UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
CABLE CAR BEVERAGE CORPORATION
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
126844109
(CUSIP Number)
BRIAN L. SCHORR
Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
(212) 451-3000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
June 24, 1997
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject to this Schedule 13D, and is filing this
schedule because of Rule 13d-(b)(3) or (4), check the following box ___.
Page 1 of 7 Pages
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SCHEDULE 13D
CUSIP NO. 126844109 Page 2 of 7 Pages
----------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Triarc Companies, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ___
(b) ___
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ___
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF - - -
SHARES
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH REPORTING 1,763,609
PERSON
WITH 9 SOLE DISPOSITIVE POWER
- - -
10 SHARED DISPOSITIVE POWER
1,763,609
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,763,609
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES X
---
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.7%
14 TYPE OF REPORTING PERSON
CO
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Page 3 of 7 pages
SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $.01 per
share ("Common Stock"), of Cable Car Beverage Corporation, a Delaware
corporation (the "Company"). The address of the Company's principal executive
office is 717 17th Street, Suite 1475, Denver, Colorado 80202.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c) This statement is filed by Triarc Companies, Inc., a
Delaware corporation ("Triarc"), whose address is 280 Park Avenue, New York, New
York 10017. Triarc is a holding company which, through its subsidiaries, is
engaged in the following businesses: beverages, restaurants, dyes and specialty
chemicals. Triarc, through a subsidiary, also has an equity interest in the
liquefied petroleum gas business.
(d) - (e) None.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
No separate funds or other consideration were paid or given for
the beneficial ownership which is the subject of this Schedule 13D.
The Company, Triarc and CCB Merger Corporation, a wholly-owned
subsidiary of Triarc ("Mergerco"), entered into an Agreement and Plan of Merger
on June 24, 1997 (the "Merger Agreement"). A copy of the Merger Agreement, in
connection with which Triarc entered into the Stockholders Agreement described
in Item 4 below, is attached hereto as Exhibit A and incorporated by reference
herein. Under the terms of the Merger Agreement, Mergerco would be merged with
and into the Company, the Company would be the surviving corporation and the
Company would become a wholly owned subsidiary of Triarc (the "Merger").
Pursuant to the Merger Agreement, each issued and outstanding share of Common
Stock (other than certain shares to be cancelled in accordance with the Merger
Agreement and those held by stockholders who have exercised appraisal rights
under Delaware law) will be converted into the right to receive from Triarc
0.1722 of a fully paid and nonassessable share of the Class A Common Stock, $.10
per share, of Triarc (the "Triarc Common Stock"), subject to certain adjustments
as set forth in the Merger Agreement. The shares of Triarc Common Stock so
issued will be newly issued shares. Triarc will make cash payments in lieu of
issuing fractional shares of Triarc Common Stock, which will be paid from the
proceeds from the sale on the open market of the aggregate fractional shares of
Triarc Common Stock as provided in the Merger Agreement. The transaction is
intended to be a tax-free reorganization under the provisions of section 368(a)
of the Internal Revenue Code of 1986, as amended.
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Page 4 of 7 pages
If Triarc exercises the Options (defined in Item 5 below) granted
under the Stockholders Agreement, it currently intends to finance the purchase
price through Triarc's working capital.
ITEM 4. PURPOSE OF TRANSACTION.
In connection with the Merger Agreement described in Item 3
above, Triarc and Samuel M. Simpson, Susan L. Neff, William H. Rutter and Susan
L. Fralick (collectively, the "Stockholders") entered into a Stockholders
Agreement, dated as of June 24, 1996 (the "Stockholders Agreement"). The
Stockholders Agreement, attached hereto as Exhibit B and incorporated by
reference herein, includes, inter alia, agreements by the Stockholders to vote,
at any meeting of the holders of the Common Stock, their shares of Common Stock
(other than certain Excluded Shares identified in Schedule I to the Stockholders
Agreement), whether owned as of the date of the Stockholders Agreement or
thereafter acquired (collectively, the "Subject Stock"), in favor of the Merger
Agreement and the transactions contemplated therein, including, without
limitation, the Merger, and otherwise in accordance with the Stockholders
Agreement with respect to certain matters specified therein. Among other things,
the Merger Agreement provides that upon the effectiveness of the Merger, the
certificate of incorporation of the Company shall be restated as set forth in
Exhibit A to the Merger Agreement, and the bylaws, officers and directors of
Mergerco shall become the bylaws, officers and directors of the Company.
In addition, the Merger Agreement provides that upon the
effectiveness of the Merger, the Company shall have authorized and outstanding
1,000 shares of common stock, par value $1.00 per share, all of which shall be
owned by Triarc. The effectiveness of the Merger will cause the Company Company
Stock to cease to be authorized to be quoted by the Nasdaq and become eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Act"). Furthermore, upon the
effectiveness of the Merger, Samuel M. Simpson, President of the Company, has
agreed, and Triarc has agreed to cause the Company, as the surviving
corporation, to terminate his existing employment agreement and to enter into a
new three-year employment agreement which will contain, among other provisions,
non-compete provisions.
Depending on market conditions and other factors that it may deem
material to its investment decision, Triarc and its subsidiaries may from time
to time acquire additional shares of Common Stock in the open market or in
privately negotiated transactions.
Other than as set forth above or in Item 3 or in the materials
incorporated in this Schedule 13D by reference, Triarc has no plans with respect
to any matter specified in Item 4 of Schedule 13D or any similar action to those
enumerated therein.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Pursuant to the Stockholders Agreement, Triarc has the
contractual right to require the Stockholders to vote their shares of Subject
Stock in the manner set forth in the Stockholders Agreement. In the event that a
Stockholder fails to vote his shares of Subject Stock in such manner, each
Stockholder has appointed Triarc as his or
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Page 5 of 7 pages
her attorney and proxy to vote his or her shares of Subject Stock in the manner
set forth in the Stockholders Agreement. In addition, each Stockholder has
granted to Triarc an exclusive and irrevocable option (collectively, the
"Options") to purchase his Subject Stock if the Company shall have taken certain
specified actions with respect to an Acquisition Proposal (as defined in the
Merger Agreement), at a purchase price per share in cash equal to (i) 0.1722
times (ii) the average (without rounding) of the closing prices per share of
Triarc Common Stock on the New York Stock Exchange for the 15 consecutive
trading days ending on the trading day immediately preceding the closing of the
exercise of the Option, subject to certain adjustments as set forth in the
Stockholders Agreement. The Options granted under the Stockholders Agreement
must be exercised by Triarc simultaneously in whole and not in part. As of the
date of this Schedule 13D, there are 1,763,609 shares of Subject Common Stock,
or approximately 19.7% of the Common Stock outstanding.(1)
In addition, the Stockholders hold vested options to purchase
185,000 shares of Common Stock (collectively, the "Stockholder Options").
Assuming that all such the Stockholder Options are exercised, the shares of
Common Stock so acquired would be Subject Stock under the Stockholders Agreement
with respect to which Triarc would have the right to direct the vote with
respect to the Merger, be appointed proxy and hold an option to acquire as
described in the previous paragraph. Triarc believes that it may be deemed to
have shared voting power and shared dispositive power with respect to an
aggregate of 1,948,609 shares of Common Stock, or approximate 21.3% of the
outstanding Common Stock.(2) Triarc is reporting this 21.3% figure solely for
the purpose of establishing how many shares of Common Stock with respect to
which Triarc may be deemed to have shared voting power and shared dispositive
power under the Stockholders Agreement, and such figure should not be relied
upon for any other purposes. Notwithstanding anything to the contrary contained
in this Schedule 13D, and in accordance with Rule 13d-4 promulgated under the
Act, the filing of this Schedule 13D shall not be construed as an admission that
Triarc is the beneficial owner of such shares.
(b) Pursuant to the Stockholders Agreement Triarc has shared
power with the Stockholders to vote or to direct the vote, and to dispose of or
direct the disposition of, the Subject Stock as set forth in the Stockholders
Agreement.
(c) Except as described herein, in the Merger Agreement or in the
Stockholders Agreement, Triarc has not engaged in any transaction involving
Common Stock within the sixty (60) day period immediately preceding the date of
this Schedule 13D and, except for the shares of Subject Stock described above
which are subject to the Stockholders Agreement, Triarc does not beneficially
own any Common Stock.
Paragraphs (d) and (e) of Item 5 of Schedule 13D are not applicable to this
filing.
- --------------
(1) Such percentage is based on 8,948,324 shares of Common Stock outstanding
as of June 24, 1997 as represented by the Company in the Merger
Agreement.
(2) Such percentage is based on 8,948,324 shares of Common Stock
outstanding, plus an additional 185,000 shares issued upon exercise of
the Stockholder Options.
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Page 6 of 7 pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except as described in Items 3 and 4 above, Triarc is not a party
to any contracts, arrangements, understandings or relationships (legal or
otherwise) with respect to any securities of the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Sequentially
Exhibit Schedule Numbered Page
A. Agreement and Plan of Merger dated June 24, 1997
among the Company, Triarc and CCB Merger
Corporation.
B. Stockholders Agreement dated as of June 24, 1997
among Triarc, Samuel M. Simpson, Susan L. Neff,
William H. Rutter and Susan L. Fralick.
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Page 7 of 7 pages
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in the statement is true,
complete and correct.
Date: July 7, 1997
TRIARC COMPANIES, INC.
By: BRIAN L. SCHORR
------------------------
Name: Brian L. Schorr
Title: EVP & GC
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Exhibit A
- -------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
By and Among
CABLE CAR BEVERAGE CORPORATION,
TRIARC COMPANIES, INC.
AND
CCB MERGER CORPORATION
---------------------------------
Dated June 24, 1997
---------------------------------
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TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
Section 1.1 The Merger.............................................
Section 1.2 Closing................................................
Section 1.3 Certificate of Incorporation...........................
Section 1.4 By-laws................................................
Section 1.5 Board of Directors and Officers........................
Section 1.6 Meeting of Company Stockholders........................
Section 1.7 SEC Filings............................................
Section 1.8 Effective Time of the Merger...........................
ARTICLE II
CONVERSION OF SHARES
Section 2.1 Conversion of Shares...................................
Section 2.2 No Further Transfers...................................
Section 2.3 Exchange of Shares of Company Common Stock.............
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization and Good Standing.........................
Section 3.2 Corporate Authorization; Validity of Agreement; Company
Action.................................................
Section 3.3 Capitalization.........................................
Section 3.4 Reports and Financial Statements.......................
Section 3.5 Absence of Certain Changes.............................
Section 3.6 Consents and Approvals; No Violations..................
Section 3.7 No Undisclosed Liabilities.............................
Section 3.8 Registration Statement.................................
Section 3.9 Litigation; Compliance with Law........................
Section 3.10 Taxes..................................................
Section 3.11 No Default.............................................
Section 3.12 Contracts..............................................
Section 3.13 Intellectual Property..................................
Section 3.14 Employee Benefit Plans.................................
Section 3.15 Inventory and Supplies.................................
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Section 3.16 Receivables............................................
Section 3.17 Case Sales.............................................
Section 3.18 Transactions with Affiliates...........................
Section 3.19 State Takeover Statutes................................
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGERCO
Section 4.1 Organization and Good Standing.........................
Section 4.2 Corporate Authorization; Validity of Agreement.........
Section 4.3 Capitalization.........................................
Section 4.4 Reports and Financial Statements.......................
Section 4.5 Absence of Certain Changes.............................
Section 4.6 Consents and Approvals; No Violations..................
Section 4.7 Registration Statement.................................
Section 4.8 Tax Representations....................................
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company......................
Section 5.2 Access to Information..................................
Section 5.3 Consents and Approvals.................................
Section 5.4 No Solicitation........................................
Section 5.5 Additional Agreements..................................
Section 5.6 Notification of Certain Matters........................
Section 5.7 Indemnification of Directors and Officers..............
Section 5.8 Rule 145 Affiliates....................................
Section 5.9 Stock Exchange Listing.................................
Section 5.10 Tax-Free Reorganization................................
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions to the Obligations of Each Party............
Section 6.2 Conditions to the Obligations of the Parent and Mergerco
Section 6.3 Conditions to the Obligations of the Company...........
ARTICLE VII
TERMINATION
Section 7.1 Termination............................................
Section 7.2 Effect of Termination..................................
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ARTICLE VIII
GENERAL AGREEMENTS
Section 8.1 Definitions............................................
Section 8.2 Survival of Representations, Warranties and Agreements.
Section 8.3 Expenses...............................................
Section 8.4 Notice.................................................
Section 8.5 Amendments.............................................
Section 8.6 Waiver.................................................
Section 8.7 Brokers................................................
Section 8.8 Publicity..............................................
Section 8.9 Headings...............................................
Section 8.10 Non-Assignability......................................
Section 8.11 Entire Agreement; No Third Party Beneficiaries; Rights
of Ownership...........................................
Section 8.12 Specific Performance...................................
Section 8.13 Counterparts...........................................
Section 8.14 Governing Law..........................................
Section 8.15 Consent to Jurisdiction................................
Section 8.16 WAIVER OF JURY TRIAL...................................
Section 8.17 Disclosure Schedule....................................
iii
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Exhibit:
A - Form of Restated Certificate of Incorporation
B - Form of Affiliate Agreement
Schedule:
I - Disclosure Schedule
iv
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated June 24, 1997 (this
"Agreement"), by and among Cable Car Beverage Corporation, a Delaware
corporation (the "Company"), Triarc Companies, Inc., a Delaware corporation (the
"Parent"), and CCB Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of the Parent ("Mergerco").
The Boards of Directors of the Parent, Mergerco and the Company
have approved, and deem it advisable and in the best interests of their
respective stockholders to consummate, the merger of Mergerco with and into the
Company (the "Merger") upon the terms and subject to the conditions set forth
herein and in accordance with the General Corporation Law of the State of
Delaware (the "DGCL").
The Parent and Mergerco are unwilling to enter into this
agreement unless certain stockholders of the Company enter into a stockholders
agreement (the "Stockholders Agreement") among the Parent, Mergerco and such
stockholders providing for, among other things, the granting to the Parent and
Mergerco of the right to vote shares of Company Common Stock owned by such
stockholders under the circumstances set forth in such agreement and the
granting to Parent and Mergerco of an option to purchase such shares of Company
Common Stock owned by such stockholders under the circumstances and at the price
set forth in such agreement, and the Board of Directors of the Company has
approved the Parent and Mergerco entering into the Stockholders Agreement.
The Board of Directors of the Company, having received advice
from Montgomery Securities, its investment advisor, and an opinion from such
firm to the effect
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that the consideration to be received by the stockholders of the Company
pursuant to the Merger is fair to such stockholders from a financial point of
view (the "Company Fairness Opinion"), has approved the transactions
contemplated by this Agreement and the Stockholders Agreement (the "Contemplated
Transactions") in accordance with the provisions of Section 203 of the DGCL
("Section 203") and has resolved to recommend the approval of the Merger by the
holders of shares of the Common Stock, par value $.01 per share, of the Company
(the "Company Common Stock").
For United States federal income tax purposes, it is intended
that the Merger provided for herein shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows (capitalized terms used herein have
the meanings ascribed to them in Section 8.1):
ARTICLE
I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
conditions hereof and in accordance with the provisions of the DGCL, at the
Effective Time, Mergerco and the Company shall consummate the Merger pursuant to
which Mergerco shall be merged with and into the Company in accordance with the
applicable provisions of the DGCL and the separate existence of Mergerco shall
thereupon cease, and the Company, as the surviving
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corporation in the Merger (the "Surviving Corporation"), shall continue its
corporate existence under the laws of the State of Delaware as a wholly owned
subsidiary of the Parent. The Merger shall have the effects set forth in Section
259 of the DGCL.
Section 1.2 Closing. The closing of the Merger (the "Closing")
shall take place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison,
1285 Avenue of the Americas, New York, New York 10019-6064 on a date to be
specified by the parties, which shall be no later than five (5) Business Days
after all of the conditions set forth in Article VI hereof shall be fulfilled or
waived in accordance with this Agreement and applicable law or at such other
time, date and/or place as the Company, the Parent and Mergerco may agree (the
"Closing Date"). Subject to the provisions of Article VII hereof, failure to
consummate the Merger on the date and time and at the place determined pursuant
to this Section 1.2 shall not result in the termination of this Agreement and
will not relieve any party of any obligations hereunder.
Section 1.3 Certificate of Incorporation. The certificate of
incorporation of the Company as in effect immediately prior to the Effective
Time (the "Certificate of Incorporation") shall be amended in its entirety as
set forth in Exhibit A hereto, and such Certificate of Incorporation, as so
amended at the Effective Time, shall be the certificate of incorporation of the
Surviving Corporation, until thereafter further changed or amended as provided
therein or by applicable law.
Section 1.4 By-laws. The by-laws of Mergerco as in effect
immediately prior to the Effective Time shall be the by-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or as
otherwise permitted or required by the
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Surviving Corporation's certificate of incorporation or by applicable law,
except that at the Effective Time, the name in the heading thereof shall be
changed to "Cable Car Beverage Corporation."
Section 1.5 Board of Directors and Officers.
(a) The directors of Mergerco immediately prior to the Effective
Time shall be the initial directors of the Surviving Corporation and shall serve
until their respective successors are duly elected or appointed and qualify in
the manner provided in the certificate of incorporation and by-laws of the
Surviving Corporation, or as otherwise provided by applicable law.
(b) The officers of Mergerco immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation and shall serve
until their respective successors are duly elected or appointed and qualify in
the manner provided in the certificate of incorporation and by-laws of the
Surviving Corporation, or as otherwise provided by applicable law.
Section 1.6 Meeting of Company Stockholders.
(a) Subject to the provisions of Section 1.6(b) below, the Company
shall take all necessary action in accordance with applicable law to convene a
meeting of its stockholders (a "Meeting") to consider and vote upon the Merger
and this Agreement and shall use its best efforts to hold such Meeting as
promptly as practicable after the date the Registration Statement becomes
effective. Subject to the provisions of Section 1.6(b) below, the Company agrees
that the Board of Directors of the Company shall recommend that the Company's
stockholders vote in favor of the Merger and the approval and adoption of this
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Agreement. The Parent agrees that it shall vote, or cause to be voted, in favor
of the Merger and the adoption and approval of this Agreement any shares of
Company Common Stock held by it or by any of its Subsidiaries on the record date
set by the Company for determining shares of Company Common Stock entitled to
vote at the Meeting.
(b) Nothing in Section 1.6(a) shall prevent the Board of Directors of
the Company from withdrawing, amending or modifying its unanimous recommendation
in favor of the Merger if (i) an unsolicited bona fide written Acquisition
Proposal is submitted to the Company and is not withdrawn, (ii) the Board of
Directors of the Company concludes in good faith, based upon the advice of its
financial advisor, that such Acquisition Proposal would result in a transaction
that is more favorable from a financial point of view to the Company's
stockholders than the Merger, (iii) neither the Company nor any of its
Representatives shall violate any of the restrictions set forth in Section
5.4(a), and (iv) the Board of Directors of the Company concludes in good faith,
after consultation with its outside legal counsel, that the withdrawal,
amendment or modification of such recommendation is required in connection with
such Acquisition Proposal in order for the Board of Directors of the Company to
comply with its fiduciary obligations to the Company's stockholders under
applicable law. Nothing in Section 1.6(a) or in Section 5.4(a) shall prevent the
Board of Directors of the Company from recommending that its stockholders accept
an unsolicited tender offer or exchange offer commenced by a third party with
respect to shares of Company Common Stock if (1) such tender offer or exchange
offer constitutes an Acquisition Proposal, (2) the Board of Directors of the
Company shall have withdrawn its recommendation in favor of the Merger in
accordance with and as permitted
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by the preceding sentence, (3) the Board of Directors of the Company shall have
concluded in good faith, based upon the advice of its financial advisor, that
such tender offer or exchange offer is more favorable from a financial point of
view to the Company's stockholders than the Merger, (4) neither the Company nor
any of its Representatives shall have violated any of the restrictions set forth
in Section 5.4, and (5) the Board of Directors of the Company shall have
concluded in good faith, after consultation with its outside legal counsel, that
the recommendation in favor of acceptance of such tender offer or exchange offer
is required in order for the Board of Directors of the Company to comply with
its fiduciary obligations to the Company's stockholders under applicable law.
Nothing contained in this Section 1.6 shall limit the Company's obligation to
hold and convene the Meeting, it being understood that the Company shall be
required to hold and convene the Meeting in accordance with this Section 1.6
unless the holding of such Meeting would constitute a violation of any
applicable court order or statute. The Company shall use all reasonable efforts
to ensure that the holding of the Meeting will not constitute a violation of any
applicable court order or statute.
Section 1.7 SEC Filings.
(a) As soon as practicable after the date hereof, the Parent shall
prepare and file with the SEC the Registration Statement on Form S-4 (such
registration statement at the time it becomes effective, together with all
amendments duly filed and mailed is referred to as the "Registration Statement")
under the Securities Act, which registers the Parent Class A Common Stock to be
issued to the Company's stockholders pursuant to the Merger and in which the
prospectus (the "Prospectus") will be in the form of
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a proxy statement. The Company shall prepare and provide the Parent with
information concerning the Company required to be included in the Registration
Statement. Such information prepared and provided by the Company shall comply in
all material respects with all applicable requirements of law.
(b) Each of the Company and the Parent, as applicable, shall use its
reasonable best efforts to (i) respond to any comments of the SEC, (ii) have the
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing and to keep the Registration Statement
effective as long as is necessary to consummate the Merger and (iii) cause the
Prospectus to be mailed to the stockholders of the Company as promptly as
practicable after the Registration Statement is declared effective under the
Securities Act. Each of the Parent and the Company shall notify the other
promptly of the receipt of any comments from the SEC and of any request by the
SEC for amendments or supplements to the Registration Statement or for
additional information and will supply the other with copies of all
correspondence between such party or any of its representatives and the SEC,
with respect to the Registration Statement. The Registration Statement shall
comply in all material respects with all applicable requirements of law. The
Parent shall take any action required to be taken under state blue sky or
securities laws in connection with the Merger and the issuance of the Merger
Consideration in connection therewith.
(c) No amendment or supplement to the Registration Statement will
be made without the approval of the Company, which approval will not be
unreasonably withheld or delayed. The Parent will advise the Company, promptly
after it receives notice thereof, of the time when the Registration Statement or
any amendment thereto has become
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effective or any amendment thereto, or the issuance of any stop order, or the
suspension of the qualification of the Parent Class A Common Stock to be issued
in the Merger for offering or sale in any jurisdiction or of any request by the
NYSE for amendment of the Registration Statement.
Section 1.8 Effective Time of the Merger. As soon as practicable
following the satisfaction or waiver of the conditions set forth in Article VI
hereof, a Certificate of Merger shall be duly executed by the Company and shall
be duly filed with the Secretary of State of the State of Delaware in accordance
with the DGCL. The Merger shall become effective on the date on which such
Certificate of Merger is so filed with the Secretary of State of the State of
Delaware.
ARTICLE II
CONVERSION OF SHARES
Section 2.1 Conversion of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder thereof:
(a) Each share of Company Common Stock owned by the Parent or
Mergerco or by any direct or indirect Subsidiary of the Parent immediately prior
to the Effective Time, and each share of Company Common Stock held in the
treasury of the Company or by any direct or indirect Subsidiary of the Company
immediately prior to the Effective Time (each of the foregoing shares being an
"Excluded Share"), shall, by virtue of the Merger, and without any action on the
Company or the holder thereof, be cancelled.
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(b) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than the Excluded Shares and
other than the Dissenting Shares) shall be by virtue of the Merger, and without
any action on the part of the holder thereof, cancelled and converted solely
into the right to receive, upon the surrender of the certificate formerly
representing such share of Company Common Stock in accordance with Section 2.3
hereof, 0.1722 (the "Conversion Price") of a validly issued, fully paid and
non-assessable share of the Parent Class A Common Stock, without interest;
provided, that (i) if the Average Parent Share Price shall be less than $18.875,
then the Conversion Price shall be adjusted so that it shall equal the quotient
obtained by dividing (A) $3.25 by (B) the Average Parent Share Price, and (ii)
if the Average Parent Share Price shall be greater than $24.50, then the
Conversion Price shall be adjusted so that it shall equal the quotient obtained
by dividing (x) $4.22 by (y) the Average Parent Share Price (the Conversion
Price to reflect such adjustment, if any, is hereinafter referred to as the
"Adjusted Conversion Price").
(c) Each share of Mergerco Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one validly
issued, fully paid and non-assessable share of common stock, par value $1.00 per
share, of the Surviving Corporation.
(d) (i) Each Company Stock Option that is outstanding
immediately prior to the Effective Time, whether or not then vested or
exercisable, shall, effective as of the Effective Time, and without any action
on the part of the holder thereof, be assumed by the Parent and become and
represent an option exercisable for shares of
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Parent Class A Common Stock (a "Substitute Option") with the same vesting
schedules, if any, and expiration dates as such Company Stock Option immediately
prior to the Effective Time (but taking into account any acceleration of the
vesting of such Company Stock Option as a result of the consummation of the
Merger), with (A) the new exercise price thereof being determined by dividing
the exercise price of such Company Stock Option by the Adjusted Conversion Price
(with the result of such calculation rounded to the nearest whole cent) and (B)
the number of shares issuable upon exercise being determined by multiplying the
number of shares to be issued upon exercise of such Company Stock Option by the
Adjusted Conversion Price (with the result of such calculation rounded to the
nearest whole number).
(ii) The Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of the shares of Parent Class A Common
Stock for delivery upon exercise of the Substitute Options. As soon as
practicable after the Effective Time, but in no event later than 45 days after
the Effective Time, the Parent shall file one or more registration statements on
Form S-8 (or any successor or appropriate form (including a shelf registration
statement on Form S-3 if Form S-8 is not available)) with respect to the shares
of Parent Class A Common Stock subject to such Substitute Options and shall
maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
referred to therein) for so long as such Substitute Options remain outstanding.
(e) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time and held by a stockholder of the Company
who does
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not vote in favor of the Merger and who complies with all of the relevant
provisions of Section 262 (each such share being a "Dissenting Share") shall not
be converted into the right to receive the Merger Consideration pursuant to the
Merger, but instead the holders of Dissenting Shares shall be entitled to
receive such consideration as shall be determined in accordance with the
provisions of Section 262; provided, however, that (i) if any such holder of
Dissenting Shares shall have failed to establish its entitlement to appraisal
rights as provided in Section 262 or (ii) if any such holder of Dissenting
Shares shall have effectively withdrawn its demand for appraisal of such shares
of Company Common Stock, or lost its right to appraisal and payment as provided
in Section 262, or (iii) if neither any holder of Dissenting Shares nor the
Surviving Corporation shall have filed a petition demanding a determination of
the value of all Dissenting Shares within the time period provided in Section
262, such holder or holders (as the case may be) shall forfeit the right to the
appraisal of such shares of Company Common Stock and each such share of Company
Common Stock shall thereupon be deemed to have been converted, as of the
Effective Time, into and represent the right to receive the Merger Consideration
upon surrender of the certificate or certificates formerly representing such
shares of Company Common Stock in accordance with Section 2.3 hereof. The
Company shall not, except with the prior written consent of the Parent,
voluntarily make or agree to make any payment with respect to, or settle or
offer to settle, any such demands for payment.
Section 2.2 No Further Transfers. At the Effective Time, the
Company Common Stock transfer books shall be closed and no further transfer of
shares of Company Common Stock shall be made thereafter. If, after the Effective
Time, any certificate
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previously representing shares of Company Common Stock is presented for
transfer, it shall be forwarded to the Exchange Agent (as defined in Section 2.3
hereof) for cancellation and exchange in accordance with Section 2.3 hereof.
Section 2.3 Exchange of Shares of Company Common Stock.
(a) Prior to the Effective Time, the Parent shall designate, subject
to the approval of the Company which shall not be unreasonably withheld, a bank
or trust company to act as exchange agent (the "Exchange Agent") for the Merger.
Immediately prior to the Effective Time, the Parent will instruct the transfer
agent of the shares of the Parent Class A Common Stock to countersign and
deliver to the Exchange Agent certificates representing an aggregate number of
shares of the Parent Class A Common Stock as nearly as practicable equal to the
product of the Adjusted Conversion Price and the number of shares of Company
Common Stock to be converted into the Parent Class A Common Stock pursuant to
Section 2.1(b) so as to allow for the issuance and delivery of the Merger
Consideration on a timely basis. The Parent shall pay all reasonable charges or
expenses, including those of the Exchange Agent, in connection with the exchange
of the shares of Company Common Stock for the Merger Consideration.
(b) As soon as practicable after the Effective Time, the Parent shall
cause the Exchange Agent to mail and/or make available to each holder of a
Certificate (other than holders of Certificates theretofore representing
Excluded Shares) (a "Stockholder") a notice and letter of transmittal advising
such holder of the effectiveness of the Merger and the procedure for
surrendering to the Exchange Agent such Certificate or Certificates for exchange
for the Merger Consideration multiplied by the number of shares of
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Company Common Stock represented by such Certificate or Certificates. Upon the
surrender to the Exchange Agent of such Certificate or Certificates, together
with a letter of transmittal, duly executed and completed in accordance with the
instructions thereon, the Stockholder shall be entitled to receive the Merger
Consideration. From and after the Effective Time, until surrendered in
accordance with the provisions of this Section 2.3, each Certificate evidencing
shares of Company Common Stock (other than Certificates representing Excluded
Shares and Dissenting Shares) shall represent for all purposes only the right to
receive the Merger Consideration, without any interest thereon. Any portion of
the Merger Consideration that shall not have been paid to Stockholders pursuant
to this Section 2.3 prior to the second anniversary of the Effective Time
(including any cash payable pursuant to Section 2.3(e) hereof) shall be paid to
the Parent and any Stockholder who has not theretofore complied with this
Section 2.3 thereafter shall look, subject to escheat and other similar laws,
solely to the Parent for payment of the Merger Consideration to which they are
entitled under this Agreement.
(c) No dividends or other distributions that are otherwise payable on
the shares of the Parent Class A Common Stock constituting any of the Merger
Consideration shall be paid to the holder of any unsurrendered Certificate until
such Certificate is properly surrendered as provided herein, but (i) upon such
surrender, there shall be paid to the Person in whose name the shares of the
Parent Class A Common Stock constituting any of the Merger Consideration shall
be issued the amount of any dividends which shall have become payable with
respect to such shares between the Effective Time and the time of such surrender
and (ii) at the appropriate payment date or as soon thereafter as practicable,
there
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shall be paid to such Person the amount of any dividends on such shares of the
Parent Class A Common Stock which shall have a record or due date prior to such
surrender and a payment date after such surrender, subject in each such case to
(x) deduction therefrom of any amount required by applicable law to be withheld,
and (y) any applicable escheat laws or unclaimed property laws. On surrender of
a Certificate, no interest shall be payable with respect to the payment of such
dividends and no interest shall be payable with respect to the amount of any
cash payable in lieu of a fractional share of the Parent Class A Common Stock
pursuant to Section 2.3(e).
(d) If any cash is to be paid pursuant to Section 2.3(e), or certif
icates representing shares of the Parent Class A Common Stock are to be issued,
to a Person other than the Person in whose name the Certificate so surrendered
in exchange therefor is registered, it shall be a condition of the payment or
issuance thereof that the Certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer and that the Person requesting such
exchange shall pay to the Exchange Agent any transfer or other taxes required by
reason of the payment of cash to a Person other than, or if the issuance of
certificates representing the shares of the Parent Class A Common Stock in any
name other than that of, the registered holder of the Certificate surrendered,
or otherwise required, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not payable.
(e) Shares of the Parent Class A Common Stock shall be issued
only in whole shares. A Stockholder will not be entitled to receive Fractional
Shares but, instead, will be entitled to receive promptly from the Exchange
Agent a cash payment in lieu
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of Fractional Shares in an amount equal to such Stockholder's proportionate
interest in the net proceeds from the sale or sales in the open market by the
Exchange Agent, on behalf of all such Stockholders, of the aggregate Fractional
Shares. Such sales shall be made promptly after the Effective Time, or in the
case of Dissenting Shares which become exchangeable for the Merger Consideration
pursuant to Section 2.1(e) hereof, promptly after such change in status of such
Dissenting Shares. Such cash payments will be made to each such Stockholder only
upon proper surrender of such Stockholder's Certificates, together with a
properly completed and duly executed transmittal form and any other required
documents.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and Mergerco as follows:
Section 3.1 Organization and Good Standing. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has all
requisite corporate or other power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power, authority and governmental approvals
would not have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole. Section 3.1 of the Disclosure Schedule sets forth a complete
list of the Company's Subsidiaries, their state of incorporation and each state
in which they are qualified to do business.
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Section 3.2 Corporate Authorization; Validity of Agreement;
Company Action. (a) The Company has full corporate power and authority to
execute and deliver this Agreement and, subject to obtaining any necessary
approval of its stockholders as contemplated by Section 1.6 hereof with respect
to the Merger, to consummate the Contemplated Transactions. The execution,
delivery and performance by the Company of this Agreement, and the consummation
by it of the Contemplated Transactions, have been duly and validly authorized by
its Board of Directors and, except for obtaining the approval of its
stockholders as contemplated by Section 1.6 hereof with respect to the Merger,
no other corporate action or proceedings on the part of the Company is necessary
to authorize the execution and delivery by the Company of this Agreement, and
the consummation by it of the Contemplated Transactions. This Agreement has been
duly executed and delivered by the Company and, assuming this Agreement
constitutes a valid and binding obligation of the Parent and Mergerco,
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except that (i) such enforcement may
be subject to applicable bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights generally, and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(b) The affirmative vote of the holders of a majority of the shares
of Company Common Stock outstanding (the "Required Stockholder Vote") is the
only vote of the holders of any class or series of Company capital stock
necessary to approve the Merger.
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Section 3.3 Capitalization. (a)The authorized capital stock of
the Company consists of 25,000,000 shares of Company Common Stock. As of the
date hereof, (i) 9,024,681 shares of Company Common Stock are issued, of which
8,948,324 shares are outstanding and 76,357 shares are held in treasury and (ii)
options to acquire an aggregate of 902,500 shares of Company Common Stock have
been issued pursuant to Company Stock Options. The Company has previously
delivered to the Parent a true and correct list of all outstanding Company Stock
Options setting forth in each case the name of the optionholder, the number of
shares of Company Common Stock subject thereto, the exercise price, the vesting
schedule and the expiration date. All the outstanding shares of the Company's
capital stock are duly authorized, validly issued, fully paid and
non-assessable. There is no Voting Debt of the Company or any of its
Subsidiaries issued and outstanding. Except as set forth above, as set forth in
Section 3.3(a) of the Disclosure Schedule, and for the Contemplated
Transactions, (i) there are no shares of capital stock of the Company
authorized, issued or outstanding and (ii) there are no existing options,
warrants, calls, pre-emptive rights, subscriptions or other rights, convertible
securities, agreements, arrangements or commitments of any character, relating
to the issued or unissued capital stock of the Company or any of its
Subsidiaries, obligating the Company or any of its Subsidiaries to issue,
transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity interest in, the Company or any
of its Subsidiaries or securities convertible into or exchangeable for such
shares or equity interests or obligations of the Company or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
subscription or other right, convertible security, agreement, arrangement or
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commitment. Except as set forth in Section 3.3(a) of the Disclosure Schedule,
there are no outstanding contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of the
capital stock of the Company or any Subsidiary or affiliate of the Company or to
provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary or any other entity. Following the
Merger neither the Company nor any of its Subsidiaries will have any obligation
to issue, transfer or sell any shares of its capital stock.
(b) All of the outstanding shares of capital stock of each of the
Subsidiaries are directly owned by the Company, and all such shares have been
validly issued and are fully paid and non-assessable and are owned by either the
Company or one of its Subsidiaries free and clear of all liens, charges,
security interests, options, claims or encum brances of any nature whatsoever.
(c) Except as set forth in Section 3.3(c) of the Disclosure Schedule,
there are no voting trusts or other agreements or understandings to which the
Company or any of its Subsidiaries is a party with respect to the voting of the
capital stock of the Company or any of the Subsidiaries. None of the Company or
its Subsidiaries is required to redeem, repurchase or otherwise acquire shares
of capital stock of the Company, or any of its Subsidiaries, respectively, as a
result of the Contemplated Transactions.
Section 3.4 Reports and Financial Statements. The Company has
filed with the SEC, and has heretofore made available to the Parent true and
complete copies of, all forms, reports, schedules, statements and other
documents required to be filed by it and its Subsidiaries since December 31,
1993 under the Exchange Act and the Securities Act (as
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such documents have been amended since the time of their filing, collectively,
the "Company SEC Documents"). As of their respective dates or, if amended, as of
the date of the last such amendment, the Company SEC Documents, including,
without limitation, any financial statements or schedules included therein (a)
did not contain 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 under which they were made,
not misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. Each of the
consolidated financial statements included in the Company SEC Documents have
been prepared from, and are in accordance with, the books and records of the
Company and/or its consolidated Subsidiaries, comply in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present in all material
respects the con solidated financial position and the consolidated results of
operations and cash flows (and changes in financial position, if any) of the
Company and its consolidated Subsidiaries as at the dates thereof or for the
periods presented therein (subject, in the case of unaudited interim financial
statements, to normal year end adjustments).
Section 3.5 Absence of Certain Changes. Except as disclosed in
the Company SEC Documents or as set forth in Section 3.5 of the Disclosure
Schedule, since December 31, 1996, the Company and its Subsidiaries have
conducted their respective
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businesses and operations in the ordinary course of business consistent with
past practice. Since December 31, 1996, there has not occurred (i) any event,
change or effect (including the incurrence of any liabilities of any nature,
whether or not accrued, contingent or otherwise) having or, which would be
reasonably likely to have, in the aggregate, a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole; (ii) any declaration, setting
aside or payment of any dividend or other distribution (whether in cash, stock
or property) with respect to the equity interests of the Company or of any of
its Subsidiaries, other than regular quarterly cash dividends or dividends paid
by its Subsidiaries; or (iii) any change by the Company or any of its
Subsidiaries in accounting principles or methods, except insofar as may be
required by a change in GAAP.
Section 3.6 Consents and Approvals; No Violations. Except as set
forth in Section 3.6 of the Disclosure Schedule and for (a) the filing of a
pre-merger notification and report form by the Company under the HSR Act and the
expiration or termination of the applicable waiting period thereunder, (b) the
filing of a Certificate of Merger with the Secretary of State of the State of
Delaware in accordance with the DGCL, (c) filings with the SEC and any
applicable national securities exchanges or Nasdaq, (d) filings under state
securities, "Blue Sky" or anti-takeover laws, (e) any applicable filings
required under the laws of foreign jurisdictions and (f) filings,
authorizations, consents or approvals relating to matters which, in the
aggregate, are not material to the Company and its Subsidiaries taken as a
whole, neither the execution, delivery or performance of this Agreement nor the
consummation by the Company of the Contemplated Transactions nor compliance by
the Company with any of the provisions hereof will (i) conflict with or result
in any breach of
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any provision of the certificate of incorporation or by-laws or similar
organizational documents of the Company or of any of its Subsidiaries, (ii)
require any material filing with, or permit, authorization, consent or approval
of, any Governmental Authority, (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration)
under, any of the terms, conditions or provisions of any material Company
Agreement or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company, any of its Subsidiaries or any of their
properties or assets.
Section 3.7 No Undisclosed Liabilities. Except (a) as disclosed
in Section 3.7 of the Disclosure Schedule, (b) to the extent disclosed in the
Company SEC Documents filed prior to the date of this Agreement and (c) for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice, since December 31, 1996, neither the Company nor
any of its Subsidiaries has incurred any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise. Section 3.7 of the
Disclosure Schedule sets forth each instrument evidencing indebtedness of the
Company and its Subsidiaries which will accelerate or become due or payable, or
result in a right of redemption or repurchase on the part of the holder of such
indebtedness, or with respect to which any other payment or amount will become
due or payable, in any such case with or without due notice or lapse of time, as
a result of this Agreement, the Merger or the other Contemplated Transactions.
Section 3.8 Registration Statement. None of the information provided by
the Company for inclusion in the Registration Statement will be false or
misleading with
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respect to any material fact or will omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading.
Section 3.9 Litigation; Compliance with Law. (a) Except (i) as
disclosed in Section 3.9(a) of the Disclosure Schedule or (ii) to the extent
disclosed in the Company SEC Documents filed prior to the date of this
Agreement, there is no suit, claim, action, proceeding, review or investigation
pending or, to the knowledge of the Company, threatened against or affecting,
the Company or any of its Subsidiaries.
(b) The Company and its Subsidiaries have complied in all material
respects with all laws, statutes, regulations, rules, ordinances, and judgments,
decrees, orders, writs and injunctions, of any court or Governmental Authority
relating to any of the property owned, leased or used by them, or applicable to
their business, including, but not limited to, equal employment opportunity,
discrimination, occupational safety and health, environmental, insurance
regulatory, antitrust laws, ERISA and laws relating to Taxes (as defined in
Section 3.10).
Section 3.10 Taxes. (a) All material federal, state, county,
local, foreign, and other taxes (including, without limitation, income, profits,
premium, estimated, excise, sales, use, occupancy, gross receipts, franchise, ad
valorem, severance, capital levy, production, transfer, license, stamp,
environmental, withholding, employment, unemployment compensation, payroll
related and property taxes, import duties, and other governmental charges and
assessments), whether or not measured in whole or in part by net income, and
including deficiencies, interest, additions to tax or interest, and penalties
with
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respect thereto (hereinafter "Taxes" or, individually, a "Tax"), required to be
paid on or before the date hereof by or with respect to the Company or any of
its Subsidiaries, including amounts, other than amounts being contested in good
faith and for payment of which adequate reserves are reflected in the Company's
financial statements included in its Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1997, required to be paid on or before the date
hereof with respect to Taxes as a result of any tax sharing agreement or similar
arrangement ("Tax Sharing Agreement Amounts") of the Company or any of its
Subsidiaries, have been timely paid.
(b) All material returns and reports required to be filed by or with
respect to the Company or any of its Subsidiaries with respect to Taxes
(hereinafter "Tax Returns" or, individually, a "Tax Return") on or before the
date hereof have been timely filed. No penalties or other charges in a material
amount are or will become due with respect to the late filing of any Tax Return
of the Company or any of its Subsidiaries or payment of any Tax of the Company
or any of its Subsidiaries required to be filed or paid on or before the date
hereof.
(c) With respect to all Tax Returns filed by or with respect to the
Company or any its Subsidiaries, (i) Section 3.10(c) of the Disclosure Schedule
sets forth the periods for which the statute of limitations for the assessment
of federal Taxes have expired; (ii) except as set forth in Section 3.10(c) of
the Disclosure Schedule, no audit is in progress and no extension of time has
been executed with respect to any date on which any Tax Return was or is to be
filed and no waiver or agreement has been executed for the extension of time for
the assessment or payment of any Tax; and (iii) except as set forth in Section
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3.10(c) of the Disclosure Schedule, there is no material unassessed deficiency
proposed or threatened against the Company or any of its Subsidiaries.
(d) Except as set forth in Section 3.10(d) of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries has not been and is
not a party to any tax sharing agreement, tax indemnification agreement or
similar arrangement.
(e) Section 3.10(e) of the Disclosure Schedule identifies (i) the
common parent of each group of affiliated corporations that filed a consolidated
federal income tax return, and the period to which such returns related, that
included the Company or any of its Subsidiaries since 1987 and (ii) all material
Tax liabilities or issues that have been asserted or proposed by a taxing
authority with respect to any such return and all claims with respect to Taxes
in a material amount that have been asserted against the Company or any of its
Subsidiaries.
(f) With regard to any assets or property held or acquired by the
Company or any of its Subsidiaries, the Company or such Subsidiary has not filed
a consent to the application of Section 341(f) of the Code, or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
(as such term is defined in Section 341(f)(4) of the Code) owned by the Company
or such Subsidiary.
(g) The Company and its Subsidiaries have not agreed, and are not
required to make, any adjustment under Section 481(a) of the Code by reason of a
change in accounting method or otherwise, and there is no application to change
any accounting method by the Company or any of its Subsidiaries pending with any
taxing authority. The Internal Revenue Service has not proposed any such
adjustment or change in method.
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(h) Reserves and provisions for Taxes reflected in the Company's
financial statements included in its Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1997 are adequate.
(i) The Company and its Subsidiaries have not been and are not in
violation (or with notice or lapse of time or both, would be in violation) of
any applicable law relating to the payment or withholding of Taxes relating to
employment and have duly and timely withheld from employee salaries, wages and
other compensation and timely paid over to the appropriate taxing authorities
all amounts required to be so withheld and paid over for all periods under all
applicable laws.
(j) There are no liens or encumbrances of any kind with respect to
Taxes upon any of the assets of the Company and its Subsidiaries (except for
liens for Taxes not yet due) or on the capital stock of the Company or any of
its Subsidiaries.
Section 3.11 No Default. Except as disclosed in the Company SEC
Documents, the business of the Company and each of its Subsidiaries is not being
conducted in default or violation of any term, condition or provision of (a) its
respective certificate of incorporation or by-laws or similar organizational
documents, or (b) any Company Agreement, excluding from the foregoing clause
(b), defaults or violations that would not have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole or would not, or would not be
reasonably likely to, materially impair the ability of the Company to consummate
the Merger or the other Contemplated Transactions.
Section 3.12 Contracts. (a) The Company has previously delivered to the
Parent true and complete copies of all material Company Agreements and true and
correct
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summaries of all material oral agreements to which the Company or any of its
Subsidiaries is a party. Each material Company Agreement is valid, binding and
enforceable and in full force and effect in accordance with its terms. Neither
the Company nor any of its Subsidiaries is in default in any material respect
under any such Company Agreement, nor does any condition exist that with notice
or lapse of time or both would constitute such a material default thereunder. To
the knowledge of the Company or any of the Subsidiaries, no other party to any
such Company Agreement is in default thereunder in any material respect, nor
does any condition exist that with notice or lapse of time or both would
constitute such a material default thereunder, nor is any such material default
threatened.
(b) Except as set forth in Section 3.12(b) of the Disclosure
Schedule, neither the Company nor any Subsidiary is a party to any Company
Agreement that (i) includes any "change of control" or similar provision which,
as a result of the Merger or any other Contemplated Transaction, would result in
a violation or breach of, or default (with or without due notice or lapse of
time or both) under, such Company Agreement, or give rise to a right to
accelerate the terms of payment or the provision of benefits, or enhance the
amount of payment or the provision of benefits, thereunder, or (ii) expressly
and materially limits the ability of the Company or any of its Subsidiaries to
compete in or conduct any line of business or compete with any person or in any
geographic area or during any period of time.
(c) The Company (i) has satisfied the sales requirements under
paragraph 3 of the Stewart's Master Agreement such that the territory subject to
the Stewart's Master Agreement is worldwide and (ii) has not failed to achieve
the sales
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requirements under said paragraph 3 which would permit Stewart's to terminate
the Stewart's Master Agreement with respect to any territory.
Section 3.13 Intellectual Property.
(a) Section 3.13(a) of the Disclosure Schedule lists (i) all
Copyrights, Patents, Trademarks and formulae and processes (other than
unregistered Trademarks for which no application for registration is pending)
(collectively, the "Intellectual Property") owned by the Company or any of its
Subsidiaries, specifying as to each such item, as applicable: (A) the category
of Intellectual Property; (B) the owner of the item; (C) the jurisdictions in
which the item is issued or registered or in which any applica tion for issuance
or registration has been filed, including the respective issuance, registration
or application number; (D) the date of application, issuance or registration and
the expiration date of the item; and (E) with respect to any Trademarks, the
class or classes of goods or services on which each such Trademark is or is
intended to be used; (ii) all material licenses, sublicenses and other
agreements ("IP Licenses") under which the Company or any of its Subsidiaries is
either a licensor or licensee of any Intellectual Property; and (iii) all
agreements involving Intellectual Property that are currently in negotiation or
proposed by the Company or any of its Subsidiaries. Neither the Company nor any
of its Subsidiaries owns any Copyrights or Patents or is a party to any license
for a Copyright or Patent either as a licensor or as a licensee. The Company has
previously delivered to the Parent true and complete copies of all material
documents evidencing Intellectual Property and IP Licenses (including all
modifications, amendments and supplements).
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(b) Except as set forth in Section 3.13(b) of the Disclosure
Schedule, the Company and its Subsidiaries own or have a license for all the
Intellectual Property that is material to the business of the Company and its
Subsidiaries as presently conducted or being developed, free and clear of any
liens.
(c) None of the Company or its Subsidiaries or, to the knowledge
of the Company, any other party is in breach of or default under any IP License.
Each IP License is now, and immediately following the consummation of the
Contemplated Transactions will be, valid and in full force and effect.
(d) No Claim is pending or, to the knowledge of the Company,
threatened, that challenges the validity, enforceability, ownership of or right
to use, sell, license or dispose of any Intellectual Property, nor does the
Company know of any valid grounds for any such Claim.
(e) To the knowledge of the Company, neither the Company nor
any of its Subsidiaries has infringed upon or otherwise violated the
intellectual property rights of third parties or has received or has been the
subject of any Claim, charge or notice alleging any such infringement or other
violation, and the Company knows of no basis for any such Claim. To the
knowledge of the Company, the continued use of the Intellectual Property by the
Company or the relevant Subsidiary after the Effective Time will not infringe
upon or otherwise violate any intellectual property rights of third parties as a
result of the continued operation of the businesses of the Company and its
Subsidiaries as presently conducted.
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(f) To the knowledge of the Company, no third party is infringing
upon or otherwise violating the Intellectual Property rights of the Company or
any of its Subsidiaries.
(g) All registered Trademarks held by the Company or any of its
Subsidiaries are valid and subsisting. The Company and its Subsidiaries have
taken all necessary action to maintain and protect each item of Intellectual
Property owned or used by the Company or any of its Subsidiaries.
(h) To the knowledge of the Company, no Patent, statute, rule,
regulation, code or standard is pending or proposed that would have a material
adverse effect on the validity, enforceability, ownership of or right to use,
sell, license or dispose of any Intellectual Property.
(i) None of the material formulae and processes of the Company or
any of its Subsidiaries has been disclosed to any Person other than its
bottlers, suppliers and consultants and Stewart's.
Section 3.14 Employee Benefit Plans.
(a) With respect to each Company Benefit Plan, the Company has
previously provided to the Parent true and complete copies of (i) all plan texts
and agreements and related trust agreements, if any, (ii) all summary plan
descriptions, if any, (iii) the most recent annual report (including all
schedules thereto), if any, (iv) the most recent annual audited financial
statement, if any, (v) if the plan is intended to qualify under Code Section
401(a) or 403(a), the most recent determination letter, if any, received from
the
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IRS and (vi) all material communications with any Governmental Authority
(including, without limitation, the PBGC and the IRS).
(b) There are no Company Benefit Plans that provide retiree
medical or life or pension coverage (other than coverage mandated by law) or
that are subject to any of Code Section 412, ERISA Section 302 or Title IV of
ERISA.
(c) Each Company Benefit Plan conforms in all material respects to,
and its administration is in all material respects in compliance with, all
applicable laws and regulations, except for such failures to conform or comply
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect with respect to the Company and its
Subsidiaries taken as a whole.
(d) Except as disclosed in the Company SEC Documents or as set
forth in Section 3.14(d) of the Disclosure Schedule, the consummation of the
Contemplated Transactions will not (a) entitle any current or former Company
Employee to severance pay, unemployment compensation or any similar payment or
(b) accelerate the time of payment or vesting, or increase the amount of any
compensation due to, any current or former Company Employee.
Section 3.15 Inventory and Supplies. Except as set forth on
Section 3.15 of the Disclosure Schedule, the inventory of each of the Company
and its Subsidiaries is in good and merchantable condition, and suitable and
usable or salable in the ordinary course of business for the purposes for which
it is intended and none of such inventory is obsolete, damaged, or defective,
subject to an inventory reserve computed in a manner consistent with past
practice and reasonably estimated to reflect inventory values. Section 3.15 of
the
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Disclosure Schedule sets forth the location of all of the inventory of the
Company and its Subsidiaries. The Company has no knowledge of any adverse
condition affecting the supply of materials available to the Company and its
Subsidiaries.
Section 3.16 Receivables. All accounts and notes receivable of
the Company and its Subsidiaries (a) have arisen in the ordinary course of
business of the Company and its Subsidiaries and (b) subject only to a reserve
for bad debts computed in a manner consistent with past practice and reasonably
estimated to reflect the probable results of collection, have been collected or
are collectible in the ordinary course of business of the Company and its
Subsidiaries in the aggregate recorded amounts thereof in accordance with their
terms.
Section 3.17 Case Sales. Section 3.17 of the Disclosure Schedule
sets forth the true and correct amount of the Company's aggregate sales of cases
of soft drinks under the "Stewart's" trademark for the eighteen (18) months
ended December 31, 1991, each of fiscal years 1992, 1993, 1994, 1995 and 1996
and the first five (5) months of 1997.
Section 3.18 Transactions with Affiliates. Except to the extent
disclosed in the Company SEC Documents filed prior to the date of this
Agreement, since December 31, 1996, there have been no material transactions,
agreements, arrangements or understandings between the Company or its
Subsidiaries, on the one hand, and the Company's affiliates (other than wholly
owned Subsidiaries of the Company) or any other Person, on the other hand, that
would be required to be disclosed under Item 404 of Regulation S-K under the
Securities Act.
Section 3.19 State Takeover Statutes. The Board of Directors of the
Company has approved the Merger and this Agreement, and the entering into, and
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performance, by the Parent and Mergerco of the Stockholders Agreement. Such
approval is sufficient to render inapplicable to the Merger, this Agreement and
the entering into, and performance, by the Parent and Mergerco of the
Stockholders Agreement and any other transactions contemplated by this Agreement
and the Stockholders Agreement, the restrictions on business combinations
provided for in Section 203. Other than Section 203, no state takeover statute
or similar statute or regulation applies or purports to apply to the Merger,
this Agreement or the Stockholders Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND MERGERCO
The Parent and Mergerco, jointly and severally, represent and
warrant to the Company as follows:
Section 4.1 Organization and Good Standing. Each of the Parent
and its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, and has
all requisite corporate or other power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power, authority and
governmental approvals would not have a Material Adverse Effect on the Parent
and its Subsidiaries taken as a whole. Each of the Parent and its Subsidiaries
is duly qualified or licensed to do business and in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such
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qualification or licensing necessary, except where the failure to be so duly
qualified or licensed and in good standing would not have a Material Adverse
Effect on the Parent and its Subsidiaries taken as a whole. Mergerco has not
heretofore conducted any business other than in connection with this Agreement
and the Contemplated Transactions.
Section 4.2 Corporate Authorization; Validity of Agreement;
Necessary Action. Each of the Parent and Mergerco has full corporate power and
authority to execute and deliver this Agreement and to consummate the
Contemplated Transactions. The execution, delivery and performance by the Parent
and Mergerco of this Agreement and the consummation by the Parent and Mergerco
of the Contemplated Transactions have been duly and validly authorized by their
respective Boards of Directors and no other corporate action or proceedings on
the part of the Parent and Mergerco is necessary to authorize the execution and
delivery by the Parent and Mergerco of this Agreement, and the consummation by
the Parent and Mergerco of the Contemplated Transactions. This Agreement has
been duly executed and delivered by the Parent and Mergerco, and assuming this
Agreement constitutes a valid and binding obligation of the Company, constitutes
a valid and binding obligation of each of the Parent and Mergerco, enforceable
against each of them in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other similar
laws, now or hereafter in effect, affecting creditors rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
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Section 4.3 Capitalization. (a) The authorized capital stock of
the Parent consists of 60,000,000 shares of Parent Class A Common Stock,
16,000,000 shares of Parent Class B Common Stock, par value $.10 per share,
25,000,000 shares of Preferred Stock, of which 5,982,866 shares have been
designated Redeemable Preferred Stock. As of June 17, 1997, 23,998,221 shares of
Parent Class A Common Stock and 5,997,662 shares of Parent Class B Common Stock
were issued and outstanding, and no shares of Preferred Stock were issued or
outstanding. As of March 31, 1997, options to acquire an aggregate of 8,849,499
shares of Parent Class A Common Stock had been issued. The authorized capital
stock of Mergerco consists solely of 1,000 shares of Mergerco Common Stock, all
of which, as of the date hereof, are issued and outstanding and held by the
Parent. All of the outstanding shares of capital stock of the Parent and
Mergerco (including Mergerco) have been duly authorized and validly issued and
are fully paid and non-assessable.
(b) The shares of the Parent Class A Common Stock to be issued
pursuant to the Merger will be duly authorized, validly issued, fully paid and
non-assessable and not subject to preemptive rights.
Section 4.4 Reports and Financial Statements. The Parent has
filed with the SEC, and has heretofore made available to the Company true and
complete copies of, all forms, reports, schedules, statements and other
documents required to be filed by it and its Subsidiaries since December 31,
1993 under the Exchange Act or the Securities Act (as such documents have been
amended since the time of their filing, collectively, the "Parent SEC
Documents"). As of their respective dates or, if amended, as of the date of the
last such amendment, the Parent SEC Documents, including, without limitation,
any financial
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statements or schedules included therein (a) did not contain 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 under which they were made, not misleading and (b) complied in
all material respects with the applicable requirements of the Exchange Act and
the Securities Act, as the case may be, and the applicable rules and regulations
of the SEC thereunder. Each of the consolidated financial statements included in
the Parent SEC Documents have been prepared from, and are in accordance with,
the books and records of the Parent and/or its consolidated Subsidiaries, comply
in all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present in all material respects the consolidated financial position and the
consolidated results of operations and cash flows (and changes in financial
position, if any) of the Parent and its consolidated Subsidiaries as at the
dates thereof or for the periods presented therein (subject, in the case of
unaudited interim financial statements, to normal year end adjustments).
Section 4.5 Absence of Certain Changes. Except to the extent set
forth in the Parent SEC Documents filed prior to the date of this Agreement,
since December 31, 1996, the Parent and its Subsidiaries have conducted their
respective businesses in the ordinary course of business consistent with past
practice. Since December 31, 1996, there has not occurred (a) any event, change
or effect (including the incurrence of any liabilities of any nature, whether or
not accrued, contingent or otherwise) having or, which would be
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reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on the Parent and its Subsidiaries taken as a whole; (b) any declaration,
setting aside or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to the equity interests of the Parent or of any
of its Subsidiaries other than regular quarterly cash dividends or dividends
paid by wholly owned Subsidiaries; or (c) any change by the Parent or any of its
Subsidiaries in accounting principles or methods, except insofar as may be
required by a change in GAAP.
Section 4.6 Consents and Approvals; No Violations. Except for (a)
the filing of a pre-merger notification and report form by the Parent under the
HSR Act, and the expiration or termination of the applicable waiting period
thereunder, (b) the filing of a Certificate of Merger with the Secretary of the
State of the State of Delaware in accordance with the DGCL, (c) filings with the
SEC and any applicable national securities exchanges, (d) filings under state
securities, "Blue Sky" or antitakeover laws, (e) any applicable filings required
under the laws of foreign jurisdictions and (f) filings, authorizations,
consents or approvals relating to matters which, in the aggregate, are not
material to the Parent and its Subsidiaries (including Mergerco but excluding
the Company and its Subsidiaries) taken as a whole, neither the execution,
delivery or performance of this Agreement by the Parent and Mergerco nor the
consummation by the Parent and Mergerco of the Contemplated Trans actions nor
compliance by the Parent and Mergerco with any of the provisions hereof will (i)
conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws of the Parent and any of its Subsidiaries, (ii) require
any filing with, or permit, authorization, consent or approval of, any
Governmental Authority (except where the failure
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to obtain such permits, authorizations, consents or approvals or to make such
filings would not have a Material Adverse Effect on the Parent and its
Subsidiaries taken as a whole or would not, or would not be reasonably likely
to, materially impair the ability of the Parent and Mergerco to consummate the
Merger or the other Contemplated Transactions), (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, guarantee, other evidence of indebtedness, lease,
license, contract, agreement or other in strument or obligation to which the
Parent or any of its Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Parent, any of
its Subsidiaries or any of their properties or assets, except in the case of
clauses (iii) and (iv) for violations, breaches or defaults which would not have
a Material Adverse Effect on the Parent and its Subsidiaries taken as a whole or
would not, or would not be reasonably likely to, materially impair the ability
of the Parent or Mergerco to consummate the Merger or the other Contemplated
Transactions.
Section 4.7 Registration Statement. The Registration Statement
(and any amendment thereof or supplement thereto), at the date it becomes
effective and at the time of the Meeting, will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; provided, however, that
no representation is made by the Parent or Mergerco with respect to statements
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made therein based on information supplied by the Company for inclusion in the
Registration Statement. Subject to the proviso set forth in the preceding
sentence, the Registration Statement will comply in all material respects with
the provisions of the Securities Act and the rules and regulations thereunder.
Section 4.8 Tax Representations. (a) Mergerco is a wholly owned
subsidiary of the Parent organized for the purpose of consummating the Merger
and has no assets other than (i) Parent Class A Common Stock, if any, and (ii)
assets permitted under Treasury Regulation 1.368-2(j)(3)(iii).
(b) The Parent has no plan or intention not to (i) continue at least a
principal historic business line of the Company or (ii) use at least a
significant portion of the Company's historical assets in a business of the
Parent, in each case within the meaning of Treasury Regulation 1.368-1(d).
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company
covenants and agrees that, except (i) as expressly provided in this Agreement,
(ii) with the prior written consent of the Parent or (iii) as set forth on
Section 5.1 of the Disclosure Schedule, after the date hereof and prior to the
Effective Time:
(a) the business of the Company and its Subsidiaries, including,
without limitation, investment practices and policies, shall be conducted only
in the ordinary course of business consistent with past practice and, each of
the Company and its Subsidiaries shall use all reasonable efforts to preserve
its business organization intact and
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maintain its existing relations with material customers, distributors,
suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, split, combine or
reclassify the outstanding Company Common Stock, or any outstanding capital
stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall (i) amend
its certificate of incorporation or by-laws or similar organizational documents;
(ii) declare, set aside or pay any dividend or other distribution payable in
cash, stock or property with re spect to its capital stock other than dividends
paid by the Company's wholly owned Subsidiaries to the Company; (iii) issue,
sell, transfer, pledge, dispose of or encumber any additional shares of, or
securities convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock of any
class of the Company or its Subsidiaries, other than issuances pursuant to
exercise of stock options outstanding on the date hereof as disclosed in Section
3.3 hereof; (iv) transfer, lease, license, sell, mortgage, pledge, dispose of,
or encumber any assets that are material to the Company and its Subsidiaries
taken as a whole other than sales of investment assets in the ordinary course of
business consistent with past practice; or (v) redeem, purchase or otherwise
acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall (i) grant
any increase in the compensation payable or to become payable by the Company or
any of its Subsidiaries to any officer or employee other than scheduled annual
increases in the ordinary course of business consistent with past practice in an
amount not to exceed five percent (5%)
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for any individual; (ii) adopt any new, or amend or otherwise increase, or
accelerate the payment or vesting of the amounts payable or to become payable
under any Company Benefit Plan; (iii) enter into any, or amend any existing,
employment, consulting or severance agreement with or, except in accordance with
the existing written policies of the Company, grant any severance or termination
pay to any officer, director or employee of the Company or any of its
Subsidiaries; (iv) make any additional contributions to any grantor trust
created by the Company to provide funding for non-tax-qualified employee
benefits or compensation; or (v) provide any severance program to any Subsidiary
which does not have a severance program as of the date of this Agreement;
(e) neither the Company nor any of its Subsidiaries shall modify,
amend or terminate any of the material Company Agreements or waive, release or
assign any material rights or claims, except in the ordinary course of business
consistent with past practice;
(f) neither the Company nor any of its Subsidiaries shall permit
any material insurance policy naming it as a beneficiary or a loss payable payee
to be cancelled or terminated, except in the ordinary course of business
consistent with past practice;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur
or assume any debt except for borrowings under its existing credit facility in
an amount exceeding $100,000 without the written consent of the Parent, which
consent shall not be unreasonably withheld, provided that the Company may extend
the term of its existing credit facility for a period not to exceed one (1) year
so long as the commitment thereunder is not
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increased; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person; (iii) make any loans, advances or capital contributions to, or
investments in, any other Person (other than to wholly owned Subsidiaries of the
Company, or customary loans or advances to employees in accordance with past
practice not to exceed $25,000 in the aggregate); or (iv) enter into any
material commitment (including, but not limited to, any capital expenditure,
"take-or-pay" contract or purchase of assets) in excess of $100,000, provided
that the Company may (x) purchase inventory in the ordinary course of business
consistent with past practice (without any "take-or-pay" commitment) and (y)
enter into a lease for office space in the greater Denver, Colorado area not to
exceed 4,500 square feet, at a cost per square foot per year not to exceed
$17.00 and for a term not to exceed three (3) years;
(h) neither the Company nor any of its Subsidiaries shall change any
of the accounting principles used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay,
discharge or satisfy any material claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction of any such claims, liabilities or
obligations, (x) reflected or reserved against in, or contemplated by, the
consolidated financial statements (or the notes thereto) of the Company and its
consolidated Subsidiaries, (y) incurred in the ordinary course of business
consistent with past practice or (z) which are legally required to be paid,
discharged or satisfied;
(j) neither the Company nor any of its Subsidiaries will adopt a
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring,
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recapitalization or other material reorganization of the Company or any of its
Subsidiaries or any agreement relating to a Acquisition Proposal (other than the
Merger);
(k) neither the Company nor any of its Subsidiaries will engage in
any transaction with, or enter into any agreement, arrangement, or understanding
with, directly or indirectly, any of the Company's affiliates, including,
without limitation, any transactions, agreements, arrangements or understandings
with any affiliate or other Person covered under Item 404 of Regulation S-K
under the Securities Act that would be required to be disclosed under such Item
404 other than such transactions of the same general nature, scope and magnitude
as are disclosed in the Company SEC Documents;
(l) except upon the prior written consent of the Parent, the
Company shall not make any Tax election that would have a Material Adverse
Effect on the Company or any of its Subsidiaries; and
(m) neither the Company nor any of its Subsidiaries will enter into
an agreement, contract, commitment or arrangement to do any of the foregoing, or
to authorize, recommend, propose or announce an intention to do any of the
foregoing.
Section 5.2 Access to Information. The Company shall (and shall
cause each of its Subsidiaries to) afford to the officers, employees,
accountants, counsel, financing sources and other representatives of the Parent,
reasonable access, during normal business hours, during the period prior to the
Effective Time, to all of its and its Subsidiaries' properties, books,
contracts, commitments and records (including any Tax Returns or other Tax
related information pertaining to the Company and its Subsidiaries) and, during
such period, the Company shall (and shall cause each of its Subsidiaries to)
furnish promptly to
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the Parent (a) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements
of the federal securities laws or any insurance regulatory laws and (b) all
other information concerning its business, properties and personnel as the
Parent may reasonably request (including any Tax Returns or other Tax related
information pertaining to the Company and its Subsidiaries). The Parent will
hold any such information which is nonpublic in confidence in accordance with
the provisions of the Confidentiality Agreement.
Section 5.3 Consents and Approvals. Each of the Company, the
Parent and Mergerco will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on it with respect to
this Agreement and the Contemplated Transactions which actions shall include,
without limitation, furnishing all information in connection with approvals of
or filings with any Governmental Authority, including, without limitation, any
schedule, or reports required to be filed with the SEC, and will promptly
cooperate with and furnish information to each other in connection with any such
requirements imposed upon any of them or any of their Subsidiaries in connection
with this Agreement and the Contemplated Transactions. Each of the Company, the
Parent and Mergerco will, and will cause its Subsidiaries to, take all
reasonable actions necessary to obtain any consent, authorization, order or
approval of, or any exemption by, any Governmental Authority or other public or
private third party, required to be obtained or made by the Parent, Mergerco,
the Company or any of their Subsidiaries in connection with the Merger or the
taking of any action contemplated thereby or by this Agreement.
Section 5.4 No Solicitation.
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(a) The Company shall not directly or indirectly, and shall not
authorize or permit any of its Subsidiaries or any officer, director, employee,
agent, investment banker, financial advisor, attorney, accountant, broker,
finder or other representative (collectively, "Representatives") of any of the
Company or any of its Subsidiaries (collectively, the "Acquired Corporations")
directly or indirectly to, (i) solicit, initiate, encourage or induce the
making, submission or announcement of any Acquisition Proposal or take any
action that could reasonably be expected to lead to an Acquisition Proposal,
(ii) furnish any nonpublic information regarding any of the Acquired
Corporations to any Person in connection with or in response to an Acquisition
Proposal, (iii) engage in discussions with any Person with respect to any
Acquisition Proposal, (iv) approve, endorse or recommend (or agree to approve,
endorse or recommend) any Acquisition Proposal or (v) enter into any letter of
intent or similar document or any agreement contemplating or otherwise relating
to any Acquisition Proposal; provided, however, that this Section 5.4(a) shall
not prohibit the Company from furnishing nonpublic information regarding the
Acquired Corporations to, or entering into discussions with, any Person in
response to an unsolicited bona fide written Acquisition Proposal submitted (and
not withdrawn) by such Person if (1) the Board of Directors of the Company
concludes in good faith, based upon the advice of its financial advisor, that
such Acquisition Proposal would result in a transaction that is more favorable
from a financial point of view to the Company's stockholders than the Merger,
(2) the Board of Directors from the Company concludes in good faith, after
consultation with outside legal counsel, that such action is required in order
for the Board of Directors of the
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Company to comply with its fiduciary obligations to the Company's stockholders
under applicable law, (3) prior to furnishing any such nonpublic information to,
or entering into discussions with, such Person, the Company gives the Parent
written notice of the identity of such Person and of the Company's intention to
furnish nonpublic information to, or enter into discussions with, such Person,
and the Company receives from such Person an executed confidentiality agreement
containing customary limitations on the use and disclosure of all nonpublic
written and oral information furnished to such Person by or on behalf of the
Company, and (4) prior to furnishing any such nonpublic information to such
Person, the Company furnishes such nonpublic information to the Parent (to the
extent such nonpublic information has not been previously furnished by the
Company to the Parent).
(b) The Company shall promptly advise the Parent orally and in
writing of any Acquisition Proposal (including the identify of the Person making
or submitting such Acquisition Proposal and the terms thereof) that is made or
submitted by any Person (such Notification referred to as a "Transaction
Notice"). The Company agrees that it will not furnish confidential information
to any Person or enter into negotiations with any Person with respect to an
Acquisition Proposal until it has delivered to the Parent a Transaction Notice
and forty-eight (48) hours have passed since the Parent's receipt of such
Transaction Notice.
(c) As of the date of this Agreement, the Company shall
immediately cease and cause to be terminated any existing discussions with any
Person that relate to any Acquisition Proposal.
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(d) Notwithstanding anything to the contrary contained in this
Agreement, the Company may give a copy of this Section 5.4 to any Person who
submits an unsolicited bona fide written Acquisition Proposal to the Company if,
prior to giving a copy of this Section 5.4 to such Person, the Company gives the
Parent written notice that the Company intends to give copy of this Section 5.4
to such Person.
Section 5.5 Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable, whether under applicable laws
and regulations or otherwise, or to remove any injunctions or other impediments
or delays, legal or otherwise, to consummate and make effective the Merger and
the other Contemplated Transactions. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers and directors of the Company, the Parent and
Mergerco shall use their best efforts to take, or cause to be taken, all such
necessary actions.
Section 5.6 Notification of Certain Matters. The Company shall
give prompt notice to the Parent, and the Parent shall give prompt notice to the
Company, of (a) the occurrence, or non-occurrence of any event the occurrence or
non-occurrence of which would cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at or prior to
the Effective Time and (b) any material failure of the Company or the Parent, as
the case may be, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; provided,
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however, that the delivery of any notice pursuant to this Section 5.6 shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
Section 5.7 Indemnification of Directors and Officers. The
certificate of incorporation and by-laws of the Surviving Corporation and each
of its Subsidiaries shall contain provisions no less favorable with respect to
indemnification of directors, officers, agents and employees and other
individuals than those set forth in the certification of incorporation and
by-laws of the Company and its Subsidiaries as in effect on the date hereof,
which provisions shall not be amended, repealed or otherwise modified for a
period of five (5) years after the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who at or prior to the
Effective Time were directors, officers, agents or employees of the Company or
any of its Subsidiaries or who were otherwise entitled to indemnification
pursuant to the certificate of incorporation and by-laws (or equivalent
governing instruments) of the Company or any of its Subsidiaries; provided, that
if the Surviving Corporation or any of its subsidiaries shall not have the
financial resources to satisfy its indemnification obligations to such
directors, officers, agents or employees or other individuals as provided under
its certificate of incorporation and by-laws in accordance with this Section
5.7, the Parent agrees that it shall provide such indemnification of such
Persons to the extent set forth in such certificate of incorporation and by-laws
in accordance with this Section 5.7.
Section 5.8 Rule 145 Affiliates. At least 30 days prior to the
Closing Date, the Company shall deliver to the Parent a letter identifying, to
the best of the Company's knowledge, all Persons who are, at the time of the
Meeting, deemed to be "affiliates" of the
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Company for purposes of Rule 145 under the Securities Act (the "Company
Affiliates"). The Company shall use all reasonable efforts to cause each Person
who is identified as a Company Affiliate to deliver to the Parent prior to the
Closing Date an agreement substantially in the form of Exhibit B to this
Agreement.
Section 5.9 Stock Exchange Listing. The Parent shall use all
reasonable efforts to cause the shares of the Parent Class A Common Stock issued
in the Merger and the shares of the Parent Class A Common Stock to be reserved
for issuance upon exercise of the Substitute Options to be approved for listing
on the NYSE prior to the Closing Date.
Section 5.10 Tax-Free Reorganization. The Company shall not
intentionally take or cause to be taken any action before the Effective Time
which would disqualify the Merger as a "reorganization" within the meaning of
Section 368(a) of the Code.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions to the Obligations of Each Party. The
obligations of the Company, on the one hand, and the Parent, and Mergerco on the
other hand, to consummate the Merger are subject to the satisfaction (or, if
permissible, waiver by the party for whose benefit such conditions exist) of the
following conditions at or prior to the Effective Time:
(a) this Agreement and the Merger shall have been approved and
adopted by the Required Stockholder Vote in accordance with the DGCL;
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(b) no court, arbitrator or governmental body, agency or official
shall have issued any order, decree or ruling and there shall not be any
statute, rule or regulation, restraining, enjoining or prohibiting the
consummation of the Merger;
(c) the Registration Statement shall have become effective under the
Securities Act and no stop order suspending effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the SEC;
(d) any waiting period applicable to the Merger under the HSR Act
shall have expired or been terminated;
(e) all actions by or in respect of or filing with any Governmental
Authority required to permit the consummation of the Merger shall have been
obtained and such approval shall be in full force and effect; and
(f) the shares of Parent Class A Common Stock to be issued in the
Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance.
Section 6.2 Conditions to the Obligations of the Parent and
Mergerco. The obligations of the Parent and Mergerco to consummate the Merger
are subject to the satisfaction (or waiver by the Parent) of the following
further conditions:
(a) the representations and warranties of the Company shall have
been true and accurate in all material respects as of the Effective Time as if
made at and as of such time (except for those representations and warranties
that address matters only as of
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a particular date or only with respect to a specific period of time which need
only be true and accurate as of such date or with respect to such period);
(b) the Company shall have performed in all material respects its
obligations hereunder required to be performed by it at or prior to the
Effective Time;
(c) since December 31, 1996, except as set forth in Section 3.5 of
the Disclosure Schedule, there shall not have occurred any event, change or
effect having, or which would be reasonably likely to have, in the aggregate, a
Material Adverse Effect on the Company and its Subsidiaries, taken as a whole;
(d) the Parent shall have received a certificate signed by an
executive officer of the Company to the effect of Sections 6.2(a), (b) and
(c); (e) there shall not have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction enacted,
entered, enforced, promulgated, amended, issued or deemed applicable to the
Merger by any domestic legislative body, court, government or governmental,
administrative or regulatory authority or agency (i) restraining or preventing
the carrying out of the Contemplated Transactions, (ii) prohibiting the Parent's
ownership or operation of all or any material portion of its or the Company's
businesses or assets, or compelling the Parent to dispose of or hold separate
all or any material portion of the Parent's or the Company's businesses or
assets as a result of the Contemplated Transactions; (iii) making acquisition of
the shares of Company Common Stock pursuant to the Merger illegal; (iv)
prohibiting the Parent effectively from acquiring or holding or exercising full
rights of ownership of the shares of Company Common Stock, including, without
limitation, the right to vote the shares of Company Common Stock
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acquired by it pursuant to the Merger on all matters properly presented to the
stockholders of the Company; (v) prohibiting the Parent or any of its
Subsidiaries or affiliates from effectively controlling in any material respect
the businesses or operations of the Company, the Parent or their respective
subsidiaries; or (vi) which would impose any condition which would materially
adversely affect the business of the Company or (as a condition of consummating
the Contemplated Transactions) the business of the Parent and its Subsidiaries
taken as a whole;
(f) the Company's Board of Directors shall not have withdrawn or
modified its position with respect to the Merger;
(g) the Parent shall have received an opinion of Krys Boyle
Freedman Scott & Sawyer, P.C. in scope and substance substantially in the form
agreed to by the Company and the Parent prior to the date hereof;
(h) the Average Parent Share Price shall not be less than $15.00
per share;
(i) the holders of no greater than seven and one-half percent (7.5%)
of the shares of Company Common Stock outstanding on the record date for the
Meeting (x) shall have demanded their appraisal rights with respect to their
shares of Company Common Stock pursuant to, and otherwise complied with the
provisions of, subsection (d) of Section 262, and (y) shall not have voted in
favor of or consented to the Merger; or
(j) no suit, claim, action or proceeding with respect to the Merger
or the other Contemplated Transactions, or the Company or any of its
Subsidiaries or any of their properties or assets, shall have been instituted or
threatened which could reasonably be
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expected to have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole or would, or would be reasonably likely to, materially impair
the ability of the Company to consummate the Merger or the other Contemplated
Transactions.
Section 6.3 Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction (or waiver by the Company) of the following further conditions:
(a) the representations and warranties of the Parent and Mergerco
shall be true and accurate in all material respects as of the Effective Time as
if made at and as of such time (except for those representations and warranties
that address matters only as of a particular date or only with respect to a
specific period of time which need only be true and accurate as of such date or
with respect to such period);
(b) each of the Parent and Mergerco shall have performed in all
material respects all of the respective obligations hereunder required to be
performed by the Parent or Mergerco, as the case may be, at or prior to the
Effective Time;
(c) since December 31, 1996, there shall not have occurred any
event, change or effect having, or which would be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the Parent and
its Subsidiaries taken as a whole;
(d) the Company shall have received a certificate signed by an
executive officer of the Parent as to Sections 6.3(a), (b) and (c);
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(e) the Company shall have received an opinion of Paul, Weiss,
Rifkind, Wharton & Garrison in scope and substance substantially in the form
agreed to by the Parent and the Company prior to the date hereof;
(f) the Company shall have received an opinion of Sherman &
Howard L.L.C. to the effect that the Merger will qualify as a "reorganization"
within the meaning of Section 368 of the Code; and
(g) no suit, claim, action or proceeding with respect to the
Merger or the other Contemplated Transactions, or the Parent or any of its
Subsidiaries or any of their properties or assets, shall have been instituted
which could reasonably be expected to have a Material Adverse Effect on the
Parent and its Subsidiaries taken as a whole, or would be reasonably likely
to materially impair the ability of the Parent to consummate the Merger
or the other Contemplated Transactions.
ARTICLE VII
TERMINATION
Section 7.1 Termination. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and the Merger
contemplated herein may be abandoned at any time prior to the Effective Time,
whether before or after stockholder approval thereof:
(a) By the mutual consent of the Board of Directors of the Parent
and the Board of Directors of the Company;
(b) By either of the Board of Directors of the Company or the
Board of Directors of the Parent:
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(i) if the Merger shall not have occurred on or prior
to December 31, 1997; provided, however, that the right to terminate
this Agreement under this Section 7.1(b)(i) shall not be available to
any party whose failure to fulfill any obligation under this Agreement
has been the cause of, or resulted in, the failure of the Merger to
occur on or prior to such date;
(ii) if a complete Registration Statement shall not
have been filed with the SEC on or before October 1, 1997; or
(iii) if any Governmental Authority shall have issued
an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use their best
efforts to lift), in each case permanently restraining, enjoining or
otherwise prohibiting the Contemplated Transactions and such order,
decree, ruling or other action shall have become final and
non-appealable;
(c) By the Board of Directors of the Company:
(i) if the Parent or Mergerco (x) breaches or fails in
any material respect to perform or comply with any of its material
covenants and agreements contained herein or (y) breaches its
representations and warranties in any material respect and such
breach would have or would be reasonably likely to have a Material
Adverse Effect on the Parent and its Subsidiaries taken as a whole, in
each case such that the conditions set forth in Section 6.1 or
Section 6.3 would not be satisfied; provided, however, that if any
such breach is curable by the breaching party through the exercise of
the breaching party's best efforts and for so long as the breaching
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party shall be so using its best efforts to cure such breach, the
Company may not terminate this Agreement pursuant to this Section
7.1(c)(i);
(ii) if the Board of Directors of the Company determines
in good faith, after consultation with (x) outside legal counsel, that
termination of the Agreement is required for the Board of Directors of
the Company to satisfy its fiduciary obligations to the Company's
stockholders under applicable law by reason of an unsolicited bona fide
Acquisition Proposal having been made and (y) its financial advisor that
such Acquisition Proposal would result in a transaction that is more
favorable than the Merger from a financial point of view to the
Company's stockholders; provided that the Company shall have complied
with the provisions of Section 5.4 and shall notify the Parent at least
five (5) days in advance of its intention to terminate this Agreement
pursuant to this Section 7.1(c)(ii) or to enter into a definitive
agreement with respect to such Acquisition Proposal; and provided,
further, that within such five (5) day period the Parent has not made a
competing proposal which is at least as favorable to the Company's
stockholders from a financial point of view as such Acquisition
Proposal;
(iii) if the Company fails to obtain the Required
Stockholder Vote at the Meeting.
(d) By the Board of Directors of the Parent:
(i) if the Company (x) breaches or fails in any material
respect to perform or comply with any of its material covenants and
agreements contained herein or (y) breaches its representations and
warranties in any material respect and
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such breach would have or would be reasonably likely to have a Material
Adverse Effect on the Company and its Subsidiaries taken as a whole, in
each case such that the conditions set forth in Section 6.1 or Section
6.2 would not be satisfied; provided, however, that if any such breach
is curable by the Company through the exercise of the Company's best
efforts and for so long as the Company shall be so using its best
efforts to cure such breach, the Parent may not terminate this Agreement
pursuant to this Section 7.1(d)(i);
(ii) if (A) the Board of Directors of the Company shall
have withdrawn, or modified or changed in a manner adverse to the Parent
or Mergerco its approval or recommendation of this Agreement or the
Merger or shall have recommended an Acquisition Proposal or other
business combination, (B) the Company shall have received a bona fide
written Acquisition Proposal which has not been rejected by the Board of
Directors of the Company within fourteen (14) days after receipt
thereof, or (C) prior to the certification of the vote of the Company's
stockholders to approve the Merger at the Meeting, it shall have been
publicly disclosed or the Parent or Mergerco shall have learned that any
person, entity or "group" (as that term is defined in Section 13(d)(3)
of the Exchange Act) (an "Acquiring Person"), other than the Parent or
its Subsidiaries or any of their affiliates or the stockholders of the
Company party to the Stockholders Agreement, shall have acquired
beneficial ownership (determined pursuant to Rule 13d-3 promulgated
under the Exchange Act) of more than 20% of any class or series of
capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a
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group or otherwise, or shall have been granted any option, right or
warrant, conditional or otherwise, to acquire beneficial ownership of
more than 20% of any class or series of capital stock of the Company
(including the Shares) other than as disclosed in a Schedule 13D on file
with the SEC on the date hereof;
(iii) if the Company fails to obtain the Required
Stockholder Vote at the Meeting; or
(iv) the condition set forth in 6.2(h) is not fulfilled.
Section 7.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 7.1, written notice thereof
shall forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
forthwith become null and void, and there shall be no liability on the part of
the Parent, Mergerco or the Company except (A) for fraud or for willful breach
of this Agreement and (B) as set forth in Section 8.3 hereof and in the last
sentence of Section 5.2.
ARTICLE VIII
GENERAL AGREEMENTS
Section 8.1 Definitions. For the purposes of this Agreement, the
following terms have the meanings ascribed to them in this Section 8.1:
"Agreement" has the meaning specified in the recitals hereto.
"Acquired Corporations" has the meaning specified in Section 5.4(a).
"Acquiring Person" has the meaning specified in Section 7.1(d)(ii).
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"Acquisition Proposal" means any tender or exchange offer
involving the capital stock of the Company, any proposal for a merger,
consolidation or other business combination involving the Company or any of its
Subsidiaries, any proposal or offer to acquire in any manner a substantial
equity interest in, or a substantial portion of the business or assets of, the
Company or any of its Subsidiaries, any proposal or offer with respect to any
recapitalization or restructuring with respect to the Company or any of its
Subsidiaries or any proposal or offer with respect to any other transaction
similar to any of the foregoing with respect to the Company or any of its
Subsidiaries, other than pursuant to the transactions to be effected pursuant to
this Agreement or any other transaction with the Parent or a Subsidiary of the
Parent.
"Adjusted Conversion Price" has the meaning specified in Section 2.1(b).
"Average Parent Share Price" means the average (without rounding) of the
closing prices per share of Parent Class A Common Stock on the NYSE on the NYSE
Composite Tape for the fifteen (15) consecutive NYSE trading days ending on the
NYSE trading day immediately preceding the Closing Date.
"Business Day" means any day that is not a Saturday or Sunday or
a day on which banks located in New York City are authorized or required to be
closed.
"Certificate" means a stock certificate which immediately prior
to the Effective Time represents shares of the Company Common Stock.
"Certificate of Incorporation" has the meaning specified in Section 1.3.
"Claims" means any actions, causes of action, suits, claims, complaints,
demands, litigations or legal, administrative or arbitral proceedings or
investigations.
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"Closing" has the meaning specified in Section 1.2.
"Closing Date" has the meaning specified in Section 1.2.
"Code" has the meaning specified in the recitals.
"Company" means Cable Car Beverage Corporation, a Delaware corporation.
"Company Affiliates" has the meaning specified in Section 5.8.
"Company Agreement" means any note, bond, mortgage, indenture, guarantee,
other evidence of indebtedness, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound.
"Company Benefit Plan" means any material employee benefit plan,
arrangement, policy or commitment, including, without limitation, any
employment, consulting, severance or deferred compensation agreement, executive
compensation, bonus, incentive, pension, profit-sharing, savings, retirement,
stock option, stock purchase or severance pay plan, any life, health, disability
or accidental death and dismemberment insurance plan, any holiday or vacation
practice or any other employee benefit plan within the meaning of section 3(3)
of ERISA, that is maintained, administered or contributed to by the Company or
any of its affiliates for the benefit of their current or former employees.
"Company Common Stock" has the meaning specified in the recitals hereto.
"Company Employee" means any individual employed by the Company or any
of its Subsidiaries.
"Company Fairness Opinion" has the meaning specified in the recitals
hereto.
"Company SEC Documents" has the meaning specified in Section 3.4.
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"Company Stock Option" means an option issued by the Company that
is exercisable for Company Common Stock.
"Confidentiality Agreement" means the confidentiality agreement
between the Company and the Parent, dated April 23, 1997, as amended or modified
from time to time.
"Contemplated Transactions" has the meaning specified in the recitals
hereto.
"Conversion Price" has the meaning specified in Section 2.1(b).
"Copyrights" means any foreign or United States copyright registrations
and applications for registration thereof, and any non-registered copyrights.
"DGCL" has the meaning specified in the recitals hereto.
"Disclosure Schedule" means the disclosure schedule delivered by the
Company to the Parent prior to the date hereof.
"Dissenting Share" has the meaning specified in Section 2.1(e).
"Effective Time" means the time and date at which the Certificate of
Merger is filed with the Secretary of State of the State of Delaware pursuant to
Section 1.8.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, together with the rules and regulations promulgated thereunder.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Exchange Agent" has the meaning specified in Section 2.3(a).
"Excluded Share" has the meaning specified in Section 2.1(a).
"Fractional Shares" means fractional shares of Parent Class A Common
Stock.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
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"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Intellectual Property" has the meaning specified in Section 3.13(a).
"IP Licenses" has the meaning specified in Section 3.13(a).
"IRS" means the United States Internal Revenue Service
"Material Adverse Effect" means, with respect to any Person (or group
of Persons taken as a whole), such event, change or effect, in the aggregate
with such other events, changes or effects, which is materially adverse
to the condition (financial or otherwise), business, results of operations or
prospects of such Person.
"Meeting" has the meaning specified in Section 1.6(a).
"Merger" has the meaning specified in the recitals hereto.
"Merger Consideration" means the shares of Parent Class A Common Stock
to be issued pursuant to the Merger in exchange for Certificates, together with
any cash to be received pursuant to Section 2.3(e) in lieu of issuing
Fractional Shares.
"Mergerco" means CCB Merger Corporation, a Delaware corporation.
"Mergerco Common Stock" means the Common Stock, par value $1.00 per
share, of Mergerco.
"NYSE" means the New York Stock Exchange.
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"Order" means any order, judgment, injunction, award, decree or
writ of any Governmental Authority.
"Parent" means Triarc Companies, Inc., as Delaware corporation.
"Parent Class A Common Stock" means the Class A Common Stock, par
value $.10 per share, of Parent.
"Parent Class B Common Stock" means the Class B Common Stock, par
value $.10 per share, of Parent.
"Parent Disclosure Schedule" means the disclosure schedule
delivered by the Parent to the Company on or prior to the date hereof.
"Parent SEC Documents" has the meaning specified in Section 4.4.
"Patents" means any foreign or United States patents and patent
applications including any divisions, continuations, continuations-in-part,
substitutions or reissues thereof, whether or not patents are issued on such
applications and whether or not such applications are modified, withdrawn or
resubmitted.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization or other entity or
Governmental Entity.
"Prospectus" has the meaning specified in Section 1.7(a).
"Registration Statement" has the meaning specified in Section 1.7(a).
"Representatives" has the meaning specified in Section 5.4(a).
"Required Stockholder Vote" has the meaning specified in Section
3.2(b).
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"SEC" means the Securities and Exchange Commission.
"Section 203" has the meaning specified in the recitals hereto.
"Section 262" shall mean Section 262 of the DGCL.
"Securities Act" means the Securities Act of 1933, as amended.
"Software" means any computer software programs, source code, object
code, data and documentation.
"Stewart's" means Stewart's Restaurants Inc.
"Stewart's Master Agreement" means the Stewart's Master
Agreement, dated July 11, 1989, between Stewart's and the Company, as amended.
"Stockholder" has the meaning specified in Section 2.3(b).
"Stockholders Agreement" has the meaning specified in the recitals
thereto.
"Subsidiary" means, with respect to any Person, any corporation 50%
or more of the outstanding voting power of which, or any partnership, joint
venture, limited liability company or other entity 50% or more of the total
equity interest of which, is directly or indirectly owned by such Person.
"Substitute Option" has the meaning specified in Section 2.1(d)(i).
"Surviving Corporation" has the meaning specified in Section 1.1.
"Tax" has the meaning specified in Section 3.10(a).
"Tax Return" has the meaning specified in Section 3.10(b).
"Tax Sharing Agreement Amounts" has the meaning specified in
Section 3.10(a).
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"Trademarks" means any foreign or United States trademarks,
service marks, trade dress, trade names, brand names, designs and logos,
corporate names, product or service identifiers, whether registered or
unregistered, and all registrations and applications for registration thereof.
"Transaction Notice" has the meaning specified in Section 5.4(b).
"Voting Debt" means bonds, debentures, notes or other indebtedness
having voting rights (or convertible into securities having such rights).
Section 8.2 Survival of Representations, Warranties and
Agreements. All representations, warranties and agreements in this Agreement or
in any instrument delivered pursuant to this Agreement shall survive the
Effective Time.
Section 8.3 Expenses. (a) Except as set forth in Section 8.3(b),
whether or not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the Contemplated Transactions shall be paid
by the party incurring such costs and expenses.
(b) If the Board of Directors of the Parent shall terminate this
Agreement pursuant to Section 7.1(d)(iv) in respect of the condition set forth
in Section 6.2(h), then the Parent shall reimburse the Company for its
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred in connection with this Agreement and the
Contemplated Transactions in an amount not to exceed $225,000 in the aggregate.
Section 8.4 Notice. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by messenger,
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transmitted by telecopier, telex or telegram or mailed by registered or
certified mail, postage prepaid, as follows:
(a) If to the Parent or Mergerco, to:
Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
Attention: Brian L. Schorr, Esq.
Telecopy No.: (212) 451-3216
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Neale M. Albert, Esq.
Telecopy No.: (212) 373-2315
(b) If to the Company, to:
Cable Car Beverage Corporation
717 17th Street, Suite 1475
Denver, Colorado 80202
Attention: Samuel M. Simpson
Telecopy No.: (303) 298-1150
with a copy to:
Krys Boyle Freedman Scott & Sawyer, P.C.
Dominion Plaza
600 Seventeenth Street
Suite 2700 South Tower
Denver, Colorado 80202
Attention: Thomas Boyle, Esq.
Telecopy No.: (303) 893-2882
Except as otherwise specified herein, all notices and other
communications shall be considered to have been duly given on the first to occur
of (a) the date of delivery if delivered personally on a Business Day during
normal business hours, and if not, on the next
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occurring Business Day, (b) five (5) days following posting if transmitted by
mail, (c) the date of transmission with confirmed answer-back if transmitted by
telex on a Business Day during normal business hours, and if not, on the next
occurring Business Day, or (d) the date of receipt if transmitted by telecopier
or facsimile on a Business Day during normal business hours, and if not, on the
next occurring Business Day. Any party may change his or its address for
purposes hereof by notice to the other party given as provided in this Section
8.4.
Section 8.5 Amendments. Subject to applicable law, this Agreement
may be amended by the parties hereto, by action taken by their respective Boards
of Directors, at any time prior to the Effective Time, provided, however, that
after approval of this Agreement by the stockholders of the Company, no
amendment or modification shall (a) alter or change the amount or kind of
shares, securities, cash, property and/or rights to be received in exchange for
or on conversion of all or any of the shares of any class or series thereof of
the Company, (b) alter or change any term of the certificate of incorporation of
the Surviving Corporation to be effected by the Merger, or (c) alter or change
any of the terms and conditions of this Agreement if such alteration or change
would adversely affect the holders of any class or series of capital stock of
the Company. This Agreement may not be amended, modified or supplemented except
by written agreement of the parties hereto.
Section 8.6 Waiver. At any time prior to the Effective Time, the
parties hereto by action taken by their respective Boards of Directors may (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
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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 an instrument in writing
signed on behalf of such party.
Section 8.7 Brokers. The Company represents and warrants that no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger based upon arrangements
made by or on behalf of the Company other than the fee payable to Montgomery
Securities in connection with its providing financial advice to the Company and
the Company's Board of Directors and delivery of the Company Fairness Opinion.
The Parent and Mergerco represent and warrant that no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger based upon arrangements made by or on
behalf of the Parent and Mergerco.
Section 8.8 Publicity. So long as this Agreement is in effect,
neither the Company nor the Parent nor any of their respective affiliates shall
issue or cause the publication of any press release or other public statement or
announcement with respect to this Agreement or the Contemplated Transaction
without prior consultation with the other party, except as may be required by
law or by obligations pursuant to any listing agreement with a national
securities exchange or Nasdaq, provided that the Company and the Parent may
include this Agreement and the Stockholders Agreement as exhibits to a report on
Form 8-K filed with the SEC, and in each such case shall use all reasonable
efforts to consult with the other party prior to such release or announcement
being issued or such filing being made.
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Section 8.9 Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.10 Non-Assignability. This Agreement shall not be
assigned by operation of law or otherwise, except that at the election of the
Parent, any direct or indirect wholly owned Subsidiary of the Parent may be
substituted for Mergerco in the Merger for all purposes of this Agreement
(including, but not limited to, the representations and warranties of Mergerco
herein).
Section 8.11 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership. This Agreement and the Confidentiality Agreement (including
the exhibits hereto and the documents and the instruments referred to herein and
therein): (a) 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, and (b) except as provided in Section 5.7 with respect to
the obligations of the Parent thereunder, are not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
Section 8.12 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to the remedy of specific performance of the terms hereof, in addition
to any other remedy at law or equity.
Section 8.13 Counterparts. This Agreement may be executed in
two or more counterparts each of which shall be deemed to constitute an original
and shall become
68
<PAGE>
effective when one or more counterparts have been signed by each of the parties
hereto and delivered to the other parties.
Section 8.14 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed wholly within such state except to the extent
the provisions of the DGCL apply.
Section 8.15 Consent to Jurisdiction. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of New York, County of New York, or, if it has or can acquire jurisdiction, in
the United States District Court for the Southern District of New York, and each
of the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world.
8.16 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE MERGER OR ANY OTHER CONTEMPLATED
TRANSACTIONS.
8.17 Disclosure Schedule. The Disclosure Schedule is a part of
this Agreement as if fully set forth herein and all references to this Agreement
shall be
69
<PAGE>
deemed to include the Disclosure Schedule.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
CABLE CAR BEVERAGE CORPORATION
By: /s/ Samuel M. Simpson
Name: Samuel M. Simpson
Title: President
TRIARC COMPANIES, INC.
By: /s/ Brian L. Schorr
Name: Brian L. Schorr
Title: Executive Vice President
CCB MERGER CORPORATION
By: /s/ Brian L. Schorr
Name: Brian L. Schorr
Title: Executive Vice President
70
<PAGE>
Summary of Omitted Exhibits and Disclosure Schedule
Exhibit:
A - Form of Restated Certificate of Incorporation
B - Form of Affiliate Agreement
Schedule:
I - Disclosure Schedule
The Registrant hereby agrees to furnish supplementally a copy of any omitted
schedule or exhibit or the Disclosure Schedule to the Securities and Exchange
Commission upon its request.
<PAGE>
Exhibit B
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated June 24, 1997 (this "Agreement"), by
and among Triarc Companies, Inc., a Delaware corporation (the "Parent") and each
of the other parties signatory hereto (each, a "Stockholder" and, collectively,
the "Stockholders").
RECITALS
A. Concurrently herewith, the Parent, CCB Merger Corporation, a
Delaware corporation and wholly owned subsidiary of the Parent ("Mergerco"), and
Cable Car Beverage Corporation, a Delaware corporation (the "Company"), are
entering into an Agreement and Plan of Merger (as amended or modified from time
to time, the "Merger Agreement"; capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the Merger
Agreement) pursuant to which Mergerco will be merged with and into the Company
(the "Merger").
B. As of the date hereof, each of the Stockholders Beneficially Owns
(as defined below) the number of shares of the Common Stock, par value $.01 per
share, of the Company ("Company Common Stock") set forth opposite such
Stockholder's name on Schedule I hereto.
C. As an inducement and a condition to entering into the Merger
Agreement, the Parent has required that the Stockholders agree, and the
Stockholders have agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto hereby agree as follows:
1. Provisions Concerning Company Common Stock. Each Stockholder
hereby agrees that during the period commencing on the date hereof and
continuing until the first to occur of (i) the Effective Time and (ii) the
termination of the Merger Agreement in accordance with Section 7.1 thereof, at
any meeting of the holders of Company Common Stock, however called, or in
connection with any written consent of the holders of Company Common Stock, such
Stockholder shall vote (or cause to be voted) the Company Common Stock held of
record or Beneficially Owned by such Stockholder (but excluding the Company
Common Stock identified as Excluded Shares on Schedule I hereto), whether
heretofore owned or hereafter acquired (collectively, the "Shares"), (i) in
favor of approval of the Merger Agreement and the transactions contemplated
thereby (the "Contemplated Transactions"), including,
<PAGE>
without limitation, the Merger, and any actions required in furtherance thereof;
(ii) against any action or agreement that would result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or the Contemplated
Transactions; and (iii) except as otherwise agreed to in writing in advance by
the Parent, against the following actions (other than the Merger and the other
Contemplated Transactions): (A) any Acquisition Proposal; or (B) (1) any change
in a majority of the Stockholders who constitute the board of directors of the
Company; (2) any change in the present capitalization of the Company or any
amendment of the Company's certificate of incorporation or by-laws; (3) any
other material change in the Company's corporate structure or business; or (4)
any other action which is intended, or could reasonably be expected, to prevent,
or delay beyond the date specified in Section 7.1(b)(1) of the Merger Agreement,
the Merger or the Contemplated Transactions. Such Stockholder shall not enter
into any agreement or understanding with any Person the effect of which would be
inconsistent or violative of the provisions and agreements contained in Section
1 or 3 hereof.
For purposes of this Agreement, "Beneficially Own" or "Beneficial
Ownership" with respect to any securities shall mean having "beneficial
ownership" of such securities (as determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include securities Beneficially
Owned by all other Persons with whom such Person would constitute a "group" as
within the meanings of Section 13(d)(3) of the Exchange Act. For the purposes of
this Agreement, "Person" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization or other entity
or Governmental Authority.
2. Irrevocable Proxy. In the event the Stockholder shall fail to
comply with the provisions of Section 1, the Stockholder hereby agrees that such
failure shall result, without any further action by the Stockholder, in the
irrevocable appointment of the Parent and each of its officers, as its attorney
and proxy pursuant to the provisions of Section 212 of the General Corporation
Law of the State of Delaware, with full power of substitution, to vote and
otherwise act (by written consent or otherwise) with respect to the Shares which
the Stockholder is entitled to vote at any meeting of the holders of Company
Common Stock (whether annual or special and whether or not an adjourned or
postponed meeting) or consent in lieu of any such meeting or otherwise, on the
matters and in the manner specified in Section 1 (the "Proxy"). This Proxy and
power of attorney is irrevocable and coupled with an interest. The Stockholder
hereby revokes all other proxies and powers of attorney with respect to such
Shares that it may have heretofore appointed or granted, and no subsequent proxy
or power of attorney shall be given or written consent executed (and
<PAGE>
if given or executed, shall not be effective) by the Stockholder with respect
thereto. All obligations of the Stockholder under this Agreement shall be
binding upon the heirs, personal representatives, successors and/or assigns of
the Stockholder.
3. Grant of Option. Each Stockholder severally grants to the Parent
an exclusive and irrevocable option (an "Option") to purchase such Stockholder's
Shares in whole but not in part, subject to the provisions of Section 4 hereof,
at the Option Price (as defined below) at any time after the Company shall have
(a) delivered to the Parent a Transaction Notice or (b) shall have furnished
confidential information to any Person or entered into negotiations with any
Person with respect to an Acquisition Proposal; provided, that if the Merger
Agreement is terminated pursuant to Section 7.1(c)(iii), 7.1(d)(i) or
7.1(d)(iii) of the Merger Agreement and this Agreement does not terminate in
accordance with Section 5 hereof, then the Options granted hereunder shall
expire at 5:00 p.m. (New York City time) on the tenth (10th) Business Day
following such termination of the Merger Agreement unless the Parent shall have
delivered a written notice to each Stockholder of its exercise of the Options in
accordance with Section 4 hereof. For purposes of this Agreement, the "Option
Price" with respect to each share of Company Common Stock to be purchased by the
exercise of any Option shall be an amount in cash equal to the product obtained
by multiplying (a) 0.1722 (the "Option Conversion Price") times (b) the Option
Average Parent Share Price (as defined below); provided, that (i) if the Option
Average Parent Share Price shall be less than $18.875, then the Option
Conversion Price shall be adjusted so that it shall equal the quotient obtained
by dividing (A) $3.25 by (B) the Option Average Parent Share Price, and (ii) if
the Option Average Parent Share Price shall be greater than $24.50, then the
Option Conversion Price shall be adjusted so that it shall equal the quotient
obtained by dividing (x) $4.22 by (y) the Option Average Share Price. For the
purposes of this Section 3, "Option Average Share Price" means the average
(without rounding) of the closing prices per share of Parent Class A Common
Stock on the NYSE on the NYSE Composite Tape for the fifteen (15) consecutive
trading days ending on the NYSE trading day immediately preceding the date of
the closing of the exercise of the Option.
4. Exercise of Option. The Parent shall exercise each and every
Option granted hereunder simultaneously. In the event the Parent wishes to
exercise the Options, the Parent shall send a written notice to each Stockholder
specifying the place (which shall be either Denver, Colorado or New York, New
York), time and date (which, to the extent practicable in the reasonable
judgment of the Parent, shall be no earlier than forty-eight (48) hours after
the delivery of such notice) for the closing of such purchase. At the closing
for the exercise of the Options:
(a) the Parent shall deliver to each Stockholder a certified
or bank check or checks payable to or upon the order of such Stockholder in an
amount equal to the aggregate Option Price of the Shares being purchased from
such Stockholder; and
<PAGE>
(b) each Stockholder shall deliver to the Parent a duly
executed certificate or certificates representing the number of Shares being
purchased duly endorsed in blank or accompanied by appropriate stock powers duly
endorsed in blank.
5. Termination. This Agreement, including the Options granted
hereunder, shall terminate on the earlier to occur of (a) the Effective Time;
(b) the termination of the Merger Agreement pursuant to the following provisions
of the Merger Agreement: Section 7.1(a), 7.1(b), 7.1(c)(i) or 7.1(d)(iv), or
Section 7.1(c)(iii), 7.1(d)(i) or 7.1(d)(iii), provided that in the case of a
termination of the Merger Agreement pursuant to Section 7.1(c)(iii), 7.1(d)(i)
or 7.1(d)(iii) of the Merger Agreement, this Agreement shall terminate only if
the Company or its stockholders shall not have received an Acquisition Proposal,
and the Board of Directors of the Company shall not have withdrawn, or modified
or changed in a manner adverse to the Parent or Mergerco, its approval or
recommendation of the Merger Agreement or the Merger; and (c) the date that is
31 days after the date set forth in Section 7.1(b)(i) of the Merger Agreement,
as such date as set forth in Section 7.1(b)(i) of the Merger Agreement may be
extended, modified or waived from time to time in accordance with the provisions
of the Merger Agreement.
6. Representations and Warranties. Each Stockholder hereby
represents and warrants to the Parent and Mergerco as follows:
(a) Ownership of Company Common Stock. Such
Stockholder is, as of the date hereof, the record and Beneficial Owner of the
number of shares of Company Common Stock set forth opposite such Stockholder's
name on Schedule I hereto. On the date hereof, the Company Common Stock set
forth opposite such Stockholder's name on Schedule I hereto constitutes all of
the Company Common Stock owned of record or Beneficially Owned by such
Stockholder. Such Stockholder has good and valid title, and sole voting power
and sole power to issue instructions with respect to the matters set forth in
Section 1 hereof, sole power of disposition, sole power of conversion, sole
power to demand appraisal rights and sole power to agree to all of the matters
set forth in this Agreement (including, without limitation, to execute and
deliver the Proxy), in each case with respect to all of the Company Common Stock
set forth opposite such Stockholder's name on Schedule I hereto, with no
limitations, qualifications, encumbrances or restrictions on such rights (other
than those created under this Agreement) except as set forth on Schedule I
hereto.
(b) Power, Binding Agreement. Such Stockholder has the legal
capacity, power and authority to enter into and perform all of such
Stockholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Stockholder will not violate any other
agreement to which such Stockholder is a party. This Agreement has been duly and
validly executed and delivered by such Stockholder and constitutes a valid and
binding agreement of such
<PAGE>
Stockholder, enforceable against such Stockholder in accordance with its terms,
except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. There is no beneficiary or holder of a voting trust certificate
or other interest of any trust of which such Stockholder is trustee who is not a
party to this Agreement and whose consent is required for the execution and
delivery of this Agreement or the consummation by such Stockholder of the
transactions contemplated hereby. The Stockholder has not entered into any
voting agreement or trust or other stockholder agreement with respect to any
Company Common Stock Beneficially Owned or held of record by such Stockholder or
granted to any Person any proxy (revocable or irrevocable) or power-of-attorney
with respect to such Company Common Stock other than the Proxy expressly
contemplated hereby. If such Stockholder is married and such Stockholder's
Company Common Stock constitutes community property, this Agreement has been
duly authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse.
(c) No Conflicts. (i)Other than the filing of Forms 13-D
pursuant to the Securities Exchange Act of 1934, as amended, and such other
filings, consents, authorizations and approvals as are contemplated by the
Merger Agreement, no filing with, and no permit, authorization, consent or
approval of, any Governmental Authority is necessary for the execution of this
Agreement by such Stockholder and the consummation by such Stockholder of the
transactions contemplated hereby.
(ii) None of the execution and delivery of this
Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby or compliance by such Stockholder with any of
the provisions hereof shall (A) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of its governing documents (as applicable) or any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which such Stockholder is a
party or by which such Stockholder or any of such Stockholder's properties or
assets may be bound, or (B) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to such Stockholder or
any of such Stockholder's properties or assets.
(d) As of the date hereof, there is (i) no suit, claim,
action, proceeding, review or investigation pending, or to the knowledge of such
Stockholder, threatened against the Stockholder, and (ii) no judgment, decree,
order,
<PAGE>
writ or injunction of any Governmental Authority to which the Stockholder or his
or her assets are subject, that could materially impair the ability of the
Stockholder to perform his or her obligations hereunder or to consummate the
transactions contemplated hereby.
(e) No Finder's Fees. No broker, investment banker, financial
advisor or other Stockholder is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the Merger or
the other Contemplated Transactions based upon arrangements made by or on behalf
of such Stockholder or any of his or her affiliates or, to the knowledge of such
Stockholder, the Company or any of its affiliates, other than the fee payable to
Montgomery Securities in connection with its providing financial advice to the
Company and the Company's Board of Directors and delivery of the Company
Fairness Opinion.
(f) Reliance by the Parent. Such Stockholder understands and
acknowledges that the Parent is entering into the Merger Agreement in reliance
upon such Stockholder's execution and delivery of this Agreement.
7. Covenants.
(a) Other Potential Acquirors. Such Stockholder (i) shall
immediately cease any existing discussions or negotiations, if any, with any
parties conducted heretofore with respect to any potential Acquisition Proposal,
in his or her capacity as such, and (ii) from and after the date hereof shall
not, in such capacity, directly or indirectly, initiate, solicit or encourage
(including by way of furnishing non-public information or assistance), engage in
any discussions or negotiations with respect to, or take any other action to
facilitate, any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, an Acquisition Proposal, or agree to or
endorse any Acquisition Proposal, or authorize or permit any of such
Stockholder's agents to do so, and such Stockholder shall promptly notify the
Parent of any offers, proposals, inquiries or Acquisition Proposals and shall
provide a copy of any such written proposal and a summary of any oral proposal
to the Parent immediately after receipt thereof (and shall specify the material
terms and conditions of such proposal and identify the Person making such
proposal) and thereafter keep the Parent promptly advised of any developments
with respect thereto.
(b) Restriction on Transfer, Proxies and Non-Interference.
Such Stockholder shall not, directly or indirectly, except as contemplated by
the Merger Agreement and this Agreement: (i) offer for sale, sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to or
consent to the offer for sale, sale, transfer, tender, pledge, encumbrance,
assignment or other disposition of, any or all of such Stockholder's Shares or
any interest therein; (ii) grant any proxies or
<PAGE>
powers of attorney, deposit any Shares into a voting trust or enter into a
voting agreement with respect to any Shares; or (iii) take any action that would
make any representation or warrant of such Stockholder contained herein untrue
or incorrect or have the effect of preventing or disabling such Stockholder from
performing such Stockholder's obligations under this Agreement.
8. Further Assurances. From time to time, at the Parent's request
and without further consideration, each Stockholder shall execute and deliver
such additional documents and take all such further lawful action as may be
reasonably necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
9. Stop Transfer. Each Stockholder agrees with, and covenants to,
the Parent that such Stockholder shall not request that the Company register the
transfer (book-entry or otherwise) of any certificate or uncertificated interest
representing any of such Stockholder's Shares, unless such transfer is made in
compliance with this Agreement. In the event of a stock dividend or
distribution, or any change in the Company Common Stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of Company Common
Stock or the like, the term "Company Common Stock" shall be deemed to refer to
and include the Company Common Stock as well as all such stock dividends and
distributions and any Company Common Stock into which or for which any or all of
the Company Common Stock may be changed or exchanged.
10. Disclosure. Each Stockholder hereby agrees to permit the Parent
to publish and disclose in the S-4 and the Proxy Statement (including all
documents and schedules filed with the SEC), and any press release or other
disclosure document which the Parent, in its sole discretion, determines to be
necessary or desirable in connection with the Merger and any transactions
related thereto, such Person's identity and ownership of Company Common Stock
and the nature of his or her commitments, arrangements and understandings under
this Agreement.
11. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
(b) Certain Events. Each Stockholder agrees that this
Agreement and the obligations hereunder shall attach to such Stockholder's
Shares and shall be binding upon any person or entity to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise, including,
<PAGE>
without limitation, such Stockholder's heirs, guardians, administrators or
successors. Notwithstanding any transfer of his or her Shares, the transferor
shall remain liable for the performance of all obligations under this Agreement
of the transferor.
(c) Assignment. This Agreement shall not be assigned by the
Company or any Stockholder by operation of law or otherwise without the prior
written consent of the other party. The Parent may assign, in its sole
discretion, its rights and obligations hereunder to any direct or indirect
wholly owned subsidiary of the Parent.
(d) Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or, except as
expressly provided herein, terminated, with respect to any Stockholder, except
upon the execution and delivery of a written agreement executed by such
Stockholder and the Parent; provided that Schedule I hereto may be supplemented
by the Parent by adding the name and other relevant information concerning any
Stockholder of the Company who agrees to be bound by the terms of this Agreement
without the agreement of any other party hereto, and thereafter such added
Stockholder shall be treated as a "Stockholder" for all purposes of this
Agreement.
(e) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered by
messenger, transmitted by telecopier, telex or telegram or mailed by registered
or certified mail, postage prepaid, as follows:
If to any Stockholder: At the addresses set forth on Schedule I hereto
with a copy to: Krys Boyle Freedman Scott & Sawyer, P.C.
Dominion Plaza
600 Seventeenth Street
Suite 2700, South Tower
Denver, Colorado 80202
Attention: Thomas Boyle, Esq.
Telecopy: (303) 893-2882
If to the Parent: Triarc Companies, Inc.
280 Park Avenue
New York, New York 10017
Attention: Brian L. Schorr, Esq.
Telecopy: (212) 451-3216
with a copy to: Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
<PAGE>
Attention: Neale M. Albert, Esq.
Telecopy: (212) 373-2315
Except as otherwise specified herein, all notices and other
communications shall be considered to have been duly given on the first to occur
of (a) the date of delivery if delivered personally on a Business Day during
normal business hours, and if not, on the next occurring Business Day, (b) five
(5) days following posting if transmitted by mail, (c) the date of transmission
with confirmed answer-back if transmitted by telex on a Business Day during
normal business hours, and if not, on the next occurring Business Day, or (d)
the date of receipt if transmitted by telecopier or facsimile on a Business Day
during normal business hours, and if not, on the next occurring Business Day.
Any party may change his, her or its address for purposes hereof by notice to
the other party given as provided in this Section 9(e).
(f) Severability. Whenever possible, each provision or portion
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(g) Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such
breach, the aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.
(h) Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with his, her or its obligations hereunder, and any custom or
practice of the
<PAGE>
parties at variance with the terms hereof, shall not constitute a waiver by such
party of his, her or its right to exercise any such or other right, power or
remedy or to demand such compliance.
(j) No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity who or which is not a party hereto.
(k) Descriptive Headings. The descriptive headings used
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
(l) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together shall constitute one and the same Agreement.
(m) GOVERNING LAW. THIS AGREEMENT SHALL
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF, EXCEPT TO THE
<PAGE>
EXTENT THAT THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE APPLY.
(n) NO LIMITATION OF FIDUCIARY DUTIES. THE PARTIES HERETO
ACKNOWLEDGE AND AGREE THAT NONE OF THE PROVISIONS HEREIN SHALL BE DEEMED TO
RESTRICT OR LIMIT ANY FIDUCIARY DUTY ANY OF THE STOCKHOLDERS MAY HAVE AS A
MEMBER OF THE BOARD OF DIRECTORS OF THE COMPANY; PROVIDED, THAT NO SUCH DUTY
SHALL EXCUSE ANY OF THE STOCKHOLDERS
[Intentionally left blank]
<PAGE>
FROM HIS OBLIGATIONS AS A STOCKHOLDER TO VOTE THE SHARES OF THE COMPANY COMMON
STOCK AS HEREIN PROVIDED, AND TO OTHERWISE COMPLY WITH EACH OF THE TERMS AND
CONDITIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the Parent and each Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
TRIARC COMPANIES, INC.
By: /s/ Brian L. Schorr
Name: Brian L. Schorr
Title: Executive Vice President
STOCKHOLDERS:
/s/ Samuel M. Simpson
Samuel M. Simpson
/s/ Susan L. Neff
Susan L. Neff
/s/ William H. Rutter
William H. Rutter
/s/ Susan L. Fralick
Susan L. Fralick
<PAGE>
ACKNOWLEDGMENT:
The undersigned hereby acknowledges the terms and provisions of Section 9 of
this Agreement.
CABLE CAR BEVERAGE CORPORATION
By: /s/ Samuel M. Simpson
Name: Samuel M. Simpson
Title: President
<PAGE>
Schedule I
SHARES OF
STOCKHOLDER COMPANY EXCLUDED
NAME AND ADDRESS COMMON STOCK SHARES SHARES
Samuel M. Simpson 723,643 0 723,643(1)
3005 Cherry Ridge Road
Cherry Hills Village, CO 80110
Susan L. Neff 381,234 0 381,234
3005 Cherry Ridge Road
Cherry Hills Village, CO 80110
William H. Rutter 666,532 10,000(2) 656,532
1868 South Highland Drive
Moab, UT 84532
Susan L. Fralick
1868 South Highland Drive
Moab, UT 84532 7,200 5,000(3) 2,200
- --------------
(1) 60,000 of Mr. Simpson's Shares have been pledged to William H. Rutter
as security.
(2) Mr. Rutter's Excluded Shares are comprised of 10,000 shares in a trust
for his benefit, for which Cynthia S. Rutter is trustee.
(3) Ms. Fralick's Excluded Shares are comprised of 5,000 shares in an IRA
account.
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