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EXHIBIT 10.7
REGISTRATION RIGHTS AGREEMENT
February 20, 1998
DFA Investment Company
1325 Airmotive Way, Suite 130
Reno, Nevada 89502
Ladies and Gentlemen:
Suiza Capital Trust, a statutory business trust formed under the laws
of the State of Delaware (the "Trust") by Suiza Foods Corporation (the
"Company"), a Delaware corporation, as sponsor, among others, proposes to issue
and sell to DFA Investment Company (the "Initial Purchaser"), upon the terms
set forth in a purchase agreement dated February 20, 1998 (the "Purchase
Agreement"), among the Initial Purchaser, the Company and the Trust, 5% Trust
Convertible Preferred Securities (liquidation amount $50 per Convertible
Preferred Security) (the "Preferred Securities") (the "Initial Placement"). As
an inducement to the Initial Purchaser to enter into the Purchase Agreement and
in satisfaction of a condition to the obligations of the Initial Purchaser
thereunder, the Company agrees with you, for the benefit of the holders (each a
"Holder" and, together, the "Holders") from time to time of the Preferred
Securities and the common stock, $.01 par value per share, of the Company
issuable upon conversion of the Preferred Securities and the 5% Convertible
Subordinated Debentures due 2018 issued by the Company (such Common Stock, the
"Registrable Securities").
1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in or pursuant to the Purchase
Agreement. All references to Sections herein are to Sections of this Agreement
unless otherwise indicated. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as
amended.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by ownership,
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Effectiveness Period" has the meaning set forth in Section 2(b)
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Declaration" means the Amended and Restated Declaration of Trust
dated as of February 20, 1998, among the Company and the Regular Trustee, the
Property Trustee and the Delaware Trustee named therein.
"Indenture" means the Indenture dated as of February 20, 1998, among
the Company, as issuer, and Wilmington Trust Company, as trustee.
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
"Shelf Registration Statement" means a Shelf Registration statement of
the Company pursuant to the provisions of Section 2 hereof filed with the
Commission which covers the Registrable Securities, on an appropriate form
under Rule 415 under the Act, or any similar rule that may be adopted by the
Commission, amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
2. Shelf Registration. (a) The Company shall use its
commercially reasonable efforts to file, within 60 calendar days following the
receipt by the Company of a written request therefore by the Holders
representing more than 50% of the Registrable Securities (the "Demand Date"),
with the Commission a Shelf Registration Statement relating to the offer and
sale of the Registrable Securities by the Holders from time to time in
accordance with the methods of distribution elected by such Holders and set
forth in such Shelf Registration Statement and, thereafter, shall use
commercially reasonable efforts to cause such Shelf Registration Statement to
be declared effective under the Act within 120 calendar days following the
Demand Date; provided, however, that no Holder shall be entitled to sell or
otherwise transfer any Registrable Securities held by it unless such Holder is
in compliance with Section 3(g) hereof. The Holders as a group shall be
entitled to make only one demand on the Company pursuant to this Agreement, and
under no circumstances shall the Company be required to file more than one
Shelf Registration Statement pursuant to this Agreement.
(b) The Company shall use its commercially reasonable
efforts to keep the Shelf Registration Statement continuously effective in
order to permit the Prospectus forming part thereof to be usable by Holders for
a period (the "Effectiveness Period") from the date the Shelf Registration
Statement is declared effective that will terminate upon the earliest of the
following: (A) when all outstanding Registrable Securities held by persons
which are not affiliates of the Trust or the Company may be resold without
registration under the Act pursuant to Rule 144(k)
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under the Act or any successor provision thereto or any other applicable law,
rule or regulation, whether now in effect or hereinafter promulgated, adopted
or issued, or (B) when all outstanding Registrable Securities have been sold
pursuant to the Shelf Registration Statement; provided, that such Effectiveness
Period will be extended by the aggregate number of days during which any
Holders are prevented from selling Registrable Securities as a result of
Section 4 of this Agreement.
3. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) (1) The Company shall advise the Holders:
(i) when a Shelf Registration Statement,
and any amendment thereto, has been filed with the
Commission and when the Shelf Registration Statement
or any post-effective amendment thereto has become
effective; and
(ii) of any request by the Commission for
amendments or supplements to the Shelf Registration
Statement or the Prospectus included therein or for
additional information.
(2) The Company shall advise the Holders:
(i) the issuance by the Commission of
any stop order suspending effectiveness of the Shelf
Registration Statement or the initiation of any
proceedings for that purpose; and
(ii) the receipt by the Company of any
notification with respect to the suspension of the
qualification of the securities included therein for
sale in any jurisdiction or the initiation of any
proceeding for such purpose.
(b) The Company shall use its commercially reasonable
efforts to prevent the issuance, and, if issued, to obtain the withdrawal, of
any order suspending the effectiveness of any Shelf Registration Statement at
the earliest possible time.
(c) The Company shall furnish to each Holder of
Registrable Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one copy of such Shelf Registration
Statement and any post-effective amendments thereto, including financial
statements and schedules contained therein, provided, that the Company shall
not be required to furnish to the Holders reports and other documents
incorporated by reference in the Shelf Registration Statement or any exhibits
thereto (including those incorporated by reference).
(d) The Company shall, during the Effectiveness Period,
deliver to each Holder of Registrable Securities included within the coverage
of any Shelf Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary prospectus)
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included in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request, and the Company consents (except
upon and during the continuance of any event described in Section 4) to the use
of the Prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto during the Effectiveness Period.
(e) Prior to any offering of Registrable Securities
pursuant to any Shelf Registration Statement, the Company shall register or
qualify or cooperate with the Holders participating in an offering of the
Registrable Securities and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and sale
under the securities or blue sky laws of such jurisdictions in the United
States as any such Holders reasonably request in writing and do any and all
other acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Registrable Securities covered by such Shelf
Registration Statement; provided, however, that in no event shall the Company
be obligated to (1) qualify generally to do business or as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to so qualify but for this Section 3(e), (ii) file any
general consent to service of process in any jurisdiction where it is not as of
the date hereof then so subject or (iii) subject itself to taxation in any such
jurisdiction if it is not so subject.
(f) Unless any Registrable Securities shall be in
book-entry only form, the Company shall cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to any Shelf Registration Statement
free of any restrictive legends and in such permitted denominations and
registered in such names as the Holders may request in connection with the sale
of Registrable Securities pursuant to such Shelf Registration Statement.
(g) The Company may require each Holder of Registrable
Securities to be sold pursuant to any Shelf Registration Statement to furnish
to the Company such information regarding the Holder and the distribution by
such Holder of such Registrable Securities required by law to be disclosed in
the Shelf Registration Statement (the "Requisite Information") or as the
Company may otherwise from time to time reasonably require for inclusion in
such Shelf Registration Statement and the Company may exclude from such
registration statement such information as to any Holder that fails to furnish
such information within a reasonable time after receiving such request.
The Company shall file, within 15 business days of the receipt
of notice from any Holder which includes the Requisite Information with respect
to such Holder, a Prospectus supplement pursuant to Rule 424 to amend or
supplement such Shelf Registration Statement to include in the Shelf
Registration Statement the Requisite Information as to such Holder (and the
Registrable Securities held by such Holder), and the Company shall provide such
Holder within 15 business days of such notice with a copy of such Prospectus as
so amended or supplemented containing the Requisite Information in order to
permit such Holder to comply with the
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Prospectus delivery requirements of the Securities Act in a timely manner with
respect to any proposed disposition of such Holder's Registrable Securities.
No Holder shall be entitled to use the Prospectus unless and
until such Holder shall have furnished the information required by this Section
3(g).
(h) The Company shall use its commercially reasonable
efforts to take all other steps necessary to effect the registration, offering
and sale of the Registrable Securities covered by the Shelf Registration
Statement contemplated hereby pursuant to such Shelf Registration Statement.
4. Standstill.
(a) Any Holder participating in an offering of Registrable
Securities will notify the Company two business days prior to selling any
Registrable Securities pursuant to any Shelf Registration Statement. If, upon
receipt of such a notice, the Company certifies to such Holder in writing that
(i) due to a change in circumstances or a pending transaction, the Shelf
Registration Statement contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and (ii) the public disclosure required
to correct such misstatement or omission would be injurious to the Company,
then such Holder will refrain from selling any Registrable Securities pursuant
to the Shelf Registration Statement for the period of time, not to exceed 45
days for each circumstance or transaction, requested by the Company. The
Company will use reasonable efforts to minimize the time period during which
any Holder is required to refrain from selling Registrable Securities under
this paragraph.
(b) If, during the Effectiveness Period, the Company commences an
underwritten offering of Common Stock on its own behalf or on behalf of selling
stockholders, the Holders participating in an offering of Registrable
Securities will refrain from selling Registrable Securities pursuant to the
Shelf Registration Statement for a period of time beginning ten days before the
anticipated effective date of the Company's offering (as disclosed by the
Company to such Holders in writing) and ending 90 days after such effective
date (or 30 days after the beginning of such period, if such effective date has
not yet occurred).
5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
Sections 2 and 3 hereof.
6. Indemnification and Contribution. (a) In connection with any
Shelf Registration Statement, the Company shall indemnify and hold harmless the
Initial Purchaser, each Holder participating in an offering of Registrable
Securities, each person, if any, who controls any such Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
and each Holder's respective directors, officers, employees, trustees and
agents, as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue
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statement of a material fact contained in any Shelf
Registration Statement (or any amendment thereto) covering
Registrable Securities, including all documents incorporated
therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or
arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or
any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation or
any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of
counsel chosen by the Holders or such Holder (except to the
extent otherwise expressly provided in Section 6(c) hereof)),
reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 6(a);
provided that this indemnity shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or omission
or alleged untrue statement or omission (i) made in reliance upon and in
conformity with written information furnished to the Company by such Holder
participating in an offering of Registrable Securities in writing expressly for
use in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) or (ii) contained in any
preliminary prospectus if such Holder failed to send or deliver a copy of the
Prospectus (or any amendment or supplement thereto) to the Person asserting
such losses, claims, damages or liabilities on or prior to the delivery of
written confirmation of any sale of securities covered thereby to such Person
in any case where such Prospectus (or any amendment or supplement thereto)
would have cured the defect giving rise to such loss, claim, damage or
liability. Any amounts advanced by the Company to an indemnified party
pursuant to this Section 6 as a result of such losses shall be returned to the
Company if it shall be finally determined by such a court in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company.
(b) Each Holder participating in an offering of
Registrable Securities agrees, severally and not jointly, to indemnify and hold
harmless the Company and the other selling
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Holders and each of their respective directors, officers (including each
officer of the Company who signed the Shelf Registration Statement), employees,
trustees and agents and each Person, if any, who controls the Company, or any
other selling Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all loss, liability,
claim, damage and expense whatsoever described in the indemnity contained in
Section 6(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Shelf
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such selling Holder expressly
for use in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto); provided, however, that no
such Holder shall be liable for any claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Registrable Securities
pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers served on
such indemnified party, but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability which it may have
otherwise than under this Section 6 unless and to the extent it is not
prejudiced as a proximate result of such failure. An indemnifying party may
participate at its own expense in the defense of any such action. If an
indemnifying party so elects within a reasonable time after receipt of such
notice, such indemnifying party, jointly with any other indemnifying party, may
assume the defense of such action with counsel chosen by it (subject to the
approval of the indemnified parties defendant in such action, which approval
shall not be unreasonably withheld), unless such indemnified party reasonably
determines that there may be legal defenses available to such indemnified party
which are different from or in conflict with those available to such
indemnifying party. If an indemnifying party is not entitled to assume the
defense of such action as a result of the proviso to the preceding sentence,
counsel for such indemnifying party shall be entitled to conduct the defense of
such indemnifying party and counsel for each indemnified party or parties shall
be entitled to conduct the defense of such indemnified party or parties. If an
indemnifying party assumes the defense of an action in accordance with and as
permitted by the provisions of this paragraph, such indemnifying party shall
not be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel (in addition to any local counsel) separate from its own counsel
for all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnity provision agreement
provided for in this Section 6 is for any reason held to be unavailable to the
indemnified parties although applicable in accordance with its terms, the
Company, and the Holders participating in an offering of Registrable Securities
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company and the Holders, as incurred; provided, that no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
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Securities Act) shall be entitled to contribution from any Person that was not
guilty of such fraudulent misrepresentation. As between the Company and the
Holders, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect the relative
fault of the Company, on the one hand, and the Holders, on the other hand, with
respect to the statements or omissions which resulted in such loss, liability,
claim, damage or expense, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault of the Company, on the
one hand, and of the Holders, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, on the one hand,
or by or on behalf of the Holders, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Holders agree that it would
not be just and equitable if contributions pursuant to this Section 6 were to
be determined by pro rata allocation or by any other method of allocation that
does not take into account the relevant equitable considerations. For purposes
of this Section 6(d), each director, officer, employee, trustee, agent and
Person, if any, who controls a Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Holder, and each director, officer, employee, trustee and
agent of each of the Company, and each Person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company. No
party shall be liable for contribution with respect to any action, suit,
proceeding or claim settled without its written consent.
7. Miscellaneous.
(a) No Inconsistent Agreements; Other Registration
Rights. The Company shall not enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The Company is
not currently a party to any agreement granting any registration rights with
respect to any of its securities to any person which conflicts with the
Company's obligations hereunder or gives any other party the right to include
any securities in any Registration Statement filed pursuant hereto (except in
each case, as have been waived).
(b) Amendments and Waivers. The provision of this
Agreement, including the provisions of this sentence, may not be amended,
qualified, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of the Holders representing more than 50% of the Registrable
Securities from time to time.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
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1) if to a Holder, at the address of such Holder
as it appears on the register for the Preferred Securities or
the Common Stock, as applicable; and
2) if to the Company, initially at its address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have
duly given when received, if delivered in person or by fax;
five days after mailing, if sent by mail, or the day following
transmission, if sent by overnight courier.
The Company by notice to the others may designate additional or
different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the permitted successors and assigns of
each of the parties and the Holders, including, without the need for an express
assignment or any consent by the Company thereto, subsequent holders of
Registrable Securities. The Company hereby agrees to extend the benefits of
this Agreement to any holder of Registrable Securities and any such Holder may
specifically enforce the provisions of this Agreement as if an original party
hereto. In the event of any Fundamental Change as such term is defined in the
Indenture occurring prior to the end of the Effectiveness Period, the Company
shall require that the Person formed by such consolidation or resulting from
such merger or that acquires the assets or shares of the Company, as the case
may be (and its parent corporation, if appropriate), assume the obligations
under this Agreement and amend this Agreement to provide for registration of
any securities of such Persons into which the Preferred Securities or Debenture
may become convertible as a result of such transaction or transactions as
appropriate to provide for the continued benefits hereof are thereby made
applicable to such securities.
(e) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Agreement shall be governed by
the internal laws of the State of Delaware, without regard to principles of
conflicts of law.
(h) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any
way impaired or affected thereby, it being intended that all of the rights and
privileges of the parties shall be enforceable to the fullest extent permitted
by law.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Trust and you.
Very truly yours,
SUIZA CAPITAL TRUST
By: /s/ Michael Lewis
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Name: Michael Lewis
Title: Regular Trustee
SUIZA FOODS CORPORATION
By: /s/ Tracy L. Noll
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Name: Tracy L. Noll
Title Vice President
DFA INVESTMENT COMPANY
By: /s/ Janice C. George
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Name: Janice C. George
Title Vice President
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