EXHIBIT A
AGREEMENT AND PLAN OF MERGER
By and Among
SARATOGA BEVERAGE GROUP, INC.
ROWALE CORP.
and
THE FRESH JUICE COMPANY, INC.
Dated as of August 14, 1998
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of August 14, 1998, by
and among Saratoga Beverage Group, Inc., a Delaware corporation ("Parent"),
Rowale Corp., a Delaware corporation and wholly owned subsidiary of Parent
("Sub"), and The Fresh Juice Company, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Boards of Directors of Parent and the Company
have determined that it is in the best interests of their respective companies
and their stockholders to consummate the business combination transaction
provided for herein in which Sub will, subject to the terms and conditions set
forth herein, merge with and into the Company (the "Merger"); and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and covenants in connection with the Merger;
NOW, THEREFORE, in consideration of the mutual covenants;
representations, warranties and agreements contained herein, and intending to
be legally bound hereby, the parties agree as follows:
ARTICLE 1
THE MERGER
1.01 THE MERGER. Subject to the terms and conditions of this
Agreement, in accordance with the Delaware General Corporation Law ("DGCL"), at
the Effective Time (as hereinafter defined), Sub shall merge with and into the
Company. The Company shall become the surviving corporation (hereinafter
sometimes called the "Surviving Corporation") in the Merger, and shall continue
its corporate existence under the laws of the State of Delaware. The name of
the Surviving Corporation shall be The Fresh Juice Company, Inc. Upon
consummation of the Merger, the separate corporate existence of Sub shall
terminate.
1.02 PLAN OF MERGER. This Agreement shall constitute an agreement
of merger for purposes of the DGCL.
1.03 EFFECTIVE TIME. As promptly as practicable after all of the
conditions set forth in Article VII shall have been satisfied or, if
permissible, waived by the party entitled to the benefit of the same, the
Company and Sub shall duly execute and file a certificate of merger (the
"Certificate of Merger") with the Secretary of State of the State of Delaware
(the "Delaware Secretary") in accordance with Section 251 of the DGCL. The
Merger shall become effective on the date (the
"Effective Date") and at such time (the "Effective Time") as the Certificate of
Merger is filed with the Delaware Secretary or at such later date and time as
is specified in the Certificate of Merger.
1.04 EFFECT OF THE MERGER. At the Effective Time, the effect of
the Merger shall be as provided herein and as set forth in Section 259 of the
DGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, (i) all the property, rights, privileges, powers and
franchises of Sub shall vest in the Surviving Corporation, (ii) all debts,
liabilities, obligations, restrictions, disabilities and duties of Sub and the
Company shall become the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation and (iii) the Surviving
Corporation shall become a wholly owned subsidiary of Parent.
1.05 CONVERSION OF COMPANY COMMON STOCK.
(a) At the Effective Time, each share of the common stock,
par value $.01 per share, of the Company (the "Company Common Stock")
issued and outstanding immediately prior to the Effective Time (other
than (i) shares of Company Common Stock held in the Company's treasury
or directly or indirectly by Parent, Sub or the Company, and (ii)
Dissenting Shares (as such term is defined in Section 1.06 hereof))
shall, by virtue of this Agreement and without any action on the part
of the holder thereof, be converted into the right to receive and be
exchangeable for $3.35 per share in cash (the "Per Share Price"). By
way of example, a holder of 1,000 shares of Company Common Stock will
receive $3,350.00 in cash.
(b) Each share of Company Common Stock converted into the Per
Share Price pursuant to this Article I shall no longer be outstanding
and shall automatically be canceled and shall cease to exist, and each
certificate (each a "Certificate," and collectively, the
"Certificates") previously representing any such shares of Company
Common Stock shall thereafter represent the right to receive cash
equal to the Per Share Price multiplied by the number of shares of
Company Common Stock represented by such Certificate (in the
aggregate, the "Merger Consideration") or the right to perfect their
right to receive payment for their shares pursuant to the DGCL and
Section 1.06 hereof. Certificates previously representing shares of
Company Common Stock shall be exchanged for the Merger Consideration
upon the surrender of such Certificates in accordance with Section
2.02 hereof, without any interest thereon, subject to applicable law
and the provisions of this Agreement relating to Dissenting Shares (as
hereinafter defined).
(c) The Company (i) will grant no additional options or
restricted stock or similar rights under its 1996 Incentive Stock
Option Plan (the "Option Plan") or otherwise on or after the date of
this Agreement and (ii) has suspended, pending the termination of this
Agreement without the Merger being consummated, the Option Plan
without prejudice to the rights of the holder of options awarded
pursuant thereto. The Company will use reasonable diligence and timely
efforts to obtain the consent of each holder of an option or
restricted stock right (whether or not then exercisable or vested) to
the cancellation or conversion into
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shares of Company Common Stock of his, her or its options or warrants
in exchange for, at the Effective Time, an amount in cash equal to the
excess, if any, of the Per Share Price over the exercise price
thereof, multiplied by the number of shares of Company Common Stock
subject thereto.
(d) Each share of Company Common Stock held in the treasury
of the Company, and each share of Company Common Stock owned directly
or indirectly by Parent, Sub or the Company, shall be canceled and
retired without payment of any consideration therefor. Each share of
common stock, par value $.01 per share, of Sub issued and outstanding
immediately prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of common stock,
par value $.01 per share, of the Surviving Corporation.
1.06 RIGHTS WITH RESPECT TO DISSENTING SHARES.
(a) Notwithstanding anything in this Agreement to the
contrary and unless otherwise provided by applicable law, shares of
Company Common Stock that are issued and outstanding immediately prior
to the Effective Time and that are owned by stockholders who have
properly exercised and perfected their rights of appraisal within the
meaning of Section 262 of the DGCL (the "Dissenting Shares"), shall
not be converted into the right to receive the Per Share Price, unless
and until such stockholders shall have failed to perfect or shall have
effectively withdrawn or lost their right of appraisal and payment
under applicable law. If any such stockholder shall have failed to
perfect or shall have effectively withdrawn or lost such right of
appraisal, each share of Company Common Stock held by such stockholder
shall thereupon be deemed to have been converted into the right to
receive and become exchangeable for the Per Share Price, at the
Effective Time, pursuant to Section 1.05(a) hereof.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal received by the Company, withdrawals of such
demands, and any other instruments served in connection with such
demands pursuant to the DGCL and received by the Company and (ii) the
opportunity to direct all negotiations and proceedings with respect to
demands for appraisal under the DGCL consistent with the obligations
of the Company thereunder. The Company shall not, except with the
prior written consent of Parent, (x) make any payment with respect to
any demands for appraisal, (y) offer to settle or settle any such
demands or (z) waive any failure to timely deliver a written demand
for appraisal in accordance with the DGCL.
1.07 CERTIFICATE OF INCORPORATION. Unless otherwise agreed to by
the parties prior to the Effective Time, at and after the Effective Time, the
Certificate of Incorporation of Sub shall be the Certificate of Incorporation
of the Surviving Corporation, until thereafter amended as provided by law and
the Certificate of Incorporation.
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1.08 BYLAWS. Unless otherwise agreed to by the parties prior to
the Effective Time, at and after the Effective Time, the Bylaws of Sub shall be
the Bylaws of the Surviving Corporation, until thereafter amended as provided
by law, the Certificate of Incorporation of the Surviving Corporation and such
Bylaws.
1.09 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. As of
the Effective Time, the board of directors of the Surviving Corporation shall
consist of one (1) member whom shall be designated by Parent in writing prior
to the Effective Time. The director so designated shall hold office in
accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation until his or her respective successors are duly elected or
appointed and qualified. The board of directors of the Surviving Corporation
shall elect the officers of the Surviving Corporation.
1.10 BOARD OF DIRECTORS OF PARENT. As of the Effective Time, the
board of directors of Parent shall be the Board of Directors in office prior to
the Effective Time, plus one (1) designee of the Company. The directors in
office shall hold office in accordance with the Certificate of Incorporation
and Bylaws of the Parent until his or her respective successor(s) is (are) duly
elected or appointed and qualified. The designee of the Company to the Board of
Directors of Parent shall not serve after the 1999 Annual Meeting of
Stockholders of Parent unless such designee is nominated by the Nominating
Committee of the Board of Directors of Parent. The board of directors of the
Parent shall elect the officers of the Parent.
1.11 ADDITIONAL ACTIONS. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any further
assignments or assurances in law or any other acts are necessary or desirable
(a) to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to and possession of any property or right of the Company
acquired or to be acquired by reason of, or as a result of, the Merger, or
(b) otherwise to carry out the purposes of this Agreement, the Company and its
proper officers and directors shall be deemed to have granted to the Surviving
Corporation an irrevocable power of attorney to execute and deliver all such
proper deeds, assignments and assurances in law and to do all acts necessary or
proper to vest, perfect or confirm title to and possession of such property or
rights in the Surviving Corporation and otherwise to carry out the purposes of
this Agreement; and the proper officers and directors of the Surviving
Corporation are fully authorized in the name of the Company or otherwise to
take any and all such action.
1.12 COMPANY ACTION. The Company represents and warrants that
(i) the Board of Directors of the Company has duly approved the execution of
this Agreement, and the Merger, and has resolved to recommend approval of the
Merger by the Company's stockholders, (ii) the persons or entities listed on
Exhibit A attached hereto own an aggregate of 3,443,290 issued and outstanding
shares of Company Common Stock and (iii) each such person or entity listed on
Exhibit A has executed and delivered a Voting, Standstill and Proxy Agreement,
in substantially the form annexed hereto as Exhibit B (the "Voting Agreement").
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1.13 BOGEN AGREEMENT AND ▇▇▇▇▇ AGREEMENT. ▇▇▇▇▇▇ ▇▇▇▇▇, Parent and
the Company shall have entered into an Employment Termination, Non-Competition
and Consulting Agreement, in substantially the form annexed hereto as Exhibit C
(the "Bogen Agreement"). ▇▇▇▇▇▇ ▇▇▇▇▇, Parent and the Company shall have
entered into an Employment Termination and Non-Competition Agreement, in
substantially the form annexed hereto as Exhibit D (the "▇▇▇▇▇ Agreement").
1.14 FINANCING; EQUITY FINANCING. Parent has delivered to the
Company a commitment letter or letters (the "Commitment Letter(s)"), in form
and on terms reasonably satisfactory to the Company, from a responsible
financing source or sources, indicating its or their willingness, subject to
the conditions set forth therein, to lend (the "Financing") Parent an amount
sufficient, together with Parent's cash and cash equivalents, to fund the Per
Share Price plus expenses related to the transactions contemplated hereby. In
addition, Parent intends to issue such number of shares of its common stock to
investors, which may include one or more non-officer directors or other
affiliates of the Company, as is necessary to consummate the Financing.
ARTICLE 2
PAYMENT OF MERGER CONSIDERATION
2.01 PARENT TO MAKE CASH AVAILABLE. On or prior to the Effective
Time, Parent shall deposit, or shall cause to be deposited, with American Stock
Transfer & Trust Company or such other bank or trust company selected by Parent
and reasonably acceptable to the Company (the "Exchange Agent"), in trust for
the benefit of the holders of Certificates, for exchange in accordance with
this Article II, sufficient cash to pay in full the cash payments (such cash
being hereinafter referred to as the "Exchange Fund") to be issued pursuant to
Section 1.05 and paid pursuant to Section 2.02(a) in exchange for outstanding
shares of Company Common Stock.
2.02 EXCHANGE OF SHARES.
(a) As soon as practicable after the Effective Time, and in
no event later than three (3) business days thereafter, the Exchange
Agent shall (and Parent shall cause the Exchange Agent to so) mail to
each holder of record of a Certificate or Certificates a form letter
of transmittal and instructions for use in effecting the surrender of
the Certificates in exchange for cash equal to the Per Share Price
multiplied by the number of shares of Company Common Stock represented
by such Certificate or Certificates. Such letter of transmittal and
instructions shall be in the form agreed to by Parent and the Company
prior to the Closing. Upon surrender of a Certificate for exchange and
cancellation to the Exchange Agent, together with such letter of
transmittal, duly executed, the holder of such Certificates shall be
entitled to receive in exchange therefor a check representing the
amount of cash which such holder has the right to receive in respect
of the Certificate so surrendered pursuant to the provisions of this
Article II, and the Certificate so surrendered shall forthwith
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be canceled. No interest will be paid or accrued on the cash paid for
the Company Common Stock, unpaid dividends and distributions, if any,
payable to holders of Certificates.
(b) After the Effective Time, there shall be no transfers on
the stock transfer books of the Company of the shares of Company
Common Stock which were issued and outstanding immediately prior to
the Effective Time.
(c) Any portion of the Exchange Fund that remains unclaimed
by the stockholders of the Company for six (6) months after the
Effective Time shall be transferred to the Surviving Corporation. Any
stockholders of the Company who have not theretofore complied with
this Article II shall thereafter look only to Parent and the Surviving
Corporation for payment of their Merger Consideration, without any
interest thereon. Notwithstanding the foregoing, none of the Surviving
Corporation, the Company, Parent, Sub, the Exchange Agent or any other
person shall be liable to any former holder of shares of Company
Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
(d) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and,
if required by Parent, the posting by such person of a bond in such
amount as Parent may direct as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate,
the Merger Consideration deliverable in respect thereof pursuant to
this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Sub as
follows, subject only to the exceptions specifically disclosed under
appropriate section headings in the Company's schedules:
3.01 CORPORATE ORGANIZATION.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
The Company has the corporate power and authority to own or lease all
of its properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business in
each jurisdiction in which the nature of the business conducted by it
or the character or location of the properties and assets owned or
leased by it makes such licensing or qualification necessary, except
where the failure to be so licensed or qualified would not have a
Material Adverse Effect (as defined below) on the Company. As used in
this Agreement, the term "Material Adverse
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Effect" means, with respect to Parent, the Company or the Surviving
Corporation, as the case may be, any change or effect that is or is
reasonably expected to be materially adverse to the business,
properties, assets, liabilities, financial condition or results of
operations of such party and its Subsidiaries, taken as a whole. As
used in this Agreement, the word "Subsidiary" means any corporation,
partnership or other organization, whether incorporated or
unincorporated, which is or was consolidated with such party or with
which such party is or was consolidated for financial reporting
purposes. The Certificate of Incorporation and Bylaws of the Company,
copies of which have previously been delivered to Parent, are true and
complete copies of such documents as in effect as of the date of this
Agreement.
(b) Except as set forth on Schedule 3.01, the Company has no
direct or indirect Subsidiaries. Except as set forth on Schedule 3.01,
the Company does not own, control or hold with the power to vote,
directly or indirectly of record, beneficially or otherwise, any
capital stock or any equity or ownership interest in any corporation,
partnership, associate, joint venture or other entity, except for less
than five percent (5%) of any equity security registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(c) The minute books of each of the Company and its
Subsidiaries contains true, accurate and complete records of all
meetings and other corporate actions held or taken by its stockholders
and board of directors (including committees thereof).
3.02 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
30,000,000 shares of Company Common Stock and 7,000,000 shares of
preferred stock, par value $.01 per share ("Company Preferred Stock").
As of the date of this Agreement, there are (x) 6,467,731 shares of
Company Common Stock issued and outstanding and (y) such shares of
Company Common Stock issuable upon exercise of outstanding options or
warrants as set forth in Schedule 3.02 annexed hereto. No Company
Preferred Stock has ever been issued. Except as set forth on Schedule
3.02, all of the issued and outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights with no personal liability
attaching to the ownership thereof. The authorized and issued and
outstanding capital stock of each Subsidiary of the Company is set
forth on Schedule 3.02. All of the issued and outstanding shares of
capital stock of each Subsidiary of the Company are owned by the
Company, have been duly authorized and validly issued and are fully
paid, non-assessable and free of preemptive rights with no personal
liability attaching to the ownership thereof. Except as set forth in
Schedule 3.02 hereto, the Company does not have and is not bound by
any outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character calling for the purchase or issuance of
any shares of Company Common Stock or any other equity security of the
Company or any of its Subsidiaries or any securities representing the
right to purchase or otherwise receive any shares of Company Common
Stock or any other equity security of the Company or any of its
Subsidiaries other than as
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provided for in this Agreement. There are no bonds, debentures, notes
or other indebtedness of the Company having the right to vote (or
convertible into, or exchangeable for securities having the right to
vote) on any matters on which stockholders of the Company may vote.
(b) Except as contemplated herein or disclosed on Schedule
3.02 hereto, there are no agreements or understandings, with respect
to the voting of any shares of Company Common Stock or capital stock
of any Subsidiary of the Company or which restrict the transfer of
such shares, to which the Company or any of its Subsidiaries is a
party and, to the knowledge of the Company, there are no such
agreements or understandings to which the Company or any of its
Subsidiaries is not a party with respect to the voting of any such
shares or which restrict the transfer of such shares, other than
applicable federal and state securities laws.
(c) All dividends on Company Common Stock which have been
declared prior to the date of this Agreement have been paid in full.
3.03 AUTHORITY; NO VIOLATION.
(a) The Company has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and
the consummation by the Company of the transactions contemplated by
this Agreement have been duly and validly approved by the Board of
Directors of the Company. Subject to the requirements of applicable
law, the Board of Directors of the Company has directed that this
Agreement and the transactions contemplated hereby be submitted to the
Company's stockholders for approval at a meeting of such stockholders
(the "Company Stockholder Meeting") and has voted to recommend to its
stockholders that its stockholders approve and adopt this Agreement
and the transactions contemplated thereby and, except for the adoption
of this Agreement by the requisite vote of the Company's stockholders
and the filing of the Certificate of Merger, no other corporate
proceedings on the part of the Company are necessary to approve this
Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the
Company and (assuming the due authorization, execution and delivery by
Parent and Sub) constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
(b) Except as set forth in Schedule 3.03 hereto, neither the
execution and delivery of this Agreement by the Company, nor the
consummation by the Company of the transactions contemplated hereby,
nor compliance by the Company with any of the terms or provisions
hereof, will (i) violate, conflict with or result in a breach of any
provision of the Certificate of Incorporation or Bylaws of the
Company, (ii) assuming that the consents and approvals referred to in
Section 3.04 hereof are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to the Company or any of its Subsidiaries, or
any of their respective properties or assets, or (y)
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violate, conflict with, result in a breach of any provisions of or the
loss of any benefit under, constitute a default (or any event, which,
with notice or lapse of time, or both would constitute a default)
under, result in the termination of or a right of termination or
cancellation under, accelerate the performance required by, or result
in the creation of any lien, pledge, security interest, charge or
other encumbrance upon any of the properties or assets of the Company
or any of its Subsidiaries under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which
the Company or any of its Subsidiaries is a party, or by which the
Company or any of its Subsidiaries or any of their respective
properties or assets may be bound or affected, except (in the case of
clause (y) above) for such violations, conflicts, beaches or defaults
which, either individually or in the aggregate, will not have a
Material Adverse Effect on the Company.
3.04 CONSENTS AND APPROVALS. Except for (a) the approval of this
Agreement by the requisite vote of the stockholders of the Company, (b) the
filing of the Certificate of Merger with the Delaware Secretary pursuant to the
DGCL to effect the Merger and (c) such filings, authorizations, consents or
approvals as may be set forth in Schedule 3.04 hereto, no consents or approvals
of, or filings or registrations with, any court, administrative agency or
commission or other governmental authority or instrumentality (each a
"Governmental Entity") or with any third party are necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation by the Company of the Merger and the other transactions
contemplated hereby.
3.05 FINANCIAL STATEMENTS.
(a) The Company has previously delivered to Parent copies of
the audited consolidated balance sheets of the Company as of November
30, 1995, November 30, 1996 and November 30, 1997, and the related
consolidated statements of income, changes in stockholders' equity and
cash flows for the fiscal years 1996 through 1997, inclusive, included
in the Company's Annual Report on Form 10-KSB for the fiscal year
ended November 30, 1997 filed with the SEC under the Exchange Act. The
Company has also previously delivered to Parent copies of the
unaudited consolidated balance sheets of the Company as of May 31,
1998, and the related unaudited consolidated statements of income and
cash flows for the six months ended May 31, 1998, included in the
Company's Quarterly Report on Form 10-QSB for the quarter ended May
31, 1998 filed with the SEC under the Exchange Act. The audited
consolidated financial statements and unaudited consolidated interim
financial statements of the Company and its Subsidiaries included or
incorporated by reference in the Company SEC Reports (as hereinafter
defined) filed on or after November 30, 1995 have been prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Form 10-QSB), complied as of their
respective dates in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, and fairly present the consolidated financial
position of the Company and its
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Subsidiaries as of the dates thereof and the consolidated income and
retained earnings and sources and applications of funds for the
periods then ended (subject, in the case of any unaudited interim
financial statements, to the absence of footnotes required by GAAP and
normal year-end adjustments).
(b) Except as set forth on Schedule 3.05(b) hereto for
liabilities incurred since May 31, 1998 in the ordinary course of
business consistent with past practice and as otherwise set forth on
Schedule 3.05(b) hereto, the Company does not have any liabilities or
obligations of any nature whatsoever (whether absolute, accrued,
contingent or otherwise) which are not adequately reserved or
reflected on the balance sheet of the Company included in its
Quarterly Report on Form 10-QSB for the quarter ended May 31, 1998,
except for liabilities or obligations which in the aggregate do not
exceed $100,000, and there do not exist any circumstances that could
reasonably be expected to result in such liabilities or obligations.
3.06 FAIRNESS OPINION. The Company has received the opinion of
Ladenburg ▇▇▇▇▇▇▇▇ & Company to the effect that, as of the date of such
opinion, the Per Share Price is fair to the Company's stockholders from a
financial point of view, and such opinion has not been amended or rescinded as
of the date of this Agreement.
3.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Schedule 3.07 hereto, since May 31, 1998, there has not been any Material
Adverse Effect on the Company (including without limitation any loss of
employees or customers that has had a Material Adverse Effect, or that is
reasonably likely to have a Material Adverse Effect, on the Company) and, to
the best knowledge of the Company, no fact or condition exists which will cause
such a Material Adverse Effect on the Company in the future.
3.08 LEGAL PROCEEDINGS. Except as set forth in Schedule 3.08
hereto, neither the Company nor any of its Subsidiaries is a party to any, and
there are no pending or, to the best knowledge of the Company, threatened,
legal, administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against or affecting
the Company or any of its Subsidiaries or any property or asset of the Company
or any of its Subsidiaries, before any court, arbitrator or administrative,
Governmental Entity, domestic or foreign, which would, either individually or
in the aggregate, have a Material Adverse Effect on the Company, and no facts
or circumstances have come to the Company's attention which have caused it to
believe that such a claim, action, proceeding or investigation against or
affecting the Company or any of its Subsidiaries could reasonably be expected
to occur. Neither the Company nor any of its Subsidiaries nor any property or
asset of the Company or any of its Subsidiaries is subject to any order, writ,
judgment, injunction, decree, determination or award which restricts its
ability to conduct business in any area in which it presently does business or
has or could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect on the Company.
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3.09 TAXES AND TAX RETURNS.
(a) For purposes of this Agreement, the terms "Tax" and
"Taxes" shall mean any and all taxes, charges, fees, levies or other
assessments, including, without limitation, all net income, gross
income, gross receipts, premium, sales, use, ad valorem, value added,
transfer, franchise, profits, license, withholding, payroll,
employment, excise, estimated, severance, stamp, occupation, property
or other taxes, fees, assessments or charges of any kind whatsoever,
together with any interest and any penalties (including penalties for
failure to file in accordance with applicable information reporting
requirements), and additions to tax by any authority, whether federal,
state, or local or domestic or foreign. The term "Tax Return" shall
mean any report, return, form, declaration or other document or
information required to be supplied to any authority in connection
with Taxes. The term "Code" shall mean the Internal Revenue Code of
1986, as amended.
(b) Each of the Company and its Subsidiaries (the
"Taxpayers") has filed all Tax Returns that were required to be filed.
All such Tax Returns were when filed, and continue to be, correct and
complete in all material respects. All Taxes owed by the Taxpayers
(whether or not shown on any Tax Return) have been timely paid. Except
as set forth on Schedule 3.09(b) annexed hereto, none of the Taxpayers
currently is the beneficiary of any extension of time within which to
file any Tax Return. No claim has ever been made by an authority in a
jurisdiction where any of the Taxpayers does not file Tax Returns that
it is or may be subject to taxation by that jurisdiction. There are no
liens with respect to Taxes on any of the assets or property of any of
the Taxpayers, except for liens with respect to Taxes not yet payable.
(c) Each of the Taxpayers has withheld or collected and paid
all Taxes required to have been withheld or collected and paid in
connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, an other third party, or otherwise.
(d) There is no dispute or claim concerning any Tax Liability
of any of the Taxpayers either (A) claimed or raised by any authority
in writing or (B) as to which any of the Taxpayers or the directors
and officers (and employees responsible for Tax matters) of any of the
Taxpayers has knowledge. There are no proceedings with respect to
Taxes pending, except as set forth on Schedule 3.09(d) annexed hereto.
(e) Schedule 3.09(e) annexed hereto sets forth an accurate,
correct and complete list of all federal, state, local, and foreign
Tax Returns filed with respect to the Taxpayers for taxable periods
ended on or after November 30, 1991, indicates those Tax Returns that
have been audited and indicates those Tax Returns that currently are
the subject of audit. The Company has delivered to the Parent correct
and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to
by or on behalf of any of the Taxpayers since December 1, 1991. To the
knowledge of the
11
Taxpayers and their directors and officers (and employees responsible
for Tax matters), no other audit or investigation with respect to
Taxes is pending or has been threatened.
(f) None of the Taxpayers have waived any statute of
limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
(g) None of the assets of any of the Taxpayers are assets
that Sub or the Parent is or shall be required to treat as being owned
by another person pursuant to the provisions of Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended and in effect
immediately before the enactment of the Tax Reform Act of 1986, or is
"tax-exempt use property" within the meaning of Section 168(h)(1) of
the Code.
(h) None of the Taxpayers has agreed to make, nor is it
required to make, any adjustments under Section 481(a) of the Code by
reason of a change in accounting method or otherwise.
(i) None of the Taxpayers is a party to any contract,
arrangement or plan that has resulted or would result, separately or
in the aggregate, in the payment of any "excess parachute payments"
within the meaning of Section 280G of the Code, or the payment of any
consideration which would not be deductible by reason of Section
162(m) of the Code.
(j) None of the Taxpayers has been a United States real
property holding corporation within the meaning of Code Section
897(c)(2) during the applicable period specified in Code Section
897(c)(1)(A)(ii).
(k) None of the Taxpayers is a party to any agreement,
whether written or unwritten, providing for the payment of Tax
liabilities, payment for Tax losses, entitlements to refunds or
similar Tax matters.
(l) No ruling with respect to Taxes relating to any of the
Taxpayers has been requested by or on behalf of the Taxpayers.
(m) None of the Taxpayers (A) has never been a member of an
affiliated group (within the meaning of Section 1504 of the Code, or
any similar group as defined for state, local or foreign tax purposes)
filing a consolidated federal (or combined or unitary state, local or
foreign) income Tax Return or (B) has any liability for the taxes of
any Person (other than the Taxpayers) under Reg. ss. 1.1502-6 (or any
similar provision of state, local or foreign Law), as a transferee or
successor, by contract, or otherwise.
(n) The unpaid Taxes of the Taxpayers (A) did not, as of the
most recent fiscal quarter end, exceed the reserves for Tax liability
(rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) on their respective
books at such time and (B) do not exceed that reserve as adjusted for
the passage of time
12
through the Effective Date in accordance with the past custom and
practice of the Taxpayers in filing their Tax Returns.
(o) Schedule 3.09 sets forth the following information with
respect to each of the Company and its Subsidiaries as of the most
recent practicable date (as well as on an estimated pro forma basis as
of the Effective Date giving effect to the consummation of the
transactions contemplated hereby): (A) the basis of each of the
Company and its Subsidiaries in its assets; and (B) the amount of any
net operating loss, net capital loss, unused investment or other
credit, unused foreign tax, or excess charitable contribution
allocable to each of the Company and its Subsidiaries.
(p) None of the Company or its Subsidiaries has filed an
election, consent or agreement under Section 341(f) of the Code.
(q) For purposes of this Section 3.09, references to the
Taxpayers shall also refer to any predecessor companies.
3.10 EMPLOYEE BENEFIT PLANS.
(a) Schedule 3.10 hereto sets forth a true and complete list
of all Plans maintained or contributed to by the Company or any of its
Subsidiaries during the five (5) years preceding this Agreement. The
term "Plans" for purposes of this Article III means all employee
benefit plans, arrangements or agreements that are maintained or
contributed to, or that were maintained or contributed to at any time
during the five (5) years preceding the date of this Agreement, by the
Company or any of its Subsidiaries, or by any trade or business,
whether or not incorporated (an "ERISA Affiliate"), all of which
together with the Company would be deemed a "single employer" within
the meaning of Section 4001 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
(b) The Company has heretofore delivered to Parent true and
complete copies of each of the Plans and all related documents,
including but not limited to (i) all required Forms 5500 and all
related schedules for such Plans (if applicable) for each of the last
two (2) years, (ii) the actuarial report for such Plan (if applicable)
for each of the last two (2) years, and (iii) the most recent
determination letter from the IRS (if applicable) for such plan.
(c) (i) Except as may be provided in Schedule 3.10 hereto,
each of the Plans has been operated and administered in all material
respects in accordance with applicable laws, including but not limited
to ERISA and the Code, (ii) each of the Plans intended to be
"qualified" within meaning of Section 401(a) of the Code has been
maintained so as to qualify from the effective date of such Plan to
the Effective Time, (iii) with respect to each Plan which is subject
to Title IV of ERISA, the present value of "benefit liabilities"
(within the meaning of Section 4001(a)(16) of ERISA) under such Plan,
based upon the actuarial assumptions currently used by the Plan for
IRS funding purposes did not, as of its latest
13
valuation date, exceed the then current value of the assets of such
Plan allocable to such accrued benefits, and there has been no
"accumulated funding deficiency" (whether or not waived), (iv) no Plan
provides benefits, including without limitation death, medical or
other benefits (whether or not insured), with respect to current or
former employees of the Company, any of its Subsidiaries or any ERISA
Affiliate beyond their retirement or other termination of service,
other than (u) coverage mandated by applicable law, (v) life insurance
death benefits payable in the event of the death of a covered
employee, (w) disability benefits payable to disabled former
employees, (x) death benefits or retirement benefits under any
"employee pension plan," as that term is defined in Section 3(2) of
ERISA, (y) deferred compensation benefits accrued as liabilities on
the books of the Company, any of its Subsidiaries or any ERISA
Affiliate or (z) benefits the full cost of which is borne by the
current or former employee (or his beneficiary), (v) with respect to
each Plan subject to Title IV of ERISA no liability under Title IV of
ERISA has been incurred by the Company, any of its Subsidiaries or any
ERISA Affiliate that has not been satisfied in full, no condition
exists that presents a material risk to the Company, any of its
Subsidiaries or any ERISA Affiliate of incurring a material liability
to or on account of such Plan, and there has been no "reportable
event" (within the meaning of Section 1013 of ERISA and the
regulations thereunder), (vi) none of the Company, any of its
Subsidiaries or any ERISA Affiliate has ever maintained or contributed
to a "multiemployer pension plan," as such term is defined in Section
3(37) of ERISA, (vii) all contributions or other amounts payable by
the Company or any of its Subsidiaries as of the Effective Time with
respect to each Plan in respect of current or prior plan years have
been paid or accrued in accordance with GAAP and Section 412 of the
Code, (viii) none of the Company, any of its Subsidiaries or any ERISA
Affiliate has engaged in a transaction in connection with which the
Company, any of its Subsidiaries or any ERISA Affiliate has any
material liability for either a civil penalty assessed pursuant to
Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section
4975 or 4976 of the Code, (ix) consummation of the transactions
contemplated hereby will not cause any amounts payable under any of
the Plans to fail to be deductible for federal income tax purposes
under Sections 280G or 162(m) of the Code, and (x) there are no
pending or, to the best knowledge of the Company, threatened or
anticipated claims (other than routine claims for benefits) by, on
behalf of or against any of the Plans or any trusts related thereto.
(d) With respect to any Plan that is a welfare plan (within
the meaning of Section 3(1) of ERISA (i) no such Plan is funded
through a "welfare benefit fund," as such term is defined in Section
419(a) of the Code, and (ii) each such Plan complies in all material
respects with the applicable requirements of Section 4980B(f) of the
Code, Part 6 of Subtitle B of Title I of ERISA and any applicable
state continuation coverage requirements ("COBRA").
(e) Except as prohibited by law (including Section 411(d)(6)
of the Code), each Plan may be amended, terminated, modified or
otherwise revised by the Company, any of its Subsidiaries or its ERISA
Affiliates as of the Effective Time to eliminate, without
14
material effect, any and all future benefit accruals under any Plan
(except claims incurred under any welfare plan).
(f) Except as set forth on Schedule 3.10, since May 31, 1998,
neither the Company nor any of its Subsidiaries has entered into,
adopted or amended in any respect any collective bargaining agreement
or adopted or amended any bonus, profit sharing, compensation, stock
option, pension, retirement, deferred compensation, insurance or other
similar plan, agreement, trust, fund or arrangement for the benefit of
employees (whether or not legally binding).
3.11 SEC REPORTS. The Company has previously delivered to Parent
an accurate and complete copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement of the Company
filed since January 1, 1993 with the Securities and Exchange Commission (the
"SEC") pursuant to the Exchange Act or the Securities Act of 1933, as amended
(the "Securities Act") (collectively, the "Company SEC Reports"), and (b)
communication mailed by or on behalf of the Company to its stockholders since
January 1, 1993. The Company has timely filed (either by the required filing
date or pursuant to Rule 12b-25 promulgated under the Exchange Act) all Company
SEC Reports and other documents required to be filed by it under the Securities
Act and the Exchange Act and, as of their respective dates, all Company SEC
Reports complied with all of the rules and regulations of the SEC with respect
thereto. As of their respective dates, no such Company SEC Reports or
communications contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances in which they were
made, not misleading. The Company has made available to Parent true and
complete copies of all amendments and modifications to all agreements,
documents and other instruments which previously had been filed with the SEC by
the Company and which are currently in effect.
3.12 COMPANY INFORMATION. The information supplied by the Company
relating to the Company and its Subsidiaries contained in the proxy statement
and related materials to be sent to the stockholders of the Company in
connection with the Company Stockholder Meeting (the "Proxy Statement"), or in
any other document filed with any other regulatory agency in connection
herewith, will not contain, on the date of mailing of the Proxy Statement and
on the date of the Company Stockholder Meeting, any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances in which they are made, not false or misleading or necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Company Stockholder Meeting which shall have
become false or misleading. The Proxy Statement will comply in all material
respects with the provisions of the Securities Act and the Exchange Act and the
rules and regulations thereunder and the rules and regulations of the SEC with
respect thereto. Nothing in this Section 3.12 relates to any information
concerning Parent or Sub or their businesses, contracts, litigation,
stockholders, directors or officers.
15
3.13 COMPLIANCE WITH APPLICABLE LAW; CERTAIN AGREEMENTS. Except as
set forth in Schedule 3.13 hereto, each of the Company and its Subsidiaries
holds all material licenses, franchises, permits and authorizations necessary
for the lawful conduct of its business under and pursuant to all, and has
complied with and is not in conflict with, or in default or violation of any
(a) statute, code, ordinance, law, rule, regulation, order, writ, judgment,
injunction or decree, published policies and guidelines of any Governmental
Entity, applicable to the Company or Subsidiary or by which any property or
asset of the Company or Subsidiary is bound or affected or (b) any note, bond,
mortgage, indenture, deed of trust, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company or
Subsidiary is a party or by which the Company or Subsidiary or any property or
asset of the Company or Subsidiary is bound or affected, except for any such
non-compliance, conflicts, defaults or violations that would not, individually
or in the aggregate, have a Material Adverse Effect; and the Company neither
knows of, nor has received notice of, any material violations of any the above.
In addition to the foregoing, the Company has in place, and is in compliance
with, plans regarding Hazard Analysis Critical Control Points for each facility
of the Company.
3.14 CERTAIN CONTRACTS.
(a) Except as set forth in Schedule 3.14 hereto, neither the
Company nor any of its Subsidiaries is a party to or bound by any
contract, arrangement, commitment or understanding (whether written or
oral): (i) with respect to the employment of any director, officer or
employee, or with respect to the employment of any consultant which
cannot be terminated with a payment of less than $25,000, (ii) which,
upon the consummation of the transactions contemplated by this
Agreement, will result in any payment (whether of severance pay or
otherwise) becoming due from the Company or any of its Subsidiaries to
any officer or employee thereof, (iii) which is a material contract
(as defined in Item 601(b)(10) of Regulation S-B of the SEC) to be
performed after the date of this Agreement that has not been filed or
incorporated by reference in the Company SEC Reports, (iv) which is a
consulting or other agreement (including agreements entered into in
the ordinary course and data processing, software programming and
licensing contracts) not terminable on ninety (90) days or less notice
and involves the payment of more than $25,000 per annum, (v) which
restricts the conduct of any line of business by the Company or any of
its Subsidiaries, (vi) with or to a labor union or guild (including
any collective bargaining agreement), or (vii) (including any stock
option plan, stock appreciation rights plan, restricted stock plan or
stock purchase plan) any of the benefits of which will be increased,
or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement,
or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement. The
Company has previously delivered to Parent true and complete copies of
all employment, consulting and deferred compensation agreements which
are in writing and to which the Company is a party. Each contract,
arrangement, commitment or understanding of the type described in this
section is referred to herein as a "Company Contract".
16
(b) Except as set forth in Schedule 3.14(b) hereto, (i) each
Company Contract is legal, valid and binding upon the Company or a
Subsidiary of the Company, as the case may be, assuming due
authorization of the other party or parties thereto, and in full force
and effect, (ii) the Company or Subsidiary, as the case may be, has in
all material respects performed all obligations required to be
performed by it to date under each such Company Contract, and (iii) no
event or condition exists which constitutes or, after notice or lapse
of time or both, would constitute, a default on the part of the
Company or Subsidiary, as the case may be, under any such Company
Contract.
(c) Neither the Company nor its Subsidiaries has made any
express warranty to any person or entity with respect to any product
it manufactures or sells or has manufactured or sold or has made or
agreed to make any indemnification payment, or replacement with
respect to any product warranty claim, except for (i) the warranties
and/or agreement(s) to indemnify or replace product of which true and
correct copies have been delivered to Parent, (ii) the warranties
applicable under the Uniform Commercial Code as in effect from time to
time in the jurisdictions in which its products are sold and (iii) any
other warranties under other state or federal laws.
3.15 AGREEMENTS WITH REGULATORY AGENCIES. Neither the Company nor
any of its Subsidiaries is subject to any cease-and-desist or other order
issued by, or is a party to any written agreement, consent agreement or
memorandum of understanding, commitment letter or similar undertaking (each a
"Regulatory Agreement") with any Regulatory Agency or other Governmental Entity
that restricts the conduct of its business in any material respect, nor has the
Company or any of its Subsidiaries been notified by any Regulatory Agency or
other Governmental Entity that it is considering issuing or requesting any
Regulatory Agreement.
3.16 ENVIRONMENTAL MATTERS.
(a) The Company and its Subsidiaries are, and have been, in
material compliance with all applicable environmental laws and with
all rules, regulations, standards and requirements of the United
States Environmental Protection Agency (the "EPA") and of state and
local agencies with jurisdiction over pollution or protection of the
environment.
(b) There is no suit, claim, action or proceeding pending or,
to the best knowledge of the Company, threatened, before any
Governmental Entity or other forum in which the Company or any of its
Subsidiaries have been or, with respect to threatened proceedings, may
be named as a defendant, responsible party or potentially responsible
party (i) for alleged noncompliance (including by any predecessor),
with any environmental law, rule, regulation, standard or requirement
or (ii) relating to the release into or presence in the Environment
(as hereinafter defined) of any Hazardous Materials (as hereinafter
defined) or Oil (as hereinafter defined) whether or not occurring at
or on a site owned, leased or operated by the Company or any of its
Subsidiaries.
17
(c) Neither the Company nor any of its Subsidiaries has
received any notice regarding a matter on which a suit, claim, action
or proceeding as described in subsection (b) of this Section 3.16
could reasonably be based. No facts or circumstances have come to the
Company's attention which have caused either to believe that a
material suit, claim, action or proceeding as described in subsection
(b) of this Section 3.16 could reasonably be expected to occur.
(d) Except as set forth in the Environmental Site Assessment
Reports described in Schedule 3.16(d) hereto, during the period of the
ownership or operation by the Company or any of its Subsidiaries of
any of their respective current properties, there has been no release
or presence in the Environment of Hazardous Material or Oil in, on,
under or affecting such property. To the best knowledge of the
Company, prior to the period of the ownership or operation by the
Company or any of its Subsidiaries of any of their respective current
properties or any previously owned or operated properties, there was
no release or presence in the Environment of Hazardous Material or Oil
in, on, under or affecting any such property.
(e) The following definitions apply for purposes of this
Agreement: (i) "Hazardous Material" means any pollutant, contaminant,
or hazardous substance or hazardous material as defined in or pursuant
to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss. 9601 et seq., or any other federal, state
or local environmental law, regulation or requirement; (ii) "Oil"
means oil or petroleum of any kind or origin or in any form, as
defined in or pursuant to the Federal Clean Water Act, 33 U.S.C. ss.
1251 et seq., or any other federal, state or local environmental law,
regulation or requirement; and (iii) "Environment" means any soil,
surface waters, groundwaters, stream sediments, surface or subsurface
strata, and ambient air and any other environmental medium.
3.17 PROPERTIES.
(a) Schedule 3.17 hereto contains a true, complete and
correct list and a brief description (including carrying value) of all
real properties owned by the Company or any of its Subsidiaries.
Except as set forth in Schedule 3.17 hereto, the Company or its
Subsidiaries has good and marketable title to all the real property
and other property owned by it and included in the balance sheet of
the Company for the period ended May 31, 1998, and owns such property
subject to no encumbrances, liens, mortgages, security interests,
pledges or title imperfections except for (i) those items that secure
liabilities that are reflected in such balance sheet or the notes
thereto, (ii) statutory liens for amounts not yet delinquent or which
are being contested in good faith, (iii) with respect to owned real
property, title imperfections noted in title reports, and (iv) those
items that do not, individually or in the aggregate, have a Material
Adverse Effect on the Company or which do not and will not interfere
with the use of the property as currently used or contemplated to be
used by the
18
Company or its Subsidiaries, or the conduct of the business of the
Company or its Subsidiaries.
(b) Neither the Company nor any of its Subsidiaries has
received any notice of a material violation of any applicable zoning
or environmental regulation, ordinance or other law, order, regulation
or requirement relating to its operations or its properties and, to
the knowledge of the Company, there is no such violation. Except as
set forth in Schedule 3.17 hereto, all buildings and structures owned
and used by the Company or any of its Subsidiaries conform in all
material respects with all applicable ordinances, codes or
regulations, except to the extent such noncompliance does not or will
not have a Material Adverse Effect on the Company and which does not
or will not interfere with the use of any property as currently used
or contemplated to be used by the Company or its Subsidiaries, or the
conduct of the business of the Company or its Subsidiaries. Except as
set forth in Schedule 3.17 hereto, to the knowledge of the Company,
all buildings and structures leased and used by the Company or any of
its Subsidiaries conform in all material respects with all applicable
ordinances, codes or regulations, except to the extent such
noncompliance does not or will not have a Material Adverse Effect on
the Company and which does not or will not interfere with the use of
any property as currently used or contemplated to be used by the
Company or its Subsidiaries, or the conduct of the business of the
Company or its Subsidiaries.
(c) Schedule 3.17 contains a true, complete and correct list
of all leases pursuant to which the Company or any of its Subsidiaries
leases any real or personal property, either as lessee or as lessor
(the "Company Leases"). Assuming due authorization of the other party
or parties thereto, each of the Company Leases is valid and binding on
the Company or Subsidiary, as the case may be, and, to the best of the
Company's knowledge, valid and binding on and enforceable against all
other respective parties to such leases, in accordance with their
respective terms. Except to the extent such breaches, defaults or
events of default do not or will not have a Material Adverse Effect on
the Company and which do not or will not interfere with the use of any
property as currently used or contemplated to be used by the Company
or its Subsidiaries, or the conduct of the business of the Company or
its Subsidiaries, there are not under such Company Leases any existing
breaches, defaults or events of default by the Company or any of its
Subsidiaries, nor has the Company or any of its Subsidiaries received
notice of, or made a claim with respect to, any breach or default by
any other party to such Company Leases. Each of the Company and its
Subsidiaries enjoys quiet and peaceful possession of all such leased
properties occupied by it as lessee.
(d) All of the real properties, leasehold improvements and
items of equipment and other material personal property owned, leased,
or licensed by the Company or any of its Subsidiaries, or in which any
of those parties hold an interest, are in good maintenance, repair and
operating condition, ordinary wear and tear excepted, are adequate for
the purpose for which they are now being or are anticipated to be
used, and, to the best of the Company's knowledge, are free from any
material defects.
19
3.18 INSURANCE. The Company has made available to Parent true and
complete copies of all material policies of insurance of the Company or any of
its Subsidiaries currently in effect. All of the policies relating to insurance
maintained by the Company or any of its Subsidiaries with the respect to its
material properties and the conduct of its business in any material respect (or
any comparable policies entered into as a replacement thereof) are in full
force and effect and neither the Company nor any of its Subsidiaries has
received any notice of cancellation with respect thereto. All life insurance
policies on the lives of any of the current and former officers of the Company
or any of its Subsidiaries which are maintained by the Company or any of its
Subsidiaries or which are otherwise included as assets on the books of the
Company (i) are, or will at the Effective Time be, owned by the Company or any
of its Subsidiaries, free and clear of any claims thereon by the officers or
members of their families, except with respect to the death benefits
thereunder, as to which the Company agrees that there will not be an amendment
prior to the Effective Time without the consent of Parent, and (ii) are
accounted for properly on the books of the Company in accordance with GAAP. The
Company does not have any material liability for unpaid premium or premium
adjustments not properly reflected on the Company's May 31, 1998 balance sheet.
The Company and its Subsidiaries have been and are adequately insured with
respect to their respective property and the conduct of their respective
business in such amounts and against such risks as are substantially similar in
kind and amount to that customarily carried by parties similarly situated who
own properties and engage in businesses substantially similar to that of the
Company (including without limitation liability insurance and blanket bond
insurance). All claims under any policy or bond have been duly and timely
filed.
3.19 TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in the
Company SEC Reports or otherwise set forth on Schedule 3.19 hereto, since April
1, 1996, neither the Company nor any of its Subsidiaries has entered into any
transaction or series of transactions, in which the amount involved exceeded
$10,000, with any executive officer, director or greater-than-5% stockholder of
the Company or any "associate" (as defined in Rule 14a-1 under the Exchange
Act) of any such officer or director or "affiliates" (as defined in Rule
144(a)(1) of the Securities Act) of any such officer, director or stockholder.
3.20 LABOR MATTERS. Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining or other labor union or
guild contract nor has the Company or any of its Subsidiaries been approached
since November 30, 1997 by any collective bargaining or other labor union or
guild seeking to enter into a contract with the Company or any of its
Subsidiaries. There is no pending or, to the best knowledge of the Company,
threatened, labor dispute, strike or work stoppage against the Company or any
of its Subsidiaries which may interfere with the business activities of the
Company or any of its Subsidiaries. None of the Company, any of its
Subsidiaries or their respective representatives or employees has committed any
unfair labor practices in connection with the operation of the business of the
Company or any of its Subsidiaries, and there is no pending or, to the best
knowledge of the Company, threatened charge or complaint against the Company or
any of its Subsidiaries by the National Labor Relations Board or any comparable
state agency. Except as set forth on Schedule 3.20 hereto, to its knowledge,
neither the Company nor its Subsidiaries has hired any illegal aliens as
employees. To its knowledge, neither the Company nor
20
its Subsidiaries has discriminated on the basis of race, age, sex or otherwise
in its employment conditions or practices with respect to its employees. There
are no race, age, sex or other discrimination complaints pending, or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries by any employee, former or current, before any domestic (federal,
state or local) or foreign board, department, commission or agency nor, to the
knowledge of the Company, does any basis therefor exist. There are no pending
or, to the knowledge of the Company, threatened representation questions
respecting any employees.
3.21 INTELLECTUAL PROPERTY. The Company and its Subsidiaries own
or possess valid and binding licenses and other rights to use without payment
of any material amount all material patents, copyrights, trade secrets, trade
names, service marks, trademarks, software and other intellectual property used
in its business, which are set forth in Schedule 3.21 hereto; neither the
Company nor any of its Subsidiaries has received any notice of conflict with
respect thereto that asserts the right of others. The Company and its
Subsidiaries have performed in all material respects all the obligations
required to be performed by it with respect to the items of intellectual
property set forth in Schedule 3.21 hereto and are not in default under any
contract, agreement, arrangement or commitment relating to any of the
foregoing.
3.22 SUBSTANTIAL SUPPLIERS AND CUSTOMERS. Except as set forth on
Schedule 3.22 hereto, since November 30, 1997, none of the top ten (10)
suppliers (by dollar volume) or the top ten (10) customers (by dollar volume)
of the Company and its Subsidiaries, taken as a whole, has substantially
reduced the use or supply of the products or goods made available for purchase
by the Company or its Subsidiaries in their business or has ceased, or
threatened to cease, to use or to supply such products or goods, and the
Company does not have any reason to believe that any such supplier or customer
will do so.
3.23 BROKER'S FEES. Neither the Company nor any of its officers or
directors, has employed any broker or finder or incurred any liability for any
broker's fees, commissions or finder's fees in connection with any of the
transactions contemplated by this Agreement, except pursuant to an agreement
dated June 5, 1998 between the Company and Ladenburg ▇▇▇▇▇▇▇▇ & Company.
3.24 DISCLOSURE. No representation or warranty contained in this
Agreement or any schedule to this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements herein or therein, in light of the circumstances in which they are
made, not misleading.
21
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby represent and warrant to the Company as follows:
4.01 CORPORATE ORGANIZATION.
(a) Each of Parent and Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Each of Parent and Sub has the corporate power and authority
to own or lease all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of
the business conducted by it or the character or location of the
properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect on Parent. The
Certificate of Incorporation and Bylaws of each of Parent and Sub,
copies of which have previously been delivered to the Company, are
true and complete copies of such documents as in effect as of the date
of this Agreement.
(b) Parent has no direct or indirect Subsidiaries other than
Sub and is the sole stockholder of Sub. Sub has no direct or indirect
Subsidiaries. Neither Parent nor Sub owns, controls or holds with the
power to vote, directly or indirectly of record, beneficially or
otherwise, any capital stock or any equity or ownership interest in
any corporation, partnership, association, joint venture or other
entity, except for (i) Parent's ownership of Sub, (ii) Parent's
ownership of Company Common Stock and (iii) less than five percent
(5%) of any equity security registered under the Exchange Act.
(c) The minute books of each of Parent and Sub contain true,
complete and accurate records of all meetings and other corporate
actions held or taken by their respective stockholders and boards of
directors (including committees of their respective boards of
directors).
4.02 AUTHORITY; NO VIOLATION.
(a) Each of Parent and Sub have full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Parent and Sub and the consummation by Parent and Sub of
the transactions contemplated hereby have been duly and validly
approved by the Board of Directors of Parent and Sub, respectively.
Except for the filing of the Certificate of Merger, no other corporate
proceedings on the part of Parent or Sub are necessary to approve this
Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Parent
and Sub and (assuming the due authorization, execution and delivery by
the Company) constitutes
22
a valid and binding obligation of Parent and Sub, enforceable against
Parent and Sub in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by
each of Parent and Sub, nor the consummation by either Parent or Sub,
as the case may be, of the transactions contemplated hereby, nor
compliance by either Parent or Sub with any of the terms or provisions
hereof, will (i) violate, conflict with or result in a breach of any
provision of the Certificate of Incorporation or Bylaws of Parent, or
Sub, as the case may be, or (ii)(x) violate any statute, code,
ordinance, rule, regulations, judgment, order, writ, decree or
injunction applicable to the Parent or Sub or any of their respective
properties or assets, or (y) violate, conflict with, result in a
breach of any provisions of or the loss of any benefit under,
constitute a default (or any event which, with notice or lapse of
time, or both, would constitute a default) under, result in the
termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation of
any lien, pledge, security interest, charge or other encumbrance upon
any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Parent or Sub is a party, or by
which they or any of their respective properties or assets may be
bound or affected, except (in the case of clause (y) above) for such
violations, conflicts, breaches or defaults which, either individually
or in the aggregate, will not have a Material Adverse Effect on
Parent.
4.03 CONSENTS AND APPROVALS. Except for the filing of the
Certificate of Merger with the Delaware Secretary pursuant to the DGCL to
effect the Merger, no consents or approvals of or filings or registrations with
any Governmental Entity or with any third party are necessary in connection
with the execution and delivery by Parent and Sub of this Agreement and the
consummation by Parent and Sub of the Merger and the other transactions
contemplated hereby.
4.04 SEC REPORTS. Parent has previously delivered to the Company
an accurate and complete copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement of Parent filed
since Parent's initial public offering in June 1993 with the SEC pursuant to
the Exchange Act or the Securities Act (collectively, the "Parent SEC
Reports"), and (b) communication mailed by or on behalf of the Parent to its
stockholders since June 1, 1993. Parent has timely filed (either by the
required filing date or pursuant to Rule 12b-25 promulgated under the Exchange
Act) all Parent SEC Reports and other documents required to be filed by it
under the Securities Act and the Exchange Act and, as of their respective
dates, all Parent SEC Reports complied with all of the rules and regulations of
the SEC with respect thereto. As of their respective dates, no such Parent SEC
Reports or communications contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances in which
they were made, not misleading. Parent has made available to the Company true
and complete copies of all amendments and modifications to all agreements,
documents and other instruments which previously had been filed with the SEC by
Parent and which are currently in effect. Since March 31, 1998, there has not
been any Material Adverse Effect on Parent and, to the best knowledge of
Parent, no fact or condition
23
exists which will, or is reasonably likely to, cause such a Material Adverse
Effect on Parent in the future.
4.05 FINANCIAL ABILITY TO PERFORM. Parent has delivered to the
Company prior to the date of this Agreement a letter from a financing source
acceptable to the Company regarding its commitment to fund an amount sufficient
to pay the Merger Consideration. As of the date of this Agreement, Parent knows
of no reason that the financing source will not be able to consummate the
Financing.
4.06 DISCLOSURE. No representation or warranty contained in this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements herein, in light of the
circumstances in which they are made, not misleading. No information material
to the Merger and which is necessary to make Parent's and Sub's representations
and warranties hereto contained not misleading, has been withheld from, or has
not been delivered in writing to the Company.
ARTICLE 5
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.01 COVENANTS OF THE COMPANY. During the period from the date of
this Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or with the prior written consent
of Parent, the Company shall (and shall cause its Subsidiaries to) carry on its
business in the ordinary course consistent with past practice. The Company will
(and shall cause its Subsidiaries to) use all reasonable efforts to (x)
preserve its business organization, (y) keep available the present services of
its employees and (z) preserve for itself and Parent the goodwill of the
customers of the Company and its Subsidiaries and others with whom business
relationships exist. Without limiting the generality of the foregoing, and
except as otherwise contemplated by this Agreement or consented to in writing
by Parent, the Company shall not (and shall cause its Subsidiaries not to):
(a) declare or pay any dividends on, or make other
distributions in respect of, any of its capital stock;
(b) (i) split, combine or reclassify any shares of its
capital stock; or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for
shares of its capital stock except upon the exercise or fulfillment of
rights or options issued or existing pursuant to employee benefit
plans, programs or arrangements, all to the extent outstanding and in
existence on the date of this Agreement, or (ii) repurchase, redeem or
otherwise acquire, any shares of the capital stock of the Company, or
any securities convertible into or exercisable for any shares of the
capital stock of the Company;
24
(c) except in connection with the exercise of any of the
options or warrants of the Company outstanding as of the date of this
Agreement, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock or any
securities convertible into or exercisable for, or any rights,
warrants or options to acquire, any such shares, or enter into any
agreement with respect to any of the foregoing;
(d) amend its Certificate of Incorporation or Bylaws;
(e) except as set forth on Schedule 5.01(e), make any capital
expenditures in excess of $50,000 individually, or $150,000 in the
aggregate;
(f) enter into any new line of business;
(g) (i) acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial equity interest in
or a substantial portion of the assets of or by any other manner, any
business or any corporation, partnership, association or other
business organization or division thereof or (ii) otherwise acquire
any assets, other than in the ordinary course of business, which would
be material to the Company and its Subsidiaries, taken as a whole;
(h) take any action that is intended or would result in any
of its representations and warranties set forth in this Agreement
being or becoming untrue, or in any of the conditions to the Merger
set forth in Article VII not being satisfied, or in breach of any
provision of this Agreement except, in every case, as may be required
by applicable law;
(i) change its methods of accounting in effect at November
30, 1997, except as required by changes in GAAP or regulatory
accounting principles as concurred to by the Company's independent
auditors;
(j) except as set forth on Schedule 5.01(j), (i) except as
required by applicable law or to maintain qualification pursuant to
the Code, (x) enter into, adopt, amend, renew or terminate any Plan or
any agreement, arrangement, plan or policy between the Company or any
of its Subsidiaries and one or more of its current or former
directors, officers or employees or (y) increase in any manner
compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any plan or agreement as in effect
as of the date hereof (including, without limitation, the granting of
stock options, stock appreciation rights, restricted stock, restricted
stock units or performance units or shares); provided, however, that
the Company or its Subsidiaries may increase the compensation of
non-officer employees in the ordinary course of business consistent
with past practice; or (ii) except for the Bogen Agreement or the
▇▇▇▇▇ Agreement, enter into, modify or renew any employment, severance
or other agreement with any director, officer or employee of the
Company or any of its Subsidiaries or establish, adopt, enter into, or
amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock,
25
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement
providing for any benefit to any director, officer or employee
(whether or not legally binding);
(k) other than (i) as set forth on Schedule 5.01(k), (ii) in
the ordinary course of business consistent with past practice or (iii)
to refinance existing debt with indebtedness under the Company's
revolving credit facility, incur any indebtedness for borrowed money,
assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other individual, corporation
or other entity;
(l) other than (i) as set forth on Schedule 5.01(l) or (ii)
in the ordinary course of business consistent with past practice,
sell, lease, encumber, assign or otherwise dispose of, or agree to
sell, lease, encumber, assign or otherwise dispose of, any of its
material assets, properties or other rights or agreements;
(m) make any Tax election or settle or compromise any
material federal, state, local or foreign Tax liability;
(n) pay, discharge or satisfy any claim, liability or
obligation, other than the payment, discharge or satisfaction in the
ordinary course of business and consistent with past practice or as
incurred in connection with the Merger and the transactions expressly
contemplated hereby, subject to the limitation on fees set forth in
Section 8.03(a) hereof, of liabilities reflected or reserved against
in the balance sheet for the fiscal year ended November 30, 1997, or
subsequently incurred in the ordinary course of business and
consistent with past practice;
(o) except as set forth on Schedule 5.01(o), enter into or
renew amend or terminate, or give notice of a proposed renewal
amendment or termination, or make any commitment with respect to,
regardless of whether consistent with past practices, any lease,
contract, agreement or commitment (i) involving an aggregate payment
by or to the Company of more than $100,000, (ii) having a term of one
year or more from the time of execution or (iii) outside of the
ordinary course of business consistent with past practices;
(p) waive any material right, whether in equity or at law; or
(q) agree to do any of the foregoing.
5.02 COVENANTS OF PARENT AND SUB. During the period from the date
of this Agreement and continuing until the Effective Time, except (i) as
expressly contemplated or permitted by this Agreement or the Commitment
Letter(s) or (ii) with the prior written consent of the Company, Parent shall
not (and shall cause Sub not to) take any action that is intended or would
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue, or in any of the conditions to the Merger set forth
in Article VII (including, without limitation, Section 7.01(d)
26
hereof relating to the Financing) not being satisfied, or in breach of any
provision of this Agreement except, in every case, as may be required by
applicable law.
5.03 NO SOLICITATION; NON-DISCLOSURE.
(a) None of the Company, any of its Subsidiaries or any of
their respective directors, officers, employees, representatives,
agents and advisors or other persons controlled by the Company shall
solicit or hold discussions or negotiations with, or assist or provide
any information to, any person, entity or group (other than Parent,
Sub and their affiliates and representatives) concerning any merger,
business combination, disposition of a significant portion of its
assets, or acquisition of a significant portion of its capital stock
or similar transactions involving the Company; provided, however, that
the Board of Directors of the Company may furnish or cause to be
furnished such information to, and may participate in such discussions
or negotiations with, persons or entities who have made a bona fide
proposal if the Board of Directors of the Company believes, in good
faith, after consultation with its financial and legal advisors, that
such bona fide proposal represents a transaction which is more
favorable to the Company's stockholders from a financial point of view
and is subject only to reasonable conditions of closing which shall
include financing terms reasonably satisfactory to the Company and, in
the opinion of counsel to the Board of Directors of the Company, the
fiduciary duty of the Board of Directors under applicable law requires
it to furnish or cause to be furnished such information and/or
participate in such discussions or negotiations (a "Superior Offer").
The Company will promptly communicate to Parent, Sub and their
affiliates and representatives the terms of any proposal, discussion,
negotiation or inquiry relating to a merger or disposition of a
significant portion of its capital stock or assets or similar
transaction involving the Company and the identity of the party making
such proposal or inquiry, which it may receive with respect to any
such transaction. In the event that the Board of Directors of the
Company receives what it determines, based on the opinion of counsel
to the Board of Directors of the Company, to be a Superior Offer, the
Board of Directors may vote to recommend such Superior Offer rather
than pursuing the consummation of the transactions contemplated
hereunder or withdraw, modify or amend its recommendation of this
Agreement and the Merger, thus terminating this Agreement in
accordance with Section 8.01(h) hereof, but any such termination may
occur only (i) within twenty-one (21) days after such Superior Offer
is received and (ii) upon two (2) full business days prior notice to
Parent.
(b) No party (or its representatives, agents, counsel,
accountants or investment bankers) hereto shall disclose to any third
party, other than either party's representatives, agents, counsel,
accountants or investment bankers or the potential lenders previously
disclosed to the Company and Parent in writing, any confidential or
proprietary information about the business, assets or operations of
the other parties to this Agreement or the transactions contemplated
hereby, except as may be required by applicable law. Disclosure of
such information by the Company or Parent with respect to obtaining
financing shall be made only if the recipient executes a reasonable
and appropriate agreement to hold such
27
information confidential. The parties hereto agree that the remedy at
law for any breach of the requirements of this subsection will be
inadequate and that any breach would cause such immediate and
permanent damage as would be impossible to ascertain, and, therefore,
the parties hereto agree and consent that in the event of any breach
of this subsection, in addition to any and all other legal and
equitable remedies available for such breach, including a recovery of
damages, the non-breaching parties shall be entitled to obtain
preliminary or permanent injunctive relief without the necessity of
proving actual damage by reason of such breach and, to the extent
permissible under applicable law, a temporary restraining order may be
granted immediately on commencement of such action.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.01 REGULATORY MATTERS.
(a) The parties hereto shall cooperate with each other and
use all reasonable efforts promptly to prepare and file all necessary
documentation, to effect all applications, notices, petitions and
filings, and to obtain as promptly as practicable all permits,
consents, approvals and authorizations of all third parties and
Governmental Entities which are necessary or advisable to consummate
the transactions contemplated by this Agreement (including without
limitation the Merger). The Company and Parent shall have the right to
review in advance, and to the extent practicable each will consult
with the other on, in each case subject to applicable laws relating to
the exchange of information, all the information relating to the
Company, Parent or Sub, as the case may be, which appear in any filing
made with or written materials submitted to, any third party or any
Governmental Entity in connection with the transactions contemplated
by this Agreement. In exercising the foregoing right, each of the
parties hereto shall act reasonably and as promptly as practicable.
The parties hereto agree that they will consult with each other with
respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities
necessary or advisable to consummate the transactions contemplated by
this Agreement and each party will keep the other apprised of the
status of matters relating to completion of the transactions
contemplated herein.
(b) Parent (or Sub as the case may be) shall, upon request,
furnish the Company with all information concerning themselves, their
respective directors, officers and stockholders and such other matters
as may be reasonably necessary or advisable in connection with the
Proxy Statement made by or on behalf of the Company in connection with
the Merger and the other transactions contemplated hereby.
(c) Parent (or Sub as the case may be) and the Company shall
promptly furnish each other with copies of written communications
received by Parent, Sub or the Company,
28
as the case may be, from, or delivered by any of the foregoing to, any
Governmental Entity in respect of the transactions contemplated
hereby.
6.02 SECURITIES LAWS MATTERS.
(a) As soon as reasonably practicable after the date hereof,
the Company shall file the Proxy Statement with the SEC under the
Exchange Act. The Company shall use all reasonable efforts to have the
Proxy Statement cleared by the SEC as promptly as practicable after
such filing.
(b) Parent, Sub and the Company shall cooperate with each
other in the preparation of the Proxy Statement, and the Company shall
notify Parent and Sub of the receipt of any comments of the SEC with
respect to the Proxy Statement and of any requests by the SEC for any
amendment or supplement thereto or for additional information and
shall provide to the other parties promptly copies of all
correspondence between the party or any representative or agent of the
party and SEC. Each party shall review the Proxy Statement prior to
its being filed with the SEC and shall review all amendments and
supplements to the Proxy Statement and all responses to requests for
additional information and replies to comments prior to their being
filed with, or sent to, the SEC. The Company agrees to use all
reasonable efforts, after consultation with Parent, to respond
promptly to all such comments of and requests by the SEC.
(c) The Company further agrees to cause the Proxy Statement
and all required supplements thereto to be mailed to its stockholders
entitled to vote at the Company Stockholder Meeting at the earliest
practicable time.
6.03 COMPANY STOCKHOLDER MEETING. In order to consummate the
Merger, the Company shall take all steps necessary to duly call, give notice
of, convene and hold the Company Stockholder Meeting as soon as reasonably
practicable for the purpose of voting upon the approval of this Agreement and
the transactions contemplated hereby and shall use all reasonable efforts to
obtain such approval and adoption. Subject to Sections 5.03 or 6.11 hereof, the
Company shall, through its Board of Directors, recommend to its stockholders
approval of this Agreement and the transactions contemplated hereby.
6.04 ACCESS TO INFORMATION.
(a) Upon reasonable notice to the Chief Executive Officers of
the parties and subject to applicable laws relating to the exchange of
information, the parties shall afford each other's officers,
employees, counsel, accountants, agents, advisors and other authorized
representatives, access, during normal business hours of the person(s)
to whom access is required, during the period prior to the Effective
Time, to all its properties, books, contracts, commitments and records
and, during such period, make available to the other party (i) when
applicable, a copy of each report, schedule, registration statement
and other document filed
29
or received by it during such period pursuant to the requirements of
federal securities laws (other than reports or documents which are not
permitted to be disclosed under applicable law), (ii) copies of all
periodic reports regularly received by senior management, and (iii)
all other information concerning its business, properties, assets and
personnel as either party may reasonably request.
(b) In addition to any other confidentiality covenants and
obligations imposed under this Agreement, the parties agree to comply
with the confidentiality agreement dated as of March 30, 1998 between
Parent and the Company, as amended by that certain letter agreement
dated April 24, 1998 between Parent and the Company (the
"Confidentiality Agreement"), which is incorporated herein by
reference.
6.05 LEGAL CONDITIONS TO MERGER. Each of Parent, Sub and the
Company shall use all reasonable efforts (a) to take, or cause to be taken, all
actions necessary, proper or advisable to comply promptly with all legal
requirements which may be imposed on such party with respect to the Merger and,
subject to the conditions set forth in Article VII hereof, to consummate the
transactions contemplated by this Agreement and (b) to obtain (and to cooperate
with the other party to obtain) any consent, authorization, order or approval
of or any exemption by, any Governmental Entity and any other third party which
is required to be obtained by Parent, Sub or the Company in connection with the
Merger and the other transactions contemplated by this Agreement.
6.06 ADDITIONAL AGREEMENTS. If at any time after the Effective
Time any further action is necessary or desirable to carry out the purpose of
this Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of any of the
parties to the Merger, the proper officers and directors of each party to this
Agreement shall take all such necessary action as may be reasonably requested
by the Company or Parent (without additional cost to them).
6.07 DISCLOSURE SUPPLEMENTS. Prior to the Effective Time, each
party will supplement or amend the Schedules hereto delivered in connection
with the execution of this Agreement to reflect any matter which, if existing,
occurring or known at the date of this Agreement, would have been required to
be set forth or described in such Schedules or which is necessary to correct
any information in such Schedules which has been rendered inaccurate thereby.
No supplement or amendment to such Schedules shall have any effect for the
purposes of determining satisfaction of the conditions set forth in Sections
7.02(a) hereof or the compliance by the Company with the covenants set forth in
Section 5.01 hereof or for the purposes of determining satisfaction of the
conditions set forth in Sections 7.03(a) hereof or the compliance by Parent or
Sub with the covenants set forth in Section 5.02 hereof.
6.08 CURRENT INFORMATION.
(a) During the period from the date of this Agreement to the
Effective Time, each of the Company and Parent will cause its Chief
Executive Officer or one or more of his or
30
her designated representatives to be available to confer from time to
time with representatives of the other and to report the general
status of their ongoing operations. Each such party will promptly
notify the other party of any material change in the normal course of
its business and of any governmental complaints, investigations or
hearings or the institution of significant litigation involving them
or their subsidiaries or properties and will keep the other party
reasonably informed of such events.
(b) To the extent not covered by paragraph (a) above, the
Company shall give prompt notice to Parent, and Parent shall give
prompt notice to the Company, of (i) the occurrence or non-occurrence
of any event which would be reasonably likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate and (ii) any failure of Parent, Sub or the Company, as the
case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement;
provided, however, that the delivery of any notice pursuant to this
paragraph (b) shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
6.09 NO INCONSISTENT ACTIONS. Prior to the Effective Time, except
as otherwise permitted by this Agreement, no party will enter into any
transaction or make any agreement or commitment and will use reasonable efforts
not to permit any event to occur, which could reasonably be anticipated to
result in (x) a denial of the regulatory approvals referred to in
Section 7.01(b) or (y) the imposition of any condition or requirement that
would materially adversely affect the economic or business benefits to the
Surviving Corporation of the transactions contemplated by this Agreement.
6.10 INDEMNIFICATION OF DIRECTORS.
(a) From and after the Effective Time, Parent and Surviving
Corporation shall each defend, indemnify and advance costs and
expenses (including reasonable attorneys' fees, disbursements and
expenses) and hold harmless each present and former director and
officer of the Company or its Subsidiaries determined as of the
Effective Time (the "Indemnified Parties"), against any costs or
expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages, settlements or liabilities (collectively,
"Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative
or investigative, arising after the Effective Time and out of or
pertaining to matters existing or occurring at or prior to the
Effective Time, including without limitation, the authorization of
this Agreement and the transactions contemplated hereby, whether
asserted or claimed prior to, at or after the Effective Time, to the
fullest extent that the Company would have been permitted under
Delaware law and its certificate of incorporation or by-laws in effect
on the date hereof to indemnify such person (and also advance expenses
as incurred to the fullest extent permitted under applicable law
provided the person to whom expenses are advanced provides an
undertaking to repay such advances if it is ultimately determined that
such person is not entitled to indemnification); provided
31
that any determination required by law to be made with respect to
whether an officer's or director's conduct complies with the standards
set forth under Delaware law and the Company's certificate of
incorporation and by-laws as of the date hereof shall be made by
independent counsel selected jointly by Parent and the Indemnified
Party.
(b) In the event of any claim, action, suit, proceeding or
investigation in which indemnification pursuant to Section 6.10(a) is
sought (whether arising before or after the Effective Time), (i)
Parent shall have the right to assume the defense thereof and Parent
shall not be liable to any Indemnified Parties for any legal expenses
of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except
that if Parent elects not to assume such defense or counsel for the
Indemnified Parties advises that there are issues which raise
conflicts of interest between Parent and the Indemnified Parties, the
Indemnified Parties may retain counsel satisfactory to them and
reasonably satisfactory to Parent, and Parent shall pay the reasonable
fees and expenses of such counsel for the Indemnified Parties promptly
as statements therefor are received; provided, however, that Parent
shall be obligated pursuant to this paragraph (b) to pay for only one
firm of counsel for all Indemnified Parties in any jurisdiction unless
the use of one counsel for such Indemnified Parties would present such
counsel with a conflict of interest, (ii) the Indemnified Parties will
cooperate in the defense of any such matter unless counsel for the
Indemnified Parties advises that there are issues which raise
conflicts of interest making such cooperation inadvisable and (iii)
Parent shall not be liable for any settlement effected without its
prior written consent (which shall not be unreasonably withheld); and
provided further that Parent shall not have any obligation hereunder
to any Indemnified Party when and if a court of competent jurisdiction
shall ultimately determine, and such determination shall have become
final and nonappealable, that the indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by applicable
law. If a court of competent jurisdiction determines that the
indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law, then Parent shall provide
indemnification to the maximum extent and in such manner as is
permissible under applicable law. If such indemnity is completely
unavailable with respect to any Indemnified Party, Parent and the
Indemnified Party shall contribute to the amount payable in such
proportion as is appropriate to reflect relative faults and benefits.
(c) For a period of six (6) years following the Effective
Time, Parent will provide to the persons who served as directors or
officers of Company or any of the Company's Subsidiaries on or before
the Effective Time, insurance against liabilities and claims (and
related expenses) made against them resulting from their service as
such prior to the Effective Time. Such coverage may be provided by
means of an extended reporting period endorsement to the policy
presently issued to the Company by the present carrier for the
Company, or by such other means which shall provide substantially
equivalent coverage to the persons.
32
6.11 FIDUCIARY OBLIGATIONS. Notwithstanding anything in this
Agreement to the contrary, the Company shall not be required to take, or cause
to be taken, or fail to take any actions or to do, or cause to be done or fail
to do any things which may be contrary to the fiduciary obligations of persons
who are directors of the Company, or are acting pursuant to the exercise of the
directors' fiduciary obligations, as determined in good faith by a majority of
the directors of the Company, based as to legal matters on the advice of its
legal counsel.
6.12 FINANCING.
(a) Parent shall use all reasonable good faith efforts to
consummate the Financing and Parent will keep the Purchaser apprised
of the status of matters relating to completion of the Financing.
Parent shall raise the amount in cash equity required by the terms of
the Commitment Letter(s).
(b) In the event that the Financing is not consummated and a
claim, action, suit or proceeding is sought by Parent against the
financing source or sources for failure to consummate the Financing
(i) Parent shall offer the Company the right to join in such claim,
action, suit or proceeding, (ii) Parent and the Company shall
cooperate in any such claim, action, suit or proceeding, and (iii)
Parent and the Company shall share equally in all costs and in all
recoveries in any such claim, action, suit or proceeding. Nothing
contained herein shall obligate (A) Parent to pursue any such claim,
action, suit or proceeding or (B) the Company to participate in any
such claim, action, suit or proceeding.
ARTICLE 7
CONDITIONS PRECEDENT
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Closing of the following conditions:
(a) STOCKHOLDER APPROVAL. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the
affirmative vote of the stockholders of the Company to the extent
required by Delaware law and the Company's Certificate of
Incorporation.
(b) REGULATORY APPROVALS. All necessary approvals,
authorizations and consents of all Governmental Entities required to
consummate the transactions contemplated hereby shall have been
obtained and shall remain in full force and effect and all statutory
waiting periods in respect thereof shall have expired or been
terminated (all such approvals and the expiration of all such waiting
periods being referred to herein as the "Requisite Regulatory
Approvals").
33
(c) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No order,
injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition (an "Injunction")
preventing the consummation of the Merger or any of the other
transactions contemplated by this Agreement shall be in effect and no
proceeding initiated by any Governmental Entity seeking an injunction
shall be pending. No statute, rule, regulation, order, injunction or
decree shall have been enacted, entered, promulgated or enforced by
any Governmental Entity which prohibits, restricts or makes illegal
consummation of the Merger, or any of the other transactions
contemplated by this Agreement.
(d) FINANCING. The Financing shall have been consummated in
accordance with the proposal set forth in the Commitment Letter(s).
7.02 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The obligation
of Parent and Sub to effect the Merger is also subject to the satisfaction or
waiver by Parent and Sub, at or prior to the Effective Time, of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement shall be true
and correct as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date. Parent
shall have received a certificate signed on behalf of the Company by
its Chief Executive Officer and Chief Financial Officer to the
foregoing effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company
shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing
Date, and Parent shall have received a certificate signed on behalf of
the Company by its Chief Executive Officer and Chief Financial Officer
to such effect.
(c) CONSENTS UNDER AGREEMENTS. The consent, approval, waiver
or amendment (with financial covenants) of each person (other than the
Governmental Entities referred to in Section 7.01(b)) whose consent or
approval shall be required in order to permit the succession by the
Surviving Corporation pursuant to the Merger to any obligation, right
or interest of the Company under any material loan or credit
agreement, note, mortgage, indenture, lease, license or other
agreement or instrument shall have been obtained and shall be
reasonably satisfactory to Parent.
(d) LEGAL OPINION. Parent shall have received the legal
opinion of Bourne, ▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Company, dated the
Closing Date, covering such matters as Parent and Sub shall reasonably
request.
(e) FIRPTA. The Company shall have delivered to the Parent
and Sub an affidavit, dated as of the Effective Date, pursuant to
Sections 897 and 1445 of the Code in
34
substantially the form set forth in Exhibit E hereto, and shall have
complied with the notice requirements set forth in Treasury Regulation
Section 1.897-2(h)(2).
(f) BOGEN AGREEMENT AND ▇▇▇▇▇ AGREEMENT. The Bogen Agreement
and the ▇▇▇▇▇ Agreement shall be in full force and effect as of the
Effective Time, and the employment agreements of ▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇ with the Company shall have been terminated in all
respects, except as expressly contemplated by the Bogen Agreement and
the ▇▇▇▇▇ Agreement, respectively.
(g) DISSENTING SHARES. Dissenting Shares shall constitute not
more than five percent (5%) of the issued and outstanding shares of
Company Common Stock as of the record date for the Company Stockholder
Meeting.
(h) FIVE LOG REDUCTION. The Company shall be in compliance
with the five (5) log reduction requirements pursuant to the Food
Labeling: Warning and Notice Statement; Labeling of Juice Products;
Final Rule promulgated by the Food and Drug Administration.
7.03 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of
the Company to effect the Merger is also subject to the satisfaction, or waiver
by the Company, at or prior to the Closing of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent and Sub set forth in this Agreement shall be true
and correct of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on and as of the Closing Date. The
Company shall have received a certificate signed on behalf of Parent
and Sub by their respective Chief Executive Officers and Chief
Financial Officers to the foregoing effect.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND SUB. Parent and
Sub shall have each performed in all material respects all obligations
required to be performed by them; under this Agreement at or prior to
the Closing Date, and the Company shall have received a certificate
signed on behalf of Parent and Sub by their respective Chief Executive
Officers and Chief Financial Officers to such effect.
(c) CONSENTS UNDER AGREEMENTS. The consent, approval, waiver
or amendment (with financial covenants) of each person (other than the
Governmental Entities referred to in Section 7.01(b)) whose consent or
approval shall be required in order to permit the succession by the
Surviving Corporation pursuant to the Merger to any obligation, right
or interest of Parent or Sub under any material loan or credit
agreement, note, mortgage, indenture, lease, license or other
agreement or instrument, shall have been obtained and shall be
reasonably satisfactory to the Company.
35
(d) FAIRNESS OPINION. The Company shall have received the
written opinion of Ladenburg ▇▇▇▇▇▇▇▇ & Company to the effect that, as
of the date of such opinion, the Per Share Price is fair to the
Company's stockholders from a financial point of view, and such
opinion shall not have been amended or rescinded as of the Effective
Time.
(e) LEGAL OPINION. The Company shall have received the legal
opinion of ▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP, counsel to Parent and
Sub, dated the Closing Date, covering such matters as the Company
shall reasonably request.
(f) INSURANCE. The Company shall have received evidence,
reasonably satisfactory to it, that Parent shall have obtained the
insurance referred to in Section 6.10(c) hereof or, after giving ten
(10) days' prior written notice to Parent, shall have obtained the
insurance referred to in Section 6.10(c) hereof.
(g) PROVISION OF THE EXCHANGE FUND. Parent shall have made
available to the Exchange Agent the Exchange Fund described in Section
2.01 hereof.
ARTICLE 8
TERMINATION AND AMENDMENT
8.01 TERMINATION. This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, whether before or after
approval of the matters presented in connection with the Merger by the
stockholders of the Company and Parent:
(a) by mutual consent of Parent and the Company in a written
instrument, if the Board of Directors of each so determines by a vote
of a majority of the members of its entire Board;
(b) by either Parent or the Company upon written notice to
the other party (i) at least thirty (30) days after the date on which
any request or application for a regulatory approval required to
consummate the Merger shall have been denied or withdrawn at the
request or recommendation of the Governmental Entity which must grant
such requisite regulatory approval, unless within the thirty (30) day
period following such denial or withdrawal a petition for rehearing or
an amended application has been filed with the applicable Governmental
Entity; provided, however, that no party shall have the right to
terminate this Agreement pursuant to this Section 8.01(b)(i) if such
denial or request or recommendation for withdrawal shall be due to the
failure of the party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set forth herein,
or (ii) if any Governmental Entity of competent jurisdiction shall
have issued a final nonappealable order enjoining or otherwise
prohibiting the consummation of any of the transactions contemplated
by this Agreement;
36
(c) by either Parent or the Company if the Merger shall not
have been consummated on or before the earlier of (i) the thirtieth
(30th) day after the Company has mailed the Proxy Statement to its
stockholders or, if later, five (5) days after the Company Stockholder
Meeting and (ii) December 31, 1998, unless the failure of the Closing
to occur by such date shall be due to the failure of the party seeking
to terminate this Agreement to perform or observe in any material
respect the covenants and agreements of such party set forth herein;
(d) by the Company (provided that the Company shall not be in
material breach of any of its obligations under Section 6.03) if any
approval of the stockholders of the Company required for the
consummation of and Merger shall not have been obtained by reason of
the failure to obtain the required vote at a duly held meeting of
stockholders or at any adjournment or postponement thereof;
(e) by either Parent or the Company (provided that the
terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained
herein) if there shall have been a material breach of any of the
representations or warranties set forth in this Agreement on the part
of the other party, (i) which breach (if susceptible to cure) is not
cured within twenty (20) business days following written notice to the
party committing such breach, or (ii) which breach, by its nature,
cannot be cured;
(f) by either Parent or the Company (provided that the
terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained
herein) if there shall have been a material breach of any of the
covenants or agreements set forth in this Agreement on the part of the
other party, (i) which breach (if susceptible to cure) shall not have
been cured within twenty (20) business days following receipt by the
breaching party of written notice of such breach from the other party
hereto, or (ii) which breach, by its nature, cannot be cured;
(g) by Parent, if the Board of Directors of the Company does
not publicly recommend, as required by Section 6.03 hereof, in the
Proxy Statement that the Company's stockholders approve and adopt this
Agreement or, if after recommending in the Proxy Statement that
stockholders approve and adopt this Agreement, the Board of Directors
of the Company shall have withdrawn, modified or amended such
recommendation in any respect materially adverse to Parent;
(h) by the Company, if the Board of Directors of the Company
votes to recommend a Superior Offer rather than pursuing the
consummation of the transactions contemplated hereunder or, if after
recommending in the Proxy Statement that stockholders approve and
adopt this Agreement and the Merger, the Board of Directors of the
Company shall have withdrawn, modified or amended such recommendation
in order to recommend a Superior Offer; provided, however, that the
Company shall notify Parent at least two (2)
37
full business days prior to the exercise of its termination rights
under this Section 8.01(h); or
(i) by either Parent or the Company (provided that the
terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained
herein) after a reasonable and objective determination that any of the
conditions in Section 7.01 or 7.02, in the case of a termination by
Parent, or that any of the conditions in Section 7.01 or 7.03, in the
case of a termination by the Company, have not been satisfied or cured
within the time frames required by such sections or are incapable of
being satisfied or cured, as the case may be, by the earlier of (i)
the thirtieth (30th) day after the Company has mailed the Proxy
Statement to its stockholders or, if later, five (5) days after the
Company Stockholder Meeting and (ii) December 31, 1998.
8.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either Parent or the Company as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect except Sections
6.04(b), 6.12(b) and 8.03 shall survive any termination of this Agreement, and
there shall be no further obligation on the part of Parent, Sub, the Company,
or their respective officers or directors except for the obligations under such
provisions. Notwithstanding anything to the contrary contained in this
Agreement, no party shall be relieved or released from any liabilities or
damages arising out of its intentional breach of any provision of this
Agreement; provided, however, that no claim for intentional breach shall
survive the Closing.
8.03 EXPENSES; TERMINATION FEE.
(a) If the Merger is not consummated, all costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense,
provided that nothing contained herein shall limit Parent's rights
under Section 8.03(b) hereof. If the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by Parent; provided,
however, that Parent shall not be required to pay more than an
aggregate of $450,000 for the out-of-pocket expenses of the Company
and its advisors, including without limitation legal counsel,
investment advisors and accountants (but excluding the out-of pocket
expenses of the financial printer with respect to the Proxy
Statement).
(b) In order to induce Parent to enter into this Agreement
and to reimburse Parent for incurring the costs and expenses related
to entering into this Agreement and consummating the transactions
contemplated by this Agreement, in the event that (i) the transactions
contemplated by this Agreement are not consummated as a result of any
failure to satisfy the conditions set forth in Sections 7.01(a),
7.02(b) or 7.02(f) of this Agreement or (ii) the Company terminates
this Agreement and, at the time of termination, the Board of Directors
of the Company has received a Superior Offer and such Superior Offer
is accepted by the Company within twelve (12) months after the
termination of this Agreement), the
38
Company shall pay Parent an amount equal to $1,500,000 (inclusive of
out-of-pocket expenses) in connection with the transactions
contemplated by this Agreement.
(c) In order to induce the Company to enter into this
Agreement and to reimburse the Company for incurring the costs and
expenses related to entering into this Agreement and consummating the
transactions contemplated by this Agreement, in the event that (i) the
transactions contemplated by this Agreement are not consummated as a
result of any failure to satisfy the conditions set forth in Section
7.03(b) of this Agreement or (ii) Parent terminates this Agreement
and, at the time of termination, the Board of Directors of Parent has
received an offer to be acquired by a third party and Parent accepts
such offer within twelve (12) months after the termination of this
Agreement), Parent shall pay the Company an amount equal to $750,000
(inclusive of out-of-pocket expenses) in connection with the
transactions contemplated by this Agreement.
(d) In order to induce the Company to enter into this
Agreement, in the event that the transactions contemplated by this
Agreement are not consummated for reasons other than as a result of
any failure to satisfy the conditions set forth in Sections 7.01(a),
7.02(a), 7.02(b), 7.02(c), 7.02(e), 7.02(f), 7.02(g) or 7.02(h) of
this Agreement, Parent hereby covenants and agrees that it will not
directly or indirectly acquire an entity which manufactures fresh
juices within twelve (12) months after the termination or failure to
consummate of this Agreement.
8.04 AMENDMENT. Subject to compliance with applicable law, this
Agreement may be amended by the parties hereto, by action taken or authorized
by their respective Boards of Directors, at any time before or after approval
of the matters presented in connection with the Merger by the stockholders of
the Company; provided, however, that, after approval by the stockholders of the
Company, no amendment shall be made which reduces or changes the amount or form
of the consideration to be delivered to the stockholders of the Company without
the approval of a majority of the stockholders of the Company. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
8.05 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on behalf of such
party, but such extension or waiver shall nor operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
39
ARTICLE 9
GENERAL PROVISIONS
9.01 CLOSING. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") will take place at such
date, time and place as is mutually agreed upon by the Company and Parent,
which shall be not more than three (3) business days after the satisfaction of
the conditions set forth in Article VII hereof. The date on which such Closing
takes place is referred to herein as the "Closing Date."
9.02 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any term or provision of this Agreement to the contrary and
regardless of any investigation made by any party, none of the representations,
warranties, covenants and agreements in this Agreement or otherwise made or
delivered pursuant to, or in connection with, this Agreement, the Merger or any
related transactions shall survive the Closing Date, except for those covenants
and agreements contained or referenced in the Bogen Agreement or the ▇▇▇▇▇
Agreement and in the Confidentiality Agreement.
9.03 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given when delivered personally or telecopied
(with confirmation from recipient), three (3) days after mailed by registered
or certified mail (return receipt requested) or on the day delivered by an
express courier (with confirmation from recipient) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Parent or Sub, to:
Saratoga Beverage Group, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
40
(b) if to the Company, to:
The Fresh Juice Company, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bourne, ▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 690
Summit, New Jersey 07902-0690
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
9.04 INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The phrases "the date of this Agreement," "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to be August 14, 1998.
9.05 COUNTERPARTS. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
9.06 ENTIRE AGREEMENT. This Agreement (including the documents and
the instruments referred to herein), the Voting Agreement, the Bogen Agreement,
the ▇▇▇▇▇ Agreement, the Confidentiality Agreement and the Option Agreement by
and between Parent and ▇▇▇▇▇▇ ▇▇▇▇▇ constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof.
9.07 GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware, without regard to any
applicable to conflicts of law.
9.08 ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that the provisions contained in
Sections 5.03, 6.04(b), or 8.03 of this Agreement were not performed in
accordance with its specific terms or were otherwise breached. It is
41
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of Sections 5.03, 6.04(b) or 8.03 of this
Agreement and to enforce specifically the terms and provisions thereof in any
court of the United States or any court located in the State of New York (if
such injunction or enforcement action is instituted by the Company) or the
State of New Jersey (if such injunction or enforcement action is instituted by
Parent), this being in addition to any other remedy to which they are entitled
at law or in equity. In the event Parent institutes an action to enforce the
provisions of 8.03(b) of this Agreement, the prevailing party in such action
shall be entitled to all documented, out of pocket costs and expenses, without
limitation.
9.09 SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is deemed to be so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as is enforceable.
9.10 PUBLICITY. Except as otherwise required by law or the rules
of the National Association of Securities Dealers, so long as this Agreement is
in effect, none of Parent, Sub or the Company shall, or shall permit any of
their Subsidiaries to, issue or cause the publication of any press release or
other public announcement with respect to, or otherwise make any public
statement concerning, the transactions contemplated by this Agreement without
the consent of the other party, which consent shall nor be unreasonably
withheld.
9.11 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns. Except as otherwise expressly
provided herein, this Agreement (including the documents and instruments
referred to herein) is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
42
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
SARATOGA BEVERAGE GROUP, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Title: President and
Chief Executive Officer
ROWALE CORP.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Title: President
THE FRESH JUICE COMPANY, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Title: Chief Executive Officer
43
EXHIBIT A
COMPANY STOCKHOLDERS
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT B
VOTING, STANDSTILL AND PROXY AGREEMENT
This Voting, Standstill and Proxy Agreement (the "Agreement")
is made and entered into as of August 14, 1998 by and among THE FRESH JUICE
COMPANY, INC., a Delaware corporation (the "Company"), the stockholders of the
Company whose names and addresses are set forth on the signature pages hereto
(the "Company Stockholders"), and SARATOGA BEVERAGE GROUP, INC., a Delaware
corporation ("Saratoga").
WHEREAS, the Company, Saratoga and Rowale Corp., a
wholly-owned subsidiary of Saratoga ("Sub"), entered into, as of the date
hereof, an Agreement and Plan of Merger (the "Merger Agreement"; terms used
herein and not otherwise defined are used herein as defined in the Merger
Agreement), pursuant to which Sub will merge with and into the Company (the
"Merger") and each share of common stock, $.01 par value per share, of the
Company ("Company Common Stock") would be converted into the right to receive
$3.35 in cash; and
WHEREAS, each of the Company Stockholders owns the number of
shares of Company Common Stock set forth opposite his, her or its name on
Schedule A annexed hereto (collectively, the "Company Securities" and, with
respect to the Company Securities owned by a specific Company Stockholder, the
"Company Stockholder's Securities"); and
WHEREAS, execution and delivery of this Agreement by the
Company Stockholders is a condition to the execution and delivery of the Merger
Agreement by Saratoga and Sub, and by the Company, respectively.
NOW, THEREFORE, in order to induce Saratoga, Sub and the
Company to enter into the Merger Agreement and in consideration of the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. Term. This Agreement shall expire on the earlier of
(i) the Effective Date (as defined in the Merger Agreement) or (ii) the
termination of the Merger Agreement by any party thereto pursuant to the terms
thereof.
2. Covenants of the Company Stockholders.
(a) Each Company Stockholder agrees to vote all of
his, her or its currently owned shares of Company Common Stock for the
approval of the Merger, the Merger Agreement (in the form executed as
of the date hereof, with such changes thereto as the parties to the
Merger Agreement may agree prior to such changes), and the
transactions contemplated therein.
(b) Each Company Stockholder, in his, her or its
capacity as such, further agrees to convert, at the Closing, all
in-the-money options and warrants to purchase shares of Company Common
Stock into cash in accordance with Section 1.05(c) of the Merger
Agreement.
(c) Except in accordance with the provisions of this
Agreement or as expressly set forth in the Merger Agreement, each
Company Stockholder agrees, until the termination of this Agreement,
not to:
(i) sell, transfer, pledge, assign or
otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale,
transfer, pledge, assignment or other disposition of, any
Company Securities; or
(ii) deposit any Company Securities into a
voting trust, enter into a voting agreement or otherwise
grant any voting rights to any other person or entity with
respect to any Company Securities.
(d) Until such time as this Agreement is terminated,
each Company Stockholder agrees to take any actions as reasonably
requested by the Company or Saratoga, within his, her or its power as
are necessary or appropriate to enable the Company to satisfy the
conditions precedent set forth in the Merger Agreement to Saratoga's
obligations to consummate the Merger, and to use his, her or its best
efforts to cause the Company to satisfy such conditions precedent;
provided, however, that such Company Stockholder shall not be required
to pay any moneys or incur any liability in connection with the
foregoing.
(e) The provisions of this Section 2 are subject to
the terms of that certain Option Agreement dated March 16, 1998 by and
between ▇▇▇▇▇▇ ▇▇▇▇▇ and Saratoga.
3. Representations and Warranties of Saratoga. Saratoga
represents and warrants to the Company that the execution and delivery of this
Agreement by Saratoga and the performance by it of its obligations hereunder
have been duly authorized by all necessary corporate action, do not violate the
terms of its Certificate of Incorporation, its By-Laws, any law, rule or
regulation or any outstanding agreement or instrument to which it is a party or
is bound or subject to, and this Agreement constitutes a legal, valid and
binding agreement on its part.
4. Representations and Warranties of the Company
Stockholders. Each Company Stockholder represents and warrants to Saratoga as
follows:
(a) such Company Stockholder owns such Company
Stockholder's Securities of record or beneficially free and clear of
any lien, security interest, encumbrance or other adverse claim;
2
(b) such Company Stockholder's Securities set forth
on Schedule A hereto are the only securities of the Company owned of
record or beneficially by such Company Stockholder or in which such
Company Stockholder has any interest, and, except as set forth on
Schedule A, such Company Stockholder has no right to acquire any other
securities of the Company; and
(c) such Company Stockholder has the right, power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder; such execution, delivery and performance will
not violate any applicable law, rule or regulation or any outstanding
agreement or instrument to which such Company Stockholder is a party;
and this Agreement constitutes a legal, valid and binding agreement on
the part of such Company Stockholder enforceable against such Company
Stockholder in accordance with its terms.
5. Representations and Warranties of the Company. The
Company represents and warrants to Saratoga that the execution and delivery of
this Agreement by the Company and the performance by it of its obligations
hereunder have been duly authorized by all necessary corporate action, do not
violate the terms of its Articles of Incorporation, its By-Laws, any law, rule
or regulation or any outstanding agreement or instrument to which it is a party
or is bound or subject to, and this Agreement constitutes a legal, valid and
binding agreement on its part.
6. Proxy.
(a) Each Company Stockholder hereby irrevocably
makes, constitutes and appoints Saratoga to act as such Company
Stockholder's true and lawful proxy and attorney-in-fact in the name
and on behalf of such Company Stockholder to vote all of his, her or
its shares of Company Common Stock for the approval of the Merger, the
Merger Agreement and the transactions contemplated therein as set
forth in Section 2(a) hereof (subject to Section 15 hereof). By giving
this proxy, each such holder of Company Common Stock hereby revokes
any other proxy granted by such Company Stockholder to vote any of
such Company Stockholder's Securities with respect to such matters.
This proxy, and the power of attorney and all authority contained
herein, shall become effective as to any Company Stockholder only upon
the failure of such Company Stockholder to vote or consent with
respect to his, her or its shares in accordance with Section 2(a)
hereof, following notice to such Company Stockholder to that effect.
(b) All power and authority hereby conferred is
coupled with an interest and is irrevocable, shall not be terminated
by any act of such Company Stockholder or by operation of law, by lack
of appropriate power or authority, or by the occurrence of any other
event or events and shall be binding upon all beneficiaries, heirs at
law, legatees, distributees, successors, assigns and legal
representatives of such Company Stockholder. If after the execution of
this Agreement any Company Stockholder shall cease to have appropriate
power or authority, or if any other such event or events shall occur,
Saratoga is nevertheless authorized and directed to vote the Company
Securities in accordance with the terms of this
3
Agreement as if such lack of appropriate power or authority or other
event or events had not occurred and regardless of notice thereof.
(c) Each Company Stockholder agrees to use all good
faith efforts to cause any record owner of Company Securities of which
such Company Stockholder is the beneficial owner to grant to Saratoga
a proxy of the same effect as that contained herein. Subject to the
proviso set forth in Section 2(d) hereof, each Company Stockholder
shall perform such further acts and execute such further documents as
may be required to vest in Saratoga the power to vote the Company
Stockholder's Securities during the term of the proxy granted herein.
(d) The provisions of this Section 6 are subject to
the terms of that certain Option Agreement dated March 16, 1998 by and
between ▇▇▇▇▇▇ ▇▇▇▇▇ and Saratoga.
7. Further Assurances. Subject to the proviso set forth
in Sections 2(d) hereof, each party hereto shall perform such further acts and
execute such further documents as may reasonably be required to carry out the
provisions of this Agreement.
8. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties hereto.
9. 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 hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
10. Notices. All notices or other communications
required or permitted hereunder shall be in writing and shall be deemed duly
given when delivered in person or by telecopier, cable, telex or telegram or
three (3) days after mailed by certified mail, postage prepaid, addressed as
follows:
To the Company Stockholders, in each case to:
The address set forth on the signature pages hereto.
4
To the Company:
The Fresh Juice Company, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bourne, ▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 690
Summit, New Jersey 07902-0690
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Saratoga:
Saratoga Beverage Group, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
11. Effect of Invalidity. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
5
12. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
13. Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the Delaware without
giving effect to the conflicts of laws principles thereof.
14. Binding Effect: Benefits. This Agreement shall inure
to the benefit of and shall be binding upon the parties hereto and their
respective heirs, legal representatives, successors and assigns. Nothing in
this Agreement, expressed or implied, is intended to or shall confer on any
person other than the parties hereto and their respective heirs, legal
representatives and successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
15. Merger Agreement Amendments. No amendment to the
Merger Agreement after the date hereof shall alter or affect the rights granted
to the Company and Saratoga hereunder.
[SIGNATURES BEGIN ON NEXT PAGE]
6
IN WITNESS WHEREOF, the Company, the Company Stockholders and
Saratoga have executed this Agreement or caused this Agreement to be executed
by their respective officers thereunto duly authorized, as the case may be, as
of the date first above written.
THE FRESH JUICE COMPANY, INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇ ▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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c/o The Fresh Juice Company, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (973)
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SARATOGA BEVERAGE GROUP, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Executive Officer
EXHIBIT C
August 12, 1998
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: AMENDMENT OF EMPLOYMENT AGREEMENT
Dear ▇▇▇▇▇:
Pursuant to the proposed transaction (the "Transaction") between The
Fresh Juice Company, Inc. ("Fresh Juice") and Saratoga Beverage Group, Inc.
("Saratoga"), wherein a newly formed, wholly owned subsidiary of Saratoga will
merge (the "Merger") with and into Fresh Juice, it will be a condition to the
consummation of the Transaction that you and Fresh Juice amend, and you hereby
agree to amend, the Employment Agreement between Fresh Juice and you, dated as
of March 31, 1996 (the "Employment Agreement"), as follows:
1. Effective as of and subject to the date of consummation of the
Merger (the "Closing Date") you hereby agree to resign from all positions held
by you as an officer, director and employee of Fresh Juice and each of its
subsidiaries.
2. Effective as of and subject to the Closing Date, you hereby
waive all amounts (including payments and benefits) due to you under Sections
6, 14, 15 and 16 of the Employment Agreement, except for (i) the payment of the
sum of $250,000 in cash on the Closing Date, (ii) the provision at no cost to
you of the automobile currently utilized by you for a period of two years (with
insurance and maintenance) following the Closing Date, and (iii) the provision
at no cost to you of health or other group insurance pursuant to plans which
are in effect or which are instituted after the date hereof for executive
officers or employees generally of Fresh Juice for a period of two years
following the Closing Date.
3. Effective as of and subject to the Closing Date, you hereby agree to
extend the term of Section 24.2 of the Employment Agreement from one year to
two years following the Closing Date.
4. Upon your receipt of the sum of $250,000 in cash referenced in
paragraph 2 above, you hereby agree to terminate the Employment Agreement in
all respects other than Section 24 of the Employment Agreement which section,
as amended by this letter agreement, shall survive the termination of the
Employment Agreement. In consideration therefor, you shall have the
unconditional right to receive the sum of $750,000 plus reasonable interest (as
defined by the best rate of interest available for an escrow account
established at a mutually agreeable
bank), payable on the first anniversary of the Closing Date and evidenced by a
promissory note from Saratoga. A sum equal to $750,000 will be placed into an
interest-bearing escrow account at a bank mutually agreeable to you and
Saratoga to secure the unconditional payment obligations referenced in this
paragraph 4. Such bank will be instructed to release the proceeds of the
account to you, without any further action on the part of you or Saratoga, on
the first anniversary of the Closing Date in full payment of all obligations
under the promissory note. Upon receipt of payment, the promissory note will be
null and void and you shall return the promissory note to Saratoga for
cancellation.
5. Effective as of and subject to the Closing Date, you hereby agree to
become a full-time consultant to Saratoga and Fresh Juice during the one year
period following the Closing Date in exchange for the sum of $300,000, payable
monthly in arrears over said one year period. Full time is defined for purposes
of this letter as not more than 1,000 hours in total. You shall perform such
consulting services, if any, as shall be reasonably requested by the
President/Chief Executive Officer of Saratoga or the Board of Directors of
Saratoga. The above consulting fees shall be due and payable on an
unconditional basis, regardless whether Saratoga determines to make use of the
full 1,000 hours of time available, except that this consulting relationship
may be terminated for cause (defined as (i) conviction of a felony or crime
involving moral turpitude, or (ii) willful malfeasance or willful refusal to
perform consulting services reasonably requested, or (iii) death or disability,
which would prevent you from being a full-time consultant). In the event of a
termination of the consulting relationship by Saratoga other than for cause,
Saratoga shall remain obligated to pay the full balance due and owing on the
$300,000 consulting fee at the time of termination. You shall not be required
to perform consulting services outside of the Newark facility or at your home
on Staten Island, except that you agree that reasonable out-of-state travel may
be required (consistent with your past two years' employment). Any business
travel shall include reimbursement for travel and lodging (consistent with your
past years' employment). This consulting relationship and the mutual agreement
of the parties with respect thereto constitutes a distinct and separate
agreement, separate and apart from the other provisions of this letter or the
agreements embodied therein. For example, the payments due and owing under the
separate provisions of paragraphs 2, 4 and 6 shall not be affected by any
failure to perform under this consulting agreement (as embodied in this
paragraph 5).
6. Effective as of and subject to the Closing Date, Fresh Juice hereby
agrees to pay $15,000 toward your legal fees and expenses to ▇▇▇▇▇▇▇, Del Deo,
Dolan, Griffinger & ▇▇▇▇▇▇▇▇▇, attention ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
7. Effective as of and subject to the Closing Date, you will be
appointed as a member of the Board of Directors of Saratoga (with all
associated compensation payable to non-employee directors) until the 1999
Annual Meeting of Stockholders of Saratoga.
Kindly indicate your acceptance of the foregoing by signing in the
space provided below.
Very truly yours,
THE FRESH JUICE COMPANY, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President
Accepted and agreed to as
of August 14, 1998
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SARATOGA BEVERAGE GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
President and Chief Executive Officer
EXHIBIT D
THE FRESH JUICE COMPANY, INC.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
August 12, 1998
▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Amendment of Employment Agreement
Dear ▇▇▇▇▇:
Pursuant to the proposed transaction (the "Transaction")
between The Fresh Juice Company, Inc. ("Fresh Juice") and Saratoga Beverage
Group, Inc. ("Saratoga"), wherein a newly formed, wholly owned subsidiary of
Saratoga will merge (the "Merger") with and into Fresh Juice, it will be a
condition to the consummation of the Transaction that you and Fresh Juice
amend, and you hereby agree to amend, the Employment Agreement between Fresh
Juice and you, dated as of March 31, 1996 (the "Employment Agreement"), as
follows:
1. Effective as of and subject to the date of the consummation
of the Merger (the "Closing Date") you hereby agree to resign from all
positions held by you as an officer, director and employee of Fresh Juice and
each of its subsidiaries.
2. Effective as of and subject to the Closing Date, you hereby
waive all amounts (including payments and benefits) due to you under Sections
6, 14, 15 and 16 of the Employment Agreement, except for (i) the payment of the
sum of $250,000 in cash referenced in paragraph 3 below on the Closing Date,
(ii) the provision at no cost to you of the Cadillac automobile currently
utilized by you for a period of one year (with insurance and maintenance)
following the Closing Date, and (iii) the provision at no cost to you of health
or other group insurance pursuant to plans which are in effect or which are
instituted after the date hereof for executive officers or employees generally
of Fresh Juice for a period of one year following the Closing Date.
3. Effective as of and subject to the Closing Date, in
consideration of the payment of the sum of $250,000 in cash, you hereby agree
to extend the term of Section 24.2 (Agreement Not to Compete) from one year to
three years.
▇▇▇▇▇▇ ▇▇▇▇▇
August 12, 1998
Page 2
4. Upon your receipt of the sum of $250,000 in cash
referenced in paragraph 3 above and payment of your compensation, expenses and
benefits on account of services provided through the Closing Date, you hereby
agree to terminate the Employment Agreement in all respects other than Section
24 of the Employment Agreement, which Section, as amended by this letter
agreement, shall survive the termination of the Employment Agreement.
5. You hereby agree to amend Section 1(c)(ii)(C) of the
Option Agreement, dated as of March 16, 1998, by and between you and Saratoga
to read in its entirety "the earlier of (i) the thirtieth (30th) day after the
Company has mailed the proxy statement to its stockholders or, if later, five
(5) days after the Fresh Juice's stockholder meeting and (ii) December 31,
1998."
6. You hereby acknowledge and agree that those certain
options granted by Fresh Juice to you in the amount of (i) 100,000 shares on
October 27, 1988 under Fresh Juice's Incentive Stock Option Plan and (ii)
60,000 shares, are all ineffective, null and void.
Kindly indicate your acceptance of the foregoing by signing
in the space provided below.
Very truly yours,
THE FRESH JUICE COMPANY, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice President
Accepted and agreed to as of
August 12, 1998
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
SARATOGA BEVERAGE GROUP, INC.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
President and Chief Executive Officer
EXHIBIT E
STATEMENT THAT STOCK OF THE FRESH JUICE COMPANY, INC. IS NOT A
U.S. REAL PROPERTY INTEREST
To: Saratoga Beverage Group, Inc.
Please be advised that pursuant to your request, we advise you that as
of [EFFECTIVE DATE], ownership interests in The Fresh Juice Company, Inc. were
not U.S. real property interests for purposes of Treasury Regulations Section
1.897-2(g)(1)(ii) and (h)(1)(i).
The undersigned responsible officer of The Fresh Juice Company, Inc.,
hereby certifies under penalties of perjury that this Statement is correct to
his knowledge and belief, and that he has authority to sign this Statement on
behalf of the Corporation.
The Fresh Juice Company, Inc.
By: ______________________________
Name:
Title:
Date:_____________________________
Based on: Reg. Section 1.897-2(g)(1)(ii), (h)(1)(i).
NOTE: THIS EXHIBIT WAS CHANGED SINCE THE AGREEMENT WAS SIGNED.