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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 8)*
DREYERS GRAND ICE CREAM, INC.
(Name of Issuer)
COMMON STOCK, $1.00 PAR VALUE
(Title of Class of Securities)
26187810
(CUSIP Number)
<TABLE>
<S> <C>
James H. Ball, Esq. with a copy to:
Senior Vice President, Secretary Mary Ellen Kanoff, Esq.
and General Counsel Latham & Watkins
Nestle Holdings, Inc. 633 West Fifth Street
c/o Nestle USA, Inc. Suite 4000
800 North Brand Boulevard Los Angeles, California 90071
Glendale, California 91203 (213) 485-1234
(818) 549-7050
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 18, 1999
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement. [ ] (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
- ------------------------------------------------- -------------------------
CUSIP No. 26187810
- ------------------------------------------------- -------------------------
- --------------------------------------------------------------------------------
1 NAME OF PERSON
NESTLE HOLDINGS, INC.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
6,112,016
--------------------------------------------
NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY EACH --------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 6,112,016
--------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
6,112,016
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.2%
- --------------------------------------------------------------------------------
14 TYPE OF PERSON REPORTING*
CO
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT
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SCHEDULE 13D
- ------------------------------------------------- -------------------------
CUSIP No. 26187810
- ------------------------------------------------- -------------------------
- --------------------------------------------------------------------------------
1 NAME OF PERSON
NESTLE S.A.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
SWITZERLAND
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
6,112,016
-------------------------------------------
NUMBER OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY EACH --------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER PERSON
WITH 6,112,016
--------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
6,112,016
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.2%
- --------------------------------------------------------------------------------
14 TYPE OF PERSON REPORTING*
CO
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT
3
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This Amendment No. 8 amends Schedule 13D previously filed by Nestle
Holdings, Inc., a Delaware corporation ("Holdings") and Nestle S.A., a
corporation organized under the laws of Switzerland ("Nestle") on May 16, 1994,
as amended and restated by Amendment No. 1 to Schedule 13D filed on June 16,
1994, as amended by Amendment No. 2 to Schedule 13D filed on October 5, 1994, as
amended by Amendment No. 3 to Schedule 13D filed on April 7, 1995, as amended by
Amendment No. 4 to Schedule 13D filed on March 12, 1997, as amended and restated
by Amendment No. 5 to Schedule 13D filed on June 17, 1997, as amended by
Amendment No. 6 to Schedule 13D filed on June 18, 1997 and as amended and
restated by Amendment No. 7 to the Schedule 13D filed on June 14, 1999 (as so
amended, the "Schedule 13D"), and relates to the shares of Common Stock, $1.00
par value per share (the "Shares"), of Dreyers Grand Ice Cream, Inc., a Delaware
corporation (the "Issuer"). All references to Shares beneficially owned and
outstanding herein give effect to the two-for-one stock-split the Issuer
consummated on November 18, 1997.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
In connection with the formation of a joint venture between Nestle USA -
Food Group, Inc. ("Nestle-Food") and The Pillsbury Company ("Pillsbury") to
produce and distribute frozen dessert products in the United States, Nestle-Food
and Nestle (affiliates of Holdings) are expected to enter into a noncompetition
agreement. The noncompetition agreement, which will be entered into upon the
closing of the transaction, will provide, subject to certain exceptions
including an exception for beneficial ownership of the Issuer's voting
securities, that the parties to the joint venture generally will not acquire,
operate, control or engage in businesses which compete with the business of the
joint venture in the United States. With respect to the Issuer, the
noncompetition agreement will provide that, in the event that either Nestle-Food
or Pillsbury (or any of their respective affiliates) acquire beneficial
ownership of more than 50% of the Issuer's voting securities (a "Dreyers
Interest"), then the party (the "Acquiring Party") that beneficially owns the
Dreyers Interest will offer to sell such interest to the joint venture within 60
days of such acquisition. The parties will agree to negotiate in good faith on
an arms length basis for a period of 120 days thereafter with respect to such
offer. In the event the parties do not reach an agreement during such period,
the Acquiring Party would be able to retain the Dreyers Interest. The form of
noncompetition agreement which is expected to be executed upon the closing of
the joint venture is filed as an Exhibit 10.9 hereto and is incorporated by
reference herein.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
10.9 Form of Non-Competition Agreement between Nestle
S.A., Nestle USA - Food Group, Inc., Diageo plc, The
Pillsbury Company, and Ice Cream Partners USA to be
executed upon the closing of the joint venture
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SIGNATURE
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement is true,
complete and correct.
NESTLE HOLDINGS, INC.
By: /s/ James H. Ball
-------------------------------------------
Name: James H. Ball
Title: Senior Vice President and General
Counsel
NESTLE S.A.
By: /s/ James H. Ball
-------------------------------------------
James H. Ball, attorney-in-fact for
Name: H.P. Frick
Title: Senior Vice President and
General Counsel of Nestle S.A.
Dated: August 19, 1999
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EXHIBIT 10.9
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "AGREEMENT") is made and
entered into this ____ day of __________, 1999, by and among Nestle S.A., a
Swiss corporation ("NESTLE PARENT"), Nestle USA - Food Group, Inc., a
Pennsylvania corporation ("NESTLE USA" collectively with Nestle Parent, the
"NESTLE ENTITIES"), Diageo plc, a public limited company incorporated under the
laws of England and Wales ("PILLSBURY PARENT"), The Pillsbury Company, a
Delaware corporation ("PILLSBURY," collectively with Pillsbury Parent, the
"PILLSBURY ENTITIES" and collectively with the Nestle Entities, the "ENTITIES"),
and [Ice Cream Partners USA], LLC, a Delaware limited liability company (the
"COMPANY," collectively with the Entities, the "PARTIES").
RECITALS:
A. Pillsbury and Nestle USA have entered into an Amended and Restated
Limited Liability Company Agreement and certain related agreements concurrently
herewith (the "OPERATING AGREEMENT"), and prior to the date hereof, a
Contribution and Assumption Agreement (the "CONTRIBUTION AGREEMENT").
B. One of the material conditions precedent to the willingness of
Pillsbury and Nestle USA to enter into the Operating Agreement is that the
Parties have agreed to execute, deliver and be bound by this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual promises and
covenants of the Parties set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties, intending to be legally bound, agree as follows:
1. Certain Definitions.
"ADDITIONAL MEMBERS" means those Persons admitted to the Company as
a Member in accordance with the terms of the Operating Agreement.
"AFFILIATE" means, with reference to a specified Person: (a) a
Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the specified
Person, (b) any Person that is an officer, director, partner or trustee of, or
serves in a similar capacity with respect to, the specified Person, or for which
the specified Person is an officer, director, partner or trustee, or serves in a
similar capacity, or (c) any member of the Immediate Family of the specified
Person.
"ASSIGNEE" means any Person (a) to whom a Member (or assignee
thereof) Transfers all or any part of its Economic Interest in the Company, and
(b) which has not been admitted to the Company as a Substitute Member in
accordance with the terms of the Operating Agreement.
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"BOARD OF MANAGERS" means, at any time, the Board of Managers of
the Company.
"COMPETING BUSINESS" means any business engaged in the production,
importation, purchase, marketing, distribution, promotion or sale of Frozen
Dessert Products in the Territory; provided, however, that (i) the Entities'
Interest in the Company and the conduct of the Joint Venture Business, (ii) the
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended) of shares entitled to vote in the election of directors and
similar matters requiring approval of the shareholders of Dreyer's Grand Ice
Cream, Inc., a Delaware corporation ("DREYER'S VOTING SHARES") (subject to
Sections 2(d) and 3(d) herein) and (iii) the Haagen-Dazs Stores and the
Haagen-Dazs Stores Business shall each be deemed not to constitute a Competing
Business.
"CONFIDENTIAL INFORMATION" of a Person means all trade secrets and
other confidential information of such Person including, without limitation, (i)
any and all trade secrets concerning the business and affairs of such Person,
records, files, letters, memoranda, reports, laboratory notebooks, program
listings, product specifications, product formulas, ingredient listings,
recipes, data, know-how, improvements, discoveries, concepts, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current and planned research and
development, past, current and planned manufacturing and distribution methods
and processes, techniques, customer lists, current and anticipated customer
requirements, price lists, market studies, business plans, computer software and
programs (including object code and source code), computer software and database
technologies, systems, structures and architectures of which may be licensed to
such Person (and other items related thereto); (ii) any and all information
concerning the business and affairs of such Person (which includes historical
financial statements, financial projections and budgets, historical and
projected sales, capital spending budgets and plans, strategic and operating
plans, the names and backgrounds of key personnel, personnel training and
techniques and materials), however documented; and (iii) any and all notes,
analysis, compilations, studies, summaries, and other material prepared by or
for such Person containing or based, in whole or in part, on any information
included in the foregoing; provided, however, that Confidential Information of a
Person (a "Covered Person"), with respect to the Person (or any Affiliate
thereof) using such Confidential Information ("Using Persons"), shall not
include any material of the Covered Person that (i) is or becomes generally
known to and available for use by the public other than as a result of the fault
of the Using Persons; (ii) is or becomes available to the Using Persons on a
non-confidential basis prior to the date of this Agreement, provided that the
source of such information was not known by the Using Persons after reasonable
investigation, to be bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Covered
Person with respect to such material; or (iii) is or becomes available to the
Using Persons or their respective agents, advisors or representatives, provided
that the source of such information was not known by the Using Persons, after
reasonable investigation, to be bound by a confidentiality agreement with or
other contractual, legal or fiduciary obligation of confidentiality to the
Covered Person with respect to such material.
"DIPPED FORM" shall mean the retail sale of Frozen Dessert Products
where: (i) the Frozen Dessert Products are presented to the public in
association with the Haagen-Dazs name; (ii) the
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Frozen Dessert Products are scooped, dipped or dispensed from a soft serve
machine and sold in cones or dishes; (iii) the Frozen Dessert Products are sold
from a non-temporary food service establishment; and (iv) it would be reasonably
expected by the retail seller that a significant portion of the Frozen Dessert
Products would be consumed away from the food service establishment.
"ECONOMIC INTEREST" means a Person's right to share in the net
profits, net losses, or similar items of, and to receive distributions from, the
Company, but does not include any other rights of a Member including, without
limitation, the right to vote or to participate in the management of the
Company, or, except as specifically provided in this Agreement or required under
the Delaware Limited Liability Act, as amended, any right to information
concerning the business and affairs of the Company.
"FAIR MARKET VALUE OF THE NESTLE OFFERED INTEREST" means, the price
that would be paid for the Nestle Offered Interest (as defined herein) in an
arms-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy.
The Fair Market Value of the Nestle Offered Interest shall be determined in
accordance with Section 5(c) herein.
"FAIR MARKET VALUE OF THE PILLSBURY OFFERED INTEREST" means, the
price that would be paid for the Pillsbury Offered Interest (as defined herein)
in an arms-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy.
The Fair Market Value of the Pillsbury Offered Interest shall be determined in
accordance with Section 4(c) herein.
"FROZEN DESSERT PRODUCTS" means ice cream, sorbet, frozen yogurt,
sherbet, frozen mousse, ice milk, frozen juice bars, ice pops, water ice, ice
cream cakes, frozen fudge bars, soft serve (soft bodied, machine made) ice
cream, frozen novelty dessert products (such as bars, cones, sandwiches,
smoothies and cup products based on or primarily derived from any of the
foregoing), frozen dessert products for pets and other products based on or
primarily derived from any of the foregoing.
"HAAGEN-DAZS INTERNATIONAL BUSINESS" means substantially all of the
assets comprising the business of the production, importation, purchase,
marketing, distribution, promotion and sale (including export sale from a
facility not owned by the Company) of Frozen Dessert Products outside of the
Territory under the Haagen-Dazs Brand name and under brand names licensed to
Pillsbury by third parties outside the Territory, but excludes the ownership,
management and operation of Haagen-Dazs Stores inside and outside the Territory
which business is currently conducted by Pillsbury.
"HAAGEN-DAZS OWNER" means any direct or indirect subsidiary of
Pillsbury Parent which owns all or a portion of the Membership Interest owned by
Pillsbury as of the date hereof.
"HAAGEN-DAZS STORES" means, collectively, (i) the
Haagen-Dazs-branded retail outlets (whether stand-alone or in conjunction with
another retailer) owned by Pillsbury that
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serve Frozen Dessert Products in Dipped Form and (ii) the Haagen-Dazs-branded
retail outlets (whether stand-alone or in conjunction with another retailer) not
owned by Pillsbury which are franchised to and operated by third parties and
that serve Frozen Dessert Products in Dipped Form and Pillsbury's franchise
rights therein; in each case as of and after the date hereof.
"HAAGEN-DAZS STORES BUSINESS" means, the development, franchising,
marketing, operation and ownership of Haagen-Dazs Stores, including, without
limitation, the following:
(a) all written and oral agreements granting rights to develop,
franchise, operate and own Haagen-Dazs Stores, all rights to enter such
agreements after the date hereof, and all franchise, royalty or other fees and
income resulting from such agreements and arrangements;
(b) all of the concepts, standards, specifications, requirements,
guidelines, instructions and procedures, existing in any form as of the date
hereof and as may be developed by the owners of the Haagen-Dazs Stores Business
after the date hereof, in each case to the extent relating to the development,
franchising, marketing, operation and ownership of Haagen-Dazs Stores;
(c) the development and ownership of all Confidential Information of
Pillsbury (or any Affiliate of Pillsbury), existing as of the date hereof and as
may be developed by the owners of the Haagen-Dazs Stores Business after the date
hereof, in each case to the extent relating to the development, franchising,
marketing, operation and ownership of Haagen-Dazs Stores;
(d) the development and ownership of all advertising, marketing,
promotional materials, plans and programs, and other similar items, existing as
of the date hereof and as may be developed by the owners of the Haagen-Dazs
Stores Business after the date hereof, in each case to the extent relating to
the development, franchising, marketing, operation and ownership of Haagen-Dazs
Stores;
(e) without limiting the Joint Venture's exclusive license to use
the Pillsbury Licensed Property (as defined in that certain Trademark/Technology
License Agreement dated as of the date hereof, by and between Pillsbury and the
Company (the "Pillsbury Trademark/Technology License Agreement") in the
Territory (which, for purposes of the Pillsbury Trademark/Technology License
Agreement does not include the Haagen-Dazs Stores or the Haagen-Dazs Stores
Business), all trademarks, trade names, service marks, logos, commercial
symbols, phrases, slogans, tag lines, copyrights, distinctive interior and
exterior building designs, decor, furnishings, menus, uniforms, signs and color
combinations, existing as of the date hereof and as may be developed after the
date hereof, to the extent relating to the development, franchising, marketing,
operation and ownership of Haagen-Dazs Stores; and
(f) the sole and exclusive right (whether within or outside the
Territory) to grant to any Person the right to serve Frozen Dessert Products in
Dipped Form.
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"IMMEDIATE FAMILY" means, and is limited to, an individual Member's
current spouse, parents, parents-in-law, grandparents, children, siblings, and
grandchildren, or a trust or estate, all of the beneficiaries of which consist
of such Member or members of such Member's Immediate Family.
"INITIAL PUBLIC OFFERING" means a bona fide underwritten initial
sale of common voting securities of a Person pursuant to a registration
statement that is declared effective by the Securities and Exchange Commission.
"JOINT VENTURE BUSINESS" means the production, importation,
purchase, marketing, distribution, promotion and sale of Nestle,
Nestle-licensed, Haagen-Dazs, and Pillsbury-licensed branded and non-branded
Frozen Dessert Products in the Territory.
"MANAGERS" means at any time the Persons elected in accordance with
the terms of the Operating Agreement to serve on the Board of Managers.
"MEMBERS" means the Persons owning Membership Interests, including
any Additional Members and any Substitute Members.
"MEMBERSHIP INTEREST" or "INTEREST" means the entire ownership
interest of a Member in the Company at any particular time, including without
limitation, the Member's Economic Interest, any and all rights to vote and
otherwise participate in the Company's affairs, and the rights to any and all
benefits to which a Member may be entitled as provided in this Agreement,
together with the obligations of such Member to comply with all of the terms and
provisions of the Operating Agreement.
"NESTLE USA MANAGER" means a Manager appointed by Nestle USA.
"PERCENTAGE INTEREST" means, with respect to a Member holding one or
more Units, its interest in the Company as determined by dividing the Units
owned by such Member by the total number of Units of the Company then
outstanding.
"PERSON" means and includes an individual, a corporation, a
partnership, a limited liability company, a trust, an unincorporated
organization, a government or any department or agency thereof, or any entity
similar to any of the foregoing.
"PILLSBURY MANAGER" means a Manager appointed by Pillsbury.
"QUALIFIED VALUATOR" means, with respect to any Person, a reputable
appraiser or investment bank with an international reputation in good standing
that is not an Affiliate of such Person.
"SPECIAL VOTE OF THE BOARD OF MANAGERS" or "SPECIAL VOTE" means the
affirmative vote or consent of a majority of the Board of Managers including the
affirmative vote or consent of at least one Nestle USA Manager and one Pillsbury
Manager.
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"SUBSTITUTE MEMBER" means any Person (a) to whom a Member (or
assignee thereof) Transfers all or any part of its interest in the Company, and
(b) which has been admitted to the Company as a Substitute Member in accordance
with the terms of the Operating Agreement.
"TERRITORY" means the fifty (50) United States and the District
of Columbia.
"TRANSFER" means, with respect to any interest in the Company, a
sale, conveyance, exchange, assignment, pledge, encumbrance, gift, bequest,
hypothecation or other transfer or disposition by any other means, whether for
value or no value and whether voluntary or involuntary (including, without
limitation, by operation of law), or an agreement to do any of the foregoing.
"UNIT" means, with respect to a Membership Interest, a fractional,
undivided share of such Membership Interest issued in accordance with the terms
of the Operating Agreement.
2. Competition by Pillsbury and Pillsbury Parent with the Company.
Pillsbury Parent and Pillsbury hereby covenant and agree that for
the Pillsbury Term:
(a) Pillsbury Parent and Pillsbury will not (and Pillsbury Parent
and Pillsbury shall cause their respective Affiliates not to), directly or
indirectly, engage in a Competing Business or own, manage, operate, join,
control, or participate in the ownership, management or control of, or be
connected with or have (or acquire) an interest in or assets of (whether as a
consultant, advisor, agent, owner, partner, co-venturer, contractor, officer,
director, stockholder, Affiliate, representative, licensor or otherwise) any
Person, enterprise or business that engages in a Competing Business; provided,
however, that (i) beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of up to a 5% interest in a
Competing Business shall not be prohibited so long as no directorship or other
governance rights are held by Pillsbury Parent, Pillsbury and/or their
respective Affiliates in conjunction with such ownership in the Competing
Business (a "PILLSBURY DE MINIMUS INTEREST"); (ii) Pillsbury Parent, Pillsbury
and/or their respective Affiliates shall not be prohibited from acquiring the
equity interests or assets of a Person (including a Pillsbury De Minimus
Interest) whose principle line of business is not a Competing Business so long
as Pillsbury, Pillsbury Parent or their respective Affiliates comply with the
provisions of Section 4 hereof and (iii) activities relating to the Company
undertaken by Pillsbury Parent or Pillsbury in accordance with the terms of the
Operating Agreement shall not be prohibited.
(b) Pillsbury shall refer and shall use commercially reasonable
efforts to cause its Affiliates to refer corporate opportunities relating to
businesses that are or include Competing Businesses (excluding corporate
opportunities that involve international operations) of which their senior
executive officers become aware to the Company.
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(c) Pillsbury Parent and Pillsbury acknowledge that this Agreement
shall, in no way, limit or restrict the operations outside of the Territory of
Nestle USA, Nestle Parent or their respective Affiliates thereof.
(d) If Pillsbury and/or any of its Affiliates (each, a "PILLSBURY
OFFERING PARTY") acquire beneficial ownership of more than 50% of Dreyer's
Voting Shares (a "PILLSBURY DREYER'S OWNERSHIP INTEREST"), then Pillsbury shall
(or, if applicable, shall cause its Affiliates to) make an offer to sell the
Pillsbury Dreyer's Ownership Interest to the Company. The Pillsbury Offering
Party(ies) shall be required to commence negotiations concerning the offer to
sell within 60 days after obtaining such interest and shall be required to
negotiate for a period not to exceed one hundred twenty (120) days from the date
of commencement of such negotiations. The Company and the Pillsbury Offering
Party(ies) shall negotiate the consideration to be paid by the Company for the
Pillsbury Dreyer's Ownership Interest in good faith on an arms-length basis;
provided that, such agreement, if any, shall cover all Dreyer's Voting Shares
that the Pillsbury Offering Party(ies) beneficially owns and provided further
that such good faith negotiations shall not be considered in good faith to the
extent that the Pillsbury Offering Party(ies) would require an adjustment of the
respective Percentage Interest of Pillsbury and Nestle USA. If the parties do
not reach an agreement within such one hundred twenty (120) day period, then the
Pillsbury Offering Party need not comply with Section 4 hereof with respect to
the Pillsbury Dreyer's Ownership Interest.
3. Competition by Nestle USA and Nestle Parent with the Company.
Nestle Parent and Nestle USA hereby covenant and agree that for the
Nestle Term:
(a) Nestle Parent and Nestle USA will not (and Nestle Parent and
Nestle USA shall cause their respective Affiliates not to), directly or
indirectly, engage in a Competing Business or own, manage, operate, join,
control, or participate in the ownership, management or control of, or be
connected with or have (or acquire) an interest in or assets of (whether as a
consultant, advisor, agent, owner, partner, co-venturer, contractor, officer,
director, stockholder, Affiliate, representative, licensor or otherwise) any
Person, enterprise or business that engages in a Competing Business; provided,
however, that (i) ownership of up to a 5% interest in a Competing Business shall
not be prohibited so long as no directorship or other governance rights are held
by Nestle Parent, Nestle USA and/or their respective Affiliates in conjunction
with such ownership in the Competing Business (a "NESTLE DE MINIMUS INTEREST");
(ii) Nestle Parent, Nestle USA and/or their respective Affiliates shall not be
prohibited from acquiring the equity interests or assets of a Person (including
a Nestle De Minimus Interest) whose principle line of business is not a
Competing Business so long as Nestle USA, Nestle Parent or their respective
Affiliates complies with the provisions of Section 5 hereof and (iii) activities
relating to the Company undertaken by Nestle Parent or Nestle USA in accordance
with the terms of the Operating Agreement shall not be prohibited.
(b) Nestle USA shall refer and shall use commercially reasonable
efforts to cause its Affiliates to refer corporate opportunities relating to
businesses that are or include Competing Businesses (excluding corporate
opportunities that involve international operations) of which their senior
executive officers become aware to the Company.
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(c) Nestle Parent and Nestle USA acknowledge that this Agreement
shall, in no way, limit or restrict the operations outside of the Territory of
Pillsbury, Pillsbury Parent or their respective Affiliates, or the ownership of
the Haagen-Dazs Stores or the conduct of the Haagen-Dazs Stores Business.
(d) If Nestle USA and/or any of its Affiliates (each, a "NESTLE
OFFERING PARTY") acquire beneficial ownership (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) of more than 50% of the
Dreyer's Voting Shares (a "NESTLE DREYER'S OWNERSHIP INTEREST"), then Nestle USA
shall (or, if applicable, shall cause its Affiliates to) make an offer to sell
the Nestle Dreyer's Ownership Interest to the Company. The Nestle Offering
Party(ies) shall be required to commence such negotiations concerning the offer
to sell within 60 days after obtaining such interest and shall be required to
negotiate for a period not to exceed one hundred twenty (120) days from the date
of commencement of such negotiations. The Company and the Nestle Offering
Party(ies) shall negotiate the consideration to be paid by the Company for the
Nestle Dreyer's Ownership Interest in good faith on an arms-length basis;
provided that, such agreement, if any, shall cover all Dreyer's Voting Shares
that the Nestle Offering Party(ies) beneficially owns and provided further that
such good faith negotiations shall not be considered in good faith to the extent
that the Nestle Offering Party(ies) would require an adjustment of the
respective Percentage Interest of Pillsbury and Nestle USA. If the parties do
not reach an agreement within such one hundred twenty (120) day period, then the
Nestle Offering Party need not comply with Section 5 hereof with respect to the
Nestle Dreyer's Ownership Interest.
4. Divestiture of Pillsbury's Competing Businesses.
Pillsbury Parent and Pillsbury hereby covenant and agree that for
the Pillsbury Term:
(a) If a Pillsbury Offering Party acquires any interest in the
assets or equity interests of a Person (other than a Pillsbury De Minimus
Interest or Dreyer's Voting Shares) whose principle line of business is not a
Competing Business but that has a division or other assets constituting a
Competing Business (any such division or assets, a "PILLSBURY OFFERED
INTEREST"), Pillsbury Parent or Pillsbury shall (or, if applicable, shall cause
their applicable Affiliates to) within thirty (30) business days after acquiring
the Pillsbury Offered Interest make an offer to sell the Pillsbury Offered
Interest to the Company at a mutually agreed upon purchase price or if the
Pillsbury Offering Party and the Company cannot agree on a purchase price, at a
purchase price equal to the Fair Market Value of the Pillsbury Offered Interest
(the "PILLSBURY PRELIMINARY OFFER"). The Fair Market Value of the Pillsbury
Offered Interest shall be determined in accordance with the procedures in
Section 4(c). The Board of Managers of the Company shall have sixty (60) days to
accept or reject the Pillsbury Preliminary Offer. The Pillsbury Managers must
abstain from voting on whether to accept or reject the Pillsbury Preliminary
Offer. If the Board of Managers of the Company does not accept such Pillsbury
Preliminary Offer within such sixty (60) day period, it shall be deemed to have
rejected the Pillsbury Preliminary Offer, and the Pillsbury Offering Party shall
take commercially reasonable steps to divest the Pillsbury Offered Interest on
terms no less favorable to the Pillsbury Offering Party than the terms of the
Pillsbury Preliminary Offer.
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<PAGE> 9
(b) If the Pillsbury Offering Party is unable to divest the
Pillsbury Offered Interest on terms no less favorable to the Pillsbury Offering
Party than the terms of the Pillsbury Preliminary Offer within ninety (90) days
after the date that the Company rejects the Pillsbury Preliminary Offer, the
Pillsbury Offering Party shall use commercially reasonable efforts to divest the
Pillsbury Offered Interest during the following six-month period (the "PILLSBURY
SALE PERIOD") and the Pillsbury Offering Party shall be obligated to accept an
offer by the Company during the Pillsbury Sale Period to purchase the Pillsbury
Offered Interest at the price specified in the Pillsbury Preliminary Offer if at
the time of such offer by the Company the Pillsbury Offering Party has not
entered into a binding agreement with a third party for the sale of the
Pillsbury Offered Interest. The Pillsbury Offering Party shall not be under any
obligation to offer the Pillsbury Offered Interest at a price less than the Fair
Market Value of the Pillsbury Offered Interest to the Company or any other
Person. If, however, the Pillsbury Offering Party desires to sell the Pillsbury
Offered Interest at a discount to Fair Market Value (the "PILLSBURY DISCOUNTED
PRICE"), it shall, before offering the Pillsbury Offered Interest to any Person,
deliver a notice to the Company specifying the Pillsbury Discounted Price and
offering to sell the Pillsbury Offered Interest to the Company at the Pillsbury
Discounted Price. The Company shall have a period of ten (10) business days from
receipt of such notice to elect to purchase the Pillsbury Offered Interest at
the Pillsbury Discounted Price. If the Company exercises such right to purchase
the Pillsbury Offered Interest, then the Pillsbury Offering Party shall be
obligated to sell to the Company, and the Company shall be obligated to purchase
from the Pillsbury Offering Party, the Pillsbury Offered Interest at the
Pillsbury Discounted Price. If the Company does not exercise its right to
purchase the Pillsbury Offered Interest at the Pillsbury Discounted Price, then
the Pillsbury Offering Party may sell the Pillsbury Offered Interest to any
Person on terms no less favorable to the Pillsbury Offering Party than the offer
to sell the Pillsbury Offered Interest to the Company at the Pillsbury
Discounted Price (it being understood that if the Pillsbury Offering Party
desires to sell the Pillsbury Offered Interest for a purchase price less than
the Pillsbury Discounted Price, then the Pillsbury Offering Party shall again
comply with the procedures contemplated by this Section 4(b) before offering the
Pillsbury Offered Interest to any other Person). If the Pillsbury Offering Party
is unable to divest the Pillsbury Offered Interest during the Pillsbury Sale
Period after using commercially reasonable efforts, the Pillsbury Offering Party
may retain the Pillsbury Offered Interest.
(c) To establish Fair Market Value of the Pillsbury Offered
Interest, each of Pillsbury and Nestle USA shall appoint a Qualified Valuator
within ten (10) business days after acquiring the Pillsbury Offered Interest.
The Qualified Valuators shall have seventy-five (75) days from the date the
second Qualified Valuator is appointed (the "PILLSBURY OFFERED INTEREST
VALUATION PERIOD") to establish the Fair Market Value of the Pillsbury Offered
Interest. If, during the Pillsbury Offered Interest Valuation Period either
Pillsbury or Nestle USA provides written notice to the other Member that it has
determined that the Qualified Valuators are unlikely to agree on the Fair Market
Value of the Pillsbury Offered Interest (or, if as of the end of the Pillsbury
Offered Interest Valuation Period, the Qualified Valuators have not reached
agreement on the Fair Market Value of the Pillsbury Offered Interest), then the
Qualified Valuators shall appoint a third Qualified Valuator that shall be
unaffiliated with and independent of Pillsbury and Nestle USA and the other
Qualified Valuators. Such Qualified Valuator shall, no later than the later to
occur of the expiration of the Pillsbury Offered Interest Valuation Period or
the thirtieth (30th) day after such Qualified Valuator is selected,
independently arrive at its Fair Market Value determination. In determining Fair
Market Value of the Pillsbury Offered
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<PAGE> 10
Interest, the Qualified Valuators shall use accepted valuation practices
customarily used by reputable independent appraisers at the time the Fair Market
Value of the Pillsbury Offered Interest is determined and shall give due regard
to the then consolidated assets, liabilities, contingencies, earnings, prospects
and risks associated with the Pillsbury Offered Interest and any other factors
the Qualified Valuators deem relevant (including the original purchase price
paid for the business that includes the Pillsbury Offered Interest by the
applicable Pillsbury Entity or any Affiliates thereof). The final determination
of Fair Market Value of the Pillsbury Offered Interest shall be the amount
agreed upon by the Qualified Valuators appointed by Pillsbury and Nestle USA or,
if such Qualified Valuators do not agree and an additional Qualified Valuator is
appointed, the mean of the two appraisals which are closest in amount to each
other. The Fair Market Value of the Pillsbury Offered Interest determined
pursuant to the foregoing procedures shall be binding upon each of Nestle USA,
Pillsbury and the Company.
5. Divestiture of Nestle USA's Competing Businesses.
Nestle Parent and Nestle USA hereby covenant and agree that for the
Nestle Term:
(a) If a Nestle Offering Party acquires any interest in the assets
or equity interests of a Person (other than a Nestle De Minimus Interest or
Dreyer's Voting Shares) whose principal line of business is not a Competing
Business but that has a division or other assets constituting a Competing
Business (any such division or assets, a "NESTLE OFFERED INTEREST"), Nestle
Parent or Nestle USA shall (or, if applicable, shall cause their applicable
Affiliates to) within thirty (30) business days after acquiring the Nestle
Offered Interest make an offer to sell the Nestle Offered Interest to the
Company at a mutually agreed upon purchase price or if the Nestle Offering Party
and the Company cannot agree on a purchase price, at a purchase price equal to
the Fair Market Value of the Nestle Offered Interest (the "NESTLE PRELIMINARY
OFFER"). The Fair Market Value of the Nestle Offered Interest shall be
determined in accordance with the procedures in Section 5(c). The Board of
Managers of the Company shall have sixty (60) days to accept or reject the
Nestle Preliminary Offer. The Nestle USA Managers must abstain from voting on
whether to accept or reject the Nestle Preliminary Offer. If the Board of
Managers of the Company does not accept such Nestle Preliminary Offer within
such sixty (60) day period, it shall be deemed to have rejected the Nestle
Preliminary Offer, and the Nestle Offering Party shall take commercially
reasonable steps to divest the Nestle Offered Interest on terms no less
favorable to the Nestle Offering Party than the terms of the Nestle Preliminary
Offer.
(b) If the Nestle Offering Party is unable to divest the Nestle
Offered Interest on terms no less favorable to the Nestle Offering Party than
the terms of the Nestle Preliminary Offer within ninety (90) days after the date
that the Company rejects the Nestle Preliminary Offer, the Nestle Offering Party
shall use commercially reasonable efforts to divest the Nestle Offered Interest
during the following six-month period (the "NESTLE SALE PERIOD") and the Nestle
Offering Party shall be obligated to accept an offer by the Company during the
Nestle Sale Period to purchase the Nestle Offered Interest at the price
specified in the Nestle Preliminary Offer if at the time of such offer by the
Company the Nestle Offering Party has not entered into a binding agreement with
third party for the sale of the Nestle Offered Interest. The Nestle Offering
Party shall not be under any obligation to offer the Nestle Offered Interest at
a price less than the Fair Market Value of the Nestle Offered Interest to the
Company or any other Person.
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<PAGE> 11
If, however, the Nestle Offering Party desires to sell the Nestle Offered
Interest at a discount to Fair Market Value (the "NESTLE DISCOUNTED PRICE"), it
shall, before offering the Nestle Offered Interest to any Person, deliver a
notice to the Company specifying the Nestle Discounted Price and offering to
sell the Nestle Offered Interest to the Company at the Nestle Discounted Price.
The Company shall have a period of ten (10) business days from receipt of such
notice to elect to purchase the Nestle Offered Interest at the Nestle Discounted
Price. If the Company exercises such right to purchase the Nestle Offered
Interest, then the Nestle Offering Party shall be obligated to sell to the
Company, and the Company shall be obligated to purchase from the Nestle Offering
Party, the Nestle Offered Interest at the Nestle Discounted Price. If the
Company does not exercise its right to purchase the Nestle Offered Interest at
the Nestle Discounted Price, then the Nestle Offering Party may sell the Nestle
Offered Interest to any Person on terms no less favorable to the Nestle Offering
Party than the offer to sell the Nestle Offered Interest to the Company at the
Nestle Discounted Price (it being understood that if the Nestle Offering Party
desires to sell the Nestle Offered Interest for a purchase price less than the
Nestle Discounted Price, then the Nestle Offering Party shall again comply with
the procedures contemplated by this Section 5(b) before offering the Nestle
Offered Interest to any other Person). If the Nestle Offering Party is unable to
divest the Nestle Offered Interest during the Nestle Sale Period after using
commercially reasonable efforts, the Nestle Offering Party may retain the Nestle
Offered Interest.
(c) To establish Fair Market Value of the Nestle Offered Interest,
each of Pillsbury and Nestle USA shall appoint a Qualified Valuator within ten
(10) business days of acquiring the Nestle Offered Interest. The Qualified
Valuators shall have seventy-five (75) days from the date the second Qualified
Valuator is appointed (the "NESTLE OFFERED INTEREST VALUATION PERIOD") to
establish the Fair Market Value of the Nestle Offered Interest. If, during the
Nestle Offered Interest Valuation Period either Pillsbury or Nestle USA provides
written notice to the other Member that it has determined that the Qualified
Valuators are unlikely to agree on the Fair Market Value of the Nestle Offered
Interest (or, if as of the end of the Nestle Offered Interest Valuation Period,
the Qualified Valuators have not reached agreement on the Fair Market Value of
the Nestle Offered Interest), then the Qualified Valuators shall appoint a third
Qualified Valuator that shall be unaffiliated with and independent of Pillsbury
and Nestle USA and the other Qualified Valuators. Such Qualified Valuator shall,
no later than the later to occur of the expiration of the Nestle Offered
Interest Valuation Period or the thirtieth (30th) day after such Qualified
Valuator is selected, independently arrive at its Fair Market Value
determination. In determining Fair Market Value of the Nestle Offered Interest,
the Qualified Valuators shall use accepted valuation practices customarily used
by reputable independent appraisers at the time the Fair Market Value of the
Nestle Offered Interest is determined and shall give due regard to the then
consolidated assets, liabilities, contingencies, earnings, prospects and risks
associated with the Nestle Offered Interest and any other factors the Qualified
Valuators deem relevant (including the original purchase price paid for the
business that includes the Nestle Offered Interest by the applicable Nestle
Entity or any Affiliates thereof). The final determination of Fair Market Value
of the Nestle Offered Interest shall be the amount agreed upon by the Qualified
Valuators appointed by Pillsbury and Nestle USA or, if such Qualified Valuators
do not agree and an additional Qualified Valuator is appointed, the mean of the
two appraisals which are closest in amount to each other. The Fair Market Value
of the Nestle Offered Interest determined pursuant to the foregoing procedures
shall be binding upon each of Nestle USA, Pillsbury and the Company.
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<PAGE> 12
6. Confidentiality.
(a) The Pillsbury Entities acknowledge and agree that all
Confidential Information of the Nestle Entities and their Affiliates known or
obtained by the Pillsbury Entities or any of their Affiliates, whether before or
after the date hereof, is the property of the Nestle Entities and their
Affiliates. Therefore, the Pillsbury Entities agree that, except as expressly
permitted in writing by the Nestle Entities, Confidential Information of the
Nestle Entities and their Affiliates shall not (a) be disclosed by the Pillsbury
Entities or any of their Affiliates to any unauthorized Persons (it being
understood that disclosure by the Pillsbury Entities to any of their respective
officers, employees, representatives and agents ("PERSONNEL") who need to know
such Confidential Information in connection with their employment duties shall
be permitted), or (b) be used by the Pillsbury Entities or any of their
Affiliates in any of their operations, whether in the Territory or outside of
the Territory, except as expressly permitted in writing by the Nestle Entities
or their Affiliates, in each case, whether the Pillsbury Entities or any of
their Affiliates have such information in memory or embodied in writing or other
physical form.
The Pillsbury Entities shall be responsible for any breach of this
Section 6(a) by any of their respective Personnel. If the Pillsbury Entities
become aware of any such breach by any of their Personnel, they shall
immediately notify the Nestle Entities in writing and take all reasonable steps
required to prevent further disclosure. At the Nestle Entities' request, the
Pillsbury Entities shall take such actions as the Nestle Entities may consider
necessary to protect the confidentiality of the Confidential Information of the
Nestle Entities and their Affiliates. The Pillsbury Entities agree to indemnify
and hold harmless the Nestle Entities from and against any and all expenses
(including without limitation, reasonable attorneys' fees and expenses) arising
out of any breach or nonperformance of any of the Pillsbury Entities'
obligations set forth in this Section 6(a).
(b) The Nestle Entities acknowledge and agree that all Confidential
Information of the Pillsbury Entities and their Affiliates known or obtained by
the Nestle Entities or any of their Affiliates, whether before or after the date
hereof, is the property of the Pillsbury Entities and their Affiliates.
Therefore, the Nestle Entities agree that, except as expressly permitted in
writing by the Pillsbury Entities, Confidential Information of the Pillsbury
Entities and their Affiliates shall not (a) be disclosed by the Nestle Entities
or any of their Affiliates to any unauthorized Persons (it being understood that
disclosure by the Nestle Entities to any of their respective Personnel who need
to know such Confidential Information in connection with their duties shall be
permitted), or (b) be used by the Nestle Entities or any of their Affiliates in
any of their operations, whether in the Territory or outside of the Territory,
except as expressly permitted in writing by the Pillsbury Entities or their
Affiliates, in each case, whether the Nestle Entities or any of their Affiliates
have such information in memory or embodied in writing or other physical form.
The Nestle Entities shall be responsible for any breach of this
Section 6(b) by any of their respective Personnel. If the Nestle Entities become
aware of any such breach by any of their Personnel, they shall immediately
notify the Pillsbury Entities in writing and take all reasonable steps required
to prevent further disclosure. At the Pillsbury Entities' request, the Nestle
Entities shall take such actions as the Pillsbury Entities may consider
necessary to protect the confidentiality of the Confidential Information of the
Pillsbury Entities and their Affiliates.
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<PAGE> 13
The Nestle Entities agree to indemnify and hold harmless the Pillsbury Entities
from and against any and all expenses (including without limitation, reasonable
attorneys' fees and expenses) arising out of any breach or nonperformance of any
of the Nestle Entities' obligations set forth in this Section 6(b).
(c) The Entities acknowledge and agree that all Confidential
Information of the Company (other than Confidential Information owned by an
Entity or Affiliate thereof that is licensed to the Company by such Entity or
Affiliate thereof), on and after the date hereof, is the property of the
Company. Therefore, the Entities agree that, except as expressly permitted by
the Board of Managers of the Company by Special Vote, Confidential Information
of the Company shall not (a) be disclosed by any Entity or Affiliate of such
Entity to any unauthorized Persons (it being understood that disclosure by the
Entities to any of their respective Personnel who need to know such Confidential
Information in connection with their duties shall be permitted), or (b) be used
by the Entities or any of their Affiliates in any of their operations, whether
in the Territory or outside of the Territory, in each case, whether any of the
Entities have such information in memory or embodied in writing or other
physical form.
Each of the Entities shall be responsible for any breach of this
Section 6(c) by any of their Personnel. If an Entity becomes aware of any such
breach by any of its Personnel, it shall immediately notify the Company in
writing and take all reasonable steps required to prevent further disclosure. At
the Company's request, the Entity shall take such actions as the Company may
consider necessary to protect the confidentiality of the Confidential
Information of the Company. Each of the Entities agrees to indemnify and hold
harmless the Company from and against any and all expenses (including without
limitation, reasonable attorneys' fees and expenses) arising out of any breach
or nonperformance of any of its obligations set forth in this Section 6(c). In
addition to all other remedies available to the Company at law or in equity,
each of the Entities agrees that the Company shall be entitled to equitable
relief, including injunctive and specific performance, in the event of any
breach of the provisions hereof.
(d) Without limiting the generality of the foregoing, the provisions
of this Section 6 shall not prohibit the disclosure of Confidential Information
of the Company by an Entity or Affiliate thereof if such Entity or an Affiliate
thereof is the owner of such Confidential Information and licenses it to the
Company. Each Entity agrees to cause its Affiliates to comply with this Section
6.
7. No Solicitation of Employees.
Without the written consent of the Board of Managers of the Company
adopted by Special Vote, each of Pillsbury, during the Pillsbury Term, and
Nestle USA, during the Nestle Term, shall not (and each Entity shall cause its
Affiliates not to), directly or indirectly, either for itself or another entity,
(i) induce or attempt to induce any officer or key employee of the Company to
leave its employ, (ii) in any way interfere with the relationship between the
Company and any of its officers or key employees (it being understood that this
clause (ii) shall not prohibit Nestle USA and Pillsbury (and the Nestle USA
Managers and Pillsbury Managers) from exercising their approval and other
governance rights under the Operating Agreement), (iii) employ, or otherwise
engage as an employee, independent contractor, or otherwise, any officer or key
employee of the Company, or (iv) induce or attempt to induce any customer,
supplier,
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<PAGE> 14
distributor, licensee, or business relation of the Company to cease doing
business with the Company; provided, however, that general solicitation not
specifically directed at such employees through published notices,
advertisements and other similar items shall not be deemed to be a violation of
clauses (i) and (ii) above.
8. Equitable Relief.
The Parties acknowledge that a breach by any of the Parties of any
provision of this Agreement cannot reasonably or adequately be compensated in
damages in an action at law or in arbitration and may cause the non-breaching
Party(ies) or their successor(s) in interest irreparable injury and damage. The
Parties further acknowledge that competition in violation of this Agreement or
any other breach of this Agreement could be extremely detrimental to the
non-breaching Party(ies). By reason thereof, the Parties agree that the
non-breaching Party(ies) shall be entitled, in addition to any other remedies
they may have under this Agreement or the Operating Agreement or otherwise, to
preliminary and permanent injunctive and other equitable relief to prevent or
curtail any breach of this Agreement; provided, however, that no specification
in this Agreement of a specific legal or equitable remedy shall be construed as
a waiver or prohibition against the pursuit of other legal or equitable remedies
in the event of such a breach.
9. Term
Sections 2, 4 and 7 of this Agreement shall terminate with respect
to Pillsbury Parent and Pillsbury two years after the date on which Pillsbury or
Pillsbury Parent (or any Affiliate of Pillsbury Parent or Pillsbury) first
ceases to be a Member of the Company (the "PILLSBURY TERM"). Sections 3, 5 and 7
of this Agreement shall terminate with respect to Nestle Parent and Nestle USA
two years after the date on which Nestle USA or Nestle Parent (and/or any
Affiliate of Nestle Parent or Nestle USA) first ceases to be a Member of the
Company (the "NESTLE TERM"). The provisions of Section 6 shall survive the
termination of this Agreement in perpetuity.
10. Severability.
In the event that any provision of this Agreement or any word,
phrase, clause, sentence or other portion thereof (including, without
limitation, the geographical and temporal restrictions contained herein) should
be held to be unenforceable or invalid for any reason, such provision or portion
thereof shall be modified or deleted in such a manner so as to make this
Agreement as modified legal and enforceable to the fullest extent permitted
under applicable laws. In the event that any restrictive covenant of this
Agreement, or any word, phrase, clause, sentence or other portion thereof, is
held unenforceable because of the duration or geographic scope of such
provision, it is the intention of the Parties that the arbitrator (or court, if
applicable) shall have the power to modify such provision to the extent
necessary to render the provision enforceable and such provision as so modified
shall be enforced. In the event that any provision of Section 2, 3, 4, 5 or 7 of
this Agreement should be held unenforceable or invalid for any reason (a) with
respect to the Nestle Entities, such provision and the parallel provision that
is applicable to the Pillsbury Entities shall also be deemed unenforceable or
invalid with respect to the Pillsbury Entities or (b) with respect to the
Pillsbury Entities, such provision and the parallel
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<PAGE> 15
provision that is applicable to the Nestle Entities shall also be deemed
unenforceable or invalid with respect to the Nestle Entities.
11. Successors and Assigns.
The covenants, terms and provisions set forth herein shall inure to
the benefit of and be enforceable by the Parties, their assigns and successors
in interest, including without limitation, any entity into which any of the
Parties may be merged or by which it may be acquired, provided that rights,
duties and obligations hereunder may not be assigned by any Party hereto without
the prior written consent of the other Parties and any attempt to assign this
Agreement without such consent shall be considered null and void.
12. Integrated Agreement and Consideration.
This Agreement, together with the Operating Agreement, the
Contribution Agreement and the Ancillary Documents (as defined in the
Contribution Agreement), constitute the entire agreement among the Parties with
regard to the subject matter hereof and supersede all prior oral and written,
and all contemporaneous oral agreements and understandings relating thereto. To
the extent that any of such other documents may contradict or make unclear the
terms of this Agreement, the terms of this Agreement shall prevail unless
expressly provided for otherwise. This Agreement may only be amended by the
prior written mutual agreement of each of the Parties.
13. Further Assurances
Each of the Parties does hereby covenant and agree on behalf of
itself, its successors, and its assigns, without further consideration, to
prepare, execute, acknowledge, file, record, publish, and deliver such other
instruments, documents and statements, and to take such other action as may be
required by law or reasonably necessary to effectively carry out the purposes of
this Agreement.
14. Notices
Any notice, consent, demand, or communication required or permitted
to be given by any provision of this Agreement shall be in writing and shall be
(a) delivered personally to the Person or to an officer of the Person to whom
the same is directed, or (b) sent by facsimile (with confirmation of
transmission) or registered or certified mail, return receipt requested, postage
prepaid, addressed as follows: (i) if to the Company, [Ice Cream Partners USA],
LLC, c/o Nestle Frozen Food Company, 30003 Bainbridge Road, Solon, OH
44139-2290, Attention: James L. Dintaman, Telephone No.: (440) 498-7700,
Telecopier No.: (440) 248-7847; (ii) if to Nestle Parent or Nestle USA, Nestle
USA - Food Group, Inc., c/o Nestle USA, Inc., 800 North Brand Blvd., Glendale,
California 91203, Attention: General Counsel, North America, Telephone No.:
(818) 549-6703, Telecopier No.: (818) 549-6713; (iii) if to Pillsbury Parent or
Pillsbury, The Pillsbury Company, 200 South Sixth Street, Minneapolis, Minnesota
55402, Attention: Vice President and General Counsel, Pillsbury North America,
Telephone No.: (612) 330-2316, Telecopier No.: (612) 330-5292; or (iv) to such
other addresses as the Parties may from time to time specify by notice to the
other Parties. Any such notice shall be deemed to be delivered, given and
received for all purposes as of: (i) the date so delivered, if delivered
personally, (ii) upon receipt of a
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<PAGE> 16
confirmation of successful transmission, if sent by facsimile, or (iii) on the
date of receipt or refusal indicated on the return receipt, if sent by
registered or certified mail, return receipt requested, postage and charges
prepaid and properly addressed.
15. Construction
This Agreement shall be construed as if all Parties prepared this
Agreement.
16. Captions - Pronouns
Any titles or captions contained in this Agreement are for
convenience only and shall not be deemed part of the text of this Agreement. All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as appropriate.
17. Arbitration
The parties hereby agree that claims, disputes or controversies of
whatever nature, arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement (or any other agreement
contemplated by or related to this Agreement), including without limitation any
claim based on contract, tort or statute, or the arbitrability of any claim
hereunder (collectively, a "CLAIM") shall be settled promptly and expeditiously,
at the request of any party to this Agreement, exclusively by final and binding
arbitration conducted in New York. Each of Pillsbury and Nestle USA shall
appoint an arbitrator and the arbitrators selected by Pillsbury and Nestle USA
shall jointly select another arbitrator. The final decision regarding the Claim
shall be determined by a majority vote of the arbitrators and in accordance with
the Commercial Arbitration Rules then in effect of the American Arbitration
Association. The parties expressly agree that the arbitrators shall determine
the discovery methods that shall be available to the parties under this Section
17 as appropriate under the circumstances. Each party hereto expressly consents
to, and waives any future objection to, such forum and arbitration rules.
Judgment upon any award may be entered by any state or federal court having
jurisdiction thereof. Except as required by law, no party nor the arbitrators
shall disclose the existence, content, or results of any arbitration hereunder
without the prior written consent of all parties. Except as provided herein, the
Federal Arbitration Act shall govern the interpretation, enforcement and all
proceedings pursuant to this Section 17. The arbitrators' fees and any filing or
other fees required by the Commercial Arbitration Rules shall, to the extent
required, initially be paid by the party requesting arbitration, but shall be
assessed against the party which does not prevail in the arbitration.
Adherence to this dispute resolution process shall not limit the right of
the parties hereto to obtain any provisional remedy, including without
limitation, injunctive or similar relief, from any court of competent
jurisdiction as may be necessary to protect their respective rights and
interests pending arbitration. Notwithstanding the foregoing sentence, this
dispute resolution procedure is intended to be the exclusive method of resolving
any Claims arising out of or relating to this Agreement.
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18. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which will take effect as an original and all of which, when taken together,
shall evidence one and the same agreement.
19. Governing Law.
The terms of this Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
20. Amendments.
(a) Any provision of this Agreement may be amended if, and only if,
such amendment is in writing and is duly executed by each Party.
(b) Unless otherwise agreed by the parties, in the event any Person
becomes an Assignee of a Membership Interest or an Additional Member or
Substitute Member of the Company, such Person (and its ultimate parent company)
shall become a signatory hereto by signing a counterpart signature page to this
Agreement, and this Agreement shall be amended to the extent necessary to bind
such Person (and ultimate parent thereof) to all of the provisions of this
Agreement to the same extent that the Entities and their Affiliates are bound by
the provisions of this Agreement.
21. Third-Party Beneficiaries.
Nothing herein expressed or implied is intended to or shall be
construed to confer upon or give any person or entity, other than the Parties
and their Affiliates, and their respective successors and permitted assigns, any
rights or remedies under or by reason of this Agreement.
(Signature Page Follows)
17
<PAGE> 18
IN WITNESS WHEREOF, the undersigned, the Parties have executed this
Agreement on the date first written above, effective ___________, 1999.
DIAGEO PLC
By:
--------------------------------------
Name:
Title:
THE PILLSBURY COMPANY
By:
--------------------------------------
Name:
Title:
NESTLE S.A.
By:
--------------------------------------
Name:
Title:
NESTLE USA - FOOD GROUP, INC.
By:
--------------------------------------
Name:
Title:
[ICE CREAM PARTNERS USA], LLC
By:
--------------------------------------
Name:
Title:
S-1
