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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ........ to ........
Commission file number 1-10307
______________________________
IMPERIAL HOLLY CORPORATION
(Exact name of registrant as specified in its charter)
Texas 74-0704500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Imperial Square, Suite 200, P.O. Box 9, Sugar Land, Texas 77487
(Address of principal executive offices, including Zip Code)
(713) 491-9181
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of August 12, 1996.
10,317,807 shares.
------------------
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<PAGE>
IMPERIAL HOLLY CORPORATION
Index
<TABLE>
<CAPTION>
Page
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Consolidated Statement of Changes in
Shareholders' Equity 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
______________________
The statements regarding future market prices and operating results and
other statements that are not historical facts contained in this Quarterly
Report on Form 10-Q are forward-looking statements. The words "expect",
"project", "estimate", "believe", "predict" and similar expressions are also
intended to identify forward-looking statements. Such statements involve risks,
uncertainties and assumptions, including, without limitation, market factors,
the effect of weather and economic conditions, farm and trade policy, the
available supply of sugar, available quantity and quality of sugarbeets and
other factors detailed elsewhere in this and other Company filings with the
Securities and Exchange Commission. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated.
2
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PART I - FINANCIAL INFORMATION
IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1996 March 31, 1996
------------- --------------
(In Thousands of Dollars)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and temporary investments $ 7,855 $ 1,930
Marketable securities 40,192 37,373
Accounts receivable 55,219 38,736
Inventories:
Finished products 101,592 61,702
Raw and in-process materials 39,236 15,929
Supplies 18,597 12,124
Manufacturing costs prior to production 15,083 12,476
Prepaid expenses 7,920 3,260
-------- --------
Total current assets 285,694 183,530
NOTES RECEIVABLE 1,179 1,195
OTHER INVESTMENTS 6,960 6,702
PROPERTY, PLANT AND EQUIPMENT - net 156,620 124,103
OTHER ASSETS 9,760 9,789
-------- --------
TOTAL $460,213 $325,319
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade $ 66,036 $ 37,937
Short-term borrowings 97,862 31,839
Current maturities of long-term debt 1,475 8
Other current liabilities 45,141 32,020
-------- --------
Total current liabilities 210,514 101,804
LONG-TERM DEBT 91,448 89,800
DEFERRED TAXES AND OTHER CREDITS 41,756 22,672
SHAREHOLDERS' EQUITY
Preferred stock - -
Common stock 32,307 32,276
Retained earnings 73,978 69,829
Unrealized securities gains - net 10,210 8,938
-------- --------
Total shareholders' equity 116,495 111,043
-------- --------
TOTAL $460,213 $325,319
======== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
---------------------------
1996 1995
------------- ------------
(In Thousands of Dollars,
Except per Share Amounts)
<S> <C> <C>
NET SALES $ 179,905 $ 148,824
----------- -----------
COSTS AND EXPENSES:
Cost of sales 155,637 134,338
Selling, general and administrative 15,297 13,906
----------- -----------
Total 170,934 148,244
----------- -----------
OPERATING INCOME 8,971 580
INTEREST EXPENSE (3,035) (2,901)
REALIZED SECURITIES GAINS 392 2,457
OTHER INCOME -- Net 290 1,156
----------- -----------
INCOME BEFORE INCOME TAXES 6,618 1,292
PROVISION FOR INCOME TAXES 2,469 526
----------- -----------
INCOME BEFORE EXTRAORDINARY ITEM 4,149 766
EXTRAORDINARY ITEM - NET OF TAX - 380
----------- -----------
NET INCOME $ 4,149 $ 1,146
=========== ===========
EARNINGS PER SHARE OF COMMON STOCK:
INCOME BEFORE EXTRAORDINARY ITEM $0.40 $ 0.07
EXTRAORDINARY ITEM - NET OF TAX - 0.04
----------- -----------
NET INCOME $0.40 $ 0.11
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 10,315,289 10,287,090
=========== ===========
</TABLE>
See notes to consolidated financial statements.
4
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IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-------------------
1996 1995
------- --------
(In Thousands of Dollars)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 4,149 $ 1,146
Adjustments for non-cash and non-operating items:
Extraordinary item - net - (380)
Depreciation 3,639 3,146
Other (227) (2,942)
Working capital changes (excluding working capital
acquired in the Spreckels acquisition):
Receivables (9,857) (14,424)
Inventory (30,658) 10,824
Deferred and prepaid costs 1,246 (3,022)
Accounts payable 15,869 18,453
Other liabilities 7,700 (5,168)
-------- --------
Operating cash flow (8,139) 7,633
-------- --------
INVESTMENT ACTIVITIES:
Acquisition of Spreckels (36,059) -
Capital expenditures (1,940) (2,690)
Investment in marketable securities (1,918) (3,475)
Proceeds from sale of marketable securities 1,478 5,528
Proceeds from sale of fixed assets 21 827
Other (618) 2,604
-------- --------
Investing cash flow (39,036) 2,794
-------- --------
FINANCING ACTIVITIES:
Short-term debt:
Bank borrowings - net 33,359 (3,747)
CCC borrowings - advances 35,079 59,256
CCC borrowings - repayments (14,977) (61,301)
Repayment of long-term debt (388) (4,156)
Dividends paid 0 (411)
Other 27 90
-------- --------
Financing cash flow 53,100 (10,269)
-------- --------
INCREASE IN CASH AND TEMPORARY INVESTMENTS 5,925 158
CASH AND TEMPORARY INVESTMENTS, BEGINNING OF PERIOD 1,930 1,686
-------- --------
CASH AND TEMPORARY INVESTMENTS, END OF PERIOD $ 7,855 $ 1,844
======== ========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the Three Months Ended June 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock
------------------ Unrealized
Retained Securities
Shares Amount Earnings Gains Total
-------- ------ -------- ---------- -----
(In Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
BALANCE, MARCH 31, 1996 10,312,507 $32,276 $69,829 $ 8,938 $111,043
Net income 4,149 4,149
Employee stock
purchase plan and
stock option exercises 3,326 31 31
Change in unrealized
securities gains - net 1,272 1,272
---------- ------- ------- ------- --------
BALANCE, JUNE 30, 1996 10,315,833 $32,307 $73,978 $10,210 $116,495
========== ======= ======= ======= ========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
IMPERIAL HOLLY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Basis of Presentation -- The unaudited condensed consolidated
financial statements included herein have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission and reflect in the
opinion of management, all adjustments, consisting only of normal recurring
accruals, that are necessary for a fair presentation of financial position and
results of operations for the interim periods presented. These financial
statements include the accounts of Imperial Holly Corporation and its majority
owned subsidiaries (the "Company"). All significant intercompany balances and
transactions have been eliminated in consolidation. Certain information and
footnote disclosures required by generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations. The financial
statements included herein should be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended March 31, 1996.
Cost of Sales -- Payments to growers for sugarbeets are based in part
upon the Company's average net return for sugar sold (as defined in the
participating contracts with growers) during the grower contract years, some of
which extend beyond June 30. The contracts provide for the sharing of the net
selling price (gross sales price less certain marketing costs, including
packaging costs, brokerage, freight expense and amortization of costs for
certain facilities used in connection with marketing) with growers. Cost of
sales includes an accrual for estimated additional amounts to be paid to growers
based on the average net return realized for sugar sold in each of the contract
years through June 30. The final cost of sugarbeets cannot be determined until
the end of the contract year for each growing area. Manufacturing costs prior
to production are deferred and allocated to production costs based on estimated
total units of production for each sugar manufacturing campaign. Additionally,
the Company's sugar inventories, which are accounted for on a LIFO basis, are
periodically reduced at interim dates to levels below that of the beginning of
the fiscal year. When such interim LIFO liquidations are expected to be
restored prior to fiscal year-end, the estimated replacement cost of the
liquidated layers is utilized as the basis of the cost of sugar sold from
beginning of the year inventory. Accordingly, the cost of sugar utilized in the
determination of cost of sales for interim periods includes estimates which may
require adjustment in future fiscal periods.
Acquisition of Spreckels -- On April 19, 1996, the Company acquired
all of the outstanding capital stock of Spreckels Sugar Company, Inc. and
Limestone Products Company, Inc. (collectively "Spreckels"), a California based
beet sugar processor. The purchase price was the sum of i) Spreckels' net
working capital as of December 31, 1995, ii) $3 million and iii) net cash
advanced to Spreckels by the seller between December 31, 1995 and the closing
date. The Company funded from current borrowings under the Company's revolving
credit line $35.3 million of the purchase price at closing, and the
7
<PAGE>
seller calculated the total purchase price as $41.3 million, with a remaining
balance due of $6.0 million. As a result of a post-closing review performed by
the Company pursuant to the Stock Purchase Agreement, the Company has notified
the seller that it calculates the purchase price as $29.3 million. The Company
and the seller are presently attempting to resolve these differences.
The acquisition was accounted for as a purchase and Spreckels' results of
operations are included in the Company's consolidated financial statements
commencing April 19, 1996. Summarized proforma operating results for the three
months ended June 30, 1996 and 1995, as if the acquisition had occurred on the
first day of each of the respective periods is as follows (in thousands of
dollars, except per share amounts):
<TABLE>
<CAPTION>
Three Months Ended
June 30,
------------------
1996 1995
-------- --------
<S> <C> <C>
Net Sales $187,742 $194,830
Income before extraordinary item 4,482 869
Net Income 4,482 1,249
Earnings per share:
Income before extraordinary item 0.43 0.08
Net Income 0.43 0.12
</TABLE>
Subsequent event -- On July 25, 1996, the Company and Greencore Group
plc ("Greencore") entered into an agreement providing for the private placement
of 3,800,000 shares of the Company's common stock to Greencore for $50.4
million. Following the sale, which is subject to Hart-Scott-Rodino Act
clearance and listing of the shares on the American Stock Exchange, Greencore
would own approximately 27% of the Company's outstanding common stock. The
Board of Directors took action under the Company's 1989 Shareholder Rights Plan
to increase the ownership percentage that would trigger the Plan with respect to
Greencore to 30% during the term of the Investor Agreement between Greencore and
the Company (not more than 5 years). Thereafter, the trigger level would be
increased to 35%, until such time as Greencore's investment falls below 15%, at
which time the trigger level becomes 15%. During the term of the Investor
Agreement, Greencore will have the right to designate two nominees for election
as Directors of the Company, and would be required to vote for the director
nominees recommended by the Board of Directors. During the term of the Investor
Agreement Greencore is also subject to restrictions relative to certain actions
regarding the Company.
Earnings per share -- Effective April 1, 1996, the Company adopted
Statement of Financial Accounting Standards No. 123 "Accounting of Stock-based
Compensation" ("SFAS No. 123"), and elected to continue to following Accounting
Principles Board Opinion No. 25 to measure employee stock compensation cost.
The impact of SFAS No. 123 on proforma earnings per share for the three months
ended June 30, 1996 and 1995 was not significant.
Extraordinary Item -- In June 1995, the Company purchased and retired
$4,700,000 principal amount of its 8-3/8% senior notes due in 1999, resulting in
a gain which is reported, net of related income tax expense of $204,000, as an
extraordinary item.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company finances its working capital and capital expenditure
requirements from a combination of funds generated by operations and short-term
borrowing arrangements, including short-term, secured borrowings from the
Commodity Credit Corporation ("CCC"). CCC loans outstanding at June 30, 1996
totaled $60.0 million and are non-recourse to the Company. In the future, new
CCC loans will be made on a recourse basis if the tariff rate quota does not
exceed 1.5 million short-tons raw value (see "Business - Sugar Legislation and
Other Market Factors" in the Company's Annual Report on Form 10-K).
Increases in working capital components are largely due to the
inclusion of Spreckels in the June 30, 1996 consolidated balance sheet.
Additionally, the increase in accounts receivable for the three months ended
June 30, 1996 results from higher sales compared to the quarter ended March 31,
1996. Other increases in raw and in-process inventory and accounts payable
during the three months ended June 30, 1996 were primarily due to the seasonal
production schedule of the Company's beet sugar operations and timing of the
purchase of and payments for sugarbeets.
The purchase of Spreckels, as well as the increase in working capital
described above, were funded by advances under short-term borrowing
arrangements.
On July 25, 1996, the Company and Greencore Group plc ("Greencore")
entered into an agreement providing for the private placement of 3,800,000
shares of the Company's common stock to Greencore, an Irish sugar and
agricultural products company, for $50.4 million. The Company plans to utilize
the net proceeds from the sale initially to reduce short-term borrowings and,
longer term, for capital expenditures and reductions in long-term indebtedness.
The sale, which is expected to close by August 31, 1996, is subject to Hart-
Scott-Rodino Act clearance and listing of the shares on the American Stock
Exchange.
Fiscal 1997 capital expenditures are estimated at $12.0 million. The
Company's marketable securities portfolio is reported at its market value of
$40.2 million at June 30, 1996, $15.7 million in excess of its cost basis.
Management believes that existing internal and external sources of liquidity are
adequate to meet its financing requirements.
RESULTS OF OPERATIONS
Net sales increased $31.1 million or 21% for the three months ended
June 30, 1996, compared to the same period of the prior year, as sugar sales of
Spreckels ($36.6 million) and increased cane sales volumes as well as increases
in sugar and pulp prices offset lower sales volumes by the Company's Holly Sugar
subsidiary. Sugar sales prices increased from the year earlier period as a
smaller domestic sugarbeet crop last fall has put upward pressure
9
<PAGE>
on refined sugar prices. A significant portion of the Company's industrial
sales are made under forward sales contracts, most of which commence October 1
and extend for up to a year, resulting in a lagging effect of market price
changes on the Company's sugar sales. The Company purchases and prices raw cane
sugar under forward purchase contracts to manage its exposure to future price
changes. Pulp sales prices have increased significantly as a result of higher
feed grain prices.
Cost of sales as a percent of sales declined from 90.3% to 86.5% for
the three months ended June 30, 1996 as sales prices increased more than raw
cane costs, which together with improvements in factory operating costs
increased unit margins, particularly on cane sugar sales. The Company purchases
sugar beets under participatory contracts which provide for a percentage sharing
of the net selling price realized on refined beet sugar sales between the
Company and the grower. Use of this type of contract reduces the Company's
exposure to inventory price risk on sugarbeet purchases so long as the contract
net selling price does not fall below the regional minimum support prices
established by the USDA. Consequently, the increase in the unit selling price
of refined beet sugar resulted in increases in the unit cost of sugarbeets
purchased, mitigating the improvement in beet sugar sales margins.
Selling, general and administrative expenses increased by $1.4 million
or 10.0% for the three months ended June 30, 1996 compared to the same period of
the prior year, as the addition of $2.9 million of Spreckels selling, general
and administrative costs, and increases in incentive compensation, more than
offset reductions in advertising and general and administrative costs. The
Company expects to complete the consolidation of Spreckels sales and
administrative functions into its Sugar Land, Texas offices during the second
fiscal quarter, which is expected to significantly reduce the impact of
Spreckels operations on combined administrative costs.
Interest expense for the three months ended June 30, 1996 was higher
than the comparable period of the prior year as a result of higher short-term
average borrowings, including borrowings to finance the acquisition of Spreckels
as well as Spreckels working capital borrowings, mitigated by somewhat lower
short-term interest rates and lower long-term debt outstanding. The decrease in
other income -- net is primarily due to gains on the sale of assets of $.6
million in the prior year. The extraordinary gain resulted from the purchase
and retirement of $4.7 million principal amount of 8-3/8% senior notes in June
1995.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Annual Meeting of Shareholders held on July 26, 1996 the
following proposals were acted upon:
Proposal 1 - Nominees for Class II Directors were elected to serve for
terms of office expiring in 1999 by the vote totals as follow:
<TABLE>
<CAPTION>
NUMBER OF VOTES
---------------------------------
BROKER
FOR WITHHELD NON-VOTES
<S> <C> <C> <C>
A. M. Bartolo 9,125,887 27,943 -
Edward O. Gaylord 9,129,397 24,433 -
Roger W. Hill 9,126,205 27,625 -
Robert L. K. Lynch 9,124,813 29,017 -
</TABLE>
Class I Directors, whose terms of office continue until 1998 are John
D. Curtin, Jr., I. H. Kempner, III, James C. Kempner and Daniel K. Thorne.
Class III Directors, whose terms of office continue until 1997 are Ann O.
Hamilton, Harris L. Kempner, Jr., H. E. Lentz and Fayez Sarofim.
Proposal 2 - A Nonemployee Director Compensation Plan was approved by
a vote of 7,943,200 for and 169,543 against, with 246,865 abstentions and
794,222 broker non-votes.
Proposal 3 - An amendment to the Company's Stock Incentive Plan was
approved by a vote of 8,183,400 for and 107,245 against, with 43,167 abstentions
and 820,018 broker non-votes.
Proposal 4 - The appointment of Deloitte & Touche LLP as auditors of
the Company for the fiscal year ending March 31, 1997 was ratified by a vote of
9,097,902 for and 20,936 against with 34,992 abstentions.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The exhibits required to be filed with this report are listed
below:
Exhibit 4.1 Fifth Amendment dated as of June 28, 1996
to the Credit Agreement among the Company,
Harris Trust and Savings Bank, as agent,
and the signatory bank thereto.
Exhibit 4.2 Stock Purchase Agreement dated July 25, 1996
by and among the Company, Greencore Group plc
and Earlsfort Holdings B.V.
11
<PAGE>
Exhibit 11 Computation of Income Per Common Share
Exhibit 27 Financial Data Schedules
Registrant is a party to several long-term debt instruments under
which in each case the total amount of securities authorized does not exceed 10%
of the total assets of Registrant and its subsidiaries on a consolidated basis.
Pursuant to paragraph 4(iii) (A) of Item 601(b) of Regulation S-K, Registrant
agrees to furnish a copy of such instruments to the Securities and Exchange
Commission upon request.
(b) A report on Form 8-K was filed on May 3, 1996 and was amended by a
report filed July 5, 1996 in connection with the acquisition of Spreckels.
12
<PAGE>
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 thereunto duly authorized.
IMPERIAL HOLLY CORPORATION
(Registrant)
Dated: August 13, 1996 By: /s/ James C. Kempner
--------------------
James C. Kempner
President,
Chief Executive Officer
and Chief Financial Officer
(Principal Financial Officer)
13
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EXHIBIT 4.1
IMPERIAL HOLLY CORPORATION
FIFTH AMENDMENT TO CREDIT AGREEMENT
Harris Trust and Savings Bank
Chicago, Illinois
Texas Commerce Bank National Association
Houston, Texas
The Bank of New York
New York, New York
Frost National Bank of San Antonio
San Antonio, Texas
St. Paul Bank for Cooperatives
St. Paul, Minnesota
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of June
10, 1993, as amended to the date hereof, (the "Credit Agreement") among the
undersigned, IMPERIAL HOLLY CORPORATION, a Texas corporation (the "Company"),
you (the "Banks") and Harris Trust and Savings Bank, as agent for the Banks (the
"Agent"). All defined terms used herein shall the same meanings as in the Credit
Agreement unless otherwise defined herein.
The Banks extend an $90,000,000 revolving credit and competitive bid
facility to the Company on the terms and conditions set forth in the Credit
Agreement. The Company and the Banks now wish to amend the Credit Agreement to
increase the Harris Trust and Savings Bank's, The Bank of New York's and St.
Paul Bank for Cooperatives' respective Bank's Commitment, and all in the manner
set forth in this Amendment.
SECTION 1. AMENDMENTS.
Upon satisfaction of all of the conditions precedent set forth in Section 2
hereof, the Credit Agreement shall be amended as follows:
Section 1.1. Section 1.1(c) of the Credit Agreement shall be amended in its
entirety and as so amended shall be restated to read as follows:
"(c) The respective maximum aggregate principal amounts of the Revolving
Credit at any one time outstanding which each Bank by its acceptance hereof
severally
<PAGE>
agrees to make available to the Company are as follows (collectively, the
"Banks' Commitments" and individually, a "Bank's Commitment"):
Harris Trust and Savings Bank $30,000,000 27.27270000%
Texas Commerce Bank National Association $25,000,000 22.72730000%
The Bank of New York $25,000,000 22.72730000%
St. Paul Bank for Cooperatives $23,000,000 20.90910000%
The Frost National Bank of San Antonio $7,000,000 6.36360000%
Total $110,000,000 100%
All Loans under the Revolving Credit shall be made from each Bank in
proportion to its respective Bank's Commitment as above set forth. The Company
may elect that each Loan made hereunder be made available by means of a Base
Rate Loan, Adjusted CD Rate Loan or Eurodollar Loan, it being understood that
one or more of such Loans may be outstanding at the same time. Each Loan shall
be in an amount not less than $1,000,000 or such greater amount which is an
integral multiple of $1,000,000."
Section 1.2. The first sentence of Section 1.2 of the Credit Agreement
shall be amended by replacing the figure "$90,000,000" appearing therein with
the figure "$110,000,000".
Section 1.3. Section 5.28 of the Credit Agreement shall be amended to read
as follows:
"Section 5.28. The term "Consolidated Tangible Net Worth" shall mean the
amount of capital stock accounts (less the amount of any treasury stock) plus
(or minus in the case of a deficit) the amount of surplus and retained
earnings accounts of the Company and its Consolidated Subsidiaries, and minus
the total amount of all intangible assets of the Company and its Consolidated
Subsidiaries (including, without limitation, unamortized debt discount and
expense, trade names, trademarks, patents, copyrights and goodwill) recorded
on their respective books and records and minus all minority interests in any
Consolidated Subsidiaries without duplication of deductions if already
deducted in arriving at retained earnings and surplus, all as determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied, but in any event excluding from intangible assets the
book value of the right to purchase raw sugar on the world market and sell
that sugar in the domestic market, as evidenced by the credit balance on the
Company's import license issued by the United States Department of
Agriculture."
2
<PAGE>
Section 1.4. Section 5.41 of the Credit Agreement shall be amended to read
as follows:
"Section 5.41. The term "Fixed Charge Coverage Ratio" shall mean
the ratio of EBITDA for the four fiscal quarters of the Company
then ended to the sum of (without duplication) (a) Consolidated
Interest Expense for such period and (b) the sum of the current
maturities (determined in accordance with generally accepted
accounting principles consistently applied) of Senior Funded Debt
as of the end of such period, provided however, that for the fiscal
quarters of the Company ending on June 30, 1996 and September 30,
1996, the amount of the current maturities associated with Capital
Leases assumed in the Spreckels Sugar Company acquisition shall be
excluded from the amount of current maturities."
Section 1.5. Exhibit A to the Credit Agreement shall be amended by
deleting the amount "Ninety Million Dollars ($90,000,000)" appearing therein and
substituting therefor the amount "One Hundred and Ten Million Dollars
($110,000,000)".
Section 1.6. The Note of the Company to Harris Trust and Savings Bank
dated June 10, 1993 is hereby amended to delete the amount "Ninety Million
Dollars ($90,000,000)" appearing therein and substituting therefor the amount
"One Hundred and Ten Million Dollars ($110,000,000)".
Section 1.7. The Note of the Company to Texas Commerce Bank National
Association dated June 10, 1993 is hereby amended to delete the amount "Ninety
Million Dollars ($90,000,000)" appearing therein and substituting therefor the
amount "One Hundred and Ten Million Dollars ($110,000,000)".
Section 1.8. The Note of the Company to The Bank of New York dated June
10, 1993 is hereby amended to delete the amount "Ninety Million Dollars
($90,000,000)" appearing therein and substituting therefor the amount "One
Hundred and Ten Million Dollars ($110,000,000)".
Section 1.9. The Note of the Company to Frost National Bank of San Antonio
dated June 10, 1993 is hereby amended to delete the amount "Ninety Million
Dollars ($90,000,000)" appearing therein and substituting therefor the amount
"One Hundred and Ten Million Dollars ($110,000,000)".
Section 1.10. The Note of the Company to St. Paul Bank for Cooperatives
dated June 10, 1993 is hereby amended to delete the amount "Ninety Million
Dollars ($90,000,000)" appearing therein and substituting therefor the amount
"One Hundred and Ten Million Dollars ($110,000,000)".
-3-
<PAGE>
Section 1.11. Each Bank shall place the following legend on its Note:
"This Note has been amended pursuant to the terms of a Fifth Amendment
to Credit Agreement dated as of June 28, 1996 between the Company, Harris Trust
and Savings Bank, as Agent and the Banks named therein, including a change in
the principal amount hereof, to which Amendment reference is hereby made for a
statement of the terms thereof."
SECTION 2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
Section 2.1. The Company and the Banks, shall have executed this Amendment
(such execution may be in several counterparts and the several parties hereto
may execute on separate counterparts).
Section 2.2. As of the date written below, each of the representations and
warranties set forth in Section 6 of the Credit Agreement shall be true and
correct, except that all of the representations and warranties made under
Section 6.3 of the Credit Agreement shall be deemed to refer to the most recent
financial statements furnished to the Agent pursuant to Section 8.4 of the
Credit Agreement.
Section 2.3. As of the date written below, the Company shall be in full
compliance with all of the terms and conditions of the Credit Agreement and no
Event of Default or Potential Default shall have occurred and be continuing
thereunder or shall result after giving effect to this Amendment.
Section 2.4. As of the date written below, all legal matters incident to
the execution and delivery hereof and the instruments and documents contemplated
hereby shall be satisfactory to the Banks.
Section 2.5. The Agent shall have received an opinion of counsel to the
Company satisfactory in form and substance to the Agent.
SECTION 3. MISCELLANEOUS.
Section 3.1. Upon satisfaction of the conditions precedent set forth above,
the Company shall be deemed to have requested from Harris Trust and Savings
Bank, The Bank of New York and St. Paul Bank for Cooperatives loans in the
aggregate principal amount necessary to cause the aggregate principal amount of
all Loans outstanding under the Revolving Credit to be ratable from each Bank
in accordance with its respective Bank's Commitment. The proceeds of such loans
shall be applied to the prepayment of loans outstanding under the Revolving
Credit as necessary to achieve such result.
4
<PAGE>
Section 3.2. Except as specifically amended herein the Credit Agreement
shall continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in any note, document,
letter, certificate, the Credit Agreement itself, the Notes, or any
communication issued or made pursuant to or with respect to the Credit Agreement
or the Notes, any reference to the Credit Agreement or Notes being sufficient to
refer to the Credit Agreement as amended hereby.
Section 3.3. This Amendment may be executed in any number of
counterparts, and by the different parties on different counterparts, all of
which taken together shall constitute one and the same Agreement. Any of the
parties hereto may execute this Amendment by signing any such counterpart and
each of such counterparts shall for all purposes be deemed to be an original.
This Amendment shall be governed by the internal laws of the State of Illinois.
-5-
<PAGE>
Dated as of June 28, 1996.
IMPERIAL HOLLY CORPORATION
By_________________________
Its______________________
(CORPORATE SEAL)
ATTEST:
_____________________________
Its__________________________
Accepted as of the date last written above.
HARRIS TRUST AND SAVINGS BANK
individually and as Agent
By_____________________________
Its Vice President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By_____________________________
Its__________________________
THE BANK OF NEW YORK
By_____________________________
Its__________________________
-6-
<PAGE>
FROST NATIONAL BANK OF SAN ANTONIO
By________________________________
Its_____________________________
ST. PAUL BANK FOR COOPERATIVES
By________________________________
Its_____________________________
-7-
<PAGE>
EXHIBIT 4.2
IMPERIAL HOLLY CORPORATION
================================================================================
STOCK PURCHASE AGREEMENT
July 25, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
=================
<TABLE>
<CAPTION>
Page
<C> <S> <C>
SECTION 1 SALE OF STOCK; CLOSING; DELIVERY 1
1.1 Sales of Stock 1
1.2 Closing 1
1.3 Payment and Delivery 1
SECTION 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 1
2.1 Organization and Standing; Articles of Incorporation and Bylaws 1
2.2 Corporate Power 2
2.3 Capitalization 2
2.4 Authorization 2
2.5 SEC Documents 3
2.6 Absence of Undisclosed Liabilities 3
2.7 Compliance with Other Instruments 3
2.8 Governmental Consent, etc. 3
2.9 Litigation 4
2.10 Securities Laws 4
2.11 Permits 4
2.12 Environmental 4
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 4
3.1 Experience 4
3.2 Accredited Investor 4
3.3 Investment 4
3.4 Rule 144 5
3.5 No Federal or State Approval 5
3.6 Access to Data 5
3.7 Authorization 5
3.8 Brokers or Finders 5
3.9 Compliance with Other Instruments 5
3.10 Governmental Consent, etc. 5
3.11 No Ownership 6
3.12 Subsidiary 6
SECTION 4 CONDITIONS TO CLOSING OF PURCHASER 6
4.1 Representations and Warranties Correct 6
4.2 No Injunctions 6
4.3 HSR Clearance 6
4.4 AMEX Listing 6
4.5 Rights Agreement 6
4.6 Due Diligence Investigation 6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
<C> <S> <C>
SECTION 5 CONDITIONS TO CLOSING OF COMPANY 7
5.1 Representations and Warranties Correct 7
5.2 No Injunctions 7
5.3 HSR Clearance 7
5.4 AMEX Listing 7
5.5 Shareholder Approval 7
SECTION 6 RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;COMPLIANCE WITH SECURITIES ACT 7
6.1 Restrictions on Transferability 7
6.2 Restrictive Legend 8
6.3 Notice of Proposed Transfers 8
SECTION 7 COVENANT 9
7.1 HSR Filings 9
7.2 Related Agreements 9
7.3 Fulfillment of Closing Conditions 9
7.4 No Purchases, Sales or Hedge Transactions 9
7.5 Operations in the Ordinary Course of Business 9
7.6 Use of Proceeds 9
7.7 Rights Plan Adjustment 9
SECTION 8 MISCELLANEOUS 10
8.1 Letter Agreement Effective 10
8.2 Termination 10
8.3 Governing Law 10
8.4 Successors and Assigns 10
8.5 Entire Agreement; Amendment 10
8.6 Publicity 11
8.7 Confidentiality 11
8.8 Notices, etc. 11
8.9 Severability 12
8.10 Titles and Subtitles 12
8.11 Facsimile Signatures 12
8.12 Counterparts 12
</TABLE>
EXHIBITS
A -- Form of Registration Rights Agreement
B -- Form of Investor Agreement
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into effective
as of July 25, 1996 by and among Imperial Holly Corporation, a Texas corporation
(the "Company"), and Greencore Group plc and Earlsfort Holdings B.V.
("Purchaser").
SECTION 1
SALE OF STOCK; CLOSING; DELIVERY
1.1 SALES OF STOCK. Subject to the terms and conditions hereof, the
Company agrees to issue and sell to Purchaser, and Purchaser agrees to buy from
the Company 3,800,000 shares (the "Shares") of the Company's authorized but
unissued Common Stock, without par value, for a purchase price of $13.25 per
share for an aggregate purchase price of $50,350,000. Each share will include
rights issued pursuant to the Rights Agreement dated as of September 14, 1989
between the Company and the Bank of New York, as amended by Amendment dated
January 27, 1995 (the "Rights Agreement").
1.2 CLOSING. The closing of the purchase and sale of the Shares hereunder
(the "Closing") will take place at 10:00 a.m., local time, on a date specified
by the parties (the "Closing Date"), which will be no later than the second
business day following the satisfaction or waiver of the conditions set forth in
Sections 4 and 5 hereof, at the offices of Baker & Botts, L.L.P., One Shell
Plaza, 910 Louisiana, Houston, Texas, or at such other time and place upon which
the Company and Purchaser may mutually agree.
1.3 PAYMENT AND DELIVERY. At the Closing, the Company will deliver to
Purchaser a certificate evidencing the Shares, against payment of the purchase
price therefor, by wire transfer in same-day funds pursuant to the Company's
instructions which instructions shall be delivered to Purchaser at least two
business days prior to the Closing.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the disclosure schedule delivered by the Company
concurrently herewith (the "Disclosure Schedule"), the Company represents and
warrants to the Purchaser as of the date hereof and as of the Closing as
follows:
2.1 ORGANIZATION AND STANDING; ARTICLES OF INCORPORATION AND BYLAWS. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas. The Company has all requisite corporate
power and authority to own and operate its properties and assets, and to carry
on its business as presently conducted. The Company is
1
<PAGE>
currently qualified to do business as a foreign corporation in each jurisdiction
where the failure to be so qualified would have a material adverse effect on the
properties or business as now conducted or financial condition of the Company
and its subsidiaries, taken as a whole ("Material Adverse Effect"). The Company
has furnished to Purchaser correct and complete copies of its Articles of
Incorporation ("Charter"), Bylaws and Rights Agreement, each as amended to date.
2.2 CORPORATE POWER. The Company has and will have on the Closing Date
all requisite corporate power and authority to execute and deliver this
Agreement, the Registration Rights Agreement and the Investor Agreement (both
defined in Section 7.2 hereof), to sell and issue the Shares hereunder and to
carry out and perform its obligations under the terms of this Agreement, the
Registration Rights Agreement and the Investor Agreement.
2.3 CAPITALIZATION. The authorized capital stock of the Company consists
of 50,000,000 shares of Common Stock, without par value (the "Common Stock"), of
which 10,315,070 shares were issued and outstanding as of June 3, 1996, and
5,000,000 shares of Preferred Stock, without par value (the "Preferred Stock"),
of which 333,334 shares have been designated "Series A Junior Participating
Preferred Stock" and reserved for issuance pursuant to the Rights Agreement, no
shares of which are outstanding. The outstanding shares have been duly
authorized and validly issued, and are fully paid and nonassessable. The
Company has reserved 3,800,000 shares of Common Stock for issuance hereunder.
The Disclosure Schedule contains a complete list of shares of Common Stock
reserved and available for issuance to employees or directors under the
Company's stock purchase and option plans. Except as set forth above and in the
Disclosure Schedule, (i) no subscription, warrant, option or other right to
purchase or acquire any shares of any class of capital stock of the Company or
securities convertible into such capital stock is authorized or outstanding, and
(ii) there is no commitment of the Company to issue any such shares, warrants,
options or other such rights or securities.
2.4 AUTHORIZATION. All corporate action on the part of the Company, its
shareholders (subject to Section 5.5 hereof) and its board of directors
necessary for the authorization, execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the Investor Agreement by the
Company, the authorization, sale, issuance and delivery of the Shares and the
performance of all of the Company's obligations hereunder and thereunder has
been taken or will be taken prior to the Closing. This Agreement, the
Registration Rights Agreement and the Investor Agreement, when executed and
delivered by the Company, shall constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, except as such enforcement
is subject to the effect of (i) any applicable bankruptcy, insolvency,
reorganization or other laws relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The Shares,
when issued in compliance with the provisions of this Agreement, will be validly
issued, fully paid and nonassessable; and the Shares will be free of any
pledges, liens, encumbrances or preemptive rights, other than any liens or
encumbrances created by or imposed upon the Purchaser and restrictions on
transfer under federal and state securities laws as set forth herein and under
the Investor Agreement.
2
<PAGE>
2.5 SEC DOCUMENTS. The Company has furnished to Purchaser copies of
its Annual Report on Form 10-K for the fiscal year ended March 31, 1996 and all
other statements, reports, registration statements (other than registration
statements on Form S-8, if any) filed by the Company with the Securities and
Exchange Commission ("SEC") since March 31, 1996 and prior to the date hereof
(collectively, the "SEC Documents"). As of their respective filing dates, the
Company's SEC Documents complied in all material respects with the requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or the
Securities Act of 1933, as amended (the "Securities Act"), as the case may be,
and to the Company's knowledge none of the Company's SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The
financial statements of the Company contained in the Company's SEC Documents
fairly present the financial condition and results of operations of the Company
as of the respective dates thereof and for the periods therein referred to, all
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated, except in the case of
unaudited financial statements for the absence of notes thereto and subject to
normal year-end audit adjustments. Since March 31, 1996 and prior to the date
hereof, there has been no event or occurrence that has caused a Material Adverse
Effect.
2.6 ABSENCE OF UNDISCLOSED LIABILITIES. Other than liabilities disclosed
in the SEC Documents filed prior to the date hereof or on the Disclosure
Schedule, there are no liabilities of the Company or any of its subsidiaries,
except for liabilities that have not had, and may not reasonably be expected to
have, a Material Adverse Effect.
2.7 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of and compliance with this Agreement, the Registration Rights
Agreement and the Investor Agreement, and the issuance of the Shares, have not
resulted and will not result in any material violation of, or conflict with, or
constitute a material default under, the Company's Charter or Bylaws nor result
in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of the Company. The Board of Directors of the Company
has adopted a resolution determining that, for purposes of the Rights Agreement,
and upon consummation of the Closing, the ownership percentage with respect to
the Purchaser and its affiliates for purposes of the definition of "Acquiring
Person" in the Rights Agreement shall be 30% so long as the Investor Agreement
has not terminated and 35% from and after such termination until such time as
the Purchaser and its affiliates beneficially own less than 15% of the then
outstanding shares of the Company's Common Stock, at which time such percentage
shall become 15%.
2.8 GOVERNMENTAL CONSENT, ETC. No consent, approval or authorization of
or designation, declaration or filing with any governmental authority on the
part of the Company is required in connection with the valid execution and
delivery of this Agreement, the Registration Rights Agreement and the Investor
Agreement, or the offer, sale or issuance of the Shares, or the consummation of
any other transaction contemplated hereby, except such filings required pursuant
to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR
Act").
3
<PAGE>
2.9 LITIGATION. Section 2.9 of the Disclosure Schedule contains a
complete list of pending lawsuits or other legal proceedings to which the
Company or any of its subsidiaries is a party as of the date hereof. The
Company believes that no lawsuit or legal proceeding set forth in Section 2.9 of
the Disclosure Schedule is reasonably likely to have a Material Adverse Effect.
The Company is not aware of any lawsuit or legal proceeding threatened against
the Company or any of its subsidiaries that could reasonably be expected to have
a Material Adverse Effect.
2.10 SECURITIES LAWS. In reliance on Purchaser's investment
representations of contained in Section 3, the offer, issuance, sale and
delivery of the Shares, as provided in this Agreement, are exempt from the
registration requirements of the Securities Act and all applicable state
securities laws.
2.11 PERMITS. The Company and its subsidiaries have all permits,
licenses, registrations and approvals necessary or required by law for the
Company and each of its subsidiaries to carry on its business as presently
conducted except where the failure to have such permits, licenses, registrations
and approvals is not reasonably likely to have a Material Adverse Effect. To
the best of the Company's knowledge, there is no violation or failure of
compliance on the part of the Company or any of its subsidiaries with any of the
foregoing permits, licenses, registrations or approvals that is reasonably
likely to have a Material Adverse Effect.
2.12 ENVIRONMENTAL. The Company believes that no pending
environmental matter disclosed in the SEC Documents is reasonably likely to have
a Material Adverse Effect.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Purchaser hereby represents and warrants to the Company with respect to the
purchase of the Shares as of the date hereof and as of the Closing as follows:
3.1 EXPERIENCE. It has substantial experience in evaluating and investing
in private placement transactions of securities in companies similar to the
Company so that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests.
3.2 ACCREDITED INVESTOR. It is an "accredited investor" as such term is
defined in Rule 501(a) of the Securities Act.
3.3 INVESTMENT. It is acquiring the Shares for investment for its own
account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof. It understands that the Shares to be
purchased have not been, and will not be, registered under the Securities Act by
reason of a specific exemption from the registration provisions of the
Securities
4
<PAGE>
Act, the availability of which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of Purchaser's representations
as expressed herein.
3.4 RULE 144. It acknowledges that the Shares and the underlying Common
Stock must be held indefinitely unless subsequently registered under the
Securities Act or unless an exemption from such registration is available. It
is aware of the provisions of Rule 144 promulgated under the Securities Act
which permit limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, including, among other things, the
existence of a public market for the shares, the availability of certain current
public information about the Company, the resale occurring not less than two
years after a party has purchased and paid for the security to be sold, the sale
being effected through a "broker's transaction" or in transactions directly with
a "market maker" and the number of shares being sold during any three month
period not exceeding specified limitations.
3.5 NO FEDERAL OR STATE APPROVAL. It understands that no Federal or state
agency has passed upon the Shares or made any finding or determination as to the
fairness of the investment or any recommendation or endorsement of the Shares.
3.6 ACCESS TO DATA. It has had an opportunity to discuss the Company's
business, management and financial affairs with its management.
3.7 AUTHORIZATION. This Agreement, the Registration Rights Agreement and
the Investor Agreement when executed and delivered by Purchaser, will constitute
valid and legally binding obligations of Purchaser, enforceable in accordance
with their terms, except as such enforcement is subject to the effect of (i) any
applicable bankruptcy, insolvency, reorganization or other laws relating to or
affecting creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3.8 BROKERS OR FINDERS. The Company has not, and will not, incur,
directly or indirectly, as a result of any action taken by Purchaser, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement.
3.9 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of and compliance with this Agreement, the Registration Rights
Agreement and the Investor Agreement, and the purchase of the Shares, have not
resulted and will not result in any material violation of, or conflict with, or
constitute a material default under, the Purchaser's Charter, Bylaws or other
organizational documents nor result in the creation of, any mortgage, pledge,
lien, encumbrance or charge upon any of the properties or assets of the
Purchaser.
3.10 GOVERNMENTAL CONSENT, ETC. No consent, approval or authorization
of or designation, declaration or filing with any governmental authority on the
part of the Purchaser is required in connection with the valid execution and
delivery of this Agreement, or the offer, issuance, sale or purchase of the
Shares, or the consummation of any other transaction contemplated
5
<PAGE>
hereby, except (a) such filings as may be required to be made with the
Securities and Exchange Commission, (b) filings, if any, to be made in
compliance with applicable Blue Sky requirements, and (c) filings required
pursuant to the HSR Act.
3.11 NO OWNERSHIP. Purchaser does not "beneficially own" (as defined
under Rule 13d-3 of the Exchange Act) any shares of Common Stock.
3.12 SUBSIDIARY. Earlsfort Holdings B.V. is a wholly owned subsidiary
of Greencore Group plc, except to the extent of directors' qualifying shares, if
any.
SECTION 4
CONDITIONS TO CLOSING OF PURCHASER
Purchaser's obligations to purchase the Shares at the Closing are, at the
option of the Purchaser, subject to the fulfillment of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 2 hereof shall be true and correct in
all material respects as of the Closing Date with the same force and effect as
though the same had been made on and as of the Closing Date.
4.2 NO INJUNCTIONS. There shall not then be in effect any order enjoining
or restraining the transactions contemplated by this Agreement or the
Registration Rights Agreement.
4.3 HSR CLEARANCE. The waiting period under the HSR Act applicable to the
purchase of the Shares by Purchaser shall have expired or been terminated.
4.4 AMEX LISTING. The Shares shall have been approved for listing on the
American Stock Exchange.
4.5 RIGHTS AGREEMENT. Purchaser shall have received a certified copy of a
resolution of the Board of Directors of the Company certifying the matters set
forth in the second sentence of Section 2.7 hereof.
4.6 DUE DILIGENCE INVESTIGATION. Purchaser's due diligence investigation
of the Company's financial records, legal proceedings and environmental matters
shall not have revealed (i) any material and adverse error in the financial
information provided in the Company's Annual Report on Form 10-K for the year
ended March 31, 1996 that was not addressed in a subsequent SEC Document or (ii)
any environmental matter, litigation or contingent liability the likely effect
of which was not disclosed, in all material respects, by the Company to
Purchaser and that is reasonably likely to have a Material Adverse Effect. The
foregoing condition contained in this
6
<PAGE>
Section 4.6 may be exercised only by written notice provided to the Company by
the close of business on August 6, 1996.
SECTION 5
CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares at the Closing Date
is, at the option of the Company, subject to the fulfillment as of the Closing
Date of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Purchaser in Section 3 hereof shall be true and correct
in all material respects as of the Closing Date with the same force and effect
as though the same had been made on and as of the Closing Date.
5.2 NO INJUNCTIONS. There shall not then be in effect any order enjoining
or restraining the transactions contemplated by this Agreement and the
Registration Rights Agreement.
5.3 HSR CLEARANCE. The waiting period under the HSR Act applicable to the
purchase of the Shares by Purchaser shall have expired or been terminated.
5.4 AMEX LISTING. The Shares shall have been approved for listing on the
American Stock Exchange.
5.5 SHAREHOLDER APPROVAL. If required by applicable law or regulation,
the Company shall have obtained shareholder approval for the issuance of the
Shares to Purchaser. If shareholder approval is sought by the Company, the
Company agrees (i) to cause its Board of Directors to recommend to the Company's
shareholders that they approve the issuance of the Shares to Purchaser and (ii)
to use its reasonable best efforts to obtain such approval.
SECTION 6
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;
COMPLIANCE WITH SECURITIES ACT
6.1 RESTRICTIONS ON TRANSFERABILITY. The Shares to be issued hereunder
are "Restricted Securities" and shall not be sold, assigned, transferred or
pledged except upon the conditions specified in this Section 6, which conditions
are intended to ensure compliance with the provisions of the Securities Act.
Each Purchaser will cause any proposed purchaser, assignee, transferee, or
pledgee of the Shares held by Purchaser to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Section 6.
7
<PAGE>
6.2 RESTRICTIVE LEGEND. Each certificate representing (i) the Shares
and (ii) any other securities issued in respect of the Shares upon any stock
split stock dividend, recapitalization, merger, consolidation or similar event
shall (unless otherwise permitted by the provisions of Section 6.3 below) be
stamped or otherwise imprinted with a legend in the following form (in addition
to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SAID ACT.
Purchaser consents to the Company making a notation on its records and
giving instructions to any transfer agent of the Shares in order to implement
the restrictions on transfer established in this Section 6.
6.3 NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 6.3. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than a
transfer not involving a change in beneficial ownership), unless there is in
effect a registration statement under the Securities Act covering the proposed
transfer, the holder thereof shall give written notice to the Company of such
holder's intention to effect such transfer, sale, assignment or pledge. Each
such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and shall, be
accompanied, at such holder's expense, by either (i) a written opinion of legal
counsel, who shall be and whose legal opinion shall be reasonably satisfactory
to the Company, addressed to the Company, to the effect that the proposed
transfer of the Restricted Securities may be effected without registration under
the Securities Act or (ii) a "no action" letter from the staff of Commission to
the effect that the transfer of such securities without registration will not
result in a recommendation by the staff of the Commission that action be taken
with respect thereto, whereupon the holder of such Restricted Securities shall
be entitled to transfer such Restricted Securities in accordance with the terms
of the notice delivered by the holder to the Company. Each certificate
evidencing the Restricted Securities transferred as above provided shall bear,
except if such transfer is made pursuant to Rule 144 or a registration statement
under the Securities Act, the appropriate restrictive legend set forth in
Section 6.2 above, except that such certificate shall not bear such restrictive
legend if in the opinion of counsel for such holder and the Company such legend
is not required in order to establish compliance with any provision of the
Securities Act.
8
<PAGE>
SECTION 7
COVENANTS
7.1 HSR FILINGS. The Company and Purchaser each agrees to use its
reasonable best efforts to make promptly any filings required by the HSR Act,
and thereafter make any required submission, with respect to the issuance of the
Shares to Purchaser. The Company and the Purchaser agree to share equally the
HSR Act filing fee regarding the acquisition of the Shares by the Purchaser.
7.2 RELATED AGREEMENTS. At the Closing, the Company and the
Purchaser agree to enter into the Registration Rights Agreement in the form
attached hereto as Exhibit A and the Investor Agreement in the form attached
hereto as Exhibit B.
7.3 FULFILLMENT OF CLOSING CONDITIONS. The Company and the Purchaser
each agrees to use its reasonable best efforts to cause the fulfillment of the
closing conditions (to the extent, in whole or in part, within its direct or
indirect control) set forth in Sections 4 and 5 hereof.
7.4 NO PURCHASES, SALES OR HEDGE TRANSACTIONS. Prior to the Closing,
Purchaser agrees not to purchase or sell (or contract to purchase or sell)
shares of Common Stock or options, warrants or rights to purchase shares of
Common Stock. Purchaser also agrees not to enter into any hedge or other
transactions regarding Company securities. Nothing contained in this Section
7.4 shall prevent Purchaser from engaging in hedge or similar transactions not
involving the Company's securities.
7.5 OPERATIONS IN THE ORDINARY COURSE OF BUSINESS. During the period
from the date hereof until the Closing, the Company will, and will cause each of
its material subsidiaries to, conduct its operations according to its ordinary
course of business.
7.6 USE OF PROCEEDS. The Company agrees that the proceeds from the
sale of the Shares will be used to fund operations, to repay debt and for other
matters that arise in the ordinary course of the Company's business.
7.7 RIGHTS PLAN ADJUSTMENT. The Company shall not issue any shares of
its Common Stock (including, without limitation, in connection with a public
offering, a private placement, a business combination or pursuant to any then
outstanding warrants, options, rights or convertible securities or otherwise) if
such issuance would cause Purchaser and its affiliates to beneficially own less
than 15% of the then outstanding shares of the Company's Common Stock (a
"Dilution Transaction"), unless, prior thereto, it delivers to Purchaser a
certified copy of a resolution of the Board of Directors of the Company stating
that for purposes of the Rights Agreement, and upon consummation of such
Dilution Transaction, notwithstanding the provisions of the last sentence of
Section 2.7 of this Agreement, the ownership percentage with respect to the
Purchaser and its affiliates for purposes of the definition of "Acquiring
Person" in the Rights Agreement shall thereafter be 30% so long as the Investor
Agreement has not terminated and 35% from and after
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such termination; provided, however, that such resolution may also state that
if, at any time after a Dilution Transaction, Purchaser and its affiliates sell
or otherwise transfer in one or more transactions an Excess Amount (as defined
below) of shares of Common Stock of the Company, then, the ownership percentage
with respect to the Purchaser and its affiliates for purposes of the definition
of "Acquiring Person" in the Rights Agreement shall thereafter be 15%.
As used above, "Excess Amount" means the number of shares of Common
Stock of the Company which, if sold or otherwise transferred by Purchaser
immediately preceding the Dilution Transaction, would have caused the Purchaser
and its affiliates to beneficially own less than 15% of the then outstanding
shares of the Company's Common Stock.
SECTION 8
MISCELLANEOUS
8.1 LETTER AGREEMENT EFFECTIVE. The Purchaser agrees that the terms
and conditions of the Letter Agreement dated as of June 5, 1996 between the
Company and the Purchaser shall remain effective until the Closing.
8.2 TERMINATION. This Agreement shall terminate automatically if the
Closing has not occurred on or prior to December 31, 1996.
8.3 GOVERNING LAW. This Agreement shall be governed and construed in
all respects in accordance with the laws of the State of Texas as applied to
agreements made and performed in Texas by residents of the State of Texas. The
Company and the Purchaser each hereby consents to personal jurisdiction in any
action brought with respect to this Agreement and the transactions contemplated
hereby in the United States District Court for the Southern District of Texas.
The Company and the Purchaser each also agrees that service of process may be
accomplished pursuant to the provisions of Section 8.8 hereof.
8.4 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
8.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
documents delivered pursuant hereto at the Closing constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof, and no party shall be liable or bound to any other
party in any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
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8.6 PUBLICITY. Neither the Company nor Purchaser shall issue any
press release or otherwise make a public statement with respect to the
transactions contemplated by this Agreement without consulting the other party,
except as may be required by applicable law or regulation. In the event that
the Closing does not occur or it becomes evident that the Closing will not
occur, Purchaser agrees to permit the Company to publicly announce any such
event prior to Purchaser making any announcement of any such event.
8.7 CONFIDENTIALITY. Purchaser acknowledges and agrees that any
information or data it has acquired from the Company, not otherwise properly in
the public domain, was received in confidence. Purchaser agrees not to divulge,
communicate or disclose, except as may be required by law or for the performance
of this Agreement, or use to the detriment of the Company or for the benefit of
any other person or persons, or misuse in any way, any confidential information
of the Company.
8.8 NOTICES, ETC. Unless otherwise provided, any notice, request,
demand or other communication required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given upon personal delivery
to the party to be notified, or when sent by telex or telecopier (with receipt
confirmed), or one business day after deposit with overnight courier or three
business days after deposit with the United States Post Office, by registered or
certified mail, postage prepaid and addressed as follows (or at such other
address as a party may designate by notice to the other):
If to the Company:
Imperial Holly Corporation
One Imperial Square, Suite 200
8016 Highway 90-A
Sugar Land, TX 77478
Attention: President
Telephone: (713) 490-9780
Facsimile: (713) 490-9895
with a copy to:
Baker & Botts, L.L.P.
One Shell Plaza
910 Louisiana
Houston, TX 77002-4995
Attention: J. David Kirkland, Jr.
Telephone: (713) 229-1101
Facsimile: (713) 229-1522
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If to the Investor:
Greencore Group plc
St. Stephens Green House
Earlsforth Terrace
Dublin 2, Ireland
Attention: Chief Executive Officer
Telephone: 011-3531-605-1000
Facsimile: 011-3531-605-1101
with a copy to:
Weil, Gotshal & Manges LLP
700 Louisiana, Suite 1600
Houston, TX 77002
Attention: Steven D. Rubin
Telephone: (713) 546-5030
Facsimile: (713) 224-9511
8.9 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
invalid, unenforceable or void, this Agreement shall continue in full force and
effect without said provision. In such event, the parties shall negotiate, in
good faith, a legal, valid and enforceable substitute provision which most
nearly effects the intent of the parties in entering into this Agreement.
8.10 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.11 FACSIMILE SIGNATURES. Any signature page delivered by a fax
machine or telecopy machine shall be binding to the same extent as an original
signature page, with regard to any agreement subject to the terms hereof or any
amendment thereto. Any party who delivers such a signature page agrees to later
deliver an original counterpart to any party which requests it.
8.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
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The foregoing agreement is hereby executed as of the date first above
written.
IMPERIAL HOLLY CORPORATION
a Texas corporation
By: __________________________________
Title: __________________________________
GREENCORE GROUP PLC
By: __________________________________
Title: __________________________________
EARLSFORT HOLDINGS B.V.
By: ___________________________________
Title: ___________________________________
Stock Purchase Agreement Signature Page
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
effective as of _____________, 1996 by and among Imperial Holly Corporation, a
Texas corporation (the "Company") and Greencore Group plc and Earlsfort Holdings
B.V. (collectively, the "Investor").
RECITALS
WHEREAS, the Company and Investor are parties to that certain Stock
Purchase Agreement dated as of July 25, 1996 (the "Purchase Agreement")
providing for the issuance and sale by the Company and the purchase by the
Investor of shares of the Company's Common Stock, without par value (the "Common
Stock");
WHEREAS, the sale of the Common Stock to Investor is conditioned upon
granting the rights set forth herein to Investor;
NOW, THEREFORE, in consideration of the foregoing, the parties agree
as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings indicated:
"Advice" shall have the meaning given it in Section 5 hereof.
"Affiliate" of an Investor shall mean any Person controlling,
controlled by or under common control with Investor. As used in this
definition, the term "control," including the correlative terms "controlling,"
"controlled by" and "under common control with," shall mean possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies (whether through ownership of securities or any partnership or other
ownership interest, by contract or otherwise) of a Person.
"Commission" shall mean the Securities and Exchange Commission or any
other Federal agency then administering the Securities Act and other Federal
securities laws.
"Demand Registration" shall have the meaning given it in Section 3
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Holder" shall mean any Person holding Registrable Securities.
"Other Holders" shall mean holders of the Company's securities, other
than Investor, proposing to distribute securities pursuant to a registration
under this Agreement.
<PAGE>
"Person" shall mean any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or a political subdivision, agency or
instrumentality thereof or other entity or organization of any kind.
"Piggy-back Registration" shall have the meaning given it in Section
2(a) hereof.
"Registrable Securities" shall mean (i) the Common Stock issued to
Investor pursuant to the Purchase Agreement and (ii) any securities issued in
exchange for, as a dividend on, or in replacement of, or otherwise issued or
distributed in respect of (including securities issued in a stock dividend,
split or recombination or pursuant to the exercise of preemptive rights, if
any), any shares of Common Stock referred to in clause (i) above; provided,
however, that any securities described in clause (i) or (ii) above shall cease
to be Registrable Securities when and to the extent that such securities have
been (A) distributed to the public pursuant to a registration statement covering
such securities that has been declared effective under the Securities Act, (B)
distributed in accordance with the provisions of Rule 144 (or any similar
provision then in force) under the Securities Act, (C) transferred to any Person
in a manner such that such securities are deemed to cease being Registrable
Securities pursuant to the provisions of Sections 11(i) and (k) of this
Agreement, or (D) repurchased by the Company.
"Registration Expenses" shall have the meaning given it in Section 6
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2. PIGGY-BACK REGISTRATION RIGHTS.
(a) At any time after the date hereof, if the Company proposes to file
a registration statement under the Securities Act with the Commission with
respect to an offering by the Company for its own account or for the account of
any other Person of any Common Stock to be issued for cash pursuant to a firm
commitment underwriting (other than as set forth in Section 2(b) below), then
the Company shall in each case give written notice of such proposed filing to
Holders at least 20 days before the initial filing date with the Commission of
such registration statement, which notice shall set forth the intended method of
distribution of the Common Stock proposed to be registered by the Company. The
notice shall offer each Holder the opportunity to register such number of
Registrable Securities as such Holder may request (a "Piggy-back Registration").
Notwithstanding the foregoing, if any managing underwriter of such offering
advises the Company in writing that marketing factors require a limitation on
the number of shares to be underwritten, then the amount of Registrable
Securities to be offered for the accounts of Holders and Other Holders shall be
reduced in inverse order of the priority of registration rights held by holders
of securities requesting inclusion therein to the extent necessary, in the
opinion of such managing underwriter, to reduce the total amount of securities
to be included in such offering to the amount recommended by such managing
underwriter; provided, however, that the reduction imposed upon Holders shall
not be greater, on a percentage basis with respect to the Registrable Securities
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<PAGE>
requested to be included, than the reduction imposed upon Other Holders with
respect to the amount of securities requested for inclusion in such
registration.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Company shall not be required to include Registrable Securities
in any registration statement if the proposed registration is (i) a registration
of a stock option or other employee incentive compensation or employee benefit
plan or of securities issued or issuable pursuant to any such plan, or a
registration statement relating to warrants, options or shares of capital stock
granted or to be granted or sold primarily to employees, directors or officers
of the Company, (ii) a registration of securities issued or issuable pursuant to
a stockholder reinvestment plan or other similar plan, (iii) a registration of
securities issued in exchange for any securities or any assets of, or in
connection with a merger or consolidation with, an unaffiliated company, (iv) a
registration of securities pursuant to a "rights" or other similar plan designed
to protect the Company's stockholders from a coercive or other attempt to cause
a change in control of the Company, (v) a registration of securities filed
pursuant to Rule 145 under the Securities Act or any successor rule, (vi) a
registration of preferred stock or securities issued in connection with any debt
or preferred stock financing of the Company or (vii) a registration filed in
connection with an exchange offer or an offering of securities solely to the
Company's existing shareholders.
(c) The Company may withdraw any registration statement and abandon
any proposed offering initiated by the Company or any other Person without the
consent of any Holder, notwithstanding the request of Holders to participate
therein in accordance with this provision, if the Company determines to do so in
its sole discretion.
3. DEMAND REGISTRATION RIGHTS.
(a) At any time after the earlier of (i) December 31, 1998 or (ii) the
time at which the transfer restrictions set forth in Section 3 in the Investor
Agreement terminate, any Holder may request in writing (a "Demand Request") that
the Company file a registration statement under the Securities Act covering the
registration at least 35% of the shares of Registrable Securities then
outstanding (a "Demand Registration") to be sold pursuant to a firm commitment
public offering for cash. Upon receipt by the Company of any such Demand
Request, the Company shall promptly, but in any event within 10 business days,
give written notice thereof (the "Demand Registration Notice") to each Holder of
Registrable Securities inquiring whether each such Holder desires to include all
or any portion of its Registrable Securities in a Demand Registration. The
Company shall use its best efforts (including the filing of an appropriate
registration statement within 60 days after receiving a Demand Request) to
effect as soon as practicable the registration under the Securities Act in
accordance with Section 5 hereof of all shares of Registrable Securities covered
by the Demand Request and all other Registrable Securities which the Company has
been requested to register by the Holders thereof by written request given to
the Company within 20 days after delivery of the Demand Registration Notice;
provided, however, that the Company shall be obligated to effect only two Demand
Registrations pursuant to this Section 3. In connection with a Demand
Registration, the Holders of a majority of the Registrable Securities to be
included in the
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registration, in their sole discretion, shall determine whether (a) to proceed
with, withdraw from or terminate such offering, (b) to select, subject to the
reasonable approval of the Company, a managing underwriter or underwriters in
connection with such offering, (c) to enter into an underwriting agreement for
such offering, and (d) to take such actions as may be necessary to close the
sale of Registrable Securities contemplated by such offering, including, without
limitation, waiving any conditions to closing such sale that may not have been
fulfilled. In the event Holders exercise their discretion under this Section
3(a) to terminate a proposed Demand Registration, the terminated Demand
Registration shall constitute a Demand Registration under this Section 3, unless
the determination to terminate such Demand Registration (i) follows the exercise
by the Company of any of its rights provided by Section 3(b) or (c) or (ii)
results from a material adverse change in the financial condition, results of
operations or business of the Company.
(b) Notwithstanding the provisions of Section 3(a), if the Company
shall furnish to the Holders requesting to include Registrable Securities in the
registration a certificate signed by the President of the Company stating that
in the good faith judgment of the Company, it would be detrimental to the
Company and its shareholders for such registration statement to be filed or to
become effective and it is therefore beneficial to defer the filing or
effectiveness of such registration statement, the Company shall have the right
to defer such filing or effectiveness for a period of not more than 90 days. The
Company shall promptly give notice to the Holder at the end of any delay period
under this Section 3(b).
(c) Notwithstanding the foregoing provisions of this Section 3, if at
the time of any request by a Holder for a Demand Registration, the Company has
plans to file within 90 days after such request for the sale of any of its
securities in a public offering under the Securities Act, no Demand Registration
shall be initiated under this Section 3 until 90 days after the effective date
of such registration unless the Company is no longer using its reasonable best
efforts to effect such registration; provided, however, that the Company shall
provide the holders of Registrable Securities the right to participate in such
public offering pursuant to, and subject to, the provisions of Section 2 hereof,
if applicable.
4. HOLDBACK AGREEMENTS; REQUIREMENTS OF HOLDERS.
(a) Restrictions on Public Sale by Holders of Registrable Securities
To the extent not inconsistent with applicable law, Holders agree not to effect
any public sale or other distribution of equity securities of the Company (or
any securities convertible into or exchangeable or exercisable for equity
securities of the Company) during the period beginning on the effective date of
a registration statement filed by the Company with the Commission and ending 90
days after the date of the final prospectus with respect thereto (except for
securities that may be included in such registration pursuant to the provisions
hereof or otherwise), but only if and to the extent requested in writing by the
Company or, in the case of an underwritten public offering, the managing
underwriter or underwriters. The Company agrees to be bound by similar
restrictions in the event of an underwritten public offering pursuant to Section
3 hereof.
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(b) Cooperation by Holders. The offering of Registrable Securities by
Holders shall comply in all respects with the applicable terms, provisions and
requirements set forth in this Agreement, and each Holder shall timely provide
the Company with all information and materials required to be included in a
registration statement that relate to such Holder, and to take all such action
as may be reasonably required in order not to delay the registration and
offering of the securities by the Company. The Company shall have no obligation
to include in such registration statement shares of a Holder if such Holder has
failed to furnish such information which, in the opinion of counsel to the
Company, is required in order for the registration statement to be in compliance
with the Securities Act.
5. REGISTRATION PROCEDURES. Whenever any Registrable Securities are
to be registered pursuant to Section 2 (including the Company's rights under
Section 2(c)) or 3 of this Agreement, the Company will use its reasonable best
efforts to effect the registration of such Registrable Securities as
contemplated by such Section. In connection with any Piggy-back Registration or
Demand Registration, the Company will, subject to Section 2 or 3 hereof (as
applicable):
(a) prepare and file with the Commission a registration statement
which includes the Registrable Securities and use its reasonable best efforts to
cause such registration statement to become effective;
(b) prepare and file with the Commission such amendments and post-
effective amendments to the registration statement, and such supplements to the
related prospectus, as may be necessary to keep the registration statement
effective for a period of at least 270 days (or such shorter period during which
Holders shall have sold all Registrable Securities requested to be registered)
and to appropriately reflect the plan of distribution of the securities
registered thereunder and/or as shall be necessary so that neither such
registration statement nor the related prospectus shall contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and so
that such registration statement and the related prospectus will otherwise
comply with applicable legal requirements; and comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such registration statement during the applicable period;
(c) furnish to the Holders of Registrable Securities included in such
registration statement and the underwriter or underwriters thereof, if any,
without charge, such number of conformed copies of the registration statement
and any post-effective amendment thereto and such number of copies of the
prospectus (including each preliminary prospectus) and any amendments or
supplements thereto, and any documents incorporated by reference therein, as
Holders or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities being sold by Holders (it being
understood that the Company consents to the use of the prospectus and any
amendment or supplement thereto by Holders of Registrable Securities covered by
the registration statement and the underwriter or underwriters thereof, if any,
in connection with the offering and sale of the Registrable Securities covered
by the prospectus or any amendment or supplement thereto);
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<PAGE>
(d) notify the Holders of Registrable Securities included in such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, when the Company becomes
aware of the happening of any event as a result of which the prospectus included
in such registration statement (as then in effect) contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements therein (in the case of the prospectus or any preliminary prospectus,
in light of the circumstances under which they were made) not misleading and, as
promptly as practicable thereafter and in any event, within 15 days after such
notice, prepare and file with the Commission and furnish a supplement or
amendment to such prospectus (which may include a document filed pursuant to the
Exchange Act that is incorporated by reference therein) so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(e) otherwise comply with all applicable rules and regulations of the
Commission and make generally available to its security holders an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act no
later than 100 days after the end of the 12-month period beginning with the
first day of the Company's first fiscal quarter commencing after the effective
date of the registration statement, which earnings statement shall cover said
12-month period, which requirement will be deemed to be satisfied if the Company
complies with Rule 158 under the Securities Act.
(f) as promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a registration statement,
deliver a copy of such document to Holders of Registrable Securities covered by
such registration statement if the Holders requests such document;
(g) on or prior to the date on which the registration statement is
declared effective, use reasonable best efforts to register or qualify, and
cooperate with the Holders of Registrable Securities included in such
registration statement, the underwriter or underwriters thereof, if any, and
their counsel, in connection with the registration or qualification of the
Registrable Securities covered by the registration statement for offer and sale
under the securities or blue sky laws of each state and other jurisdiction of
the United States as the Holders or underwriter reasonably requests in writing,
to use its reasonable best efforts to keep each such registration or
qualification effective, including through new filings, or amendments or
renewals, during the period such registration statement is required to be kept
effective and to do any and all other acts or things necessary or advisable to
enable the disposition in all such jurisdictions of the Registrable Securities
covered by the applicable registration statement; provided, that the Company
will not be required to qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 5(g),
to take any action which would subject it to general service of process or
taxation in any such jurisdiction where it is not then so subject;
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<PAGE>
(h) cooperate with the Holders of Registrable Securities covered by
the registration statement and the managing underwriter or underwriters thereof,
if any, to facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legends) representing securities to be sold under the
registration statement, and enable such securities to be in such denominations
and registered in such names as the managing underwriter or underwriters, if
any, or Holders may request, subject to the underwriters' obligation to return
any certificates representing securities not sold;
(i) enter into such customary agreements (including an underwriting
agreement in customary form) and take all reasonable actions as may be
appropriate in the judgment of the Company in order to facilitate the
disposition of such Registrable Securities;
(j) make available for inspection by Holders of Registrable Securities
included in such registration statement, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney,
accountant or other agent retained by any such seller or underwriter
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company and subsidiaries
(collectively, the "Records"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibilities, and cause the Company's
officers, directors and employees to supply all Records reasonably requested by
any such Inspector in connection with such registration statement; provided,
that with respect to any Records that are confidential, the Inspectors shall
execute such confidentiality agreements as the Company may reasonably request in
order to ensure that the confidentiality of confidential Records will be
maintained; and
(k) if requested by Holders of Registered Securities covered by the
Registration, use its best efforts to furnish to underwriters for Holders a
"comfort" or "special procedures" letter (to the extent permitted by the
standards of the AICPA or other relevant authorities) signed by the independent
public accountants who have audited the Company's financial statements included
in such registration statement, covering the matters customarily covered in
accounts' letters delivered in connection with such registration statement.
Holders, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 5(d), will forthwith discontinue
disposition of the Registrable Securities until Holders' receipt of the copies
of the supplemented or amended prospectus contemplated by Section 5(d) or until
it is advised in writing (the "Advice") by the Company that the use of the
prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the prospectus, and,
if so directed by the Company, such Holder will, or will request the managing
underwriter or underwriters of such Registrable Securities, if any, to deliver
to the Company (at the Company's expense) all copies in their possession or
control, 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.
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6. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all Commission
and securities exchange or National Association of Securities Dealers, Inc.
registration and filing fees, all fees and reasonable expenses incurred in
connection with compliance with state or other securities or blue sky laws and
compliance with the rules of the NASD (including fees and disbursements of
counsel in connection with state or other securities or blue sky qualifications
of the Registrable Securities), rating agency fees, printing expenses, messenger
and delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed and fees and
disbursements of counsel for the Company and its independent certified public
accountants (including the expenses of any special audit or "comfort" or special
procedures letters required by or incident to such performance), the reasonable
fees and expenses of one counsel for the Holders, securities act liability
insurance (if the Company elects to obtain such insurance), and the fees and
expenses of any special experts retained by the Company in connection with such
registration, excluding any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities (all such expenses being
herein called "Registration Expenses"), will be borne by the Company.
(b) Notwithstanding anything herein to the contrary, each Holder shall
pay such portion of the Registration Expenses as may be required by applicable
law but Holder is entitled to reimbursement from the Company for such
Registration Expenses if not prohibited by applicable law.
7. INDEMNIFICATION; CONTRIBUTION.
(a) Indemnification by the Company. The Company will, and hereby
does, indemnify and hold harmless, with respect to any registration statement
filed by it, to the full extent permitted by law, the Holders who sells
Registrable Securities covered by such registration statement, its officers,
directors, employees, agents and general or limited partners (and the directors,
officers, employees and agents thereof) and each other Person, if any, who
controls such Holder within the meaning of the Securities Act (collectively, the
"Holder Indemnitees") against all losses, claims, damages, liabilities and
expenses, joint or several (including reasonable fees of counsel and any amounts
paid in settlement effected with the Company's consent), to which any such
Holder Indemnitee may become subject under the Securities Act, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions, suits, investigations or proceedings, whether commenced or threatened,
in respect thereof) are caused by (i) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement in which
such Registrable Securities were included as contemplated hereby or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading or, (ii) any
untrue statement or alleged untrue statement of a material fact
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contained in any preliminary, final or summary prospectus, together with the
documents incorporated by reference therein (as amended or supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein in the light of the circumstances under which they were made not
misleading; and in each such case the Company will reimburse each such Holder
Indemnitee for any reasonable legal or any other expenses incurred by any of
them in connection with investigating or defending any such loss, claim, damage,
liability, expense, action, suit, investigation or proceeding; provided, that
the Company shall not be liable to any such Holder Indemnitee in any such case
to the extent that any such loss, claim, damage, liability or expense (or
action, suit, investigation or proceeding, whether commenced or threatened, in
respect thereof) arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement or amendment thereof or supplement thereto, or in any such
preliminary, final or summary prospectus, in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any such
Holder Indemnitee for use in the preparation thereof; and provided, further,
that the Company shall not be liable to any such Holder Indemnitee with respect
to any preliminary prospectus to the extent that any such loss, claim, damage,
liability or expense of such Holder Indemnitee results from the fact that such
Holder Indemnitee (or any underwriter therefore) sold Registrable Securities to
a person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the prospectus (excluding documents
incorporated by reference) or of the prospectus as then amended or supplemented
(excluding documents incorporated by reference) if the Company has previously
furnished copies thereof in compliance with Section 5 of this Agreement and the
loss, claim, damage, liability or expense of such Holder Indemnitee results from
an untrue statement or omission of a material fact contained in such preliminary
prospectus which was corrected in the prospectus (or the prospectus as amended
or supplemented). Such indemnity and reimbursement of expenses shall remain in
full force and effect regardless of any investigation made by or on behalf of
such Holder Indemnitee or any of the prospective sellers or any of their
respective directors, officers, employees, agents, general or limited partners
or controlling Persons and shall survive the transfer of such securities by such
Holder.
(b) Indemnification by Holder. The Holder whose Registrable
Securities are included in any registration statement hereunder will and hereby
does indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors, officers, employees and agents and each Person who
controls the Company (within the meaning of the Securities Act) (collectively,
the "Company Indemnitees") against all losses, claims, damages, liabilities and
expenses (including reasonable fees of counsel and any amounts paid in
settlement effected with Holder's consent) to which any Company Indemnitee may
become subject under the Securities Act, at common law or otherwise insofar as
such losses, claims, damages, liabilities or expenses (or actions, suits,
investigations or proceedings, whether commenced or threatened, in respect
thereof) are caused by (i) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement in which Holder's
Registrable Securities were included or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material
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fact contained in any preliminary, final or summary prospectus, together with
the documents incorporated by reference therein (as amended or supplemented if
the Company shall have filed with the Commission any amendment thereof or
supplement thereto), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein in the light of the circumstances under which they were made
not misleading to the extent, but only to the extent, in the cases described in
clauses (i) and (ii), that such untrue statement or omission is contained in any
information furnished in writing by that Holder for use in the preparation
thereof and (iii) with respect to any preliminary prospectus, the fact that
Holder (or any underwriter therefor) sold Registrable Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the prospectus (excluding documents incorporated by
reference) or of the prospectus as then amended or supplemented (excluding
documents incorporated by reference) if (A) the Company has previously furnished
copies thereof in compliance with Section 5 of this Agreement and (B) the loss,
claim, damage, liability or expense of such Company Indemnitee results from an
untrue statement or omission of a material fact contained in such preliminary
prospectus which was corrected in the prospectus (or the prospectus as amended
or supplemented). Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company (except as
provided above) or any of the prospective sellers or any of their respective
directors, officers, employees, agents, general or limited partners or
controlling Persons and shall survive the transfer of such securities by such
Holder.
(c) Conduct of Indemnification Proceeding. Promptly after receipt by
an indemnified party under Section 7(a) or 7(b) above of written notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing with respect to which a claim for indemnification may be made
pursuant to this Section 7, such indemnified party shall, if a claim in respect
thereto is to be made against an indemnifying party, give written notice to the
indemnifying party of the threat or commencement thereof, but the failure so to
notify the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any such
claim, action, suit, proceeding or investigation referred to under Section 7(a)
or 7(b) shall be brought against any indemnified party and it shall notify the
indemnifying party of the threat or commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense of any such claim, action, suit, proceeding or
investigation, the indemnifying party shall not be liable to such indemnified
party under this Section 7 for any legal expenses of counsel or any other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof unless the indemnifying party has failed to assume the defense
of such claim, action, suit, proceeding or investigation or to employ counsel
reasonably satisfactory to such indemnified party. Each indemnified party shall
have the right to employ separate counsel to represent it and assume its defense
(in which case the indemnifying party shall not represent it) if, upon the
advice of counsel, the representation of both parties by the same counsel would
be inappropriate due to actual or
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potential conflicts of interests between them and in which case the reasonable
fees and expenses of one separate counsel for the indemnified party shall be
paid by the indemnifying party. The indemnifying party shall not be required to
indemnify the indemnified party with respect to any amounts paid in settlement
of any claim, action, suit, proceeding or investigation entered into without the
written consent of the indemnifying party. No indemnifying party will consent
to the entry of any judgment or enter into any settlement without the consent of
the indemnified party, unless (i) such judgment or settlement does not impose
any obligation or liability upon the indemnified party other than the execution,
delivery or approval thereof, and (ii) such judgment or settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim for
all persons that may be entitled to or obligated to provide indemnification or
contribution under this Section 7.
(d) Additional Indemnification. Indemnification similar to that
specified in the preceding subsections of this Section 7 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any state securities or blue sky laws.
(e) Contribution. If the indemnification provided for in this Section
7 is unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b) above, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions, suits, investigations or
proceedings in respect thereof) referred to in Section 7(a) or 7(b) (as
applicable) in such proportion as is appropriate to reflect the relative fault
of the indemnifying party on the one hand and of the indemnified party on the
other in connection with the statements, omissions, actions or inactions that
resulted in such losses, claims, damages, liabilities or expenses. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnifying party, any action or inaction by any such party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement, omission, action or inaction. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses (or actions, suits, investigations or
proceedings in respect thereof) referred to above in this Section 7(e) shall be
deemed to include any reasonable legal or other expenses incurred by such
indemnified party in connection with investigating or defending any such action,
suit, proceeding, investigation or claim (which shall be limited as provided in
Section 7(c) if the indemnifying party has assumed the defense of any such
action, suit, proceeding, investigation or claim in accordance with the
provisions thereof) that is the subject of this Section 7(e). No person guilty
of fraudulent misrepresentation within the meaning of Section 11(f) of the
Securities Act shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Promptly after receipt by an
indemnified party under this Section 7(e) of written notice of the commencement
of any action, suit, proceeding, investigation or threat thereof made in writing
with respect to which a claim for contribution may be made against an
indemnifying party under this Section 7(e), such indemnified party shall, if a
claim for contribution
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<PAGE>
in respect thereto is to be made against an indemnifying party, give written
notice to the indemnifying party in writing of the commencement thereof (if the
notice specified in Section 7(c) has not been given with respect to such
action); but the failure to so notify the indemnifying party shall not relieve
it from any obligation to provide contribution that it may have to any
indemnified party under this Section 7(e) except to the extent that the
indemnifying party is actually prejudiced by the failure to give notice.
Notwithstanding anything in this Section 7(e) to the contrary, no indemnifying
party shall be required pursuant to this Section 7(e) to contribute any amount
that exceeds the amount by which the dollar amount of the proceeds received by
such indemnifying party from the sale of Registrable Securities and other
securities of the Company (after deducting any underwriting commissions,
discounts and transfer taxes applicable thereto) in the offering to which the
losses, claims, damages, liabilities or expenses of the indemnified parties
relate exceeds the amount of any losses, claims, damages, liabilities and
expenses that such indemnifying party has otherwise been required to pay as
indemnity or contribution hereunder by reason of such losses, claims, damages,
liabilities or expenses.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(e) 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.
If indemnification is available under this Section 7, the indemnifying
partes shall indemnify each indemnified party to the full extent provided in
Sections 7(a) and (b) without regard to the relative fault of said indemnifying
party or indemnified party or any other equitable consideration provided for in
this Section 7(e). The provisions of this Section 7(e) shall be in addition to
any other rights to indemnification or contribution that any indemnified party
may have pursuant to law or contract and shall remain in full force and effect
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the transfer of securities by any such party.
(f) Indemnification and Contribution of Underwriters. In connection
with any underwritten offering contemplated by this Agreement that includes
Registrable Securities, the Company and all sellers of Registrable Securities
included in any registration statement will agree to customary provisions for
indemnification and contribution (consistent with the other provisions of this
Section 7, except as may be otherwise agreed in writing by the Company and such
sellers) in respect of losses, claims, damages, liabilities and expenses of the
underwriters of such offering.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. Holders may not
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell Holder's securities on the terms of and on the basis provided in
any underwriting arrangements approved by the Company and (b) completes and
executes all questionnaires, powers of attorney, custody agreements,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.
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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 Commission thereunder from time to time in
order 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 Commission.
Upon the request of any Holder, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.
11. MISCELLANEOUS.
(a) Recapitalizations, Exchanges, etc. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
Registrable Securities, to any and all shares of equity capital or other
securities of the Company or any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) that may be issued in
respect of, in exchange for, or in substitution of the Registrable Securities,
in each case as the amounts of such securities outstanding are appropriately
adjusted for any equity dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date of this Agreement.
(b) Notices. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed (i) if to Company, to: Imperial Holly Corporation, One Imperial
Square, Suite 200, 8016 Highway 90-A, Sugar Land, TX 77478, Attention: President
(with a copy to Baker & Botts, L.L.P., 3000 One Shell Plaza, Houston, Texas
77002, Attention: J. David Kirkland), (ii) if to Holder at Holder's address as
shown on the stock transfer records of the Company (with a copy to Weil, Gotshal
& Manges LLP, 700 Louisiana, Suite 1600, Houston, Texas 77002, Attention:
Steven D. Rubin), or to such other address (as to a Holder) as such Holder may
furnish to the Company, or (as to the Company) as the Company may furnish to the
Holder except that notices of changes of address shall be effective only upon
receipt.
(c) Applicable Law. This contract is entered into under, and shall be
construed in accordance with and governed for all purposes by, the laws of the
State of Texas without regard to any principles of conflict of laws that, if
applied, might permit or require the application of the laws of a different
jurisdiction. The Company and the Investor each hereby consents to personal
jurisdiction in any action brought with respect to this Agreement and the
transactions contemplated hereby in the United States District Court for the
Southern District of Texas ("Southern District"). The Company and the Investor
each also agrees that service of process may be accomplished pursuant to the
provisions of Section 11(b) hereof.
(d) Amendment and Waiver. This Agreement may be amended, and the
provisions hereof may be waived, only by a written instrument signed by the
Company and Holders of a majority of the Registrable Securities then
outstanding. No failure by either party hereto at any time
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<PAGE>
to give notice of any breach by the other party of, or to require compliance
with, any condition or provision of this Agreement shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
(e) Remedy. The parties agree that in the event there is any breach
or asserted breach of the terms, covenants or conditions of this Agreement, the
remedy of the parties hereto shall be in law and in equity and injunctive relief
shall lie for the enforcement of or relief from any provisions of this
Agreement. If any remedy or relief is sought and obtained by any party against
one of the other parties pursuant to this Section 11(e), the other party shall,
in addition to the remedy of relief so obtained, be liable to the party seeking
such remedy or relief for the reasonable expenses incurred by such party in
successfully obtaining such remedy or relief, including the fees and expenses of
such party's counsel.
(f) Severability. It is a desire and intent of the parties that the
terms, provisions, covenants and remedies contained in this Agreement shall be
enforceable to the fullest extent permitted by law. If any such term,
provision, covenant or remedy of this Agreement or the application thereof to
any Person or circumstances shall, to any extent, be construed to be invalid or
unenforceable in whole or in part, then such term, provision, covenant or remedy
shall be construed in a manner so as to permit its enforceability under the
applicable law to the fullest extent permitted by law. In any case, the
remaining provisions of this Agreement or the application thereof to any Person
or circumstances other than those to which they have been held invalid or
unenforceable shall remain in full force and effect.
(g) Counterparts. This Agreement 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 agreement.
(h) Headings; Use of Certain Terms. The section and paragraph
headings in this Agreement have been inserted for purposes of convenience of
reference only and shall not be used for interpretive purposes. As used in 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
paragraph, subparagraph, section, subsection, or other subdivision. Whenever
the context may require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns and verbs shall include the plural and vice versa.
(i) Binding Effect; Transfer of Rights Under this Agreement. Unless
otherwise provided herein, the provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns, and is not intended to
confer upon any other Person any right or remedies hereunder; provided, however,
that the rights and obligations of Holder under this Agreement may be
transferred or assigned by a Holder only to one or more transferees to whom, in
the aggregate, all of such Holder's Registrable Securities are transferred and
only if such transferees shall, in connection with the transfer of such
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<PAGE>
Registrable Securities, provide the Company with a duly executed addendum to
this Agreement, in form and substance reasonably satisfactory to the Company,
pursuant to which such transferee expressly and without qualification (A)
assumes all of the obligations of its transferor hereunder and (B) agrees itself
to be bound by the terms hereof; provided, further, that any such transfer shall
not operate to release the transferring Holder from any of its obligations
hereunder existing on the date of such transfer. In the event any Registrable
Securities are transferred to a person who does not provide the addendum
referred to above in this Section 11(i), such Registrable Securities shall be
deemed to have ceased to be Registrable Securities effective upon such transfer.
(j) Effectiveness; Entire Agreement. This agreement shall become
effective immediately upon the closing of the Purchase Agreement. This
Agreement together with the Standstill 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. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(k) Termination. The right of Holder to effect registration of its
Registrable Securities pursuant to Section 2 or 3 hereof shall terminate at such
time as all Registrable Securities held by such Holder can be sold pursuant to
Rule 144 of the Securities Act in a single three-month period.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
IMPERIAL HOLLY CORPORATION
a Texas corporation
By: _____________________________________
Name: ___________________________________
Title: __________________________________
GREENCORE GROUP PLC
By: _____________________________________
Name: ___________________________________
Title: __________________________________
EARLSFORT HOLDINGS B.V.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
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IMPERIAL HOLLY CORPORATION
===============================================================================
INVESTOR AGREEMENT
____________, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 1 CERTAIN DEFINITIONS........................... 1
SECTION 2 STOCKHOLDER ACTIVITIES........................ 2
2.1 Certain Agreements............................ 2
2.2 Suspension.................................... 3
2.3 Obligation to Request Securities from
the Company.................................. 3
SECTION 3 RESTRICTIONS ON TRANSFER...................... 4
3.1 Transfer Restrictions......................... 4
3.2 Market Standoff............................... 5
3.3 Stop Transfer Order........................... 5
3.4 Legend........................................ 5
SECTION 4 RIGHT OF FIRST REFUSAL........................ 6
4.1 Right of First Refusal........................ 6
4.2 Assignment of Right of First Refusal.......... 7
SECTION 5 RIGHT OF FIRST OFFER.......................... 7
5.1 Investor Offers............................... 7
5.2 Acceptance of Offer........................... 8
5.3 Closing....................................... 8
5.4 Limitation of Rights.......................... 8
5.5 Assignment of Right of First Offer............ 8
SECTION 6 VOTING PROVISIONS............................. 8
6.1 Voting by Investor............................ 8
6.2 Presence for Quorum........................... 9
SECTION 7 BOARD REPRESENTATION.......................... 9
SECTION 8 EQUITY ACCOUNTING............................. 9
SECTION 9 MISCELLANEOUS................................. 9
9.1 Termination................................... 9
9.2 Specific Enforcement.......................... 10
9.3 Governing Law................................. 10
9.4 Successors and Assigns........................ 10
9.5 Entire Agreement; Amendment................... 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
9.6 Publicity...................................... 10
9.7 Confidentiality................................ 11
9.8 Notices, etc................................... 11
9.9 Severability................................... 12
9.10 Titles and Subtitles........................... 12
9.11 Facsimile Signatures........................... 12
9.12 Counterparts................................... 12
</TABLE>
<PAGE>
INVESTOR AGREEMENT
This Investor Agreement (this "Agreement") is entered into effective
as of _______, 1996 by and among Imperial Holly Corporation, a Texas corporation
(the "Company"), and Greencore Group plc and Earlsfort Holdings B.V.
(collectively, the "Investor").
RECITALS
WHEREAS, the Company and Investor are parties to that certain Stock
Purchase Agreement dated as of July 25, 1996 (the "Purchase Agreement")
providing for the issuance and sale by the Company and the purchase
("Acquisition") by the Investor of 3,800,000 shares ("Shares") of the Company's
Common Stock, without par value ("Company Common Stock");
WHEREAS, the Shares will represent approximately 27% of the total
number of shares of Company Common Stock outstanding immediately after the
Acquisition;
WHEREAS, the Company and Investor wish to provide for and acknowledge
certain arrangements and understandings following the Acquisition;
WHEREAS, the Company's issuance and sale and the Investor's purchase
of the Shares is conditioned upon the execution of this Agreement;
NOW THEREFORE, in consideration of the foregoing, the parties agree as
follows:
SECTION 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the
respective meanings set forth in this Section 1:
"Affiliate" means, with respect to any entity, an affiliate of that
entity as defined in Rule 12b-2 under the Exchange Act.
"Beneficial owner" or "beneficially owned" or "beneficial ownership"
shall have the meaning assigned to such term in Rule 13d-3 under the Exchange
Act.
"Independent Director" means a member of the Board of Directors of the
Company other than any director nominated by the Investor or any director having
an interest in the matter to be voted upon.
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"Subsidiary" means, with respect to any entity, any other entity of
which securities or other ownership interest having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are owned directly or indirectly by such entity.
"Voting Power" means, with respect to Voting Securities, the maximum
number of votes that the holders of Voting Securities are entitled to vote in
the election of directors (except to the extent such voting rights are
contingent upon dividend arrearages or similar circumstances).
"Voting Securities" means all classes of the Company's capital stock
that are entitled by their terms (and determined without regard to the voting
provisions of this Agreement) to vote generally in the election of directors and
all options, rights, warrants and other securities convertible into, or
exercisable or exchangeable for, any shares of such capital stock (excluding
options granted pursuant to the Company's employee stock plans).
SECTION 2
STOCKHOLDER ACTIVITIES
2.1 CERTAIN AGREEMENTS. The Investor agrees that, except as
specifically permitted or contemplated by this Agreement or unless previously
approved in writing by the Company upon the approval of a majority of the
Independent Directors, the Investor and each of its Affiliates will not in any
manner, directly or indirectly acting alone or in concert with others:
(i) acquire, or offer or agree, attempt, seek or propose to acquire,
directly or indirectly, any securities or property of the Company or any of
its successors or subsidiaries (or any direct or indirect beneficial
ownership, rights, options or interests therein), provided, that the
Investor may acquire Voting Securities, subject to Section 2.3 hereof, if
after the acquisition thereof the Investor and its Affiliates would not
hold in the aggregate 30% or more of the Voting Power of the Company (such
percentage limitation being the "Percentage Limitation");
(ii) solicit proxies or consents or become a "participant" in a
"solicitation" (as such terms are defined or used in Regulation 14A under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), of
proxies or consents with respect to securities of the Company or any of its
successors or subsidiaries or initiate any shareholder proposal or
"election contest" (as such term is defined or used in Rule 14a-11 of the
Exchange Act) with respect to the Company or any of its successors or
subsidiaries or, directly or indirectly, act to encourage, or induce
others to take any such action;
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<PAGE>
(iii) take any public action for the purpose of convening a
shareholders meeting of the Company or any of its successors or
subsidiaries or, directly or indirectly, act to encourage, or induce others
to take such action;
(iv) make any public announcement or disclosure relating to the
acquisition of Voting Securities that would result in the Investor
exceeding the Percentage Limitation or a merger, business combination, sale
of assets, liquidation, restructuring, recapitalization or other
extraordinary corporate transaction relating to the Company or any of its
successors or subsidiaries (other than the establishment of joint ventures,
licenses or other transactions in the ordinary course of business);
(v) deposit Voting Securities into a voting trust or subject Voting
Securities to voting agreements, except as provided in Section 6.1 hereof,
or grant any proxy with respect to any Voting Securities to any person not
designated by the Company who is not an officer, director or employee of
Investor;
(vi) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) for the purpose of
acquiring, holding, voting or disposing of securities of the Company or any
of its successors or subsidiaries or otherwise with respect to the Company
or taking any other actions restricted or prohibited under any clause of
this Section 2.1;
(vii) disclose publicly any intention, plan or arrangement
inconsistent with the foregoing or the other provisions of this Agreement
relating to any Voting Securities; or
(viii) enter into any discussions, negotiations, arrangements or
understandings with any third party with a view to, or advising, aiding,
abetting, soliciting, inducing or encouraging, any action prohibited by any
of the foregoing.
2.2 SUSPENSION. The agreements contained in Section 2.1 hereof shall not
apply during the pendency of (i) a sale of all or substantially all of the
Company's assets or (ii) a business combination or other transaction approved by
the Company's Board of Directors if upon consummation of any such transaction
the Company's shareholders immediately preceding consummation of the transaction
would beneficially own less than 50% of the surviving entity immediately
following consummation of the transaction. Notwithstanding the foregoing
provisions of this Section 2.2, if during such pendency period the Investor has
made a competing higher offer for the Company, the Investor shall be permitted
to consummate its then pending offer.
2.3 OBLIGATION TO REQUEST SECURITIES FROM THE COMPANY. If at any time
Investor beneficially owns less than the Percentage Limitation due in whole or
in part to a primary issuance of Voting Securities for cash or in connection
with an acquisition of assets or a business combination, or otherwise (other
than pursuant to an employee stock plan), and Investor wishes to
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<PAGE>
increase its beneficial ownership of Voting Securities up to the Percentage
Limitation, then, prior to Investor purchasing Voting Securities in the open
market, Investor agrees to request in writing (the "Investor Request") that the
Company issue primary Voting Securities to Investor. The Company will have 20
business days after receipt of the Investor Request to determine whether it
wishes to issue primary Voting Securities (including treasury stock) to
Investor. The purchase price per share for such primary Voting Securities will
be the average of the closing price per share of the Voting Securities for the
five trading days immediately preceding the date of the Investor Request.
SECTION 3
RESTRICTIONS ON TRANSFER
3.1 TRANSFER RESTRICTIONS. The Investor will not, at any time, directly
or indirectly, sell, transfer any beneficial interest in, pledge, hypothecate or
otherwise dispose, or offer to sell, transfer any beneficial interest in,
pledge, hypothecate or otherwise dispose, any Voting Securities except:
(i) to any direct or indirect subsidiary of the Investor, provided
that (A) such subsidiary shall agree in writing to be bound by the terms of
this Agreement, (B) the Investor shall own, directly or indirectly, all
securities of such subsidiary (a "Wholly-Owned Subsidiary"), and (C) should
such subsidiary no longer be a Wholly-Owned Subsidiary, the Voting
Securities owned by such subsidiary shall be transferred back to the
Investor (and at the time of such transfer, such subsidiary shall so agree
in writing);
(ii) with the prior consent of the Independent Directors specifically
expressed in a resolution, provided, that the Company shall have a right of
first refusal as described in Section 4.1 hereof to purchase such
securities;
(iii) pursuant to a tender or exchange offer recommended to the
shareholders by the Independent Directors;
(iv) to a transferee where the amount of Voting Securities transferred
to such transferee and its Affiliate does not exceed 2% of the Voting
Power, provided that the Investor has not transferred any Voting Securities
to such transferee together with its Affiliates during the 12 months
immediately preceding such transfer;
(v) in the event that (A) the Shares are sold in an underwritten
public offering pursuant to a registration statement permitted by the
Registration Rights Agreement between the Company and the Investor of even
date herewith and (B) the offering is a bona fide, widely distributed
public offering;
(vi) into a tender or exchange offer not approved by the Board of
Directors pursuant to which, if such offer were consummated, the offeror
would
4
<PAGE>
beneficially own more than 50% of the Voting Power, provided, that the
Company shall have a right of first refusal as described in Section 4.1
hereof to purchase such securities;
(vii) pursuant to a merger or consolidation in which the Company is
acquired, or sale of all or substantially all of the Company's assets to
another corporation or any other transaction approved by the Company's
Board of Directors; or
(viii) to other persons, provided, that the Company shall have a
right of first offer as described in Section 5.1 hereof to purchase such
securities.
3.2 MARKET STANDOFF. The Investor shall not, to the extent requested by
the Company and any underwriter of Common Stock or other securities of the
Company, directly or indirectly, sell, offer to sell, contract to sell, grant
any option to purchase or otherwise transfer or dispose of any securities of the
Company held by it for a period of up to 90 days following the commencement date
of a public offering of such Common Stock or other securities of the Company.
3.3 STOP TRANSFER ORDER. The Company shall not be required (i) to
transfer on its books any Voting Securities that shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement or
(ii) to treat as owner of such Voting Securities or accord the right to vote as
such owner or pay dividends to any transferee to whom such Voting Securities
shall have been so transferred in violation of any the provisions set forth in
this Agreement. Any purported transfer of Voting Securities by any holder that
is not in compliance with the terms and conditions of this Agreement shall be
void, and the transferee under any such purported transfer shall acquire no
title or ownership thereby. The Investor hereby agrees to the entry of a stop
transfer order with the transfer agent or agents of the Company against the
transfer of Voting Securities except in compliance with the requirements of this
Agreement.
3.4 LEGEND. To assist in effectuating the provisions of this Agreement,
Investor hereby consents to the placement of the following legend on all
certificates representing the Voting Securities beneficially owned by it until
termination of this Agreement:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF AN AGREEMENT BETWEEN INVESTOR AND THE COMPANY AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE THEREWITH. A COPY OF SUCH AGREEMENT IS ON FILE AT THE OFFICE OF
THE SECRETARY OF THE COMPANY.
5
<PAGE>
SECTION 4
RIGHT OF FIRST REFUSAL
4.1 RIGHT OF FIRST REFUSAL. Prior to making any sale, transfer or
other disposition of Voting Securities pursuant to Section 3.1(ii) or (vi), the
Investor shall give the Company the opportunity to purchase such securities in
the following manner:
(i) The Investor shall give notice (the "Transfer Notice") to the
Company in writing of such intention specifying the number of Voting
Securities proposed to be sold or transferred, the proposed price per
Voting Security (the "Transfer Consideration"), and the other material
terms upon which such disposition is proposed to be made.
(ii) In connection with proposed transfers of Voting Securities
pursuant to Section 3.1(ii) hereof, the Company shall have the right,
exercisable by written notice given by the Company to the Investor within
90 days after receipt of the Transfer Notice, to purchase (or to cause a
corporation, entity, person or group designated by the Company to purchase)
all of the Voting Securities specified in such Transfer Notice for cash in
an amount equivalent to the aggregate Transfer Consideration. If the
purchase price specified in the Transfer Notice includes any property other
than cash, such purchase price shall be deemed to be the amount of any cash
included in the purchase price plus the value (as jointly determined by a
nationally recognized investment banking firm selected by each party or, in
the event such firms are unable to agree, a third nationally recognized
investment banking firm to be selected by such firms) of such other
property included in such price. For this purpose:
(A) The parties shall use their best efforts to cause any
determination of the value of any securities included in the purchase
price to be made within five business days after the date of delivery of
the Transfer Notice. If the investment banking firms selected by the
Company and the Investor are unable to agree upon the value of any such
securities within such five-day period, the parties shall promptly select
a third firm whose determination shall be conclusive.
(B) The parties shall use their best efforts to cause any
determination of the value of property other than securities to be made
within 10 business days after the date of delivery of the Transfer Notice.
If the investment banking firms selected by the Company and the Investor
are unable to agree upon a value within such 10-day period, the parties
shall promptly select a third firm whose determination shall be
conclusive.
6
<PAGE>
(C) The date on which the Company must exercise its right of
first refusal shall be extended until five business days after the
determination of the value of property included in the purchase price if
such property consists solely of securities or 10 business days after the
determination of such value if other property is included.
(iii) In connection with proposed transfers of Voting Securities
pursuant to Section 3.1(vi) hereof, the Company shall have the right,
exercisable by written notice given by the Company to the Investor no later
than three business days prior to termination of the tender or exchange
offer, as extended, to purchase (or to cause a corporation, entity, person
or group designated by the Company to purchase) all of the Voting
Securities specified in such Transfer Notice for cash in an amount
equivalent to the aggregate Transfer Consideration. If the purchase price
specified in the Transfer Notice includes any property other than cash, the
relevant portions of clause (ii) of this Section 4.1 shall apply.
(iv) If the Company or its assigns exercises the right of first
refusal hereunder, the closing of the purchase of the Voting Securities
with respect to which such right has been exercised shall take place within
20 business days after the Company or its assigns gives notice of such
exercise, which period of time shall be extended, as necessary, in order to
comply with applicable securities and other applicable laws and
regulations. Upon exercise of its right of first refusal, the Company or
its assigns and the Investor shall be legally obligated to consummate the
purchase contemplated thereby and shall use their reasonable best efforts
to secure any approvals required in connection therewith.
(v) If neither the Company nor its assigns exercise the right of first
refusal with respect to proposed transfers of Voting Securities under
Section 3.1(ii) hereunder within the time specified for such exercise,
provided a binding agreement to sell such Voting Securities is entered into
within 30 days following the expiration of such time for exercise, the
Investor shall be free, during the period of 60 days following the
expiration of such time for exercise, to sell the Voting Securities
specified in the Transfer Notice at a price not less than the Transfer
Consideration.
4.2 ASSIGNMENT OF RIGHT OF FIRST REFUSAL. The Company may assign its
rights under Section 4.1 hereof to other persons who shall then be entitled to
purchase such securities.
SECTION 5
RIGHT OF FIRST OFFER
5.1 INVESTOR OFFERS. Prior to making any offer to sell, transfer or
otherwise dispose of any Voting Securities for cash to any third party pursuant
to Section 3.1(viii) hereof the Investor shall give the Company 90 days prior
written notice (the "Offer"), delivered or mailed as provided
7
<PAGE>
in Section 9.8 hereof, of Investor's desire to sell any Voting Securities
(the"Offered Securities"), stating the proposed price per Voting Security, the
number of Voting Securities offered and the other material terms of such
proposed sale. Such notice shall include a representation to the Company that
the Investor has a good faith intention to sell such Voting Securities on the
terms specified therein. The Offer shall constitute an offer by the Investor,
irrevocable for 90 days, to the Company for all of the Offered Securities on the
terms specified in the Offer.
5.2 ACCEPTANCE OF OFFER. Within 90 days after receipt of an Offer, the
Company may elect to provide written notice to the Investor (an "Acceptance
Notice") that the Company has elected to purchase all of the Offered Securities.
If the Company fails to provide an Acceptance Notice to the Investor by the end
of such 90-day period, the Company shall be deemed to have elected not to
purchase the Offered Securities.
5.3 CLOSING. The closing of any sale of Offered Securities shall take
place on such date, within 20 business days of the date of the Acceptance Notice
(subject to extension to comply with applicable securities and other applicable
laws and regulations related to the transfer of the Offered Securities to the
Company), as shall be agreed by the Company and the Investor. At any such
closing, the Investor shall deliver to the Company certificate(s) representing
the Offered Securities being sold, duly assigned to the Company or its assigns,
against payment of the applicable purchase price by check or wire transfer of
same day funds.
5.4 LIMITATION OF RIGHTS. If the Company does not elect to purchase the
Offered Securities within the 90-day period in Section 5.2 hereof, then the
Investor must sell all, but not less than all, of the Offered Securities at not
less than the price stated in the Offer and otherwise on terms no less favorable
to the Investor than those presented to the Company in the Offer on or before
the 90th day following the expiration of the 90-day period in Section 5.2 hereof
(subject to extension to comply with applicable securities and other applicable
laws and regulations related to the transfer of the Offered Securities from the
Investor to the purchasers). If the Offered Securities have not been sold
within such 90-day period, then the Investor may not sell any Offered Securities
unless it provides the Company with a new Offer pursuant to Section 5.1 hereof.
5.5 ASSIGNMENT OF RIGHT OF FIRST OFFER. The Company may assign its rights
under this Section 5 to other persons who shall then be entitled to accept the
Offer and purchase such securities.
SECTION 6
VOTING PROVISIONS
6.1 VOTING BY INVESTOR. With respect to the election of directors of the
Company, the Investor shall vote all Voting Securities directly or indirectly
owned by the Investor in the manner recommended to shareholders by the Company's
Board of Directors.
8
<PAGE>
6.2 PRESENCE FOR QUORUM. The Investor and its Affiliates, as holders
of Voting Securities, shall be present, in person or by proxy, at all meetings
of shareholders of the Company with respect to which Investor receives notice so
that all Voting Securities directly or indirectly owned by it and its Affiliates
may be counted for the purpose of determining the presence of a quorum at such
meetings.
SECTION 7
BOARD REPRESENTATION
Until such time as Investor holds less than 15% of the Voting Power, the
Company will cause to be included in the Company's annual proxy materials
qualified natural persons designated by Investor ("Designees") as nominees for
election to the Company's Board of Directors such that two of the Company's
directors constitute Designees. The Company agrees to solicit proxies from its
shareholders for the Designees. If a Designee shall cease to be a director of
the Company for any reason, the Company shall promptly, upon the request of
Investor, use its reasonable best efforts to cause the election or appointment
of a qualified, acceptable person recommend by Investor to replace such
Designee. The right to designate directors of the Company pursuant to this
Section 7 is personal to Investor and may not be transferred in any manner
without the consent of the Independent Directors.
SECTION 8
EQUITY ACCOUNTING
If the Investor elects to account for its investment in the Company
pursuant to the equity method, if requested by the Investor, the Company will
furnish to the Investor information that is required by generally accepted
accounting principles to enable the Investor to account for its investment in
the Company pursuant to the equity method, to the extent reasonably available to
the Company.
SECTION 9
MISCELLANEOUS
9.1 TERMINATION. This Agreement shall terminate upon the earlier to occur
of the following: (i) the fifth anniversary of the date of this Agreement; (ii)
the date on which the Investor beneficially owns less than 8% of the Voting
Power; (iii) such time as the aggregate number of shares of the Company's Common
Stock beneficially owned by I. H. Kempner, III, James C. Kempner and the H.
Kempner Trust Association is less than 300,000 shares (appropriately adjusted
for stock splits, reverse stock splits, stock dividends, recapitalizations and
similar events); (iv) such time as any other person or group beneficially owns
more Voting Securities than the aggregate Voting Securities then beneficially
owned by the Investor and (A) the descendants of H. Kempner
9
<PAGE>
or (B) trusts controlled by or for the benefit of the descendants of H. Kempner;
or (v) the date on which a person or group (not including the Investor or the
persons referred to in subclause (A)or (B) of clause (iv) of this Section 9.1)
beneficially owns more than 50% of the Voting Power, whether by way of tender or
exchange offer or otherwise. In the event that a person or group beneficially
owns a greater number of Voting Securities than Investor, the Company agrees to
provide the Investor with a certified copy of the beneficial ownership of the
persons referred to in subclause (A) or (B) of clause (iv) of this Section 9.1.
9.2 SPECIFIC ENFORCEMENT. The Company and the Investor acknowledge and
agree that if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached, irreparable
damage would occur and it would be extremely impracticable and difficult to
measure damages. Accordingly, in addition to any other rights and remedies to
which the parties may be entitled by law or equity, the parties shall be
entitled to an injunction or injunctions to prevent or cure breaches of the
provision of this agreement and to enforce specifically the term and provisions
hereof, and the parties expressly waive (a) the defense that a remedy in damages
will be adequate and (b) any requirement, in an action for specific performance,
for the posting of a bond.
9.3 GOVERNING LAW. This Agreement shall be governed and construed in all
respects in accordance with the laws of the State of Texas as applied to
agreements made and performed in Texas by residents of the State of Texas. The
Company and the Investor each hereby consents to personal jurisdiction in any
action brought with respect to this Agreement and the transactions contemplated
hereby in the United States District Court for the Southern District of Texas.
The Company and the Investor each also agrees that service of process may be
accomplished pursuant to the provisions of Section 9.8 hereof.
9.4 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
9.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other documents
delivered pursuant hereto at the Closing constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and no party shall be liable or bound to any other party in
any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
9.6 PUBLICITY. Neither the Company nor Purchaser shall issue any press
release or otherwise make an public statement with respect to the transactions
contemplated by this Agreement without consulting the other party, except as may
be required by applicable law or regulation.
10
<PAGE>
9.7 CONFIDENTIALITY. Purchaser acknowledges and agrees that any
information or data it has acquired from the Company, not otherwise properly in
the public domain, was received in confidence. Purchaser agrees not to divulge,
communicate or disclose, except as may be required by law or for the performance
of this Agreement, or use to the detriment of the Company or for the benefit of
any other person or persons, or misuse in any way, any confidential information
of the Company.
9.8 NOTICES, ETC. Unless otherwise provided, any notice, request, demand
or other communication required or permitted under this Agreement shall be given
in writing and shall be deemed effectively given upon personal delivery to the
party to be notified, or when sent by telex or telecopier (with receipt
confirmed), or one business day following deposit with overnight courier or
three business days following deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed as follows (or at
such other address as a party may designate by notice to the other):
If to the Company:
Imperial Holly Corporation
One Imperial Square, Suite 200
8016 Highway 90-A
Sugar Land, TX 77478
Attention: President
Telephone: (713) 490-9780
Facsimile: (713) 490-9897
with a copy to:
Baker & Botts, L.L.P.
One Shell Plaza
910 Louisiana
Houston, TX 77002-4995
Attention: J. David Kirkland, Jr.
Telephone: (713) 229-1101
Facsimile: (713) 229-1522
11
<PAGE>
If to the Investor:
Greencore Group plc
St. Stephen's Green House
Earlsfort Terrace
Dublin 2, Ireland
Attention: Chief Executive Officer
Telephone: 011-3531-605-1000
Facsimile: 011-3531-605-1101
with a copy to:
Weil, Gotshal & Manges LLP
700 Louisiana, Suite 1600
Houston, TX 77002
Attention: Steven D. Rubin
Telephone: (713) 546-5030
Facsimile: (713) 224-9511
9.9 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
invalid, unenforceable or void, this Agreement shall continue in full force and
effect without said provision. In such event, the parties shall negotiate, in
good faith, a legal, valid and enforceable substitute provision which most
nearly effects the intent of the parties in entering into this Agreement.
9.10 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.11 FACSIMILE SIGNATURES. Any signature page delivered by a fax
machine or telecopy machine shall be binding to the same extent as an original
signature page, with regard to any agreement subject to the terms hereof or any
amendment thereto. Any party who delivers such a signature page agrees to later
deliver an original counterpart to any party which requests it.
9.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
12
<PAGE>
The foregoing agreement is hereby executed as of the date first above
written.
IMPERIAL HOLLY CORPORATION
a Texas corporation
By: ________________________
Title: ________________________
GREENCORE GROUP PLC
By: ________________________
Title: ________________________
EARLSFORT HOLDINGS B.V.
By: ________________________
Title: ________________________
13
<PAGE>
EXHIBIT 11
IMPERIAL HOLLY CORPORATION AND SUBSIDIARIES
COMPUTATION OF INCOME PER COMMON SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30, 1996
___________________
(In Thousands of Dollars)
<S> <C>
INCOME FOR PRIMARY AND FULLY DILUTED COMPUTATION:
Income before Extraordinary Item:
As reported $ 4,149
Adjustments - none -
-----------
As adjusted 4,149
===========
Net Income:
As reported $ 4,149
Adjustments - none -
-----------
As adjusted $ 4,149
===========
PRIMARY EARNINGS PER SHARE:
Weighted average shares of common stock outstanding 10,315,289
Incremental shares issuable from assumed exercise of
stock options under the treasury stock method 79,344
-----------
Weighted average shares of common stock outstanding,
as adjusted 10,394,633
===========
Primary earnings per share:
Before extraordinary item $ 0.40
===========
Net income 0.40
===========
FULLY DILUTED EARNINGS PER SHARE:
Weighted average shares of common stock outstanding 10,315,289
Incremental shares issuable from assumed exercise of
stock options under the treasury stock method 115,887
-----------
Weighted average shares of common stock outstanding,
as adjusted 10,431,176
===========
Fully diluted earnings per share:
Before extraordinary item $ 0.40
===========
Net income 0.40
===========
</TABLE>
__________
This calculation is submitted in accordance with Item 601(b)(11) of Regulation
S-K; the amount of dilution illustrated in this calculation is not required to
be disclosed pursuant to paragraph 14 of Accounting Principles Board Opinion
No. 15.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's unaudited condensed consolidated financial statements for the three
months ended June 30, 1996 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 7,855
<SECURITIES> 40,192
<RECEIVABLES> 55,219
<ALLOWANCES> 0
<INVENTORY> 159,425
<CURRENT-ASSETS> 285,694
<PP&E> 303,612
<DEPRECIATION> 146,992
<TOTAL-ASSETS> 460,213
<CURRENT-LIABILITIES> 210,514
<BONDS> 91,448
0
0
<COMMON> 32,307
<OTHER-SE> 84,188
<TOTAL-LIABILITY-AND-EQUITY> 460,213
<SALES> 179,905
<TOTAL-REVENUES> 179,905
<CGS> 155,637
<TOTAL-COSTS> 155,637
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,035
<INCOME-PRETAX> 6,618
<INCOME-TAX> 2,469
<INCOME-CONTINUING> 4,149
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,149
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
</TABLE>
