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AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
AMERICANA FOODS LIMITED PARTNERSHIP
(A TEXAS LIMITED PARTNERSHIP)
DATED AS OF JANUARY 10, 2003
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TABLE OF CONTENTS
Page
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Section 1. Definitions................................................... 2
Section 2. Organization of the Partnership............................... 10
2.1. Name......................................................... 10
2.2. [Intentionally Omitted]...................................... 10
2.3. Principal Office............................................. 10
2.4. Filings...................................................... 10
2.5. Limitations on Partnership Powers............................ 11
2.6. Affiliate Agreements......................................... 11
2.7. Term......................................................... 11
Section 3. Purpose....................................................... 11
Section 4. Capital Contributions, Percentage Interests and Capital
Accounts................................................... 11
4.1. Initial Capital Contributions................................ 11
4.2. Additional Capital Contributions............................. 12
4.3. Percentage Ownership Interest................................ 15
4.4. Return of Capital Contribution............................... 15
4.5. Capital Accounts............................................. 16
4.6. New Partners................................................. 16
4.7. Preemptive Rights............................................ 16
Section 5. Distributions................................................. 17
5.1. Distribution of Cash Flow.................................... 17
5.2. Withholding.................................................. 18
Section 6. Allocations................................................... 18
6.1. General Rule................................................. 18
6.2. Special Allocations.......................................... 18
6.3. Tax Allocations.............................................. 20
6.4. Allocation with Respect to Transferred Interests............. 20
6.5. Other Allocation Rules....................................... 21
Section 7. Books, Records, Tax Matters and Bank Accounts................. 21
7.1. Books and Records............................................ 21
7.2. Tax Matters Partner.......................................... 21
7.3. Bank Accounts................................................ 21
7.4. Tax Returns.................................................. 21
7.5. Reports and Financial Statements............................. 22
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7.6. Accountant Work Papers....................................... 23
Section 8. Management and Operations..................................... 23
8.1. Management................................................... 23
8.2. Meetings of the Partners..................................... 23
8.3. Matters Requiring Limited Partner Approval................... 24
8.4. Other Activities............................................. 26
8.5. Limitation on Actions of Partners; Binding Authority......... 26
Section 9. Confidentiality............................................... 27
Section 10. Representations and Warranties............................... 28
10.1. In General................................................... 28
10.2. Representations and Warranties............................... 28
Section 11. Transfers of Interests....................................... 29
11.1. Confirmation of Ownership.................................... 29
11.2. Prohibited Transfers......................................... 30
11.3. Permitted Transfers.......................................... 30
11.4. Admission of Transferee...................................... 31
Section 12. Sale, Assignment or Other Disposition of Interests........... 32
12.1. Call Right................................................... 32
12.2. Right of First Offer......................................... 33
12.3. Right of First Refusal; Right to Compel Sale................. 34
12.4. Right of First Refusal of Americana Partners; Right of
Integrated to Compel Sale of Interest........................ 36
12.5. Americana Tag Along.......................................... 37
12.6. Change of Control of CoolBrands.............................. 38
12.7. Americana Call Right......................................... 39
12.8. Withdrawals.................................................. 39
12.9. Interests Held by a Partner.................................. 39
Section 13. Dissolution.................................................. 39
13.1. Limitations.................................................. 39
13.2. Exclusive Events Requiring Dissolution....................... 40
13.3. Liquidation.................................................. 40
13.4. Continuation of the Partnership.............................. 41
Section 14. Indemnification.............................................. 41
14.1. Exculpation of Partners...................................... 41
14.2. Indemnification by Partnership............................... 41
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Section 15. Miscellaneous................................................ 42
15.1. Notices...................................................... 42
15.2. Governing Law................................................ 42
15.3. Consent to Jurisdiction...................................... 42
15.4. Successors................................................... 42
15.5. Pronouns..................................................... 42
15.6. Table of Contents and Captions Not Part of Agreement......... 43
15.7. Severability................................................. 43
15.8. Counterparts................................................. 43
15.9. Entire Agreement and Amendment............................... 43
15.10. Further Assurances........................................... 43
15.11. No Third Party Rights........................................ 43
15.12. Incorporation by Reference................................... 43
15.13. Limitation on Liability...................................... 43
15.14. Specific Performance; Remedies............................... 44
15.15. No Waiver.................................................... 44
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AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
AMERICANA FOODS LIMITED PARTNERSHIP
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of Americana Foods
Limited Partnership (this "Agreement") is made and entered into, and is
effective, as of January 10, 2003 (the "Effective Date"), by and among Americana
Foods Limited Partnership, a limited partnership organized under the laws of the
State of Texas (the "Partnership"), CBA Foods LLC, a Delaware limited liability
company ("Integrated"), Americana Foods Corp., a Delaware corporation ("AFC"),
and AF Sub. Corp., a Delaware corporation ("AFSC," and together with AFC, the
"Americana Partners"). All capitalized terms used herein shall have the meaning
ascribed to such terms in Section 1 hereto.
WITNESSETH:
WHEREAS, the Partnership is engaged in the business of manufacturing,
marketing and selling ice cream, frozen yogurt, yogurt mix and frozen novelty
items, including, without limitation acting as the exclusive supplier of
[ORIGINAL TEXT REDACTED] to [ORIGINAL TEXT REDACTED] and its distributors and
franchisees and as of the Effective Date, as a supplier of products to IBI in
accordance with the Integrated Manufacturing Agreement (as defined below);
WHEREAS, the Americana Partners are currently the sole partners of the
Partnership;
WHEREAS, Integrated Brands, Inc., a New Jersey corporation ("IBI") and the
Americana Partners have executed a securities purchase agreement, dated as of
January 10, 2003 (the "Purchase Agreement"), whereby, subject to certain
conditions set forth therein, IBI (or one or more Affiliates designated by IBI)
shall acquire from the Americana Partners, and the Americana Partners shall
sell, transfer and assign to IBI (or one or more Affiliates designated by IBI),
Interests in the Partnership representing up to 50.1% of the Percentage Interest
(as defined below) in the Partnership;
WHEREAS, IBI has designated its Affiliate, Integrated, as the entity which
will acquire its limited partnership interest in the Partnership;
WHEREAS, on the date hereof, the Partnership desires to admit Integrated as
a limited partner; and
WHEREAS, the Partners intend that this Agreement supercede the limited
partnership agreement of the Partnership dated as of December 2, 1991, as
amended.
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NOW, THEREFORE, in consideration of the agreements and covenants set forth
above and herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Definitions. As used in this Agreement:
"Act" shall mean the Texas Revised Limited Partnership Act, as amended from
time to time.
"Additional Capital Equipment And Improvements" shall mean any equipment
and improvements funded by any additional Capital Contributions made by the
Partners pursuant to Sections 4.2(b)(ii) and 4.2(b)(iii).
"Adjusted Capital Account Deficit" shall mean, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the applicable Fiscal Year after (i) crediting such Capital Account with any
amounts which such Partner is deemed to be obligated to restore pursuant to
Regulations Sections 1.704-1(b)(2)(ii)(C), 1.704-2(g)(1) and 1.704-2(i)(5), and
(ii) debiting such Capital Account by the amount of the items described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing
definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
"Advisor" shall mean any accountant, attorney or other advisor retained by
a Partner.
"Affiliate" of any Person shall mean any other Person that directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition "control" (including its correlative
meanings, "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 of a Person (whether through ownership
of securities or partnership or other ownership interests, by contract or
otherwise). In addition, "Affiliate" shall include as to any Person any
employee, officer, member, partner or director of such Person or other Person
related to such Person within the meaning of Code Sections 267(b) or 707(b)(1).
"Agreement" shall mean this Amended and Restated Limited Partnership
Agreement of Americana Foods Limited Partnership, as amended from time to time
pursuant to the provisions hereof.
"Americana Call Option Price" shall mean a price equal to the amount
obtained by (i) multiplying [ORIGINAL TEXT REDACTED] by one of the following, as
applicable: (A) if the Date of Determination is before the date which is
[ORIGINAL TEXT REDACTED] after the Call Option Date, [ORIGINAL TEXT REDACTED]
for the number of full months between the Date of Determination and the Cap Ex
Date (based on the [ORIGINAL TEXT REDACTED] for such period divided by the
number of full months in such period multiplied by twelve), or (B) if the Date
of Determination is on or after the date which is [ORIGINAL TEXT
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REDACTED] after the Call Option Date, [ORIGINAL TEXT REDACTED] of the
Partnership for the preceding [ORIGINAL TEXT REDACTED], (ii) subtracting from
the amount determined in clause (i) any Indebtedness of the Partnership net of
cash (to be determined at the time of the applicable Transfer), and (iii)
multiplying the amount determined in clauses (i) and (ii) by the Percentage
Interest being Transferred.
"Appraised Value" shall have the meaning provided in Section 4.2.
"Authorized Person" shall have the meaning provided in Section 2.4(a).
"Book Value" means with respect to any Partnership property, the
Partnership's adjusted basis in the property for federal income tax purposes,
except that (i) the initial Book Value of any property contributed to the
Partnership shall be equal to the agreed fair market value of such property,
(ii) the Book Value of Partnership property may be adjusted from time to time to
reflect the adjustments required or permitted by Regulation Section
1.704-1(b)(2)(iv)(d), (e), (f) or (g) and (iii) if the Book Value of an item of
Partnership property differs from its adjusted basis as computed for tax
purposes at the beginning of any period, the amount of depreciation,
amortization or other cost recovery deduction computed with respect the property
for the period for book purposes shall be computed as described in the
definition of "Profits."
"Call Notice" shall have the meaning provided in Section 12.1.
"Call Option" shall have the meaning provided in Section 12.1.
"Call Option Date" shall mean the date on which the Call Period begins.
"Call Option Price" shall mean a price equal to the amount obtained by
(i) multiplying [ORIGINAL TEXT REDACTED] by one of the following, as applicable:
(A) if the Date of Determination is before the date which is [ORIGINAL TEXT
REDACTED] after the Call Option Date, [ORIGINAL TEXT REDACTED] for the number of
full months between the Date of Determination and the Cap Ex Date (based on the
[ORIGINAL TEXT REDACTED] for such period divided by the number of full months in
such period multiplied by twelve), or (B) if the Date of Determination is on or
after the date which is [ORIGINAL TEXT REDACTED] after the Call Option Date,
[ORIGINAL TEXT REDACTED] of the Partnership for the preceding [ORIGINAL TEXT
REDACTED], (ii) subtracting from the amount determined in clause (i) any
Indebtedness of the Partnership net of cash (to be determined at the time of the
applicable Transfer), and (iii) multiplying the amount determined in clauses (i)
and (ii) by the Percentage Interest being Transferred. The Call Option Price
shall, at the election of Integrated, be payable in cash or shares of capital
stock of CoolBrands International Inc. ("CoolBrands"); provided that such shares
must be freely transferable without restriction and will be valued for purposes
hereof at the opening sale price on the Toronto Stock Exchange (or such other
exchange on which such shares are primarily traded) on the date of such payment;
provided further that if the Call Option Price is paid in shares, CoolBrands
must implement arrangements
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where such shares may be sold on the date of receipt for net cash proceeds to
the Americana Partners of not less than the amount of cash otherwise payable.
"Call Period" means the four year period beginning on the date that is
[ORIGINAL TEXT REDACTED] after the CapEx Date.
"Called Interest" shall have the meaning provided in Section 12.1.
"Capital Account" shall have the meaning provided in Section 4.5.
"CapEx Amount" shall mean the first [ORIGINAL TEXT REDACTED] in the
aggregate of capital expenditures made by the Partnership and Capital
Contributions made in accordance with Section 4.2(b) (iii) during the period
beginning on the Effective Date; provided, however, that if prior to the date
that would otherwise be (but for this proviso) the CapEx Date, the Americana
Partners have made additional Capital Contributions pursuant to Section
4.2(b)(i) in an amount in excess of [ORIGINAL TEXT REDACTED] (excluding the
Severance Obligations but including any Credited Amounts as of the date of
determination), then the CapEx Amount shall be equal to [ORIGINAL TEXT REDACTED]
times the additional Capital Contributions made by the Americana Partners
pursuant to Section 4.2(b)(i) (excluding the Severance Obligations but including
any Credited Amounts).
"CapEx Date" shall mean the first day of the month following the date on
which, in the General Partners' reasonable determination, normal saleable
production has commenced (after a customary start-up period) on all production
lines related to capital expenditure projects related to the CapEx Amount.
"Capital Contribution" shall mean, with respect to any Partner, the
aggregate amount of cash and the fair market value (valued at cost, if new, or,
if used, by appraisal but not less than cost if purchased within the prior 12
months) of any assets contributed or deemed contributed by such Partner to the
capital of the Partnership; provided, however, that with respect to the
Equipment and any Additional Equipment, such fair market value shall also
include all costs and expenses incurred in connection with the installation
thereof and shall be reduced by the value of the depreciation on such Equipment
or Additional Equipment on the date of such contribution, amortized ratably over
a useful life of seven years.
"Cash Flow" shall mean, for any period, Gross Receipts less (i) all
expenses of the Partnership, (ii) any and all Taxes required to be paid by the
Partnership or any Subsidiary (not paid by such Subsidiary), and (iii) reserves
for reasonably anticipated obligations and reasonable contingencies of the
Partnership (as determined by the General Partner).
"Certificate of Limited Partnership" shall mean the Certificate of Limited
Partnership of Americana Foods Limited Partnership, as amended.
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"Change of Control" means the occurrence of any of the following events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the total voting power of the capital stock of
CoolBrands International Inc. outstanding immediately prior to such transaction;
(ii) a merger or consolidation or similar transaction involving CoolBrands
International Inc. after which the holders of CoolBrands International Inc.'s
capital stock do not own at least 50% of the total voting power represented by
the capital stock of the surviving entity of such merger or consolidation; or
(iii) the adoption of a plan of complete liquidation or the sale or disposition
by CoolBrands International Inc. of all or substantially all of its assets.
"Change of Control Call" shall have the meaning provided in Section
12.6(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, including the corresponding provisions of any successor law.
"Company" shall have the meaning provided in the first paragraph of this
Agreement.
"Confidential Information" shall have the meaning provided in Section 9(a).
"Credited Amounts" shall have the meaning provided in Section 4.2(b)(i).
"Date of Determination" shall mean the date that the applicable Call
Notice, ROFO Notice or ROFR Notice, as the case may be, is deemed to have been
received by the Americana Partners in accordance with the provisions of Section
15.1.
"Dissolution Event" shall have the meaning provided in Section 13.2.
"Distributions" shall mean the distributions payable (or deemed payable) to
a Partner.
"EBITDA" means for any period, the sum on a consolidated basis of (i) Net
Income, plus (ii) interest expense, plus (iii) income tax expense, plus (iv)
depreciation expense, plus (v) amortization expense, of the Partnership. For
purposes of the definition of EBITDA, the terms used in clauses (ii) through (v)
in the preceding sentence shall be determined in accordance with GAAP.
"Effective Date" shall have the meaning given to such term in the preamble.
"Equipment" shall have the meaning given to such term in the Integrated
Equipment Rental Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
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"Fiscal Year" shall mean each calendar year ending December 31, as may be
changed from time to time in the sole discretion of the General Partner.
"GAAP" shall mean generally accepted accounting principles as adopted in
the United States as in effect from time to time.
"GAAP Income" shall mean the gross income from operations of the
Partnership for any month, Fiscal Year or other period, as applicable, as
determined in accordance with GAAP.
"GAAP Loss" shall mean the aggregate of losses, deductions and expenses of
the Partnership for any month, Fiscal Year or other period, as applicable, as
determined in accordance with GAAP.
"General Partner" shall mean the Partner who holds a General Partner
Interest, as specified on Exhibit A.
"General Partner Interest" means an Interest held by the General Partner,
in its capacity as general partner of the Partnership, as set forth on Exhibit
A.
"GP Interest Closing Date" shall have the meaning given to such term in the
Purchase Agreement.
"Gross Receipts" shall mean, for any period, gross cash receipts received
by the Partnership.
"IBI Available Requirements" shall mean with respect to any Product (as
defined in the Manufacturing Agreement), and during any relevant period, the
portion of the total requirements for such Product of IBI (or any Affiliate
thereof) that IBI (or any Affiliate thereof) is not committed to order from
another Person pursuant to a written agreement entered into prior to the date
hereof.
"Indebtedness" shall mean, without duplication, (i) indebtedness arising
from the lending of money by any Person to the Partnership or any of its
Subsidiaries; (ii) indebtedness, whether or not in any such case arising from
the lending by any Person of money to the Partnership or any of its
Subsidiaries, (A) which is represented by notes payable or drafts accepted that
evidence extensions of credit, (B) which constitutes obligations evidenced by
bonds, debentures, notes or similar instruments, or (C) upon which interest
charges are customarily paid (other than accounts payable) or that was issued or
assumed as full or partial payment for property; (iii) reimbursement obligations
with respect to letters of credit or guaranties of letters of credit; and (iv)
all indebtedness secured by any mortgage, pledge, security, Lien or conditional
sale or other title retention agreement to which any property or asset owned or
held by such Person is subject, whether or not the indebtedness secured thereby
shall have been assumed.
6
"Integrated Equipment Rental Agreement" shall have the meaning given to
such term in the Purchase Agreement.
"Integrated Manufacturing Agreement" shall have the meaning given to such
term in the Purchase Agreement.
"Interest" of any Partner shall mean the entire partnership interest of
such Partner in the Partnership (whether a General Partner Interest or a Limited
Partner Interest), and any and all rights, powers and benefits accorded a
Partner under this Agreement and the duties and obligations of such Partner
hereunder.
"Invested Capital" shall mean the amount of a Partner's Capital
Contribution less (i) Distributions and (ii) in the case of the Americana
Partners, any amounts paid to the Americana Partners with respect to their
Limited Partner Interests, including, without limitation, amounts paid upon
exercise of the Option. The parties agree that as of November 18, 2002 the
Invested Capital of the Americana Partners was [ORIGINAL TEXT REDACTED], and
that the Americana Partners made no Capital Contributions and received no
Distributions between such date and the date hereof.
"IRR" means an annualized internal rate of return for the Americana
Partners on their Invested Capital from November 18, 2002 through and including
the date of determination of such rate of return.
"Issuance Items" shall have the meaning provided in Section 6.2(h).
"Limited Partner" means any holder of a Limited Partner Interest of the
Partnership.
"Limited Partner Interest" means an Interest of a Limited Partner in the
Partnership representing a fractional part of the Interests of all Partners and
includes any and all benefits to which the holder of such Limited Partner
Interest may be entitled, as provided in this Agreement, together with all
obligations of such Person to comply with the terms and provisions of this
Agreement.
"Management Agreement" shall mean the Management Agreement entered into
between the Partnership, IBI and the Americana Partners, as of the date hereof
pursuant to which IBI will provide certain management services to the
Partnership.
"Management Fee" shall have the meaning given to such term in the
Management Agreement.
"MUS Receivables" shall mean the MUS Receivables described and defined in
Schedule 2.9(a) of the Purchase Agreement.
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"Net Income" shall mean the amount, if any, by which GAAP Income for any
period exceeds GAAP Loss for such period.
"Net Loss" shall mean the amount, if any, by which Loss for any period
exceeds Income for such period.
"New Interest Notice" shall have the meaning provided in Section 4.7(b).
"New Interests" shall mean the issuance of additional Interests to either
existing Partners or to a new Partner or Partners.
"Nonpurchasing Partner" shall have the meaning provided in Section 4.7(b).
"Option" shall have the meaning given to such term in the Purchase
Agreement.
"Option Closing Date" shall have the meaning given to such term in the
Purchase Agreement.
"Original Agreements" shall mean each of the Integrated Equipment Rental
Agreement, the Integrated Manufacturing Agreement and the Original [ORIGINAL
TEXT REDACTED] Agreement.
"Original [ORIGINAL TEXT REDACTED] Agreement" shall have the meaning given
to such term in the Purchase Agreement.
"Participating Partner" shall have the meaning provided in Section 4.7(b).
"Partner" and "Partners" shall mean Integrated, AFSC, AFC and any other
Person admitted to the Partnership as a Partner pursuant to this Agreement.
"Percentage Interest" shall have the meaning provided in Section 4.3.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other legal entity.
"Pro Rata Share" shall have the meaning provided in Section 4.7(a).
"Profits" and "Losses", as those terms are used in Section 6, shall mean
for any period the taxable income or losses, respectively, of the Partnership as
determined for federal income tax purposes in accordance with the accounting
method followed by the Partnership for such purposes, adjusted as follows:
(a) Any income that is exempt from federal income tax shall be added
to such taxable income and/or reduce such losses.
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(b) Any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), shall be
subtracted from such taxable income and/or reduce such losses.
(c) If property is reflected on the books of the Partnership at a Book
Value that differs from the adjusted tax basis of such property,
depreciation, amortization and gain or loss with respect to such property
shall be determined by reference to such Book Value in accordance with
Regulations Section 1.704-1(b)(2)(iv)(g).
(d) Any items specially allocated pursuant to Section 6.2 of this
Agreement shall be excluded from Profits and Losses.
"Put Price" shall mean an amount that will provide an IRR on the Invested
Capital of the Americana Partners equal to [ORIGINAL TEXT REDACTED].
"Regions Bank Loan" shall mean the Indebtedness pursuant to the Loan
Agreement, dated as of November 19, 2002, between the Partnership and Regions
Bank, and all other Loan Documents (as defined therein).
"Regulations" shall mean the Treasury Regulations promulgated pursuant to
the Code, as amended from time to time, including the corresponding provisions
of any successor regulations.
"Required Sale Notice" shall have the meaning provided in Section 12.3(b).
"Response Notice" shall have the meaning provided in Section 12.2(a).
"Restated [ORIGINAL TEXT REDACTED] Agreement" shall have the meaning given
to such term in the Purchase Agreement.
"ROFO Interest" shall have the meaning provided in Section 12.2(a).
"ROFO Notice" shall have the meaning provided in Section 12.2(a).
"ROFR Notice" shall have the meaning provided in Section 12.3.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subsidiary" or "Subsidiaries" shall mean any Person of which fifty percent
(50%) or more is owned, directly or indirectly, by the Partnership.
"Tag Along Notice" shall have the meaning provided in Section 12.5.
"Tax Matters Partner" shall have the meaning provided in Section 7.2.
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"Taxes" shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, export, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added or VAT, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any tax due under any
tax sharing or tax indemnity agreement, and including any interest, penalty, or
addition thereto, whether disputed or not.
"Termination" shall have the meaning provided in Section 12.6(b).
"Termination Fee" shall have the meaning provided in Section 12.6(b).
"Transfer" shall mean, as a noun, any transfer, sale, assignment, exchange,
charge, pledge, gift, hypothecation, conveyance, encumbrance or other
disposition, voluntary or involuntary, by operation of law or otherwise and, as
a verb, voluntarily or involuntarily, by operation of law or otherwise, to
transfer, sell, assign, exchange, charge, pledge, give, hypothecate, convey,
encumber or otherwise dispose of.
Section 2. Organization of the Partnership.
2.1. Name. The name of the Partnership shall be "Americana Foods
Limited Partnership". The business and affairs of the Partnership shall be
conducted under such name or such other name as the General Partner deems
necessary or appropriate to comply with the requirements of law in any
jurisdiction in which the Partnership may elect to do business.
2.2. [Intentionally Omitted].
2.3. Principal Office. The principal address of the Partnership shall
be 3333 Dan Morton Drive, Dallas, Texas 75236, or at such other place or places
as may be determined by the General Partner from time to time.
2.4. Filings.
(a) The Certificate of Limited Partnership of the Partnership was
filed on December 13, 1991 with the office of the Secretary of State of Texas,
as provided in Section 2.01 of the Act, and on February 28, 1992, December 20,
1993 and November 19, 2002, the General Partner of the Partnership caused to be
duly filed with the office of the Secretary of State of Texas Certificates of
Amendment to the Certificate of Partnership in accordance with Section 2.02 of
the Act. A certified copy of the Certificate of Limited Partnership as of the
date hereof has been delivered to each of the Partners.
(b) The General Partner shall use its reasonable efforts to take
such other actions as may be reasonably necessary to perfect and maintain the
status of the Partnership as a limited partnership under the laws of the State
of Texas.
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(c) Subject to Section 2.5, an Authorized Person shall cause the
Partnership to be qualified, formed or registered under assumed or fictitious
name statutes or similar laws in any jurisdiction in which the Partnership
transacts business in which such qualification, formation or registration is
required or desirable. Subject to Section 2.5, an Authorized Person shall
execute, deliver and file any certificates (and any amendments and/or
restatements thereof) necessary for the Partnership to qualify to do business in
a jurisdiction in which the Partnership may wish to conduct business.
2.5. Limitations on Partnership Powers. Notwithstanding anything
contained herein to the contrary, the Partnership shall not do business in any
jurisdiction that would jeopardize the limitation on liability afforded to the
Limited Partners under the Act or this Agreement.
2.6. Affiliate Agreements. Subject to Section 8.3, the Partners agree
that services may be provided to the Partnership by a Partner or an Affiliate of
a Partner.
2.7. Term. The Partnership shall continue in existence until the
Partnership is dissolved as provided in Section 13.
Section 3. Purpose. The purpose of the Partnership, subject in each case to
the terms hereof, shall be to engage in the business of manufacturing, marketing
and selling ice cream, frozen yogurt, yogurt mix and frozen novelty items,
including, without limitation acting as a supplier of [ORIGINAL TEXT REDACTED]
products to [ORIGINAL TEXT REDACTED] and as a supplier of products to IBI, and
any business related thereto or useful in connection therewith. However, the
business and the purposes of the Partnership shall not be limited to its initial
principal business activity and the Partnership shall have the authority to
engage in any other lawful business, purpose or activity permitted by the Act or
which may be exercised by any person, together with any powers incidental
thereto, so far as such powers or privileges are necessary or convenient to the
conduct, promotion or attainment of the business purposes or activities of the
Partnership.
Section 4. Capital Contributions, Percentage Interests and Capital
Accounts.
4.1. Initial Capital Contributions. The Persons listed on Exhibit A
made Capital Contributions to the Partnership as set forth therein and their
Capital Account balances as of the date hereof are as set forth in Exhibit A.
Exhibit A shall also specify the nature of the Interests held by such Persons
(i.e., whether the Interest held by such Person is a General Partner Interest or
Limited Partner Interest). The information on Exhibit A may be modified from
time to time by the General Partner, without any further action by the other
Partners, to reflect any additional Capital Contributions actually made,
Transfers of Interests and any other changes to the information from time to
time set forth in Exhibit A. The Partnership may borrow from its Partners as
well as from banks or other lending institutions to finance its working capital
or the acquisition of assets upon such terms and conditions as shall be approved
by the General Partner and to the extent required pursuant to Section 8.3, the
Limited Partners, and any borrowing from
11
Partners shall not be considered Capital Contributions or reflected in their
Capital Accounts. The value of all non-cash Capital Contributions made by
Partners as of the Effective Date shall be set forth on Exhibit A. No Partner
shall be entitled to any interest or compensation with respect to his Capital
Contribution or any services rendered on behalf of the Partnership except as
specifically provided in this Agreement or in the Management Agreement, or as
otherwise approved by the General Partner or, if applicable, the Limited
Partners pursuant to Section 8.3. No Partner shall have any liability for the
repayment of the Capital Contribution of any other Partner and each Partner
shall look only to the assets of the Partnership for return of his Capital
Contribution.
4.2. Additional Capital Contributions.
(a) Except as specifically required in Section 4.2(b) below, no
Partner shall be required to make any additional Capital Contributions.
(b) Mandatory Capital Contributions. Subject to the other
provisions of this Agreement,
(i) At all times from and after the GP Interest Closing Date
but before April 30, 2003, upon the determination by the General Partner,
in its good faith business judgment, that additional funds are necessary to
meet the working capital requirements of the Partnership, the General
Partner may, from time to time, require that the Americana Partners make
additional Capital Contributions pursuant to this Section 4.2(b)(i),
provided that all such Capital Contributions made by the Americana Partners
pursuant to this Section 4(b)(i) shall not exceed [ORIGINAL TEXT REDACTED].
Upon such determination by the General Partner, the General Partner shall
give written notice to the Americana Partners of the required additional
Capital Contributions (which notice shall be accompanied by a [ORIGINAL
TEXT REDACTED] cash flow projection giving effect to the projected use of
such additional Capital Contribution prepared by the General Partner using
its good faith business judgment), and each of the Americana Partners shall
contribute the required additional Capital Contribution to the capital of
the Partnership pursuant to this Section 4.2(b)(i); provided, however, that
the written notice with respect to any amounts in excess of the first
[ORIGINAL TEXT REDACTED] required to be contributed by the Americana
Partners pursuant to the provisions of this Section 4.2(b)(i) shall be
provided at least 30 days prior to the date such additional Capital
Contribution is required to be so contributed. When the General Partner, in
its good faith business judgment (taking into account all relevant factors,
including without limitation, the future cash needs of the Partnership, the
expected availability of funds under the Regions Bank Loan and the relative
costs of commercially reasonable alternative sources of capital),
determines that all or any portion of any additional Capital Contributions
made by the Americana Partners pursuant to this Section 4.2(b)(i) is no
longer necessary to meet the working capital requirements of the
Partnership, based on the General Partner's reasonable projections of
working capital
12
requirements of the Partnership (such amount which is determined to no
longer be necessary is referred to as the "Excess Working Capital
Contribution"), then the Partnership shall be entitled to retain such
Excess Working Capital Contribution provided that it reduces the Americana
Partners' obligations to make any additional Capital Contributions that the
Americana Partners are otherwise required to make pursuant to Section
4.2(b)(ii) by an amount equal to the Excess Working Capital Contribution
(the "Credited Amounts"). The Partners hereby acknowledge that pursuant to
the provisions of the Purchase Agreement, the Americana Partners have
assumed the Partnership's severance obligation with respect to Severance
Obligations (as defined in the Purchase Agreement), and that this
obligation, when assumed, shall be deemed to be an additional Capital
Contribution of up to [ORIGINAL TEXT REDACTED] made in accordance with this
Section 4.2(b)(i). Notwithstanding anything contained herein to the
contrary, the assumption of such Severance Obligations shall not result in
an increase in the Americana Partners' Capital Account or Invested Capital.
(ii) At all times from and after the GP Interest Closing
Date, upon the determination by the General Partner, in its good faith
business judgment that additional funds are necessary to meet the capital
expenditure requirements of the Partnership or in order to fund the future
operations of the Partnership after the date of such additional Capital
Contributions, the General Partner may, from time to time, require the
Partners to make additional Capital Contributions, and such additional
Capital Contributions shall be made in the following proportions: (A)
Integrated (together with any Affiliate thereof that is also a Partner)
shall make [ORIGINAL TEXT REDACTED] of such additional Capital
Contributions, and (B) the Americana Partners shall make [ORIGINAL TEXT
REDACTED] of such additional Capital Contributions; provided, however, that
the aggregate amount of all such Capital Contributions required by all
Partners pursuant to this Sections 4.2(b)(ii) and 4.2(b)(iii) prior to
January 1, 2006 shall not exceed [ORIGINAL TEXT REDACTED], and the
aggregate amount of all such Capital Contributions required pursuant to
this Sections 4.2(b)(ii) and 4.2(b)(iii) after January 1, 2006 shall not
exceed [ORIGINAL TEXT REDACTED] (including, for purposes hereof, any
additional Capital Contributions made pursuant to this Sections 4.2(b)(ii)
and 4.2(b)(iii) prior to January 1, 2006). Upon such determination by the
General Partner, the General Partner shall give written notice to the
Partners of the required additional Capital Contributions and each Partner
so required shall contribute to the capital of the Partnership pursuant to
this Section 4.2(b)(ii). If the General Partner furnishes the Partners with
a written notice to make additional Capital Contributions pursuant to this
Section 4.2(b)(ii), and it is the first such notice pursuant to which the
amount of all additional Capital Contributions made pursuant to this
Section 4.2(b)(ii) would, after giving effect to the amounts to be
contributed pursuant to such notice, exceed [ORIGINAL TEXT REDACTED] in the
aggregate, then the Partners shall not be obligated to make such additional
Capital Contributions unless (A) the General Partner provides a business
plan setting forth the intended use of the additional Capital Contributions
and projections related thereto (prepared using assumptions considered by
13
the General Partner to be reasonable), and (B) IBI (or any Affiliate
thereof), together with any other Person or Persons that IBI (or any
Affiliate thereof) solicited on behalf of the Partnership, has entered into
a binding commitment (or commitments) for the remaining term of the
then-current term of the Manufacturing Agreement to have the aggregate
amount of any products manufactured by the Partnership utilizing Additional
Capital Equipment And Improvements for IBI (or any Affiliate thereof) and
for any other Persons the purchase orders for whom were solicited by IBI
(or any Affiliate thereof), to be equal to or greater than the IBI
Available Requirements for such products.
(iii) Immediately after the Option Closing Date, IBI shall
on behalf of its Affiliates who then hold Interests in the Partnership,
contribute to the capital of the Partnership the Equipment, plus any
additional Equipment that may be leased to the Partnership by IBI or any of
its Affiliates after the Effective Date and prior to the Option Closing
Date if required by the terms of the lease or rental agreement with respect
thereto (the "Additional Equipment"). No Partner shall be required to make
an additional Capital Contribution pursuant to this Section 4.2(b)(iii) as
a result of the Capital Contribution of the Equipment (including any
Additional Equipment) by IBI on behalf of its Affiliates pursuant to this
Section 4.2(b)(iii), which contribution shall be deemed a Capital
Contribution by such Affiliates of IBI and shall satisfy to the extent of
such amount any additional Capital Contributions required from such
Partners under Section 4.2(b)(ii); provided, however, that the Americana
Partners shall pay to IBI on the Option Closing Date [ORIGINAL TEXT
REDACTED] of the value of such contributed Equipment (and any Additional
Equipment) as determined in accordance with this Agreement for purposes of
valuing Capital Contributions which amounts shall be deemed a Capital
Contribution under Section 4.2(b) (ii) by Americana Partners; and provided
further that with respect to any such Additional Equipment, the terms upon
which it shall be contributed to the Partnership shall be as set forth in
the lease or rental agreement with respect thereto or if not set forth
therein, then on the same terms as the contribution of the Equipment.
(c) Optional Capital Contributions. Subject to the provisions in
Section 4.2(b) to the contrary, at all times after the GP Interest Closing Date,
upon the unanimous approval of the Partners that additional funds are necessary
to meet the working capital or capital expenditure requirements of the
Partnership, or any other reasonable business needs of the Partnership, the
Partners shall, from time to time, make additional Capital Contributions on the
terms and subject to the conditions as agreed to from time to time.
(d) Upon the failure of a Partner (a "Defaulting Partner" to make
any additional Capital Contribution required by Section 4.2(b), (the portion
thereof not contributed by such Defaulting Partner being referred to herein as
the "Deficiency"), the General Partner shall give written notice of such
failure, including the name of the Defaulting Partner and the amount of such
Deficiency, to the other Partners (each, a "Non-Defaulting Partner"). Each
Non-Defaulting Partner may (in addition to, and not in lieu of, any other rights
or remedies such
14
Non-Defaulting Partner may have under this Agreement, at law or in equity), in
its sole and absolute discretion, within ten [ORIGINAL TEXT REDACTED] after the
receipt of such written notice, contribute all or any portion of such Deficiency
to the capital of the Partnership (a "Deficiency Contribution"); provided,
however, that if the proposed aggregate Deficiency Contributions of two or more
Non-Defaulting Partners are greater than the amount of the Deficiency, then,
unless such Non-Defaulting Partners agree on the amount of the Deficiency
Contributions to be made by each of them, such Deficiency Contributions shall be
made in proportion to such Non-Defaulting Partners' Percentage Interests. In the
event that no other Partner is, or Partners are, willing to contribute all of
the Deficiency Contribution, the General Partner has the right, in its absolute
discretion, to arrange for a loan to cover such amount without the consent of
the Limited Partners.
4.3. Percentage Ownership Interest. The Partners shall have the
initial percentage ownership interests in the Partnership set forth on Exhibit A
(such percentage interests as adjusted pursuant to this Agreement are referred
to as a Partner's "Percentage Interest"). The Percentage Interests of the
Partners in the Partnership shall be adjusted so that the respective Percentage
Interests of the Partners at any time shall be as set forth in Exhibit A on the
effective date hereof, as adjusted in proportion to their respective additional
Capital Contributions made (or deemed to be made) pursuant to Section 4.2(b),
any adjustment required pursuant to Section 6.4(d)(ii) of the Purchase Agreement
and to reflect the Transfers of the GP Interest and the Additional LP Interests
(as such terms are defined in the Purchase Agreement); provided, however, that
no adjustment shall be made to the Percentage Interest of the Americana Partners
with respect to any mandatory additional Capital Contribution that is made in
accordance with Section 4.2(b)(i), no adjustment shall be made with respect to
the additional Capital Contribution made by Integrated pursuant to Section
4.2(b)(iii) or the payment by the Americana Partners made in connection
therewith, and no adjustment shall be made with respect to any indemnification
payments treated as contributions to the Partnership pursuant to Section 6.2(c)
of the Purchase Agreement; provided further, however, that upon the failure of
any Partner to make any such mandatory additional Capital Contribution required
by any provision of Section 4.2(b), then the Non-Defaulting Partners shall
engage an investment banker or other financial expert of national reputation who
has no prior affiliation with the Non-Defaulting Partners, who shall determine
the fair market value of each Partner's respective Interest in the Partnership
(without any control premiums or minority discounts), and after taking into
account (a) such value of the Partners' respective Interest in the Partnership,
and (b) the amount of the Deficiency, such expert shall determine the
appropriate manner in which to equitably reduce the Defaulting Partner's
Percentage Interest and increase any Non-Defaulting Partner's Percentage
Interest.
4.4. Return of Capital Contribution. No Partner shall have any right
to withdraw or make a demand for withdrawal of the balance reflected in such
Partner's Capital Account (as determined under Section 4.5) until the full and
complete winding up and liquidation of the business of the Partnership.
15
4.5. Capital Accounts. A separate capital account (the "Capital
Account") shall be established and maintained for each Partner in accordance
with Section 1.704-1(b)(2)(iv) of the Regulations. The Capital Account of each
Partner shall be increased by (i) the amount of any Capital Contributions made
by such Partner, (ii) any items of income or gain allocated to the Partner, and
(iii) any other adjustments required by the Regulations. The Capital Account of
each Partner shall be reduced by (i) the amount of any cash and the fair market
value (as agreed to by the Partners) of any property distributed to the Partner
by the Partnership (net of liabilities secured by such distributed property that
the Partner is considered to assume or take subject to), (ii) any items of loss
or deduction allocated to the Partner, and (iii) any other adjustments required
by the Regulations. The Partnership may or shall, as applicable, adjust the
Capital Accounts of the Partners to reflect the adjustments required or
permitted by Regulations Section 1.704-1(b)(2)(iv)(d), (e), (f) or (g) to
reflect a revaluation of the Partnership's assets on the Partnership's books in
connection with any contribution of money or other property to the Partnership,
any distribution of money or other property by the Partnership or any issuance
or redemption of Interests in the Partnership. No Partner shall be obligated to
restore any negative balance in its Capital Account. No Partner shall be
compensated for any positive balance in its Capital Account except as otherwise
expressly provided herein.
4.6. New Partners. Subject to the provisions of Section 4.7, the
Partnership may issue New Interests to a new Partner or Partners, as the case
may be, only if such new Partner (i) has delivered to the Partnership its
Capital Contribution, (ii) has agreed in writing to be bound by the terms of
this Agreement as a Partner by becoming a party hereto, and (iii) has delivered
such additional documentation as the General Partner shall reasonably require to
so admit such new Partner to the Partnership, and further only if the issuance
of such New Interests is at the fair market value with respect thereto, as
determined by the Partners in good faith; provided, however, that if the
purchase price at which any New Interests are proposed to be sold is greater
than [ORIGINAL TEXT REDACTED] in any one transaction or greater than [ORIGINAL
TEXT REDACTED] in any series of related transactions and the Partners cannot
agree upon whether such purchase price represents fair market value, then the
Partnership shall obtain a fairness opinion (addressed to the Partnership) from
an investment banker of national reputation reasonably acceptable to the
Partners as to the fairness of such proposed consideration to the Partnership
and its partners. The costs of such fairness opinion shall be borne by the
Partnership. Notwithstanding the foregoing, it is expressly acknowledged and
agreed that upon the GP Interest Closing Date an Affiliate of IBI shall be
admitted as the General Partner, AFSC shall resign and withdraw as general
partner and a Certificate of Amendment to the Certificate of Limited Partnership
shall be filed with the office of the Secretary of State of Texas evidencing
such change.
4.7. Preemptive Rights.
(a) Each Partner shall have the preemptive right to purchase up
to such Partner's pro rata share, based upon its Percentage Interest (the "Pro
Rata Share"), of any New
16
Interests, that the Partnership may from time to time, after the date of this
Agreement, issue to third parties.
(b) The Partnership will give the Partners at least thirty (30)
days' prior written notice of the Partnership's intention to issue New Interests
(the "New Interest Notice"), describing the type and amount of New Interests to
be issued and the price and the general terms and conditions upon which the
Partnership proposes to issue such New Interests. Each Partner may purchase up
to such Partner's Pro Rata Share of such New Interests, by delivering to the
Partnership, within [ORIGINAL TEXT REDACTED] after the date of mailing of any
such New Interest Notice by the Partnership, a written notice specifying the
amount of the New Interests which such Partner desires to purchase (which may be
all or any of its Pro Rata Share), for the price and upon the general terms and
conditions specified in the New Interest Notice; provided, however, that each
Partner may transfer any or all of its rights under this Section 4.7 to any of
its Affiliates. If any Partner fails to notify the Partnership in writing within
such [ORIGINAL TEXT REDACTED] period of its election to purchase any portion of
such Partner's full Pro Rata Share of an offering of New Interests (a
"Nonpurchasing Partner"), then such Nonpurchasing Partner will forfeit the right
hereunder to purchase any portion of such Partner's Pro Rata Share of such New
Interests. If a Partner fails to elect to purchase the full amount of such
Partner's Pro Rata Share of the New Interests, the Partnership shall give notice
of such failure to the Partners who did so elect (a "Participating Partner").
Such notice may be made by telephone if confirmed in writing within two (2)
days. The Participating Partners shall have [ORIGINAL TEXT REDACTED] from the
date such notice was given to notify the Partnership in writing of its election
to purchase that portion of the New Interest not subscribed for by the
Nonpurchasing Partner.
(c) In the event that the Partners fail to exercise in full the
preemptive rights within such [ORIGINAL TEXT REDACTED] period, then the
Partnership will have [ORIGINAL TEXT REDACTED] thereafter to sell the New
Interests with respect to which the Partner's preemptive rights hereunder were
not exercised, at a price and upon terms and conditions not more favorable to
the purchaser(s) thereof than specified in the Partnership's New Interest
Notice. In the event that the Partnership has not issued and sold the New
Interests within such [ORIGINAL TEXT REDACTED] period, then the Partnership
shall not thereafter issue or sell any New Interests without again first
offering such New Interests to the Partners in accordance with this Section 4.7.
Section 5. Distributions.
5.1. Distribution of Cash Flow.
(a) Subject to the provisions of Section 6.07(a) of the Act and
the reasonably anticipated business needs and opportunities of the Partnership,
taking into account all debts, liabilities and obligations of the Partnership
then due, working capital and other amounts which the General Partner deems
necessary for the Partnership's business or to place into reserves for customary
and usual claims with respect to such business, specifically including
17
the Partnership's obligation to pay the Management Fee, and subject also to any
restrictions under applicable law (including, without limitation, any obligation
to withhold and remit any amounts to any governmental authority), the General
Partner may resolve to distribute the Cash Flow of the Partnership to the
Partners, at such intervals as the General Partner shall determine from time to
time, pro rata to the Partners based upon their respective Percentage Interests
in the Partnership. Notwithstanding anything contained herein to the contrary,
no Distribution shall be made unless and until the Management Fee as of the date
thereof has been paid in full.
(b) No Partner shall be entitled to any Distributions except as
specifically provided in this Agreement. No Partner shall be entitled to payment
of the value of its interest upon withdrawal under Sections 6.02(b)(2) or 6.04
of the Act.
(c) Notwithstanding anything contained herein to the contrary,
for so long as the Regions Bank Loan remains outstanding, the General Partner
shall not make any Distributions in violation of the agreements relating to the
Regions Bank Loan.
5.2. Withholding. The Partnership is authorized to withhold from
distributions or with respect to allocations and pay over to any federal, state,
local or foreign government any amounts required to be withheld pursuant to any
provisions of federal, state, local or foreign law. Any amount so paid over
shall be treated as a distribution to the relevant Partner.
Section 6. Allocations.
6.1. General Rule. After taking into account any special allocations
pursuant to Section 6.2, and subject to any limitations contained therein,
Profits or Losses (and items of either) for any Fiscal Year or portion thereof
shall be allocated among the Partners to effectuate the intended economic
sharing arrangement of the Partners as reflected in Section 5.1.
6.2. Special Allocations. The allocation of Profits and Losses and
items of income, gain, loss or deduction shall be subject to the following
limitations and adjustments:
(a) No Losses or items of loss, deduction or expense may be
allocated to a Partner if such allocation would create or increase a Adjusted
Capital Account Deficit for such Partner. Any loss or deduction that cannot be
allocated to a Partner because of the limitation of this Section 6.2(a) shall be
allocated among the other Partners in accordance with their Percentage
Interests. If at the end of any Fiscal Year a Partner has an Adjusted Capital
Account Deficit (after taking into account all allocations provided for in this
Section 6 other than this sentence and Section 6.2(c)), the Partner shall be
allocated items of gross income and gain to the extent necessary to eliminate
such deficit balance as quickly as possible.
(b) "Nonrecourse deductions" (as defined in Regulations Section
1.704-2(b)(1)) shall be allocated among the Partners in proportion to their
Percentage Interests. Beginning in the first Fiscal Year in which the
Partnership has nonrecourse deductions, or makes
18
a distribution of proceeds of a "nonrecourse liability" (as defined in
Regulations Section 1.752-1(a)(2)), that is allocable to an increase in
"partnership minimum gain" (as defined in Regulations Section 1.704-2(d)(1)),
and in each Fiscal Year thereafter, if there is a net decrease in partnership
minimum gain during a Fiscal Year, then each Partner shall be allocated items of
income and gain for such year (and, if necessary, subsequent years) in
accordance with the "minimum gain chargeback" provisions of Regulations Section
1.704-2(f).
(c) Any Partner who unexpectedly receives, with respect to the
Partnership, an adjustment, allocation, or distribution described in Regulation
Section 1.704-1(b)(2)(ii)(d)(3) shall be allocated items of income and gain in
accordance with the "qualified income offset" provisions of Regulations Section
1.704-1(b)(2)(ii)(d); provided, however, that an allocation pursuant to this
Section 6.2(c) shall be made only if and to the extent that such Partner would
have an Adjusted Capital Account Deficit after all other allocations provided
for in this Section 6 have been tentatively made as if this Section 6.2(c) were
not in this Agreement.
(d) "Partner nonrecourse deductions" (as defined in Regulations
Section 1.704-2(i)(2)) shall be allocated to the Partner who bears the economic
risk of loss with respect to such deductions, as determined under Regulations
Section 1.704-2(i). If there is a net decrease in "partner nonrecourse debt
minimum gain" (as defined in Regulations Section 1.704-2(i)(2)) in any Fiscal
Year, the Partner shall be allocated items of income and gain for such year (and
subsequent years if necessary) in accordance with the chargeback requirement of
Regulations Section 1.704-2(i)(4).
19
6.3. Tax Allocations.
(a) Except as otherwise provided herein, items of income, gain,
loss, deduction and expense shall be allocated for tax purposes in a manner
consistent with the allocations set forth in this Section 6; provided, however,
in accordance with Code Section 704(c) and the Regulations thereunder, income
and loss with respect to any property contributed to the capital of the
Partnership (including, if the property so contributed constitutes a partnership
interest, the applicable distributive share of each item of income, gain, loss,
expense and other items attributable to such partnership interest whether
expressly so allocated or reflected in partnership allocations) shall, solely
for tax purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its initial Book Value at the time of
contribution. Such allocations shall be made (i) with respect to the Equipment
and any Additional Equipment, in accordance with the traditional method set
forth in Regulations Section 1.704-3(b), (ii) with respect to assets contributed
(or deemed contributed) by the Americana Partners, in accordance with any
method(s) permitted under Regulations Section 1.704-3, as determined by the
Americana Partners in their sole discretion, and (iii) with respect to any other
Capital Contributions consisting of property, using any method(s) permitted
under Regulations 1.704-3, as agreed by the Partners.
(b) In the event of a revaluation of the Book Value of
Partnership property, allocations to the Partners of items of depreciation,
amortization and gain or loss as computed for tax purposes with respect to
Partnership property shall be made in a manner that takes into account the
variation between the adjusted tax basis of such property and its Book Value as
determined under Section 1.704-1(b)(2)(iv)(g) of the Regulations.
(c) Any portion of gain with respect to an asset that is treated
as ordinary income for federal income tax purposes pursuant to Section 1245 or
1250 of the Code (a "Recapture Amount") shall be allocated to the Partner to
which the depreciation deductions giving rise to such Recapture Amount
(including depreciation deductions for periods prior to the date the applicable
property was contributed to the Partnership) were allocated.
(d) Any elections or other decisions relating to such allocations
shall be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations pursuant to this Section
6.3 are solely for purposes of federal, state and local taxes and shall not
affect, or in any way be taken into account in computing, any Partner's Capital
Account or share of profits, losses, other items or distributions pursuant to
any provisions of this Agreement.
6.4. Allocation with Respect to Transferred Interests. The General
Partner is authorized to adopt any convention or combination of conventions
likely to be upheld for federal income tax purposes regarding the allocation
and/or special allocation of items of Partnership income, gain, loss, deduction
and expense with respect to a New Interest, a transferred Interest and a
redeemed Interest. Upon admission as Partner, a transferee of an
20
Interest shall succeed to the Capital Account of the transferor Partner to the
extent it relates to the transferred Interest.
6.5. Other Allocation Rules. (a) The Partners are aware of the income
tax consequences of the allocations made by this Section 6 and hereby agree to
be bound by the provisions of this Section 6 in reporting their shares of
Partnership Income and Loss for income tax purposes.
Section 7. Books, Records, Tax Matters and Bank Accounts.
7.1. Books and Records. The books and records of account of the
Partnership shall be maintained in accordance with GAAP. The books and records
shall be maintained at the Partnership's principal office or at a location
designated by the General Partner, and all such books and records shall be
available to any Partner at such location for review and copying, at such
Partner's sole cost and expense, during normal business hours on at least
twenty-four (24) hours' prior notice.
7.2. Tax Matters Partner. The General Partner is hereby designated as
the "tax matters partner" of the Partnership, as defined in Section 6231(a)(7)
of the Code (the "Tax Matters Partner"). Except as otherwise provided in this
Agreement, all elections required or permitted to be made by the Partnership
under the Code or state tax law shall be timely determined and made by the
General Partner. The Partners intend that the Partnership be treated as a
partnership for U.S. federal, state and local tax purposes, and the Partners
will not elect or authorize any person to elect to change the status of the
Partnership from that of a partnership for U.S. federal, state and local income
tax purposes. The General Partner agrees to consult with Limited Partners in
good faith with respect to any written notice of any inquiries, claims,
assessments, audits, controversies or similar events received from any taxing
authority. In addition, if and only if Integrated or any of its Affiliates so
requests, the Partnership shall make an election pursuant to Code Section 754 to
adjust the basis of the Partnership's property in the manner provided in Code
Sections 734(b) and 743(b) for taxable years beginning in 2003. The Partnership
hereby indemnifies and holds harmless the General Partner from and against any
claim, loss, expense, liability, action or damage resulting from its acting or
its failure to take any action as the "tax matters partner" of the Partnership,
provided that any such action or failure to act does not constitute gross
negligence or willful misconduct.
7.3. Bank Accounts. All funds of the Partnership are to be deposited
in the Partnership's name in such bank account or accounts as may be designated
by the General Partner and shall be withdrawn subject to the terms of this
Agreement on the signature of such Person or Persons as the General Partner may
authorize.
7.4. Tax Returns. The Tax Matters Partner shall use all commercially
reasonable efforts to prepare or cause to be prepared all income and other tax
returns of the Partnership required by applicable law and to cause the same to
be filed in a timely manner (including extensions). Not more than [ORIGINAL TEXT
REDACTED] after the end of each
21
Fiscal Year, the Partnership's tax advisors, as selected by the General Partner,
shall deliver or cause to be delivered to each Partner a copy of the tax returns
and Schedule K-1 for the Partnership and its Subsidiaries, if any, with respect
to such Fiscal Year, together with such information with respect to the
Partnership and such Subsidiaries as shall be necessary for the preparation by
such Partner of its U.S. federal and state income or other tax and information
returns. The Partnership shall pay for all costs of preparing tax returns and
all costs related thereto.
7.5. Reports and Financial Statements.
(a) Within [ORIGINAL TEXT REDACTED] of the end of each month, the
Partnership shall furnish the Partners with copies of (i) the balance sheet of
the Partnership as at the end of such month and the prior month, together with
the balance sheet as at the end of the preceding Fiscal Year of the Partnership,
(ii) a statement of GAAP Income or GAAP Loss for the month then ended and for
the portion of the Fiscal Year of the Partnership then elapsed, and setting
forth in comparative form the budgeted figures for the month then ended and the
portion of the Fiscal Year of the Partnership then elapsed and the actual
figures for the same month of the previous Fiscal Year and the same portion of
the previous Fiscal Year of the Partnership, and (iii) a statement of cash flows
for the month then ended and the portion of the Fiscal Year of the Partnership
then elapsed and setting forth in comparative form the budgeted figures for the
month then ended and the portion of the Fiscal Year of the Partnership then
elapsed and the actual figures for the same month of the previous Fiscal Year
and the same portion of the previous Fiscal Year of the Partnership, all in
reasonable detail and prepared in accordance with GAAP (except for the absence
of footnotes thereto), and subject to normal and recurring year end adjustments.
(b) Within [ORIGINAL TEXT REDACTED] of the end of each Fiscal
Year, the Partnership shall furnish the Partners with copies of the balance
sheet of the Partnership as at the end of such Fiscal Year, and a statement of
GAAP Income or GAAP Loss and a statement of cash flows, in each case for the
Fiscal Year of the Partnership then ended, all in reasonable detail, prepared in
accordance with GAAP and setting forth in each case in comparative form the
figures for the previous two Fiscal Years, audited by the Partnership's
independent accounting firm.
(c) Prior to the beginning of each Fiscal Year of the
Partnership, the General Partner shall develop a statement of monthly cash flow
projections for the Partnership for the upcoming Fiscal Year, prepared in good
faith and based upon what the Partnership believes in good faith at such time to
be reasonable assumptions.
(d) The Partnership shall deliver to each Partner copies of any
management reports, documentation of material financial transactions,
projections, operating reports, acquisition analyses, presentations to banks,
financial institutions or potential investors, consultants' reports and such
other similar financial information as the Partners may reasonably
22
request, as soon as practicable after such reports and other financial
information becomes available.
7.6. Accountant Work Papers. The Partners and any of their respective
auditors shall be entitled, upon reasonable notice, and at their own expense, to
make such reasonable investigation of the work papers of the Partnership's
accountant in connection with any audit.
Section 8. Management and Operations.
8.1. Management. Except as expressly set forth herein, the Partnership
shall be managed by the General Partner, which shall have the authority to
exercise all of the powers and privileges granted by the Act, any other law and
this Agreement, together with any powers incidental thereto, and to take any
other action not prohibited under the Act or other applicable law, so far as
such powers or actions are necessary or convenient to the conduct, promotion or
attainment of the business, purposes or activities of the Partnership. No
Limited Partner shall have any right to participate in or exercise control or
management power over the business and affairs of the Partnership. The General
Partner may consult with the Limited Partners, but shall have absolute authority
in accordance with this Agreement and the Management Agreement, to manage the
day-to-day business operations and affairs of the Business.
8.2. Meetings of the Partners.
(a) The General Partner shall meet with the Limited Partners once
every month at such times and places in New York City, New York as are mutually
agreed to by the Partners (unless the requirement for any such monthly meeting
is waived by mutual agreement of the Partners) (the "Monthly Meetings") and at
such other times as may be necessary (the "Special Meetings") on at least
[ORIGINAL TEXT REDACTED] prior written notice of the time and place of such
Special Meeting given by any Partner.
(b) Any meeting of the Partners may be held by conference
telephone call, video conference or through similar communications equipment by
means of which all persons participating in the meeting can communicate with
each other. Participation in a meeting by telephone, video conference or other
similar communications equipment held pursuant to this Section shall constitute
presence in person at such meeting. Partners may vote in person or by proxy at
such meeting.
(c) Any action required or permitted to be taken at a meeting of
the Limited Partners may be taken without a meeting if the approval of Partners
required to approve such action at a meeting at which all Partners are in
attendance consent thereto in writing.
(d) Except as otherwise expressly provided in this Agreement,
none of the Limited Partners shall have any duties or liabilities to the
Partnership or any other Partner (including any fiduciary duties), whether or
not such duties or liabilities otherwise arise or exist
23
in law or in equity, and each Partner hereby expressly waives any such duties or
liabilities; provided, however, that this section shall not eliminate or limit
the liability of any Partner (A) for acts or omissions that involve fraud, gross
negligence, willful or wanton misconduct or a knowing and culpable violation of
law, or (B) for any transaction not permitted or authorized under or pursuant to
this Agreement from which a Partner derived a personal benefit unless such
transaction is permissible under, or otherwise approved in accordance with, this
Agreement; provided, further, however, that the duty of care of each of the
Partners is to not act with fraud, gross negligence, willful or wanton
misconduct or a knowing and culpable violation of law. Except as provided in
this Agreement, whenever in this Agreement a Limited Partner is permitted or
required to make a decision affecting or involving the Partnership, any Limited
Partner or any other Person, such Limited Partner shall be entitled to consider
only such interests and factors as he, she or it desires, including a particular
Limited Partner's interests, and shall, to the fullest extent permitted by
applicable law, have no duty or obligation to give any consideration to any
interest of or factors affecting the Partnership or any Partner.
8.3. Matters Requiring Limited Partner Approval. Except as expressly
provided in this Section 8.3, or as otherwise required by the Act or other
applicable law, no Limited Partner approval shall be required for any purpose
and no Limited Partner vote shall have any authority to bind the Partnership or
any Partner.
(a) Prior to the GP Interest Closing Date. From the date hereof
until the GP Interest Closing Date, the Partnership shall not, and shall not
permit or cause any Subsidiary to, take any of the following acts, without first
obtaining the approval of Integrated:
(i) Creating, incurring or suffering to exist any
Indebtedness (including, without limitation, letters of credit, if any,
used to secure supply arrangements) or any capitalized lease obligation or
entering into any agreement, commitment, assumption or guarantee with
respect to any of the foregoing;
(ii) the making of any capital expenditures;
(iii) hiring or terminating any employee, or increasing the
compensation (including benefits) payable to or to become payable to any
employee;
(iv) the sale of New Interests pursuant to Section 4.7;
(v) making any Distribution;
(vi) the dissolution, liquidation, or winding up of the
Partnership, including any sale of all or substantially all of the assets
of the Partnership, in any single transaction or series of related
transactions;
(vii) entering into any merger, consolidation,
reorganization, acquisition (in which the Partnership would be the acquired
entity) or other similar
24
transaction involving the Partnership, or entering into any agreement or
other transaction other than in the ordinary course of business; and
(viii) agreeing to any amendment to, or modification or
waiver of any material right under, any of the Original Agreements or any
Material Contract (as defined in the Purchase Agreement).
(b) After the GP Interest Closing Date. After the GP Interest
Closing Date, the Partnership shall not, and shall not permit or cause any
Subsidiary to, take any of the following acts, without first obtaining the
approval of AFC:
(i) Creating, incurring or suffering to exist any
Indebtedness (including, without limitation, letters of credit, if any,
used to secure supply arrangements) or any capitalized lease obligation
(other than Indebtedness and capitalized lease obligations as of the
Effective Date (including any additional drawdowns under the Regions Bank
Loan)) or entering into any agreement, commitment, assumption or guarantee
with respect to any of the foregoing, in an amount in excess of [ORIGINAL
TEXT REDACTED] ("Indebtedness Cap"); provided, however, that the
Partnership may, and may permit or cause any Subsidiary to, create, incur
or suffer to exist any of the foregoing obligations in an amount in excess
of the Indebtedness Cap by an amount equal to the amount of additional
Capital Contributions that the General Partner could, at such time, require
pursuant to Sections 4.2(b)(ii) and 4.2(b)(iii) minus any additional
Capital Contributions made by the Partners pursuant to Sections 4.2(b)(ii)
and 4.2(b)(iii) (the "Available Debt Basket"); provided further, for as
long as any of the foregoing obligations that are in excess of the
Indebtedness Cap remain outstanding, the amount of additional Capital
Contributions required pursuant to Sections 4.2(b)(ii) and 4.2(b)(ii) shall
be reduced to the extent such obligations exceed the Indebtedness Cap and
as such obligations are repaid or otherwise satisfied, the amount of
additional Capital Contributions required pursuant to Sections 4.2(b)(ii)
and 4.2(b)(iii) shall be increased by the amount of such repayment or
satisfaction;
(ii) creating, incurring or suffering to exist any
Indebtedness to Integrated (or any Affiliate thereof), except as
contemplated by the Integrated Equipment Rental Agreement;
(iii) the sale of New Interests pursuant to Section 4.7;
(iv) the dissolution, liquidation, or winding up of the
Partnership, including any sale of all or substantially all of the assets
of the Partnership, in any single transaction or series of related
transactions;
(v) engaging in any type of business activity that is of a
material nature and is not related to the frozen dessert industry;
25
(vi) entering into any merger, consolidation,
reorganization, acquisition (in which the Partnership would be the acquired
entity) or other similar transaction involving the Partnership; and
(vii) agreeing to any amendment to, or modification or
waiver of any material right under, the Original Agreements.
(c) Affiliated Transactions. The Partners agree that in the event
at any time the General Partner of the Partnership is not enforcing any material
rights which the Partnership may have pursuant to the terms of the Original
Agreements or the Management Agreement (other than termination of the Management
Agreement pursuant to Section 7.3(b)), including, without limitation, the right
to any price increase required thereunder, then any Partner may notify the
General Partner of specific actions that it believes must be taken to enforce
the relevant agreement, and the Partners will for a period of [ORIGINAL TEXT
REDACTED] negotiate in good faith to determine appropriate action to be taken.
If the Partners cannot reach agreement as to the appropriate action to be taken
after such [ORIGINAL TEXT REDACTED] period, then any holder of at least
[ORIGINAL TEXT REDACTED] Percentage Interest may bring an action to enforce such
agreement on behalf of the Partnership. In connection with any such litigation,
the Partners hereby agree that the prevailing party shall be entitled to payment
from the other party for all reasonable out of pocket costs and expenses
incurred in connection with such litigation (including, without limitation,
reasonable attorneys fees).
8.4. Other Activities. Neither the Partnership nor any Partner (or any
Affiliate of any Partner) shall have any right by virtue of this Agreement
either to participate in or to share in any other ventures, activities or
opportunities of any of the other Partners or their Affiliates, or in the income
or proceeds derived from such ventures, activities or opportunities.
8.5. Limitation on Actions of Partners; Binding Authority. No Partner
shall, without the prior written consent of the General Partner, take any action
on behalf of, or in the name of, the Partnership, or enter into any contract,
agreement, commitment or obligation binding upon the Partnership, or, in its
capacity as a Partner of the Partnership, perform any act in any way relating to
the Partnership or the Partnership's assets, except in a manner and to the
extent consistent with the provisions of this Agreement. Any action taken by the
General Partner pursuant to this Agreement shall constitute the act of and serve
to bind the Partnership and each Partner thereof. Notwithstanding any provision
in this Agreement to the contrary and without the need for any additional
consent from any Person, the Partnership is hereby authorized to execute,
deliver and perform that certain Management Agreement and the Original
Agreements, and at such times specified in the Purchase Agreement, the Restated
[ORIGINAL TEXT REDACTED] Agreement. Persons dealing with the Partnership are
entitled to rely conclusively upon the respective power and authority of each of
the Officers and the General Partner as set forth herein.
26
Section 9. Confidentiality.
(a) Any information relating to the Partnership or any Subsidiary
or a Partner's business, operation or finances which are proprietary to the
Partnership or any Subsidiary or a Partner, including, without limitation, any
proprietary information relating to [ORIGINAL TEXT REDACTED], are hereinafter
referred to as "Confidential Information". All Confidential Information in
tangible form (plans, writings, drawings, computer software and programs, etc.)
or provided to or conveyed orally or visually to a receiving Partner, shall be
presumed to be proprietary at the time of delivery to the receiving Partner. All
Confidential Information shall be protected by the receiving Partner from
disclosure with the same degree of care with which the receiving Partner
protects its own Confidential Information from disclosure. Each Partner agrees:
(a) not to disclose such Confidential Information to any Person except to those
of its employees or representatives who need to know such Confidential
Information in connection with the conduct of the business of the Partnership or
any Subsidiary and who have agreed to maintain the confidentiality of such
Confidential Information, or (b) neither it nor any of its employees or
representatives will use the Confidential Information for any purpose other than
in connection with the conduct of the business of the Partnership or any
Subsidiary; provided that such restrictions shall not apply if such Confidential
Information:
(i) is or hereafter becomes public, other than by breach of
this Agreement or the Management Agreement;
(ii) was already in the receiving Person's possession prior
to any disclosure of the Confidential Information to the receiving Person
by the divulging Person;
(iii) has been or is hereafter obtained by the receiving
Person from a third party that, to the knowledge of the receiving Person,
is not bound by any confidentiality obligation with respect to the
Confidential Information; or
(iv) was obtained or developed without reference to the
Confidential Information, provided that the Partner who disclosed or used
the Confidential Information can demonstrate by documentary evidence that
such information was obtained or developed without reference to the
Confidential Information;
provided, further, that nothing herein shall prevent any Partner from disclosing
any portion of such Confidential Information (1) to the Partnership or any
Subsidiary and allowing the Partnership or any Subsidiary to use such
Confidential Information in connection with the Partnership's or any
Subsidiary's business, (2) pursuant to judicial or administrative order or in
response to a governmental inquiry, by subpoena or other legal process, or as
required by applicable law, rule or regulation of any governmental body or stock
exchange rule, but only to the extent required by such order, inquiry, subpoena,
process, law, rule or regulation, and only after reasonable notice to the
original divulging Partner, (3) in order to initiate, defend or otherwise pursue
legal proceedings between the parties regarding this Agreement, (4) necessary
27
in connection with a possible or actual Transfer of an Interest permitted
hereunder, provided that the Person to whom the Confidential Information is
disclosed in connection therewith agrees in writing to keep such information
confidential under terms substantially similar to this Section 9(a), (5) to a
Partner's respective Advisors, or (6) to any Person in the course of due
diligence in connection with the possible sale of all or a portion of either
Partner's business, provided that such Person is subject to a confidentiality
agreement that is no less restrictive than the provisions of this Section 9.
(b) The Partners and their Affiliates shall each act to safeguard
the secrecy and confidentiality of, and any proprietary rights to, any
non-public information relating to the Partnership and its business or any
Subsidiary and its business, except to the extent such information is required
to be disclosed by law or reasonably necessary to be disclosed in order to carry
out the business of the Partnership or such Subsidiary or in order to initiate,
defend or otherwise pursue legal proceedings between or involving the parties
regarding this Agreement. Each Partner may, from time to time, provide the other
Partners written notice of its nonpublic information which is subject to this
Section 9(b).
(c) Each Partner acknowledges that (a) it was generally familiar
with each other Partner's and its Affiliates' business and operations and the
industries in which they operate, prior to commencing any due diligence or
negotiations with respect to the transactions contemplated herein and in the
Investment Agreement, and (b) it has existing business relationships with
certain of the Partnership's customers and suppliers and it is generally
familiar with the Partnership's customers and suppliers. In addition, each
Partner acknowledges and agrees that each of the other Partners and/or one or
more of its Affiliates are engaged in a business which is competitive with the
business of the other Partner and/or its Affiliates and customers, and, although
each Partner and its Affiliates agree to comply with the provisions set forth in
this Section 9, each Partner acknowledges that the provisions of this Section 9
do not constitute a non-competition agreement and that each Partner and its
Affiliates will continue to compete with the other Partners and their Affiliates
notwithstanding the execution and delivery of this Agreement.
Section 10. Representations and Warranties.
10.1. In General. As of the date hereof, each of the Partners hereby
makes each of the representations and warranties applicable to such Partner as
set forth in Section 10.2. Such representations and warranties shall survive the
execution of this Agreement.
10.2. Representations and Warranties. Each Partner hereby represents
and warrants (as to itself) that:
(a) Due Incorporation or Formation; Authorization of Agreement.
Such Partner is a corporation duly organized or a partnership or limited
liability company duly formed, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation and has the
corporate, partnership or company power and authority to
28
own its property and carry on its business as owned and carried on at the date
hereof and as contemplated hereby. Such Partner is duly licensed or qualified to
do business and in good standing in each of the jurisdictions in which the
failure to be so licensed or qualified would have a material adverse effect on
its financial condition or its ability to perform its obligations hereunder.
Such Partner has the corporate, partnership or company power and authority to
execute and deliver this Agreement and to perform its obligations hereunder, and
the execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate, partnership or company action. This
Agreement constitutes the legal, valid and binding obligation of such Partner,
enforceable against such Partner in accordance with its terms.
(b) Governmental Authorizations. Any registration, declaration or
filing with, or consent, approval, license, permit or other authorization or
order by, or exemption or other action of, any governmental, administrative or
regulatory authority, domestic or foreign, that was or is required in connection
with the valid execution, delivery, acceptance and performance by such Partner
under this Agreement or consummation by such Partner (or any of its Affiliates)
of any transactions contemplated hereby has been completed, made or obtained on
or before the date hereof.
(c) Litigation. There are no actions, suits, proceedings or
investigations pending, or, to the knowledge of such Partner or any of its
Affiliates, threatened against or affecting such Partner or any of its
Affiliates or any of their properties, assets or businesses in any court or
before or by any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator which could, if adversely determined (or,
in the case of an investigation could lead to any action, suit or proceeding
which if adversely determined could) reasonably be expected to materially impair
such Partner's ability to perform its obligations under this Agreement or to
have a material adverse effect on the consolidated financial condition of such
Partner; such Partner and its Affiliates have not received any currently
effective notice of any default, and such Partner and its Affiliates are not in
default, under any applicable order, writ, injunction, decree, permit,
determination or award of any court, any governmental department, board, agency
or instrumentality, domestic or foreign, or any arbitrator which could
reasonably be expected to materially impair such Partner's (or any of its
Affiliate's) ability to perform its obligations under this Agreement or to have
a material adverse effect on the consolidated financial condition of such
Partner.
(d) Investment Company Act. Neither such Partner nor any of its
Affiliates is, nor will the Partnership as a result of such Partner holding an
interest therein be, an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended.
Section 11. Transfers of Interests.
11.1. Confirmation of Ownership. The General Partner hereby confirms
that the initial percentage ownership interests in the Company set forth on
Exhibit A accurately represent the partnership Interest of each Partner as of
the date of this Agreement. Each Partner
29
hereby confirms and agrees that as of the date of this Agreement the Percentage
Interest and Capital Contributions set forth opposite such Partner's name on
Exhibit A hereto is such Partner's entire equity interest in the Company and
that any and all agreements (other than the Purchase Agreement) heretofore
entered into by such Partner with the Company contemplating the issuance of
partnership interests or other equity interest in the Company to such Partner
are no longer in effect.
11.2. Prohibited Transfers. Notwithstanding anything to the contrary
contained herein, except as provided in Section 11.3, each Partner agrees that
such Partner will not, directly or indirectly, Transfer all or any part of its
Interest, whether legal or beneficial, in the Partnership, and any attempt to so
Transfer such Interest (and such Transfer) shall be null and void and of no
effect. Without limiting the foregoing, and for purposes of clarification, (i) a
Transfer by CoolBrands of any ownership interest in Integrated or IBI would be
deemed to be an indirect Transfer of Integrated's Interests, and (ii) a Transfer
by Capricorn of any ownership interest in AFC or AFSC would be deemed to be an
indirect Transfer of the Americana Partners' Interests.
11.3. Permitted Transfers. The provisions of Section 11.2 shall not
apply to the following Transfers:
(a) Any Transfer of Interests contemplated by the Purchase
Agreement;
(b) Any Transfer of partnership interests by a Partner to an
Affiliate of such Partner, provided that such Affiliate shall remain an
Affiliate of such Partner at all times that such Affiliate holds such
partnership interests;
(c) any transfer of partnership interests permitted in accordance
with Section 12; and
(d) After the expiration of the Call Period, any Transfer of
partnership interests by a Partner to any third party, which transfer is
approved by the other Partners not Affiliated with such transferring Partner
(which approval shall not be unreasonably withheld, it being understood that the
Limited Partners must provide reasons in writing to the proposed transferor in
the event that they withhold such consent).
The exceptions in clauses (b) - (d) above are subject to the condition that each
such Affiliate or other transferee referred to therein (each a "Permitted
Transferee") shall comply with the requirements of Section 11.4. Except for
Transfers of Interests contemplated by the Purchase Agreement, the provisions of
this Agreement shall be applied to the partnership interests acquired by any
Permitted Transferee of a Partner in the same manner and to the same extent as
such provisions were applicable to such partnership interests in the hands of
such transferring Partner. In furtherance of the preceding sentence, (i) the
Partners acknowledge that but for the exception for Transfers of Interests
contemplated by the Purchase Agreement as set forth in the preceding sentence,
Integrated would be considered a Permitted Transferee of the Americana
30
Partners with respect to the Interests obtained pursuant to the Purchase
Agreement, and therefore would otherwise be subject to the restrictions and
entitled to the rights specifically granted to the Americana Partners, and (ii)
that the preceding requirement shall not apply to Transfers of any Interest made
pursuant to the Purchase Agreement, such that after giving effect to any such
Transfer contemplated by the Purchase Agreement, the provisions of this
Agreement shall be applied to Integrated (and any other Affiliate of IBI
receiving Interests pursuant to the Purchase Agreement) without regard to the
applicability of such provisions to the Americana Partners, and such Interests
shall, for all intents and purposes of this Agreement, be subject to the
restrictions and entitled to the rights specifically granted hereunder to
Integrated or its Affiliates. Subject to the foregoing, any reference in this
Agreement to the Americana Partners shall be deemed to include the Americana
Partners and their Permitted Transferees and any reference in this Agreement to
Integrated shall be deemed to include Integrated and its Permitted Transferees.
11.4. Admission of Transferee. Notwithstanding anything in this
Agreement to the contrary, no Transfer of Interests in the Partnership shall be
permitted unless the Permitted Transferee is admitted as a Partner under this
Section 11.4. If a Partner Transfers all or any portion of its Interest in the
Partnership, such transferee may become a Partner if (i) such transferee
executes and agrees to be bound by this Agreement as if such transferee were a
Partner as of the date hereof, (ii) the transferor and/or transferee pays all
reasonable legal and other fees and expenses incurred by the Partnership in
connection with such Transfer and substitution (except that IBI and its
Affiliates shall not be responsible for any fees or expenses of the Partnership
in connection with the Transfers of Interests contemplated by the Purchase
Agreement), and (iii) the transferor and transferee execute such documents and
deliver such certificates to the Partnership and the remaining Partners as may
be required by applicable law or otherwise advisable. Notwithstanding the
foregoing, any Transfer or purported Transfer of any Interest, whether to
another Partner or to a third party, shall be of no effect, and such transferee
shall not become a Partner, if the General Partner determines in its sole
discretion that:
(a) the Transfer would require registration of any Interest
under, or result in a violation of, any federal or state or other jurisdiction
securities laws;
(b) as a result of such Transfer the Partnership would be
required to register as an investment company under the Investment Company Act
of 1940, as amended, or any rules or regulations promulgated thereunder;
(c) as a result of such Transfer the aggregate value of Interests
held by "benefit plan investors" including at least one benefit plan investor
that is subject to ERISA, would be "significant" (as such terms are defined in
U.S. Department of Labor Regulation 29 C.F.R. 2510.3-101(f)(2)) with the result
that the assets of the Partnership will be deemed to be "plan assets" for
purposes of ERISA; or
(d) as a result of such Transfer, the Partnership would or may
have in the aggregate more than [ORIGINAL TEXT REDACTED] Partners and as a
result, in the opinion of counsel to the Partnership, the Partnership would
constitute a "publicly traded
31
partnership" within the meaning of Section 7704 of the Code. For purposes of
determining the number of Partners under this Section 4.6(e), a Person (the
"beneficial owner") indirectly owning an interest in the Partnership through a
partnership, grantor trust or S corporation (as such terms are used in the Code)
(the "flow-through entity") shall be considered a Partner, but only if (i)
substantially all of the value of the beneficial owner's interest in the
flow-through entity is attributable to the flow-through entity's interest
(direct or indirect) in the Partnership and (ii) in the sole discretion of the
General Partner, a principal purpose of the use of the flow-through entity is to
permit the Partnership to satisfy the [ORIGINAL TEXT REDACTED] Partner
limitation.
The General Partner may require the provision of a certificate as to the
legal nature and composition of a proposed transferee of an Interest of a
Partner and from any Partner as to its legal nature and composition and shall be
entitled to rely on any such certificate in making such determinations under
this Section 11.4.
Section 12. Sale, Assignment or Other Disposition of Interests
12.1. Call Right.
(a) Any time during the Call Period, Integrated shall have the
right, at its option (the "Call Option"), to acquire all, but not less than all,
of the Americana Partners' Interest (the "Called Interest") at a price equal to
the Call Option Price; provided, however, that if Integrated receives an ROFO
Notice, an ROFR Notice or a Required Sale Notice (as such terms are defined
below) prior to delivering a Call Notice (as defined below), then the Call
Option shall be suspended until (i) with respect to an ROFO Notice, [ORIGINAL
TEXT REDACTED] after the expiration of the ROFO Option Period (as defined
below), (ii) with respect to an ROFR Notice, [ORIGINAL TEXT REDACTED] following
the expiration of the ROFR Option Period (as defined below), and (iii) with
respect to a Required Sale Notice, [ORIGINAL TEXT REDACTED] following the
expiration of the ROFR Option Period, at which time the Call Option shall be
reinstated.
(b) Integrated may exercise the Call Option by providing written
notice of its intention to exercise the Call Option with respect to the Called
Interest to the Partnership and the Americana Partners (a "Call Notice"), at
which time Integrated shall be obligated to purchase from the Americana
Partners, and the Americana Partners shall become obligated to sell to
Integrated, the Called Interest at the Call Option Price, on the date that is
[ORIGINAL TEXT REDACTED] after the delivery of such Call Notice, subject to and
in accordance with the provisions of this Section 12.1. During such [ORIGINAL
TEXT REDACTED] period, any Person who has executed and delivered to the
Americana Partners (copies of which shall be provided to Integrated) (i) a
non-binding indication of interest with respect to a possible acquisition of the
Called Interest and (ii) a confidentiality agreement in form and substance
substantially similar to the provisions of Section 9(a) hereof, and any of its
Advisors, shall be entitled, upon reasonable notice, and at their own expense
(or the expense of
32
the Americana Partners), to make such reasonable investigation of the business
and operations of the Partnership, and such reasonable examination of the books,
records and financial condition of the AF Business as they reasonably request in
connection with their evaluation of a possible acquisition of the Called
Interest. Any such investigation and examination shall be conducted during
regular business hours and under reasonable circumstances without material
interference with Integrated's or the Partnership's normal business operations,
and Integrated shall, and shall cause the Partnership and its executives and
management to reasonably cooperate with respect thereto. If, within ninety
[ORIGINAL TEXT REDACTED] of the delivery of the Call Notice, the Americana
Partners deliver a ROFR Notice pursuant to Section 12.3 for which the price to
be paid for the ROFO Interest is greater than the Call Option Price, then the
Call Notice shall be terminated and of no further effect, and the Transfer of
any Interest by the Americana Partners shall be subject to the provisions of
Section 12.3.
(c) If the Americana Partners have not delivered a ROFR Notice
for which the price to be paid for the ROFO Interest is greater than the Call
Option Price within the [ORIGINAL TEXT REDACTED] period set forth in Section
12.1(b) above, then at the closing of the Call Option, the Americana Partners
shall deliver to Integrated, against payment of the Call Option Price, the
Called Interest, to be sold to Integrated free and clear of all liens, charges,
pledges and other encumbrances and accompanied by transfer powers duly endorsed
for transfer, any and all documentation evidencing the Called Interest and such
other documentation as reasonably requested by Integrated. The closing of a sale
of the Called Interest pursuant to this Section 12.1 shall be consummated no
later than [ORIGINAL TEXT REDACTED] after the receipt of the Call Notice; unless
prior to such date the Americana Partners have delivered a ROFR Notice pursuant
to Section 12.3. Upon the delivery of a Call Notice, the Americana Partners may
not Transfer the Called Interest unless (i) (A) the sale of the Called Interest
to Integrated is not consummated within [ORIGINAL TEXT REDACTED] of its receipt
of the Call Notice and the Americana Partners did not deliver a ROFR Notice
during such time, and (B) the failure to consummate the sale is not attributable
to any act or failure to act on the part of the Americana Partners, or (ii) the
Americana Partners deliver a ROFR Notice for which the price to be paid for the
ROFO Interest is greater than the Call Option Price within the [ORIGINAL TEXT
REDACTED] period set forth in Section 12.1(b) above (in which case the Transfer
of any such Interest shall be pursuant to Section 12.3); provided, that any
Transfer by the Americana Partners must comply with the other provisions of this
Section 12 (including, without limitation, Sections 12.2, 12.3 and 12.4).
12.2. Right of First Offer. Notwithstanding the provisions of Section
12.1 to the contrary, but subject to the provisions of Section 12.3, the
Americana Partners may Transfer all, but not less than all, of their Interest,
pursuant to the provisions of this Section 12.2.
(a) If at any time during the Call Period, the Americana Partners
have not received a bona fide written offer from a Person not Affiliated with
the Americana Partners to acquire all (and not less than all) of their Interest
(for all purposes of Section 12, such Interests of the Americana Partners shall
be determined on a collective basis) at a price greater than the
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Call Option Price, Integrated has not furnished a Call Notice pursuant to
Section 12.1, and the Americana Partners desire to Transfer all, but not less
than all, of their Interest (the "ROFO Interest"), the Americana Partners shall
provide written notice of such desire to Integrated ("ROFO Notice"), which
notice shall state that the Americana Partners desire to Transfer all of their
Interest in accordance with this Section 12.2, and such ROFO Notice shall
constitute an irrevocable offer to sell the entire ROFO Interest to Integrated
at a price equal to the Call Option Price. Integrated shall have the irrevocable
and exclusive option to acquire the ROFO Interest on the terms and conditions
set forth in this Section 12.2(a). The option of Integrated to purchase the ROFO
Interest shall be exercised by delivery of a written notice (the "Response
Notice") to the Americana Partners and the Partnership within [ORIGINAL TEXT
REDACTED] following receipt of the ROFO Notice (the "ROFO Option Period").
Integrated shall have the right to purchase the ROFO Interest for a price equal
to the Call Option Price. If Integrated elects to acquire the ROFO Interest
pursuant to this Section 12.2(a), then at the closing of such Transfer,
Integrated shall deliver by a certified or bank's cashier's check, cash or wire
transfer, an amount equal to the Call Option Price to the Americana Partners
against the simultaneous delivery of the ROFO Interest, free and clear of all
liens, charges, pledges and other encumbrances and accompanied by transfer
powers duly endorsed for transfer, any and all documentation evidencing such
ROFO Interest and such other documentation as reasonably requested by
Integrated. If Integrated did not deliver a Response Notice prior to the
expiration of the ROFO Option Period and within [ORIGINAL TEXT REDACTED] of the
expiration of the ROFO Option Period the Americana Partners obtain a bona fide
written offer from a Person not Affiliated with the Americana Partners to
acquire all of its Interest and notifies Integrated in writing of such proposed
Transfer (a "Third Party Offer"), then the Americana Partners may Transfer the
ROFO Interest subject to the provisions of Section 12.3. If ninety (90) days
after the expiration of the ROFO Option Period the Americana Partners have not
received a bona fide written offer from a Person not Affiliated with the
Americana Partners and have not notified Integrated of the same, then any such
Transfer will again be subject to the provisions of this Section 12.2 and the
Americana Partners shall be required to deliver a new ROFO Notice in connection
therewith.
(b) If prior to sending a ROFO Notice to Integrated pursuant to
Section 12.2(a) or after the expiration of ninety (90) days after a ROFO Option
Period, Integrated has not furnished a Call Notice pursuant to Section 12.1 and
the Americana Partners have obtained a Third Party Offer to purchase the ROFO
Interest at a price greater than the Call Option Price, then any Transfer of the
ROFO Interest by the Americana Partners shall be subject to the provisions of
Section 12.3, without first having to comply with the provisions of Section
12.2(a).
12.3. Right of First Refusal; Right to Compel Sale
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(a) Subject to the application of the provisions of Section 12.1
and 12.2, if at any time during the Call Period, the Americana Partners obtain a
Third Party Offer, they shall provide written notice to Integrated and the
Partnership setting forth the name and address of the proposed purchaser, the
purchase price and type of consideration which the prospective purchaser has
offered to pay, and any other material terms and conditions of the Third Party
Offer (the "ROFR Notice"). The ROFR Notice shall constitute an irrevocable offer
to sell the ROFO Interest to Integrated, and thereafter Integrated shall have
the irrevocable and exclusive option to acquire the ROFO Interest on the terms
and conditions set forth in the ROFR Notice pursuant to this Section 12.3(a).
The option of Integrated to purchase the ROFO Interest pursuant to this Section
12.3(a) shall be exercised by delivery of a Response Notice to the Americana
Partners and the Partnership within [ORIGINAL TEXT REDACTED] following receipt
of the ROFR Notice (the "ROFR Option Period"). Integrated shall have the right
to purchase the ROFO Interest for cash consideration or in shares of capital
stock of CoolBrands; provided that such shares must be freely transferable
without restriction and will be valued for purposes hereof at the opening sale
price on the Toronto Stock Exchange (or such other exchange on which such shares
are primarily traded) on the date of such payment; provided, further that if
such payment is made in shares, CoolBrands must implement arrangements where
such shares may be sold on the date of receipt for net cash proceeds to the
Americana Partners of not less than the amount of cash otherwise payable. If
part or all of the consideration to be paid for the ROFO Interest as stated in
the ROFR Notice is other than cash, the price stated in such ROFR Notice shall
be deemed to be the sum of the cash consideration, if any, specified in such
ROFR Notice, plus the fair market value of the non-cash consideration. The fair
market value of the non-cash consideration shall be determined in good faith by
the Partners or if the Partners cannot agree then the Partners shall engage an
investment banker or other financial expert of national reputation and
reasonably acceptable to the Partners to make such determination, and the
judgment of such expert as to the fair market value of such non-cash
consideration shall be binding upon the Partners. The costs of any such third
party determination shall be shared in proportion to the relative Percentage
Interests of the Americana Partners and Integrated. If Integrated did not
deliver a Response Notice prior to the expiration of the ROFR Option Period,
then the Americana Partners may Transfer the ROFO Interest to the proposed
purchaser pursuant to the ROFR Notice within [ORIGINAL TEXT REDACTED] of the
expiration of the ROFR Option Period. If after [ORIGINAL TEXT REDACTED]
following the expiration of the ROFR Option Period the Americana Partners have
not Transferred the ROFO Interest pursuant to the ROFR Notice, then any
subsequent Transfer will again be subject to the provisions of Section 12.2 and
12.3.
(b) If, and only if, the Third Party Offer is for a price greater
than the Call Option Price and Integrated does not elect to acquire the ROFO
Interest pursuant to Section 12.3(a), the Americana Partners shall have the
right to cause Integrated to sell in the proposed sale all, but not less than
all, of its Interest; provided, however, that the Americana Partners shall only
have such right to cause Integrated to sell its Interest during the Call Period.
If the Americana Partners shall so elect, they must first give notice in writing
to such effect (a "Required Sale Notice") to the Partnership and Integrated. The
Required Sale Notice shall set
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forth the name and address of the proposed purchaser, the purchase price of the
Interests, and any other material terms and conditions of the third party offer.
Upon the receipt of the Required Sale Notice, Integrated shall participate in
the proposed sale and the closing of such proposed sale shall be held at the
time and place designated by the proposed purchaser, but in any event within
[ORIGINAL TEXT REDACTED] after the date of the Required Sale Notice. At the
closing of such sale, Integrated shall deliver to the purchaser, against payment
of the purchase price, its Interest, to be sold to the purchaser free and clear
of all liens, charges, pledges and other encumbrances and accompanied by
transfer powers duly endorsed for transfer, any and all documentation evidencing
its Interest and such other documentation as reasonably requested by the
Americana Partners or the purchaser. Such sale shall be made on the same terms
and conditions specified in the Required Sale Notice. The Americana Partners
shall pay all expenses incurred by Integrated in connection with the Transfer.
(c) If after [ORIGINAL TEXT REDACTED] following the expiration of
the ROFR Option Period (if pursuant to Section 12.3(a) or the delivery of the
Required Sale Notice (if pursuant to Section 12.3(b), as applicable, the
Americana Partners have not Transferred the ROFO Interest pursuant to the ROFR
Notice or the Required Sale Notice, as applicable, then any subsequent Transfer
will again be subject to the provisions of Section 12.2 and 12.3.
12.4. Right of First Refusal of Americana Partners; Right of
Integrated to Compel Sale of Interest.
(a) If at any time during the Call Period, Integrated receives a
Third Party Offer to Transfer all, but not less than all of its Interests (the
"Integrated Interest"), it shall provide the Americana Partners with an ROFR
Notice. The ROFR Notice shall constitute an irrevocable offer to sell the
Integrated Interest to the Americana Partners, and thereafter the Americana
Partners shall have the irrevocable and exclusive option to acquire the
Integrated Interest on the terms and conditions set forth in the ROFR Notice
pursuant to this Section 12.4(a). The option of the Americana Partners to
purchase the Integrated Interest pursuant to this Section 12.4(a) shall be
exercised by delivery of a Response Notice to Integrated and the Partnership
within [ORIGINAL TEXT REDACTED] following receipt of the ROFR Notice. The
Americana Partners shall have the irrevocable and exclusive option to acquire
the Integrated Interest on the terms and conditions set forth in the ROFR
Notice. The option of the Americana Partners to purchase the Integrated Interest
shall be exercised by delivery of a Response Notice within [ORIGINAL TEXT
REDACTED] following receipt of the ROFR Notice (the "Integrated ROFR Option
Period"). The Americana Partners shall have the right to purchase the Integrated
Interest for cash consideration whether or not part or all of the consideration
specified in the ROFR Notice is other than cash. If part or all of the
consideration to be paid for the Integrated Interest as stated in the ROFR
Notice is other than cash, the price stated in such ROFR Notice shall be deemed
to be the sum of the cash consideration, if any, specified in such ROFR Notice,
plus the fair market value of the non-cash consideration. The fair market value
of the non-cash consideration shall be determined in good faith by the Partners,
or in the event that
36
the Partners are unable to agree upon the fair market value thereof, the
Partners shall engage an investment banker or financial expert of national
reputation and reasonably acceptable to the Partners, and the judgment of such
expert as to the fair market value of such non-cash consideration shall be
binding upon the Partners. The costs of any such third party determination shall
be shared in proportion to the relative Percentage Interests of the Americana
Partners and Integrated. If the Americana Partners did not deliver a Response
Notice prior to the expiration of the Integrated ROFR Option Period, then
Integrated may Transfer the Integrated Interest to the proposed purchaser
pursuant to the ROFR Notice within [ORIGINAL TEXT REDACTED] of the expiration of
the Integrated ROFR Option Period and if the purchase price is greater than or
equal to the Call Option Price then Integrated shall have the right to cause the
Americana Partners to sell their Interest in the proposed sale (a "Compelled
Sale"). Subject to the provisions of Section 12.4(b) with respect to a Compelled
Sale, if after [ORIGINAL TEXT REDACTED] following the expiration of the
Integrated ROFR Option Period the Americana Partners have not Transferred the
Integrated Interest pursuant to the ROFO Notice, then any subsequent Transfer
will again be subject to the provisions of Section 12.4.
(b) If Integrated elects to cause a Compelled Sale, it must give
notice in writing to such effect (a "Compelled Sale Notice") to the Partnership
and the Americana Partners. Upon the receipt of the Compelled Sale Notice, the
Americana Partners shall participate in the proposed sale, the Americana
Partners (or any successor or transferee thereof) shall approve such transaction
pursuant to Section 8.3, and the closing of such proposed sale shall be held at
the time and place designated by the proposed purchaser, but in any event within
[ORIGINAL TEXT REDACTED] after the date of the Compelled Sale Notice. At the
closing of such sale, the Americana Partners shall deliver to the purchaser,
against payment of the purchase price, its Interest, to be sold to the purchaser
free and clear of all liens, charges, pledges and other encumbrances and
accompanied by transfer powers duly endorsed for transfer, any and all
documentation evidencing its Interest and such other documentation as reasonably
requested by Integrated or the purchaser. Such sale shall be made on the same
terms and conditions specified in the Compelled Sale Notice.
12.5. Americana Tag Along. In the event that (i) Integrated is selling
the Interest of Integrated in the Partnership to a Person not Affiliated with
Integrated at a price equal to or greater than the Call Option Price, (ii) the
Americana Partners have not exercised its option to acquire the Interest of
Integrated in the Partnership on the terms and conditions set forth in the ROFR
Notice and (iii) the Americana Partners have not received a Compelled Sale
Notice, then the Americana Partners shall have the right to give notice in
writing to Integrated that they wish to sell their respective Interests in such
sale (a "Tag Along Notice"). Upon receipt of a Tag Along Notice, Integrated
shall not be permitted to consummate a sale of the Interests of Integrated in
the Partnership unless the Person or group purchasing such Interest (the
"Proposed Purchaser") also purchases the Interests of the Americana Partners,
which purchase shall be made on the same terms and conditions, including,
without limitation, the purchase price (the "Tag Along Price"), as the Proposed
Purchaser shall have offered to purchase the Integrated Interest. At the closing
of such purchase, the Proposed Purchaser shall deliver a certified or bank
37
cashier's check, cash or shall wire transfer the Tag Along Price (to the extent
the Tag Along Price is to be paid in cash) to the Americana Partners against the
simultaneous delivery of the Integrated Interest and all of the Americana
Partners' Interests, free and clear of all liens, charges, pledges and other
encumbrances and accompanied by transfer powers duly endorsed for transfer, any
and all documentation evidencing the Integrated Interest and all of the
Americana Partners' Interests and such other documentation as reasonably
requested by the Proposed Purchaser. Such Tag Along right shall not apply to any
indirect transfer as a result of a Change in Control of CoolBrands
International, Inc. In addition to the foregoing right, in the event that the
price at which Integrated proposes to sell its Interests is less than the Call
Option Price, then the Americana Partners shall have, at their option, the right
to a tag along right in accordance with the foregoing, or the right to purchase
all, but not less than all, of the Integrated Interest at a price equal to the
Americana Call Option Price; provided, however, that if the Americana Partners
exercise such call right and then directly or indirectly Transfer the Interests,
in whole or in part, in one or a series of related transactions within one year
after purchasing such Interests from Integrated for a price greater than the
Americana Call Option Price, the Americana Partners shall, upon the consummation
of such Transfer, pay to Integrated [ORIGINAL TEXT REDACTED] of the difference
between the Americana Call Option Price and the price received in such sale with
respect to the Interests (determined on a proportionate basis if the Interests
were not Transferred in whole). For purposes of this provision, the Americana
Partners agree that they will not take any action with respect to the Interests
which is intended to deprive Integrated of the benefit of this provision. All
payments made by the Americana Partners pursuant to this Section 12.5 shall be
paid by delivery of a certified or bank's cashier's check, cash or wire
transfer.
12.6. Change of Control of CoolBrands. If a Change of Control occurs
prior to the Call Period, then, Integrated, at its option, shall be required to
exercise either the Change of Control Call or the Termination, as follows:
(a) If Integrated shall so elect, then Integrated shall have the
right to acquire all, but not less than all, of the Americana Partners' Interest
in connection with such Change of Control (the "Change of Control Call"). If
Integrated so elects, it must first give notice in writing to such effect to the
Partnership and the Americana Partners. Upon receipt of such notice, the
Americana Partners shall be obligated to sell, and Integrated shall be obligated
to purchase, all but not less than all of the Americana Partners' Interests
within [ORIGINAL TEXT REDACTED] for the Put Price. At the closing of such
purchase, Integrated shall deliver a certified or bank cashier's check, cash or
shall wire transfer the Put Price to the Americana Partners against the
simultaneous delivery of the all of the Americana Partners' Interests, free and
clear of all liens, charges, pledges and other encumbrances and accompanied by
transfer powers duly endorsed for Transfer, any and all documentation evidencing
all of the Americana Partners' Interests and such other documentation as
reasonably requested by Integrated.
(b) If Integrated shall so elect, then Integrated shall have the
right to terminate (the "Termination") all of the rights and obligations of
Integrated pursuant to this
38
Agreement, the Original Agreements, the Management Agreement and any other
agreement related thereto and to withdraw in all capacities as a Partner, to be
effective immediately after the payment of the Termination Fee. If Integrated so
elects, it must first give notice in writing to such effect to the Partnership
and the Americana Partners. Within [ORIGINAL TEXT REDACTED] of such notice, and
as full and complete consideration for the Termination, Integrated shall (i)
Transfer all of its Interests to the Americana Partners, free and clear of all
liens, charges, pledges and other encumbrances and accompanied by transfer
powers duly endorsed for Transfer, (ii) pay the sum of [ORIGINAL TEXT REDACTED]
to the Americana Partners, payable by delivery of a certified or bank cashier's
check, cash or wire transfer, and (iii) if not previously contributed, Transfer
title to the Equipment to the Partnership, free and clear of all liens, charges,
pledges and other encumbrances, except those which attach by virtue of such
Transfer to the Partnership (collectively, such items (i) through (iii), the
"Termination Fee").
12.7. Americana Call Right. In the event that IBI has failed to
exercise the Option on or before January 1, 2005, then the Americana Partners
shall have the right to purchase all but not less than all of the Integrated
Interests for cash, at a price equal to the fair market value as determined in
good faith by the Partners or in the event the Partners shall not agree upon the
fair market value thereof, the Partners shall engage an investment banker or
financial expert of national reputation and reasonably acceptable to the
Partners, who shall determine the fair market value of each Partner's respective
Interest in the Partnership (without any control premiums or minority
discounts), and the judgment of such expert as to the fair market value of such
Interests shall be binding upon the Partners. The costs of any such third party
determination shall be shared in proportion to the relative Percentage Interests
of the Americana Partners and Integrated.
12.8. Withdrawals. Each of the Partners does hereby covenant and agree
that it will not withdraw, resign, retire or disassociate from the Partnership,
except as a result of a Transfer of its entire Interest in the Partnership
permitted under the terms of this Agreement and that it will carry out its
duties and responsibilities hereunder until the Partnership is terminated,
liquidated and dissolved under Section 12. No Partner shall be entitled to
receive any distribution or otherwise receive the fair market value of its
Interest in compensation for any purported resignation or withdrawal not in
accordance with the terms of this Agreement.
12.9. Interests Held by a Partner. For purposes of the provisions of
Section 12, the Interest held by a Partner shall be deemed to include any
Interest held by an Affiliate of such Partner, and any Interests held by such
Affiliate shall be subject to the same rights, restrictions and obligations set
forth in Section 12 as if held by such Partner and all references to Integrated
shall mean the Affiliates of IBI that are Partners.
Section 13. Dissolution.
13.1. Limitations. The Partnership may be dissolved, liquidated and
terminated only pursuant to the provisions of this Section 13, and, to the
fullest extent permitted by law but
39
subject to the terms of this Agreement, the parties hereto do hereby irrevocably
waive any and all other rights they may have to cause a dissolution of the
Partnership or a sale or partition of any or all of the Partnership's assets.
13.2. Exclusive Events Requiring Dissolution. The Partnership shall be
dissolved only upon the earliest to occur of the following events (a
"Dissolution Event"):
(a) at any time at the election of the General Partner, subject
to the consent of the Limited Partners if required pursuant to Section 8.3;
(b) at any time there are no Partners (unless otherwise continued
in accordance with the Act); or
(c) the entry of a decree of judicial dissolution pursuant to
Section 18-802 of the Act.
13.3. Liquidation. Upon the occurrence of a Dissolution Event, the
business of the Partnership shall be continued to the extent necessary to allow
an orderly winding up of its affairs, including the liquidation of the assets of
the Partnership pursuant to the provisions of this Section 13.3, as promptly as
practicable thereafter, and each of the following shall be accomplished:
(a) The General Partner shall cause to be prepared a statement
setting forth the assets and liabilities of the Partnership as of the date of
dissolution, a copy of which statement shall be furnished to all of the
Partners.
(b) The property and assets of the Partnership shall be
liquidated or distributed in kind under the supervision of the General Partner
as promptly as possible, but in an orderly, businesslike and commercially
reasonable manner.
(c) To the extent that an asset is to be distributed in kind, the
amount of the distribution shall be considered to be such fair market value of
the asset.
(d) The proceeds of sale and all other assets of the Partnership
shall be applied and distributed as follows and in the following order of
priority:
(i) to the satisfaction of the debts and liabilities of the
Partnership (contingent or otherwise) and the expenses of liquidation or
distribution (whether by payment or reasonable provision for payment),
other than liabilities to Partners or former Partners for distributions;
and
(ii) the balance, if any, to the Partners in accordance with
the provisions of Section 5, as if such balance were Cash Flow.
40
13.4. Continuation of the Partnership. Notwithstanding anything to the
contrary contained herein, the death, retirement, resignation, expulsion,
bankruptcy, dissolution or removal of a Partner shall not in and of itself cause
the dissolution of the Partnership, and the Partners are expressly authorized to
continue the business of the Partnership in such event, without any further
action on the part of the Partners.
Section 14. Indemnification.
14.1. Exculpation of Partners. No Partner or officer of the
Partnership shall be liable to the Partnership or to the other Partners for
damages or otherwise with respect to any actions, or failure to take an action,
in good faith and reasonably believed by such Partner or officer to be in or not
opposed to the best interests of the Partnership except to the extent any
related loss results from fraud, gross negligence, willful or wanton misconduct
or a knowing and culpable violation of law on the part of such Partner or
officer or the willful breach of any obligation under this Agreement or of the
fiduciary duties owed to the Partnership or the other Partners by such Partner
or officer.
14.2. Indemnification by Partnership. The Partnership hereby
indemnifies, holds harmless and defends the Partners, the officers and each of
their respective agents, officers, directors, members, managers, partners,
shareholders and employees from and against any loss, cost, expense, damage,
punitive damage, claim, liability or injury suffered or sustained by them
(including but not limited to any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim) by reason of or
arising out of (i) their activities on behalf of the Partnership or in
furtherance of the interests of the Partnership, (ii) their status as a Partner,
General Partner or officer of the Partnership, or (iii) the Partnership's
assets, property, business or affairs (including, without limitation, the
actions of any officer, director, member or employee of the Partnership or any
of its Subsidiaries), if the acts or omissions were not performed or omitted
fraudulently or as a result of gross negligence, willful or wanton misconduct or
a knowing and culpable violation of law by the indemnified party or as a result
of the willful breach of any obligation under this Agreement by the indemnified
party or of the fiduciary duties owed to the Partnership or the other Partners
by such Partner or Person. Reasonable expenses incurred by the indemnified party
in connection with any such proceeding relating to the foregoing matters shall
be paid or reimbursed by the Partnership in advance of the final disposition of
such proceeding upon receipt by the Partnership of (i) written affirmation by
the Person requesting indemnification of its good faith belief that it has met
the standard of conduct necessary for indemnification by the Partnership and
(ii) a written undertaking by or on behalf of such Person to repay such amount
if it shall ultimately be determined by a court of competent jurisdiction that
such Person has not met such standard of conduct, which undertaking shall be an
unlimited general obligation of the indemnified party but need not be secured.
Notwithstanding the foregoing provisions of this Section 14.2, the Partnership
will have no duty to indemnify, hold harmless or defend any of the Partners with
respect to claims brought among or between them to enforce the terms of this
Agreement.
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Section 15. Miscellaneous.
15.1. Notices. Any notice or demand which is required or provided to
be given under this Agreement shall be deemed to have been sufficiently given
and received for all purposes when delivered in writing by certified or
registered mail, postage and charges prepaid, return receipt requested, or
overnight delivery providing receipt of delivery, to the following addresses: if
to the Americana Partners, [ORIGINAL TEXT REDACTED] or at any other address
designated by the Americana Partners to the Partnership and Integrated in
writing; if to Integrated, c/o Integrated Brands, Inc., 4175 Veterans Highway,
Ronkonkoma, New York 11779, Attention: David J. Stein, with a copy to Goodwin
Procter LLP, 599 Lexington Avenue, New York, New York 10022, Attention: Daniel
R. Kaplan, Esq., or at any other address designated by the Integrated to the
Partnership and the Americana Partners in writing.
15.2. Governing Law. This Agreement and the rights of the Partners
hereunder shall be governed by, and interpreted in accordance with, the laws of
the State of New York.
15.3. Consent to Jurisdiction.
(a) Any legal action or proceeding with respect to this Agreement
or any document related hereto shall be brought solely in the courts of the
State of New York, New York County or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement,
each party hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The parties
hereto hereby irrevocably waive any objection, including, without limitation,
any objection to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(b) Each party irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such party
at its address provided herein.
(c) Nothing contained in this Section 15.3 shall affect the right
of any party hereto to serve process in any other manner permitted by law.
15.4. Successors. This Agreement shall be binding upon, and inure to
the benefit of, the parties and their successors and permitted assigns. Except
as otherwise provided herein, any Partner who Transfers its Interest as
permitted by the terms of this Agreement shall have no further liability or
obligation hereunder, except with respect to claims arising prior to such
Transfer.
15.5. Pronouns. Whenever from the context it appears appropriate, each
term stated in either the singular or the plural shall include the singular and
the plural, and pronouns
42
stated in either the masculine, the feminine or the neuter gender shall include
the masculine, feminine and neuter.
15.6. Table of Contents and Captions Not Part of Agreement. The table
of contents and captions contained in this Agreement are inserted only as a
matter of convenience and in no way define, limit or extend the scope or intent
of this Agreement or any provisions hereof.
15.7. Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable in any jurisdiction or in any respect, then
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired, and the Partners shall use
their best efforts to amend or substitute such invalid, illegal or unenforceable
provision with enforceable and valid provisions which would produce as nearly as
possible the rights and obligations previously intended by the Partners without
renegotiation of any material terms and conditions stipulated herein.
15.8. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
15.9. Entire Agreement and Amendment. This Agreement and the other
written agreements described herein between the parties hereto entered into as
of the date hereof, constitute the entire agreement between the Partners
relating to the subject matter hereof. In the event of any conflict between this
Agreement or such other written agreements, the terms and provisions of this
Agreement shall govern and control. This Agreement may only be amended by
written instrument executed by each Partner. No amendment or waiver by any
Partner shall be enforceable against such Partner unless it is in writing and
duly executed by such Partner.
15.10. Further Assurances. Each Partner agrees to execute and deliver
any and all additional instruments and documents and do any and all acts and
things as may be necessary or expedient to effectuate more fully this Agreement
or any provisions hereof or to carry on the business contemplated hereunder.
15.11. No Third Party Rights. The provisions of this Agreement are for
the exclusive benefit of the Partners and the Partnership, and no other party
(including, without limitation, any creditor of the Partnership) shall have any
right or claim against any Partner by reason of those provisions or be entitled
to enforce any of those provisions against any Partner.
15.12. Incorporation by Reference. Every Exhibit and Annex attached to
this Agreement is incorporated in this Agreement by reference unless this
Agreement otherwise expressly provides.
15.13. Limitation on Liability. Except as set forth in Section 14, the
Partners shall not be bound by, or be personally liable for, by reason of being
a Partner, a judgment,
43
decree or order of a court or in any other manner, for the expenses, liabilities
or obligations of the Partnership, and the liability of each Partner shall be
limited solely to the amount of its Capital Contributions as provided under
Section 4.
15.14. Specific Performance; Remedies. It is specifically understood
and agreed that any breach of the provisions of this Agreement by any person
subject hereto will result in irreparable injury to the other parties hereto,
that the remedy at law alone will be an inadequate remedy for such breach, and
that, in addition to any other remedies which they may have, such other parties
may enforce their respective rights by actions for, and shall be entitled to,
specific performance and injunctive relief, and each Person party hereto agrees
to waive, and use its best efforts to cause any Affiliates to waive, any
requirement for the securing or posting of any bond in connection with such
remedy. Whenever possible, each provision of this Agreement shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be deemed prohibited or invalid under such
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, and such prohibition or invalidity shall not
invalidate the remainder of such provision or the other provisions of this
Agreement.
15.15. No Waiver. One or more waivers of the breach of any provision
of this Agreement by any Partner shall not be construed as a waiver of a
subsequent breach of the same or any other provision, nor shall any delay or
omission by a Partner to seek a remedy for any breach of this Agreement or to
exercise the rights accruing to a Partner by reason of such breach be deemed a
waiver by a Partner of its remedies and rights with respect to such breach.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
AMERICANA FOODS LIMITED PARTNERSHIP
By: AF Sub Corp., its general partner
By: "signed"
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Name: [ORIGINAL TEXT REDACTED]
Title: [ORIGINAL TEXT REDACTED]
CBA FOODS LLC
By: Integrated Brands, Inc., its
managing member
By: "David J. Stein"
------------------------------------
Name: David J. Stein
Title: Co-CEO and Secretary
AMERICANA FOODS CORP.
By: "signed"
------------------------------------
Name: [ORIGINAL TEXT REDACTED]
Title: [ORIGINAL TEXT REDACTED]
AF SUB CORP.
By "signed"
-------------------------------------
Name: [ORIGINAL TEXT]
REDAC[ORIGINAL TEXT REDACTED]
EXHIBIT A
Initial Capital Accounts and Percentage Interests
[ORIGINAL TEXT REDACTED]