and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
(f) Notices and Other Communications. Except as
otherwise provided, all notices, consents, requests, instructions and other
communications provided for herein shall be promptly given, if in writing and
delivered personally, by telecopy, express courier or sent by registered mail,
postage prepaid, if to:
THE SELLER:
c/o Dreyer's Grand Ice Cream, Inc.
5929 College Avenue
Oakland, California 94618
Attention: William F. Cronk, III
With a copy to:
Edmund R. Manwell, Esq.
Manwell & Milton
101 California Street, Suite 3750
San Francisco, California 94111
THE PURCHASER:
President
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
800 North Brand Boulevard
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Glendale, California 91203
With copies to:
James H. Ball, Esq.
Senior Vice President and General Counsel
Nestle USA, Inc.
800 North Brand Boulevard
Glendale, California 91203
and
Wayne F. Erdelack, Esq.
Vice President and Deputy General Counsel
Nestle USA, Inc.
30003 Bainbridge Road
Solon, Ohio 44139
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner.
(g) Amendments. This Agreement may not be amended,
modified or supplemented other than by a written instrument signed by all
parties hereto which are, at the time of such amendment or modification,
subject to this Agreement.
(h) Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns (including, without limitation,
successor trustees under the Cronk Revocable Trust); provided, however, that
the Seller may not assign any of its rights or obligations hereunder except in
accordance with the provisions of Section 2 and the Purchaser may not assign
any of its rights or obligations hereunder except to its affiliates.
(i) Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement, regardless of any investigation made by or on behalf of any party.
(j) Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of
Delaware.
(k) Signatures. This Agreement shall be effective upon
delivery of original signature pages or facsimile copies thereof executed by
each of the parties hereto.
(l) Termination. The Right of First Refusal granted by
the Seller to the Purchaser shall terminate when the Purchaser no longer
Beneficially Owns 10% or more of the outstanding voting securities of Dreyer's,
on a Fully Diluted basis; provided, however, that for
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purposes of this Section 6(l), the Purchaser's Beneficial Ownership of Dreyer's
outstanding voting securities on a Fully Diluted basis shall be deemed to be
reduced solely as a result of sales of shares by the Purchaser, but not by
reason of a percentage reduction occuring as a result of the issuance by
Dreyer's of any shares of its capital stock, or any other securities, or any
securities convertible into or exchangeable for, or options or warrants to
purchase, shares of its capital stock or any other securities, other than the
issuance of such securities pursuant to (i) the conversion of any of the 6.25%
Subordinated Convertible Notes of Dreyer's due June 30, 2001, (ii) the exercise
of any options outstanding as of the Effective Date which were granted pursuant
to any stock option plan of Dreyer's or (iii) the exercise of any rights
(excluding the Rights) outstanding as of the Effective Date which were granted
pursuant to any employee stock purchase or gift plan of Dreyer's.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Purchaser and the Seller have caused
this Agreement to be executed and delivered as of the day and year first above
first written.
____________________________________
William F. Cronk, III
____________________________________
William F. Cronk, III as co-trustee of
the Cronk Revocable Trust
____________________________________
Janet M. Cronk
____________________________________
Janet M. Cronk as co-trustee of
the Cronk Revocable Trust
NESTLE HOLDINGS, INC.
____________________________________
By:
Title:
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EXHIBIT D
Form of Distributor Agreement
By and Between
DREYER'S GRAND ICE CREAM, INC.
and
NESTLE ICE CREAM COMPANY
Dated as of May , 1994
<PAGE> 124
050294
DISTRIBUTOR AGREEMENT
This Distributor Agreement (the "Agreement") is made as of May ____,
1994, by and between Nestle Ice Cream Company, a Delaware corporation
("Company"), with offices at 1700 E. 17th Avenue, Columbus, Ohio 43219, and
Dreyer's Grand Ice Cream, Inc., a Delaware corporation ("Distributor"), with
offices at 5929 College Avenue, Oakland, California 94618-1391.
RECITALS
WHEREAS, Company manufactures, sells and distributes certain ice cream
and frozen novelty products and is desirous of having Distributor develop a
demand for and sell certain of Company's products by purchasing such products
from Company at wholesale and selling such products to retailers within certain
prescribed territories and markets; and
WHEREAS, Distributor is a manufacturer and distributor of ice cream and
other food products and possesses the ability to act as a wholesale distributor
of Company's products, and desires in such capacity to promote the sale and
distribution of certain products manufactured by Company in the prescribed
territories and markets; and
WHEREAS, an affiliate of Company and Distributor have entered into the
following agreements, all of even date herewith: (i) Stock and Warrant Purchase
Agreement; (ii) Warrant Agreement, and (iii) Registration Rights Agreement
(collectively, the "Stock Agreements");
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto mutually agree
as follows:
1. APPOINTMENT
a. Company hereby appoints Distributor as (i) an exclusive wholesale
distributor of those branded products of Company set forth in Exhibit A hereto
(the "Nestle Products") in and for the market areas and geographical areas
listed in Exhibit B-1 and B-2 hereto which are denoted as exclusive (the
"Exclusive Territories"), and (ii) a
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non-exclusive wholesale distributor of the Nestle Products in and for
the market areas and geographical areas which are listed in Exhibit B-1 and B-3
hereto which are denoted as non-exclusive (the "Non-Exclusive Territories"),
and Distributor hereby accepts such appointments. The Exclusive Territories and
Non-Exclusive Territories are hereinafter sometimes referred to as the
"Territories". Distributor shall sell Nestle Products only to retailers
located within each market area or geographical area in the Territories which
are part of the approved channels of distribution identified in Exhibit B
hereto for each such market area or geographical area, and shall distribute
such Nestle Products only to such customers' facilities located within the
Territories. Distributor's rights as a distributor of Nestle Products shall be
subject to all of the terms and provisions of this Agreement including, without
limitation Section 5 of this Agreement.
b. Upon written notice by Company to Distributor that Company desires
to add market areas or geographic areas located within Distributor's Existing
Markets (as defined in paragraph 5.a of this Agreement) to the Territories
listed in Exhibit B-1 to this Agreement, in accordance with a timetable for
transition identified in such notice (which in all events shall allow for at
least a ninety (90) day transition period), Distributor shall become the
distributor for such market areas or geographic areas. Notwithstanding the
prior sentence, under all circumstances Distributor will have no obligation to
accept the appointment as exclusive distributor for any market area or
geographic area until and unless the Company is able to deliver at lest
eighty-seven and five-tenths percent (87.5%) of the total sales of Nestle
Products in each of the channels of distribution to be assigned to Distributor
on an exclusive basis in such area; but once appointment as exclusive
distributor is accepted by Distributor, any such area shall be deemed an
Exclusive Territory for all purposes hereunder. Upon Distributor's receipt of
any such notice of Company's desire to appoint Distributor as the exclusive
distributor of any channel of distribution or area (provided the appointment
complies with the requirements of this Agreement, including without limitation
this paragraph 1.b), then Distributor and Company shall negotiate in good
faith to establish performance objectives in accordance with paragraph 5.a of
this Agreement, to allow for the transition of responsibility from Nestle to
Distributor for distribution of Nestle Products in such Exclusive Territory
pursuant to the timetable for transition identified in such notice.
c. At such time as Distributor becomes the exclusive distributor of the
Nestle Products for any channel of distribution or area, Distributor agrees not
to distribute or enter into any agreement to distribute products competitive
with the Nestle Products (based upon the formulation and price of such
products) including, but not limited to, frozen novelty products produced by
Chipwich, Eskimo Pie, Frozfruit, Mars (excluding the "Mars territory" as
hereinafter defined), Unilever and Wells, in such channel or such area. Except
as specifically agreed between the parties, Distributor shall not enter into
any new contractual relationship concerning the distribution of any products
competitive
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with the Nestle Products for any channel of distribution or area that
would not be terminable by Distributor upon the effective date that Distributor
becomes the exclusive distributor of Nestle Products for such channel or area.
Distributor agrees that it will terminate all such contracts for a given
channel or area effective upon the effective date of such appointment of
Distributor as exclusive distributor. This paragraph 1.c shall not apply to
any of Distributor's (or its subsidiary's) manufactured products
("Distributor's Products") or to any products sold or distributed by
Distributor (or its subsidiary) pursuant to a contractual obligation with any
of the following companies: Ben & Jerry's Homemade, Inc.; ConAgra, Inc.; Mars,
Inc. (exclusion limited to the "Mars territory"); Presto Food Products, Inc.;
Steve's Homemade Ice Cream, Inc.; and Calip Dairies, Inc. "Mars territory"
means the State of Wisconsin; the State of Illinois (excluding Greene, Madison,
Jersey and Monroe counties); Clinton and Scott counties in Iowa; and the State
of Indiana.
d. Notwithstanding the exclusive distributor rights granted to
Distributor with respect to the Exclusive Territories, it is mutually
understood and agreed that the existing Nestle licensees/distributors
previously disclosed by Company to Distributor shall have the right to continue
selling any Nestle Products for which they are currently authorized.
2. REPRESENTATIONS OF DISTRIBUTOR
Distributor represents and warrants to Company that:
a. Distributor has all permits and licenses necessary for Distributor
to lawfully distribute Nestle Products in the Territories.
b. The relationship of Distributor and Company is that of buyer and
seller and nothing in this Agreement shall be construed to create any other
relationship.
c. Distributor has not paid or agreed to pay any consideration to
Company or any Company officer, director, employee or representative with
respect to entering into this Agreement, nor has it paid or agreed to pay any
franchise fee. Except as provided elsewhere in this Agreement, Company and its
affiliates have neither, directly nor indirectly, orally or in writing
(including, without limitation, the Stock Agreements), represented that Company
will (i) provide outlets or accounts for Nestle Products, (ii) cause the
purchase of Nestle Products from Distributor, (iii) guarantee profits from the
distribution of Nestle Products or (iv) refund the price paid or repurchase
Nestle Products if Distributor is dissatisfied with such Products.
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In reliance on the above representations and warranties, Company has
entered into this Agreement with Distributor.
3. OPERATION
a. All orders which Company receives from Distributor for Nestle
Products shall be subject to acceptance by Company. Company will use all
reasonable efforts to accept and fill orders as promptly as practicable,
subject, however, to delays beyond Company's reasonable control. Distributor
agrees to use its best efforts to place orders for Nestle Products with Company
at least five (5) business days in advance of the requested delivery date.
b. Company reserves to itself the unqualified right to manage its
business in all respects, including, but not limited to, the right to maintain
or alter the flavors, formula, ingredients, labeling, or packaging of any
Company products. Orders may be filled by Company from such Company production
facilities as Company shall determine.
c. This Agreement shall extend only to those Nestle Products and
package sizes listed on Exhibit A. Provided, however, that it is expressly
agreed that this Agreement may be extended by Company to include Dole(R) sorbet
and other Company frozen novelty and frozen dessert products from time to time
by ninety (90) days prior written notice to Distributor, in which case the
names of such other products and package sizes shall be entered on an amended
Exhibit A and such other products shall be deemed to be Nestle Products
hereunder. It is acknowledged and agreed that for the purposes of this
Agreement, the term "frozen dessert" shall mean and refer to ice cream,
sherbet, ice milk and frozen yogurt products designed for take home
consumption, including, but not limited to ice cream cakes, ice cream pies, ice
cream nutrolls, ice cream parfaits and ice cream tortes; excluding, however any
dairy-based or other frozen dessert products sold in half-gallon, quart or
pint-sized containers for a suggested retail price on a non-promoted basis
equal to or greater than an average of one dollar twenty-five cents ($1.25) per
pint, one dollar seventy cents ($1.70) per quart, and three dollars ($3.00) per
one-half gallon over a fifty-two (52) week period adjusted by the CPI Index
(December 1993 to equal 100 for this purpose) but, notwithstanding the
foregoing, not to include any Dole(R) sorbet products referenced above.
Company shall have the right, at any time and in its sole discretion, to
discontinue the sale of any Nestle Products, packages or containers on a
national, regional, state-wide or media-coverage area basis or to a particular
class of trade. Company shall have the right, at any time, upon ninety (90)
days prior written notice to Distributor, to delete one or more Territories
from this Agreement. Company and Distributor also may from time to time, by
mutual agreement, extend this Agreement to include other market or geographical
areas, either on an exclusive or non-exclusive basis, in which case the
description(s) of such other market or geographical areas shall be
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entered on an amended Exhibit B, and such other market or geographical
areas shall be deemed to be part of the Exclusive Territories or Non-Exclusive
Territories hereunder, as the case may be. In addition, Company may at any
time, upon ninety (90) days prior written notice to Distributor, extend this
Agreement to other channels of distribution, or delete any or all of the
channels of distribution in any of the Territories, provided that Company shall
not have the right to delete the grocery channel in a Territory unless it also
deletes all other channels in such Territory, in which case the description(s)
of such other channels of distribution shall be entered on or deleted from an
amended Exhibit B, and thereafter only the channels of distribution listed on
such revised Exhibit B, shall be deemed to be authorized channels of
distribution hereunder for the Territories listed. In the event of any changes
in (i) the products comprising the Nestle Products, (ii) the market or
geographical areas comprising the Territories, (iii) the channels of
distribution assigned to Distributor, or (iv) the exclusive or non-exclusive
status of any of the Territories or channels of distribution subject to this
Agreement, the parties shall negotiate in good faith mutually acceptable
changes to any performance standards or objectives which may be applicable to
the Territories or channels of distribution affected by such changes.
d. Distributor shall pay Company for Nestle Products purchased by
Distributor from Company according to Company's then prevailing distributor
price list in effect at the time of shipment of Distributor's order. Terms of
payment are 28 days net from date of invoice. Interest charges will be
assessed on all past due balances at an annual percentage rate equal to (i) the
prime interest rate in effect at Citibank N.A. for its preferred commercial
borrowers, plus one percent (1%), or (ii) the highest rate permitted by law,
whichever is less. Credit terms are subject to change if any outstanding
balance remains unpaid after 28 days. All Nestle Products shall be sold to
Distributor f.o.b. Distributor's warehouses from such Company location(s) as
may be designated by Company from time to time, unless Distributor elects to
arrange for pickup at Company's facilities or warehouses. Company reserves the
right to change the Company shipping location(s) upon reasonable notice to
Distributor. Title and risk of loss shall pass to Distributor either (i) upon
delivery of the Nestle Products to Distributor's warehouses, or (ii) upon
delivery to Distributor or a carrier selected by Distributor if Distributor
elects to pick up Nestle Products at Company's facilities or warehouses.
Company shall use its best efforts to give Distributor at least thirty (30)
days prior notice of any changes in price, or other terms and conditions of
sale; however, Company reserves the right to implement changes in credit terms
effective upon notice. Once Nestle Products are received by Distributor or its
customer, the same may not be returned to Company without prior approval of the
Company.
Company shall inform Distributor of its prices in writing from time to
time, but Company shall have the unlimited right to change prices and establish
other terms and
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conditions of sale at any time, subject to its notice obligation set
forth in the preceding paragraph; however, Company shall not have the right to
change terms relating to delivery, title or risk of loss, except with
Distributor's prior written approval. Distributor shall be free to establish
its resale prices and terms of sale for Nestle Products, and the parties
represent and acknowledge that they have no understanding that controls or
restricts any such resale prices or terms of sale.
e. Company may extend credit terms to Distributor, subject to prior
approval in writing by an authorized representative of Company. Distributor
shall promptly pay all invoices rendered by Company and shall furnish such
credit information (including, but not exclusively limited to, full and
adequate financial statements) as may be requested from time to time by Company
to evaluate credit terms, if any, requested by Distributor.
f. Company shall not deliver to Distributor any Nestle Products which,
at the time of delivery, have less than sixty (60) days remaining of shelf
life.
g. Company may make available to Distributor from time to time display
freezers for delivery to retail accounts. Such units would be provided on a
lease basis, on such terms as the parties may mutually agree.
h. Without limitation of paragraph 4.f, Company shall notify
Distributor, as promptly as practicable, of any material claim related to any
Nestle Product. For purposes of this paragraph 3(h), "material claim" shall
mean a claim which is reasonably likely to require action by Distributor to
maintain its customer relationships or protect the health of consumers.
4. GENERAL OBLIGATIONS OF COMPANY
a. Company, at Company's sole discretion, will make available for use
by Distributor point-of-sale advertising and promotional materials relating to
Nestle Products.
b. Company shall use its best efforts to (i) manufacture and provide to
Distributor an adequate and timely supply of high quality Nestle Products to
meet Distributor's requirements hereunder, (ii) maintain, at Company's expense,
marketing programs (including, but not limited to, media, consumer and trade
promotions) as it reasonably deems appropriate, in support of the Nestle
Products on an on-going basis, and (iii) provide such reasonable co-operation,
advice and assistance to Distributor as Distributor may request from time to
time in support of Distributor's sales efforts under this Agreement; provided,
however, that Company shall have no obligation to become actively involved in
Distributor's distribution and sales activities. In the event Distributor
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is unable to satisfy any requirement set forth in this Agreement or otherwise
mutually agreed upon in writing by Company and Distributor for any of the
Territories due to Company's failure to perform its best efforts obligations as
hereinabove provided, then such requirement shall be reduced retrospectively as
appropriate to reflect the effect of such failure by Company.
c. Company agrees to use its best efforts to cause other distributors,
subdistributors and customers in channels of distribution or market areas other
than those listed in Exhibit B hereto, not to sell or resell to accounts in the
Exclusive Territories for sale in the channels of distribution listed in
Exhibit B with respect to said Exclusive Territories. Upon notification from
Distributor, Company shall promptly look into and use its best efforts to take
appropriate action to cause any unauthorized sales or resales in the Exclusive
Territories to terminate. As used in this Agreement, "best efforts" means
reasonable use of available resources to accomplish the objectives of this
Agreement. Nothing in this Agreement shall (i) obligate Company to take any
action or institute any proceeding in the event that any other individual or
business entity sells or distributes Nestle Products in the Exclusive
Territories (unless such individual or business entity is under a contractual
obligation to Company not to sell Nestle Products in the Exclusive Territories)
or (ii) limit or affect the right of Company to sell Nestle Products to other
customers or distributors who are located outside the Exclusive Territories or
who are located inside the Territories but would resell Nestle Products only
outside the Exclusive Territories. In the event Distributor is unable to
satisfy any requirement set forth in this Agreement or otherwise mutually
agreed upon in writing by Company and Distributor for any of the Territories
due to Company's failure to prevent unauthorized and unanticipated (at the time
such requirement was established) shipments of Nestle Products into such
Territories by third parties, then such requirement shall be reduced
retrospectively as appropriate to reflect the effect of such unauthorized
shipments.
d. Any use by Distributor of any trademarks, trade names or logos
owned by or licensed to Company (collectively the "Trademarks"), in both form
and manner, shall be at the sole discretion of Company. Except as otherwise
provided in paragraph 5.f., all permitted use of the Trademarks by Distributor
shall cease immediately upon written notification by Company to Distributor to
stop such use or upon termination of this Agreement for any reason.
Distributor shall not (i) adopt any trademark, logo or trade name which, in the
judgment of Company, is confusingly similar to any of the Trademarks or (ii)
contest or assist others in contesting the validity or ownership of (or
Company's license to use) any of the Trademarks. Distributor agrees that, as
between Company and Distributor, the Trademarks are valid and existing
trademarks, trade names and logos of Company and are the sole and exclusive
property of Company. Nothing in this Agreement shall give Distributor any
right, title, or interest in any of the Trademarks or in the goodwill
associated with any of the Trademarks, except the right to use the
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Trademarks in strict compliance with the terms and conditions of this
Agreement or as may be otherwise specified in writing by Company. All goodwill
associated with the use of any of the Trademarks by Distributor shall inure to
the benefit of Company or the licensors of such Trademarks. Distributor shall
change or discontinue the way in which Distributor uses any Trademarks upon
written notice from Company to do so. This Agreement is not intended to be and
shall not be construed as a license of the Trademarks.
e. Company warrants that, as of the date of delivery to Distributor,
the Nestle Products sold to Distributor shall comply with all applicable local,
state and federal laws and regulations and shall be wholesome, merchantable and
fit for human consumption. Company shall indemnify and hold Distributor
harmless from and against any and all liability, loss or damage, cost or
expense (including court costs and reasonable attorney fees), arising out of a
breach of the warranty of Company contained in this paragraph.
f. Company shall immediately inform Distributor of any claim, suit,
proceeding or action connected with or relating to any Nestle Product sold to
Distributor of which Company becomes aware if an allegation of liability on the
part of Distributor is involved, and Distributor shall have the right to assume
control of any such suit, proceeding or action, unless Company is named as a
defendant. Company agrees to indemnify, defend and hold Distributor and its
affiliates harmless from and against any and all liability, loss or damage,
cost or expense (including, with respect to the defense of third-party claims,
court costs, litigation expenses, out-of-pocket costs and reasonable attorneys'
fees) connected with or relating to (i) Company's acts or omissions in
connection with its performance of, or its failure to perform, any of its
obligations under this Agreement, except to the extent in either case such
liability, loss or damage, cost or expense is due to the negligence of
Distributor or to the acts of unrelated third parties, (ii) any breach by
Company of any representation, warranty or covenant made by Company hereunder,
(iii) any defects in Company's manufacturing, packaging, storage and delivery
to the Distributor of the Nestle Products, or (iv) Nestle Products which are
misbranded or adulterated at the time of delivery to Distributor.
5. GENERAL OBLIGATIONS OF DISTRIBUTOR
Distributor shall have the following general obligations:
a. Distributor shall convert Company's present method of distribution
of Nestle Products in the Exclusive Territories from sales via centralized
grocery store/chain warehousing and broker representation to a system of direct
store delivery ("DSD") and Distributor sales representation for grocery stores.
Following execution of this Agreement, or following Distributor's appointment
as exclusive
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distributor pursuant to a notice to Distributor under paragraph 1.b of
this Agreement, Distributor and Company shall negotiate in good faith to
establish performance objectives for distribution of Nestle Products in grocery
stores for Distributor's Existing Markets in the Exclusive Territories, to be
completed prior to such transition dates as may be mutually agreed upon in
writing by Company and Distributor for such markets, and upon completion of
said mutually-agreed performance objectives for such markets, Distributor and
Company shall cooperate in arranging for an orderly transition to Distributor
of the responsibility for the distribution of the Nestle Products in such
markets, but in all events prior to any applicable transition dates which have
been mutually agreed upon by the parties or which have been set forth in a
notice to Distributor from the Company pursuant to paragraph 1.b of this
Agreement. The factors to be considered in negotiation of performance
objectives for Nestle Products for each channel of distribution in the
Exclusive Territories shall include, without limitation, (1) volume, (2) market
share, (3) ACV distribution, (4) merchandising, (5) promotions, (6) displays,
(7) financial budget and (8) reporting. "Distributor's Existing Markets" shall
mean all markets in which Distributor and/or its subsidiary Edy's Grand Ice
Cream currently has achieved distribution of Distributor's products in grocery
stores representing at least fifty percent (50%) All Commodity Volume in the
market, and where Distributor or Edy's has operated for at least two years.
During the transition to DSD distribution and thereafter during the term of
this Agreement, Distributor shall utilize its best efforts to maintain
competitive retail price levels and maintain or improve distribution levels of
Nestle Products in the various market areas and geographical areas comprising
the Exclusive Territories. For the purposes of this paragraph 5.a the term
"best efforts" shall mean and refer to (i) Distributor's reasonable use of
available resources to accomplish an orderly transition to DSD distribution in
accordance with any applicable transition dates which have been mutually agreed
upon by the parties; and (ii) appropriate reduction by Distributor of its
distribution margins to permit the maintenance of competitive retail price
levels in the Exclusive Territories (excluding Florida and Atlanta) relative to
the accounts served by Distributor with Nestle Products, so as to maintain the
average profit levels existing for such Exclusive Territories and accounts
(after adjusting for the effect of Company's changeover from licensing to
copacking and self-manufacturing the Nestle Products) for the six-month periods
prior to the respective dates of transition to DSD distribution of such
Exclusive Territories and accounts. Company acknowledges and agrees that
Distributor's obligation to reduce distribution margins as set forth above in
this paragraph shall be contingent upon (i) Company, in its reasonable
determination, reducing its prices of the Nestle Products to Distributor to
reflect the value of Distributor's DSD distribution system and sales
representation, such reduced distributor prices to be effective as of and from
the date of each such transition, or (ii) Distributor's receipt of equivalent
value as if such reduction in wholesale prices of the Nestle Products had been
provided by Company to Distributor, as mutually agreed by the parties.
Distributor shall purchase Nestle Products from Company only, shall maintain at
all times
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a sufficient inventory of Nestle Products for Distributor's customers
and shall provide qualified personnel to furnish "Full Service" Direct Store
Delivery ("F/S-DSD") of Nestle Products for all customer accounts served by
Distributor in the Territories. The term "F/S-DSD" means that employees of the
Distributor will use their best efforts to provide full retail case services
for its customers and, if permitted, physically stock Nestle Products in the
stores of the customer with the intention of maintaining a constant "in stock"
condition, constructing displays of Nestle Products in the store and handling
or coordinating the handling of the Nestle Products throughout the entire
distribution process in order to meet the distribution and product quality
standards set forth in Exhibit C hereto.
b. Distributor shall use its best efforts to promote the sale,
distribution (on a DSD basis) and use of Nestle Products in the Territories and
use its best efforts to build, maintain and expand maximum and competitive
distribution of Nestle Products in all sections of the Territories in a manner
reasonably satisfactory to Company; however, in the event Distributor is unable
to achieve DSD distribution for any particular account within a reasonable
period of time, then Company shall have the right to establish whatever method
of distribution for such account it may deem appropriate, as determined by its
Vice President-Sales. Distributor acknowledges that Company's distributor
pricing structure for Nestle Products will vary among different markets and
geographic areas due to local competitive conditions. Distributor agrees that
it will not ship or sell Nestle Products intended for one market or area into
another market or area without Company's prior approval, if Company's
distributor prices for the Nestle Products are different for such markets or
areas. A material breach by Distributor of its obligations to use its best
efforts under this Section 5, which continues after notice and opportunity to
cure as provided in Section 6 hereof, shall constitute grounds for termination
of this Agreement. Distributor will use its best efforts to achieve such
performance objectives in each of the Exclusive Territories as may be mutually
agreed upon in writing by Company and Distributor from time to time.
c. Distributor shall procure and maintain during the term of this
Agreement workmen's compensation insurance as required by applicable law, as
well as occurrence basis automobile liability insurance on all motor vehicles
used by Distributor to distribute Nestle Products, with insurers reasonably
acceptable to Company and naming Company and the owner of any of the Trademarks
appearing on Nestle Products as additional insureds and with limits of not less
than $2,000,000 combined single limit per occurrence for bodily injury and
property damage. Distributor shall provide Company with a certificate of
insurance evidencing such coverages, which certificate must provide that the
insurer shall give Company at least thirty (30) days prior written notice of
any cancellation or material change in any such coverage.
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d. Distributor shall procure and maintain during the term of this
Agreement occurrence basis comprehensive general liability insurance (including
products liability and contractual liability coverage) with insurers reasonably
acceptable to Company and naming Company and the owner of any of the Trademarks
appearing on Nestle Products as additional insureds and with limits of not less
than $20,000,000 combined single limit per occurrence for bodily injury and
property damage. Such insurance minimum shall be reviewed by the parties at
five-year intervals and shall be adjusted as appropriate by mutual agreement of
Distributor and Company. Distributor shall provide Company with a certificate
of insurance evidencing such coverages, which certificate must provide that the
insurer shall give Company at least thirty (30) days prior written notice of
any cancellation or material change in any of such coverages. Distributor
shall use its best efforts to ensure that Nestle Products in its possession or
under its control which are involved in an insurance claim shall not be
transferred to a third party, except with Company's prior written approval.
e. Distributor shall immediately inform Company of any claim, suit,
proceeding or action connected with or relating to any Nestle Product sold to
Distributor of which Distributor becomes aware and, if an allegation of
liability on the part of Company is involved, Company shall have the right to
assume control of any such suit, proceeding or action. Distributor agrees to
indemnify, defend and hold Company and its affiliates, including the owners of
the Trademarks, harmless from and against any and all liability, loss or
damage, cost or expense (including, with respect to the defense of third-party
claims, court costs, litigation expenses, out of pocket costs and reasonable
attorneys' fees) connected with or relating to (i) the distribution, sale,
advertisement, storage or transportation by Distributor of Nestle Products
purchased from Company pursuant to this Agreement, (ii) Distributor's acts or
omissions in connection with its performance of, or its failure to perform, any
of its obligations under this Agreement, except to the extent in either case
such liability, loss or damage, cost or expense is due to the negligence of
Company or to the acts of unrelated third parties, (iii) any breach by
Distributor of any representation, warranty or covenant made by Distributor
hereunder, (iv) any acts or omissions of Distributor's subdistributors
authorized under paragraph 5.l of this Agreement (but excluding (x) any act or
omission of an authorized subdistributor which relates to the distribution of
Nestle Products purchased directly from Company, and not from Distributor, or
(y) any failure or refusal by any authorized subdistributor, other than Edy's
Grand Ice Cream, to adjust distribution margins as contemplated by paragraph
5.a hereof), or (v) any defects in Nestle Products arising after the delivery
of such Products to Distributor unless such defects are due to the negligence
of Company.
f. In the event Company permits Distributor to place any Company trade
name, logo, trademark, device or advertising matter on any of Distributor's
distribution vehicles, Distributor agrees that it will cease using (and will
remove) any such Company
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trade name, logo, trademark, device or advertising matter from Distributor's
distribution vehicles within thirty (30) days after the termination of this
Agreement, unless Company otherwise authorizes in writing the continuance of
Distributor's use of any such trade name, logo, trademark, device or
advertising matter.
g. Distributor shall maintain complete and accurate records of orders
to and deliveries from Company, as well as sales and inventory records, on such
forms as may be mutually agreed upon by the parties, shall submit to Company
reports based on such records, and shall provide Company access to such records
upon reasonable notice during Distributor's regular business hours. Such
records shall be structured so as to enable Distributor to conduct or
participate in product withdrawals and recalls by tracing or locating to the
extent possible under Distributor's record-keeping system all other units of
the same lot in the distribution chain, provided all such units have been
marked by Company with a clearly visible lot code. Distributor agrees to
maintain true and accurate records with respect to all sales of Nestle Products
sold during each calendar year during the term hereof and shall deliver to
Company, within 45 days after the close of each calendar year, a statement
signed and certified by a duly authorized financial officer of Distributor
certifying as to the amount of sales of Nestle Products sold in the Territories
during the preceding calendar year. Upon request from Company, Distributor
shall furnish to Company, on a monthly basis, a record of sales (by product and
by outlet) of all Nestle Products sold to each customer in each of the market
areas and geographical areas comprising the Territories during the previous
calendar month, in a machine readable format reasonably acceptable to Company.
Upon reasonable request, Distributor shall also furnish to Company in such
format and at such frequency as Company may reasonably require (within the
capabilities of Distributor) a record of sales (by product and by outlet) of
Nestle Products sold to a particular key customer or customers in any area of
the Territories. Company, through its duly authorized representatives, shall
upon reasonable notice and during Distributor's regular business hours have the
right to examine Distributor's books and records relating to sales of Nestle
Products in the Territories and to make copies or extracts thereof. Distributor
shall render all assistance reasonably requested by Company in connection
therewith. Distributor shall also permit Company's personnel on reasonable
notice to make periodic audits and inspections of its facilities and vehicles
used for storage and distribution of Nestle Products to determine compliance
with the terms and conditions of this Agreement. Distributor agrees to permit
Company, upon reasonable notice to Distributor, to conduct semi-annual tests at
Company's expense to evaluate the effectiveness of Distributor's recall
system.
h. Distributor shall at all times conduct itself in a professional
manner and shall comply withsuch guidelines and directives regarding Nestle
Product representation
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as may reasonably be issued by Company from time to time. Distributor
shall provide such additional trucks and warehousing capability as may be
reasonably necessary to provide a level of F/S-DSD service for Nestle Products
that is satisfactory to Distributor's customers. Distributor shall (i)
maintain adequate facilities for the storage, warehousing and prompt delivery
of Nestle Products; (ii) permit joint sales efforts by its salespeople with
Company sales personnel; (ii) hold sales meetings and business reviews with
Company sales personnel as needed; (iv) provide such reports and forecasts
relating to sales of Nestle Products as may be reasonably required by Company;
(v) handle special orders or give special service when reasonably necessary;
and (vi) reasonably cooperate at all times with Company personnel.
i. Distributor shall assert any complaints or claims arising out of or
relating to a shipment of Nestle Products to Distributor within thirty (30)
days of Distributor's receipt of such shipment; otherwise the same shall be
deemed to have been waived, unless such complaints or claims involve damage to
or defects in Nestle Products which are proven to be attributable to
manufacture.
j. Distributor shall comply with all applicable federal, state and
local laws, rules and regulations pertaining to the performance of its
obligations under this Agreement and with all reasonable policies established
by Company and communicated to Distributor which relate in general to
distributors of Nestle Products. Distributor shall administer and communicate
all trade promotions so as to ensure that all customers in the geographical
area covered by the promotion are aware of the trade promotion and that such
promotions are offered to each such customer on a fair and proportionately
equal basis. Distributor shall maintain in full force and effect all permits
and licenses necessary to distribute Nestle Products in the Territories.
k. Distributor shall use its best efforts to keep Company informed of
all market and economic conditions in the Territories of which Distributor
becomes aware and which may materially affect the sale of Nestle Products.
l. Distributor will not establish any subdistributorships or
subdistribute Nestle Products to or through any other distributor without the
prior written consent of Company, which shall not be unreasonably withheld
except that Distributor shall have the right to continue selling through its
current first-tier subdistributors which are listed on Exhibit D hereto, in the
channels of distribution indicated in said Exhibit D. Company acknowledges
that Distributor has distributed products to various independent distributors
from time to time in various markets or geographical areas which are not served
directly by Distributor. Distributor agrees to use its best efforts to work
with Company to either (i) establish distribution arrangements with such
independent distributors whereby said distributors would provide distribution
services on terms consistent with the terms of this
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Agreement and otherwise satisfactory to Company (in which event and
with Company's approval such distributors may be added to Exhibit D hereto as
authorized subdistributors), or (ii) establish distribution agreements on a
direct basis between Company and said independent distributors on terms
consistent with this Agreement and otherwise satisfactory to Company. Except
as otherwise provided in this Agreement, Distributor agrees not to sell to any
person Distributor has reason to believe will redistribute or subdistribute
Nestle Products. Distributor shall not convert Nestle Products to any other
package, container or use. Distributor agrees that it will require its
authorized subdistributors to restrict their sales of Nestle Products to only
those channels of distribution and market areas where Distributor is authorized
to sell Nestle Products hereunder. Distributor agrees that it will not sell
Nestle Products to a subdistributor if Distributor knows or has convincing
reason to believe that such subdistributor is selling or intends to sell Nestle
Products outside of the Territories or to a customer or customers in any
channel of distribution to which Distributor is not authorized to sell Nestle
Products pursuant to this Agreement. No arrangements or dealings between
Distributor and its subdistributors shall modify or limit Distributor's
obligations to Company under this Agreement.
m. Distributor shall use its best efforts to cause its personnel and
its authorized subdistributors' personnel to attend Company sales, marketing,
and related meetings and training sessions as may be reasonably scheduled by
Company and shall consistently and effectively use such Company training
programs and materials, as provided, in Distributor's operation.
n. Distributor shall at all times use its best efforts to preserve and
enhance the high quality image, reputation, and goodwill of Company and the
Nestle Products.
o. Distributor shall be open for business during customary business
hours and days to be competitive with major competition. Distributor shall
provide regular deliveries of Nestle Products with sufficient frequency to be
competitive with major competition. Distributor shall maintain a sufficient
inventory of Nestle Products in order to fill, deliver and handle all orders
placed by customers in the Territories, including orders for new items and
introductory offers.
p. Distributor shall provide for the safe and proper handling,
storage, placement, and installation of Company point of sale materials and
shall display such materials in a conspicuous place wherever possible at each
retail location.
q. Distributor shall submit for Company's prior written approval all
advertising, promotional materials, copy, literature or artwork referring or
relating to Nestle Products and/or the Trademarks prior to any use or
distribution thereof. Upon
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receipt of written notice from Company, Distributor shall discontinue
any advertising or promotional practices that Company finds injurious to
Company's image or business or to the Trademarks.
r. All pallets furnished by Company shall remain the property of
Company and such pallets, or pallets of equal quality received in exchange
therefor, shall be returned to Company or so exchanged at Distributor's
warehouses.
s. Distributor shall be responsible for all federal, state and local
sales taxes and other taxes of a similar nature that may be assessed against
Distributor in connection with the sale of any Nestle Products.
6. TERM AND TERMINATION
This Agreement has no stated term. Although the parties desire this
Agreement to be mutually profitable, Distributor acknowledges and agrees that
Company has made no representation or warranty that this Agreement will be
extended or continue for any period of time. Accordingly, all investments made
by Distributor are at its own risk and not in reliance on the expectation of
the continuation of this relationship. Under no circumstances shall this
relationship be deemed to constitute that of franchisor and franchisee, and the
parties expressly disclaim any intention to create a franchise arrangement.
This Agreement may be terminated by the Company at any time for any
reason, with or without cause, upon ninety (90) days prior written notice
thereof to Distributor.
This Agreement may be terminated by Distributor upon ninety (90) days
prior written notice in the event that those certain two Right of First Refusal
Agreements of even date herewith between an affiliate of Company and Messrs.
William F. Cronk, III and T. Gary Rogers, respectively, (and their respective
spouses, together with certain testamentary trusts) have been terminated
pursuant to Section 6(l) of each said Agreement.
In addition, in the event of a material breach by one party of any of
the terms of this Agreement, the non-breaching party shall have the right, at
its option, to terminate this Agreement. In such event, the non-breaching
party shall give written notice to the breaching party of such breach and the
latter party shall then have thirty (30) days (or ten (10) days in the case of
a monetary breach) within which to cure such breach; provided, however, that no
such notice with respect to a sales or distribution-related breach may be given
unless, within thirty (30) days prior to giving such notice, a responsible
representative of the non-breaching party shall have met with responsible
personnel of the
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breaching party in the relevant market and discussed the breach. If the
breach is not cured within the applicable time period, then the breaching party
shall be in default and, in addition to any other rights or remedies it may
have under this Agreement or under applicable law, the non-breaching party
shall also have the right to immediately terminate this Agreement on written
notice to the party in default.
Notwithstanding anything to the contrary contained in this Agreement,
Company may, if Distributor is in breach of any material obligation of
Distributor under paragraph 5 of this Agreement after notice and opportunity to
cure, take such action as may reasonably be necessary to maintain the
uninterrupted distribution of Nestle Products in the Territories, including
(but not limited to) the servicing of customers either directly or through
other distributors, and upon demand Distributor shall reimburse Company for
costs and expenses incurred by or on behalf of Company in taking such action to
the extent that such costs and expenses exceed those which Company would have
incurred if such breach had not occurred. In exercising the rights set forth
in the preceding sentence, Company shall use its best efforts to avoid taking
actions which would prevent Distributor from remedying such breach, as long as
Distributor has commenced in good faith to do so and is diligently continuing
such efforts to remedy.
This Agreement may be terminated immediately by either party upon
(i) the filing of a petition proposing the adjudication of the
other party as a bankrupt or insolvent or the financial reorganization
of such other party or any arrangement by such other party with its
creditors, whether pursuant to the Federal Bankruptcy Act or any
similar federal or state proceeding, unless such petition is withdrawn
or dismissed within sixty (60) days after the date of its filing, or
(ii) the admission in writing by the other party of its
inability to pay its debts when due, or
(iii) the appointment of a receiver or trustee for the
business or property of the other party, unless such appointment shall
be vacated within thirty (30) days of its entry, or
(iv) the making by the other party of an assignment for the
benefit of its creditors or the dissolution or liquidation of the
other party.
In the event of the termination of this Agreement, Company shall have
the right to cancel unfilled orders and to stop or re-route any shipment of
Nestle Products inroute to Distributor. Within ten (10) days after the
termination of this Agreement, Distributor
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shall return to Company all property belonging to Company in Distributor's
possession or control.
Distributor shall not be entitled to any compensation or damages under
any state franchise statute with respect to this Agreement, including the
termination thereof, or the distribution of Nestle Products pursuant hereto.
7. COMPANY'S PURCHASE OPTION UPON TERMINATION
Upon termination pursuant to paragraph 6 above, Company shall have the
option, exercisable upon thirty (30) days prior written notice to Distributor,
to purchase Nestle Products in Distributor's inventory by paying the net
purchase price paid by Distributor to Company for such Nestle Products. Company
reserves the right to reject any Nestle Products not in good and marketable
condition.
Any credits on account provided by the Company to Distributor or any
outstanding indebtedness due to Company from Distributor may be offset as a
credit against any sums payable by Company to Distributor under the preceding
subparagraph.
8. PROHIBITION AGAINST ASSIGNMENT
Distributor shall not assign this Agreement or any of its rights or
obligations under this Agreement without the prior written consent of Company.
Any dissolution, merger, consolidation, or other reorganization of Distributor,
or the sale of all or substantially all of Distributor's assets, shall be
deemed an assignment.
Notwithstanding any other provision of this Agreement the sole remedy
for breach of the foregoing provision shall be the right to terminate this
Agreement pursuant to Section 6 hereof immediately upon notice to Distributor.
9. NO INCIDENTAL DAMAGES, ETC.
a. In no event (including, without limitation, any termination of this
Agreement) shall either party hereto be liable to the other party or any other
person for any incidental, indirect, special or consequential damages of any
nature whatsoever arising out of or relating to this Agreement, such party's
performance under this Agreement, or the sale of Nestle Products by Company to
Distributor.
b. In no event (including, without limitation, any termination of this
Agreement) shall Company be liable to Distributor or any other person for any
monies or
17
<PAGE> 141
other consideration invested in Distributor's business or otherwise expended
by Distributor in the course of performing its obligations hereunder.
10. MISCELLANEOUS
a. The failure of either Company or Distributor at any time or times
to enforce any provision of this Agreement shall in no way be construed as a
waiver of such provision and shall not affect the right of that party at a
later time to enforce each and every such provision. Waiver of any breach of
this Agreement by either party shall not be deemed to be a waiver of any
subsequent or continuing breach of this Agreement.
b. Any notices required or permitted to be given hereunder shall be in
writing, delivered personally or by certified United States mail or by
overnight air courier service to:
<TABLE>
<CAPTION>
Company Distributor
<S> <C>
Nestle Ice Cream Company Dreyer's Grand IceCream, Inc.
1700 E. 17th Avenue 5929 College Avenue
Columbus, Ohio 43219 Oakland, California 94618-1391
Attention: President Attention: Paul R. Woodland
with a copy to: with a copy to:
Nestle USA, Inc. Edmund R. Manwell, Esq.
30003 Bainbridge Road Manwell & Milton
Solon, Ohio 44139 101 California Street, 37th Floor
Attention: Wayne F. Erdelack San Francisco, California 94111
Deputy General Counsel
</TABLE>
or to such other addresses as may be designated in writing by either party.
c. Either party shall be excused from performance under this Agreement
while and to the extent that such performance is prevented by an Act of God,
strike or other labor dispute, war or war condition, riot, civil disorder,
government regulation, embargo, fire, flood, accident or any other casualty
beyond the reasonable control of such party. During any period during which
performance is excused, the non-disabled party may seek to have its needs,
which would otherwise be met hereunder, met by others without liability to the
disabled party hereunder; provided, however, that if such disability continues
for more than sixty (60) days, the non-disabled party shall have the right to
terminate this Agreement upon written notice to the disabled party.
18
<PAGE> 142
d. Distributor is and will at all times during the term of this
Agreement remain an independent contractor. It is not the intention of Company
or Distributor by this Agreement or otherwise to undertake a joint venture,
partnership, agency or franchisor-franchisee relationship or to make
Distributor in any sense an agent of Company. Under no circumstances shall any
employee of Distributor be deemed or construed to be an employee of Company.
Company shall not be liable for any injuries or damages incurred by Distributor
as a result of its activities in the performance of this Agreement. Distributor
shall not have any authority to create or assume in Company's name or on its
behalf any obligation, express or implied, or to act or purport to act as
Company's agent or legally empowered representative for any purpose whatsoever.
Neither party shall be liable to any third party in any way for any engagement,
obligation, commitment, contract, representation or transaction or for any act
or omission to act of the other party, except as expressly provided for herein.
e. Time is of the essence in this Agreement.
f. In the event any litigation or other legal proceedings are
instituted to enforce or declare the meaning of any provision of this Agreement
or as a result of the default of any party hereunder, the prevailing party
shall be entitled to its reasonable costs and expenses associated therewith,
including court costs, litigation costs and reasonable attorneys' fees.
g. This Agreement constitutes the entire agreement and understanding
between the parties hereto, and shall not be amended or modified except by a
writing signed by Distributor and by a duly authorized officer of Company.
h. This Agreement shall become effective on the date hereinabove set
forth and shall continue in effect until terminated as provided herein.
i. This Agreement shall in all respects be governed by, construed and
enforced in accordance with the laws of the State of Delaware. The parties
further specifically agree that any action or proceeding arising out of or in
connection with this Agreement shall be venued in a federal or state court of
appropriate subject matter jurisdiction located in such State and the parties
hereto consent to the jurisdiction of each of said courts. The illegality or
unenforceability of any provision of this Agreement shall not impair the
legality or enforceability of any other provision.
j. Each of the parties hereto shall pay and discharge, at its own
expense, any and all expenses, charges, fees and taxes arising out of or
incidental to the carrying on of its business and the performance of its
obligations under this Agreement, including,
19
<PAGE> 143
without limitation, workmen's compensation, unemployment insurance and social
security taxes levied or assessed with respect to any of its employees. Each
of the parties shall indemnify, defend and hold the other harmless from and
against any and all liability, loss or damage, cost or expense (including court
costs, litigation costs and reasonable attorney fees) arising out of or
resulting from any claims, demands, suits or causes of action, of whatsoever
nature and by whomsoever asserted, in any way relating to such party's
expenses, charges, fees and taxes referred to in this subparagraph.
k. No representation, promise, inducement or statement of intention
other than those set forth in this Agreement has been made by Company or
Distributor and neither party shall be bound by or liable for any other alleged
representation, promise, inducement or statement of intention. Notwithstanding
anything to the contrary in any prior Agreement between Company and
Distributor, this Agreement cancels and supersedes all previous distributor
agreements, written or oral, between Company and Distributor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
NESTLE ICE CREAM COMPANY
By: _________________________
Its: ________________________
DREYER'S GRAND ICE CREAM, INC.
By: _________________________
Its: ________________________
20
<PAGE> 144
LIST OF EXHIBITS
EXHIBIT A: List of Nestle Products
EXHIBIT B: Territories and Authorized Channels of Distribution
EXHIBIT C: Product Handling Requirements
EXHIBIT D: Authorized Subdistributors
21
<PAGE> 145
EXHIBIT A
LIST OF NESTLE PRODUCTS
* All Nestle and Carnation branded frozen novelty products
* All Carnation branded ice cream products
* Frozen novelty products produced under other brands as to which Nestle
controls the rights through master licensing agreements:
* Disney Characters
* Dole(R)
* Drumstick(R)
* Heath(R)
* The Flintstones(R)
* Frosty Paws(R) frozen treats for dogs
For purposes of this Agreement, the term "frozen novelty products"
shall mean the following products: ice cream products, water ices, sherbet and
ice milk products, and frozen confections.
The Nestle Products to be distributed to the Grocery category shall
consist of (i) frozen novelty products packaged in multipacks and (ii)
Carnation brand packaged ice cream. The Nestle Products to be distributed to
the Special Markets category shall consist of all Nestle and Carnation branded
frozen novelty products when packaged for sale on a single unit or individual
bulk sales basis. For purposes of this Agreement, "Special Markets" shall mean
all channels of distribution other than grocery stores and warehouse clubs such
as "Sam's".
22
<PAGE> 146
EXHIBIT B-1
TERRITORIES FOR GROCERY STORE DISTRIBUTION
Non-Exclusive
Exclusive Territories Territories
--------------------- -------------
23
<PAGE> 147
EXHIBIT B-2
SPECIAL MARKETS
II. EXCLUSIVE TERRITORIES AND AUTHORIZED CHANNELS OF DISTRIBUTION
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
================================================================================================
TERRITORY CONVEN. DRUG FOOD MILITARY SCHOOLS SPORTS/ STREET THEATERS THEME
STORES* STORES SVC.** SPECIAL VENDING PARKS
EVENTS
================================================================================================
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
================================================================================================
</TABLE>
* The term "convenience store" shall mean any retail establishment with three
(3) cash registers or less per site selling products listed in Exhibit A
where sales of such products are on a single unit or individual bulk basis.
** Excluding national accounts such as McDonalds.
24
<PAGE> 148
EXHIBIT B-3
SPECIAL MARKETS
II. NONEXCLUSIVE TERRITORIES AND AUTHORIZED CHANNELS OF DISTRIBUTION
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
================================================================================================
TERRITORY CONVEN. DRUG FOOD MILITARY SCHOOLS SPORTS/ STREET THEATERS THEME
STORES* STORES SVC.** SPECIAL VENDING PARKS
EVENTS
================================================================================================
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------
================================================================================================
</TABLE>
* The term "convenience store" shall mean any retail establishment with three
(3) cash registers or less per site selling products listed in Exhibit A
where sales of such products are on a single unit or individual bulk basis.
** Excluding national accounts such as McDonalds.
25
<PAGE> 149
EXHIBIT C
PRODUCT HANDLING REQUIREMENTS
The following standards are to be continuously observed to preserve the
quality of Nestle products:
A. Storage Temperature
1. Frozen Storage
Storage should be maintained at temperatures between -20 degree F and
-30 degree F.
B. Delivery Vehicle Loading and Unloading
1. Products are to be moved promptly to and from storage to ensure that
the above product temperatures are not exceeded.
2. Product should not be exposed to ambient temperatures for more than
10 minutes.
3. Prior to loading, refrigerated vehicles must be pre-cooled to an air
temperature not to exceed -10 degree F for frozen products.
4. All delivery vehicles will be clean and free of any off odors.
C. Storage Area
1. Housekeeping and handling must be of an acceptable level to ensure
that product will not be damaged or contaminated.
2. Thermometers
a. Accurate continuously reading thermometers are to be provided in
each storage area showing the existing air temperature.
b. Accurate temperature records are to be maintained by a continuous
record of a daily plant log in warehouse facilities.
3. Product must be rotated so that the oldest product is shipped and
placed on retail shelves first.
4. Ice cream novelties must be shelved first and then packaged ice cream.
26
<PAGE> 150
5. No product will be distributed for sale after expiration of the
specified code dates, if any.
6. An adequate insect and rodent program must be maintained in storage
areas.
7. Accurate shipping records must be kept in order to permit tracing of
product from warehouses to shipping destinations.
27
<PAGE> 151
EXHIBIT D
AUTHORIZED SUBDISTRIBUTORS
<TABLE>
<CAPTION>
Markets or Authorized
Geographic Channel(s) of
Name of Distributor Areas Distribution
------------------- ---------- -------------
<S> <C> <C> <C>
1. Edy's Grand Ice Cream As mutually agreed all
2. King Sooper Denver certain grocery stores
3. City Markets Denver certain grocery stores
</TABLE>
28
<PAGE> 152
EXHIBIT E
FORM OF GECC AMENDMENT
<PAGE> 153
AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
This Amendment to Registration Rights Agreement (the "Amendment") is
entered into this ___ day of May, 1994 by and among Dreyer's Grand Ice Cream,
Inc., a Delaware corporation (the "Company"), and Trustees of General Electric
Pension Trust, a New York common law trust ("GE Pension"), GE Investment
Private Placement Partners, I, a Delaware limited partnership ("GEIPPP") and
General Electric Capital Corporation, a New York corporation (collectively the
"Investors").
Recitals
A. The Company entered into a Registration Rights Agreement dated June
30, 1993 with the Investors (the "Agreement"), pursuant to which the Investors
acquired the right under certain circumstances to cause securities of the
Company held by them to be registered by the Company under the Securities Act
of 1933.
B. The Company and Investors now desire to amend the Agreement as set
forth herein.
1. Amendments.
1.1. Section 2.2(a) is hereby amended by adding the following
at the end of such section:
"Notwithstanding anything to the contrary in this
Section 2.2(a), if any such proposal by the Company to
register any of its securities was as a result of the
exercise of a demand registration right under
Section 3 of the Nestle Registration Rights Agreement,
then the Company shall not be obligated to include
any Registrable Securities in any such registration
without the consent of the Nestle Holders; provided,
however, that such consent shall be deemed to have
been given if the Nestle Holders allow any securities
of the Company other than 'Registrable Securities'
(as defined in the Nestle Registration Rights
Agreement) to be included in such registration."
1.2. Subsection 2.2(b) is hereby amended to read in its
entirety as follows:
"(b) Priority in Incidental Registrations. If the
managing underwriter of any underwritten offering
shall inform the Company by letter of its belief that
the number or type of Registrable Securities
1
<PAGE> 154
requested to be included in such registration would
materially adversely affect such offering, then the
Company will include in such registration, to the extent
of the number and type which the Company is so advised can
be sold in (or during the time of) such offering
(i) first, all securities proposed by the Company to be
sold for its own account, if any; (ii) second, and only if
all the securities proposed by the Company to be sold for
its own account have been so included, such Registrable
Securities and securities of the Company requested
for inclusion in such registration pursuant to the
exercise of piggyback registration rights under
Section 4(a) of the Nestle Registration Rights Agreement
(the 'Nestle Securities'), pro rata among the holders of
the Registrable Securities and Nestle Securities on
the basis of the respective percentages of the total
amount of securities requested to be so included by such
holders which are represented by Registrable Securities,
on the one hand, and Nestle Securities, on the other
hand; and (iii) third, and only if all of the Registrable
Securities and Nestle Securities have been included in such
registration, any other securities of the Company
requested to be included in such registration; provided,
however, that if such registration was as a result of the
exercise of a demand registration right pursuant to
Section 3 of the Nestle Registration Rights Agreement, and
the Nestle Holders have consented to the inclusion of
Registrable Securities in such offering, then the
securities to be included in such registration shall be
selected, after all 'Registrable Securities' (as defined
in the Nestle Registration Rights Agreement) originally
proposed to be included in such registration have been so
included, (y) first, from the Registrable Securities and
(z) second, and only if all the Registrable Securities
have been included in such registration, from any other
securities eligible for inclusion in such registration."
1.3. Subsection 2.4(c) is hereby amended to read in its
entirety as follows:
"(c) Holdback Agreements. (i) Each holder of Registrable
Securities agrees, in each of the instances set out below,
not to effect any public sale or distribution, including any
sale pursuant to Rule 144 under the Securities Act, of any
Registrable Securities, and not to effect any such public
sale or distribution of any other equity
2
<PAGE> 155
security of the Company or of any security convertible
into or exchangeable or exercisable for any equity
security of the Company during the 15 days prior to, and
during the 90-day period (or such longer period as may be
reasonably requested by the underwriter, if any, of an
offering) beginning on, the effective date of a registration
statement (except as part of such registration) provided
that each holder of Registrable Securities has received
written notice of such registration at least 15 days prior
to such effective date:
(1) in the case of an underwritten public
offering in which any such holder is participating, if
requested by the managing underwriters of such
underwritten public offering,
(2) in the case of an underwritten public
offering in which any such holder is not participating
and which is initiated pursuant to the exercise
of demand registration rights under Section 3
of the Nestle Registration Rights Agreement, if
requested by the managing underwriters of such
underwritten public offering,
(3) in the case of a registration pursuant to
Section 2.1 hereof in which any such holder is
participating and which is not an underwritten
public offering, if requested by the holders of
a majority of the Registrable Securities
requesting such registration,
(4) in the case of an incidental registration
pursuant to Section 2.2 hereof in which any such
holder is participating and which is not an
underwritten public offering, if requested by the
holders of a majority of the securities
requesting such registration, or
(5) in the case of a registration in which any
such holder is not participating and which is
initiated pursuant to the exercise of demand
registration rights under Section 3 of the
Nestle Registration Rights Agreement and which
is not an underwritten public offering, if
requested by the Nestle Holders.
3
<PAGE> 156
(ii) In the event of any registration of Registrable
Securities pursuant to Section 2.1 or 2.2 hereof, the
Company agrees (i) not to effect any public or private
sale or distribution of any of its equity securities or
of any equity security convertible into or exchangeable
or exercisable for any equity security of the Company
(other than any such sale or distribution of such
securities in connection with any merger or
consolidation by the Company or any subsidiary of the
Company of the capital stock or substantially all the
assets of any other person or in connection with an
employee stock option or other benefit plan) during the
15 days prior to, and during the 90-day period beginning
on, the effective date of such registration statement
(except as part of such registration) to the extent the
Company is timely notified in writing by a holder of the
Registrable Securities or the managing underwriters of
any such registration, and (ii) that any agreement
entered into after the date of this Agreement pursuant
to which the Company issues or agrees to issue any
privately placed equity securities shall contain a
provision under which holders of such securities agree
not to effect any public sale or distribution of any
such securities during the period referred to in the
foregoing clause (i), including any sale pursuant to
Rule 144 under the Securities Act (except as part of
such registration, if permitted)."
1.4. Section 3 of the Agreement is hereby amended by adding
the following definitions in their correct alphabetical position:
"'Nestle' means Nestle Holdings, Inc., a Delaware
corporation."
"'Nestle Holders' means the selling holders of a
majority of all 'Registrable Securities' (as defined
in the Nestle Registration Rights Agreement) included
in a demand registration under Section 3 of the
Nestle Registration Rights Agreement."
"'Nestle Registration Rights Agreement' means the
Registration Rights Agreement dated May ___, 1994
between the Company and Nestle as in effect on such
date."
4
<PAGE> 157
2. Miscellaneous.
2.1. Except as expressly amended herein, all terms,
covenants and provisions of the Agreement are and shall remain in full
force and effect and all references therein to such Agreement shall
henceforth refer to the Agreement as amended by this Amendment. This
Amendment shall be deemed incorporated into, and a part of, the
Agreement.
2.2. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. No third party beneficiaries are intended in connection with
this Amendment.
2.3. This Amendment shall be governed by and construed in
accordance with the law of the State of Delaware.
2.4. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Amendment to be executed and delivered as of the date first above written.
DREYER'S GRAND ICE CREAM, INC. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By:___________________________ By:__________________________
Title:________________________ Title:_______________________
GENERAL ELECTRIC CAPITAL GE INVESTMENT PRIVATE PLACEMENT
CORPORATION PARTNERS I
By:___________________________ By: GE Investment Management
Title:________________________ Incorporated, its
General Partner
By:__________________________
Title:_______________________
5
<PAGE> 158
EXHIBIT F
FORM OF RIGHTS AGREEMENT AMENDMENT
F-1
<PAGE> 159
FIRST AMENDMENT TO AMENDED AND RESTATED RIGHTS AGREEMENT
This First Amendment (the "Amendment"), dated this ____ day of May,
1994, amends the Amended and Restated Rights Agreement (the "Rights Agreement")
by and between Dreyer's Grand Ice Cream, Inc., a Delaware corporation (the
"Company"), and First Interstate Bank of California, a state banking
corporation organized and existing under the laws of the State of California
(the "Rights Agent") (successor to the former Rights Agent, Bank of America,
N.T. & S.A.). All terms not otherwise defined herein shall have the meaning
given such terms in the Rights Agreement.
WHEREAS, the Board of Directors of the Company has approved the sale
of common stock of the Company and warrants to purchase common stock of the
Company (the "Securities") pursuant to a Stock and Warrant Purchase Agreement
(the "Stock Purchase Agreement"), Collateral Agreements (as defined in the
Stock Purchase Agreement) and Right of First Refusal Agreements (as defined in
the Stock Purchase Agreement) (all such agreements collectively referred to as
the "Agreements"), and such sale and related transactions would otherwise cause
the purchaser to become an Acquiring Person;
WHEREAS, the Board of Directors of the Company has determined that it
is desirable to amend the definition of Acquiring Person so that the purchaser
of the Securities will not be deemed an Acquiring Person upon consummation of
the Agreements;
WHEREAS, pursuant to Section 27 of the Rights Agreement the Company
may, subject to certain limitations, amend the Rights Agreement without the
approval of any holders of Rights Certificates to make any provisions with
respect to the Rights which the Company deems necessary or desirable.
NOW, THEREFORE, upon all of the terms and conditions set forth
hereinafter, the Company and the Rights Agent agree as follows:
1. AMENDMENT.
The first sentence of Section 1(a) of the Rights Agreement is hereby
amended to read in its entirety as follows:
"(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter
defined) of 20% or more of the Common Shares of the Company then
outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit plan of the Company or any Subsidiary
of the Company (iv) any entity holding Common Shares for or
pursuant to the terms of any such
- 1 -
<PAGE> 160
plan, (v) T. Gary Rogers, William F. Cronk, III, or any Affiliate
or Associate of T. Gary Rogers or William F. Cronk, III, or (vi)
Nestle Holdings, Inc., a Delaware corporation, or any Affiliate or
Associate of Nestle Holdings, Inc., so long as Nestle Holdings,
Inc. is not in breach of Section 6.1(d) or proviso (B) to Section
6.1, as may be applicable at the time, of the Stock and Warrant
Purchase Agreement dated May __, 1994 between the Company and
Nestle Holdings, Inc. (each of the foregoing in clauses (v) and
(vi) an "Exempted Person")."
2. MISCELLANEOUS.
(a) Choice of Law. This Amendment shall be deemed to be
a contract made under the laws of the state of Delaware and for all purposes
shall be governed and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.
(b) Counterparts. This Amendment may be executed in one
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
(c) Severability. If any term or provision of this Amendment
is held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms and provisions of this
Amendment shall in no way be affected, impaired or invalidated.
(d) Existing Terms. The existing terms and conditions of the
Rights Agreement shall remain in full force and effect except as such terms and
conditions are specifically amended or conflict with the terms of this
Amendment.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed and delivered by its duly authorized officer on the
day and year first above written.
THE COMPANY: RIGHTS AGENT:
DREYER'S GRAND ICE CREAM, INC. FIRST INTERSTATE BANK OF
CALIFORNIA
By: _________________________ By: _________________________
Its: _________________________ Its: _________________________
- 2 -
<PAGE> 161
EXHIBIT G
Form of Registration Rights Agreement
G-1
<PAGE> 162
==============================================================================
EXHIBIT G
FORM OF
REGISTRATION RIGHTS AGREEMENT
BY AND BETWEEN
DREYER'S GRAND ICE CREAM, INC.
AND
NESTLE HOLDINGS, INC.
DATED AS OF MAY ___, 1994
==============================================================================
<PAGE> 163
TABLE OF CONTENTS*
<TABLE>
<S> <C> <C>
SECTION 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Securities Subject to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Registrable Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Holders of Registrable Securities . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3. Demand Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Demand by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Effective Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Registration Statement Form . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(d) Selection of Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(e) Registration of Other Securities . . . . . . . . . . . . . . . . . . . . . . . . 4
(f) Priority in Requested Registration . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4. Piggyback Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Underwriter's Cutback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) No Effect on Demand Registrations . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5. Hold-Back Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(a) Restrictions on Public Sale by Holders of
Registrable Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Restrictions on Public Sale by the Company and Others . . . . . . . . . . . . . 7
SECTION 6. Registration Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7. Registration Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 8. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Indemnification by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Indemnification by Holder of Registrable Securities . . . . . . . . . . . . . . 15
(c) Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9. Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
__________________________________
* This Table of Contents does not constitute a part of this Agreement or
have any bearing upon the interpretation of any of its terms or
provisions.
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<TABLE>
<S> <C> <C>
SECTION 10. Participation in Underwritten Registrations . . . . . . . . . . . . . . . . . . . . 17
SECTION 11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(f) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(g) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(h) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(i) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(j) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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<PAGE> 165
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is dated
as of May ___, 1994 and entered into by and between DREYER'S GRAND ICE CREAM,
INC., a Delaware corporation (the "Company") and NESTLE HOLDINGS, INC., a
Delaware corporation (the "Purchaser").
This Agreement is made pursuant to the Stock and Warrant
Purchase Agreement dated as of May ___, 1994 by and between the Company and the
Purchaser (the "Purchase Agreement"). In order to induce the Purchaser to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution of this
Agreement is a condition to the Closing under the Purchase Agreement.
Capitalized terms used herein but not otherwise defined shall have the meaning
assigned such terms in the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Agent: Any Person authorized to act and who acts on behalf of
the Purchaser with respect to the transactions contemplated by this Agreement.
Common Shares: The shares of the common stock, par value
$1.00 per share, of the Company.
Exchange Act: The Securities Exchange Act of 1934, as amended
from time to time.
GECC Registration Rights Agreement: That certain Registration
Rights Agreement dated as of June 30, 1993 by and between the Company and
General Electric Capital Corporation ("GECC"), Trustees of General Electric
Pension Trust ("GEPT"), and GE Investment Private Placement Partners, I
("GEIPPP" and together with GECC and GEPT, "GE"), as in effect on the Effective
Date.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Preemptive Rights: The preemptive rights granted to the
Purchaser by the Company pursuant to Section 5.4 of the Purchase Agreement.
Preemptive Rights Shares: Any Common Shares acquired by the
Purchaser pursuant to the Preemptive Rights.
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Prospectus: The prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by the Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
Registrable Securities: (i) the Common Shares acquired by the
Purchaser pursuant to the terms of the Purchase Agreement, (ii) the Warrant
Shares, (iii) the Right of First Refusal Shares, and (iv) the Preemptive Rights
Shares. Registrable Securities shall also include any securities which may be
issued or distributed with respect to, or in exchange for, such Registrable
Securities pursuant to a stock dividend, stock split or other distribution,
merger, consolidation, recapitalization or reclassification or similar
transaction; provided, however, that any such Registrable Securities shall
cease to be Registrable Securities to the extent (i) a Registration Statement
with respect to the sale of such Registrable Securities has been declared
effective under the Securities Act and such Registrable Securities have been
disposed of in accordance with the plan of distribution set forth in such
Registration Statement, (ii) such Registrable Securities are distributed
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act, or (iii) such Registrable Securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting
transfer under the Securities Act shall have been delivered by the Company and
they may be publicly resold without subsequent registration under the
Securities Act or in compliance with Rule 144 thereunder; provided, further,
however, that any securities that have ceased to be Registrable Securities
cannot thereafter become Registrable Securities, and any securities that are
issued or distributed in respect of securities that have ceased to be
Registrable Securities are not Registrable Securities.
Registration: A Demand Registration (as defined in Section 3)
or a Piggyback Registration (as defined in Section 4) of the Company's
securities for sale to the public under a Registration Statement.
Registration Expenses: See Section 7 hereof.
Registration Statement: Any registration statement of the
Company filed with the Securities and Exchange Commission under the rules and
regulations promulgated under the Securities Act which covers Registrable
Securities pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such Registration Statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such Registration Statement.
Right of First Refusal Agreements: That certain Right of
First Refusal Agreement dated as of the date hereof by and between the
Purchaser and T. Gary Rogers, Kathleen T. Rogers, and the Rogers Revocable
Trust, and that certain Right of First Refusal Agreement dated as of the date
hereof by and between the Purchaser and William F. Cronk, III, Janet M. Cronk,
and the Cronk Revocable Trust.
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Right of First Refusal Shares: Any Common Shares and any
other voting securities of the Company acquired by the Purchaser pursuant to
the Right of First Refusal Agreements.
Securities Act: The Securities Act of 1933, as amended from
time to time.
SEC: The Securities and Exchange Commission.
Underwritten Registration or Underwritten Offering: A
Registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
Warrants: The Series A Warrants and Series B Warrants, each
to purchase Common Shares, issued and sold pursuant to the Purchase Agreement
and the Warrant Agreement dated as of the date hereof by and between the
Company and the Purchaser (the "Warrant Agreement").
Warrant Shares: Any Common Shares issued or issuable upon
exercise of any Warrant.
SECTION 2. Securities Subject to this Agreement.
(a) Registrable Securities. The securities entitled to
the benefits of this Agreement are the Registrable Securities.
(b) Holders of Registrable Securities. A Person is
deemed to be a holder of Registrable Securities whenever such Person owns
Registrable Securities or has the right to acquire such Registrable Securities,
whether or not such ownership or right was acquired pursuant to the Purchase
Agreement, the Warrant Agreement, the Right of First Refusal Agreements, or the
Preemptive Rights, and whether or not such acquisition has actually been
effected and disregarding any legal restrictions upon the exercise of such
right.
SECTION 3. Demand Registrations.
(a) Demand by Holders. Subject to the transfer
restrictions of Section 6.3 of the Purchase Agreement, the holders of
Registrable Securities, at any time from and after the Closing, may make three
written requests, in the aggregate with respect to all such holders, to the
Company for Registration of Registrable Securities representing, in each
instance, not less than 600,000 Common Shares under and in accordance with the
provisions of the Securities Act; provided, however, that the holders of Excess
Shares shall be entitled to make a written request to the Company for one
Registration of Excess Shares under and in accordance with the provisions of
the Securities Act without regard to the foregoing limitations as to number of
requests and minimum number of shares. Any such Registration requested shall
hereinafter be referred to as a "Demand Registration." Each request for a
Demand Registration shall specify the kind and aggregate amount of Registrable
Securities to be registered and the intended methods of disposition thereof.
Upon such request for a Demand Registration, the Company shall use its best
efforts to effect the Registration of such Registrable Securities under (i) the
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Securities Act, and (ii) the blue sky laws of such jurisdictions as any holder
of such Registrable Securities requesting such Registration or any underwriter,
if any, may reasonably request, provided that the Company shall not be required
to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not, but for the requirements of this paragraph,
be obligated to be so qualified or to consent to general service of process in
such jurisdiction. The Company shall also use its best efforts to have all
such Registrable Securities registered with or approved by such other federal
or state governmental agencies or authorities as may be necessary in the
opinion of counsel to the Company and counsel to the holders of a majority of
such Registrable Securities to consummate the disposition of such Registrable
Securities.
(b) Effective Registration. The Company shall be deemed
to have effected a Demand Registration if the Registration Statement relating
to such Demand Registration is declared effective by the SEC and remains
effective until the earlier of such time as all the Registrable Securities
covered by such Registration Statement have been sold or withdrawn, or 90 days;
provided, however, that no Demand Registration shall be deemed to have been
effected if (i) such Registration, after it has become effective, is interfered
with by any stop order, injunction or other order or requirement of the SEC or
other governmental agency or court for any reason not attributable to the
selling holders of Registrable Securities, or (ii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such Registration are not satisfied, other than by reason of a
failure on the part of the selling holders of Registrable Securities.
(c) Registration Statement Form. Registrations under
this Section 3 shall be on such appropriate registration form of the SEC as
shall be selected by the Company and as shall permit the disposition of such
Registrable Securities in accordance with the intended method or methods of
disposition specified in the request for such Registration; provided, however
that the Company shall include in such registration form, if reasonably
requested by the holders of a majority of the Registrable Securities for which
Registration is being requested under this Section 3, information which is
otherwise required under applicable SEC regulations to be incorporated by
reference in such registration form.
(d) Selection of Underwriters. If at any time or from
time to time any of the holders of the Registrable Securities covered by a
Registration Statement desires to sell Registrable Securities in an
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the holders
of a majority of the Registrable Securities included in such offering;
provided, however, that the banker(s) and manager(s) so selected must be
nationally recognized in the securities field; provided, further, however, that
the Company shall have the right to make a reasonable objection to such
selection if such objection is based upon the Company's prior experience or
relationship with such banker(s) or manager(s).
(e) Registration of Other Securities. Whenever the
Company shall effect a Registration pursuant to this Section 3, no securities
other than Registrable Securities shall be included among the securities
covered by such Registration unless the selling holders of a majority of all
Registrable Securities to be covered by such Registration shall have consented
in writing to the inclusion of such other securities.
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(f) Priority in Requested Registration. If the Company
shall effect a Registration pursuant to this Section 3 in connection with an
Underwritten Offering by one or more holders of Registrable Securities, and if
the managing underwriter of such offering shall advise the Company in writing
(with a copy to each selling holder of Registrable Securities requesting
Registration) that, in its opinion, the number of securities requested to be
included in such Registration exceeds the number which can be sold in such
offering within a price range acceptable to the selling holders of a majority
of the Registrable Securities requested to be included in such Registration,
the Company will include in such Registration, to the extent of the number
which the Company is so advised can be sold in such offering, Registrable
Securities requested to be included in such Registration, selected pro rata
from the Registrable Securities of the selling holders requesting such
Registration on the basis of the percentage of the total amount of the
Registrable Securities which such selling holders requested to be so
registered.
SECTION 4. Piggyback Registrations.
(a) Participation. Subject to Section 4(b) hereof, if at
any time from and after the Closing under the Purchase Agreement the Company
proposes to file a Registration Statement under the Securities Act with respect
to any offering of any of its securities, whether or not by the Company for its
own account (other than (i) a registration on Form S-4 or S-8 or any successor
form to such Forms, or (ii) any registration of securities as it relates to an
offering and sale to management of the Company pursuant to any employee stock
plan or other employee benefit plan arrangement), then, as promptly as
practicable, the Company shall give written notice of such proposed filing to
each holder of Registrable Securities and such notice shall offer the holders
of Registrable Securities the opportunity to register such number of
Registrable Securities as each such holder may request (a "Piggyback
Registration"). Subject to Section 4(b), the Company shall include in such
Registration Statement all Registrable Securities requested within 30 days
after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such holder) to be
included in the Registration for such offering pursuant to a Piggyback
Registration; provided, however, that if such Registration Statement was the
subject of an exercise of a demand registration right pursuant to Section 2.1
of the GECC Registration Rights Agreement, then the Company shall not be
obligated to include any Registrable Securities in such Registration without
the consent of the selling holders of a majority of all "Registrable
Securities" (as defined in the GECC Registration Rights Agreement) included in
the Registration (the "GE Holders"); provided, further, however, that such
consent shall be deemed to have been given if the GE Holders allow any
securities other than "Registrable Securities" (as defined in the GECC
Registration Rights Agreement) to be included in such Registration. Each
holder of Registrable Securities shall be permitted to withdraw all or part of
such holder's Registrable Securities from a Piggyback Registration at any time
prior to the effective date thereof.
(b) Underwriter's Cutback. The Company shall use its
best efforts to cause the managing underwriter or underwriters of a proposed
Underwritten Offering to permit the Registrable Securities requested to be
included in the Registration for such offering under Section 4(a) or pursuant
to other piggyback registration rights granted by the Company, if any (the
"Piggyback Securities"), to be included on the same terms and conditions as any
similar securities included therein. Notwithstanding the foregoing, if the
managing underwriter or
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<PAGE> 170
underwriters of any such proposed Underwritten Offering informs the Company and
the holders of such Piggyback Securities in writing that the total amount or
kind of securities, including Piggyback Securities, which such holders and any
other persons or entities intend to include in such offering would be
reasonably likely to adversely affect the price or distribution of the
securities offered in such offering or the timing thereof, then the securities
to be included in the Registration for such offering shall be the number of
securities that, in the opinion of such underwriter or underwriters, can be
sold without an adverse effect on the price, timing or distribution of the
securities to be included, selected (i) first, from all securities proposed by
the Company to be sold for its own account, if any, (ii) second, and only if
all securities proposed by the Company to be sold for its own account have been
so included, from (A) the Piggyback Securities and (B) the securities requested
for inclusion in such Registration pursuant to the exercise of piggyback
registration rights under Section 2.2 of the GECC Registration Rights Agreement
(the "GE Piggyback Securities"), provided that if less than 100% of the
Piggyback Securities and GE Piggyback Securities are to be included in such
Registration, the securities to be so included shall be selected pro rata from
the Piggyback Securities and the GE Piggyback Securities, based upon the
percentage of the total amount of securities which such selling holders
requested to be so registered, and (iii) third, and only if all of the
Piggyback Securities and GE Piggyback Securities have been included in such
Registration, from any other securities eligible for inclusion in such
Registration; provided, however, that if such Registration Statement was the
subject of an exercise of a demand registration right pursuant to Section 2.1
of the GECC Registration Rights Agreement and the GE Holders have consented to
the inclusion of Piggyback Securities in such offering, then the securities to
be included in such Registration shall be selected, after all Registered
Securities (as defined in the GECC Registration Rights Agreement) originally
proposed to be included in such Registration have been so included, (i) first,
from the Piggyback Securities and (ii) second, and only if all the Piggyback
Securities have been included in such Registration, from any other securities
eligible for inclusion in such Registration.
(c) No Effect on Demand Registrations. No Registration
of Registrable Securities effected pursuant to a request under this Section 4
shall be deemed to have been effected pursuant to Section 3 hereof or shall
relieve the Company of its obligation to effect any Registration upon request
under Section 3 hereof.
SECTION 5. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holders of Registrable
Securities. Each holder of Registrable Securities agrees:
(1) in the case of an Underwritten Registration
in which any such holder is participating, if requested by the
managing underwriters of such Underwritten Registration,
(2) in the case of an Underwritten Registration
in which any such holder is not participating and which is initiated
pursuant to the exercise of demand rights under Section 2.1 of the GE
Registration Rights Agreement, if requested by the managing
underwriters of such Underwritten Registration,
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<PAGE> 171
(3) in the case of a Demand Registration in which
any such holder is participating and which is not an Underwritten
Registration, if requested by the holders of a majority of the
Registrable Securities requesting such Registration,
(4) in the case of a Piggyback Registration in
which any such holder is participating and which is not an
Underwritten Registration, if requested by the holders of a majority
of the securities requesting such registration, or
(5) in the case of a Registration in which any
such holder is not participating and which is initiated pursuant to
the exercise of demand rights under Section 2.1 of the GE Registration
Rights Agreement and which is not an Underwritten Registration, if
requested by the holders of a majority of the securities requesting
such registration
not to effect any public sale or distribution of securities of the Company the
same as or similar to those being registered, or any securities convertible
into or exchangeable or exercisable for such securities, in such Registration
Statement (or registration statement, as the case may be), including a sale
pursuant to Rule 144 under the Securities Act, (except as part of an
Underwritten Registration) during the 15-day period prior to, and during the
90-day period beginning on, the effective date of any Registration Statement
(or registration statement, as the case may be) (except as part of such
Registration), to the extent timely notified in writing by the managing
underwriters or the holders, as the case may be.
The foregoing provisions shall not apply to any holder of
Registrable Securities if such holder is prevented by applicable statute or
regulation from entering any such agreement; provided that any such holder
shall undertake, in its request to participate in any such Underwritten
Offering, not to effect any public sale or distribution of the applicable class
of Registrable Securities commencing on the date of sale of such applicable
class of Registrable Securities unless it has provided 60 days' prior written
notice of such sale or distribution to the underwriter or underwriters.
(b) Restrictions on Public Sale by the Company and
Others. The Company agrees:
(1) not to effect any public or private sale or
distribution of its equity securities, including a sale pursuant to
Regulation D under the Securities Act, during the 15-day period prior
to, and during the 90-day period beginning on, the effective date of a
Registration Statement filed under Section 3 or Section 4 hereof to the
extent timely notified in writing by a holder of Registrable
Securities covered by such Registration Statement or the managing
underwriters (the "Holdback Period") (except as part of such
Underwritten Registration or pursuant to registrations on Forms S-4 or
S-8 or any successor form to such forms), and
(2) to cause each holder of its privately placed
equity securities issued by the Company at any time on or after the
date of this Agreement to agree not to effect any public sale or
distribution of any such securities during the Holdback Period,
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<PAGE> 172
including a sale pursuant to Rule 144 under the Securities Act (except
as part of such Underwritten Registration, if permitted).
SECTION 6. Registration Procedures.
In connection with the Company's registration obligations
pursuant to Sections 3 and 4 hereof, the Company will use its best efforts to
effect such registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will as expeditiously as possible:
(a) before filing a Registration Statement or Prospectus
or any amendments or supplements thereto (each a "Public Document"),
(i) furnish to the selling holders of the Registrable Securities
covered by each such Public Document, and the underwriters, if any,
copies of each such Public Document (including all drafts of such
Public Document which are distributed to the underwriters, and if the
subject offering is not an Underwritten Offering, all drafts of such
Public Document available to the Company during the 14 day period
prior to the initial filing of such Public Document), (ii) allow such
holders and underwriters a reasonable opportunity to review and
comment upon each such Public Document, (iii) make the Company's
representatives available for discussion and consultation regarding
the contents of each such Public Document and (iv) consider in good
faith all comments proposed by such holders on each such Public
Document;
(b) prepare and file with the SEC a Registration
Statement or Registration Statements relating to the applicable Demand
Registration or Piggyback Registration including all exhibits and
financial statements required by the SEC to be filed therewith, and
use its best efforts to cause such Registration Statement to become
effective under the Securities Act; and prepare and file with the SEC
such amendments and post-effective amendments to such Registration
Statement, and such supplements to the Prospectus, as may be requested
by any holder of Registrable Securities or any underwriter of
Registrable Securities or as may be required by the rules, regulations
or instructions applicable to the registration form utilized by the
Company or by the Securities Act or rules and regulations otherwise
necessary to keep the Registration Statement effective until the
earlier of such time as all the Registrable Securities covered by such
Registration Statement have been sold or withdrawn, or 90 days; and
cause the Prospectus as so supplemented to be filed pursuant to Rule
424 under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of
all securities covered by such Registration Statement during the
applicable period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(c) notify the selling holders of Registrable Securities
and the managing underwriters, if any, promptly, and (if requested by
any such Person) confirm such advice in writing,
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<PAGE> 173
(1) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and,
with respect to the Registration Statement or any
post-effective amendment, when the same has become effective,
(2) of any request by the SEC for amendments or
supplements to the Registration Statement or the Prospectus or
for additional information,
(3) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that
purpose,
(4) if at any time the representations and
warranties of the Company contemplated by paragraph (o) below
cease to be true and correct, if the effect of such breach
would be to cause a failure of a condition to the closing of
the underwriting or purchase agreement,
(5) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose, and
(6) of the existence of any fact which results in
the Registration Statement or the Prospectus containing an
untrue statement of material fact or omitting to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances in which they were made;
(d) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of the Registration
Statement at the earliest possible moment;
(e) if requested by the managing underwriter or
underwriters or a holder of Registrable Securities being sold in
connection with an Underwritten Offering, immediately incorporate in a
Prospectus supplement or post-effective amendment such information as
the managing underwriters and the holders of a majority of the
Registrable Securities being sold agree should be included therein
relating to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with respect to
the amount of Registrable Securities being sold to such underwriters,
the purchase price being paid therefor by such underwriters and with
respect to any other terms of the underwritten (or best efforts
underwritten) offering of the Registrable Securities to be sold in
such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(f) furnish to each selling holder of Registrable
Securities and each managing underwriter, without charge, at least one
signed copy of the Registration Statement and
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any post-effective amendment thereto, including financial statements
and schedules, all documents incorporated therein by reference and all
exhibits (including those incorporated by reference);
(g) deliver to each selling holder of Registrable
Securities and the underwriters, if any, without charge, as many
copies of the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Persons may reasonably
request (it being understood that the Company consents to the use of
the Prospectus or any amendment or supplement thereto by each of the
selling holders of Registrable Securities and the underwriters, if
any, in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement
thereto) and such other documents as such selling holder may
reasonably request in order to facilitate the disposition of the
Registrable Securities by such holder and underwriters, if any;
(h) prior to any public offering of Registrable
Securities, register or qualify or cooperate with the selling holders
of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under
the securities or blue sky laws of such jurisdictions as any selling
holder of Registrable Securities or any underwriter reasonably
requests in writing and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statement; provided
that the Company will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to
take any action which would subject it to general service of process
in any such jurisdiction where it is not then so subject;
(i) cooperate with the selling holders of Registrable
Securities and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing
underwriters may request at least two business days prior to any sale
of Registrable Securities to the underwriters;
(j) use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers
thereof or the underwriters, if any, to consummate the disposition of
such Registrable Securities;
(k) if any fact contemplated by paragraph (c)(6) above
shall exist, prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities, the Prospectus will not contain an untrue statement of a
material fact or omit to state any
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<PAGE> 175
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(l) cause all Registrable Securities covered by the
Registration Statement to be quoted on the Nasdaq National Market
System or listed on each securities exchange on which similar
securities issued by the Company are then listed if requested by the
holders of a majority of such Registrable Securities or the managing
underwriters, if any;
(m) not later than the effective date of the applicable
Registration Statement, provide the applicable transfer agent with
printed certificates for the Registerable Securities which are in a
form eligible for deposit with Depositary Trust Company;
(n) enter into agreements (including underwriting
agreements) and take all other appropriate actions in order to
expedite or facilitate the disposition of such Registrable Securities
and in such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an Underwritten
Registration:
(1) make such representations and warranties to
the holders of such Registrable Securities and the
underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in primary
Underwritten Offerings;
(2) obtain opinions of counsel to the Company
(which counsel shall have relevant expertise in the matters
opined upon) and updates thereof addressed to each selling
holder and the underwriters, if any, covering the matters
customarily covered in opinions requested in Underwritten
Offerings and such other matters as may be reasonably
requested by such holders and underwriters;
(3) obtain "cold comfort" letters and updates
thereof from the Company's independent certified public
accountants addressed to the selling holders of Registrable
Securities and the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily
covered in "cold comfort" letters by underwriters in
connection with primary Underwritten Offerings;
(4) if an underwriting agreement is entered into,
cause the same to set forth in full the indemnification
provisions and procedures of Section 8 hereof with respect to
all parties to be indemnified pursuant to said Section; and
(5) deliver such documents and certificates as
may be requested by the holders of a majority of the
Registrable Securities being sold and the managing
underwriters, if any, to evidence compliance with paragraph
(k) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company.
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<PAGE> 176
The above shall be done at the effectiveness of such Registration
Statement, each closing under any underwriting or similar agreement as
and to the extent required thereunder and from time to time as may be
requested by any selling holder in connection with the disposition of
Registrable Securities pursuant to such Registration Statement;
(o) make available for inspection by a representative of
the holders of a majority of the Registrable Securities, any
underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney or accountant retained by the
sellers or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company to the extent
necessary to conduct a reasonable investigation within the meaning of
the Securities Act, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with
the registration; provided that any records, information or documents
that are designated by the Company in writing as confidential shall be
kept confidential by such Persons unless disclosure of such records,
information or documents is required by court or administrative order;
(p) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make generally
available to its security holders, earnings statements satisfying the
provisions of Section 11(a) of the Securities Act, no later than 45
days after the end of any 12-month period (or 90 days, if such period
is a fiscal year) (1) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in an
Underwritten Offering, or, if not sold to underwriters in such an
offering, (2) beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of the Registration
Statement, which statements shall cover said 12-month periods;
(q) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter" that is required to be retained in accordance with the
rules and regulations of the NASD); and
(r) promptly prior to the filing of any document which is
to be incorporated by reference into the Registration Statement or the
Prospectus (after initial filing of the Registration Statement) (i)
furnish to the selling holders of the Registrable Securities covered
by the Registration Statement in which such document is incorporated
by reference, and the underwriters, if any, copies of each such
document (including all drafts of such document which are distributed
to the underwriters, and if the subject offering is not an
Underwritten Offering, all drafts of such document available to the
Company during the 14 day period prior to the initial filing of such
document), (ii) allow such holders and underwriters a reasonable
opportunity to review and comment upon each such document, (iii) make
the Company's representatives available for discussion and
consultation regarding the contents of each such document and (iv)
consider in good faith all comments proposed by such holders on each
such document.
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<PAGE> 177
The Company may require each seller of Registrable Securities
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such securities as the Company may
from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 6(k) hereof,
such holder will forthwith discontinue disposition of Registrable Securities
until such holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 6(k) hereof, or until it is advised in
writing by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and, if so directed by the
Company, such holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such holder's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice,
the time periods during which such Registration Statement shall be maintained
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each seller of Registrable Securities covered by such Registration Statement
either receives the copies of the supplemented or amended prospectus
contemplated by Section 6(k) hereof or is advised in writing by the Company
that the use of the Prospectus may be resumed.
SECTION 7. Registration Expenses.
(a) All expenses incident to the Company's performance of
or compliance with this Agreement will be paid by the Company, regardless of
whether the Registration Statement becomes effective, including without
limitation:
(1) all registration and filing fees (including with
respect to filings required to be made with the SEC and the NASD);
(2) fees and expenses of compliance with securities or
blue sky laws (including fees and disbursements of counsel for the
underwriters or selling holders in connection with blue sky
qualifications of the Registrable Securities and determination of
their eligibility for investment under the laws of such jurisdictions
as the managing underwriters or holders of a majority of the
Registrable Securities being sold may designate);
(3) printing (including expenses of printing certificates
for the Registrable Securities in a form eligible for deposit with the
Depositary Trust Company and of printing prospectuses), messenger,
telephone and delivery expenses;
(4) fees and disbursements of counsel for the (i)
Company, (ii) the underwriters and (iii) the sellers of the
Registrable Securities (subject to the provisions of Section 7(b)
hereof);
13
<PAGE> 178
(5) fees and disbursements of all independent certified
public accountants of the Company (including the expenses of any
special audit and "cold comfort" letters required by or incident to
such performance);
(6) fees and disbursements of underwriters (excluding
discounts, commissions or fees of underwriters, selling brokers,
dealer managers or similar securities industry professionals relating
to the distribution of the Registrable Securities or legal expenses of
any Person other than the Company, the underwriters and the selling
holders) customarily paid by issuers;
(7) fees and expenses of other Persons retained by the
Company; and
(8) fees and expenses associated with any NASD filing
required to be made in connection with the Registration Statement,
including, if applicable, the fees and expenses of any "qualified
independent underwriter" (and its counsel) that is required to be
retained in accordance with the rules and regulations of the NASD (all
such expenses being herein called Registration Expenses").
The Company will, 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 and the fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed.
(b) In connection with each Registration Statement
required hereunder, the Company will reimburse the holders of Registrable
Securities being registered pursuant to such Registration Statement for the
reasonable fees and disbursements of not more than one counsel chosen by the
holders of a majority of such Registrable Securities.
SECTION 8. Indemnification.
(a) Indemnification by Company. The Company agrees to
indemnify and hold harmless each holder of Registrable Securities, its
officers, directors, employees and Agents and each Person who controls such
holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act (each such person being sometimes hereinafter referred
to as an "Indemnified Holder") from and against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and legal
expenses) arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are based upon any
such untrue statement or omission or allegation thereof based upon information
furnished in writing to the Company by such holder expressly for use therein;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or
is based upon an untrue statement
14
<PAGE> 179
or alleged untrue statement or omission or alleged omission in any Prospectus
or preliminary prospectus, if such untrue statement or alleged untrue
statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus or preliminary prospectus and if, having
previously been furnished by or on behalf of the Company with copies of the
Prospectus or preliminary prospectus as so amended or supplemented, such holder
thereafter fails to deliver such Prospectus or preliminary prospectus as so
amended or supplemented, prior to or concurrently with the sale of a
Registrable Security to the person asserting such loss, claim, damage,
liability or expense who purchased such Registrable Security which is the
subject thereof from such holder. This indemnity will be in addition to any
liability which the Company may otherwise have. The Company will also
indemnify underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, their officers and
directors and each Person who controls such Persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same
extent as provided above with respect to the indemnification of the Indemnified
Holders of Registrable Securities.
If any action or proceeding (including any governmental
investigation or inquiry) shall be brought or asserted against an Indemnified
Holder in respect of which indemnity may be sought from the Company, such
Indemnified Holder shall promptly notify the Company in writing, and the
Company shall assume the defense thereof, including the employment of counsel
satisfactory to such Indemnified Holder and the payment of all expenses. Such
Indemnified Holder shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Holder unless (a) the
Company has agreed to pay such fees and expenses or (b) the Company shall have
failed to assume the defense of such action or proceeding and has failed to
employ counsel reasonably satisfactory to such Indemnified Holder in any such
action or proceeding or (c) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Holder and the
Company, and such Indemnified Holder shall have been advised by counsel that a
conflict of interest exists between the Indemnified Holder and the Company (in
which case, if such Indemnified Holder notifies the Company in writing that it
elects to employ separate counsel at the expense of the Company, the Company
shall not have the right to assume the defense of such action or proceeding on
behalf of such Indemnified Holder, it being understood, however, that the
Company shall not, in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm
of attorneys at any time for such Indemnified Holder and any other Indemnified
Holders, which firm shall be designated in writing by such Indemnified
Holders). The Company shall not be liable for any settlement of any such
action or proceeding effected without its written consent, but if settled with
its written consent, or if there be a final judgment for the plaintiff in any
such action or proceeding, the Company agrees to indemnify and hold harmless
such Indemnified Holders from and against any loss or liability by reason of
such settlement or judgment in accordance with this Agreement.
(b) Indemnification by Holder of Registrable Securities.
Each holder of Registrable Securities agrees to indemnify and hold harmless the
Company, its directors and officers and each Person, if any, who controls the
Company within the meaning of either Section
15
<PAGE> 180
15 of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to such holder, but only with
respect to information relating to such holder furnished in writing by such
holder expressly for use in any Registration Statement or Prospectus, or any
amendment or supplement thereto, or any preliminary prospectus. In case any
action or proceeding shall be brought against the Company or its directors or
officers or any such controlling person, in respect of which indemnity may be
sought against a holder of Registrable Securities, such holder shall have the
rights and duties given the Company and the Company or its directors or
officers or such controlling person shall have the rights and duties given to
each holder by the preceding paragraph. In no event shall the liability of any
selling holder of Registrable Securities hereunder be greater in amount than
the dollar amount of the proceeds received by such holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above with respect to information so furnished in writing by such Persons
specifically for inclusion in any Prospectus or Registration Statement or any
amendment or supplement thereto, or any preliminary prospectus.
(c) Contribution. If the indemnification provided for in
this Section 8 is unavailable to an indemnified party under Section 8(a) or
Section 8(b) hereof (other than by reason of exceptions provided in those
Sections) in respect of any losses, claims, damages, liabilities or expenses
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 fault of the Company on the one hand and of the Indemnified Holder 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 Holder 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 Holder 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 8(a), 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 each holder of Registrable Securities agree
that it would not be just and equitable if contribution pursuant to this
Section 8(c) 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. Notwithstanding the provisions of
this Section 8(c), an Indemnified Holder shall not be required to contribute
any amount in excess of the amount by which the total price at which the
Securities sold by such Indemnified Holder or its affiliated Indemnified
Holders and distributed to the public were
16
<PAGE> 181
offered to the public exceeds the amount of any damages which such Indemnified
Holder, or its affiliated Indemnified Holder, has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
SECTION 9. Rule 144.
The Company covenants that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any holder of
Registrable Securities made after ___________, 1996 [second anniversary of
Closing Date under Purchase Agreement], make publicly available such
information as necessary to permit sales pursuant to Rule 144 under the
Securities Act), and it will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any holder of Registrable Securities, the Company
will deliver to such holder a written statement as to whether it has complied
with such information and requirements.
SECTION 10. Participation in Underwritten Registrations.
No Person may participate in any Underwritten Registration
hereunder unless such Person (a) agrees to sell such Person's securities on the
basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents required under the terms of such underwriting arrangements.
SECTION 11. Miscellaneous.
(a) Remedies. Each holder of Registrable Securities, in
addition to being entitled to exercise all rights provided herein, in the
Purchase Agreement and granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on
or after the date of this Agreement enter into any agreement with respect to
its securities which is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The Company represents and warrants that the rights granted
to the holders of Registrable Securities hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of the
Company's securities under any
17
<PAGE> 182
agreement in effect on the date hereof, including, without limitation, the GECC
Registration Rights Agreement.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company has obtained the written
consent of holders of at least a majority of the outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to departure
from the provisions hereof that relates exclusively to the rights of holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other holders of Registrable Securities may be given by the holders
of a majority of the Registrable Securities being sold.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, postage prepaid, telex, telecopier, or air courier
guaranteeing overnight delivery, if to:
A HOLDER OF REGISTRABLE SECURITIES, at the most current
address given by such holder to the Company in accordance with
the provisions of this Section 11(d), which address initially
is, with respect to the Purchaser:
President
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
800 North Brand Boulevard
Glendale, California 91203
With copies to:
James H. Ball, Esq.
Senior Vice President and General Counsel
Nestle USA, Inc.
800 North Brand Boulevard
Glendale, California 91203
and
Wayne F. Erdelack, Esq.
Vice President and Deputy General Counsel
Nestle USA, Inc.
30003 Bainbridge Road
Solon, Ohio 44139
18
<PAGE> 183
THE COMPANY, initially to:
T. Gary Rogers
Chief Executive Officer and Chairman of the Board
Dreyer's Grand Ice Cream, Inc.
5929 College Avenue
Oakland, California 94618
and thereafter at such other address, notice of which is given
in accordance with the provisions of this Section 11(d),
With copies to:
Seth A. Kaplan, Esq.
Wachtell, Lipton, Rosen and Katz
51 West 52nd Street
New York, New York 10019
and
Edmund R. Manwell, Esq.
Manwell & Milton
101 California Street, Suite 3750
San Francisco, California 94111
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and
on the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
(e) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent holders of Registrable Securities; provided, however,
that after the Closing this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a holder of Registrable Securities unless
and to the extent such successor or assign acquired Registrable Securities from
such holder.
(f) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
19
<PAGE> 184
(h) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
(i) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(j) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Company with respect to the securities sold pursuant to the Purchase Agreement.
This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
20
<PAGE> 185
IN WITNESS WHEREOF, the Company and the Purchaser have caused
this Agreement to be executed and delivered by their respective officers
thereunto duly authorized, all as of the day and year first above written.
DREYER'S GRAND ICE CREAM, INC.
____________________________________
By:
Title:
NESTLE HOLDINGS, INC.
____________________________________
By:
Title:
21
<PAGE> 186
EXHIBIT H
FORM OF LEGAL OPINION
OF
WACHTELL, LIPTON, ROSEN & KATZ
May __, 1994
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
800 North Brand Blvd.
Glendale, California 91203
Re: Dreyer's Grand Ice Cream, Inc.
Gentlemen:
[insert standard introductory language]
Based on and subject to the foregoing, we are of the opinion
that:
1. The execution, delivery and performance of each of
the Principal Agreements (1) have been duly authorized by all necessary
corporate action of the Company, and each of the Principal Agreements has been
duly executed and delivered by the Company.
2. Each of the Principal Agreements constitutes valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with its terms
__________________________________
1. All capitalized but undefined terms used herein shall have the meaning
assigned such terms in the Stock and Warrant Purchase Agreement by and
between Dreyer's Grand Ice Cream, Inc. and Nestle Holdings, Inc. (the
"Purchase Agreement"). For purposes of this form of legal opinion,
the term Principal Agreements means the Purchase Agreement and each of
the Collateral Agreements except the Distributor Agreement.
<PAGE> 187
except to the extent that the rights and remedies created thereby may be
limited by (i) bankruptcy, insolvency, reorganization, and other laws of
general application affecting the rights and remedies of creditors, (ii)
equitable principles (whether considered in an action at law or in equity)
which provide, among other things, that the remedies of specific performance
and injunctive and other forms of equitable relief are subject to equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought and (iii) the unenforceability under certain
circumstances under law or court decisions of provisions providing for the
indemnification of or contribution to a party with respect to a liability where
such indemnification or contribution is contrary to public policy.
3. The Securities to be issued and sold by the Company
pursuant to the Purchase Agreement and Warrant Agreement have been duly
authorized and, when issued to and paid for by you in accordance with the terms
of the Purchase Agreement and Warrant Agreement, will be validly issued, fully
paid and non-assessable and free of preemptive rights.
4. The Warrant Shares to be issued upon exercise of the
Warrants have been duly authorized and reserved for issuance by the Company
and, upon exercise of the Warrants in accordance with the terms of the Warrant
Agreement, such Warrant Shares, if issued in accordance with the terms of the
Warrant Agreement, will be validly issued, fully paid and nonassessable and
free of preemptive rights.
5. Based upon the representations contained in Sections
2.19, 3.4 and 3.5 of the Purchase Agreement, it is not necessary in connection
with the sale of the Securities under the Purchase Agreement to register the
Securities under the Securities Act of 1933, as amended.
6. No authorization, approval or consent of, or
exemption or other action by, or registration or filing with, any governmental
authority is required in connection with the execution, delivery and
performance by the Company of each of the Principal Agreements, or in
connection with the offer, sale and delivery of the Securities, other than such
authorizations, approvals, consents, exemptions, registrations or filings as
shall have been made or secured by the date hereof.
<PAGE> 188
7. Neither the Company nor any of its Subsidiaries is,
or will be upon the issuance and sale of the Securities, subject to regulation
under the Investment Company Act of 1940, as amended.
[insert standard concluding language]
Very truly yours,
<PAGE> 189
EXHIBIT I
FORM OF LEGAL OPINION
OF
MANWELL & MILTON
May __, 1994
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
800 North Brand Blvd.
Glendale, California 91203
Re: Dreyer's Grand Ice Cream, Inc.
Gentlemen:
[insert standard introductory language]
Based on and subject to the foregoing, we are of the opinion
that:
1. The Company(1) and each of its Subsidiaries has been
duly incorporated
__________________________________
1. All capitalized but undefined terms used herein shall have the meaning
assigned such terms in the Stock and Warrant Purchase Agreement by and
between the Company and Nestle Holdings, Inc. (the "Purchase
Agreement"). For purposes of this opinion, the term Principal
Agreements means the Purchase Agreement and each of the Collateral
Agreements; the term Rogers Shares means the Shares as defined in the
Rogers Right of First Refusal Agreement; the term Cronk Shares means
the Shares as defined in the Cronk Right of First Refusal Agreement;
the term Rogers Right of First Refusal means the Right of First
Refusal as defined in the Rogers Right of First Refusal Agreement; the
term Cronk Right of First Refusal means the Right of First Refusal as
defined in the Cronk Right of First Refusal Agreement; the term Rogers
BOA Consent means that certain Agreement Regarding Right of First
Refusal by and
<PAGE> 190
and is validly existing and in good standing under the laws of its jurisdiction
of incorporation with full corporate power and authority to own or lease its
properties and conduct its business as presently being conducted and to enter
into each of the Principal Agreements and perform its obligations thereunder.
2. The Rogers Revocable Trust has been duly created and
is validly existing under the terms of the Rogers Trust Agreement and the laws
of the State of California.
3. The Cronk Revocable Trust has been duly created and
is validly existing under the terms of the Cronk Trust Agreement and the laws
of the State of California.
4. Each of the Company and its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which it owns or leases property or conducts business,
except where the failure to so qualify or be licensed would not have a material
adverse effect on the financial condition or business of the Company and its
Subsidiaries taken as a whole.
5. The authorized capital stock of the Company consists
of 10,000,000 shares of Preferred Stock, $1.00 par value, including the Series
A Convertible Preferred Stock and the Series B Convertible Preferred Stock,
none of which are issued and outstanding, and 30,000,000 shares of Common
Stock, $1.00 par value (the "Common Stock"), of which [14,764,596 shares plus
any additional shares issued in accordance with Section 2.12 of the Purchase
Agreement from the Effective Date until Closing] were issued and outstanding
as of May , 1994. All the outstanding shares of Common Stock have been duly
and validly issued and are fully paid and nonassessable. No class of capital
stock of the Company is entitled to preemptive rights. To the best of our
knowledge after due inquiry, except for the Rights and options and warrants
listed on Exhibit A hereto, the Convertible Notes, the Series A Convertible
Preferred Stock and the Series B Convertible Preferred Stock (i) there are no
outstanding subscriptions, warrants, options, calls or commitments of any
character related to or entitling any Person to purchase or otherwise acquire
any shares of the Company's capital stock, (ii) there are no obligations or
securities convertible into or exchangeable for shares of any capital stock of
the Company or any commitments of any character relating to or entitling any
Person to purchase or otherwise acquire any such obligations or securities, and
(iii) there are no preemptive or similar rights to subscribe for or to purchase
any capital stock of the Company. All of the outstanding shares of the
capital stock of each Subsidiary have been
__________________________________
among Nestle Holdings, Inc., Bank of America National Trust and
Savings Association, and T. Gary Rogers and Kathleen T. Rogers,
individually and as trustees of the Rogers Revocable Trust and the
Four Rogers Trust; and the term Cronk BOA Consent means that certain
Agreement Regarding Right of First Refusal by and among Nestle
Holdings, Inc., Bank of America National Trust and Savings
Association, and William F. Cronk, III and Janet M. Cronk,
individually and as trustees of the Cronk Revocable Trust.
<PAGE> 191
validly issued and are fully paid and nonassessable and are owned beneficially
and of record by the Company and its Subsidiaries, free and clear of any Lien.
6. Each of T. Gary Rogers ("Gary Rogers") and Kathleen
T. Rogers ("Kathleen Rogers") has the legal capacity to act as sole trustee of
the Rogers Revocable Trust and, as an individual or co-trustee of the Rogers
Revocable Trust, as the case may be, to enter into each of the Rogers Right of
First Refusal Agreement and the Rogers BOA Consent, perform the obligations
thereunder and consummate the transactions contemplated thereby.
7. Each of William F. Cronk, III ("William Cronk") and
Janet M. Cronk ("Janet Cronk") has the legal capacity to act as sole trustee of
the Cronk Revocable Trust and, as an individual or co-trustee of the Cronk
RevocableTrust, as the case may be, to enter into each of the Cronk Right of
First Refusal Agreement and the Cronk BOA Consent, perform the obligations
thereunder and consummate the transactions contemplated thereby.
8. Each of Gary Rogers and Kathleen Rogers is a duly
appointed trustee of the Rogers Revocable Trust under the Rogers Trust
Agreement and under the laws of the State of California, with full right, power
and authority as such trustee to grant the Rogers Right of First Refusal with
respect to the Rogers Shares, sell the Rogers Shares, enter into each of the
Rogers Right of First Refusal Agreement and the Rogers BOA Consent, perform the
trustee's obligations thereunder and consummate the transactions contemplated
thereby on behalf of the Rogers Revocable Trust. Gary Rogers and Kathleen
Rogers are the only named and acting co-trustees of the Rogers Revocable Trust
as of the date hereof.
9. Each of William Cronk and Janet Cronk is a duly
appointed trustee of the Cronk Revocable Trust under the Cronk Trust Agreement
and under the laws of the State of California, with full right, power and
authority as such trustee to grant the Cronk Right of First Refusal with
respect to the Cronk Shares, sell the Cronk Shares, enter into each of the
Cronk Right of First Refusal Agreement and the Cronk BOA Consent, perform the
trustee's obligations thereunder and consummate the transactions contemplated
thereby on behalf of the Cronk Revocable Trust. William Cronk and Janet Cronk
are the only named and acting co-trustees of the Cronk Revocable Trust as of
the date hereof.
10. The execution, delivery and performance of the
Distributor Agreement has been duly authorized by all necessary corporate
action of the Company, and the Distributor Agreement has been duly executed and
delivered by the Company.
11. The execution, delivery and performance of each
of the Rogers Right of First Refusal Agreement and the Rogers BOA Consent
are authorized by the Rogers Trust Agreement and the laws of the State of
California, and each of the Rogers Right of First
<PAGE> 192
Refusal Agreement and the Rogers BOA Consent has been duly executed and
delivered by each of the Rogers Entities.
12. The execution, delivery and performance of each of
the Cronk Right of First Refusal Agreement and the Cronk BOA Consent are
authorized by the Cronk Trust Agreement and the laws of the State of
California, and each of the Cronk Right of First Refusal Agreement and the
Cronk BOA Consent has been duly executed and delivered by each of the Cronk
Entities.
13. The Distributor Agreement constitutes a valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms except as such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium and other laws relating to
or affecting the rights of creditors generally, (ii) equitable principles
(whether considered in an action at law or in equity) which provide, among
other things, that the remedies of specific performance and injunctive and
other forms of equitable relief are subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be brought
and (iii) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or contribution to
a party with respect to a liability where such indemnification or contribution
is contrary to public policy.
14. The Rogers Right of First Refusal Agreement
constitutes a valid and legally binding obligation of each of Gary Rogers, Gary
Rogers as trustee of the Rogers Revocable Trust, Kathleen Rogers, Kathleen
Rogers as trustee of the Rogers Revocable Trust and the Rogers Revocable Trust
enforceable against each of Gary Rogers, Gary Rogers as trustee of the Rogers
Revocable Trust, Kathleen Rogers, Kathleen Rogers as trustee of the Rogers
Revocable Trust and the Rogers Revocable Trust in accordance with its terms
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting the rights
of creditors generally, (ii) equitable principles (whether considered in an
action at law or in equity) which provide, among other things, that the
remedies of specific performance and injunctive and other forms of equitable
relief are subject to equitable defenses and to the discretion of the court
before which any proceedings therefor may be brought and (iii) the
unenforceability under certain circumstances under law or court decisions of
provisions providing for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is contrary
to public policy.
15. The Rogers BOA Consent constitutes a valid and
legally binding obligation of each of the Rogers Entities and the Rogers
Revocable Trust enforceable against each of the Rogers Entities and the Rogers
Revocable Trust in accordance with its terms except as such enforceability may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting the rights of creditors generally, (ii) equitable
principles (whether considered in an action at law or in equity) which provide,
4
<PAGE> 193
among other things, that the remedies of specific performance and injunctive
and other forms of equitable relief are subject to equitable defenses and to
the discretion of the court before which any proceedings therefor may be
brought and (iii) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy.
16. Each of the Cronk Right of First Refusal Agreement
and the Cronk BOA Consent constitutes a valid and legally binding obligation of
each of the Cronk Entities and the Cronk Revocable Trust enforceable against
each of the Cronk Entities and the Cronk Revocable Trust in accordance with its
terms except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
the rights of creditors generally, (ii) equitable principles (whether
considered in an action at law or in equity) which provide, among other things,
that the remedies of specific performance and injunctive and other forms of
equitable relief are subject to equitable defenses and to the discretion of the
court before which any proceedings therefor may be brought and (iii) the
unenforceability under certain circumstances under law or court decisions of
provisions providing for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is contrary
to public policy.
17. To the best of our knowledge after due inquiry, no
authorization, approval or consent of, or exemption or other action by, or
registration or filing with, any Person is required in connection with the
execution, delivery and performance by the Company of the terms and conditions
of each of the Principal Agreements, other than such authorizations, approvals,
consents, exemptions, registrations or filings as shall have been made or
secured by the date hereof.
18. No authorization, approval or consent of, or
exemption or other action by, or registration or filing with, any governmental
authority, or, to the best of our knowledge after due inquiry, any other Person
is required in connection with the execution, delivery and performance by each
of Gary Rogers, Gary Rogers as trustee of the Rogers Revocable Trust, Kathleen
Rogers and Kathleen Rogers as trustee of the Rogers Revocable Trust of the terms
and conditions of the Rogers Right of First Refusal Agreement, other than such
authorizations, approvals, consents, exemptions, registrations or filings as
shall have been made or secured by the date hereof.
19. No authorization, approval or consent of, or
exemption or other action by, or registration or filing with, any governmental
authority, or, to the best of our knowledge after due inquiry, any other Person
is required in connection with the execution, delivery and performance by each
of the Rogers Entities of the terms and conditions of the Rogers BOA Consent,
other than such authorizations, approvals, consents, exemptions, registrations
or filings as shall have been made or secured by the date hereof.
5
<PAGE> 194
20. No authorization, approval or consent of, or
exemption or other action by, or registration or filing with, any governmental
authority, or, to the best of our knowledge after due inquiry, any other Person
is required in connection with the execution, delivery and performance by each
of the Cronk Entities of the terms and conditions of each of the Cronk Right of
First Refusal Agreement and the Cronk BOA Consent, other than such
authorizations, approvals, consents, exemptions, registrations or filings as
shall have been made or secured by the date hereof.
21. To the best of our knowledge after due inquiry, there
is no action, proceeding or investigation pending or threatened against the
Company or any of its Subsidiaries in any court or before any governmental
authority or arbitration board or tribunal which, if adversely determined,
singly and in the aggregate with all such other actions, proceedings and
investigations, would have a material adverse effect on the financial condition
or business of the Company and its Subsidiaries taken as a whole.
22. To the best of our knowledge after due inquiry, there
is no action, proceeding or investigation pending or threatened against any of
the Rogers Entities or the Rogers Revocable Trust in any court or before any
governmental authority or arbitration board or tribunal which, if adversely
determined, singly and in the aggregate with all such other actions,
proceedings and investigations, would have a material adverse effect on the
financial condition or business of any of the Rogers Entities or the Rogers
Revocable Trust taken as a whole.
23. To the best of our knowledge after due inquiry, there
is no action, proceeding or investigation pending or threatened against any of
the Cronk Entities or the Cronk Revocable Trust in any court or before any
governmental authority or arbitration board or tribunal which, if adversely
determined, singly and in the aggregate with all such other actions,
proceedings and investigations, would have a material adverse effect on the
financial condition or business of any of the Cronk Entities or the Cronk
Revocable Trust taken as a whole.
24. The execution and delivery of each of the Principal
Agreements, and the consummation of the transactions contemplated thereby,
including, without limitation, the issuance and sale of the Securities and
Warrant Shares by the Company pursuant to the Purchase Agreement and Warrant
Agreement, will not conflict with or constitute a breach of, or default under,
the charter or bylaws of the Company or any of its Subsidiaries or, to the best
of our knowledge after due inquiry, except as set forth on Exhibit B, any
material agreement, indenture or other instrument to which the Company or any
of its Subsidiaries is a party or by which it or any of them is bound, or any
law, administrative regulation or court or governmental decree applicable to
the Company or any of its Subsidiaries.
25. The execution and delivery of each of the Principal
Agreements and the consummation of the transactions contemplated thereby,
including, without limitation, the
6
<PAGE> 195
issuance and sale of the Securities and Warrant Shares by the Company pursuant
to the Purchase Agreement and Warrant Agreement, will not conflict with or
constitute a breach of, or default under, the Ben & Jerry's Agreement, as
amended by the Ben & Jerry's Amendments, and will not trigger the payment of a
termination or other fee under such agreement.
26. The execution and delivery of each of the Rogers
Right of First Refusal Agreement and the Rogers BOA Consent, and the
consummation of the transactions contemplated thereby, including, without
limitation, the grant of the Rogers Right of First Refusal, will not conflict
with or constitute a breach of, or default under, the Rogers Trust Agreement
or, to the best of our knowledge after due inquiry, any material agreement,
indenture or other instrument to which any of the Rogers Entities or the Rogers
Revocable Trust is a party or by which any of them is bound, or any law,
administrative regulation or court or governmental decree applicable to any of
the Rogers Entities or the Rogers Revocable Trust.
27. The execution and delivery of the Rogers Right of
First Refusal Agreement, and the consummation of the transactions contemplated
thereby, including, without limitation, the grant of the Rogers Right of First
Refusal, will not conflict with or constitute a breach of, or default under,
the Rogers BOA Security Documents, as amended by the Rogers BOA Consent.
28. The execution and delivery of each of the Cronk Right
of First Refusal Agreement and the Cronk BOA Consent, and the consummation of
the transactions contemplated thereby, including, without limitation, the grant
of the Cronk Right of First Refusal, will not conflict with or constitute a
breach of, or default under, the Cronk Trust Agreement or, to the best of our
knowledge after due inquiry, any material agreement, indenture or other
instrument to which any of the Cronk Entities or the Cronk Revocable Trust is a
party or by which any of them is bound, or any law, administrative regulation
or court or governmental decree applicable to any of the Cronk Entities or the
Cronk Revocable Trust.
29. The execution and delivery of the Cronk Right of
First Refusal Agreement, and the consummation of the transactions contemplated
thereby, including, without limitation, the grant of the Cronk Right of First
Refusal, will not conflict with or constitute a breach of, or default under,
the Cronk BOA Security Documents, as amended by the Cronk BOA Consent.
[insert standard concluding language]
Very truly yours,
7
<PAGE> 196
EXHIBIT J
Form of
Amendment to the
Rogers BOA Security Document
<PAGE> 197
AGREEMENT REGARDING RIGHT OF FIRST REFUSAL
This Agreement is entered into as of May __, 1994 among Nestle Holdings,
Inc. ("Purchaser"), Bank of America National Trust and Savings Association
("Bank") and T. Gary Rogers and Kathleen Tuck Rogers, individually and as
trustees of the Rogers Revocable Trust and as trustees of the Four Rogers Trust
("Sellers").
RECITALS
A. Sellers and Purchaser have, or are about to, enter into a Right of First
Refusal Agreement dated as of May __, 1994 (the "Right of First Refusal
Agreement").
B. Under the Right of First Refusal Agreement, Sellers have granted to
Purchaser a right of first refusal covering all voting securities of Dreyer's
Grand Ice Cream, Inc., now or hereafter beneficially owned by the Sellers (the
"Shares").
C. The Sellers have pledged certain of the Shares as collateral for the
Sellers' obligations with respect to credit extended by the Bank. All present
and future obligations of Sellers, or any of them, to the Bank, whether direct
or contingent, are referred to herein as the "Indebtedness." Any Shares now or
hereafter pledged by the Sellers to the Bank are referred to as the "Pledged
Shares."
AGREEMENT
1. Consent and Agreement of Bank. The Bank consents to the execution of
the Right of First Refusal Agreement and agrees that the rights of Purchaser
thereunder are senior to the security interest of the Bank, to the extent and
as described in this Agreement. The Bank agrees that, so long as the Right of
First Refusal Agreement remains in effect, any sale of the Pledged Shares by
the Bank shall be conducted in accordance with the Right of First Refusal
Agreement (as modified by this Agreement). The Bank agrees to give the
Purchaser notice of any material default of the Sellers under the Indebtedness,
which default is not waived by the Bank; provided, however, that a failure to
give such notice shall not diminish the Bank's rights or obligations under this
Agreement. The Bank agrees that it may not transfer all or any portion of its
rights with respect to the Indebtedness or the Pledged Shares unless the
transferee shall agree in writing to be bound by the provisions of this
Agreement.
2. Modification of Right of First Refusal Agreement. With respect to a
proposed sale by the Bank under paragraph (d) of Section 1 of the Right of
First Refusal Agreement (entitled "Rule 144 Sales") following a default by the
Sellers under their obligations to the Bank, the provisions of the paragraph
are modified as follows (capitalized terms have the meanings defined in the
Right of First Refusal Agreement):
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<PAGE> 198
(a) If the Bank provides a Rule 144 Notice to the Purchaser, the Purchaser
may, within the Rule 144 Exercise Period, provide to the Bank a notice, in
writing (the "Floor Price Notice"), stating that the Purchaser does not wish
to purchase the Rule 144 Shares at the Rule 144 Purchase Price, but stating
that the Purchaser is willing to purchase the Rule 144 Shares during the
Qualified Period at a price equal to a lower price specified by the Purchaser
in the Floor Price Notice (the "Floor Price").
(b) If the Purchaser provides the Floor Price Notice to the Bank, then the
Bank may (but is not obligated to), at any time during the Qualified Period,
do either or both of the following:
(i) sell any or all of the Rule 144 Shares pursuant to Rule 144 at a
per-share price greater than the Floor Price; or
(ii) provide written notice to the Purchaser that the Bank will sell all
or a specified portion of the Rule 144 Shares to the Purchaser at the Floor
Price. Upon the providing of such notice to the Purchaser, the Purchaser
shall be unconditionally obligated (unless prohibited by law) to purchase
the Shares specified in such notice at the Floor Price. The closing of the
sale shall occur under the time limits stated in subparagraph (e) of section
1 of the Right of First Refusal Agreement.
(c) If, during the Rule 144 Exercise Period, the Purchaser does not
provide to the Bank either the Rule 144 Exercise Notice or the Floor Price
Notice, then the Bank may, during the Qualified Period, sell any or all of
the Rule 144 Shares pursuant to Rule 144 at any commercially reasonable
price.
(d) A sale under (b)(i) or (c) above shall be otherwise without
restriction and shall not require further notice to the Purchaser; and upon
any such sale, the Right of First Refusal shall terminate with respect to the
Rule 144 Shares so sold. If at the end of the Qualified Period the Bank has
not sold all of the Rule 144 Shares as aforesaid, then the Bank shall not
thereafter sell such unsold Shares without again complying with the
provisions of the Right of First Refusal Agreement.
(e) Except as modified by this paragraph 2, all other provisions of
paragraph (d), Section 1 of the Right of First Refusal Agreement shall remain
in effect, including the right of the Purchaser to purchase the Rule 144
Shares at the Rule 144 Purchase Price.
3. Agreement of Sellers. The Sellers agree that a sale by the Bank
pursuant to the Right of First Refusal Agreement (as modified by this
Agreement) will constitute a commercially reasonable disposition of the Pledged
Shares and that if the
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<PAGE> 199
Purchaser acquires any of the Pledged Shares pursuant to such sale, such
purchase shall be deemed to have been in good faith, and the Pledged Shares
shall be free and clear of any claim by the Sellers. As collateral security
for the Indebtedness, the Sellers hereby assign to the Bank and grant to the
Bank a security interest in the Sellers' rights under the Right of First
Refusal Agreement with respect to the Pledged Shares, and any amendment,
substitution or replacement thereof. The Sellers hereby grant the Bank a power
of attorney to exercise any rights of the Sellers under the Right of First
Refusal Agreement, either in the Bank's own name or in the name of the Sellers.
The Sellers will execute a financing statement appropriate to perfect the
Bank's security interest.
4. Agreements of Purchaser and Sellers. The Purchaser and the Sellers
agree that, upon receipt of written notice from the Bank that the Sellers are
in default under the Indebtedness and that the Bank has elected to sell the
Pledged Shares, any notices given to the Purchaser by the Bank under the Right
of First Refusal Agreement shall be effective as if given by the Sellers, and
if the Purchaser elects to exercise its rights under the Right of First Refusal
Agreement, the Purchaser will send to the Bank any payment due to the Sellers
under the Right of First Refusal Agreement, which the Sellers acknowledge will
satisfy the Purchaser's obligations to make payment for the Pledged Shares
which it elects to purchase under the Right of First Refusal Agreement. The
Purchaser may not transfer any of its rights under the Right of First Refusal
Agreement unless the transferee shall agree in writing to be bound by the
provisions of this Agreement.
5. Sale by the Sellers. The Bank agrees that if the Bank consents to the
terms of any sale of the Pledged Shares by the Sellers, and the Purchaser
exercises its right under the Right of First Refusal Agreement to purchase the
Pledged Shares on the terms approved by the Bank and delivers the cash or other
consideration therefor to the Bank, then the Bank shall deliver to the
Purchaser all of the Pledged Shares thereby purchased by the Purchaser and the
Bank further agrees that all the Pledged Shares so delivered to the Purchaser
shall be free and clear of all claims and security interests of the Bank. The
Sellers agree that any delivery to the Bank of the cash or other consideration
pursuant to the previous sentence shall be deemed, for purposes of the Right of
First Refusal Agreement, to be a delivery to the Sellers. Notwithstanding the
provisions of the Individual Loan Agreement among the Bank and the Sellers or
any security agreement regarding the Pledged Shares, the Bank hereby consents
to the sale of any or all of the Pledged Shares for a purchase price at least
equal to the lesser of the following: (a) an amount sufficient to repay the
Bank in full all amounts secured by the Pledged Shares, or (b) the fair market
value of the Pledged Shares to be sold (determined as the average of the
reported closing sales prices on the five preceding trading days on the NASDAQ
National Market System). The foregoing sentence shall not be deemed to modify
any terms of the Right of First
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<PAGE> 200
Refusal Agreement relating to the calculation of the sales price of the Shares.
6. Certain Non-Binding Provisions. The Bank shall not be obligated under
any of the terms or conditions of the Right of First Refusal Agreement,
including the covenants of the Sellers thereunder, except as provided in this
Agreement. The Bank shall not be bound by any amendment to the Right of First
Refusal Agreement, unless the Bank consents thereto in writing.
7. Further Assurances. Upon the terms and subject to the conditions
contained herein, each of the parties hereto agrees (i) to use all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, (ii) to execute any
documents, instruments or conveyances of any kind which may be reasonably
necessary or advisable to carry out any of the transactions contemplated
hereunder and (iii) to cooperate with each other in connection with the
foregoing.
8. Specific Enforcement. The Purchaser, the Sellers and the Bank
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state thereof having
jurisdiction, this being in addition to any other remedy to which they may be
entitled at law or equity.
9. Entire Agreement. This Agreement and the agreements referred to herein
contain the entire understanding of the parties with respect to the
transactions contemplated hereby.
10. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more of the counterparts has been signed by
each party and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
11. Notices and Other Communications. All notices, consents, requests,
instructions and other communications provided for herein shall be promptly
given, if in writing and delivered personally, by telecopy or sent by
registered mail, postage prepaid, if to:
The Sellers:
c/o Dreyer's Grand Ice Cream, Inc.
5929 College Avenue
Oakland, CA 94618
Attention: T. Gary Rogers
-4-
<PAGE> 201
With a copy to:
Edmund R. Manwell, Esq.
Manwell & Milton
101 California Street, Suite 3750
San Francisco, CA 94111
The Purchaser:
President
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
800 North Brand Boulevard
Glendale, CA 91203
With copies to:
James H. Ball, Esq.
Senior Vice President and General Counsel
Nestle USA, Inc.
800 North Brand Boulevard
Glendale, CA 91203
and
Wayne F. Erdelack, Esq.
Vice President and Deputy General Counsel
Nestle USA, Inc.
30003 Bainbridge Road
Solon, Ohio 44139
The Bank:
San Francisco Private Banking #1329
50 California Street, 28th floor
San Francisco, CA 94111
Attention: Ellen B. Levine
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner.
12. Amendments. This Agreement may not be amended, modified or
supplemented other than by a written instrument signed by all parties hereto
which are, at the time of such amendment or modification, subject to this
Agreement.
13. Successors and Assigns. All covenants and agreements contained herein
shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that no party may assign any of its
right or obligations hereunder without the prior written consent of the other
parties hereto, except that the Purchaser and the Bank may assign any of their
respective rights and obligations hereunder to their respective affiliates.
-5-
<PAGE> 202
14. Attorneys' Fees. In the event of any dispute under this Agreement, the
prevailing party shall be entitled to its reasonable attorneys' fees (including
the allocated cost of in-house counsel).
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
16. Termination. This Agreement shall terminate when the Right of First
Refusal Agreement terminates.
In Witness Whereof, the parties have caused this Agreement to be executed
and delivered as of the date first written above.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By_______________________________
Ellen B. Levine, Vice President
NESTLE HOLDINGS, INC.
By_______________________________
Typed Name_______________________
Title____________________________
_________________________________
T. Gary Rogers, Individually
and as Trustee of the Rogers Revocable
Trust and the Four Rogers Trust
_________________________________
Kathleen T. Rogers, Individually and as
Trustee of the Rogers Revocable
Trust and the Four Rogers Trust
-6-
<PAGE> 203
EXHIBIT K
Form of Amendment
to the Cronk BOA Security Documents
<PAGE> 204
AGREEMENT REGARDING RIGHT OF FIRST REFUSAL
This Agreement is entered into as of May __, 1994 among Nestle Holdings,
Inc. ("Purchaser"), Bank of America National Trust and Savings Association
("Bank") and William F. Cronk, III and Janet M. Cronk, individually and as
trustees of the Cronk Revocable Trust ("Sellers").
RECITALS
A. Sellers and Purchaser have, or are about to, enter into a Right of First
Refusal Agreement dated as of May __, 1994 (the "Right of First Refusal
Agreement").
B. Under the Right of First Refusal Agreement, Sellers have granted to
Purchaser a right of first refusal covering all voting securities of Dreyer's
Grand Ice Cream, Inc., now or hereafter beneficially owned by the Sellers (the
"Shares").
C. The Sellers have pledged certain of the Shares as collateral for the
Sellers' obligations with respect to credit extended by the Bank. All present
and future obligations of Sellers, or any of them, to the Bank, whether direct
or contingent, are referred to herein as the "Indebtedness." Any Shares now or
hereafter pledged by the Sellers to the Bank are referred to as the "Pledged
Shares."
AGREEMENT
1. Consent and Agreement of Bank. The Bank consents to the execution of
the Right of First Refusal Agreement and agrees that the rights of Purchaser
thereunder are senior to the security interest of the Bank, to the extent and
as described in this Agreement. The Bank agrees that, so long as the Right of
First Refusal Agreement remains in effect, any sale of the Pledged Shares by
the Bank shall be conducted in accordance with the Right of First Refusal
Agreement (as modified by this Agreement). The Bank agrees to give the
Purchaser notice of any material default of the Sellers under the Indebtedness,
which default is not waived by the Bank; provided, however, that a failure to
give such notice shall not diminish the Bank's rights or obligations under this
Agreement. The Bank agrees that it may not transfer all or any portion of its
rights with respect to the Indebtedness or the Pledged Shares unless the
transferee shall agree in writing to be bound by the provisions of this
Agreement.
2. Modification of Right of First Refusal Agreement. With respect to a
proposed sale by the Bank under paragraph (d) of Section 1 of the Right of
First Refusal Agreement (entitled "Rule 144 Sales") following a default by the
Sellers under their obligations to the Bank, the provisions of the paragraph
are modified as follows (capitalized terms have the meanings defined in the
Right of First Refusal Agreement):
(a) If the Bank provides a Rule 144 Notice to the Purchaser, the Purchaser
may, within the Rule 144 Exercise
-1-
<PAGE> 205
Period, provide to the Bank a notice, in writing (the "Floor Price Notice"),
stating that the Purchaser does not wish to purchase the Rule 144 Shares at
the Rule 144 Purchase Price, but stating that the Purchaser is willing to
purchase the Rule 144 Shares during the Qualified Period at a price equal to
a lower price specified by the Purchaser in the Floor Price Notice (the
"Floor Price").
(b) If the Purchaser provides the Floor Price Notice to the Bank, then the
Bank may (but is not obligated to), at any time during the Qualified Period,
do either or both of the following:
(i) sell any or all of the Rule 144 Shares pursuant to Rule 144 at a
per-share price greater than the Floor Price; or
(ii) provide written notice to the Purchaser that the Bank will sell all
or a specified portion of the Rule 144 Shares to the Purchaser at the Floor
Price. Upon the providing of such notice to the Purchaser, the Purchaser
shall be unconditionally obligated (unless prohibited by law) to purchase
the Shares specified in such notice at the Floor Price. The closing of the
sale shall occur under the time limits stated in subparagraph (e) of section
1 of the Right of First Refusal Agreement.
(c) If, during the Rule 144 Exercise Period, the Purchaser does not
provide to the Bank either the Rule 144 Exercise Notice or the Floor Price
Notice, then the Bank may, during the Qualified Period, sell any or all of
the Rule 144 Shares pursuant to Rule 144 at any commercially reasonable
price.
(d) A sale under (b)(i) or (c) above shall be otherwise without
restriction and shall not require further notice to the Purchaser; and upon
any such sale, the Right of First Refusal shall terminate with respect to the
Rule 144 Shares so sold. If at the end of the Qualified Period the Bank has
not sold all of the Rule 144 Shares as aforesaid, then the Bank shall not
thereafter sell such unsold Shares without again complying with the
provisions of the Right of First Refusal Agreement.
(e) Except as modified by this paragraph 2, all other provisions of
paragraph (d), Section 1 of the Right of First Refusal Agreement shall remain
in effect, including the right of the Purchaser to purchase the Rule 144
Shares at the Rule 144 Purchase Price.
3. Agreement of Sellers. The Sellers agree that a sale by the Bank
pursuant to the Right of First Refusal Agreement (as modified by this
Agreement) will constitute a commercially reasonable disposition of the Pledged
Shares and that if the Purchaser acquires any of the Pledged Shares pursuant to
such sale, such purchase shall be deemed to have been in good faith,
-2-
<PAGE> 206
and the Pledged Shares shall be free and clear of any claim by the Sellers. As
collateral security for the Indebtedness, the Sellers hereby assign to the Bank
and grant to the Bank a security interest in the Sellers' rights under the
Right of First Refusal Agreement with respect to the Pledged Shares, and any
amendment, substitution or replacement thereof. The Sellers hereby grant the
Bank a power of attorney to exercise any rights of the Sellers under the Right
of First Refusal Agreement, either in the Bank's own name or in the name of the
Sellers. The Sellers will execute a financing statement appropriate to perfect
the Bank's security interest.
4. Agreements of Purchaser and Sellers. The Purchaser and the Sellers
agree that, upon receipt of written notice from the Bank that the Sellers are
in default under the Indebtedness and that the Bank has elected to sell the
Pledged Shares, any notices given to the Purchaser by the Bank under the Right
of First Refusal Agreement shall be effective as if given by the Sellers, and
if the Purchaser elects to exercise its rights under the Right of First Refusal
Agreement, the Purchaser will send to the Bank any payment due to the Sellers
under the Right of First Refusal Agreement, which the Sellers acknowledge will
satisfy the Purchaser's obligations to make payment for the Pledged Shares
which it elects to purchase under the Right of First Refusal Agreement. The
Purchaser may not transfer any of its rights under the Right of First Refusal
Agreement unless the transferee shall agree in writing to be bound by the
provisions of this Agreement.
5. Sale by the Sellers. The Bank agrees that if the Bank consents to the
terms of any sale of the Pledged Shares by the Sellers, and the Purchaser
exercises its right under the Right of First Refusal Agreement to purchase the
Pledged Shares on the terms approved by the Bank and delivers the cash or other
consideration therefor to the Bank, then the Bank shall deliver to the
Purchaser all of the Pledged Shares thereby purchased by the Purchaser and the
Bank further agrees that all the Pledged Shares so delivered to the Purchaser
shall be free and clear of all claims and security interests of the Bank. The
Sellers agree that any delivery to the Bank of the cash or other consideration
pursuant to the previous sentence shall be deemed, for purposes of the Right of
First Refusal Agreement, to be a delivery to the Sellers. Notwithstanding the
provisions of the Individual Loan Agreement among the Bank and the Sellers or
any security agreement regarding the Pledged Shares, the Bank hereby consents
to the sale of any or all of the Pledged Shares for a purchase price at least
equal to the lesser of the following: (a) an amount sufficient to repay the
Bank in full all amounts secured by the Pledged Shares, or (b) the fair market
value of the Pledged Shares to be sold (determined as the average of the
reported closing sales prices on the five preceding trading days on the NASDAQ
National Market System). The foregoing sentence shall not be deemed to modify
any terms of the Right of First Refusal Agreement relating to the calculation
of the sales price of the Shares.
-3-
<PAGE> 207
6. Certain Non-Binding Provisions. The Bank shall not be obligated under
any of the terms or conditions of the Right of First Refusal Agreement,
including the covenants of the Sellers thereunder, except as provided in this
Agreement. The Bank shall not be bound by any amendment to the Right of First
Refusal Agreement, unless the Bank consents thereto in writing.
7. Further Assurances. Upon the terms and subject to the conditions
contained herein, each of the parties hereto agrees (i) to use all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, (ii) to execute any
documents, instruments or conveyances of any kind which may be reasonably
necessary or advisable to carry out any of the transactions contemplated
hereunder and (iii) to cooperate with each other in connection with the
foregoing.
8. Specific Enforcement. The Purchaser, the Sellers and the Bank
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state thereof having
jurisdiction, this being in addition to any other remedy to which they may be
entitled at law or equity.
9. Entire Agreement. This Agreement and the agreements referred to herein
contain the entire understanding of the parties with respect to the
transactions contemplated hereby.
10. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more of the counterparts has been signed by
each party and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
11. Notices and Other Communications. All notices, consents, requests,
instructions and other communications provided for herein shall be promptly
given, if in writing and delivered personally, by telecopy or sent by
registered mail, postage prepaid, if to:
The Sellers:
c/o Dreyer's Grand Ice Cream, Inc.
5929 College Avenue
Oakland, CA 94618
Attention: William F. Cronk, III
-4-
<PAGE> 208
With a copy to:
Edmund R. Manwell, Esq.
Manwell & Milton
101 California Street, Suite 3750
San Francisco, CA 94111
The Purchaser:
President
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
800 North Brand Boulevard
Glendale, CA 91203
With copies to:
James H. Ball, Esq.
Senior Vice President and General Counsel
Nestle USA, Inc.
800 North Brand Boulevard
Glendale, CA 91203
and
Wayne F. Erdelack, Esq.
Vice President and Deputy General Counsel
Nestle USA, Inc.
30003 Bainbridge Road
Solon, Ohio 44139
The Bank:
San Francisco Private Banking #1329
50 California Street, 28th floor
San Francisco, CA 94111
Attention: Ellen B. Levine
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner.
12. Amendments. This Agreement may not be amended, modified or
supplemented other than by a written instrument signed by all parties hereto
which are, at the time of such amendment or modification, subject to this
Agreement.
13. Successors and Assigns. All covenants and agreements contained herein
shall bind and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that no party may assign any of its
right or obligations hereunder without the prior written consent of the other
parties hereto, except that the Purchaser and the Bank may assign any of their
respective rights and obligations hereunder to their respective affiliates.
-5-
<PAGE> 209
14. Attorneys' Fees. In the event of any dispute under this Agreement, the
prevailing party shall be entitled to its reasonable attorneys' fees (including
the allocated cost of in-house counsel).
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
16. Termination. This Agreement shall terminate when the Right of First
Refusal Agreement terminates.
In Witness Whereof, the parties have caused this Agreement to be executed
and delivered as of the date first written above.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By_______________________________
Ellen B. Levine, Vice President
NESTLE HOLDINGS, INC.
By_______________________________
Typed Name_______________________
Title____________________________
_________________________________
William F. Cronk, III, Individually
and as Trustee of the Cronk Revocable
Trust
_________________________________
Janet M. Cronk, Individually and as
Trustee of the Cronk Revocable Trust
-6-
<PAGE> 210
EXHIBIT L
FORM OF LEGAL OPINION
OF
LATHAM & WATKINS
May __, 1994
Dreyer's Grand Ice Cream, Inc.
5929 College Avenue
Oakland, California 94618
Re: Nestle Holdings, Inc.
Gentlemen:
[insert standard introductory language]
Based on and subject to the foregoing, we are of the opinion
that:
Based upon the representations contained in Sections 2.19, 3.4
and 3.5 of the Purchase Agreement(1), it is not necessary in connection with the
sale of the Securities under the Purchase Agreement to register the Securities
under the Securities Act of 1933, as amended.
[insert standard concluding language]
Very truly yours,
__________________________________
1. All capitalized but undefined terms used herein shall have the meaning
assigned such terms in the Stock and Warrant Purchase Agreement by and
between Dreyer's Grand Ice Cream, Inc. and Nestle Holdings, Inc. (the
"Purchase Agreement").
<PAGE> 211
EXHIBIT M
FORM OF LEGAL OPINION
OF
JAMES H. BALL, ESQ.
May __, 1994
Dreyer's Grand Ice Cream, Inc.
5929 College Avenue
Oakland, California 94618
Re: Nestle Holdings, Inc.
Gentlemen:
[insert standard introductory language]
Based on and subject to the foregoing, I am of the opinion
that:
1. The Purchaser(1) has been duly incorporated and is
validly existing and in good standing under the laws of the State of Delaware
with full corporate power and authority to own or lease its properties and
conduct its business as presently being conducted and to enter into each of the
Nestle Principal Agreements and perform its obligations thereunder.
2. NICC has been duly incorporated and is validly
existing and in good standing under the laws of the State of Delaware with full
corporate power and authority to own or lease its properties and conduct its
business as presently being conducted and to enter into the Distributor
Agreement and perform its obligations thereunder.
1
__________________________________
1. All capitalized but undefined terms used herein shall have the meaning
assigned such terms in the Stock and Warrant Purchase Agreement by and
between Dreyer's Grand Ice Cream, Inc. and Nestle Holdings, Inc. (the
"Purchase Agreement"). For purposes of this form of legal opinion,
the term Nestle Principal Agreements means the Purchase Agreement, the
Warrant Agreement and the Registration Rights Agreement.
<PAGE> 212
3. Each of the Purchaser and NICC is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which it owns or leases property or conducts business, except
where the failure to so qualify or be licensed would not have a material
adverse effect on the financial condition or business of the Purchaser and its
Subsidiaries taken as a whole.
4. The execution, delivery and performance of each of
the Nestle Principal Agreements have been duly authorized by all necessary
corporate action of the Purchaser, and each of the Nestle Principal Agreements
has been duly executed and delivered by the Purchaser.
5. The execution, delivery and performance of the
Distributor Agreement have been duly authorized by all necessary corporate
action of NICC, and the Distributor Agreement has been duly executed and
delivered by NICC.
6. Each of the Nestle Principal Agreements constitutes a
valid and legally binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms except as such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting the rights of creditors generally, (ii) equitable
principles (whether considered in an action at law or in equity) which provide,
among other things, that the remedies of specific performance and injunctive
and other forms of equitable relief are subject to equitable defenses and to
the discretion of the court before which any proceedings therefor may be
brought and (iii) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy.
7. The Distributor Agreement constitutes a valid and
legally binding obligation of NICC, enforceable against NICC in accordance with
its terms except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
the rights of creditors generally, (ii) equitable principles (whether
considered in an action at law or in equity) which provide, among other things,
that the remedies of specific performance and injunctive and other forms of
equitable relief are subject to equitable defenses and to the discretion of the
court before which any proceedings therefor may be brought and (iii) the
unenforceability under certain circumstances under law or court decisions of
provisions providing for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is contrary
to public policy.
8. The execution and delivery of each of the Nestle
Principal Agreements, and the consummation of the transactions contemplated
thereby, will not conflict with or constitute a breach of, or default under,
the charter or bylaws of the Purchaser or, to the best of my knowledge after
due inquiry, any material agreement, indenture or other instrument to
2
<PAGE> 213
which the Purchaser is a party or by which it is bound, or any law,
administrative regulation or court or governmental decree applicable to the
Purchaser.
9. The execution and delivery of the Distributor
Agreement, and the consummation of the transactions contemplated thereby, will
not conflict with or constitute a breach of, or default under, the charter or
bylaws of NICC or, to the best of my knowledge after due inquiry, any material
agreement, indenture or other instrument to which NICC is a party or by which
it is bound, or any law, administrative regulation or court or governmental
decree applicable to NICC.
10. To the best of my knowledge after due inquiry, no
authorization, approval or consent of, or exemption or other action by, or
registration or filing with, any Person is required in connection with the
execution, delivery and performance by the Purchaser of each of the Nestle
Principal Agreements, other than such authorizations, approvals, consents,
exemptions, registrations or filings as shall have been made or secured by the
date hereof.
11. To the best of my knowledge after due inquiry, no
authorization, approval or consent of, or exemption or other action by, or
registration or filing with, any Person is required in connection with the
execution, delivery and performance by NICC of the Distributor Agreement, other
than such authorizations, approvals, consents, exemptions, registrations or
filings as shall have been made or secured by the date hereof.
[insert standard concluding language]
Very truly yours,
3
<PAGE> 1
Exhibit-99.1
TRANSACTION PRESS RELEASE
******************************* PRESS RELEASE *******************************
DATED MAY 6, 1994
To Be Released Immediately
Contacts: Paul R. Woodland, CFO - 510-601-4348
William C. Collett, Treasurer - 510-601-4339
Oakland, CA May 6, 1994 1:00pm Western/4:00pm Eastern
Dreyer's Grand Ice Cream, Inc. and Nestle USA, Inc. announced today that
Dreyer's and a Nestle affiliate have entered into a definitive agreement for
the purchase by Nestle of three million newly issued shares of Dreyer's common
stock for $32 per share and warrants to purchase an additional two million
shares at an exercise price of $32 per share. In addition, the companies are
entering into a distribution agreement under which Dreyer's will have the
opportunity to distribute Nestle's frozen novelty and ice cream products in
certain markets beginning in 1995.
The purchase of the shares and exercise of the warrants would give Nestle
ownership of 22% of Dreyer's common shares on a fully diluted basis, treating
as outstanding the 2.9 million shares into which the approximately $100 million
principal amount convertible notes sold in June 1993 to certain entities
associated with General Electric Company may be converted. Warrants for one
million shares will expire in three years and warrants for the other million
shares will expire in five years. Nestle is paying an aggregate of $10 million
for the two million warrants.
Dreyer's also announced that it is embarking on a five year plan to accelerate
the sales of its branded products by greatly increasing its consumer marketing
efforts
<PAGE> 2
and expanding its distribution system into additional markets. Under the plan,
Dreyer's will increase the amount of its spending for advertising and consumer
promotion from a level of approximately $12 million in 1993 to $40 million in
1994, and plans to spend approximately $50 million annually on these marketing
activities from 1995 through 1998. The Company will begin selling its Edy's
branded products in the Boston and Charlotte markets this year, in addition to
the previously announced introduction of Dreyer's line of products into the
Houston market.
T. Gary Rogers, Chairman and Chief Executive Officer of Dreyer's, said the
company's plan is a response to growth opportunities presented by the highly
fragmented conditions in the U.S. ice cream industry, where no ice cream brand
currently accounts for more than 11% of total industry sales.
"We believe an opportunity exists for the company to significantly increase its
market share over the next several years if it is willing to make a substantial
commitment in marketing and geographic expansion during that time," Rogers
said.
Dreyer's said that management anticipates that the new business plan will have
the effect of materially reducing earnings during the next twelve to twenty
four months below levels that would have been attained under the current
business plan. The potential benefits of the new strategy are increased market
share and future earnings above those levels that would be attained in the
absence of this strategy. Dreyer's believes that these benefits are not likely
to impact the company's results until 1996 at the earliest. No assurance can
be given that the anticipated benefits of the strategy will be achieved. The
success of the strategy
2
<PAGE> 3
will depend upon, among other things, consumer responsiveness to the marketing
plan, competitors' activities, and general economic conditions.
Dreyer's also announced that its board of directors has authorized the
repurchase of up to 5 million shares through open market purchases and
negotiated transactions. The timing and amount of such purchases will depend
upon, among other things, market conditions, availability of shares for
purchase and the prices at which such shares may be available.
Under the agreements, Nestle will initially have the right to nominate two
directors to the Dreyer's board, and subsequently to nominate additional
directors in proportion to Nestle's actual ownership of shares in the future.
Nestle has agreed to certain standstill arrangements under which, among other
things, it will not without the consent of Dreyer's board purchase additional
shares if its fully diluted ownership position (treating the shares underlying
the General Electric convertible notes as outstanding) would be greater than
25% except in certain circumstances. In addition, during the standstill period
Nestle will not engage in the solicitation of proxies or make any acquisition
proposal if such proposal would require public disclosure.
The standstill provisions will terminate on the earlier of the tenth
anniversary of the closing of the Nestle investment or one year after Nestle
owns less than 1% of Dreyer's common shares. The standstill provisions will be
subject to an earlier termination if Dreyer's initiates or solicits an
extraordinary transaction or a third party acquires in excess of 20% of the
shares. After termination of the standstill,
3
<PAGE> 4
Nestle will not acquire 35% or more of the shares except pursuant to an offer
for all of the shares at the same price.
Nestle will not sell any shares for three years without Dreyer's consent,
except in certain circumstances. The restrictions on transfer will terminate on
the death or resignation of Mr. Rogers and Mr. William F. Cronk, III, President
of Dreyer's; if Mr. Rogers alone sells 50% or more of his stock or both of
them sell 50% or more of the stock currently owned by them; if the company
commits certain breaches leading to termination of the distribution agreement;
or under certain other circumstances. In addition, Nestle has been granted
certain registration rights with respect to its shares.
Messrs. Rogers and Cronk and their respective affiliates have granted Nestle a
right of first refusal with respect to their present and future shares. Mr.
Rogers, Mr. Cronk and their affiliates currently own respectively 1,585,350 and
895,521 shares that will be subject to the right of first refusal. Nestle's
exercise of the right of first refusal is subject to Nestle not owning 35% or
more of Dreyer's shares, on a fully diluted basis after giving effect to such
purchase. Nestle will have the right to sell shares in order to permit exercise
of the right of first refusal.
Dreyer's will have the right to cause Nestle to exercise the warrants at $24
per share subject to certain conditions at any time during the three year
period following the closing. Dreyer's will also have the right to cause
Nestle to exercise the warrants at any time through the warrant expiration
dates at $32 per share if the average trading price of the common stock exceeds
$60 during a 130 trading day period, subject to certain conditions.
Furthermore, within five years from the date of closing, if the average trading
price of the common stock equals or exceeds
4
<PAGE> 5
$60 during a 130 trading day period, Nestle will be required to pay an
additional $2 for each share purchased by it and each share issued in respect
of warrants exercised by it.
Consummation of the Nestle investment is subject to certain conditions,
including the expiration or termination of applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act.
5
<PAGE> 1
Exhibit-99.2
EARNINGS PRESS RELEASE
******************************* PRESS RELEASE *******************************
DATED MAY 6, 1994
To Be Immediately Released.
Contact: William C. Collett, Treasurer - 510/601-4339
Oakland, CA Friday, May 6, 1994.
Dreyer's Grand Ice Cream, Inc. (OTC - DRYR) announced record sales for the
first quarter ended March 26, 1994, while earnings were lower than the prior
year's first quarter, according to T. Gary Rogers, Chairman.
Consolidated net sales for the thirteen week period were $112,001,000, compared
with $102,317,000 for the same period in 1993, an increase of 9 percent. Sales
of the Company's Dreyer's and Edy's brand products increased 17 percent for the
quarter and represented 66 percent of consolidated net sales for the quarter
compared with 62 percent in the first quarter of 1993.
Net income for the first quarter totaled $1,582,000, or $.11 per common share,
a decrease from the comparable net income of $2,118,000, or $.15 per common
share achieved in the first quarter of 1993.
The decrease in earnings for the quarter was primarily the result of increased
selling, general, and administrative expenses, and interest expense, which more
than offset the effect of higher sales and a slightly increased gross margin.
In a separate release, Dreyer's announced today that it has entered into a
transaction to sell common stock representing a minority ownership position to
an affiliate of Nestle USA, Inc. In addition, Dreyer's is embarking on a five
year plan to accelerate sales of its branded products. Information regarding
the agreement with Nestle and management's five year plan is included in
the separate announcement.
Dreyer's Grand Ice Cream, Inc. manufactures and distributes premium quality ice
creams and other premium dairy-based products made only from the highest
quality ingredients available.
(continued...)
<PAGE> 2
SUMMARY OF EARNINGS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
--------------------
March 26, 1994 March 27, 1993
-------------- --------------
<S> <C> <C>
Net Sales . . . . . . . . . . . . . . . . . . . . . . . . $112,001 $102,317
======== ========
Net Income . . . . . . . . . . . . . . . . . . . . . . . $1,582 $2,118
====== ======
Net Income Per Common Share . . . . . . . . . . . . . . . $0.11 $0.15
===== =====
Average Common Shares Outstanding . . . . . . . . . . . . 14,698 14,579
</TABLE>
