Document:

Exhibit 4.2

 

Execution Copy

 

STOCKHOLDERS
AGREEMENT

 

STOCKHOLDERS AGREEMENT
(the “Agreement”), dated as of June 18, 2002, by and among MWI
Holdings, Inc. (the “Company”), Bruckmann, Rosser, Sherrill & Co. II, L.P.
(“BRS”), Agri Beef Co. (“AgriBeef”), and the other parties set
forth on the signature pages hereto (such other parties, collectively, the “Additional
Stockholders”).  Each of BRS,
AgriBeef, the Additional Stockholders and their respective Permitted
Transferees and any other Person executing a joinder hereto are each referred
to herein as a “Stockholder” and together as the “Stockholders”.  Capitalized terms used but not otherwise
defined herein shall have the meaning set forth in Section 1 hereof.

 

WHEREAS, BRS and AgriBeef
each own shares of Common Stock;

 

WHEREAS, the Company and
the Stockholders desire to enter into this Agreement for the purposes, among
others, of (i) establishing the composition of the board of directors of the
Company (the “Board”) and the board of directors of each of the Company’s
Subsidiaries, (ii) assuring the continuity in the management and ownership of
the Company and (iii) limiting the manner and terms by which the Stockholder
Shares may be transferred.

 

NOW, THEREFORE, in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

1.                                       Definitions.  As used herein, the following terms shall
have the following meanings:

 

“Affiliate” shall
mean, as to any Person, any other Person which directly or indirectly controls,
or is under common control with, or is controlled by, such Person.  As used in this definition, “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise); provided, that beneficial ownership of 10% or more of
the voting securities (or the equivalents) of a Person shall be deemed to be
control.

 

“Approved Sale”
means a Sale of the Company approved by the Board and the holders of a majority
of the Stockholder Shares then outstanding.

 

“Common Stock”
means, collectively, (a) the Company’s common stock, $0.01 par value per share,
(b) any other class of common stock, and (c) any capital stock of the Company
issued or issuable with respect to the securities referred to in clauses (a)
and (b) above whether by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.

 

“Common Stock Deemed
Outstanding” means the number of shares of Common Stock, determined on a
fully diluted basis giving effect to all outstanding securities convertible 

 

 

into or exchangeable for Common Stock (collectively, “Common Stock
Equivalents”) or any options, warrants or other rights to acquire Common Stock
or Common Stock Equivalents.

 

“Common Stock
Equivalents” has the meaning set forth in the definition of Common Stock
Deemed Outstanding.

 

“Electing Stockholders”
has the meaning set forth in Section 4(a)(ii).

 

“Election Period”
has the meaning set forth in Section 4(a)(ii).

 

“Family Group”
means, with respect to any natural person, such person’s spouse, siblings and
descendants (whether natural or adopted) and any trust or other entity solely
for the benefit of such person and/or such person’s spouse, siblings and/or
descendants.

 

“Independent Third
Party” means any Person who, immediately prior to the contemplated
transaction, (a) does not own in excess of 5% of the Common Stock Deemed
Outstanding, (b) is not an Affiliate of any such 5% owner of the Common Stock
Deemed Outstanding, or (c) is not a member of the Family Group of any such 5%
owner of the Common Stock Deemed Outstanding.

 

“Other Stockholders”
means with respect to a Stockholder, all Stockholders other than such
Stockholder.

 

“Ownership Ratio” means,
as to a Stockholder at the time of determination, the percentage obtained by
dividing the number of Stockholder Shares owned by such Stockholder at such
time, by the aggregate number of Common Stock Deemed Outstanding at such time.

 

“Permitted Transferees”
has the meaning set forth in Section 4(c).

 

“Person” means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.

 

“Public Sale”
means any sale of Stockholder Shares to the public pursuant to an offering
registered under the Securities Act or to the public effected through a broker,
dealer or market maker pursuant to the provisions of Rule 144 or Rule 144A (if
such rule is available) under the Securities Act (or any similar rule or rules
then in effect).

 

“Qualified Public
Offering” means the consummation of a sale, in an underwritten public
offering registered under the Securities Act and underwritten by a nationally
recognized investment bank, of shares of Common Stock (a) at an offering price
which represents a common equity valuation of the Company of at least $100
million, and (b) resulting in aggregate gross proceeds to the Company of at
least $25 million.

 

“Sale of the Company”
means (i) a transaction or series of transactions (including by way of merger,
consolidation, or sale of equity) the result of which is that the holders of
the Common Stock immediately prior to such transaction(s) (on a fully diluted
as if converted basis) are after giving effect to such transaction(s) no
longer, in the aggregate, the “beneficial owners” 

 

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(as such term is defined
in Rule 13d-3 and Rule 13d-5 promulgated under the Securities Exchange Act),
directly or indirectly through one or more intermediaries, of more than 50% of
the Common Stock (on a fully diluted basis as if converted basis), or (ii)
sale, lease, transfer, conveyance or other disposition to an Independent Third
Party or group of Independent Third Parties, in one or a series of related
transactions, of all or substantially all of the Company’s assets determined on
a consolidated basis..

 

“Securities Act”
means the Securities Act of 1933, as amended from time to time.

 

“Stockholder Shares”
means (a) any Common Stock held by the Stockholders from time to time, and (b)
any equity securities issued or issuable directly or indirectly with respect to
the securities referred to in clause (a) above by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. 
As to any particular shares constituting Stockholder Shares, such shares
will cease to be Stockholder Shares when they have been sold in a Public
Sale.  For purposes of this Agreement, a
Person will be deemed to be a holder of Stockholder Shares whenever such Person
has the right to acquire directly or indirectly such Stockholder Shares (upon
conversion or exercise, in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the exercise
of such right), whether or not such acquisition has actually been effected.

 

“Sub Board” has
the meaning set forth in Section 2(a)(iii).

 

“Subsidiary”
means, with respect to any Person, any corporation, partnership, association or
other business entity of which (a) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (b) if a partnership, association or other business entity, a
majority of the partnership or other similar ownership interest thereof is at
the time owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person or Persons
shall be deemed to have a majority ownership interest in a partnership,
association or other business entity if such Person or Persons shall be
allocated a majority of partnership, association or other business entity gains
or losses or shall be or control the managing director or a general partner of
such partnership, association or other business entity.

 

“Transaction Documents”
means, collectively, this Agreement, the Recapitalization and Stock Purchase
Agreement dated as of the date hereof by and among the Company, AgriBeef and
MWI Veterinary Supply Co. (the “Purchase Agreement”), and the other documents
contemplated by the Purchase Agreement.

 

“Transfer” has the
meaning set forth in Section 4(a)(i).

 

“Transfer Notice”
has the meaning set forth in Section 4(a)(i).

 

“Transferring
Stockholder” has the meaning set forth in Section 4(a)(i).

 

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2.                                       Board
of Directors.

 

(a)                                  Until
the provisions of this Section 2 cease to be effective, each Stockholder
shall vote all voting securities of the Company over which such Stockholder has
voting control, and shall take all other necessary or desirable actions within
such Stockholder’s control (whether in such Stockholder’s capacity as a
stockholder, director, member of a board committee or officer of the Company or
otherwise, and including, without limitation, attendance at meetings in Person
or by proxy for purposes of obtaining a quorum and execution of written
consents in lieu of meetings), and the Company shall take all necessary and
desirable actions within its control (including, without limitation, calling
special board and stockholder meetings), so that:

 

(i)                                     the
Board shall initially be comprised of seven (7) directors;

 

(ii)                                  the
following persons will be elected to the Board (beginning as of the date
hereof):

 

(A)                              so
long as BRS together with its Permitted Transferees continues to hold at least
25% of the Stockholder Shares held by BRS as of the date hereof (the “BRS
Shares”), five (5) individuals designated by the holders of a majority of
the BRS Shares; and

 

(B)                                so
long as AgriBeef together with its Permitted Transferees continues to hold at
least 25% of the Stockholder Shares held by AgriBeef as of the date hereof (the
“AgriBeef Shares”), one (1) individual designated by the holders of a
majority of the AgriBeef Shares (the “AgriBeef Director”); and

 

(C)                                the
Company’s Chief Executive Officer;

 

(iii)                               at
all times the composition of the board of directors of each of the Company’s
Subsidiaries, if any (a “Sub Board”), shall be the same as that of the
Board;

 

(iv)                              any
committees of the Board or a Sub Board shall be created only upon the approval
of a majority of the votes cast by the members of the Board; provided that, so
long as AgriBeef together with its Permitted Transferees continues to hold at
least 25% of the AgriBeef Shares, the Audit Committee and the Compensation
Committee shall, at the option of the holders of a majority of the AgriBeef
Shares, include the AgriBeef Director;

 

(v)                                 any
director shall be removed from the Board, a Sub Board or any committee thereof
(with or without cause) at the written request of the Stockholder or
Stockholders which have the right to designate such a director hereunder, but
only upon such written request and under no other circumstances (in each case,
determined on the basis of a vote or consent of the relevant Stockholder(s)
referred to in clause (ii) above or the Board, as the case may be); provided,
that the holders of a majority of the Stockholder Shares may remove any
director for cause but a replacement director may only be designated by the
Stockholders which have the right to designate such director hereunder;

 

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(vi)                              in
the event that any representative designated hereunder for any reason ceases to
serve as a member of the Board or a Sub Board or any committee thereof during
such representative’s term of office, the resulting vacancy on the Board or
such Sub Board or committee shall be filled by a representative designated by
the Stockholder(s) which have the right to designate the director who ceases to
serve.  If any party fails to designate a
representative to fill a directorship pursuant to the terms of this Section 2,
the election of an individual to such directorship shall be accomplished in
accordance with the Company’s Bylaws and applicable law; provided that the
Person or Person’s entitled to designate such director pursuant to this Section 2
may subsequently remove and replace such person;

 

(b)                                 The
Company shall pay the reasonable travel and out-of-pocket expenses incurred by
each director in connection with attending the meetings of the Board or any Sub
Board and any committee thereof.

 

(c)                                  The
provisions of this Section 2 shall terminate automatically and be of no
further force and effect upon the occurrence of a Qualified Public Offering.

 

(d)                                 In
the event that any provision of the Company’s bylaws or certificate of incorporation
is inconsistent with any provision of this Section 2, the Stockholders
shall take such action as may be necessary to amend any such provision in the
Company’s bylaws or certificate of incorporation to remedy such inconsistency.

 

3.                                       Representations
and Warranties.  Each Stockholder,
severally and not jointly, represents and warrants that (a) this Agreement has
been duly authorized, executed and delivered by such Stockholder and
constitutes the valid and binding obligation of such Stockholder, enforceable
in accordance with its terms, and (b) each Stockholder represents that such
Stockholder has not granted and is not a party to any proxy, voting trust or
other agreement which is inconsistent with or conflicts with the provisions of
this Agreement, and no holder of Stockholder Shares shall grant any proxy or
become party to any voting trust or other agreement which is inconsistent with
or conflicts with the provisions of this Agreement.

 

4.                                       Restrictions
on Transfer by Stockholders/Other Rights.

 

(a)                                  First
Offer Rights.

 

(i)                                     Subject
to Sections 4(b), 4(c) and 4(d), at least thirty (30) days prior to any sale,
assignment, transfer, pledge, hypothecation, give away or other disposition,
whether voluntarily or by operation of law, whether for consideration or for no
consideration (a “Transfer”) (other than with respect to a Public Sale
or an Approved Sale) of any Stockholder Shares by any Stockholder, the Person
making such Transfer (the “Transferring Stockholder”) shall deliver a
written notice (the “Transfer Notice”) to the Company and the Other
Stockholders specifying in reasonable detail the identity of the prospective
transferee(s), the number of Stockholder Shares proposed to be Transferred, the
proposed purchase price (which shall be payable solely in cash) and the other
material terms and conditions of the Transfer.

 

(ii)                                  The
Other Stockholders may elect to purchase all, but not less than all, of the
Stockholder Shares to be Transferred, upon the same terms and conditions as
those set forth in the Transfer Notice, by giving written notice of such
election to the Company and the 

 

5

 

Transferring Stockholder within thirty (30) days after
the Transfer Notice has been delivered to the Other Stockholders (the “Election
Period”).  If the Other Stockholders
have in the aggregate elected to purchase more than the number of Stockholder
Shares being offered by the Transferring Stockholder, the Stockholder Shares
shall be allocated among the Other Stockholders electing to purchase
Stockholder Shares (the “Electing Stockholders”) based upon each such
Electing Stockholder’s proportionate ownership of all Stockholders Shares owned
by the Electing Stockholders.  If the
Other Stockholders have elected to purchase Stockholder Shares hereunder, the
transfer of such shares shall be consummated as soon as practicable after the
delivery of the election notice(s) to the Transferring Stockholder, but in any
event within thirty (30) days after the expiration of the Election Period.

 

(iii)                               If
the Other Stockholders do not elect to purchase all of the Stockholder Shares
specified in the Transfer Notice, then the Company may elect to purchase all,
but not less than all, of the Stockholder Shares to be Transferred, upon the
same terms and conditions as those set forth in the Transfer Notice, by giving
written notice of such election to the Transferring Stockholder within ten (10)
days after the Election Period.  If the
Company elects to purchase the Stockholder Shares hereunder, the transfer of
such shares shall be consummated as soon as practicable after the delivery of
the election notice to the Transferring Stockholder, but in any event within
forty (40) days after the expiration of the Election Period.

 

(iv)                              If
the Other Stockholders and the Company do not elect to purchase all of the
Stockholder Shares specified in the Transfer Notice and if the terms and
conditions of this Section 4(a) have been met, then the Transferring
Stockholder may transfer the Stockholder Shares specified in the Transfer
Notice at a price and on terms no more favorable to the transferee(s) thereof
than specified in the Transfer Notice during the sixty-day period immediately
following the expiration of the Election Period.  Any Stockholder Shares not transferred within
such sixty-day period will continue to be subject to the provisions of this Section 4(a).

 

(b)                                 Tag
Along Rights.

 

(i)                                     Subject
to Sections 4(a), 4(c) and 4(d), at least thirty (30) days prior to any
Transfer (other than with respect to a Public Sale or an Approved Sale) of any
Stockholder Shares by BRS, BRS shall deliver to the Other Stockholders a
Transfer Notice to the Company and the Other Stockholders specifying in
reasonable detail the identity of the prospective transferee(s), the number of
Stockholder Shares proposed to be Transferred, the proposed purchase price
(which shall be payable solely in cash) and the other material terms and
conditions of the Transfer (which Transfer Notice may be the same notice as the
Transfer Notice under Section 4(a) above).

 

(ii)                                  The
Other Stockholders may elect to participate in the contemplated Transfer by
delivering written notice to BRS within thirty (30) days after delivery of the
Transfer Notice.  If any Other
Stockholders have elected to participate in such Transfer, BRS and such Other
Stockholders shall be entitled to sell in the contemplated Transfer, at the
same price and on the same terms, a number of Stockholder Shares equal to the
product of (i) the quotient determined by dividing (A) the number of Stockholder
Shares owned by such Stockholder by (B) the aggregate number of Stockholder
Shares owned by BRS and such Other Stockholders 

 

6

 

participating in such Transfer, and (ii) the aggregate
number of Stockholder Shares to be sold in the proposed Transfer.

 

(c)                                  Permitted
Transfers.  The restrictions
contained in this Section 4 shall not apply with respect to any Transfer
of Stockholder Shares by any Stockholder (i) in the case of an individual
Stockholder, pursuant to applicable laws of descent and distribution or to any
member of such Stockholder’s Family Group, or (ii) in the case of an entity,
any Transfer (including by way of distribution) to its partners, limited
partners, stockholders, members, or any Transfer to its Affiliates, employees,
directors, consultants or employees, directors or consultants of its
Affiliates; provided, that the restrictions contained in this Section 4
shall continue to be applicable to such Stockholder Shares after any such Transfer;
provided further, that the transferees of such Stockholder Shares shall have
agreed in writing to be bound by the provisions of this Agreement which affect
the Stockholder Shares so transferred by executing a joinder substantially in
the form attached hereto as Exhibit A. 
All transferees permitted under this Section 4(c) are collectively
referred to herein as “Permitted Transferees.”

 

(d)                                 Termination
of Restrictions.  The restrictions
set forth in this Section 4 shall continue with respect to each Stockholder
Share until the earlier of (i) the Transfer of such Stockholder Share in a
Public Sale or an Approved Sale, or (ii) the consummation of a Qualified Public
Offering.

 

5.                                       Sale
of the Company.

 

(a)                                  In
the event of an Approved Sale, each Stockholder will (i) consent to and raise
no objections against the Approved Sale or the process pursuant to which the
Approved Sale was arranged, (ii) waive any dissenter’s rights and other similar
rights, and (iii) if the Approved Sale is structured as a sale of stock, each
Stockholder will agree to sell its Stockholder Shares on the terms and
conditions of the Approved Sale.  Each
Stockholder will take all necessary and desirable actions as directed by the
Board in connection with the consummation of any Approved Sale, including
without limitation executing the applicable purchase agreement and granting
identical indemnification rights (whether directly to the buyer of the
Stockholder Shares or pursuant to the provisions of a contribution agreement)
pro rata based on the number of Stockholder Shares sold by such Stockholders
(or held by such Stockholders in the case of an asset sale).

 

(b)                                 The
obligations of each Stockholder under this Section 5 are subject to the
satisfaction of the following conditions: (i) upon consummation of an Approved
Sale, each Stockholder shall receive in exchange for the Stockholder Shares
held by such Stockholder the same portion of the aggregate consideration from
such sale or exchange that such Stockholder would have received if such aggregate
consideration had been distributed by the Company in complete liquidation
pursuant to the rights and preferences set forth in the Company’s Certificate
of Incorporation, as amended, (ii) if the holders of a class or series of
capital stock of the Company are given an option as to the form of
consideration to be received, all holders of shares of such class or series of
capital stock shall be given the same option (excluding any options or similar
securities given to an executive of the Company as an incentive to remain an
employee following the Approved Sale; provided that such incentive compensation
is reasonable under the circumstances and is negotiated by the Company, such
executives and the applicable purchaser 

 

7

 

in good faith without the intention of allocating
incentive consideration to an executive in excess of what such purchaser would
normally allocate in lieu of paying a larger purchase price for the Company),
and (iii) each holder of then currently exercisable rights to acquire
Stockholder Shares shall be given an opportunity to exercise such rights prior
to the consummation of the Approved Sale and participate in such sale as a
holder of such Stockholder Shares.

 

(c)                                  All
Stockholders will bear their pro rata share (based upon the number of
Stockholder Shares sold) of the reasonable costs of any sale of Stockholder
Shares pursuant to an Approved Sale (not including fees paid to BRS and its
Affiliates) to the extent such costs are incurred for the benefit of all
selling Stockholders and are not otherwise paid by the Company or the acquiring
party.  Costs incurred by any Stockholder
on its own behalf will not be considered costs of the transaction hereunder.

 

(d)                                 This
Section 5 shall automatically terminate upon a Qualified Public Offering.

 

6.                                       Stockholder
Preemptive Rights.

 

(a)                                  Subject
to Section 6(b) below, if the Company proposes to issue any shares of
Common Stock or any Common Stock Equivalents, in each case after the date
hereof, the Company will offer to sell to each Stockholder a number of such
securities (“Offered Shares”) so that the Ownership Ratio for such
Stockholder immediately after the issuance of such securities (and assuming the
purchase of such Offered Shares) would be equal to the Ownership Ratio for such
Stockholder immediately prior to such issuance of securities.  The Company shall give each Stockholder at
least thirty (30) days prior written notice of any proposed issuance, which
notice shall disclose in reasonable detail the proposed terms and conditions of
such issuance (the “Issuance Notice”). 
Each Stockholder will be entitled to purchase such securities at the
same price, on the same terms (including, if more than one type of security is
issued, the same proportionate mix of such securities), and at the same time as
the securities are issued by delivery of irrevocable written notice (the “Election
Notice”) to the Company of such election within thirty (30) days after delivery
of the Issuance Notice (the “Preemptive Period”).  If any Stockholder has elected to purchase
any Offered Shares, the sale of such shares shall be consummated as soon as
practical after the delivery of the Election Notice.  To the extent the Stockholders do not elect
to, or are not entitled to, purchase all of the Offered Shares, then the
Company may issue the remaining Offered Shares at a price and on terms no more
favorable to the transferee(s) thereof specified in the Issuance Notice during
the 120-day period following the Preemptive Period.

 

(b)                                 The
rights contained in this Section 6 shall not apply to the issuance of
Common Stock or Common Stock Equivalents (i) as a stock dividend or upon any
subdivision or stock split of the outstanding shares of Common Stock; (ii) upon
conversion of any shares of convertible securities; (iii) to officers,
directors and other employees of the Company and to consultants to the Company;
(iv) to financial institutions or lessors in connection with commercial credit
arrangements, equipment financing, commercial property lease transactions or
similar transactions or to an entity as a component of any business
relationship with such entity also involving a material marketing,
distribution, product development, supply and/or technology licensing
arrangement, (v) issued in connection with bona fide acquisitions, mergers or
similar 

 

8

 

transactions, (vi) issued to Persons other than BRS
and its Affiliates (provided such issuances are approved by BRS), or (vii)
pursuant to any under-written public offering.

 

(c)                                  This
Section 6 shall automatically terminate upon a Qualified Public Offering.

 

7.                                       Legend.  In addition to any legend required by any
other document, each certificate evidencing Stockholder Shares and each
certificate issued in exchange for or upon the transfer of any Stockholder
Shares (if such shares remain Stockholder Shares as defined herein after such
transfer) shall be stamped or otherwise imprinted with a legend in
substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON JUNE 18, 2002, HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS CONTAINED IN A STOCKHOLDERS
AGREEMENT DATED AS OF JUNE 18, 2002 , BY AND AMONG THE ISSUER OF SUCH
SECURITIES (THE “COMPANY”) AND THE COMPANY’S STOCKHOLDERS AS SUCH AGREEMENT MAY
BE AMENDED FROM TIME TO TIME.  A COPY OF
SUCH STOCKHOLDERS’ AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO
THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

The Company shall imprint such legend on certificates
evidencing Stockholder Shares outstanding prior to the date hereof.  The legend set forth above shall be removed
from the certificates evidencing any shares which cease to be Stockholder
Shares.

 

8.                                       Transfers
in Violation of Agreement.  Any Transfer
or attempted Transfer of any Stockholder Shares in violation of any provision
of this Agreement shall be null and void, and the Company shall not record such
Transfer on its books or treat any purported transferee of such Stockholder
Shares as the owner of such shares for any purpose.

 

9.                                       Transfer
of Stockholder Shares.

 

(a)                                  Stockholder
Shares are transferable (i) in a Public Sale and (ii) subject to Section 9(b)
below, by any other legally available means of Transfer; provided, that any
Transfer must also comply with the terms of Section 4 and the other
provisions of this Agreement.

 

(b)                                 In
connection with the Transfer of any Stockholder Shares other than a Transfer
described in clause (i) of Section 9(a) above, the holder thereof shall
deliver written 

 

9

 

notice to the Company describing in reasonable detail
the Transfer or proposed Transfer, together with an opinion of counsel
reasonably acceptable to the Company to the effect that such Transfer of Stockholder
Shares may be effected without registration of such Stockholder Shares under
the Securities Act.  In addition, if the
holder of the Stockholder Shares delivers to the Company an opinion of counsel
that no subsequent Transfer of such Stockholder Shares shall require
registration under the Securities Act, the Company shall promptly upon such
contemplated Transfer deliver new certificates for such Stockholder Shares
which do not bear the first sentence of the legend set forth in Section 7
above.  If the Company is not required to
deliver new certificates for such Stockholder Shares not bearing such legend,
the holder thereof shall not consummate a Transfer of the same until the
prospective transferee has confirmed to the Company in writing its agreement to
be bound by the conditions contained herein, as provided in Section 4(c)
above.

 

(c)                                  Upon
the request of a holder of Stockholder Shares, the Company shall as soon as
practicable supply to such Person or its prospective transferees all
information regarding the Company required to be delivered in connection with a
Transfer pursuant to Rule 144A (or any similar rule or rules then in effect) of
the Securities and Exchange Commission.

 

(d)                                 Upon
the request of a holder of Stockholder Shares, the Company shall remove the
legend set forth in Section 7 above from the certificates for the
Stockholder Shares; provided, that such Stockholder Shares are eligible for
sale pursuant to Rule 144 (or any similar rule or rules then in effect) of the
Securities and Exchange Commission.

 

10.                                 Management
Agreement Amendment.  The Company
agrees that it shall not permit its wholly owned Subsidiary MWI Veterinary
Supply Co. (“MWI”), to amend the Management and Consulting Services
Agreement by and among MWI and Bruckmann, Rosser, Sherrill & Co., L.L.C.,
dated as of the date hereof, to raise the fees payable by MWI thereunder,
except in the good faith commercially reasonable discretion of the Board after
consultation with AgriBeef; provided that this restriction shall apply only so long
as AgriBeef continues to hold at least 50% of the Stockholder Shares held by
AgriBeef as of the date hereof.

 

11.                                 Amendment
and Waiver.  No modification,
amendment or waiver of any provision of this Agreement shall be effective
against the Company or the Stockholders unless such modification, amendment or
waiver is approved in writing by the Company and the holders of a majority of
the Stockholder Shares.  The failure of
any party to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.

 

12.                                 Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement
shall be reformed, 

 

10

 

construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.

 

13.                                 Entire
Agreement.  Except as otherwise
expressly set forth herein, this document and the other Transaction Documents
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way
(including, without limitation, any term sheets executed by the Company and BRS
or their Affiliates).

 

14.                                 Successors
and Assigns.  Except as otherwise
provided herein, this Agreement shall bind and inure to the benefit of and be
enforceable by the Company and its successors and assigns and the Stockholders
and any subsequent holders of Stockholder Shares and the respective successors
and assigns of each of them, so long as they hold Stockholder Shares (and hold
or have received Stockholder Shares in accordance with the terms hereof).

 

15.                                 Counterparts.  This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.

 

16.                                 Remedies.  The parties hereto shall be entitled to
enforce their rights under this Agreement specifically to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. 
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the
Company or any Stockholder may in its sole discretion apply to any court of law
or equity of competent jurisdiction for specific performance and/or injunctive
relief (without posting a bond or other security) in order to enforce or
prevent any violation of the provisions of this Agreement.

 

17.                                 Notices.
All notices, requests, consents and other communications provided for herein
shall be in writing and shall be (i) delivered in person, (ii) transmitted by
telecopy, (iii) sent by first-class, registered or certified mail, postage
prepaid, or (iv) sent by reputable overnight courier service, fees prepaid, to
the recipient at the address or telecopy number set forth below, or such other
address or telecopy number as may hereafter be designated in writing by such
recipient.  Notices shall be deemed given
upon personal delivery, seven days following deposit in the mail as set forth
above, upon acknowledgment by the receiving telecopier or one day following
deposit with an overnight courier service.

 

11

 

If to the Company:

 

MWI Veterinary Supply Co.

2201 N. 20th
Street

Nampa, ID  83687

Attn:  President

Fax:

 

with copies to (which
shall not constitute notice to the Company):

 

Bruckmann, Rosser
Sherrill & Co., Inc.

156 East 56th Street,
29th Floor

New York, NY 10022

Attn:                    Bruce Bruckmann

Brett Pertuz

Fax:  (212) 521-3799

 

Kirkland & Ellis

153 East 53rd Street

New York, NY 10022

Attn:  Eunu Chun, Esq.

Fax:  (212) 446-4900

 

If to BRS:

 

Bruckmann, Rosser
Sherrill & Co., Inc.

156 East 56th Street,
29th Floor

New York, NY 10022

Attn:  Brett Pertuz

Fax:  (212) 521-3799

 

with a copy to (which
shall not constitute notice to BRS):

 

Kirkland & Ellis

153 East 53rd Street

New York, New York  10022

Attn:  Eunu Chun, Esq.

Fax:  (212) 446-4900

 

12

 

If to AgriBeef:

 

Agri Beef Co.

1555 Shoreline Drive, 3rd
Floor

P.O. Box 6640

Boise, Idaho  83702

Attn: Robert Rebholtz and
Rick Stott

Fax:  (208) 338-2605

 

with a copy to (which
shall not constitute notice to AgriBeef):

 

Christensen, Miller,
Fink, Jacobs, Glaser, Weil & Shapiro, LLP

2121 Avenue of the Stars,
18th Floor

Los Angeles, CA 90067

Attn: Barry E. Fink and
Jeffrey Soza

Fax:  (310) 282-6280

 

or such other address or to the attention of such
other Person as the recipient party shall have specified by prior written
notice to the sending party.

 

18.                               Governing
Law.  The corporate law of the State
of New York shall govern all issues concerning the relative rights of the
Company and its stockholders.  All other
provisions of this Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to
principles of conflicts of laws or choice of law of the State of New York or
any other jurisdiction which would result in the application of the law of any
jurisdiction other than the State of New York.

 

19.                                 Descriptive
Headings.  The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
part of this Agreement.

 

20.                                 Time
of the Essence; Computation of Time. 
Time is of the essence for each and every provision of this
Agreement.  Whenever the last day for the
exercise of any privilege or the discharge or any duty hereunder shall fall
upon a Saturday, Sunday, or any date on which banks in New York City, New York
are authorized to be closed, the party having such privilege or duty may
exercise such privilege or discharge such duty on the next succeeding day which
is a regular business day.

 

21.                                 Waiver
of Jury Trial.  The parties to this
Agreement each hereby waives, to the fullest extent permitted by law, any right
to trial by jury of any claim, demand, action, or cause of action (i) arising
under this Agreement or (ii) in any way connected with or related or incidental
to the dealings of the parties hereto in respect of this Agreement or any of
the transactions related hereto, in each case whether now existing or hereafter
arising, and whether in contract, tort, equity, or otherwise.  The parties to this Agreement each hereby
agrees and consents that any such claim, demand, action, or cause of action
shall be decided by court trial without a jury and that the parties to this Agreement
may file an original counterpart of a copy of 

 

13

 

this Agreement with any court as written evidence of
the consent of the parties hereto to the waiver of their right to trial by
jury.

 

*     *     *    
*     *

 

14

 

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

 

	
   

  	
  MWI
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Mary Pat Thompson

  	
   

  
	
   

  	
  Name: Mary
  Pat Thompson

  
	
   

  	
  Title:  VP & CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRUCKMANN,
  ROSSER, SHERRILL & CO. II, L.P.

  
	
   

  	
  By:
  BRSE, L.L.C., as General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Bruce C. Bruckmann

  	
   

  
	
   

  	
  Name: Bruce
  C. Bruckmann

  
	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGRI
  BEEF CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  W.B. Rawlings

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

	
   

  	
  ADDITIONAL STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
  /s/
  Marilena Tibrea

  	
   

  
	
   

  	
  Marilena
  Tibrea

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Stephen C. Sherrill, POA

  	
   

  
	
   

  	
  Julie
  Frist

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  James Cleary

  	
   

  
	
   

  	
  James
  Cleary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Mary Pat Thompson

  	
   

  
	
   

  	
  Mary
  Pat Thompson

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Herb Ingersoll

  	
   

  
	
   

  	
  Herb
  Ingersoll

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  James Ross

  	
   

  
	
   

  	
  James
  Ross

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Jeff Danielson

  	
   

  
	
   

  	
  Jeff
  Danielson

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  John Ryan

  	
   

  
	
   

  	
  John
  Ryan

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Steve Nelson

  	
   

  
	
   

  	
  Steve
  Nelson

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  James Culpepper

  	
   

  
	
   

  	
  James
  Culpepper

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  James Hay

  	
   

  
	
   

  	
  James
  Hay

  

 

16

 

EXHIBIT
A

 

FORM
OF JOINDER TO

STOCKHOLDERS AGREEMENT

 

THIS JOINDER to the
Stockholders Agreement, dated as of [Date], by and among MWI Holdings, Inc., a
Delaware corporation (the “Company”), and certain stockholders of the Company
(the “Agreement”), is made and entered into as of                               
by and between the Company and                               
(“Holder”).  Capitalized terms used but
not otherwise defined herein shall have the meanings set forth in the
Agreement.

 

WHEREAS, Holder has
acquired certain shares of Common Stock (“Holder Stock”), and the Agreement and
the Company requires Holder, as a holder of Common Stock, to become a party to
the Agreement, and Holder agrees to do so in accordance with the terms hereof.

 

NOW, THEREFORE, in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Joinder hereby agree as follows:

 

1.                                       Agreement
to be Bound.  Holder hereby agrees
that upon execution of this Joinder, it shall become a party to the Agreement
and shall be fully bound by, and subject to, all of the covenants, terms and
conditions of the Agreement as though an original party thereto and shall be
deemed a Stockholder for all purposes thereof. 
In addition, Holder hereby agrees that all Common Stock held by Holder
shall be deemed Stockholder Shares for all purposes of the Agreement.

 

2.                                       Successors
and Assigns.  Except as otherwise
provided herein, this Joinder shall bind and inure to the benefit of and be
enforceable by the Company and its successors and assigns and Holder and any
subsequent holders of Holder Stock and the respective successors and assigns of
each of them, so long as they hold any shares of Holder Stock.

 

3.                                       Counterparts.  This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.

 

4.                                       Notices.  For purposes of Section 16 of the
Agreement, all notices, demands or other communications to the Holder shall be
directed to:

 

[Name]

[Address]

[Facsimile Number]

 

5.                                      Governing
Law. The corporate law of the State of Delaware shall govern all issues
concerning the relative rights of the Company and its stockholders.  All other provisions of this Agreement shall
be governed by and construed in accordance with the internal laws of the State
of New York, without giving effect to principles of conflicts of 

 

A-1

 

laws or choice of law of the State of New York or
any other jurisdiction which would result in the application of the law of any
jurisdiction other than the State of New York.

 

6.                                       Descriptive
Headings.  The descriptive headings
of this Joinder are inserted for convenience only and do not constitute a part
of this Joinder.

 

* * * * *

 

A-2

 

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

 

	
   

  	
  MWI
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  [HOLDER]

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

A-3Exhibit
4.3

 

Execution
Copy

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT, dated as of June 18,
2002, by and between MWI Holdings, Inc. (the “Company”), Bruckmann,
Rosser, Sherrill & Co. II, L.P. (“BRS”), Agri Beef Co. (“AgriBeef”),
the other Persons set forth on the signature pages hereto and such other
Persons which become party to this Agreement (such Persons, collectively, the “Additional
Stockholders”).  Capitalized terms
used herein but not otherwise defined shall have the meanings assigned to such
terms in Section 1.

 

1.                                      Definitions.  As used herein, the following terms shall
have the following meanings.

 

“BRS Registrable Securities” means (i)
any shares of Common Stock issued or issuable to BRS, and (ii) any shares
of capital stock of the Company issued or issuable with respect to the
securities referred to in clause (i) by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. 
For purposes of this Agreement, a Person will be deemed to be a holder
of BRS Registrable Securities whenever such Person has the right to acquire
directly or indirectly such BRS Registrable Securities (upon conversion or
exercise in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such right),
whether or not such acquisition has actually been effected.  Such securities will cease to be BRS
Registrable Securities when sold pursuant to Rule 144 or any offering
registered under the Securities Act.

 

“Common Stock” means, collectively,
(i) the Company’s common stock, $0.01 
par value per share, (ii) any other class of common stock, and
(iii) any capital stock of the Company issued or issuable with respect to
the securities referred to in clauses (i) or (ii) above whether by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

“Other Registrable Securities” means
(i) any shares of Common Stock issued or issuable to AgriBeef or any Additional
Stockholder, and (ii) any shares of capital stock of the Company issued or
issuable with respect to the securities referred to in clause (i) by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.  For purposes of this Agreement, a Person will
be deemed to be a holder of Other Registrable Securities whenever such Person
has the right to acquire directly or indirectly such Other Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected.  Such securities will cease to
be Other Registrable Securities when sold pursuant to Rule 144 or any offering
registered under the Securities Act.

 

1

 

“Person” means an individual, a
partnership, a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization
or other entity, or a governmental entity (or any department, agency or
political subdivision thereof).

 

“Registrable Securities” means
collectively, the BRS Registrable Securities and the Other Registrable
Securities

 

“Registration Expenses” means all
expenses incident to the Company’s performance of or compliance with this
Agreement, including without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, and fees and disbursements of counsel for the
Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other Persons retained by the
Company.

 

“Rule 144” means Rule 144 under
the Securities Act (or any similar rule then in force).

 

“Securities Act” means the Securities
Act of 1933, as amended.

 

2.                                      Demand
Registrations.

 

(a)                                  Requests
for Registration.  Subject to this Section 2,
the holders of a majority of the BRS Registrable Securities may request
registration, whether underwritten or otherwise, under the Securities Act of
all or part of their Registrable Securities on Form S-1 or any similar
long-form registration (“Long-Form Registrations”) or on Form S-2
or S-3 or any similar short-form registration (“Short-Form Registrations”),
if available.  Each request for a
Long-Form Registration or Short-Form Registration shall specify the approximate
number of Registrable Securities requested to be registered and the anticipated
per share price range for such offering. 
Within twenty (20) days after receipt of any such request for a
Long-Form Registration or Short-Form Registration, the Company will give
written notice of such requested registration to all other holders of
Registrable Securities and will include (subject to the provisions of this
Agreement including clause (d) below) in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within twenty (20) days after the receipt of the Company’s
notice.  All registrations requested
pursuant to this Section 2(a) are referred to herein as “Demand
Registrations”.

 

(b)                                 Long-Form
Registrations.  The holders of a
majority of the BRS Registrable Securities will be entitled to request four (4)
Long-Form Registrations in which the Company will pay all Registration
Expenses.  A registration will not count
as the permitted Long-Form Registration until it has become effective and
unless the holders of BRS Registrable Securities are able to register and sell
at least 90% of the BRS Registrable Securities requested to be included in such
registration; it being understood and agreed that the requisite holders of BRS
Registrable Securities making a request for a Demand Registration hereunder may
withdraw from such registration at any time prior to the effective date of such
Demand Registration, in which case such request will not count as one 

 

2

 

of the permitted Demand Registrations for such holders, irrespective of
whether or not such registration is effected.

 

(c)                                  Short-Form
Registrations.  The holders of a
majority of the BRS Registrable Securities will be entitled to request an
unlimited number of Short-Form Registrations in which the Company will pay all
Registration Expenses.  The holders of a
majority of the Other Registrable Securities will be entitled to request up to
3 Short-Form Registrations in which the Company will pay all Registration
Expenses.  Demand Registrations will be
Short-Form Registrations whenever the Company is permitted to use any
applicable short form.  After the Company
has become subject to the reporting requirements of the Exchange Act, the
Company will use its best efforts to make Short-Form Registrations available
for the sale of Registrable Securities.

 

(d)                                 Priority
on Demand Registrations.  The Company
will not include in any Demand Registration any securities which are not
Registrable Securities (other than securities owned by the Company which the
Company proposes to register) without the prior written consent of the holders
of at least a majority of the BRS Registrable Securities included in such
registration.  If a Demand Registration
is an underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any,
which can be sold therein without adversely affecting the marketability of the
offering, the Company will include in such registration, (i) first, the
number of Registrable Securities requested to be included in such registration pro rata, if necessary, among the holders of Registrable
Securities based on the number of shares of Registrable Securities requested to
be included therein by each such holder, and (ii) second, any other
securities of the Company requested to be included in such registration pro rata, if necessary, on the basis of the number of shares
of such other securities requested to be included therein by each such holder.

 

(e)                                  Restrictions
on Demand Registrations.  The Company
will not be obligated to effect any Demand Registration (i) within six
months after the effective date of a previous Demand Registration or
(ii) if the Company shall furnish to the holders requesting such Demand
Registration a certificate signed by the Company’s Chairman of the Board
stating that in the good faith judgment of the Board of Directors of the
Company, it would be materially harmful to the economic prospects of the
Company for such Demand Registration to be effected at such time, in which
event the Company shall have the right to defer such filing for a period of not
more than 120 days after receipt of the initial request for the Demand
Registration; provided, that such right to
delay a request shall be exercised by the Company not more than once in any
twelve-month period.

 

(f)                                    Selection
of Underwriters.  In the case of a
Demand Registration, the holders of a majority of the BRS Registrable
Securities to be included in such Demand Registration will have the right to
select the investment banker(s) and manager(s) to administer the offering,
which investment banker(s) and manager(s) will be nationally recognized and
reasonably acceptable to the Company.

 

(g)                                 Other
Registration Rights.  Except as
provided in this Agreement, the Company will not grant to any Persons the right
to request the Company to register any equity 

 

3

 

securities of the Company, without the prior written consent of a
majority of the holders of BRS Registrable Securities.

 

3.                                      Piggyback
Registrations.

 

(a)                                  Right
to Piggyback.  Whenever the Company
proposes to register any of its Common Stock under the Securities Act other
than pursuant to the Company’s initial public offering (if the applicable
underwriters request that only securities owned by the Company be included in
such offering), a Demand Registration, and other than pursuant to a
registration statement on Form S-8 or S-4 or any similar or successor form and
the registration form to be used may be used for the registration of
Registrable Securities (a “Piggyback Registration”), the Company will
give prompt written notice to all holders of Registrable Securities of its
intention to effect such a registration and will, subject to the provisions of
this Agreement including clauses (c) and (d) below, include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within twenty (20) days after
the receipt of the Company’s notice.

 

(b)                                 Piggyback
Expenses.  The Registration Expenses
of the holders of Registrable Securities will be paid by the Company in all
Piggyback Registrations.

 

(c)                                  Priority
on Primary Registrations.  If a
Piggyback Registration is an underwritten primary registration on behalf of the
Company, the Company will include in such registration all securities requested
to be included in such registration; provided, that
if the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without adversely affecting
the marketability of the offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell,
(ii) second, the number of Registrable Securities requested to be included
in such registration by the holders of Registrable Securities, pro rata among the holders of such Registrable Securities on
the basis of the number of shares of such Registrable Securities requested to
be included therein by such holder, and (iii) third, other securities, if
any, requested to be included in such registration.

 

(d)                                 Priority
on Secondary Registrations.  If a
Piggyback Registration is an underwritten secondary registration on behalf of
holders of the Company’s securities (which registration was granted in
accordance with Section 2(g) above), the Company will include in such
registration all securities requested to be included in such registration; provided, that if the managing underwriters advise the
Company in writing that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Company will include in such registration the securities and Registrable
Securities requested to be included therein pro rata, if
necessary, among the holders of such securities and Registrable Securities on
the basis of the number of securities requested to be included in such
registration.

 

(e)                                  Selection
of Underwriters.  In case of a
Piggyback Registration that is an underwritten offering, the Company will have
the right to select the investment banker(s) and manager(s) to administer the
offering, which investment banker(s) and manager(s) will be nationally 

 

4

 

recognized and reasonably acceptable to the holders of a majority of
the Registrable Securities.  The Company
shall not be required to include any Registrable Securities in such
underwritten offering unless the holders of a majority of the Registrable
Securities comply with Section 8 hereof.

 

(f)                                    Other
Registrations.  If the Company has
previously filed a registration statement with respect to Registrable
Securities pursuant to this Section 3, and if such previous registration
has not been withdrawn or abandoned, the Company will not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Forms S-4 or S-8 or any similar or successor
forms or in connection with a Unit Offering Registration), whether on its own
behalf or at the request of any holder or holders of such securities, until a
period of at least six months has elapsed from the effective date of such
previous registration.

 

4.                                      Holdback
Agreements.

 

(a)                                  Each
holder of Registrable Securities agrees not to effect any public sale or
distribution (including sales pursuant to Rule 144) of equity securities
of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and the 90-day
period beginning on the date of the final prospectus relating to any Demand
Registration or Piggyback Registration (except as part of such registration),
unless the underwriters managing the registered public offering, if any, or the
Company request otherwise, in which case, each holder of Registrable Securities
agrees to be bound by a holdback of up to a 180 day period beginning the date
of the final prospectus relating to any such Demand Registration or Piggyback
Registration.

 

(b)                                 The
Company agrees (i) not to effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and during the
90-day period beginning on the effective date of any underwritten Demand
Registration or Piggyback Registration (except as part of such underwritten
registration, or pursuant to registrations on Forms S-4 or S-8 or any
similar or successor forms), unless the underwriters managing the registered
public offering otherwise agree, and (ii) to use its best efforts to cause
each holder of at least 5% (on a fully diluted basis) of its Common Stock, or
any securities convertible into or exchangeable or exercisable for Common
Stock, purchased from the Company at any time after the date of this Agreement
(other than in a registered public offering) to agree not to effect any public
sale or distribution (including sales pursuant to Rule 144) of any such
securities during such period (except as part of such underwritten
registration, if otherwise permitted), unless the underwriters managing the
registered public offering otherwise agree.

 

5.                                      Registration
Procedures.  Whenever the holders
of Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company will use its reasonable best
efforts to effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant
thereto the Company will as expeditiously as possible:

 

5

 

(a)                                  prepare
and file with the Securities and Exchange Commission a registration statement
with respect to such Registrable Securities and use its reasonable best efforts
to cause such registration statement to become effective (provided that before
filing a registration statement or prospectus or any amendments or supplements
thereto, the Company will furnish to one counsel selected by the holders of a
majority of the Registrable Securities covered by such registration statement
copies of all such documents proposed to be filed);

 

(b)                                 prepare
and file with the Securities and Exchange Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for the lesser of (x) 180 days and (y) such shorter period
which will terminate when all Registrable Securities covered by the
registration statement have been sold and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;

 

(c)                                  furnish
to each seller of Registrable Securities such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such seller;

 

(d)                                 use
its reasonable best efforts to register or qualify such Registrable Securities
under such other securities or blue sky laws of such jurisdictions as any
seller reasonably requests and do any and all other acts and things which may
be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subsection, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of
process (i.e., service of process which is not
limited solely to securities law violations) in any such jurisdiction);

 

(e)                                  notify
each seller of such Registrable Securities, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements therein not misleading, and, at the
request of any such seller, the Company will promptly prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading;

 

(f)                                    cause
all such Registrable Securities to be listed on each securities exchange or
nationally recognized quotation system on which similar securities issued by
the Company are then listed;

 

6

 

(g)                                 provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such registration statement;

 

(h)                                 enter
into such customary agreements (including underwriting agreements in customary
form) and take all such other actions as the holders of a majority of the
Registrable Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock split or a
combination of shares);

 

(i)                                     make
available at reasonable times for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement subject to
the applicable person(s) executing a nondisclosure agreement in reasonable form
and substance if reasonably required by the Company;

 

(j)                                     otherwise
use its reasonable best efforts to comply with all applicable rules and
regulations of the Securities and Exchange Commission, and make available to
its security holders, as soon as reasonably practicable, an earning statement
covering the period of at least twelve months beginning with the first day of
the Company’s first full calendar quarter after the effective date of the
registration statement, which earning statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;

 

(k)                                  permit
any holder of Registrable Securities which holder, in its sole and exclusive
judgment, might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration or comparable
statement and to require the insertion therein of material, furnished to the
Company in writing, which in the reasonable judgment of such holder and its
counsel should be included;

 

(l)                                     in
the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any common stock included
in such registration statement for sale in any jurisdiction, the Company will
use its reasonable best efforts promptly to obtain the withdrawal of such
order;

 

(m)                               use
its reasonable best efforts to cause such Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities; and

 

(n)                                 obtain
a “cold comfort” letter from the Company’s independent public accountants in
customary form and covering such matters of the type customarily covered by “cold

 

7

 

comfort” letters as the holders of a majority of the Registrable
Securities being sold reasonably request.

 

If any such registration or comparable statement refers to any holder
by name or otherwise as the holder of any securities of the Company and if, in
its sole and exclusive judgment, such holder is or might be deemed to be a
controlling person of the Company, such holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory
to such holder and presented to the Company in writing, to the effect that the
holding by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the Company’s
securities covered thereby and that such holding does not imply that such
holder will assist in meeting any future financial requirements of the Company,
or (ii) in the event that such reference to such holder by name or
otherwise is not required by the Securities Act or any similar Federal statute
then in force, the deletion of the reference to such holder; provided, that with respect to this clause (ii) such holder
shall furnish to the Company an opinion of counsel to such effect, which
opinion and counsel shall be reasonably satisfactory to the Company.

 

6.                                      Registration
Expenses.  Except as otherwise provided herein, (i) all
Registration Expenses will be borne by the Company, and (ii) the Company will
reimburse the holders of Registrable Securities covered by a registration for
the reasonable fees and disbursements of one counsel chosen by the holders of a
majority of the BRS Registrable Securities.

 

7.                                      Indemnification.

 

(a)                                  The
Company agrees to indemnify, to the extent permitted by law, each holder of
Registrable Securities, its partners, members, officers and directors and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses arising out of or
based upon any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse such holder, partners,
members, director, officer or controlling person for any legal or other
expenses reasonably incurred by such holder, partner, member, director, officer
or controlling person in connection with the investigation or defense of such
loss, claim, damage, liability or expense, except insofar as the same are
caused by or contained in any information furnished in writing to the Company
by such holder expressly for use therein or by such holder’s failure to deliver
a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such holder with a
sufficient number of copies of the same. 
In connection with an underwritten offering, the Company will indemnify
such underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the holders of
Registrable Securities.

 

(b)                                 In
connection with any registration statement in which a holder of Registrable
Securities is participating, each such holder will furnish to the Company in
writing such information and affidavits as the Company reasonably requests for
use in connection with any such registration 

 

8

 

statement or prospectus and, to the extent permitted by law, will
(i) indemnify the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act) against any
losses, claims, damages, liabilities and expenses resulting from any untrue or
alleged untrue statement of material fact relating to such holder and provided
by such holder to the Company or the Company’s agent contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission
is contained in, or based upon, any information or affidavit so furnished in
writing by such holder; provided, that
the obligation to indemnify will be individual to each holder and will be
limited to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement, and (ii)
reimburse the Company, its directors and officers and each Person who controls
the Company (within the meaning of the Securities Act) for any legal or other
expenses reasonably incurred by such Persons in connection with the
investigation or defense of such loss, claim, damage, liability or expense,
except insofar as the same are caused by or contained in any information
furnished to such holder of Registrable Securities by such Persons expressly
for use therein.  In connection with an
underwritten offering in which a holder of Registrable Securities is
participating, each such holder will indemnify such underwriters, their
officers and directors and each Person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Company, its directors and officers and
each Person who controls the Company (within the meaning of the Securities
Act).

 

(c)                                  Any
Person entitled to indemnification hereunder will (i) give prompt written
notice to the indemnifying party of any claim with respect to which it seeks
indemnification (provided that failure to give such notice shall not affect the
right of such Person to indemnification hereunder unless such failure is
prejudicial to the indemnifying party’s ability to defend such claim) and
(ii) unless in such indemnified party’s reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party.  If such defense is assumed, the indemnifying
party will not be subject to any liability for any settlement made by the
indemnified party without its prior written consent (but such consent will not
be unreasonably withheld).  An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.

 

(d)                                 The
indemnification provided for under this Agreement will remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling Person of such indemnified party
and will survive the transfer of securities. 
The Company and each holder also agree to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such party
in the event the indemnification provided for herein is unavailable for any
reason.

 

9

 

(e)                                  Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with an underwritten public offering conflict with the foregoing provisions,
the provisions in the underwriting agreement shall control.

 

8.                                      Participation
in Underwritten Registrations. 
No Person may participate in any registration hereunder which is
underwritten unless such Person (a) agrees to sell such Person’s
securities on the basis provided in any underwriting arrangements approved by
the Person or Persons entitled hereunder to approve such arrangements and
(b) completes and executes all customary questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements; provided, that no holder of Registrable Securities included
in any underwritten registration shall be required to make any representations
or warranties to the Company or the underwriters other than representations and
warranties regarding such holder and such holder’s intended method of
distribution.

 

9.                                      Rule
144 Reporting.  With a view to
making available to the holders of Registrable Securities the benefits of
certain rules and regulations of the Securities and Exchange Commission which
may permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its best efforts to:

 

(a)                                  make
and keep current public information available, within the meaning of Rule 144
or any similar or analogous rule promulgated under the Securities Act, at all
times after it has become subject to the reporting requirements of the Exchange
Act;

 

(b)                                 file
with the Securities and Exchange Commission, in a timely manner, all reports
and other documents required of the Company under the Securities Act and
Exchange Act (after it has become subject to such reporting requirements); and

 

(c)                                  so
long as any party hereto owns any Registrable Securities, furnish to such
Person forthwith upon request, a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time commencing
ninety (90) days after the effective date of the first registration filed by
the Company for an offering of its securities to the general public), the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); a copy of the most recent annual or quarterly
report of the Company; and such other reports and documents as such Person may
reasonably request in availing itself of any rule or regulation of the
Securities and Exchange Commission allowing it to sell any such securities
without registration.

 

10

 

10.                                 Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when delivered
personally, mailed by certified or registered mail, return receipt requested
and postage prepaid, or sent via a nationally recognized overnight courier, or
sent via facsimile to the recipient.  Such
notices, demands and other communications will be sent to the address indicated
below:

 

If to the Company:

 

c/o MWI Veterinary Supply Co.

2201 N. 20th Street

Nampa, ID 
83687

Attn: 
President

Fax:

 

with copies (which shall not constitute
notice to the Company) to:

 

Bruckmann, Rosser, Sherrill & Co., Inc.

156 East 56th Street, 29th
Floor

New York, New York  10022

Attention:                 Bruce Bruckmann

Brett Pertuz

Fax:  (212) 521-3799

 

Kirkland & Ellis

153 East 53rd Street

New York, NY 
10022

Attention:  Eunu Chun, Esq.

Fax:                           (212) 446-4900

 

If to BRS:

 

Bruckmann, Rosser, Sherrill & Co., Inc.

156 East 56th Street, 29th
Floor

New York, New York  10022

Attention: 
Brett Pertuz

Fax: 
(212) 521-3799

 

with a copy (which shall not constitute
notice to BRS) to:

 

Kirkland & Ellis

153 East 53rd Street

New York, NY 
10022

Attention:  Eunu Chun, Esq.

Fax:                           (212) 446-4900

 

11

 

If to AgriBeef:

 

Agri Beef Co.

1555 Shoreline Drive, 3rd Floor

P.O. Box 6640

Boise, Idaho 
83702

Attn: Robert Rebholtz and Rick Stott

Fax: 
(208) 338-2605

 

with a copy (which shall not constitute
notice to BRS) to:

 

Christensen, Miller, Fink, Jacobs, Glaser,
Weil & Shapiro, LLP

2121 Avenue of the Stars, 18th Floor

Los Angeles, CA 90067

Attention: 
Barry E. Fink

Fax: 
(310) 282-6280

 

or such other address or to the attention of such other Person as the
recipient party shall have specified by prior written notice to the sending
party.

 

11.                               Miscellaneous.

 

(a)                                  No
Inconsistent Agreements.  The Company
will not enter into any agreement which is inconsistent with or violates the
rights granted to the holders of Registrable Securities in this Agreement.

 

(b)                                 Remedies.  Any Person having rights under any provision
of this Agreement will be entitled to enforce such rights specifically to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.  The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that any party may in its sole discretion apply to any court
of law or equity of competent jurisdiction (without posting any bond or other
security) for specific performance and for other injunctive relief in order to
enforce or prevent violation of the provisions of this Agreement.

 

(c)                                  Amendments
and Waivers.  Except as otherwise
provided herein, the provisions of this Agreement may be amended or waived only
upon the prior written consent of the Company and holders of at least a
majority of the Registrable Securities.

 

(d)                                 Successors
and Assigns.  All covenants and
agreements in this Agreement by or on behalf of any of the parties hereto will
bind and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not. 
In addition, whether or not any express 

 

12

 

assignment has been made, the provisions of this Agreement which are
for the benefit of purchasers or holders of Registrable Securities are also for
the benefit of, and enforceable by, any subsequent holder of Registrable
Securities.

 

(e)                                  Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.

 

(f)                                    Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures
of more than one party, but all such counterparts taken together will
constitute one and the same Agreement.

 

(g)                                 GOVERNING
LAW.  ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK.

 

(h)                                 Time
is of the Essence; Computation of Time. 
Time is of the essence for each and every provision of this
Agreement.  Whenever the last day for the
exercise of any privilege or the discharge of any duty hereunder shall fall
upon a Saturday, Sunday, or any date on which banks in New York, New York are
authorized to be closed, the party having such privilege or duty may exercise
such privilege or discharge such duty on the next succeeding day which is a
regular business day.

 

(i)                                     Descriptive
Headings.  The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
part of this Agreement.

 

*  
*   *   *   *

 

13

 

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

 

 

	
   

  	
  MWI HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Mary Pat Thompson

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRUCKMANN, ROSSER,
  SHERRILL & CO. II, L.P.

  
	
   

  	
  By: BRSE, L.L.C., as
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Bruce C. Bruckmann

  	
   

  
	
   

  	
  Name: Bruce C.
  Bruckmann

  	 

	
   

  	
  Title:   Managing Director

  	 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGRI BEEF CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ W.B. Rawlings

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

 

	
   

  	
  ADDITIONAL
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Marilena Tibrea

  	
   

  
	
   

  	
  Marilena Tibrea

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Stephen C.
  Sherrill, POA

  	
   

  
	
   

  	
  Julie Frist

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James Cleary

  	
   

  
	
   

  	
  James Cleary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Mary Pat Thompson

  	
   

  
	
   

  	
  Mary Pat Thompson

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Herb Ingersoll

  	
   

  
	
   

  	
  Herb Ingersoll

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James Ross

  	
   

  
	
   

  	
  James Ross

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jeff Danielson

  	
   

  
	
   

  	
  Jeff Danielson

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John Ryan

  	
   

  
	
   

  	
  John Ryan

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Steve Nelson

  	
   

  
	
   

  	
  Steve Nelson

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James Culpepper

  	
   

  
	
   

  	
  James Culpepper

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James Hay

  	
   

  
	
   

  	
  James Hay

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