Document:

Exhibit 10.85

 

FORM OF

INDEMNITY ESCROW AGREEMENT

 

This INDEMNITY ESCROW AGREEMENT (this “Escrow
Agreement”) is entered into as of this       day
of July, 2004 by and between Southern Iowa Gaming Co., an Iowa corporation, St. Joseph Riverboat
Partners, a Missouri general partnership  and
Mark Twain Casino, L.L.C., a
Missouri limited liability company (collectively,
and together with their respective affiliates, “Seller”), Herbst Gaming, Inc., a Nevada corporation, (together with its affiliates, “Buyer”)
and Lawyers Title of Arizona (“Escrow Agent”).

 

Recitals

 

WHEREAS, concurrently herewith, Seller and
Buyer, or their designated affiliates, as the case may be, are entering into
those certain Asset Purchase and Sale Agreements (the “Agreements”),
copies of which are attached hereto as Exhibits A, B and C and by this
reference incorporated herein.

 

WHEREAS, as a material inducement to execute
and deliver the Agreements and as a condition to the consummation of the
transactions contemplated by the Agreements, Seller has agreed to indemnify,
defend and hold harmless the Buyer Indemnitees from and against certain Damages
in accordance with the Agreements.

 

WHEREAS, As security for the Seller’s
indemnity obligations under the Agreements, Seller has agreed to establish an
escrow account for the purposes of providing funding for Seller’s Secured
Indemnity Obligations.

 

WHEREAS, Buyer and Seller now desire to
evidence their agreement regarding the disbursement of the Indemnity Fund (as
defined below) pursuant to the terms of this Escrow Agreement.

 

Agreements

 

NOW THEREFORE, for and in consideration of the mutual covenants and promises contained
herein and in the Agreements, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Escrow Agent,
Seller and Buyer hereby agree as follows:

 

1.                                       Defined
Terms.  Capitalized terms used in
this Escrow Agreement without definition shall have the meanings ascribed to
them in the Agreements, and in the event of any conflict among the Agreements,
the meanings ascribed to them in the Southern Iowa Gaming Agreement that is
attached hereto as Exhibit A.  

 

2.                                       Appointment
of Escrow Agent.  Buyer and Seller
hereby appoint the Escrow Agent to act as escrow agent hereunder and the Escrow
Agent agrees to act as such.

 

 

Indemnity Escrow Agreement

 

3.                                       Establishment
of the Indemnity Fund. 
(a)  At the Closing, Seller shall deposit (or cause to be
deposited) with the Escrow Agent (A) the sum of $7,187,500 in cash (the “Cash
Security Deposit”) and (B) an irrevocable letter of credit in the amount of
$7,187,500 (the “Seller Letter of Credit”, and together with the Cash
Security Deposit, the “Indemnity Escrow Amount”), in accordance with the
terms of Section 18.4 of each of the Agreements.  The Escrow Agent shall promptly acknowledge in writing to Buyer
and Seller receipt thereof.

 

(b)                                 The
Escrow Agent shall hold the Indemnity Escrow Amount and all interest and other
amounts earned thereon (collectively, as it shall exist from time to time, the
“Indemnity Fund”), in escrow pursuant to the terms hereof.  Upon receipt of any cash representing any
portion of the Escrow Amount, whether on the Effective Date or upon any
drawdown of the Seller Letter of Credit, the Escrow Agent agrees to deposit
such portion of the Indemnity Escrow Amount in a separate special
interest-bearing account in a federally chartered bank with security for the
amount of the Indemnity Escrow Amount in excess of the federally insured amount
(the “Escrow Account”).  At no
time shall any portion of the Indemnity Fund be invested in either Buyer or
Seller, or in any affiliate of either of them.

 

4.                                       Payments
from the Indemnity Fund.  (a)  Buyer shall initiate a claim against the
Indemnity Fund by delivering to the Seller, with a copy to the Escrow Agent, a
written notice (an “Indemnification Notice”, or in the case of an
Unliquidated Claim, an “Unliquidated Claim Notice”), which
Indemnification Notice, or Unliquidated Claim Notice, as the case may be,
shall:

 

(i)                                     state that the
Buyer or the Buyer Indemnitee to which such claim relates is entitled to
indemnification under one or more of the Agreements and has paid or incurred
one or more Damages (each a “Covered Damage”) that satisfy the
indemnification limitation provisions set forth in Section 18.3 of the
relevant Agreement or Agreements;

 

(ii)                                  state in good faith
either (A) in the case of an Indemnification Notice, the aggregate amount of
each such Covered Damage or (B) in the case of an Unliquidated Claim Notice, an
estimate of the aggregate amount of each such Covered Damage (the amount so
stated pursuant to this Section 4(a)(ii), the “Indemnification Amount”);

 

(iii)                               state in good faith the
amount of cash necessary to satisfy such Covered Damages (which in the case of
an Unliquidated Claim Notice shall be 110% of the Indemnification Amount); and

 

(iv)                              specify in reasonable
detail the nature and basis of each such Covered Damage, including the identity
of the parties known to be involved.

 

(b)                                 If
the Seller shall object in good faith to any portion of any Indemnification
Amount specified in any Indemnification Notice, the Seller shall, within thirty
(30) days after receipt (or deemed receipt pursuant to Section 10 hereof)
by the Seller from Buyer of such Indemnification Notice, deliver to the Escrow
Agent, with a copy to Buyer, a certificate, executed by the Seller (a “Certificate
of Objections”),

 

2

 

(i)                                     specifying each
such amount to which the Seller objects in good faith; and

 

(ii)                                  specifying in
reasonable detail the nature and basis for each such good faith objection.

 

(c)                                  If
the Escrow Agent shall not have received a Certificate of Objections objecting
to an Indemnification Amount on or prior to the thirtieth (30th) day after
receipt (or deemed receipt pursuant to Section 10 hereof) by the Seller of
an Indemnification Notice specifying such Indemnification Amount, the Seller
shall be deemed to have acknowledged that the Indemnification Amount claimed on
such Indemnification Notice is correct and final and the Escrow Agent shall
thereafter transfer to or to the order of Buyer out of the Indemnity Fund an
amount of cash equal to the Indemnification Amount set forth in the
Indemnification Notice, provided that no such transfer shall be made with
respect to any Unliquidated Claim Notice unless Buyer shall, within sixty (60)
days after the final determination of the Indemnification Amount estimated in
such Unliquidated Claim Notice, have filed an Indemnification Notice setting
forth the liquidated Indemnification Amount.

 

(d)                                 If
the Escrow Agent receives, on or prior to the thirtieth (30th) day after
receipt (or deemed receipt pursuant to Section 10 hereof) by the Seller of
an Indemnification Notice, a Certificate of Objections objecting to the Indemnification
Amount specified in such Indemnification Notice, or any portion thereof, the
portion not objected to shall be distributed to or upon the order of Buyer out
of the Indemnity Fund and the portion so objected to shall be held by the
Escrow Agent and shall not be released from the Indemnity Fund, except in
accordance with either:

 

(i)                                     a written
memorandum pursuant to Section 5(a) hereof, executed by an authorized
signatory of each of Buyer and the Seller, or

 

(ii)                                  written instructions
executed by an authorized signatory of each of Buyer and the Seller and a copy
of the final judgment of the arbitrator having jurisdiction over the matters
relating to the claim, as provided in Section 5,

 

upon receipt of which the Escrow Agent shall distribute to or upon the
order of Buyer the amount (if any) by which the amount provided for in the
written memorandum or judgment, as the case may be, exceeds the amount not
objected to and previously distributed in accordance with this
Section 4(d).

 

(e)                                  In the event that at the time for any payment
to be made by the Escrow Agent to Buyer pursuant to this Escrow Agreement there
shall be insufficient cash in the Indemnity Fund for such payment to be made,
the Escrow Agent shall make a draw down against the Seller Letter of Credit, in
accordance with the terms thereof, in such amount as shall be necessary to
satisfy such payment obligation, and shall disburse the cash proceeds of such
draw down in accordance with the terms of this Escrow Agreement.  In any event, within two business days prior
to the expiration of the Seller Letter of Credit, if an Indemnification Notice
has been filed and (i) either (A) a Certificate of Objections has been filed
with respect to such Indemnification Notice, but the Damages the subject thereof
have not been resolved, or (B) the

 

3

 

period
for filing a Certificate of Objections has not expired, and (ii) there would be
insufficient cash in the Indemnity Fund to satisfy the sum of the amount of the
Damages specified in such Indemnification Notice plus the aggregate amount of
all Damages that are the subject of previously filed Indemnification Notices
and that have not as of such date been resolved, then the Escrow Agent shall
make a draw down against the Seller Letter of Credit in such an amount as would
be sufficient, when aggregated with the amount of cash then held by the Escrow
Agent in the Indemnity Fund, to permit the payment in cash of all unpaid, and
110% of all unresolved, Damages, and the cash proceeds of such draw down shall
become part of the Indemnity Fund and shall be disbursed in accordance with the
terms of this Escrow Agreement.

 

(f)                                    On
the date that is six (6) months after the Closing Date (the “First Payout
Date”), Escrow Agent shall make a distribution from the cash amounts then held
by the Escrow Agent to Seller and/or permit the Seller to make a reduction in
the face amount of the Seller Letter of Credit, if any, in accordance with the
following:

 

(i)                                     To the extent that
50% of the amount of the Cash Security Deposit as of the Closing Date exceeds
the sum of (x) all amounts theretofore paid out pursuant to this Section 4
(the “First Paid Out Amount”), and (y) 110% of the cumulative
Indemnification Amounts claimed by Buyer in all Indemnification Notices and
Unliquidated Claim Notices that Buyer has delivered to Seller by the First
Payout Date, but which have not already been paid out or otherwise resolved
(such amount, together with the First Paid Out Amount is referred to as “First
Indemnification Amount”), the Escrow Agent shall make a cash distribution
of such excess to the Seller, and the Seller shall be authorized to effect, and
the Escrow Agent shall permit, a reduction in the face amount of the Seller
Letter of Credit by 50% of the face amount as of the Closing Date of the Seller
Letter of Credit.

 

(ii)                                  If, however, the
First Indemnification Amount exceeds 50% of the amount as of the Closing Date
of the Cash Security Deposit but is less than 50% of the amount as of the
Closing Date of the Indemnity Escrow Amount, then no cash distribution shall be
made to Seller, and the Seller shall be authorized to effect, and the Escrow
Agent shall permit, a reduction in the face amount of the Seller Letter of
Credit by an amount equal to the difference of (x) 50% of the face amount as of
the Closing Date of the Seller Letter of Credit, less (y) the amount of any
such excess.

 

(iii)                               If the First
Indemnification Amount exceeds 50% of the amount of the Indemnity Escrow Amount
as of the Closing Date, then the Escrow Agent shall not make any cash
distributions nor shall Seller be authorized to effect, nor shall the Escrow
Agent permit, any reduction in the face amount of the Seller Letter of Credit.

 

(g)                                 On
the date that is one (1) year after the Closing Date (the “Second Payout
Date”), the Escrow Agent shall make a distribution from the cash amounts then
held by the Escrow Agent to Seller and/or permit the Seller to make a reduction
in the face amount of the Seller Letter of Credit, if any, in accordance with
the following:

 

4

 

(i)                                     To the extent that
75% of the amount as of the Closing Date of the Cash Security Deposit exceeds
the sum of (x) all amounts theretofore paid out in satisfaction of Damages pursuant
to this Section 4 (the “Second Paid Out Amount”), and (y) 110% of
the cumulative Indemnification Amounts claimed by Buyer in all Indemnification
Notices and Unliquidated Claim Notices which Buyer has delivered to Seller by
the Second Payout Date, but which have not already been paid out or otherwise
resolved (the said amount, together with Second Paid Out Amount is referred to
as “Second Indemnification Amount”), the Escrow Agent shall make a cash
distribution of such excess to the Seller, and the Seller shall be authorized
to effect, and the Escrow Agent shall permit, a reduction in the face amount of
the Seller Letter of Credit by an amount equal to 25% of the face amount as of
the Closing Date of the Seller Letter of Credit.

 

(ii)                                  If, however, the
Second Indemnification Amount exceeds 75% of the amount as of the Closing Date
of the Cash Security Deposit but is less than 75% of the amount as of the
Closing Date of the Indemnity Escrow Amount, then no cash distribution shall be
made to Seller, and Seller shall be authorized to effect, and the Escrow Agent
shall permit, a reduction in the face amount of the Seller Letter of Credit by
an amount equal to the difference of (x) 25% of the face amount as of the
Closing Date of the Seller Letter of Credit, less (y) the amount of any such
excess.

 

(iii)                               If the Second
Indemnification Amount exceeds 75% of the amount of the Indemnity Escrow Amount
as of the Closing Date, then the Escrow Agent shall not make any distributions
from the Cash Security Deposit nor shall Seller be authorized to effect, nor
shall the Escrow Agent permit, any reduction in the face amount of the Seller
Letter of Credit.

 

(h)                                 On
the date that is eighteen (18) months after the Closing Date (the “Third
Payout Date”), the Escrow Agent shall make distributions from the cash amounts
then held by the Escrow Agent and/or authorize the Seller to make a reduction
in the face amount of the Seller Letter of Credit, if any, in accordance with
the following:

 

(i)                                     To the extent that
the amount of cash then remaining in the Indemnity Fund exceeds 110% of the
cumulative Indemnification Amounts claimed by Buyer in all Indemnification
Notices and Unliquidated Claim Notices which Buyer has delivered to Seller by
the Third Payout Date, but which have not already been paid out or otherwise
resolved by the Third Payout Date (such amount is referred to as “Final
Indemnification Amount”), Escrow Agent shall distribute such excess (A)
first, in satisfaction of all resolved but unpaid Damages, and (B) second
to Seller, and Seller shall be authorized to effect, and the Escrow Agent shall
permit, the cancellation of the Seller Letter of Credit.

 

(ii)                                  If, however, the
Final Indemnification Amount exceeds the amount of cash then remaining in the
Indemnity Fund but is less than the aggregate amount of the Indemnity Fund,
then no distribution of cash shall be made to Seller from the Indemnity Fund,
and the Seller shall be authorized to effect, and

 

5

 

the Escrow Agent shall permit, a reduction in the face amount of the
Seller Letter of Credit by an amount equal to the difference of (x) the face
amount then outstanding of the Seller Letter of Credit, less (y) the amount of
any such excess.

 

(iii)                               If the Final
Indemnification Amount exceeds the amount then remaining in the Indemnity Fund,
then no distribution of cash shall be made to Seller from the Indemnity Fund,
nor shall Seller be authorized to effect, nor shall the Escrow Agent permit,
any reduction in the face amount, or cancellation, of the Seller Letter of
Credit.

 

(i)                                     Upon
the termination of this Escrow Agreement in accordance with Section 9, the
Escrow Agent shall promptly liquidate any investments of the Indemnity Fund and
distribute to the Seller the sum of the resulting cash and other property, and
the Seller shall be authorized to effect, and the Escrow Agent shall permit,
the cancellation of the Seller Letter of Credit.

 

(j)                                     Notwithstanding
any other provision of this Escrow Agreement to the contrary, at any time prior
to the termination of this Escrow Agreement, the Escrow Agent shall, if so
instructed in writing signed by Buyer and the Seller, pay from the Indemnity
Fund, as instructed, to or upon the order of Buyer, as directed in such
writing, the amount of cash or other property so instructed.

 

5.                                       Resolution
of Conflicts.  (a)  In case the Seller shall timely object in
writing to any claim or claims by Buyer made in any Indemnification Notice, as
provided in Section 4(b) hereof, the Seller and Buyer shall attempt in
good faith for forty-five (45) days following delivery of the Certificate of
Objections to agree upon the rights of the respective parties with respect to
each of such claims.  If the Seller and
Buyer should so agree, a memorandum setting forth such agreement shall be
prepared and signed by an authorized signatory of both parties and shall be
delivered to the Escrow Agent.  The
Escrow Agent shall be entitled to rely on any such memorandum and shall
distribute amounts from the Indemnity Fund in accordance with the terms
thereof.

 

(b)                                 If
no such agreement can be reached in accordance with the provisions of
Section 5(a), either Buyer or the Seller may, by written notice to the
other, with a copy to the Escrow Agent, demand arbitration of the matter in
accordance with the provisions of Section 11 of this Escrow Agreement,
unless the amount of the damage or loss is at issue in pending litigation with
a third party, in which event arbitration shall not be commenced until such
amount is ascertained or both parties agree to arbitration.  The decision of the arbitrator as to the
validity and amount of any claim in such Indemnification Notice shall be
binding and conclusive upon the parties to this Escrow Agreement, and the Escrow
Agent shall be entitled to act in accordance with such decision and make or
withhold payments out of the Indemnity Fund in accordance therewith.

 

6.                                       Taxes.  (a) 
The parties agree to treat the Indemnity Fund as owned by Seller and not
received by Buyer, in all cases to the extent not paid to Buyer pursuant to
Section 4 hereof, and to file all Tax Returns on a basis consistent with
such treatment.

 

6

 

(b)                                 All
dividends, distributions, interest and gains earned or realized on the amounts
in the Indemnity Fund (“Earnings”) shall be treated as having been
received by Seller for United States federal income tax purposes.  Unless otherwise required by law, the
parties agree that, for United States federal income tax purposes, Seller shall
report Earnings as its income.

 

(c)                                  Any
disbursement of amounts in the Indemnity Fund to Buyer shall be treated for
United States federal income tax purposes as consisting, in part, of imputed
interest on the amount of such payment from the date of this Escrow Agreement
until the date of payment in accordance with the Code and Treasury Regulations
promulgated thereunder.

 

(d)                                 Seller
shall timely file information statements with the IRS (to the extent required
by law).  Seller may require Buyer to
provide Seller with an IRS Form W-9 or W-8BEN, as applicable, and any other
forms and documents that Seller may reasonably request to complete such
information returns and payee statements (collectively, the “Tax Reporting
Documentation”).  The parties hereto
understand that if such Tax Reporting Documentation is not provided to Seller,
then Seller may be required by the Code to withhold a portion of any imputed
interest or other payments made to Buyer. 
All tax withheld pursuant to this subsection (d) shall be treated
as having been paid to the person from whom such amounts were withheld for
purposes of determining any further amounts to which such person is entitled
hereunder.

 

7.                                       Assignment
of Rights to the Indemnity Fund; Assignment of Obligations; Successors.  This Escrow Agreement may not be assigned by
operation of law or otherwise without the express written consent of Buyer and
Seller (which consent may be granted or withheld in their sole discretion), and
any assignment in violation of this requirement shall be void; provided,
however, any corporation or association into which the Escrow Agent may
be converted or merged, or with which it may be consolidated, or to which it
may sell or transfer all or substantially all of its corporate trust business
and assets as a whole or substantially as a whole, or any corporation or
association resulting from any such conversion, sale, merger, consolidation or
transfer to which the Escrow Agent is a party, shall be and become the
successor Escrow Agent under this Escrow Agreement and shall have and succeed
to the rights, powers, duties, immunities and privileges as its predecessor,
without the execution or filing of any instrument or paper or the performance
any further act, provided such corporation or association is a bank or trust company
having a corporate trust office in Phoenix, Arizona and assets in excess of
$100 million.  This Escrow Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns.

 

8.                                       Escrow
Agent.  (a)  Except as expressly contemplated by this
Escrow Agreement or by joint written instructions from Buyer and Seller, the
Escrow Agent shall not sell, transfer or otherwise dispose of, in any manner,
all or any portion of the Indemnity Fund, except pursuant to an order of a
court of competent jurisdiction.

 

(b)                                 The
duties and obligations of the Escrow Agent shall be determined solely by this
Escrow Agreement, and the Escrow Agent shall not be liable except for the
performance or non-performance of such duties and obligations as are
specifically set forth in this Escrow Agreement.

 

7

 

(c)                                  In
the performance of its duties hereunder, the Escrow Agent shall be entitled to
rely upon any document, instrument or signature believed by it in good faith to
be genuine and signed by any party hereto or an authorized officer or agent
thereof and shall not be required to investigate the truth or accuracy of any
statement contained in any such document or instrument.  The Escrow Agent may assume that any person
purporting to give any notice in accordance with the provisions of this Escrow
Agreement has been duly authorized to do so.

 

(d)                                 The
Escrow Agent shall not be liable for any error of judgment, or any action
taken, suffered or omitted to be taken, hereunder while acting in good faith
and in the exercise of reasonable judgment. 
The Escrow Agent may consult with independent counsel of its own choice
and shall have full and complete authorization and protection for any action
taken or suffered by it hereunder in good faith and in accordance with the
reasonable opinion of such counsel.

 

(e)                                  The
Escrow Agent shall have no duty as to the collection or protection of the
Indemnity Fund or income thereon, nor as to the preservation of any rights
pertaining thereto, beyond the safe custody of any such funds actually in its
possession.

 

(f)                                    As
compensation for its services to be rendered under this Escrow Agreement, for
each year or any portion thereof, the Escrow Agent shall receive a fee in the
amount specified in Schedule A to this Escrow Agreement and shall be
reimbursed upon request for all expenses, disbursements and advances, including
reasonable fees of outside counsel, if any, incurred or made by it in
connection with the preparation of this Escrow Agreement and the carrying out
of its duties under this Escrow Agreement. 
All such fees and expenses shall be paid by Seller.

 

(g)                                 The
Escrow Agent may at any time resign by giving thirty (30) days’ prior written
notice of resignation to Buyer and Seller. 
Buyer and Seller may at any time jointly remove the Escrow Agent by
giving twenty (20) days’ prior written notice signed by each of them to the
Escrow Agent.  If the Escrow Agent shall
resign or be removed, a successor Escrow Agent, which shall be a bank, title
insurance company, or trust company having a corporate trust office in Phoenix,
Arizona or St. Joseph, Missouri and assets in excess of $100 million, and which
shall be reasonably acceptable to Buyer, shall be appointed by Seller by written
instrument executed by Seller and Buyer and delivered to the Escrow Agent and
to such successor Escrow Agent and, thereupon, the resignation or removal of
the predecessor Escrow Agent shall become effective and such successor Escrow
Agent, without any further act, deed or conveyance, shall become vested with
all right, title and interest to all cash and property held hereunder by such
predecessor Escrow Agent, and such predecessor Escrow Agent shall, on the
written request of Seller, Buyer or the successor Escrow Agent, execute and
deliver to such successor Escrow Agent all the right, title and interest
hereunder in and to the Indemnity Fund of such predecessor Escrow Agent and all
other rights hereunder of such predecessor Escrow Agent.  If no successor Escrow Agent shall have been
appointed within thirty (30) days of a notice of resignation by the Escrow
Agent, the Escrow Agent’s sole responsibility shall thereafter be to hold the
Indemnity Fund until the earlier of its receipt of designation of a successor
Escrow Agent, a joint written instruction by Buyer and Seller and termination
of this Escrow Agreement in accordance with its terms.

 

8

 

(h)                                 In
the event of any disagreement (other than as evidenced by a Certificate of
Objections) between any of the parties (other than Escrow Agent) to this Escrow
Agreement, or between them or any of them and any other person or entity
resulting in conflicting or adverse claims or demands being made in connection
with the Indemnity Fund, or in the event that Escrow Agent, in good faith,
shall be in doubt as to what action it should take hereunder, Escrow Agent at
its option may refuse to comply with any claims or demands on it, or refuse to
take any other action hereunder, so long as such disagreement continues or such
doubt exists, and, in any such event, Escrow Agent shall not be or become
liable in any way or to any person or entity for its failure or refusal to act,
and Escrow Agent shall be entitled to either;

 

(i)                                     continue
so to refrain from acting until (A) the rights of all parties shall have been
determined by a final and unappealable order of a court of competent
jurisdiction or by a final and unappealable award of arbitrators, or (B) all
differences shall have been resolved by agreement among all of the interested
persons or entities, and Escrow Agent shall have been notified thereof in
writing signed by all such persons or entities, or

 

(ii)                                  file
an interpleader action in any court of competent jurisdiction.

 

(i)                                     Buyer
and Seller shall jointly and severally indemnify, defend and hold the Escrow
Agent harmless from and against any and all loss, damage, tax (other than any
tax associated with the receipt by the Escrow Agent of fees, expenses and other
payments hereunder), liability and expense that may be incurred by Escrow Agent
arising out of or in connection with its duties, obligations or performance as
Escrow Agent hereunder, except as caused by Escrow Agent’s gross negligence or
willful misconduct, including the legal costs and expenses of bringing an
interpleader action pursuant to Section 8(h)(ii) of this Escrow Agreement
and of defending itself against any claim or liability in connection with its
performance or non-performance hereunder. 
The terms of this Section 8(i) shall survive the termination of
this Escrow Agreement and, with respect to claims arising in connection with
Escrow Agent’s duties while acting as such, the resignation or removal of
Escrow Agent.

 

9.                                       Termination.  This Escrow Agreement shall terminate (the “Termination
Date”) on the earlier of: (a) two (2) business days following the
distribution of all amounts that are distributable with respect to the Final
Indemnification Amount set forth in the Final Officer’s Certificate delivered
prior to the date set forth in Section 4(h) hereof, or, if no Final
Officer’s Certificate shall have been delivered prior to the date set forth in
Section 4(h), such date in Section 4(h), and (b) the date on which
there are no funds or other property remaining in the Indemnity Fund.

 

10.                                 Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed given (a) upon personal
delivery to the party to be notified or delivery by facsimile (with
acknowledgment of complete transmission), (b) one (1) business day after
the business day of deposit with a nationally recognized overnight courier
service for next day delivery, freight prepaid, or (c) three (3) business
days after deposit with the United States Post Office for delivery by registered
or certified mail, postage prepaid.  Any
such communication shall be addressed to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):

 

9

 

	
  (i)

  	
   

  	
  If
  to Buyer:

  	
   

  	
  Herbst
  Gaming Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  5195
  Las Vegas Blvd.

  
	
   

  	
   

  	
   

  	
   

  	
  Las
  Vegas, Nevada  89118

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:
  Ed Herbst and Sean Higgins

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  a copy to:

  	
   

  	
  Gibson,
  Dunn & Crutcher, LLP

  
	
   

  	
   

  	
   

  	
   

  	
  333
  S. Grand Avenue

  
	
   

  	
   

  	
   

  	
   

  	
  Los
  Angeles, California  90071-3197

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:
  Peter Ziegler

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  If
  to Seller:

  	
   

  	
  to
  the address set forth for such Seller in the relevant Agreement at Exhibit A,
  B or C, as the case may be.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  a copy to:

  	
   

  	
  Howard
  Grace

  
	
   

  	
   

  	
   

  	
   

  	
  7575
  North 16th Street

  
	
   

  	
   

  	
   

  	
   

  	
  Suite
  1

  
	
   

  	
   

  	
   

  	
   

  	
  Phoenix,
  Arizona  85020

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  If
  to Escrow Agent:

  	
   

  	
  Lawyers
  Title of Arizona

  
	
   

  	
   

  	
   

  	
   

  	
  1850
  North Central Avenue, Suite 125

  
	
   

  	
   

  	
   

  	
   

  	
  Phoenix,
  Arizona  85004-4590

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:
  Sandy Butler

  

 

11.                                 Arbitration.  Any and all questions,
disputes or controversies arising in connection with this Escrow Agreement
(with the exception of any remedy seeking equitable relief which shall not be
subject to this Section 11), in interpretation, application, performance,
nonperformance of any instructions executed and delivered hereunder
(collectively “Disputes”) shall, at the demand of any party hereto, be
determined by arbitration.  Buyer and
Seller shall appoint a single arbitrator (“Arbitrator”) who is licensed by the
American Arbitration Association (“AAA”) to arbitrate such
Disputes.  In the event Buyer and Seller
cannot agree on the selection of the Arbitrator, each party shall select one
Arbitrator who shall together select the single Arbitrator who shall arbitrate
the matter.  Upon making a determination
with respect to any dispute, the Arbitrator shall submit a written decision on
each such Dispute to Seller and Buyer. 
Any determination by the Arbitrator with respect to any Disputes shall
be final and binding on each party to this Escrow Agreement.  The forum for any arbitration will be Los
Angeles, California.  The arbitration
shall be conducted in accordance with the Commercial Arbitration Rules of the
AAA as in effect for commercial arbitrations conducted by the AAA.  Seller and Buyer agree that the costs of the
Arbitrator shall be borne as determined by the Arbitrator.  Judgment upon the award of the Arbitrator
may be entered in any Court having jurisdiction thereof.

 

12.                                 Governing
Law.  This Escrow Agreement shall be
governed by, and construed in accordance with, the laws of the State of Arizona
applicable to contracts executed and to be performed entirely within that
State.  Any controversy or claim arising
out of or relating to this Escrow Agreement or a breach hereof shall be settled
in accordance with the arbitration provisions set forth in Section 11 of
this Escrow Agreement.

 

10

 

13.                                 Amendments.  This Escrow Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of,
Buyer, Seller and the Escrow Agent or (b) by a waiver in accordance with
Section 14 of this Escrow Agreement.

 

14.                                 Waiver.  Buyer, Seller and the Escrow Agent may
(a) extend the time for the performance of any obligation or other act of
any other party hereto or (b) waive compliance with any agreement or
condition contained herein.  Any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed by Buyer, in the case of a waiver or extension by Buyer, Seller,
in the case of a waiver or extension by Seller, or the Escrow Agent, in the
case of a waiver or extension by the Escrow Agent.  Any waiver of any term or condition shall not be construed as a
waiver of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition, of this Escrow Agreement.  The failure of any party to assert any of
its rights hereunder shall not constitute a waiver of any of such rights.

 

15.                                 Severability.  In the event that any provision of this
Escrow Agreement or the application thereof, becomes or is declared by a court
of competent jurisdiction to be illegal, void or unenforceable, the remainder
of this Escrow Agreement will continue in full force and effect and the
application of such provision to other persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties hereto.  Buyer, Seller and the Escrow Agent further
agree to use commercially reasonable efforts to replace such void or
unenforceable provision of this Escrow Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of such void or unenforceable provision.

 

16.                                 Entire
Agreement; No Third-Party Beneficiaries. 
This Escrow Agreement, the Agreements and the Deposit Escrow Agreement
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Escrow Agreement. 
This Escrow Agreement is not intended to confer upon any Person other
than the parties any rights or remedies.

 

17.                                 Counterparts.  This Escrow Agreement may be executed in one
or more counterparts (including by facsimile), all of which shall be considered
one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
party, it being understood that all parties need not sign the same counterpart.

 

***Signature Pages Follow***

 

11

 

IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed as of the date first written above.

 

	
   

  	
  BUYER

  
	
   

  	
   

  
	
   

  	
  Herbst Gaming, Inc.,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ESCROW AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  Lawyer’s Title of Arizona

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

	
   

  	
  SELLER

  
	
   

  	
   

  
	
   

  	
  Southern
  Iowa Gaming Co.,

  
	
   

  	
  an
  Iowa corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  St.
  Joseph Riverboat Partners,

  
	
   

  	
  a
  Missouri general partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Continental
  Gaming, Inc.,

  
	
   

  	
   

  	
  a
  Missouri corporation,

  
	
   

  	
   

  	
  its
  managing partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Mark
  Twain Casino, L.L.C.,

  
	
   

  	
  a
  Missouri limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Cardinal
  Gaming, Inc.,

  
	
   

  	
   

  	
  a
  Missouri Corporation, its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

SCHEDULE A

 

1.                                       The
Escrow Agent shall be paid a one-time fee of Three Hundred Dollars ($300.00)
upon receipt of the Cash Security Deposit.

 

2.                                       The
Escrow Agent shall be paid a one-time fee of Twenty Five Dollars ($25.00) with
respect to each check issued by the Escrow Agent in connection with any partial
or full release or payment of cash funds held by the Escrow Agent pursuant to
the terms of this Escrow Agreement.

 

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Exhibit 4.7  

  
 

    FORM OF AMENDED AND RESTATED
  SHAREHOLDERS AGREEMENT    
    

        THIS AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (this "Agreement"), dated as
of            , 2004, is by and
among Merisant Worldwide, Inc., a Delaware corporation formerly known as Tabletop Holdings, Inc. (together with any corporate successor thereto, whether by merger, consolidation, or
otherwise, the "Company"), Tabletop Holdings, LLC, a Delaware limited liability company (the
"LLC"), the persons named in Exhibit A as Initial Investors (the "Initial
Investors") and the persons named in Exhibit A as Additional Investors (the "Additional
Investors," and, together with the Initial Investors, the "Investors"). The Investors, together with the Company and the LLC,
are hereinafter referred to as the "Parties." In this Agreement, "Shareholders" shall refer to the LLC
and the Investors. 

        WHEREAS,
the Company, the LLC and the Initial Investors are parties to that certain Shareholders Agreement dated as of March 17, 2000 (the "Existing
Shareholders Agreement"); 

        WHEREAS,
the Company is presently contemplating an initial public offering of its income deposit securities ("IDSs"), each representing
one share of the Company's Class A Common Stock, par value $0.01 per share (together with any securities issued or distributed in respect thereof, or in substitution therefor, the
"Class A Common Stock") and $            principal amount of the Company's    % Senior Subordinated Notes due 2019
(the
"Senior Subordinated Notes") as well as a separate issuance of $            principal amount of the Senior Subordinated Notes (not in the form
of
IDSs) (the "Separate Senior Subordinated Notes," the issuance of the IDSs and the Separate Senior Subordinated Notes herein referred to as the
"Offering"); 

        WHEREAS,
in connection with the Offering and immediately preceding the consummation thereof, each issued and outstanding share of common stock, par value $0.01 per share (the
"Existing Common Stock"), of the Company will be converted into            shares of Class B Common Stock, par value $0.01 per share
(together with any securities issued or distributed in respect thereof, or in substitution therefor (other than pursuant to Article VI hereof), the "Class B
Common Stock," and, together with the Class A Common Stock, the "Common Stock"), of the Company (the
"Conversion") pursuant to the Amended and Restated Certificate of Incorporation of the Company; 

        WHEREAS,
immediately after the Conversion, each of the LLC and the Initial Investors will be the owner of the number of shares of Class B Common Stock set forth opposite its name
on Exhibit A hereof; 

        WHEREAS,
upon the completion of the Offering, the Company shall, subject to the terms and conditions set forth in this Agreement, repurchase from the LLC and the Initial Investors
Class B Common Stock as set forth in Section 7.2 hereof; 

        WHEREAS,
promptly after the consummation of the Offering, each of the Additional Investors and certain of the Initial Investors, as a result of their receipt of shares of Class B
Common Stock pursuant to the Company's Stock Appreciation Rights Plan ("SAR Plan") (and assuming no exercise of the Over-Allotment Option),
will be the owner of the additional number of shares of Class B Common Stock set forth opposite its name on Exhibit A hereof; 

        WHEREAS,
pursuant to an underwriting agreement entered into among the Company and the underwriters of the Offering (collectively, the
"Underwriters"), the Company has granted the Underwriters an option to purchase additional IDSs (the "Over-Allotment
Option"), the proceeds of which, if exercised, will be used by the Company to repurchase a portion of the remaining shares of Class B Common Stock held by the
Shareholders as set forth in Section 7.3 hereof; 

        WHEREAS,
pursuant to Section 1 of the Existing Shareholders Agreement, the Shareholders have agreed to vote for and consent to any actions required with respect to the Offering
and raise no 

 

objections
against the Offering and to take all reasonable actions in connection with the consummation of the Offering as requested by the Board of Directors of the Company (the
"Board"); 

        WHEREAS,
entrance into this Agreement is a condition to each of the Additional Investors' and certain of the Initial Investors' receipt of Class B Common Stock pursuant to the SAR
Plan; 

        WHEREAS,
it is necessary, in connection with the consummation of the Offering, for the Shareholders to make certain representations and agreements as set forth herein; and 

        WHEREAS,
the Parties now desire to amend and restate the Existing Shareholders Agreement in its entirety, effective upon consummation of the Offering. 

        NOW,
THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, agree that this Agreement shall, in accordance with Section 7.1 hereof, amend and supersede in its entirety the Existing Shareholders Agreement, and agree as
follows: 

Article I

 Representations, Warranties and Covenants of the Company  

        1.1    Representations, Warranties and Covenants of the
Company.    The Company represents and warrants to, and covenants and agrees with, each of the Shareholders as follows: 

        (a)   The
Company is a corporation validly existing and in good standing under the laws of the State of Delaware. 

        (b)   The
Company has full corporate power and corporate authority to make, execute, deliver and perform this Agreement and to carry out all of the transactions provided for
herein. 

        (c)   The
Company has taken such corporate action as is necessary or appropriate to enable it to perform its obligations hereunder, and this Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in accordance with the terms hereof. 

        (d)   The
Company will not acquire, directly or indirectly, any interest in , or derivative position determined by referenc to the value of, any Senior Subordinated Notes or
Separate Senior Subordinated Notes, except through a repurchase or redemption of 100% of the Senior Subordinated Notes and Separate Senior Subordinated Notes outstanding, whether issued in connection
with the Offering, or thereafter; provided, however, that the Company or any of its subsidiaries may
acquire IDSs. 

        (e)   The
Company is not party to, and is not aware of, any plan, agreement or arrangement pursuant to which any person who is purchasing Separate Senior Subordinated Notes in
the Offering would or could acquire any IDSs or any capital stock of the Company or transfer any of the Separate Senior Subordinated Notes to any holder of IDSs or capital stock of the Company. The
Company has no
actual knowledge that the representations contained in the Registration Statement on Form S-1, as amended, filed with the Securities and Exchange Commission in connection with the
Offering (the "Form S-1") set forth under the heading "Notice to Purchasers of Separate Senior Subordinated Notes and Acknowledgement
of Purchaser Intent" will be untrue as of the time such representations are to be made by any person who is purchasing Separate Senior Subordinated Notes in the Offering. 

        (f)    In
connection with the annual audit of the Company's financial statements by its independent auditors, the Company agrees to make reasonable efforts to cooperate with
the Company's independent auditors for the purpose of confirming the accuracy of the representations and compliance by the Company and each Shareholder, as applicable, with the covenants contained in
Sections 1.1(d) and (e) and Sections 2.1(c), (d) and (e) hereof. 

2

 
Article II

 Representations, Warranties and Covenants of Each Shareholder  

        2.1    Representations, Warranties and Covenants of Each
Shareholder.    Each of the Shareholders severally represents and warrants to, and covenants and agrees with, the Company as follows: 

        (a)   Such
Shareholder has full legal right, capacity, power and authority (including the due authorization by all necessary corporate or partnership action in the case of
corporate or partnership Shareholders) to enter into this Agreement and to perform such Shareholder's obligations hereunder without the need for the consent of any other person or entity; and this
Agreement has been duly authorized, executed and delivered and constitutes the legal, valid and binding obligation of such Shareholder, enforceable against such Shareholder in accordance with the
terms hereof. 

        (b)   Such
Shareholder has received a copy of the Form S-1, and has been given the opportunity to obtain information regarding the business and affairs of
the Company to such Shareholder's satisfaction. 

        (c)   Such
Shareholder (and any of such Shareholder's affiliates, as defined below) will not acquire, directly or indirectly (other than as a result of the exchange rights set
forth in Article VI hereof), any Separate Senior Subordinated Notes or IDSs in the Offering or at any time after the Offering, in each case until such time as such Shareholder (and any of such
Shareholder's affiliates) no longer owns an equity interest in the Company or any rights to acquire an equity interest in the Company. Such Shareholder (and any of such Shareholder's affiliates)
currently has no plan, intent or arrangement of any kind to complete the direct or indirect acquisition of any Separate Senior Subordinated Notes or IDSs other than in accordance with
Article VI hereof. As used in this Section 2.1, an "affiliate" of a Shareholder shall mean (i) any person bearing a relationship to the Shareholder described in
Section 267(b) of the Internal Revenue Code of 1986, as amended, or (ii) any person owned or controlled by the Shareholder or by the same interests as the Shareholder within the meaning
of Section 482 of the Internal Revenue Code of 1986, as amended. 

        (d)   Such
Shareholder (and any of such Shareholder's affiliates) will not, directly or indirectly, enter into a constructive ownership transaction within the meaning of
Section 1260(d) of the Internal Revenue Code of 1986, as amended, with respect to the Separate Senior Subordinated Notes (assuming that the Separate Senior Subordinated Notes are financial
assets for the purposes of Section 1260(d)) until such time as such Shareholder (and any of such Shareholder's affiliates) no longer owns an equity interest in the Company or any rights to
acquire an equity interest in the Company. 

        (e)   Such
Shareholder has read the section of the Form S-1 entitled "Notice to Purchasers of Separate Senior Subordinated Notes and Acknowledgement of
Purchaser Intent" and has no actual knowledge that any representation contained therein will be untrue at the time such representation is made by any person who is purchasing Separate Senior
Subordinated Notes in the Offering. Such Shareholder is not aware of any plan or arrangement whereby any purchaser of Separate Senior Subordinated Notes in the Offering would or could acquire any IDSs
or any capital stock of the Company or transfer the Separate Senior Subordinated Notes to any holder of IDSs or capital stock of the Company. 

        (f)    In
connection with the annual audit of the Company's financial statements by its independent auditors, such Shareholder agrees to make commercially reasonable efforts to
cooperate with the Company's independent auditors for the purpose of confirming the accuracy of the representations and the compliance by each Shareholder, as applicable, with the representations and
covenants contained in Sections 2.1(c), (d) and (e) hereof. 

3

 

        (g)   Effective
upon the consummation of the Offering, such Shareholder hereby waives any preemptive rights or registration rights, or the failure to receive advance notice
under any such rights, that such Shareholder may have had under the Existing Shareholders Agreement, and any such preemptive rights or registration rights under the Existing Shareholders Agreement
shall no longer be of any force or effect. 

        (h)   The
number of shares of Existing Common Stock held of record and beneficially by such Shareholder (prior to giving effect to the Conversion) is set forth opposite such
Shareholder's name on Exhibit A. Such Shareholder has good, valid and marketable title to the Existing Common Stock held by such Shareholder free
and clear of any liens, charges, claims, pledges, security interests, conditional sale agreements and other encumbrances whatsoever (other than the Existing Shareholders Agreement). 

        (i)    Such
Shareholder has not Transferred (as hereinafter defined) all or any part of the Existing Common Stock held by such Shareholder. 

        2.2    Reliance.    Each Shareholder
acknowledges that the Company and each of the other Shareholders is entering into this Agreement in reliance upon such Shareholder's representations and warranties and other covenants and agreements
contained herein, and that counsel to the Company and counsel to the underwriters and the Company's lenders will rely upon such Shareholder's representations and warranties and other covenants and
agreements contained herein for the purpose of issuing certain opinions to the Company, to the underwriters and to the lenders in connection with the Offering and related transactions. 

Article III

 Transfer Restrictions  

        3.1    Provisions Regarding Transfers of Shares of Class B Common
Stock.    The following provisions shall apply with respect to the Transfer (as hereinafter defined) of any shares of Class B Common
Stock owned by any Shareholder: 

        (a)   Each
Shareholder is prohibited from Transferring any of his or its Class B Common Stock except as contemplated by Article VI hereof or to Permitted
Transferees (as hereinafter defined); provided, however, that no Transfer shall be effected except in
compliance with the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), (and applicable state securities laws)
or pursuant to an available exemption therefrom. 

        (b)   No
Transfer shall, in any event, be made by any Shareholder unless in connection with such Transfer, the applicable transferee has complied with the terms and provisions
of this Agreement. No Shareholder or transferee may effect any Transfer of shares of Class B Common Stock, whether to a Permitted Transferee or otherwise (other than in compliance with
Article VI hereof), unless the transferee executes an agreement pursuant to which such transferee agrees to be bound by the terms and provisions of this Agreement applicable to the transferor
(except as otherwise specifically provided herein). Any purported Transfer in violation of this covenant shall be null and void and of no force and effect and the purported transferee shall have no
rights or privileges in or with respect to the Company. As used herein, "Transfer" means the making of any sale, exchange, assignment, hypothecation,
gift, security interest, pledge or other encumbrance, or any contract therefor, any voting trust or other agreement or arrangement with respect to the transfer of voting rights (including any proxy or
similar arrangement (whether or not revocable)) or any other beneficial interest in any of the shares of Class B Common Stock, the creation of any other claim thereto or any other transfer or
disposition whatsoever, whether voluntary or involuntary, affecting the right, title, interest or possession in or to such shares of Class B Common Stock. 

4

 

        Prior
to any proposed Transfer of any shares of Class B Common Stock (other than in accordance with Article VI hereof), the holder thereof shall give written notice to the
Company describing the manner and circumstances of the proposed Transfer accompanied, if requested by the Company, by a written opinion of legal counsel reasonably satisfactory to the Company,
addressed to the Company and the transfer agent, if other than the Company, and reasonably satisfactory in form and substance to each addressee, to the effect that the proposed Transfer of the shares
of Class B Common Stock may be effected without registration under the Securities Act and applicable state securities laws. Each certificate evidencing the shares transferred shall bear the
legend set forth in Section 3.2, except that such certificate shall not bear such legend if the opinion of counsel referred to above is to the
further effect that such legend is not required in order to establish compliance with any provision of the Securities Act or applicable state securities laws. 

        (c)(i) If
any Shareholder other than the LLC desires to Transfer shares of Class B Common Stock (other than in accordance with Article VI hereof) (such
Shareholder being herein referred to as the "Transferor Shareholder"), then such Transfer must be to a person who shall have made a  bona fide offer to
purchase such shares and the Transferor Shareholder shall promptly furnish to all other Shareholders (the
"Shareholder Offerees") and the Company a notification (the "Notice of Transfer") of such desire to
Transfer such shares and of the bona fide offered price for such shares proposed to be Transferred, the method of payment of such offered price, the
identity of the prospective purchaser or purchasers (the "Proposed Purchaser") and all other pertinent terms and conditions of such  bona fide offer.

         (ii)  For
a period of 15 days commencing on the date of its receipt of the Notice of Transfer, the Shareholder Offerees shall have the right to purchase all or any
portion of the shares of Class B Common Stock proposed to be Transferred upon the same terms and conditions and at the bona fide offer price as
described in the Notice of Transfer. The specific portion of such shares which each Shareholder Offeree shall be so entitled to purchase shall be determined on a pro rata basis in proportion to the
respective shares of each Shareholder Offeree desiring to purchase the offered shares
available for purchase. Any Shareholder Offeree desiring so to purchase such shares shall give notification of such desire to the Transferor Shareholder and the Company and all other Shareholder
Offerees confirming such desire and the proposed terms of purchase. In the event that any Shareholder Offeree does not purchase its full pro rata share of any such shares proposed to be Transferred,
such unpurchased shares shall be offered by the Transferor Shareholder to the Shareholder Offerees subscribing to purchase shares on a pro rata basis on similar terms of purchase. In the event that
the Shareholder Offerees do not purchase, in accordance with the provisions of this clause (ii), all of the shares proposed to be Transferred as described in the Notice of Transfer, the Company
shall have the exclusive right, by a vote of the disinterested directors, to agree to purchase all or any portion of such shares proposed to be Transferred that remain after the application of this  Section 3.1(c)(ii)
 upon the same terms and conditions as described in the Notice of Transfer. If the Company desires to so purchase such shares
it shall give notification of such desire to the Transferor Shareholder and all other Shareholders confirming such desire and the proposed terms of purchase. No such shares shall be made available for
purchase by any non-Shareholder pursuant to the remaining provisions of this Section 3.1 unless and until all Shareholder Offerees
and the Company shall have had an opportunity to purchase all such shares in accordance with the provisions of this clause (ii). 

        (iii)  The
closing of any purchase by the Company or any Shareholder Offerees of any offered shares of Class B Common Stock as provided in this  Section 3.1(c) shall take place on such date as designated
by the Company or such Shareholder Offeree occurring within 30 days after
receipt by the Transferor Shareholder of the last notification to be provided to the 

5

 

Transferor
Shareholder in accordance with the terms hereof from the Company or such Shareholder Offeree of the exercise of the Company's or such Shareholder Offeree's right to purchase hereunder. At
such closing, the Transferor Shareholder shall deliver to the Company or such Shareholder Offeree, as the case may be, such documentation as the Company or such Shareholder Offeree shall reasonably
request to evidence the Transfer of such offered shares, against payment therefor by the Company or such Shareholder Offeree. 

        (iv)  In
the event that, after compliance with the foregoing provisions of this Section 3.1(c), the Company and the
Shareholder Offerees, taken together, fail to purchase all of the shares of Class B Common Stock proposed to be Transferred by the Transferor Shareholder, then for a period of 60 days
commencing on the date that neither the Company nor any Shareholder Offeree remains entitled to exercise its right to purchase any offered shares in accordance with the foregoing provisions of this  Section 3.1(c),
 the Transferor Shareholder may Transfer to the Proposed Purchaser all of the shares described in the Notice of Transfer;  provided, however, that any such Transfer to the Proposed Purchaser must be made for the consideration
and upon the terms and conditions set forth in the Notice of Transfer. If the Transferor Shareholder shall not consummate the Transfer of such shares to the Proposed Purchaser within such
60-day period, such shares shall remain subject to the provisions of this Agreement and the Transferor Shareholder shall not thereafter Transfer any such shares to any person without again
first complying with all of the provisions of this Agreement. 

        (d)   As
used herein, (i) prior to the automatic separation of the IDSs pursuant to the terms thereof,"Permitted
Transferee" shall mean any person other than a holder of the Company's Class A
Common Stock, including a holder of Class A Common Stock held as part of an IDS, or the Company's or Merisant Company's long-term indebtedness in any form, including, without
limitation, the Senior Subordinated Notes, whether held as Separate Senior Subordinated Notes or as part of an IDS, and (ii) after the automatic separation of the IDSs pursuant to the terms
thereof, "Permitted Transferee" shall mean any person. 

        3.2    Legend.    Each certificate evidencing
any shares of Class B Common Stock, unless such transfer is pursuant to a registered public offering of the Class B Common Stock, in which case the first paragraph below shall not apply,
shall bear the following legend in addition to any other legend required under applicable law: 

	

"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE LAWS OR ANY EXEMPTION
FROM REGISTRATION IS AVAILABLE."
	

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SECURITYHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. THE SALE, TRANSFER OR OTHER
DISPOSITION OF THE SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH."

        3.3    Notation.    A
notation will be made in the appropriate transfer records of the Company with respect to the restrictions on transfer of the Class B Common Stock referred to in this Agreement. 

        3.4    Limitation on Repurchase of Shares of Class B Common Stock and Dividend
Payments.    Each Shareholder understands that the Company has entered into certain financing and other agreements 

6

 

which
contain prohibitions, restrictions and limitations on the ability of the Company to purchase any of the shares of Class B Common Stock and IDSs (including the shares of Class A
Common Stock and the Senior Subordinated Notes comprising the IDSs) and, under certain circumstances, to pay dividends on the Common Stock. 

Article IV

 Corporate Actions  

        4.1    Directors.    For so long as the LLC is
the beneficial owner (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of at least 5% of the outstanding shares of Common Stock in the
aggregate on a fully-diluted basis and as a result the LLC has the right to elect two directors in accordance with the Amended and Restated Certificate of Incorporation of the Company, each
Shareholder and Permitted Transferee agrees that it shall take, at any time and from time to time, all action necessary (including voting the Class B Common Stock
owned by him, her or it, calling special meetings of shareholders and executing and delivering written consents) to ensure that the Board at all times includes two individuals designated by the LLC. 

        4.2    Right to Remove Certain of the Company's
Directors.    The LLC may request that any director designated by it be removed (with or without cause) by written notice to the other
Shareholders, and, in any such event, each Shareholder shall promptly consent in writing or vote or cause to be voted all shares of Class B Common Stock now or hereafter owned or controlled by
it for the removal of such person as a director. In the event any person ceases to be a director, such person shall also cease to be a member of any committee of the Board. 

        4.3    Right to Fill Certain Vacancies in the
Board.    In the event that a vacancy is created on the Board at any time by the death, disability, retirement, resignation or removal (with
or without cause) of a director designated by the LLC and elected by the holders of Class B Common Stock, or if otherwise there shall exist or occur any vacancy on the Board in a directorship
subject to designation by the LLC and election by the holders of Class B Common Stock, such vacancy shall not be filled by the remaining members of the Board, but each Shareholder hereby agrees
promptly to consent in writing or vote or cause to be voted all shares of Class B Common Stock now or hereafter owned or controlled by it to elect that individual designated to fill such
vacancy and serve as a director, as shall be designated by the LLC. 

        4.4    Confidentiality.    

        (a)   Each
Shareholder hereby agrees that Confidential Information (as defined below) has been and may be made available to him or it in connection with such Shareholder's
interest in the Company and its subsidiaries. Each Shareholder agrees that he or it will not use the Confidential Information in any way that is reasonably likely to result in a material detriment to
the business of the Company and its subsidiaries. Each Shareholder further acknowledges and agrees that he or it will not disclose any Confidential Information to any person;  provided, that Confidential
Information may be disclosed (i) to such Shareholder's Representatives (as defined below) in the normal course of the
performance of their duties, (ii) to the extent required by applicable statute, law, rule or regulation (including complying with any oral or written questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar process to which a Shareholder is subject) or by generally accepted accounting principles, (iii) to any third party to
whom such Shareholder is contemplating a transfer of his or its shares of Class B Common Stock, provided that such transfer would not be in
violation of the provisions of this Agreement and as long as such third party is advised of the confidential nature of such information and agrees to be bound by a confidentiality agreement in form
and substance satisfactory to the Company and substantially similar to the provisions hereof or (iv) if the prior consent of the Board shall have been obtained. Nothing contained herein shall
prevent the use of 

7

 

Confidential
Information in connection with the assertion or defense of any claim by or against the Company or any Shareholder. 

        (b)   "Confidential Information" means any information concerning the Company, its financial condition, business, subsidiaries,
operations or prospects in the possession of or to be furnished to any Shareholder in his or its capacity as a shareholder of the Company or by virtue of his or its present or former position as, or
right to designate, a director of the Company; provided, that the term "Confidential Information" does not include information which (a) was or
becomes generally available publicly other than as a result of a disclosure by a Shareholder or his or its partners, directors, officers, employees, agents, counsel, investment advisers, accountants,
consultants or representatives (all such persons being collectively referred to as "Representatives") in violation of this  Section 4.4(b) or,
(b) was or becomes available to such Shareholder on a nonconfidential basis from a source other than the Company, any
regulatory entity or a Shareholder or his or its Representatives, provided that such source is or was (at the time of receipt of the relevant
information) not, to the best of such Shareholder's knowledge, bound by a confidentiality agreement with the Company or another person. 

Article V

 Registration Rights  

        The Shareholders shall have registration rights with respect to the IDSs or Class A Common Stock and Senior Subordinated Notes to be received upon the
exchange of the Class B Common Stock as set forth in the Registration Rights Agreement attached hereto as Exhibit D (the
"Registration Rights Agreement"). Each of the Shareholders agrees not to effect any public sale or public distribution of any securities of the Company
during the periods specified in the Registration Rights Agreement, except as permitted thereby, and each such Shareholder agrees to be bound by the rights of priority to participate in offerings as
set forth therein. 

8

 
Article VI

 Exchange of Class B Common Stock for IDSs  

        6.1    Exchange of Class B Common Stock for
IDSs.    

        (a)   Shares
of Class B Common Stock shall be exchangeable for IDSs at the option of the holder thereof on any Exchange Date (as defined below) at the Exchange Rate (as
defined below); provided, however, that (i) until the date that is 180 days from the
effective date hereof, shares of Class B Common Stock shall not be exchangeable for IDSs, and (ii) until the date that is two years from the effective date hereof, shares of
Class B Common Stock designated as Restricted Shares on Exhibit A shall not be exchangeable for IDSs. Notwithstanding anything in this
Article VI to the contrary other than Section 6.1(e) and (f), no Shareholder shall have any right to exchange, and the Company may not exchange, any shares of Class B Common Stock
for IDSs: (i) if such exchange does not comply with applicable laws, including, without limitation, securities laws, laws relating to redemption of common stock and laws relating to the
issuance of debt, (ii) unless the IDSs (and/or the shares of Class A Common Stock and the Senior Subordinated Notes comprising the IDSs) issuable upon such exchange have been registered
under the Securities Act if such registration is required pursuant to the Amended and Restated Bylaws of the Company or the Securities Act, (iii) if such exchange conflicts with or causes a
default under any material financing agreement, (iv) if such exchange causes a mandatory suspension of dividends or deferral of interest under any material financing agreement as of the
measurement date immediately following the date of the proposed exchange, or (v) so long as an event of default or deferral of interest has occurred and is continuing under the indenture
governing the Senior Subordinated Notes. Any IDSs for which shares of Class B Common Stock have been exchanged pursuant hereto prior to the date that is two years from the effective date hereof
shall be sold or otherwise transferred by the Shareholder making such exchange in a public offering or otherwise to a person who is not an affiliate of such Shareholder within 30 days after the
date of such exchange. If such sale or other transfer is not consummated within such period, the Company and the Shareholder shall rescind such exchange unless such rescission falls under
clause (i), (iii) or (iv) above. 

        (b)   To
exercise the exchange right, the holder of Class B Common Stock to be exchanged shall surrender the certificate representing such Class B Common Stock,
duly endorsed or assigned to the Company or in blank, at the principal office of the Transfer Agent (as hereinafter defined) accompanied by written notice to the Company that such holder elects to
exchange such Class B Common Stock. Unless the IDSs issuable on exchange are to be issued in the same name as the name in which the Class B Common Stock is registered, in which case the
Company shall bear the related taxes, each share surrendered for exchange shall be accompanied by instruments of transfer, in form and substance satisfactory to the Company, duly executed by the
holder or such holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Company demonstrating that such taxes have been
paid). 

        (c)   Each
exchange consummated pursuant to this Section 6.1 shall be deemed to have been effected immediately prior to
the close of business on the applicable Exchange Date, provided that certificates representing shares of Class B Common Stock shall have been
surrendered and such notice (and if applicable, payment of an amount equal to the distribution payable on such shares) received by the Company as aforesaid, and the person or persons in whose name or
names any certificate or certificates representing IDSs shall be issuable upon such exchange shall be deemed to have become the holder or holders of record of the shares and Senior Subordinated Notes
represented thereby at such time on such Exchange Date, and such exchange shall be at the Exchange Rate in effect at such time and on such date unless the stock transfer records of the Company for the
Class B Common Stock shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders of record at the close of 

9

 

business
on the next succeeding day on which such stock transfer records for the Class B Common Stock are open, but such exchange shall be at the Exchange Rate in effect on the date on which
such shares have been surrendered and such notice received by the Company. 

        (d)   As
promptly as practicable after the surrender of the certificates representing the Class B Common Stock as aforesaid, the Company shall issue and deliver at such
office to such holder, or on his written order, certificates representing the full number of shares of Class A Common Stock and Senior Subordinated Notes represented by the IDSs issuable upon
the exchange of such shares of Class B Common Stock in accordance with the provisions of this Section 6.1, and any fractional interest
shall be settled as provided by Section 6.2 below. 

        (e)   Notwithstanding
anything to the contrary contained in this Agreement, in the event of a redemption by the Company of 100% of the Senior Subordinated Notes such that
following the redemption there will no longer be any Senior Subordinated Notes and IDSs outstanding, the Company shall give notice to the holders of the Class B Common Stock at least
30 days but not more than 60 days prior to such redemption date (the "Notes Redemption Date"). Notwithstanding any restrictions on exchange set
forth in this Agreement, if the Company redeems all of the Senior Subordinated Notes outstanding, all outstanding shares of the Class B Common Stock will be automatically (and without any
action required on the part of the holders of the Class B Common Stock) exchanged on the Notes Redemption Date for IDSs at the Exchange Rate, and the Senior Subordinated Notes acquired by the
holders of the Class B Common Stock as part of the IDSs in such exchange shall be redeemed by the Company as part of such redemption. 

        (f)    Notwithstanding
anything to the contrary contained in this Agreement, following the maturity date of the Senior Subordinated Notes, and during any period in which there
are otherwise no longer any Senior Subordinated Notes and IDSs outstanding (other than in connection with a redemption of 100% of the Senior Subordinated Notes), the holders of Class B Common
Stock shall have the right to exchange their shares of Class B Common Stock for shares of Class A Common Stock on a one-for-one basis, except as adjusted pursuant
to Section 6.3. 

        6.2    No Fractional IDSs.    No fractional
portion of an IDS (or shares of Class A Common Stock or Senior Subordinated Notes comprising the IDS) shall be issued upon exchange of Class B Common Stock. Instead of any fraction of an
IDS (or shares of Class A Common Stock or Senior Subordinated Notes comprising the IDS) that would otherwise be deliverable upon the exchange of Class B Common Stock, the Company shall
pay to the holder of such shares an amount in cash in respect of such fractional interest based upon the Fair Market Value (as defined below) of IDSs on the Trading Day (as defined below) immediately
preceding the Exchange Date. 

        6.3    Exchange Rate Adjustments.    

        (a)   The
Exchange Rate shall be adjusted from time to time as follows: 

          (i)  If
the Company shall after the date hereof: 

        (1)   pay
or make a distribution to holders of Class A Common Stock in the form of shares of Class A Common Stock or Class B Common Stock; 

        (2)   subdivide
its outstanding Class A Common Stock or Class B Common Stock into a greater number of shares of Class A Common Stock or Class B
Common Stock; 

        (3)   combine
its outstanding Class A Common Stock or Class B Common Stock into a smaller number of shares of Class A Common Stock or Class B
Common Stock; 

        (4)   issue
any equity securities by reclassification of its Class A Common Stock or Class B Common stock (other than any reclassification by way of merger or
binding share exchange that is subject to Section 6.3(b)); or 

10

 

        (5)   issue
rights, options or warrants to all holders of Class A Common Stock entitling them to subscribe for or purchase IDSs, Class A Common Stock and/or
Class B Common Stock at a price per share less than the Fair Market Value per share of IDSs, Class A Common Stock or Class B Common Stock on the record date for the determination
of stockholders entitled to receive such rights, options or warrants; 

        then
the Exchange Rate in effect at the opening of business on the day following the record date for the determination of stockholders entitled to receive such distribution or at the
opening of business on the day following the day on which such subdivision, combination or reclassification becomes effective, as the case may be, shall be adjusted so that the holder of any share of
Class B Common Stock thereafter surrendered for exchange shall be entitled to receive the number of IDSs (including the number of shares of Class A Common Stock and the principal amount
of Senior Subordinated Notes comprising the IDSs) and other equity securities issued by reclassification of Class A Common Stock or Class B Common Stock that such holder would have owned
or have been entitled to receive after the happening of any of the events described above had such shares been exchanged immediately prior to the record date in the case of a distribution or the
effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this subparagraph (i) shall become effective immediately after the opening of
business on the day following such record date (except as provided in Section 6.3(e)) in the case of a distribution and shall become effective immediately after the opening of business on the
day next following the effective date in the case of a subdivision, combination or reclassification. 

         (ii)  Except
as provided in clause (i) of this Section 6.3(a), if the Company shall after the date of consummation of the Offering issue or sell shares of
Class A Common Stock (or securities convertible into or exchangeable for shares of Class A Common Stock) at a price per share of Class A Common Stock less than the Fair Market
Value per share of Class A Common Stock on the date of issuance or sale, then the Exchange Rate in effect immediately prior to the issuance or sale shall be adjusted as the Board determines to
be equitable in the circumstances. Such adjustment shall become effective immediately after the opening of business on the day following such issuance or sale. In determining whether any such issuance
or sale would allow a person or entity to subscribe for or purchase shares of Class A Common Stock at less than the Fair Market Value, the value of any consideration received by the Company
upon such sale other than cash shall be determined by the Board. 

        (iii)  No
adjustment in the Exchange Rate shall be required unless such adjustment would require a cumulative increase or decrease of at least 1% in the Exchange Rate;  provided, however, that any adjustments that by reason of this subparagraph (iii) are not
required to be made shall be carried forward and taken into account in any subsequent adjustment until made; and provided,  further, that any adjustment
shall be required and made in accordance with the provisions of this Section 6.3 (other than this subparagraph
(iii)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of IDSs. All calculations under this Section 6.3 shall
be made to the nearest cent (with $.005 being rounded upward) or to the nearest one-tenth of a share (with .05 of a share being rounded upward), as the case may be. Anything in this
subsection (a) to the contrary notwithstanding, the Company shall be entitled, to the extent permitted by law, to make such increases in the Exchange Rate, in addition to those required by this
subsection (a), as it in its discretion shall determine to be advisable in order that any share distributions, subdivision, reclassification or combination of shares, distribution of rights, options
or warrants to purchase shares or securities, or a distribution of other assets (other than cash distributions) hereafter made by the Company to its shareholders shall not be taxable. 

        (b)   Except
as otherwise provided for in Section 6.3(a)(i), if the Company shall be a party to any transaction (including, without limitation, a merger, consolidation,
statutory share exchange, 

11

 

tender
offer for all or substantially all of the IDSs or Class A Common Stock, sale or transfer of all or substantially all of the Company' assets or recapitalization of the IDSs or
Class A Common Stock) (each of the foregoing being referred to herein as a "Transaction"), in each case as a result of which IDSs or
Class A Common Stock shall be converted into the right to receive shares, stock, securities or other property (including cash or any combination thereof), the Company (or its successor in such
Transaction) shall make appropriate provision so that each share of Class B Common Stock, if not converted into the right to receive shares, stock, securities or other property in connection
with such Transaction in accordance with the third to last sentence of this subsection (b) shall thereafter be exchangeable into the kind and amount of shares, stock, securities and other
property (including cash or any combination thereof) receivable upon the consummation of such Transaction by a holder of that number of IDSs into which one share of Class B Common Stock was
convertible immediately prior to such Transaction, assuming such holder of Common Stock (i) is not a person with which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made, as the case may be (a "Constituent Person"), or an affiliate of a Constituent Person and
(ii) failed to exercise his rights of the election, if any, as to the kind or amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon
such Transaction (each, a "Non-Electing Share") (provided that if the kind and amount of shares, stock, securities and other property
(including cash or any combination thereof) receivable upon consummation of such Transaction is not the same for each Non-Electing Share, the kind and amount of shares, stock, securities
and other property (including cash or any combination thereof) receivable upon such Transaction by each Non-Electing Share shall be deemed to be the kind and amount so receivable per share
by a plurality of the Non-Electing Shares). The Company shall not be a party to any Transaction in which any share of Class B Common Stock is converted into the right to receive
shares, stock, securities or other property (including cash or any combination thereof) with an aggregate value (as determined by the Board in good faith, whose determination shall be conclusive) less
than that receivable by the number of shares of IDSs into which shares of Class B Common Stock were exchangeable immediately prior to such Transaction. The Company shall not be a party to any
Transaction unless the terms of such Transaction are consistent with the provisions of this subsection (b), and it shall not consent or agree to the occurrence of any Transaction until the Company has
entered into an agreement with the successor or purchasing entity, as the case may be, for the benefit of the holders of the Class B Common Stock that will contain provisions enabling holders
of Class B Common Stock that remains outstanding after such Transaction to exchange their Class B Common Stock into the consideration received by holders of IDSs at the Exchange Rate in
effect immediately prior to such Transaction. The provisions of this subsection (b) shall similarly apply to successive Transactions. 

        (c)   If:

          (i)  the
Company shall declare a distribution (other than cash distributions which do not constitute extraordinary dividends) on the Class A Common Stock in the form
of shares of Class A Common Stock or Class B Common Stock, or there shall be a reclassification, subdivision or combination of the Class A Common Stock or Class B Common
Stock; or 

         (ii)  the
Company shall grant to the holders of Class A Common Stock rights, options or warrants to subscribe for or purchase IDSs, Class A Common Stock or
Class B Common Stock at less than Fair Market Value; or 

        (iii)  the
Company shall sell Class A Common Stock or securities convertible into Class A Common Stock for less than Fair Market Value; or 

        (iv)  the
Company shall enter into a Transaction; or 

12

 

         (v)  there
shall occur the voluntary or involuntary liquidation, dissolution or winding up of the Company; 

        then
the Company shall cause to be mailed to the holders of the Class B Common Stock at their addresses as shown on the stock transfer records of the Company, as promptly as
possible, but at least 15 days prior to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such distribution or
rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock or IDSs of record to be entitled to such distribution or rights, options or warrants
are to be determined or (ii) the date on which such reclassification, subdivision, combination, Transaction or liquidation, dissolution or winding up is expected to become effective, and the
date as of which it is expected that holders of IDSs of record shall be entitled to exchange their IDS (or shares of Class A Common Stock or Senior Subordinated Notes comprising the IDSs) for
securities or other property, if any, deliverable upon such reclassification, subdivision, combination, Transaction or liquidation, dissolution or winding up. Failure to give or receive such notice or
any defect therein shall not affect the legality or validity of the proceedings described in this Section 6.3. 

        (d)   Whenever
the Exchange Rate is adjusted as herein provided, the Company shall promptly prepare a notice of such adjustment of the Exchange Rate setting forth the adjusted
Exchange Rate and the effective date such adjustment becomes effective and shall mail such notice of such adjustment of the Exchange Rate to the holder of each share of Class B Common Stock at
such holder's last address as shown on the stock transfer records of the Company. The inclusion of the Company's calculation of the adjusted Exchange Rate as set forth in such notice shall be
conclusive evidence of the correctness of such adjustment absent manifest error. 

        (e)   In
any case in which Section 6.3(a) provides that an adjustment shall become effective on the day following the record date for an event, the Company may defer
until the occurrence of such event (i) issuing to the holder of any share of Class B Common Stock converted after such record date and
before the occurrence of such event the additional IDSs issuable upon such conversion by reason of the adjustment required by such event over and above the shares of IDSs issuable upon such conversion
before giving effect to such adjustment and (ii) fractionalizing any share of Class B Common Stock and/or paying to such holder any amount of cash in lieu of any fraction pursuant to
Section 6.2. 

        (f)    There
shall be no adjustment of the Exchange Rate in case of the issuance of any equity securities of the Company in a reorganization, acquisition or other similar
transaction except as specifically set forth in this Section 6.3. If any action or transaction would require adjustment of the Exchange Rate pursuant to more than one subsection of
Section 6.3(a), only one adjustment shall be made, and such adjustment shall be the amount of adjustment that has the highest absolute value. 

        6.4    Related Covenants.    

        (a)   If
the Company shall take any action affecting the IDSs, Class A Common Stock or Class B Common Stock, other than the actions described in this
Article VI, that in the opinion of the Board would materially and adversely affect the exchange rights of the holders of Class B Common Stock, the Exchange Rate for the Class B
Common Stock shall be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board, in its sole discretion, determines to be equitable in the circumstances. If
there is an automatic separation of the IDSs at any time, the exchange rights of the holders of Class B Common Stock shall be adjusted, to the extent permitted by law, in such manner, if any,
and at such time, as the Board, in its sole discretion, determines to be equitable in the circumstances, provided that the conditions precedent set forth in  Section 6.1(a) shall continue to apply
to such exchange rights. 

13

 

        (b)   The
Company shall at all times reserve and keep available, free from preemptive rights, out of the aggregate authorized but unissued Class A Common Stock, for the
purpose of effecting the exchange of the Class B Common Stock, the full number of shares of Class A Common Stock deliverable upon the exchange of all outstanding shares of Class B
Common Stock not theretofore exchanged. For purposes of this subsection (b), the number of shares of Class A Common Stock that shall be deliverable upon the exchange of all outstanding shares
of Class B Common Stock shall be computed as if at the time of computation all outstanding shares were held by a single holder. 

        (c)   The
Company covenants that any shares of Class A Common Stock issued upon the exchange of Class B Common Stock for IDSs shall be validly issued, fully paid
and non-assessable. 

        (d)   The
Company shall list the IDSs required to be delivered upon exchange of the Class B Common Stock, prior to such delivery, upon each national exchange, if any,
upon which the outstanding IDSs are listed at the time of such delivery. 

        (e)   Prior
to the delivery of the IDSs (including the shares of Class A Common Stock and the Senior Subordinated Notes comprising the IDSs) that the Company shall be
obligated to deliver upon the exchange of the Class B Common Stock, the Company shall comply with all federal and state laws and regulations thereunder requiring registration of such securities
with, or any approval or consent to the delivery thereof, by any governmental authority. 

        (f)    The
Company shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue and delivery of IDSs or other securities or
property on exchange of the Class B Common Stock pursuant hereto; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of IDSs or other securities or property in a name other than that of the
record holder of the Class B Common Stock to be exchanged, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the
amount of any such tax or established, to the reasonable satisfaction of the Company, that such tax has been paid. 

        6.5    Certain Defined Terms.    

        (a)   As
used herein the term "Current Market Price" of any IDS or equity security of the Company or any other issuer for any
day shall mean the last reported sales price, regular way, on such day, or, if no sale takes place on such day, the average of the reported closing bid and asked prices on such day, regular way, in
either case as reported on the Nasdaq National Market or, if such security is not listed or admitted for trading on the Nasdaq National Market, on the principal national securities exchange on which
such security is listed or admitted for trading or, if not listed or admitted for trading on any national securities exchange, the average of the closing bid and asked prices on such day in the
over-the-counter market. 

        (b)   As
used herein, the term "Exchange Date" shall mean any date on or after the 181st day after the effective
date hereof or, with respect to the Restricted Shares, the date that is two years from the effective date hereof, and prior to the maturity date of the Senior Subordinated Notes and designated by the
LLC or, upon liquidation of the LLC, a majority of the holders of shares distributed upon such liquidation to the holders of any membership interests initially issued to Pegasus Partners II, L.P.
under the Amended and Restated Limited Liability Company Agreement, dated as of March 8, 2000, by and among the LLC and the members of the LLC, as amended from time to time (the
"Pegasus Shareholders") as an Exchange Date by providing not less than 15 days written notice to the Company and each of the other Shareholders;  provided, however, that (i) a date within 6 months of any previous Exchange Date may not
be designated as an Exchange Date and (ii) the LLC and the Pegasus Shareholders may not declare an Exchange Date if the number of shares of Class B Common Stock to be exchanged on such
Exchange Date is less than 

14

 

the
lesser of            shares or            % of the total number of shares of Class B Common Stock then outstanding.

        (c)   As
used herein the term "Exchange Rate" shall mean an amount equal to (i) the per IDS initial public offering
price of the IDSs less the principal amount of the Senior Subordinated Note comprising the IDSs divided by (ii) the per IDS initial public offering price of the IDSs, as adjusted from time to
time in accordance with this Article VI; 

        (d)   As
used herein the term "Fair Market Value" with respect to the IDSs or the Class A Common Stock shall mean the
average of the daily Current Market Prices per IDS or share of Class A Common Stock, as applicable, during the ten consecutive Trading Days selected by the Company commencing not more than 20
Trading Days before, and ending not later than, the earlier of the day in question and the day before the "ex-date" with respect to the issuance or distribution requiring such computation.
The term "ex-date," when used with respect to any issuance or distribution, means the first day on which the IDSs or Class A Common Stock, as applicable, trade regular way, without
the right to receive such issuance or distribution, on the exchange or in the market, as the case may be, for purposes of determining that day's Current Market Price. 

        (e)   As
used herein, the term "Trading Day" shall mean any day on which the securities in question are traded on the Nasdaq
National Market or, if such securities are not listed or admitted for trading on the Nasdaq National Market, on the principal national securities exchange on which securities are listed or admitted
or, if not listed or admitted for trading on any national securities exchange, on the applicable securities market in which such securities are traded. If such securities are not trading on any
securities market, the Board shall determine which day shall be deemed the Trading Day. 

        (f)    As
used herein, the term "Transfer Agent" shall mean Wells Fargo Bank, National Association or any successor transfer
agent of the Company's IDSs. 

Article VII

 Amendment and Restatement; Repurchase of Class B Common Stock  

        7.1    Amendment and Restatement of Existing Shareholders Agreement; Approvals of Offering
Transactions.    

        (a)   Each
party hereto agrees that, upon consummation of the Offering, (i) the Existing Shareholders Agreement shall be amended and restated and replaced in its
entirety with this Agreement and (ii) the terms of the Existing Shareholders Agreement shall cease to be of any effect. 

        (b)   Each
Shareholder consents and agrees to take all action necessary for the consummation of the Offering and the related transactions. 

        (c)   Each
party hereto consents to the amendment and restatement of the certificate of incorporation of the Company and to the amendment and restatement of the bylaws of the
Company, substantially in the forms as filed by the Company as exhibits to the Form S-1. 

        7.2    Repurchase Upon Offering.    Upon
consummation of the Offering (the "Initial Repurchase Date"), each of the LLC and the Initial Investors hereby sells, transfers and assigns to the
Company, and the Company hereby purchases from the LLC and such Initial Investor, free and clear of all liens, claims, security interests, pledges, charges, equities, options, restrictions and
encumbrances, the number of shares of Class B Common Stock set forth opposite the LLC's and such Initial Investor's name on Exhibit B. 

15

 

        7.3    Repurchase Upon Exercise of the Over-Allotment
Option.    

        (a)   Upon
exercise by the Underwriters of the Over-Allotment Option in full, each Shareholder hereby sells, transfers and assigns to the Company, and the Company
hereby purchases from such Shareholder, free and clear of all liens, claims, security interests, pledges, charges, equities,
options, restrictions and encumbrances, the number of shares of Class B Common Stock set forth opposite such Shareholder's name on  Exhibit C. 

        (b)   Upon
any partial exercise of the Over-Allotment Option, each Shareholder hereby sells, transfers and assigns to the Company, and the Company hereby purchases
from such Shareholder, free and clear of all liens, claims, security interests, pledges, charges, equities, options, restrictions and encumbrances, such pro rata number of shares of Class B
Common Stock of such Shareholder based on the number of shares of Class B Common Stock set forth opposite such Shareholder's name on  Exhibit C as will be purchased by the total proceeds
received by the Company in such partial exercise of the Over-Allotment Option. 

        (c)   Notwithstanding
Sections (a) and (b) above, if the Over-Allotment Option is exercised prior to the issuance of shares pursuant to the SAR Plan,
none of the Additional Investors will sell their shares of Class B Common Stock to the Company, and the Initial Investors will sell such pro rata number of shares of Class B Common Stock
of such Initial Investor based on the number of shares of Class B Common Stock set forth opposite such Initial Investor's name on  Exhibit C as will be purchased by the total proceeds received
by the Company in connection with such exercise of the Over-Allotment
Option. In such case, payments under the SAR Plan shall be adjusted accordingly as determined by the Compensation Committee of the Board. 

        7.4    Repurchase Price.    The per share
purchase price for the Class B Common Stock is an amount equal to the Exchange Rate multiplied by the per IDS initial public offering price of the IDSs. 

        7.5    Release From Liability.    Each of the
Shareholders hereby releases and discharges the Company from any and all claims and/or causes of action, known or unknown, arising from or relating to the Existing Common Stock, the Existing
Shareholders Agreement and with respect to any Class B Common Stock repurchased by the Company in accordance with this Article VII. 

Article VIII

 Miscellaneous  

        8.1    Specific Performance.    The Parties
agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any court within the United States, this being in addition to any other remedy to which they are entitled at law or in equity. 

        8.2    Expenses.    All costs and expenses
incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such expense. 

        8.3    Entire Agreement; Amendments.    This
Agreement and the documents delivered pursuant hereto contain the entire understanding of the Parties hereto with regard to the subject matter contained herein or therein, and supersede all prior
agreements, understandings or letters of intent between or among any of the Parties hereto. This Agreement shall not be amended, modified or supplemented without the written consent of each of
(i) the Company, (ii) the LLC (which consent shall have been approved by members holding at least 80% of the membership interests if such amendment, modification or supplement adversely
affects the members as a whole; provided, however, that if such amendment, modification or supplement
specifically adversely affects a member (as 

16

 

opposed
to the members as a whole), the consent of such member shall be required unless such member is a "Defaulting Member" as defined in the Amended and Restated Limited Liability Company Agreement
of the LLC) and (iii) in the event that such amendment, modification or supplement adversely affects the Investors, the holders of a majority of the shares of Class B Common Stock then
held by the Investors. 

        8.4    Waivers.    Any term or provision of
this Agreement may be waived, or the time for its performance may be extended, by the Party or Parties entitled to the benefit thereof. Any such waiver shall be validly and sufficiently given for the
purposes of this Agreement if, as to any Party, it is in writing signed by an authorized representative of such Party. The failure of any Party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any Party thereafter to enforce each and
every such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach. 

        8.5    Partial Invalidity.    Wherever
possible, each provision hereof shall be interpreted in such manner as to be effective and valid under applicable law, but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability
without invalidating the remainder of such provision or provisions or any other provisions hereof, unless such a construction would be unreasonable. 

        8.6    Execution in Counterparts.    This
Agreement may be executed in counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement,
and shall become binding when one or more counterparts have been signed by each of the Parties hereto and delivered to each of the Parties hereto. 

        8.7    Governing Law.    This Agreement shall
be governed by and construed in accordance with the internal laws (as opposed to the conflicts of law provisions) of the State of Delaware. 

        8.8    Further Assurances.    Each Party shall
cooperate and take such action as may reasonably be requested by another Party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby. 

        8.9    Successors and Assigns.    All
covenants and agreements in this Agreement by or on behalf of any of the Parties hereto shall bind and inure to the benefit of the respective successors and assigns of the Parties hereto whether so
expressed or not. 

        8.10    Descriptive Headings; Interpretation; No Strict
Construction.    The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this
Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and singular forms of nouns, pronouns, and verbs
shall include the plural and vice versa. Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in
accordance with the terms thereof, and if applicable hereof. The use of the words "include," "includes" or "including" in this Agreement shall be by way of example rather than by limitation. The use
of the words "or," "either" or "any" shall not be exclusive. The Parties have participated jointly in the negotiating and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted by each of the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. 

        8.11    Notices.    All notices, demands or
other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when (a) delivered personally to
the recipient, (b) faxed to the recipient (with hard copy sent to the 

17

 

recipient
by reputable overnight courier service (charges prepaid) that same day) if faxed before 5:00 p.m. New York City time on a business day, and otherwise on the next business day, or
(c) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands and other communications shall be sent to the Company at
the address set forth below and to the other Parties at such address as indicated by the Company's records, or at such address or to the attention of such other person as the recipient Party has
specified by prior written notice to the sending Party. The Company's address is: 

10
S. Riverside Plaza, Suite 850

Chicago, Illinois 60606

Attention: General Counsel

Telephone: (312) 840-6000

Fax: (312) 840-5541 

        8.12    Delivery by Facsimile.    This
Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or
thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to
deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of
a contract and each such party forever waives any such defense. 

        8.13    Party No Longer Owning Shares of Class B Common
Stock.    If a Party ceases to own any shares of Class B Common Stock and to have any right to purchase or receive any shares of
Class B Common Stock, such Party will no longer be deemed to be a Shareholder for purposes of this Agreement and shall not be bound by the terms hereof. 

        8.14    Term.    This Agreement shall continue
at all times hereafter and terminate only upon the date on which no shares of Class B Common Stock remain outstanding. Sections 1.1(d) and (e) and Sections 2.1(c) and (d) shall
terminate on the date on which the IDSs automatically separate pursuant to the terms thereof. 

*            *            *            *    
        *

18

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. 

	 	 	MERISANT WORLDWIDE, INC.
	

 	
 	

By:	

  

	 	 	Name:	 
	 	 	Its:	 
	

 	
 	
TABLETOP HOLDINGS, LLC
	

 	
 	

By:	

  

	 	 	Name:	 
	 	 	Its:	 
	

 	
 	
INITIAL INVESTORS:
	

 	
 	

  
 Arnold Donald
	

 	
 	

  
 Jerry Knock
	

 	
 	

  
 Ed Flowers
	

 	
 	

  
 Karl Sestak
	

SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
	 	 	 	 

	

 	
 	

  
 Roberto Mourey
	

 	
 	

  
 Steve Adolph
	

 	
 	

  
 Joann Digman
	

 	
 	

  
 Barb Jones
	

 	
 	

  
 Thomas Verbeke
	

 	
 	

  
 Robert Border
	

 	
 	

  
 Richard Federer
	

 	
 	

  
 Ken Jones
	

SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
	 	 	 	 

	

 	
 	

  
 Lincoln D. Germain
	

 	
 	

  
 John Sheptor
	

 	
 	

  
 Michael G. Nichols
	

 	
 	

  
 Luther C. Kissam, IV, as Trustee of the

Luther C. Kissam IV Trust
	

 	
 	

  
 Etienne J. Veber, as Trustee of the

Etienne J. Veber Trust
	

 	
 	

  
 Jane Boyce
	

 	
 	

  
 Dana Voris
	

SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
	 	 	 	 

	

 	
 	

  
 Carl W. Warschausky, as Trustee of the

Carl W. Warschausky Trust
	

 	
 	
J.H. WHITNEY MEZZANINE FUND, L.P.
	

 	
 	

By:	

Whitney GP, L.L.C.,

its General Partner
	

 	
 	

By:	

  

	

 	
 	

Name:	

 
	 	 	A Managing Member
	

 	
 	
J.H. WHITNEY MARKET VALUE FUND, L.P.
	

 	
 	

By:	

Whitney Market Value GP, Ltd.,

its General Partner
	

 	
 	

By:	

  

	

 	
 	

Name:	

 
	 	 	A Managing Member
	

 	
 	
THE NORTHWESTERN MUTUAL LIFE

    INSURANCE COMPANY
	

 	
 	

By:	

  

	 	 	Name:	 
	 	 	Its:	 
	

SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
	 	 	 	 

	

 	
 	
GARMARK PARTNERS, L.P.
	

 	
 	

By:	

GarMark Associates L.L.C.,

its General Partner
	

 	
 	
 
	

 	
 	

By:	

  
 Authorized Signatory
	

 	
 	

By:	

  
 Authorized Signatory
	

 	
 	
ADDITIONAL INVESTORS:
	

 	
 	

  
 Chris Sinclair
	

 	
 	

  
 Dan Beck
	

 	
 	

  
 Ellen Hoffing
	

 	
 	

  
 Lyle Sajewich
	

 	
 	

  
 Randy Jackson
	

SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

QuickLinks

FORM OF AMENDED AND RESTATED SHAREHOLDERS AGREEMENT

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